A.5.7.3.1 CNA Summary and Scope Information

A. Approving Agency. HUD is the approving agency for all CNAs prepared for properties with insured mortgages. This includes RAD transactions with mortgage insurance.

73 The owner may hire and pay the third-party Needs Assessor when CNAs are required for Asset Management oversight of properties with no insured mortgage, such as budget-based rent increase events where no Servicing Lender is involved.

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B. Property ID, FHA numbers . For existing FHA insured properties, enter the Property ID (commonly referred to as “iREMS” number) in addition to FHA numbers. Lenders should verify that these numbers are accurate prior to submission.

C. Seismic SXS, SX1 values. These values are required for all existing properties and should be obtained and entered in accordance with the instructions in Appendix 5, Section A.5.3. For new construction, enter zero (0) for each value. For scattered sites, enter the values for the particular site with the highest values in the CNA e-Tool. A seismic hazard and building performance analysis report must be submitted for all the buildings on the sites that are not exempt, per Appendix 5, Section A.5.3.1.2.

D. Federally Assisted. The Needs Assessor must answer this question “yes” or “no” and must know the correct answer for the subject property prior to conducting any on-site inspection. It is the responsibility of the Lender to know the correct definition of “assisted housing” (See Appendix 5, Section A.5.2) and to apply the definition to the subject property and advise the Needs Assessor accordingly. Failure to correctly identify a federally assisted property and to document compliance with Section 504 of the Rehabilitation Act of 1973 is not acceptable.

E. Vacant Units. The actual number of vacant units at the time of the on-site visit should be entered. This means all units present at the property, and not occupied by a tenant, resident manager, or management employee, or in use by management as an office or display unit. Units used for storage or “offline” units are “vacant units.” For new construction projects, enter zero “0”.

F. Minimum Sample . For existing properties under Section 223(a)(7), 223(f) and 241(a) programs, the Needs Assessor must enter the minimum percentage of all units that must be inspected. HUD requires the following:

1. For properties built and occupied as new construction within 10 years of the CNA, not less than 10 percent of units must be inspected.

2. For all other properties, not less than 25 percent of units must be inspected.

3. In all cases, the selection of units must be proportionally distributed among unit types, buildings, and floor levels and otherwise random.

4. It is the Lender’s responsibility to examine rent rolls, operating statements, and due diligence reports to determine whether excessive or disproportionate patterns of vacancy require that the Needs Assessor inspect a greater sample of units and to advise the Needs Assessor accordingly. Minimum percentage inspection requirements specified above do not relieve the Needs Assessor and Lender from addressing circumstances where more units should be inspected, such as:

   • A property with a history of vacancy exceeding 15 percent. For such property, not less than 50 percent of vacant units, including those already selected for an inspection per Appendix 5, Section A.5.7.2.2.A.2.a-c above should be inspected.

• A property with particular units, floors of buildings, or buildings vacant for 6 or more of the previous 12 months. Such vacancy may be due to adverse physical conditions or to remodeling and either circumstance requires inspection of the relevant units, floors, or buildings.

G. ASHRAE Energy Audit. Indicate “yes” or “no” whether an ASHRAE Energy Audit has been completed and used to inform the utility usage characteristics of components and alternatives. If “yes,” identify the name and relevant professional credential of the energy auditor. (For required credentials see Chapter 6,

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Section 6.4.10.) The Lender must attach the energy auditor’s report to the CNA at submission. See MAP Guide Chapter 6 for instructions on energy and water utility conservation.

H. Additional Tests . Indicate “yes” or “no” whether the CNA relied upon or required any additional testing or special inquiry. Name or identify the test, inquiry, or resulting report in the comment section. Examples of an additional test in this context may include a seismic analysis, a radon test and report, an intrusive examination by a professional or contractor other than the Needs Assessor, a lead-based paint inspection or risk assessment report, a mold assessment report, or similar tests or reports. The Lender must attach such results or reports to the CNA at submission

I. Date of Site Visit. This is the date the Needs Assessor intends as the time when observations of physical conditions are represented as true and correct. This date is the commencement of any maximum shelf life for a CNA report. For new construction or substantial rehabilitation proposals where the CNA is prepared by the Project Architect or the Lender’s Construction Analyst, this date is the anticipated date of the final endorsement.