Fannie Mae requires an environmental hazard assessment for ____________ if an environmental problem is identified by the lender.

• A. Condo and co-op projects
• B. Single-family homes
• C. Office buildings
• D. Industrial sites

Answer: (A)

The main idea is that Fannie Mae’s environmental risk check is triggered for multi-unit projects when a problem is found. An environmental hazard assessment is required for condo and co-op projects if the lender identifies an environmental issue, because issues in a shared-project setting can affect the entire association and multiple units, not just a single home. This assessment helps determine the extent of the hazard, potential remediation, and impact on collateral value for the whole project.

Single-family homes are typically evaluated on a property-by-property basis and don’t involve shared risk across units, so an environmental hazard assessment isn’t normally required solely because a hazard is suspected. Office buildings and industrial sites use different environmental due diligence processes appropriate to commercial or industrial properties, rather than the same condo/co-op environmental assessment used for residential projects.