Properties that fail to meet a particular standard may be corrected through remedial actions and then retested. Remedial actions must be undertaken with the advice and written endorsement of a qualified environmental consultant. All remedial actions must be taken in accordance with all regulatory and good management standards.
Typically, lenders must confirm the completion and effectiveness of remedial actions based on the following conditions:
A qualified environmental consultant states in writing that remedial work needed to make the property eligible under the environmental standards can be completed within 90 days.
The project’s developer or sponsor signs a contract with a qualified firm to perform the remedial work within 90 days.
The lender must warrant that the job has been satisfactorily completed and the property meets Fannie Mae’s environmental eligibility standards.
The project developer or sponsor must provide a performance escrow equal to 150% of the gross contract amount to ensure the completion of the remedial work.