source:
  type: guide
  id: fnma-sel-b4-2.1-04
  authority: Fannie Mae Selling Guide B4-2.1-04 — Environmental Hazard Assessments
  description: Fannie Mae Selling Guide B4-2.1-04 — Environmental Hazard Assessments.
  coverage_tier: operative
obligations:
- id: fnma-sel-b4-2.1-04-full
  canonical_id: fnma-sel-b4-2.1-04-full
  section: Fannie Mae Selling Guide B4-2.1-04 — Environmental Hazard Assessments
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B4-2.1-04 — Environmental Hazard Assessments
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B4-2.1-04, Environmental Hazard Assessments (06/03/2020) Introduction
      This topic contains information on environmental hazard assessments, including:
      Overview Types of Environmental Hazard Assessments Acceptability of Consultants
      Phase I Environmental Hazard Assessment Phase II Environmental Hazard Assessment
      Description Who Should Complete the Phase II Environmental Hazard Assessment
      Phase II Environmental Hazard Assessment Report Forms and Requirements Kinds
      of Testing or Sampling Under Phase II Environmental Hazard Assessments Results
      of an Environmental Hazard Assessment Published May 6, 2026 649 Overview An
      environmental hazard assessment is required for condo and co-op projects if
      an environmental problem is identiﬁed by the lender through performance of its
      project underwriting or due diligence. If environmental problems are identiﬁed,
      the problems must be determined to be acceptable. Lenders should keep a copy
      of this assessment in the project review ﬁle. Types of Environmental Hazard
      Assessments The table below describes two types of environmental hazard assessments.
      Type Performed by Description Phase I assessment (see E-2-02, Suggested Format
      for Phase I Environmental Hazard Assessments) the lender or by someone employed
      by the lender gathers information from various sources to evaluate the environmental
      soundness of the project. Phase II assessment a qualiﬁed environmental consultant
      when required • Phase I assessment identiﬁes problems or • Phase I assessment
      is inconclusive with regard to any particular hazard. Acceptability of Consultants
      Fannie Mae reserves the right to notify lenders that a particular consultant
      is no longer acceptable. Fannie Mae also reserves the right to refuse to accept,
      at any time, any future environmental assessment, report, warranty, or certiﬁcation
      from individual consultants, speciﬁc consulting ﬁrms, or speciﬁc branch oﬃces
      of consulting ﬁrms. Phase I Environmental Hazard Assessment A Phase I assessment
      enables lenders to quickly determine whether adequate information exists to
      evaluate the environmental status of a property. A Phase I assessment is principally
      a screening process that focuses on reviewing the available documentation, interviewing
      people who are knowledgeable about the site operations, and inspecting the site,
      the building, and adjoining properties. Fannie Mae does not require a speciﬁc
      form for a Phase I assessment. Any report that is thorough and professionally
      prepared will be acceptable. For a suggested format, see E-2-02, Suggested Format
      for Phase I Environmental Hazard Assessments. Published May 6, 2026 650 Phase
      II Environmental Hazard Assessment Description A Phase II assessment provides
      a more detailed review of the site. It includes speciﬁc physical sampling for
      each hazard that was not acceptable under the Phase I assessment, as well as
      a review of historical records. It determines the presence or absence of speciﬁc
      environmental liabilities (such as asbestos or leaking underground storage tanks)
      or quantiﬁes the extent of an observed or suspected environmental liability
      (such as soil or groundwater contamination). Who Should Complete the Phase II
      Environmental Hazard Assessment The specialized nature of the investigations
      conducted under a Phase II assessment requires the knowledge and experience
      of a qualiﬁed consultant. Lenders must use care in choosing ﬁrms to perform
      environmental hazard assessments. Lenders should conﬁrm that the consultant
      it plans to use is not aﬃliated with the buyer or seller of the property or
      a ﬁrm engaged in a business that might present a conﬂict of interest. Lenders
      should also evaluate whether the consulting ﬁrm’s personnel have adequate and
      appropriate education and training to carry out the required duties. Phase II
      Environmental Hazard Assessment Report Forms and Requirements Fannie Mae does
      not specify an exact format for the consultant’s report. Any report that is
      thorough and professionally prepared will be acceptable. The table below provides
      the requirements for the Phase II Environmental Assessment Report. ✓ The consultant’s
      report for a Phase II environmental hazard assessment report must include a
      full description of the sampling procedures include the laboratory results include
      the consultant’s recommendations follow all regulatory standards and good management
      practices at all times, especially when physical sampling and laboratory analysis
      are involved include a certiﬁcation in the report that: • the assessment was
      performed diligently and in accordance with all regulatory and good management
      standards; and • to the best of the consultant’s knowledge, the results are
      complete and accurate Published May 6, 2026 651 ✓ The consultant’s report for
      a Phase II environmental hazard assessment report must include the signature
      of an oﬃcer of the consulting ﬁrm that conducted the work Kinds of Testing or
      Sampling Under Phase II Environmental Hazard Assessments Examples of the kind
      of testing or sampling that occur under a Phase II assessment include but are
      not limited to the following: investigating the status of any enforcement actions
      related to neighboring properties under the Superfund or Resource, Conservation,
      and Recovery Acts; testing for underground storage leaks; sampling and analyzing
      the soil; sampling and analyzing the groundwater; testing soil or facilities
      that are suspected as being contaminated by polychlorinated biphenyls; and sampling
      and analyzing bulk asbestos and developing related abatement and maintenance
      programs, if necessary. Results of an Environmental Hazard Assessment Lenders
      must evaluate the results of the assessment and determine if the conditions
      are acceptable to be remediated. Refer to B4-2.1-05, Unacceptable Environmental
      Hazards and B4-2.1-06, Remedial Actions for Environmental Hazard Assessments
      Below Standards. Recent Related Announcements The table below provides references
      to recently issued Announcements that are related to this topic. Announcements
      Issue Date Announcement SEL-2020-03 June 03, 2020'
  judgment: false
