As you may already be aware, the 2023 Enterprise Multifamily Radon Policy has been released, requiring all loan applications received after June 30, 2023 to adhere to a uniform radon protocol for both Fannie Mae and Freddie Mac mortgages. This new policy mandates radon testing for all properties, with only a few exceptions, regardless of radon zone.

With the effective date fast approaching, it’s more important than ever to ensure that your properties are in compliance with the new policy requirements.

Frequently Asked Questions About the 2023 Multifamily Radon Policy

To ensure you’re on the right track for compliance, here are some frequently asked questions about the 2023 Multifamily Radon Policy:

FAQ #1: What changes did Fannie Mae and Freddie Mac make to radon policies in 2023?

  • All properties need radon testing regardless of radon zone, with few exceptions (see below exemptions)
  • 25% of ground floor units to be tested with no fewer than 1 test per residential building
  • Environmental Professionals (EPs) to oversee testing protocol. FHFA does not require radon certification
  • In the ESA’s executive summary, a summary of the radon findings and recommendation, including estimated cost for any further testing and/or mitigation
  • State and local regulations for testing must be followed if they are more stringent than FHFA radon policy (ie: certification, licensure, cannister placement).
  • Tenant notification required (written notice regarding access and closed conditions)
  • Allowance for no more than 15% lost, faulty, inaccessible tests or EP discretion.
  • Follow up testing will require 25% radon placement in buildings with elevated radon results identified during first round of testing
  • Post-installation mitigation testing must be performed and reviewed by EP

FAQ #2: Do enterprise-backed multifamily mortgages require radon testing?

• Yes, unless an exemption or deferral applies, radon testing will be required for every multifamily mortgage loan purchased. Property with 5 or more units is considered a multifamily property.

FAQ #3: Which enterprise-backed mortgage loans are exempt from radon testing?

• Cooperatives.
• Supplemental loans.
• Manufactured housing communities.
• Properties with no ground-contact residential space.
• New construction built with radon resistant measures.
• Properties with property-wide radon mitigation systems and an operations and maintenance plan in place.
• Refinanced properties that have previously undergone the updated radon testing and mitigation (if applicable) requirements.
• When the EP concludes and documents that testing or mitigation is not necessary.

FAQ #4: Is radon testing necessary for adjacent units that aren’t used as collateral for a mortgage loan, like those that are a part of a condominium complex or a split-up condo?

  •  No, radon testing is not necessary for adjacent units that aren’t used as collateral for a mortgage loan.

FAQ #5: Are upper floor residential units required to be tested? 

  • No, upper floor residential units are not required to be tested. 

FAQ #6: Do properties that qualify for the Enterprises’ small balance loan programs require testing?

  • Small loan testing will be postponed until 2024

FAQ #7: What if my state requires different radon testing standards than Fannie Mae or Freddie Mac?:

• If any enterprise radon requirements appear to conflict, the Lender must comply with all state and local regulations, as well as any more stringent Enterprise requirements.

FAQ #8:If there is an elevated reading in one of the units tested, will other areas need to be tested?

The EP must recommend one of the following for all residential buildings that have at least one unit with elevated radon concentrations equal to or greater than 4.0 pCi/L after the first round of testing:
• Additional testing of 25% of ground-contact units in buildings with radon levels of 4.0 pCi/L or higher using either short-term or long-term testing. Units that tested at or above 4.0 pCi/L in the first round of testing must be retested. If more units must be tested to meet the 25% threshold, the EP may choose them at their discretion.
• If a second round of testing is conducted, remediation is required if the average of the two short-term tests or the long-term test results are not satisfactory.
• Installation of radon mitigation systems in all buildings with radon concentrations of 4.0 pCi/L or higher.
• Based on the Enterprises’ programmatic requirements, follow-up testing and mitigation may be completed during due diligence or as a post-closing obligation.

FAQ #9: What is required for mitigation of any building at the property having a unit with elevated levels of radon?

Following the above-mentioned testing protocols, any unit that is required to be mitigated per the testing protocols must be mitigated.

  • Mitigation will be carried out in accordance with all applicable laws and regulations.
  • The type of mitigation system required will be determined by a qualified radon mitigation firm.
  • At the discretion of the engaged mitigation firm, additional considerations may include the installation of a multi-unit mitigation system.
  • Mitigation systems will be managed under an operations and maintenance plan, including periodic inspections of system components by a Borrower representative.
  • If post-closing testing or mitigation is required, the lender will submit documentation from the EP stating what steps were taken, that the work was satisfactorily completed, and an estimated completion date.
  • Post-mitigation testing must confirm radon levels of below 4.0 pCi/L.

Finals Thoughts on the 2023 Multifamily Radon Policy

At AEI, we’re dedicated to assisting you in staying ahead of industry changes and navigating complex regulations. We believe that this is the best way to ensure the success and longevity of your commercial real estate investments. Don’t let the 2023 Enterprise Multifamily Radon Policy catch you off guard. Contact us today to learn how we can help ensure compliance and protect the health and safety of your tenants.

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