Selling Guide

Published June 5, 2018

B4-2.1-05: Unacceptable Environmental Conditions (04/01/2009)

This topic contains information on unacceptable environmental conditions, including:

Overview

The existence of one or more unacceptable environmental conditions generally will result in a project being ineligible. However, if the lender believes that the relative risk is minimal or can be managed, it may contact the Fannie Mae Project Standards team (see E-1-03, List of Contacts).

Unacceptable Environmental Conditions

The table below describes examples of unacceptable environmental conditions; however, this list is not exhaustive.

Examples of Unacceptable Environmental Conditions
a property that is (or has been) used as a landfill or other solid, hazardous, or municipal waste disposal site
a property that is (or has been) used for activity related to the storage of oil, hazardous waste, or other toxic substances—except that the property may have been used for the storage of small quantities of hazardous substances that are generally recognized as appropriate for residential uses and maintenance of the property
a property that is the subject of outstanding environmental or public health litigation or administrative action from private parties or public officials
a high-risk neighboring property that has evidence of hazardous waste spills or soil or groundwater contamination on or around its site
a property that has documented soil or groundwater contamination and/or a documented tank leak that is leaking at more than 0.05 gallons per hour (which is the National Fire Protection Association’s standard)
a property with soil sampling that has values for metal in excess of the following concentration limits in parts per million (ppm):
  • chromium: 100 ppm

  • arsenic: 20 ppm

  • zinc: 350 ppm

  • cadmium: 3 ppm

  • lead: 100 ppm

  • nickel: 100 ppm

  • copper: 170 ppm

  • selenium: 20 ppm

a property that is contaminated from polychlorinated biphenyls (PCBs)
a property with soil sampling that has values for other organic materials in excess of the following concentration limits in parts per million (ppm):
  • total volatile organics: 1 ppm

  • total hydrocarbons: 100 ppm

  • total petroleum hydrocarbons: 100 ppm

a property with groundwater sampling that has values for other organic materials in excess of the following concentration limits in parts per million:
  • total organics (volatiles and base neutrals): 0.10 ppm

  • total petroleum hydrocarbons: 1.00 ppm

a property with groundwater sampling that has values for metals in excess of the following concentration limits in parts per million:
  • arsenic: 0.05 ppm

  • lead: 0.05 ppm

  • boron: 1.00 ppm

  • mercury: 0.002 ppm

  • cadmium: 0.01 ppm

  • selenium: 0.01 ppm

  • chromium: 0.05 ppm

  • silver: 0.05 ppm

a property with high radon levels (e.g., above four picocuries per liter) that can be corrected only through large capital improvements or extensive ongoing maintenance programs that are beyond the financial or technical abilities of the HOA or co-op corporation for the project
a property that has conditions representing material violations of applicable local, state, or federal environmental or public health statutes and laws
a property that is contaminated by friable asbestos-containing materials