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

• A. Condo and co-op projects
• B. Single-family homes
• C. Industrial facilities
• D. Commercial leases

Answer: (A)

Environmental risk in a project with multiple units is treated differently than risk tied to a single property. The main idea here is that when a lender identifies an environmental issue in a condo or co-op project, Fannie Mae requires an environmental hazard assessment to evaluate how that problem could affect the entire project, not just one unit. In condo and co-op setups, the project as a whole—its common elements, association finances, and overall marketability—can be impacted by environmental hazards. The assessment helps determine the scope of the problem, potential remediation needs, and whether financing can proceed under any required conditions.

Single-family homes are standalone properties; an environmental issue there is evaluated as a property-specific concern, so the project-wide hazard assessment isn’t triggered in the same way. Industrial facilities and commercial leases involve different risk profiles and lending criteria, and their standard processes don’t align with the condo/co-op project-specific environmental hazard assessment described here.