Levels of HUD environmental review

Part 58 of Title 24 puts a project assisted by the Department of Housing and Urban Development (HUD) at one of four levels of review: exempt, categorically excluded, environmental assessment or environmental impact statement. The categorical exclusions are in two lists, one subject to the related federal laws and authorities at 24 CFR 58.5 and one not. The responsible entity makes the determination.

Who the rule binds

Part 58 covers the programs listed at 24 CFR 58.1(b). The determinations are the responsible entity's, the body that 24 CFR 58.2(a)(7) names for each program.

Part 50, under which HUD conducts the review, has two like lists: categorical exclusions not subject to the laws and authorities cited in 24 CFR 50.4, unless an entry says otherwise (24 CFR 50.19), and those subject to them (24 CFR 50.20).

What it asks

Grouping. The responsible entity "must group together and evaluate as a single project all individual activities which are related either on a geographical or functional basis, or are logical parts of a composite of contemplated actions" (24 CFR 58.32(a)).
Exempt (24 CFR 58.34). For its twelve entries, and for projects made up solely of them, the responsible entity "does not have to comply with the requirements of this part" or act under the National Environmental Policy Act (NEPA) and the authorities cited at 24 CFR 58.5, the applicable requirements of 24 CFR 58.6 excepted (24 CFR 58.34(a)). Two entries are "Environmental and other studies, resource identification and the development of plans and strategies" and "Inspections and testing of properties for hazards or defects" (24 CFR 58.34(a)(1), (5)). The last is any exclusion on the first list below, "provided that there are no circumstances which require compliance with any other Federal laws and authorities cited in § 58.5" (24 CFR 58.34(a)(12)). The responsible entity must document each exemption determination in writing (24 CFR 58.34(b)).
Categorically excluded (24 CFR 58.35). A categorical exclusion is "a category of activities for which no environmental impact statement or environmental assessment and finding of no significant impact under NEPA is required, except in extraordinary circumstances" (24 CFR 58.35).
The first list: subject to 24 CFR 58.5. Six entries, which "may be subject to review under authorities listed in § 58.5" (24 CFR 58.35(a)). Rehabilitation of a multifamily residential building is on the list when "Unit density is not changed more than 20 percent", the land use stays residential, and "The estimated cost of rehabilitation is less than 75 percent of the total estimated cost of replacement after rehabilitation" (24 CFR 58.35(a)(3)(ii)).
The second list: not subject to 24 CFR 58.5. Eight entries that HUD has determined "would not alter any conditions that would require a review or compliance determination under the Federal laws and authorities cited in § 58.5" (24 CFR 58.35(b)). Two are "Tenant-based rental assistance" (24 CFR 58.35(b)(1)) and the affordable housing pre-development costs of 24 CFR 58.35(b)(6), which include consulting costs related to the activities it lists. For all eight the request for release of funds, its notice of intent and the certification are not required unless paragraph (c) applies; the applicable requirements of 24 CFR 58.6 remain (24 CFR 58.35(b)).
Extraordinary circumstances. Either list gives way under paragraph (c), quoted below. The term is defined at 24 CFR 58.2(a)(3); one of its four indicators concerns unusual physical conditions at the site or near it.
Environmental assessment (EA) (24 CFR 58.36). Required for a project neither exempt nor categorically excluded, unless the need for an impact statement is evident. It ends in a Finding of No Significant Impact (FONSI) or a finding of significant impact, which sends the review on under the subparts on impact statements (24 CFR 58.40(g)).
Environmental impact statement (EIS) (24 CFR 58.37). Required "when the project is determined to have a potentially significant impact on the human environment" (24 CFR 58.37(a)). Also required, except as paragraph (c) provides, at 2,500 or more of any of these: beds, in total, in hospitals or nursing homes built or given sites; existing housing units removed, demolished, converted or substantially rehabilitated, categorically excluded rehabilitation aside; housing units built or installed; housing units given sites; additional housing units that added water and sewer capacity could support (24 CFR 58.37(b)). Where the responsible entity determines from an EA that the thresholds are the only reason for the EIS, it may prepare a FONSI, which "must be made available for public review for at least 30 days" before the final decision (24 CFR 58.37(c)). No EIS is required where 24 CFR 58.53 applies (24 CFR 58.37(d)).
The record (24 CFR 58.38). The responsible entity "must maintain a written record of the environmental review undertaken under this part for each project", the Environmental Review Record (ERR), which "shall be available for public review" (24 CFR 58.38). It describes the project, evaluates its effects, documents compliance with the applicable statutes and authorities and records the written determinations (24 CFR 58.38(a)).

What it means for the Phase I and the consultant

The level is not a Phase I conclusion. The standard for the Phase I Environmental Site Assessment, ASTM E1527-21, addresses one body of federal law only, the all appropriate inquiries provisions behind the landowner liability protections (E1527-21, 1.1.4), and lists regulatory compliance among its non-scope considerations (E1527-21, 13.1.5.14).

The level decides whether the review takes up HUD's contamination policy (24 CFR 58.5(i)(2)). The authorities at 24 CFR 58.5 apply to a first-list exclusion and a project that gets an EA, and not to an exempt activity or, extraordinary circumstances excepted, a second-list exclusion (24 CFR 58.34(a), 58.35, 58.40(f)).

Whether a site condition a Phase I reports is an extraordinary circumstance is the responsible entity's determination (24 CFR 58.35(c)).

A special study prepared for the recipient that the review uses or cites, and that is not otherwise generally available, "shall not be incorporated by reference but shall be included in the ERR" (24 CFR 58.38(b)).

The responsible entity must re-evaluate its findings where "There are new circumstances and environmental conditions which may affect the project or have a bearing on its impact", concealed or unexpected conditions found during the work among them (24 CFR 58.47(a)(2)).

What the rule says

If a responsible entity determines that an activity or project identified in paragraph (a) or (b) of this section, because of extraordinary circumstances and conditions at or affecting the location of the activity or project, may have a significant environmental effect, it shall comply with all the requirements of this part.

24 CFR 58.35(c), 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.