Projects that receive HUD funding must complete a HUD Environmental Review (ER) – to ensure compliance with NEPA and related laws and authorities of 24 CFR Part 58.5 and 50.4 – before any funds, regardless of source, can be committed to a project. Funding may be in the form of grants or FHA insured loans. ERs must be completed using the HUD Environmental Review Online System (HEROS) directly for HUD approved lenders (Part 50 Reviews) or for HUD designated Responsible Entities (REs) which are also known as units of general local government (Part 58 Reviews). The level of ER is determined by the type of funding and the scope and nature of the project.
HUD FHA financing and HUD CPD grants require a Phase I Environmental Site Assessment (ESA). Phase I ESAs are conducted in accordance with ASTM E1527-21 and include a Tier 1 Vapor Encroachment Screening (VES) in accordance with ASTM E2600-15. Phase I ESAs must be updated every six months.
HUD CENST Environmental Reviews (ERs) are Categorically excluded from NEPA, not subject to the related laws and authorities at 24 CFR 58.5 or 50.4. These projects are typically routine maintenance only. CENST ERs require compliance with flood insurance and in some cases airport clear zones and coastal barrier resources. Lead-based paint and asbestos is not required. Radon is encouraged. Phase I ESAs are not required.
HUD CEST Environmental Reviews (ER’s) are Categorically excluded from NEPA, but subject to the related laws and authorities at 24 CFR 58.5 or 50.4. These projects may include acquisition, repair, improvement, reconstruction, or rehabilitation but not substantial rehabilitation. Phase I ESAs are required. Lead-based paint, asbestos and radon is required as applicable. CEST ERs require compliance with: airport hazards, coastal barrier resources, flood insurance, air quality, coastal zone management, contamination and toxic substances, endangered species, explosives and flammable facilities, farmland protection, floodplain management, historic preservation, noise abatement and control, sole source aquifers, wetlands, wild & scenic rivers and environmental justice.
HUD EA (Environmental Assessment) Environmental Reviews (ERs) must comply with NEPA and are subject to the related laws and authorities at 24 CFR 58.5 or 50.4. These projects are new construction and substantial rehabilitation. Phase I ESA is required. Lead-based paint, asbestos and radon is required as applicable. EA ERs require compliance with CEST factors and NEPA considerations: land development, socioeconomic, community facilities and services, natural features and climate and energy.
Properties constructed before 1978 typically require a lead-based paint inspection or risk assessment. Exceptions include senior housing and zero-bedroom dwellings assuming no children under 6 years of age reside at the property. Lead-based inspections are conducted in accordance with chapter 5 of the HUD Guidelines for the Evaluation and Control of Lead-based Paint Hazards in Housing. Risk assessments are conducted in accordance with Chapter 7 of the HUD Guidelines. Operation & Maintenance (O&M) plans may also be required when the potential for lead-based paint hazards exist.
Radon testing requirements are becoming more stringent. In most cases, financing will be contingent upon radon testing regardless of the EPA radon zone. When radon levels exceed 4 picocuries per liter (pCi/L), radon mitigation is usually required as well as operation, maintenance & monitoring (OM&M) plans. Radon testing is conducted in accordance with AARST MAMF-2017 (2021 revisions).
Properties constructed before 1989 typically require a baseline or comprehensive asbestos survey in accordance with ASTM E2356. Removal of friable asbestos is usually required. O&M plans are typically required for non-friable and encapsulated asbestos containing materials.
HUD FHA financing and certain HUD CPD grants will require evaluation of additional nuisances and hazards, including:
- Pressurized pipelines transferring flammable or combustible liquids and gases. For all project types, no structures, ancillary facilities or structures, common areas, parking areas or like related property improvements or features may be constructed or located within 10 feet of or on the easement of a pressurized pipeline transferring flammable or combustible liquids and gases that exceed 200 psi operating pressure (pressurized pipelines). All new construction, rehabilitation projects where residential density is increased, projects where there is a conversion from non-residential to residential use, or projects where a vacant building is made habitable must consider the potential hazard of pressurized pipelines. The analysis must identify all buried and aboveground pressurized pipelines within a one (1) mile radius of the property that exceed 200 psi operating pressure.
- Fall Hazards. Structures considered under this part include high voltage utility post and towers; free-standing radio/TV/cell towers; free-standing water towers; wind turbines; and other like free-standing structures. Also, No buildings, ancillary facilities, structures or common areas may be constructed or located within the easement of any overhead high voltage transmission line.
- Oil or gas wells, sour gas wells and slush pits. If one of these sites is within 300 feet of a residential structure, further evaluation is needed.
- Hydraulic fracturing (fracking). Fracking well pads within 1,000 feet of a residential structure require further evaluation.
- Filled Ground. If any part of a site is to be developed on filled ground, HUD may require that all grading be properly controlled to prevent differential earth movement, sliding, erosion, and/or other occurrences which might damage dwellings, streets or other improvements.
Projects that impact a wetland or floodplain must go through HUD’s 8-Step or 5-Step Decision Making Process which includes the following steps:
- Define how the project will impact a wetland or floodplain
- Initial public notice
- Evaluate alternatives
- Identify adverse and beneficial impacts
- Mitigate impacts
- Re-evaluate alternatives
- Final public notice
- Implement proposal with mitigation
When Phase I ESAs indicate Recognized Environmental Conditions (RECs) or Vapor Encroachment Conditions (VECs), Phase II ESAs are typically conducted to further evaluate RECs and/or VECs. Phase II ESAs may include additional research as well as soil, groundwater, soil-gas and/or indoor air evaluations. Soil, soil-gas, groundwater and indoor air evaluations are conducted in accordance with ASTM E1903-19. Lenders and investors frequently require state-sponsored “closure” of open RECs/VECs. Programs may be regulatory in nature or voluntary.
- LIHTC, Fannie Mae, Freddie Mac and conventional financing of multifamily projects
- Commercial and industrial sites
- Land conservancy
- UST removals and closures.
- Drinking water sampling
- Regulatory and voluntary program support