9.2.2 HUD Responsibilities

A. In accordance with 24 CFR 50.32, HUD, not the Lender, is responsible for independently evaluating the information supplied by the Lender in HEROS, supplementing that information as needed, and making the required findings in HEROS as the environmental review record for the project. HUD will determine whether the proposed project site is out of compliance with applicable laws, Executive Orders, or regulations, would otherwise endanger residents’ health or safety, or would put FHA mortgage insurance or the U.S. Government at financial risk or liability.

B. HUD staff shall promptly notify the Lender that HUD will take appropriate action to ensure that the objectives and procedures of HUD environmental policy are achieved if it becomes aware that an action subject to limitation as discussed in Section 9.2.1.C has taken place or may be about to take place.

C. Trained HUD staff must review the documentation submitted by the Lender and must make a site visit. The site visit will help validate the information provided in the HEROS Environmental Report. HUD staff should use the latest Multifamily Site Assessment Form to prepare for and document the site visit. HUD staff will analyze each response, conduct consultation when required, supplement the Lender’s documentation as needed, and make the required findings in HEROS. As part of its environmental review responsibilities, HUD may require additional environmental material from a Lender, such as a Phase II Environmental Site Assessment or a Biological Evaluation, even when the Lender might not believe that such additional environmental material is necessary.

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D. HUD staff must certify the completed environmental review in HEROS as the preparer. The Approving Official for the program must also certify the HEROS environmental review.[26]

E. Regulations at 24 CFR 50.32 require that Environmental Assessment-level reviews for projects with more than 200 units (or as specified at 24 CFR 50.32) be sent for review and comment to the Regional or Field Environmental Officer (REO/FEO) in whose jurisdiction the project is located. The REO/FEO must also review and comment on Environmental Assessment-level new construction projects or projects that convert land uses to residential when noise is in the unacceptable noise zone (above 75 DNL (a weighted day-night average sound level)). Neither requirement applies to categorically excluded projects.

F. The REO/FEOs are the regional experts on environmental review requirements and should be consulted for technical assistance on complex environmental issues, such as:

1. projects in the normally unacceptable noise zone;

2. projects in a floodplain or wetland, particularly when the project uses the incidental exception discussed in Section 9.6.5.F.1;

3. projects with an adverse effect on historic properties including archaeological resources;

4. projects with contamination issues; or

5. any other environmental issue that requires specialized knowledge or a mitigation plan to resolve potential impacts.

6. REO/FEOs should also review special environmental conditions in the Firm Commitment, particularly when they have given technical assistance on an issue.

G. Housing staff are strongly encouraged to consult with the REO/FEO (regardless of the number of units) for CEST and EA projects that:

1. Are located on or adjacent to a designated Superfund Site or a Formerly Used Defense Site (FUD).

2. Have an unresolved contamination issue with the potential to affect the health and safety of occupants.[ 27] For example:

   • An ASTM Phase I or Phase II Environmental Site Assessment (ESA) indicates a release or threat of release of hazardous substances or petroleum products but does not identify a Recognized Environmental Condition (REC), or

• There is current or proposed remediation, mitigation or monitoring at the site; or

• Issues are raised in the Phase I or Phase II ESA but not addressed in the mitigation plan.

3. Are located on or directly adjacent to a parcel with a floodway.

H. When Housing staff determine they should or must consult with the REO/FEO, they should do so at the earliest possible time after receipt of the required information from the Lender. Housing staff should also invite REO/FEOs to the concept meeting for new construction projects over 200 units or if there is a complex environmental issue.

26 The Production Division Director is the Approving Official for Multifamily Production.

27 Not including Asbestos, Lead Based Paint or Radon.

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I. HUD will discuss any environmental conditions in the letter of invitation for Sections 221(d)(4), 220, 241(a) and 231. Any requirements that affect project design will be fully detailed. The Lender must assure that any requirements affecting project design are conveyed to the design Architect for incorporation into the contract drawings and specifications.

J. Housing staff shall ensure that all environmental conditions are identified, any required mitigation plans are approved, and the environmental review in HEROS is completed and approved prior to issuance of a Firm Commitment.

K. When environmental reviews reveal environmental conditions that require mitigation, HUD will require an acceptable plan for mitigation prior to Firm Commitment and will condition the Firm Commitment on completion.[28] HUD will discuss the requirements for completion of mitigation in HEROS on the Mitigation Measures and Conditions Screen. HUD staff will identify who is responsible for implementing a special condition along with the associated timelines (e.g. by initial endorsement, final endorsement, or ongoing by Asset Management). Mitigation plans must be detailed in the Firm Commitment, Closing Agreement and other relevant documents.

L. HUD staff must update and record the completion of the environmental conditions in HEROS using the Mitigation Follow-up Screen. Regional Production Division Directors will determine the appropriate staff positions in each office to review and upload the mitigation resolutions after construction completion and final endorsement. This screen appears only after an environmental review has been marked Completed in HEROS. Note that HEROS will allow HUD to continue editing environmental reviews to document that mitigation measures and conditions are fulfilled.

M. HUD shall distribute completed environmental reviews to those who have requested them. Additional efforts for involving agencies, Tribes or the public shall be made when required by the implementing procedures of the laws and authorities cited in 24 CFR 50.4. HUD staff shall also ‘archive’ HEROS reports at the time the Multifamily office issues the Firm Commitment. This archive step posts the environmental review record and all uploaded documentation online and makes it available to the public for one year.