Lender Due Diligence Requirements
Due diligence requirements vary significantly by lender type. Understanding your lender's specific requirements for Phase 1 ESA, ALTA Survey, and Property Condition Assessment helps you prepare accurate budgets and realistic timelines.
SBA Loans
7(a) & 504 ProgramsDue diligence requirements for Small Business Administration 7(a) and 504 loan programs. Phase 1 ESA required for most loans over $150,000 with real estate collateral.
- Phase 1 ESA for RE collateral
- ALTA Survey standard
- 60-90 day timeline
Fannie Mae
DUS MultifamilyEnvironmental and property requirements for Fannie Mae Delegated Underwriting and Servicing (DUS) multifamily loans per Form 4251.
- Phase 1 ESA required
- PCA required
- Radon/Lead/Asbestos screens
HUD/FHA
FHA MultifamilyMAP Guide requirements for HUD/FHA-insured multifamily loans including Section 221(d)(4), 223(f), and 232. Survey per Form HUD-92457.
- Form 92457 survey
- NEPA compliance
- HUD-approved appraisers
CMBS
Securitized LoansThe strictest due diligence requirements in commercial lending. B-piece investors require clean Phase 1 ESAs with no unresolved RECs.
- No RECs allowed
- 30-day survey
- B-piece review
Quick Comparison
| Requirement | SBA | Fannie Mae | HUD/FHA | CMBS |
|---|---|---|---|---|
| Phase 1 ESA | Most loans* | Required | Required | Required |
| ESA Standard | ASTM E1527-21 | E1527-21 + Form 4251 | E1527-21 + MAP Guide | E1527-21 |
| ALTA Survey | Standard | 2021 Standards | Form 92457 | 30-day requirement |
| PCA Required | Sometimes | Yes | Yes (223f) | Yes |
| Radon Testing | High-risk only | Zones 1-2 | Zones 1-2 | Zones 1-3 |
| REC Tolerance | Case-by-case | Must resolve | Must resolve | None (kickout) |
| Typical Timeline | 60-90 days | 45-60 days | 90-180 days | 60-90 days |
* SBA requires Phase 1 ESA for 7(a) loans over $150,000 with RE collateral; all 504 loans