U.S. Department of Housing and Urban Development

H O U S I N G

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Special Attention of: Notice H 94-88 (HUD)

All Directors of Housing

All Area and State Coordinators Issued: October 28, 1994

All Directors of Multifamily Expires: October 31, 1995

All Chief Appraisers
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Cross References:

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Subject:Submission of Environmental Site Assessment Transaction

Screen Process and Phase I Environmental Site

Assessment Process

I.Purpose. This Notice is intended to clarify existing policy

and ensure that Field Offices (FO) take all precautions to

prevent the Department from becoming a Potentially

Responsible Party in any future CERCLA (Comprehensive

Environmental Response, Compensation, and Liability Act of

1980\) action which could result from environmental

contamination and/or hazards found on a property for which

an application for HUD assistance has been submitted. The

Department proposes to amend the Code of Federal Regulations

and appropriate handbooks to require applicants for

multifamily mortgage insurance to submit a Transaction

Screen Process and Phase I Environmental Site Assessment, in

accordance with the American Society for Testing and

Material (ASTM), Standards E 1528-93 and E 1527-93 as

amended. The revised regulations will not preempt state or

local laws that are more stringent. Until the Department

completes the administrative process to implement the Code

of Federal Regulations and handbook changes, FO should

adhere to the guidelines set forth in this Notice.

II.Applicability. This Notice will apply to all applications

for multifamily mortgage insurance (new construction,

substantial rehabilitation, and refinancing of previously

uninsured projects) as well as elderly and handicapped

housing pursuant to Section 202 and Section 811, HOPE, and

Special Purpose Grants. This requirement will not apply to

Multifamily Property Disposition Cases.

III\. Background. The ASTM is a private not-for-profit standards-writing

organization that publishes specifications, tests,

and practices concerning engineering materials, manufactured

products, and the environment. ASTM standards are written

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HMIT : Distribution: W-3-1,W-2(H),W-3(A)(H),(OGC),(ZAS),W-4(H),R-1,

R-2,R-3,R-3-1,R-3-2,R-3-3,R-6,R-6-1,R-6-2,R-7,

R-7-1,R-8

Previous Editions Are Obsolete HUD 21B (3-80)

GPO 871 902

by voluntary members located around the world in commercial

organizations, governmental bodies, and academic institutions. They

participate in ASTM to develop voluntary standards that promote both

private and public interests. The purpose of developing the standards

is to define good commercial and customary practice for conducting an

environmental site assessment of a parcel of commercial real estate

with respect to the range of contaminants within the scope of

Comprehensive Environmental Response, Compensation and Liability Act

(CERCLA) and petroleum products. As such, the procedures are intended

to permit a user to satisfy one of the requirements to qualify for the

innocent landowner defense to CERCLA liability: that is, the

practices that constitute \"all appropriate inquiry into the previous

ownership and uses of the property consistent with good commercial or

customary practice.\"

IV\. Policy.

A.Pending amendments to the CFR\'s and housing handbooks, if a FO,

in pursuing their environmental reviews, has any question

concerning the environmental safety of a particular property the

FO should require the submission of an (ASTM) Environmental Site

Assessment: Transaction Screen Process. If additional

information is needed to determine site acceptability a Phase I

Environmental Site Assessment may also be required.

B.The submission of any studies as an application exhibit is the

responsibility of the applicant. The FO is not to become

involved in the selection or recommendation of consultants, or

approval of the submitted studies. Field Offices will not

develop a panel of approved consultants for applicants to

consider for services.

C.The submission of the studies required under paragraph A, do not

relieve the Field Office of its responsibilities pursuant to 24

CFR Parts 50 and 51 and Handbooks 1390.2 and 1390.4. Field

Offices will continue to complete Forms HUD-4128 and HUD-4128.1

in accordance with outstanding instructions. The studies

submitted by the applicant will be attached to the HUD

environmental review as documentation supporting the Field Office

decision making process.

D.The FO will review the applicant\'s studies and require additional

studies as necessary.

E.If the applicant\'s studies or subsequent studies reveal site

contamination, the applicant will be required to take remedial

action prior to the issuance of ANY commitment by the Department.

If the applicant has a

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contract for remediation of the problem acceptable to the FO, and

has obtained an approval letter from the applicable Federal,

state and/or local agency with jurisdiction, the FO may commit

pending completion of the contract.

F.Copies of the ASTM Standards E1528-93 and E1527-93, will be sent

under separate mailing to all Directors of Housing, Directors of

Multi-family Housing and Chief Appraisers. Field Office can

secure additional copies as needed, directly from ASTM.

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Assistant Secretary for Housing

\- Federal Housing Commissioner

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