HUD/FHA Multifamily Due Diligence Requirements

HUD/FHA multifamily mortgage insurance programs require rigorous environmental and property due diligence, and it is one of the few programmes that spells out exactly which Table A items it wants. The survey instructions live on form HUD-91073M, which enumerates 16 Table A items and prescribes the certification; environmental review follows the Multifamily Accelerated Processing (MAP) Guide Chapter 9. If you were handed form HUD-92457, that is the 2006 edition and it is superseded.

Overview of HUD/FHA Multifamily Programs

HUD's Federal Housing Administration insures mortgages for multifamily properties through various Section programs. These government-insured loans offer favorable terms but require comprehensive due diligence.

Section 221(d)(4)

New construction and substantial rehabilitation of multifamily rental housing.

  • Non-recourse financing
  • Up to 40-year terms + construction
  • Up to 87% LTV (90% for affordable)
  • Davis-Bacon wage requirements

Section 223(f)

Acquisition or refinancing of existing multifamily properties.

  • Non-recourse financing
  • Up to 35-year terms
  • Up to 85% LTV (87% for affordable)
  • Properties must be 3+ years old

Section 232

Healthcare facilities including nursing homes, assisted living, and board & care.

  • New construction or refinance
  • Up to 40-year terms
  • State licensing required
  • Healthcare-specific due diligence

Section 241(a)

Supplemental loans for improvements to HUD-insured properties.

  • Must have existing HUD mortgage
  • For capital improvements
  • Co-terminus with first mortgage
  • Additional environmental review may be needed

Phase 1 ESA Requirements

HUD requires Phase I Environmental Site Assessments for all multifamily mortgage insurance applications as detailed in the MAP Guide Chapter 9. The assessment must meet ASTM standards and EPA All Appropriate Inquiries requirements.

Mandatory Requirements

  • Phase 1 ESA required for all HUD-insured loans
  • Must comply with ASTM E1527-21 (current standard)
  • Must satisfy EPA All Appropriate Inquiries (40 CFR Part 312)
  • Site visit within 180 days of application
  • Full report within 1 year of firm commitment

MAP Guide Chapter 9 Standards

The Phase 1 ESA must be prepared by a qualified Environmental Professional and address all requirements in the MAP Guide environmental chapter.

Standard ASTM E1527-21
AAI Compliance 40 CFR Part 312
Site Visit Age 180 days at application
Report Age 1 year at firm commitment
Reliance HUD, lender, and borrower
EP Qualifications Per ASTM E1527-21 Section 4

Additional Environmental Assessments

HUD requires additional environmental hazard assessments beyond the Phase 1 ESA for all multifamily projects:

Lead-Based Paint

Required for all pre-1978 properties. Risk assessment or inspection per HUD Guidelines.

Asbestos

Survey required for pre-1981 properties. AHERA-certified inspector required.

Radon

Required in EPA Zones 1 and 2. ANSI/AARST standards for testing protocol.

Mold

Assessment required if visible mold or moisture damage is present during inspection.

NEPA Review: HUD projects must also comply with the National Environmental Policy Act (NEPA). Most projects receive a Categorical Exclusion, but some may require an Environmental Assessment (EA) or Environmental Impact Statement (EIS).

ALTA Survey Requirements (Form HUD-91073M)

The governing document is form HUD-91073M, Survey Instructions and Surveyor's Report. MAP Guide section 19.4.7.6 requires both an ALTA/NSPS Land Title Survey and a surveyor's report supplementing it, each conforming to that form, including the Table A items the form lists and the certification it prescribes. The survey has to let the title company delete the standard survey exception from the mortgagee policy.

If you were sent form HUD-92457, it is the superseded edition. HUD-92457 (02/2006) is titled HUD Survey Instructions and Report for Insured Multifamily Projects and is written against the old ALTA/ACSM standard, referencing Handbooks 4430.1 and 4460.1. Its own cover states that previous editions are obsolete. The 2021 MAP Guide points at HUD-91073M instead. Surveys ordered against the 2006 form will carry the wrong certification language.

Governing form HUD-91073M
Standard cited 2021 ALTA/NSPS Minimum Standards
Certification Borrower, lender, title insurer and HUD
Survey age 180 days to initial closing, 120 for as-built at final

Required Table A Items

Unusually among the programmes we track, HUD enumerates them. The form states that the survey must comply with the additional responsibilities within Table A, 'items 1, 2, 3, 4, 6a, 6b, 7a, 8, 9, 10, 11a, 12, 13, 16, 17, and 18.' That list is repeated word for word in the certification the surveyor signs, so there is nothing to negotiate and nothing to infer.

1 Monuments
2 Address
3 Flood Zone
4 Gross Land Area
6a Zoning Classification
6b Zoning Setbacks Depicted
7a Building Exterior Dimensions
8 Substantial Features
9 Parking Spaces
10 Party Walls
11a Underground Utilities (Client Plans)
12 Governmental Agency Requirements
13 Adjoining Owners
16 Evidence of Recent Work
17 Street Right-of-Way Changes
18 Offsite Easements

Items HUD Adds Only in Certain Circumstances

Three more items are conditional on what is happening at the site. They are the ones that get missed, because they are not in the certification list:

  • Item 5, Vertical Relief: Site grading is involved. Contours may not exceed 1-foot vertical intervals, except 2-foot and 5-foot where the mean site gradient exceeds 5 and 10 percent. Where curbs or gutters exist, show top of curb and flow line elevations.
  • Item 6a, Zoning Classification: Plot plan design or redesign is involved.
  • Item 21, Additional Items (Write-In): A qualified specialist has field-delineated wetlands. The surveyor locates and shows any delineation markers observed, or states that none were. HUD writes this as an amendment to 2021 item 20, which is item 21 under the 2026 standard.

A numbering trap. HUD-91073M cites the 2021 standard. Items 1 to 19 are numbered identically in 2021 and 2026, so the enumerated list transfers unchanged. The exception is the wetland clause, which amends 'Optional Item 20': item 20 was the blank write-in slot in 2021, and under the 2026 standard the write-in is item 21 while item 20 became the new encroachment summary table. Read HUD's wetland instruction as 2026 item 21.

Construction Loans (221(d)(4)): For new construction, an As-Built ALTA Survey is required upon completion, certified to the current date and showing all improvements as constructed. The as-built fieldwork window is 120 days to final closing rather than 180.

Working out which items your property adds on top of HUD's list is a separate question: see Table A items by property type. If the site is in a state that makes the surveyor file the plat, that filing has its own clock, covered in which states require a survey to be recorded.

Configure Table A for HUD/FHA

Property Condition Assessment

What one costs and why it is quoted per square foot: property condition assessment cost. The governing standard is ASTM E2018-24.

HUD requires a Property Condition Assessment (PCA) for Section 223(f) and other acquisition/ refinance programs. The assessment must follow ASTM E2018 standards.

PCA Requirements for Section 223(f)

  • Required for all 223(f) loans
  • ASTM E2018 standard compliance
  • 12-year capital needs projection
  • Immediate repairs identification
  • Replacement reserve analysis
  • Accessibility compliance assessment

Capital Needs Assessment

The PCA must include a detailed capital needs assessment identifying immediate repairs, short-term repairs (Years 1-2), and long-term capital items through Year 12.

Inspection Scope 100% exteriors, minimum 10% unit interiors
Capital Needs Period 12 years
Critical Repairs Must be completed before closing
Non-Critical Repairs Can be escrowed post-closing

Appraisal Requirements

HUD appraisals must be prepared by a HUD-approved appraiser following the MAP Guide appraisal requirements and USPAP standards.

Appraiser HUD-approved MAI appraiser
Standard USPAP + MAP Guide
Approaches All three approaches required
Report Age 120 days at firm commitment

Rent Comparability Study

For affordable housing projects, HUD may require a Rent Comparability Study (RCS) to support the proposed rent levels. This is separate from the appraisal.

Timeline Considerations

HUD loan processing is thorough and takes longer than conventional financing. Plan your due diligence timeline accordingly.

3-4 weeks Phase 1 ESA
2-4 weeks ALTA Survey
2-3 weeks PCA
3-4 weeks Appraisal
1-2 weeks NEPA Review
90-180 days Total HUD Process

Pre-Application Meeting

Consider scheduling a pre-application meeting with HUD to discuss project-specific requirements. Environmental issues or unusual property conditions can significantly extend the timeline.

Frequently Asked Questions

Is it form HUD-92457 or HUD-91073M?

HUD-91073M, Survey Instructions and Surveyor's Report, is the current form and the one the 2021 MAP Guide points at in section 19.4.7.6. HUD-92457 is the February 2006 edition, titled HUD Survey Instructions and Report for Insured Multifamily Projects; it is written against the old ALTA/ACSM standard and its own cover states that previous editions are obsolete. Both are still on hud.gov, which is why the older one keeps circulating. Order against HUD-91073M, which enumerates Table A items 1, 2, 3, 4, 6a, 6b, 7a, 8, 9, 10, 11a, 12, 13, 16, 17 and 18 and repeats them in the certification the surveyor signs.

Does HUD require NEPA compliance?

Yes, all HUD-insured projects must comply with the National Environmental Policy Act (NEPA). Most multifamily projects receive a Categorical Exclusion, but projects in sensitive areas or with significant environmental impacts may require an Environmental Assessment or Environmental Impact Statement.

What is the difference between Section 221(d)(4) and 223(f)?

Section 221(d)(4) is for new construction and substantial rehabilitation, while Section 223(f) is for acquisition or refinancing of existing properties at least 3 years old. The due diligence requirements are similar, but 221(d)(4) requires additional construction- related documentation and Davis-Bacon wage compliance.

How long are HUD Phase 1 ESA reports valid?

The site reconnaissance (site visit) must be within 180 days of application submission. The full Phase 1 ESA report must be within 1 year of firm commitment. If reports age out during processing, an update letter or new report may be required.

Are HUD appraisers different from regular appraisers?

Yes, HUD multifamily appraisers must be on HUD's approved appraiser roster. They must hold the MAI designation from the Appraisal Institute and demonstrate experience with HUD multifamily projects. HUD maintains a searchable roster of approved appraisers.

Sources

The MAP Guide cites the 2021 ALTA/NSPS standard. Items 1 to 19 carry the same numbers in 2026, so the enumerated list transfers unchanged; only the write-in item moved. Re-read the form before relying on this page: HUD revises it independently of the Guide.

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