Radon is a colorless, odorless gas that, with prolonged exposure, has been linked to an increased risk of lung cancer. In fact, radon is the second leading cause of lung cancer in the United States behind smoking, resulting in 21,000 deaths annually according to the EPA. However, despite its prevalence across the entire US, the standards for testing have been inconsistent. That, however, is about to change.
New 2023 Radon Testing Requirements
Under the provisions set out by the 2023 Enterprise Multifamily Radon Policy, loan applications received by Fannie Mae and Freddie Mac will be required to comply with new radon testing requirements. These include testing for radon at all multifamily Enterprise-backed properties, regardless of location, with some exemptions and deferrals. Additionally, the required testing for radon will increase from 10 percent of ground floor units to 25 percent.
The process of managing radon testing will continue to be conducted by an environmental professional, and tenant notifications for radon testing will be required by either the environmental professional or the property representative. Furthermore, lenders and environmental consultants will be provided with extra guidance on the Enterprises’ radon standards, including the need for compliance with state and local radon laws.
Potential Impact on Real Estate Transactions
For buyers, the 2023 Enterprise Multifamily Radon Policy could result in added requirements to test for radon as part of the loan application process, and they may need to mitigate high levels of radon before completing a sale. Similarly, sellers may also be required to test for radon and mitigate high levels of radon before a sale can be completed.
There are, however, several areas and loan types that will not be subject to the new rules put forth by the 2023 Enterprise Multifamily Radon Policy, including:
Refinances of properties with existing Enterprise debt that have undergone previous radon testing and mitigation (if applicable) compliant with this policy
Manufactured Housing Communities
Properties with no ground-contact residential units (including properties with ground-floor retail, first-floor amenities/leasing, or residential units above parking garage or over code-compliant ventilated crawl space)
Upper-floor residential units
Any improvements that are not part of the collateral
Properties with property-wide radon mitigation systems and Operations and Maintenance (O&M) plans in place
New construction built with radon resistant measures
When the RMP/EP concludes that testing or mitigation is not necessary and reasons supporting this conclusion
Small loans/Small Balance Loan (SBL) mortgages, which will be deferred from testing until 2024, when it will be reassessed
Professional Radon Testing
As NRPP-certified radon measurement professionals, we are dedicated to maintaining the highest standards of expertise and compliance in the field. Our commitment to staying up to date with the latest radon measurement standards ensures that we deliver exceptional service. Whether you are a current owner or in the process of purchasing a multifamily property, our licensed, certified, and highly trained team is here to fulfill all your radon testing requirements with utmost precision and efficiency.
The 2023 Enterprise Multifamily Radon Policy will be going into effect on June 30, 2023. For a full breakdown of the new guidelines for radon testing, check out the links below: