HUD Phase I requirements for an FHA multifamily loan

Chapter 9 of the Multifamily Accelerated Processing (MAP) Guide, issued by the Department of Housing and Urban Development (HUD), sets what a Phase I Environmental Site Assessment (ESA) must hold when a lender applies for Federal Housing Administration (FHA) multifamily mortgage insurance. In most cases the Phase I need cover only the parcel that secures the mortgage, but it must consider contamination reaching that parcel from others (MAP Guide, 9.1.2.A.1). In-place asbestos and lead-based paint, and radon, have their own sections (MAP Guide, 9.4.A). This page rests on the 2020 MAP Guide, revision of March 19, 2021, and a HUD memorandum of January 12, 2023. Mortgagee Letter 2026-04, the only later letter or notice whose title touches the chapter as of October 9, 2026, changes no section cited here.

Who the rule binds

The lender submits the Phase I, complete and final, not as a summary, with the pre-application or, where that stage is left out, the application for Firm Commitment. It must inform the preparer of every item below and verify that its professionals are qualified (MAP Guide, 9.2.1.A, 9.2.4.A, 9.4.1.A).
HUD conducts the review under part 50 and independently evaluates what the lender supplies (MAP Guide, 9.2.2.A; 24 CFR 50.32).

What it asks

Section 9.4.1.A in order. Its citations of the Phase I standard are to ASTM E1527-13, the 2013 edition.

Purpose. The Introduction's Purpose subsection must describe HUD's purpose: documenting compliance with 24 CFR 50.3(i). Beyond determining recognized environmental conditions (RECs), the report's evaluation must say whether the preparer recommends further investigation or corrective action to meet that policy (MAP Guide, 9.4.1.A.1; 9.4.1.A.8 says should).
Format. The guide requires the report format and table of contents of Appendix X4 of ASTM E1527-13. A Phase I for a new application after February 13, 2024 must conform to ASTM E1527-21 (HUD memorandum, January 12, 2023). The report must make clear that HUD is an authorized user. The preparer must be told that HUD posts its review online for one year, Phase I included (MAP Guide, 9.3.D, 9.4.1.A.2).
Timing. The Phase I must be conducted within one year of its submission to HUD, counting from the earliest of the site visit, records review documents and interviews. One conducted more than 180 days before submission, yet inside the year, must be updated under Section 4.6 of ASTM E1527-13. One prepared more than one year before submission is not acceptable, even one updated within 180 days of it (MAP Guide, 9.4.1.A.3).
Qualifications. The section must state the preparer's qualifications; the environmental professional must meet every qualification requirement in Appendix X2 of ASTM E1527-13 (MAP Guide, 9.4.1.A.4).
Findings. The section must list all known or suspect RECs, controlled RECs (CRECs), historical RECs (HRECs) and de minimis conditions, and also vapor encroachment conditions (VECs), likely VECs and any circumstance where a VEC cannot be ruled out (MAP Guide, 9.4.1.A.5).
Opinions. The section must discuss each finding and whether it is a REC under Section 12.6 of ASTM E1527-13, and justify any finding deemed not one. Where the preparer cannot say, it must state what information or investigation would decide. It must identify any data gaps and say whether they are significant (MAP Guide, 9.4.1.A.6).
Conclusions. The section must say whether a REC, a CREC included, exists on the site, following one of the two statements that Section 12.8 of ASTM E1527-13 quotes (MAP Guide, 9.4.1.A.7).
User provided information. The borrower, or the current owner if different, shall complete the user questionnaire of Appendix X3 of ASTM E1527-13. It goes in this section, and the preparer must take it into account (MAP Guide, 9.4.1.A.9).
Testing. None is required. An earlier Phase II at the property done in general accordance with ASTM E1903-19 must be referenced and discussed, including whether a condition is a REC (MAP Guide, 9.4.1.A.10).
Vapor encroachment screen. The report must incorporate one: the non-invasive Tier 1 screening of Section 8 of ASTM E2600-15, in its own section and carried into the findings, opinions and conclusions. A VEC it finds must be reviewed under the Phase I to decide whether it is a REC (MAP Guide, 9.4.1.A.11).
Lead-based paint chips. Chips outside a structure, and no part of one, may be deemed a hazardous substance. Where a structure built before 1978 is or was on the site, any evidence of them must be discussed in Site Reconnaissance, listed in Findings, and discussed in Opinions as a de minimis condition or a REC (MAP Guide, 9.4.1.A.12).
Underground storage tanks (USTs). The Phase I must identify on-site USTs that hold or held hazardous waste or petroleum products. For a tank the state regulates, it must document that the tank complies with state regulations, including confirmation of its integrity. For any other, HUD will require an operations and maintenance plan and an integrity test. Propane USTs are excepted (MAP Guide, 9.4.1.A.13).
Previous remediation. Remediation performed or under way must be fully documented: any involvement of local, state, tribal or federal (LSTF) authorities, No Further Action letters, ongoing work and monitoring, and whether it is consistent with current LSTF standards. Where the condition is not yet an HREC, the Opinions must discuss the remediation's extent and justify whether it should resolve any RECs or undecided issues (MAP Guide, 9.4.1.A.6, 9.4.1.A.14).
HUD's evaluation. A REC identified in the Phase I will require a Phase II, unless the Phase I is enough to determine that corrective action is not feasible; then HUD may reject the property. The Phase II page gives HUD's other grounds for requiring one (MAP Guide, 9.4.1.A.15).

What it means for the Phase I and the consultant

The guide says the comparable sections of the latest edition in force should be the ones referenced and relied on (MAP Guide, 9.1.1.D); neither it nor the memorandum names them for ASTM E1527-21. The two editions are not numbered alike: in E1527-21, Appendix X4 examines the REC definition and section 12.8 is on additional investigation (E1527-21, 12.8, Appendix X4).

Several items go beyond that standard, which only suggests a report format (E1527-21, 12.1) and requires neither the E2600 guide (E1527-21, 3.2.53.1) nor recommendations (E1527-21, 12.9). It counts its 180 days and its year back from the acquisition or intended transaction, not a submission (E1527-21, 4.6.1, 4.6.2).

What the rule says

It is HUD policy that all property proposed for use in HUD programs be free of hazardous materials, contamination, toxic chemicals and gasses, and radioactive substances, where a hazard could affect the health and safety of occupants or conflict with the intended utilization of the property.

24 CFR 50.3(i)(1), edition revised as of April 1, 2025

This page is general reference for environmental professionals. It does not review any project. The regulation is the authority, and the determinations of HUD or of the entity responsible for the review govern.