9.1.3 Levels of Environmental Review

A. All projects submitted under MAP require an environmental review. The level of environmental review varies based on the HUD program and proposed activity.

• B. Projects are categorized by activities into four levels of review under 24 CFR Part 50:

1. Categorically Excluded Not Subject to the laws and authorities at 50.4 (CENST)

2. Categorically Excluded Subject to the laws and authorities at 50.4. (CEST)

3. Environmental Assessment (EA)

4. Environmental Impact Statement (EIS)

C. In general, the level of environmental review does not directly correspond to the HUD program. For example, a 221(d)(4) substantial rehabilitation project can be reviewed as CEST if below certain thresholds, or as an EA if above those thresholds. The following discussion outlines level of review determinations by HUD program and project specific activities.

1. Categorically Excluded Not Subject to Related Laws and Authorities (CENST): 223(a)(7). HUD has determined programmatically that Section 223(a)(7) projects are categorically excluded, not subject to the laws and authorities at 50.4 as per 24 CFR 50.19(b)(21) other than the flood insurance requirements specified at 24 CFR 50.4(b)(1) and described at Section 9.6.6.[21] Compliance with MAP radon requirements described at Section 9.6.3 is encouraged.

2. Categorically Excluded Not Subject to Related Laws and Authorities (CENST): 223(f) under limited circumstances. The categorical exclusion at 24 CFR 50.19(b)(21) also applies to currently HUD-insured Section 223(f) refinancing transactions that will not allow new construction or rehabilitation, nor result in any physical impacts or changes except for maintenance.[22] . HUD must determine for each currently insured 223(f) whether the physical impacts meet the environmental definition of the term "maintenance" and must document this in the description of the proposed project in the project summary screen in HEROS.

   • For environmental review purposes, the term “maintenance” means an activity that slows or halts deterioration of a building and does not materially add to its value or adapt it to new uses. A more detailed explanation including examples is found in in “Guidance for Categorizing an Activity as Maintenance for Compliance with HUD Environmental Regulations, 24 CFR Parts 50 and 58.”[23]

• Note that this definition of maintenance is specifically for environmental review purposes. Please see Chapter 5, Section 5.1 for definitions of alterations and repairs that apply for other program purposes.

21 Unless extraordinary circumstances require an EA or EIS as per 24 CFR 50.19(a). 22 Unless extraordinary circumstances require an EA or EIS as per 24 CFR 50.19(a). 23 HUD Notice CPD 16-02: https://www.hudexchange.info/resource/3197/guidance-categorizing-activity-asmaintenance-environmental-regulations-24-cfr-parts-50-and-58/

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• The flood insurance requirements specified at 24 CFR 50.4(b)(1) and MAP Guide Section 9.6.6 are still applicable, as are the Lead Based Paint requirements discussed in Section 9.6.1. Compliance with MAP radon requirements described at Section 9.6.3 is encouraged.

3. Categorically Excluded Subject to Related Laws and Authorities (CEST): 223(f). Pursuant to 24 CFR 50.20(a)(5), the purchase or refinance of housing or medical facilities under section 223(f) of the National Housing Act is categorically excluded from NEPA but still subject to the laws and authorities listed at 24 CFR 50.4.

Almost all 223(f) projects will be CEST, with two limited exceptions:

• 1. Currently HUD-insured Section 223(f) refinancing transactions that will not incorporate new construction or rehabilitation, nor result in any physical impacts or changes except for maintenance as discussed in Section 9.1.3; or
• 2. Extraordinary circumstances with the potential for a significant impact (see 24 CFR 50.20(a) and (b)).

• CEST projects must comply with all of the laws and authorities listed in Section 9.3.G.1. Projects must also comply with the requirements related to Nuisances and Hazards in Section 9.6.19 unless otherwise noted in the guidance.

• For 223(f) projects that include new construction of accessory structures or ancillary improvements, the level of review remains the same as a traditional 223(f) refinance (CEST), but because the project will include ground disturbance, there is a greater risk of environmental impact. The project description must include the extent of the ground disturbance and the HEROS review must consider the laws and authorities at 24 CFR 50.4 and Section 9.3.G.1 in the context of new construction, including:

  • 1. Consultation with federally recognized Tribes in addition to the State Historic Preservation Officer (SHPO) under the National Historic Preservation Act.
  • 2. Noise assessment and mitigation as required if the new construction is a noise sensitive use.
  • 3. Above Ground Storage Tank requirements for new construction.
  • 4. Airport clear zone requirements for new construction.
  • 5. The 8-step analysis for construction in a floodplain or wetland.
  • 6. Consideration of Endangered Species, Farmlands, Sole Source Aquifers, Wild and Scenic Rivers, Coastal Zones and Air Quality.

4. Categorically Excluded Subject to Related Laws and Authorities (CEST): rehabilitation under 221(d)(4), 220, 231 and 241(a) under limited circumstances. Rehabilitation projects under the 221(d)(4), 220, 231 or 241(a) programs may also be reviewed as CEST if they are not considered substantial rehabilitation under HUD’s environmental regulations (see 24 CFR 50.20(a)(2)(ii)).[24] Note that for environmental review purposes, the term “substantial rehabilitation” refers to

24 Current regulations define rehabilitation for multifamily residential buildings as CEST if unit density is not changed more than 20%, the project does not involve changes in land use from residential to non-residential; and estimated cost of rehabilitation is less than 75 percent of the total estimated replacement cost after rehabilitation. Projects should refer to the latest CEST regulations.

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rehabilitation that does not qualify as CEST in 24 CFR 50.20(a)(2)(ii). Please see Chapter 5 for a definition of substantial rehabilitation that applies for FHA program purposes.

• Projects that exceed the 50.20(a)(2)(ii) thresholds are considered substantial rehabilitation for purposes of the environmental review and must complete an Environmental Assessment. Projects at or below these thresholds may complete a CEST-level environmental review documenting compliance with the related laws and authorities at 24 CFR 50.4 and Section 9.3.G.1 and the requirements related to Nuisances and Hazards in Section 9.6.19 unless otherwise noted in the guidance.

  • In order to consider a CEST level environmental review for a rehabilitation project under the 221(d)(4), 220, 231 and 241(a) programs, Lenders must document and HUD staff must confirm that the project meets the categorical exclusion threshold in the description of the proposed project in the project summary screen in HEROS. In the absence of this documentation, rehabilitation projects under these programs will require an Environmental Assessment level of review.

5. Environmental Assessment (EA): All 221(d)(4), 220, 231 or 241(a) new construction projects and rehabilitation projects that fall above the Part 50 definition of substantial rehabilitation as discussed in Section 9.1.3. Environmental Assessments must include all of the laws and authorities listed at 24 CFR 50.4 and Section 9.3.G.1, Additional Nuisances and Hazards at Section 9.6.19 and the Environmental Assessment requirements at Section 9.6.20.

6. Environmental Impact Statement (EIS): Projects over 2500 units, as discussed at 24 CFR 50.42(b). Contact HUD staff immediately if the project is close to 2500 units.

7. The Section 213 Cooperative Housing Program follows Traditional Application Processing (TAP), not MAP. Section 213 projects must follow environmental review thresholds as discussed in 24 CFR 50.20 and described in Section 9.1.3.B.4 And Section 9.1.3.B.5.