On Jan. 31, 2013, HUD issued a mortgagee letter (ML 2013-07) to approved mortgage lenders amending the previous environmental review requirements for the assessment and remediation of radon gas at FHA-insured apartment properties. FHA will now require radon testing of 25 percent of ground level units; if the testing finds levels in excess of the action level, remediation is required. The changes will affect all pre-application and firm commitment packages submitted after June 1, 2013.
Radon is a colorless, odorless gas emitted from soil. Certain areas of the country have relatively high levels of radon, but radon can be found everywhere. The Environmental Protection Agency (EPA) has established an action level for indoor radon levels. Radon testing involves placing charcoal canisters in rooms on the lowest level of a structure for 48 hours to 72 hours. Laboratory analyses determine whether the concentration of radon in the air sample exceeds the action level and must be remediated. Remediation requires positive ventilation of the lowest level if the building.
ML 2013-07 outlines the specific testing requirements, the qualifications for firms conducting the testing and resident notification requirements, as well as mitigation and remediation requirements. Many lenders and insurers already have modified their testing and mitigation requirements to be in line with those established in ML 2013-07 due in part to the relative low-cost of testing and effective mitigation actions for radon gas.
Please contact David Cardwell, NMHC Vice President of Capital Markets, at email@example.com for information about the Mortgagee Letter 2013-07 and Ron Nickson, NMHC Vice President of Building Codes, at firstname.lastname@example.org for further information on radon engineering controls.
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