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The Federal Housing Finance Agency (FHFA) has made enhancements to radon standards for Fannie Mae- and Freddie Mac-backed multifamily properties. The aligned standards for the government-sponsored enterprises (GSEs) will require additional radon testing for properties with loan applications received after June 30.

The enhanced radon testing standards will better identify properties with elevated levels of radon, a naturally occurring radioactive gas that can cause lung cancer. This includes increasing the amount of required testing from 10% of ground-floor units to 25%, requiring an environmental professional to oversee radon testing, requiring residents to be notified of testing, and providing additional guidance for lenders and environmental consultants on radon standards.

“The enterprises’ adoption of enhanced radon testing requirements during National Radon Action Month will help ensure that multifamily properties with hazardous levels of radon are more accurately identified and properly mitigated,” said FHFA director Sandra L. Thompson. “FHFA and the enterprises are committed to providing safe and sustainable housing opportunities for renters while ensuring a strong and liquid multifamily mortgage market.”

According to the FHFA, the enhancements were made after extensive research and outreach, including a 2021 listening session with over 485 stakeholders. The GSEs will collaborate with housing providers, radon industry stakeholders, and the Centers for Disease Control and Prevention to encourage better data collection around radon at multifamily properties nationwide.

The Mortgage Bankers Association (MBA) responded to the announcement, asking the FHFA to remain flexible on the six-month implementation date if it looks like the new standards would affect the current lending pipeline.

“MBA and its members fully support safe and healthy multifamily housing and appreciate FHFA’s willingness to work closely with scientists and industry stakeholders during this process. We hope that these new radon testing standards strike the appropriate balance of ensuring tenant safety without leading to significant delays and added costs to multifamily projects,” said MBA president and CEO Bob Broeksmit. “Industry participants, FHFA, the GSEs, and the Department of Housing and Urban Development—which has its own testing protocol—should continue to collect data on radon and strongly consider adjustments to these standards, if necessary, to ensure they align with tenant risk.”