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Radon is a naturally occurring, radioactive gas found all over the United States. Radon moves through the ground to the air above, and into buildings through foundation cracks, other structural openings, and well-water. Radon trapped inside homes can result in serious adverse health effects.
The multifamily industry is dedicated to providing housing that is affordable, decent, and provides for the health and safety of its residents and their families. Importantly, we understand and accept our obligation to conduct the necessary environmental tests to evaluate the presence of potential environmental hazards such as radon and to undertake mitigation efforts should hazards be identified. However, the industry continues to have issues and concerns with certain practical and procedural aspects of the adoption of the EPA’s Voluntary Consensus Standards for Radon Testing and Mitigation for all multifamily properties financed by the Enterprises.
Read on for the latest legislative, regulatory and industry actions related to this topic.
FHFA Announces Changes to Fannie Mae and Freddie Mac’s Multifamily Radon Standards
On January 19, FHFA announced that Fannie Mae and Freddie Mac’s multifamily radon standards will be updated to require additional radon testing for properties with loan applications received after June 30, 2023.
- What This Means: Per an FHFA announcement: "Enhancements to these radon standards will require testing at Enterprise-backed multifamily properties, regardless of where the property is located (subject to some exceptions and deferrals), in addition to:
- Increasing the amount of required testing from 10 percent of ground floor units to 25 percent of ground floor units;
- Requiring an environmental professional to oversee radon testing;
- Requiring the environmental professional or property representative to notify tenants of radon testing; and
- Providing additional guidance for lenders and environmental consultants on the Enterprises' radon standards. As part of such guidance, the Enterprises will reinforce the need for compliance with state and local radon laws."
- Industry Impact: Although this action took into account the broad industry feedback obtained during the comment period (detailed below), how this will impact the industry is somewhat of a mixed bag.
- In a win for the industry, the rule includes our recommendations on how much testing is required. The proposed rule would have required testing 100 percent of ground floor units 10 percent of all units in higher floors.
- However, FHFA has left in place the proposed requirement that every building be tested regardless of location—despite industry calls to remove it. This may impact the timing of Enterprise loan closings in states that currently do not have a radon testing requirement since the resources to conduct testing are currently lacking in those states.
- What Now: The multifamily industry will have to prepare for the “go-live” date of June 30 by identifying more testing resources, modifying processes and notifying borrowers of the potential for longer settlement timelines for Enterprise loan purchases.
Explore FHFA’s new rule to learn more. >>>
Industry Submits Comment Letter on Radon Following Listening Session
On August 6, an industry coalition submitted a comment letter and a technical report to the Federal Housing Finance Agency (FHFA) on proposed changes to the multifamily radon testing protocols for loans purchased by the Enterprises (Fannie Mae and Freddie Mac).
- What This Means: The letter provided additional support to the industry’s positions expressed in a March 31 letter to FHFA and stressed during the listening session. Specifically, the industry letter outlined the following two objectives and implementation steps that should be met:
- First, to ensure that any changes to protocols protect the health and safety of our residents and are technically practical to implement; and
- Second, to ensure that the science of radon testing supports any changes in protocols.
The coalition also engaged Exponent, an engineering and scientific consulting firm, to perform a peer review of two scientific studies on radon testing for multifamily properties to ensure that FHFA was fully informed prior to relying on these studies to support their decision. Exponent’s analysis showed that the reviewed scientific study conclusions were deeply flawed. The full review can be accessed here.
Access our comment letter to dive deeper into our recommendations.
FHFA Holds Listening Session on Radon Testing Protocols
On July 20, the Federal Housing Finance Agency (FHFA) held a listening session on proposed changes to the multifamily radon testing protocols for loans purchased by the Enterprises (Fannie Mae and Freddie Mac).
For more information on the current radon standards or to submit additional comments, visit FHFA’s website.
NMHC Leads Coalition Weighing in on Revised Radon Testing Protocols
NMHC spearheaded a broad coalition letter signed by ten housing providers following a request from the Federal Housing Finance Agency (FHFA) to provide comments on a directive that would require Fannie Mae and Freddie Mac (Enterprises) to implement revised radon testing protocols.
- What This Means: This directive came in response to changes the Department of Housing and Urban Development (HUD) adopted in December 2020 as part of revisions to the Multifamily Accelerated Processing (MAP) guide.
- Industry Impact: Given the lack of field experience in implementing the HUD requirement that 100 percent of ground floor units, plus 10 percent of units on remaining floors be tested (the prior requirement was for 25 percent of ground floor units and 10 percent of units on other floors), there is no data on the infrastructure necessary to implement a significant revision to the current testing protocol including availability of trained radon sampling workforce capacity and certified laboratory capacity.
- NMHC's Viewpoint: While expressing support for measures that protect the health of multifamily residents, the coalition questioned whether there was sufficient capacity for the Enterprises to implement the expanded testing requirements given that the MAP guide requirements became effective just recently at the end of March 2021. The process for vetting these revisions to the radon sampling protocol were not subject to the typical constraints of a federal rule making process and relied upon a study that has not been made available to the regulated community.
Read our full comment letter to learn more. >>>