Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 14441 

should be considered in our evaluation 

of the petition. 

APHIS received nine comments on 

the petition from agricultural trade 

groups, farmers, and members of the 

public. Five comments generally 

supported BASF’s petition, while four 

expressed objections to crops developed 

or modified through genetic 

engineering. 

APHIS decided, based on its review of 

the petition and its evaluation and 

analysis of the comments received 

during the 60-day public comment 

period on the petition, that the petition 

involves an organism developed using 

genetic engineering that raises 

substantive new issues. According to 

our public review process for such 

petitions (see footnote 3), APHIS is 

following Approach 2, in which we first 

solicit written comments from the 

public on a draft environmental 

assessment (EA) and a draft plant pest 

risk assessment (PPRA) for a 30-day 

comment period through the 

publication of a Federal Register notice. 

Then, after reviewing and evaluating the 

comments on the draft EA and the draft 

PPRA and other information, APHIS 

revises the draft PPRA as necessary and 

prepares a final EA. APHIS also 

publishes a notice in the Federal 

Register announcing the regulatory 

status of the organism developed using 

genetic engineering and the availability 

of APHIS’ final EA, PPRA, finding of no 

significant impact (FONSI), and our 

regulatory determination. 

A second opportunity for public 

involvement was provided on August 

17, 2021, with a notice published in the 

Federal Register (86 FR 45955–45956) 

announcing the availability of the draft 

EA and draft PPRA for public review 

and comment. That comment period 

closed on September 16, 2021. APHIS 

received 2,743 comments on the 

petition and supporting documents. All 

but eight of the comments consisted of 

identical and near-identical copies of a 

form letter submitted by different 

individuals who expressed their general 

opposition to the concept and use of 

genetic engineering for any purpose. 

Commenters objected to GMB151 

soybean because it expresses a novel 

protein from Bacillus thuringiensis, 

which many stated has not been 

adequately evaluated for use as a 

pesticide. Others objected to 

deregulation of GMB151 soybean on 

grounds that it would contribute to 

weed resistance. Commenters also 

opposed deregulation because it would 

contribute to an increase in the use of 

isoxaflutole, which they stated will 

jeopardize human health and safety. 

The comments are addressed in our 

final EA. 

National Environmental Policy Act 

The final EA contains the results of 

APHIS’ review and evaluation of the 

comments received during the comment 

period on the draft EA, draft PPRA, and 

the petition. The final EA provides the 

public with documentation of APHIS’ 

review and analysis of any potential 

environmental impacts associated with 

the determination of nonregulated status 

of GMB151 soybean. The EA was 

prepared in accordance with: (1) 

National Environmental Policy Act 

(NEPA), as amended (42 U.S.C. 4321 et 

seq.), (2) regulations of the Council on 

Environmental Quality for 

implementing the procedural provisions 

of NEPA (40 CFR parts 1500–1508), (3) 

USDA regulations implementing NEPA 

(7 CFR part 1b), and (4) APHIS’ NEPA 

Implementing Procedures (7 CFR part 

372). Based on our EA, the response to 

public comments, and other pertinent 

scientific data, APHIS has reached a 

FONSI with regard to the preferred 

alternative identified in the EA (to make 

a determination of nonregulated status 

of GMB151 soybean). 

Determination 

Based on APHIS’ analysis of field and 

laboratory data submitted by BASF, 

references provided in the petition, 

peer-reviewed publications, information 

analyzed in the EA, the PPRA, 

comments provided by the public, and 

information provided in APHIS’ 

response to those public comments, 

APHIS has determined that GMB151 

soybean is unlikely to pose a plant pest 

risk and therefore is no longer subject to 

our regulations governing the 

importation, interstate movement, or 

release into the environment of 

organisms developed using genetic 

engineering. 

Copies of the signed determination 

document, PPRA, final EA, and FONSI, 

as well as the previously published 

petition and supporting documents, are 

available as indicated in the ADDRESSES

and FOR FURTHER INFORMATION CONTACT

sections of this notice. 

Authority: 7 U.S.C. 7701–7772 and 

7781–7786; 31 U.S.C. 9701; 7 CFR 2.22, 

2.80, and 371.3. 

Done in Washington, DC, this 10th day of 

March 2022. 

Anthony Shea, 

Administrator, Animal and Plant Health 

Inspection Service. 

[FR Doc. 2022–05444 Filed 3–14–22; 8:45 am] 

BILLING CODE 3410–34–P 

DEPARTMENT OF AGRICULTURE 

Rural Housing Service 

[Docket No. RHS–22–MFH–0002] 

Multi-Family Housing Preservation and 

Revitalization (MPR) Demonstration 

Program—Section 514 and Section 515 

for Fiscal Year 2022 

AGENCY: Rural Housing Service, United 

States Department of Agriculture. 

ACTION: Notice of Solicitation of 

Applications (NOSA). 

SUMMARY: The Rural Housing Service 

(RHS) (Agency), a Rural Development 

agency of the United States Department 

of Agriculture (USDA), announces it is 

soliciting applications to defer existing 

eligible loans for the Multi-Family 

Housing (MFH) Preservation and 

Revitalization (MPR) Demonstration 

Program. Current RHS borrowers (stayin owners) and/or eligible applicants 

applying to assume existing Section 515 

Rural Rental Housing (RRH) or Section 

514 Off-Farm Labor Housing (Off-FLH) 

loans that are closed and were obligated 

on or after October 1, 1991, are invited 

to apply for MPR deferral-only 

assistance for such loans. This Notice 

does not provide any funding or 

additional units of Agency Rental 

Assistance (RA). 

DATES: Complete applications 

requesting deferral-only assistance 

under this NOSA must be received no 

later than 5 p.m., Eastern Standard 

Time, May 16, 2022. The Agency will 

not consider any applications received 

after the closing deadlines. 

ADDRESSES: Application Submission: 

All materials must be submitted via 

CloudVault. The submission process is 

detailed in section III. Application and 

Submission Information of this Notice. 

After publication in the Federal 

Register, this Notice will be posted on 

the Rural Development (RD) website, 

www.rd.usda.gov/newsroom/noticessolicitation-applications-nosas. The 

Agency will publish, as necessary, any 

revisions and amendments reflecting 

program modifications, in the Federal 

Register within the period this Notice 

remains open. Expenses incurred in 

applying for this NOSA will be borne by 

and be at the applicant’s sole risk. 

FOR FURTHER INFORMATION CONTACT: 

Fallan Faulkner, Multi-Family 

Specialist, Multi-Family Housing, RHS, 

U.S Department of Agriculture, via 

email: fallan.faulkner@usda.gov, or by 

phone: 615–812–0050. Any questions 

on eligibility for deferral should be 

directed via email at: RD.MPR@

usda.gov. Please include in the subject 


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line ‘‘MPR NOSA Eligibility’’ and the 

name and address of the property in 

question. 

For information regarding the 

Addendum: Capital Needs Assessment 

Process located at the end of this notice, 

contact: Fallan Faulkner, Multi-Family 

Specialist, Multi-Family Housing, RHS, 

U.S. Department of Agriculture, via 

email: fallan.faulkner@usda.gov or 

telephone: (615) 812–0050. 

SUPPLEMENTARY INFORMATION: 

Authority 

The Consolidated Appropriations Act, 

2021 (H.R. 133) authorized USDA to 

conduct a demonstration program for 

the preservation and revitalization of 

the Section 514 (Off-FLH) and 515 

programs authorized by the Housing Act 

of 1949; 7 CFR part 3560. 

Rural Development: Key Priorities 

The Agency encourages applicants to 

consider projects that will advance the 

following key priorities: 

• Assisting Rural communities 

recover economically from the impacts 

of the COVID 19 pandemic, particularly 

disadvantaged communities. 

• Ensuring all rural Residents have 

equitable access to RD programs and 

benefits for RD funded projects. 

• Reducing climate pollution and 

increasing resilience to the impacts of 

climate change through economic 

support to rural communities. 

For further information, visit https:// 

www.rd.usda.gov/priority-points. 

Executive Summary 

This Notice solicits applications for 

deferrals of any closed Section 514 (OffFLH) or 515 Agency loan obligated on 

or after October 1, 1991 for the purpose 

of revitalization and preservation of 

existing properties. Under this NOSA, 

eligible loan payments can be deferred 

for 20 years. The cash flow from the 

deferred RHS direct loan principal and 

interest payment will be deposited to 

the RHS project’s reserve account or as 

directed by the Agency to meet the 

specific project’s present and future 

physical needs as determined by the 

Capital Needs Assessment (CNA) 

concurrently approved by the Agency. 

At the end of this Notice, a CNA 

addendum is provided with detailed 

instructions to assist the applicant in 

completing CNA reports, expected 

useful life tables, and forms. The 

deferral may also support new debt 

payments being incurred for repair/ 

rehabilitation loans and/or to reduce 

tenant rents as determined by the 

Agency to be in the best interests of the 

tenants and Government. There are no 

other MPR tools or forms of assistance 

available under this NOSA. 

I. MPR Debt Deferral Information 

A. Deferral of Principal and Interest 

Payments 

A deferral of principal and interest 

payments for 20 years of any closed 

Section 514 (Off-FLH) or Section 515 

Agency loan(s) that was obligated on or 

after October 1, 1991. Loans obligated 

prior to October 1, 1991 are not eligible 

for deferral under this NOSA. If there 

are multiple loans on the account, all 

loans must be obligated on or after 

October 1, 1991 to be eligible. If the 

account has a loan(s) obligated prior to 

October 1, 1991, the account/property is 

not eligible for MPR. The total of all 

liens against the project, with the 

exception of Agency deferred debt, 

cannot exceed the Agency-approved 

security value of the project. All Agency 

debt, either in first lien position or in a 

subordinated lien position, must be 

secured by the project, except deferred 

debt, which is not included in the 

Agency’s total lien position for 

computation of the Agency’s security 

value in the MPR program. 

(1) The deferral will assure the 

continued feasibility of preserving 

needed rental units based on criteria 

described in 7 CFR 3560.57(a)(3). 

(2) Transfers with MPR Deferrals must 

be processed through the MFH 

Production and Preservation Division in 

accordance with the transfers 

regulations. 

(3) All terms and conditions of the 

deferral will be described in the MPR 

Conditional Commitment (MPR–CC), 

the MPR Debt Deferral Agreement, and 

any associated transfer approval. 

(4) A balloon payment of principal 

and accrued interest (deferral balloon) 

will be due at the end of the deferral 

period, or upon default pursuant to the 

terms contained therein. Interest will 

accrue at the promissory note rate. If 

applicable, the subsidy will be applied 

as set out in the Agency’s Form RD 

3560–9, ‘‘Multiple Family Housing 

Interest Credit Agreement.’’ 

B. Eligibility Deferral Information 

Any questions on eligibility for 

deferral should be directed via email at: 

RD.MPR@usda.gov. Please include in 

the subject line ‘‘MPR NOSA Eligibility’’ 

and the name and address of the 

property in question. 

C. Project Consolidation Information 

MPR deferrals may be approved for 

project consolidations for stay-in-owner 

or transfer transactions in accordance 

with 7 CFR part 3560 providing the 

following are met: 

(1) All projects being consolidated 

must be submitted on one application 

and located in the same market area as 

defined in 7 CFR 3560.11; 

(2) Projects must be of the same type, 

managed under one management plan 

and one management agreement, and in 

sufficient proximity to permit 

convenient and efficient management of 

the property. 

D. Terms 

The Agency will require a reamortization of the existing loan(s). 

MPR debt deferrals authorized in 

conjunction with transfers or 

subordinations will become effective 

upon completion of all planned repairs 

and rehabilitation deemed acceptable to 

the RHS approval official as outlined in 

the MPR conditional commitment. 

E. Transfers 

Special conditions apply to transfers. 

Under the provisions of 7 CFR 3560.406, 

debt deferral for any eligible loans(s) as 

described herein may be included in the 

transfer underwriting under the 

following conditions: 

1. The new owner, including all 

principals, sharing an identity of 

interest (IOI) with the selling entity in 

any other RHS properties, is fully 

compliant with all Agency requirements 

and conditions, unless there is an 

Agency approved workout agreement as 

specified in 7 CFR 3560.453 in place 

and on schedule for at least six (6) 

months prior to the date of application. 

2. The maximum return-to-owner- 

(RTO) will be determined prior to 

applying the deferral. 

II. Eligibility Information 

A. Applicant Eligibility Requirements 

(1) For the purpose of this Notice, 

‘‘Applicant’’ includes the applying 

entity (e.g., ABC LLP) and the entity’s 

principals (e.g., John Doe, General 

Partner of ABC LLP; XYZ, Inc., General 

Partner of ABC LLP; John Doe Jr., 

President of XYZ, Inc.). In the case of a 

single asset entity that is not a natural 

person, the Agency will rely solely on 

the qualifications of the natural 

person(s) managing/controlling the 

entity (whether directly or indirectly 

through other entities) to establish the 

applicant’s eligibility. 

(2) Eligible applicants for the MPR 

program include individuals, 

partnerships or limited partnerships, 

consumer cooperatives, trusts, State or 

local public agencies, corporations, 

limited liability companies, non-profit 

organizations, Indian tribes, 

associations, or other entities authorized 

by the Agency that own (stay in owner) 


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or will be the owner of the project for 

which an application for transfer of 

ownership by the Agency has been 

submitted. 

(3) Eligibility requirements include 

substantial and verifiable favorable 

experience and creditworthiness as 

required by the respective MFH program 

regulations specified in 7 CFR part 

3560, with the exception that stay-in 

owner applicants are not required to 

meet the test for other credit for MPR 

purposes as stated in 7 CFR 

3560.55(a)(2). Appropriate credit reports 

for the applicant, entity and principals 

will be submitted and considered in 

both the MPR and transfer processing 

eligibility determination as defined in 

Section III. Application and Submission 

Information B. 9. below. 

B. Additional Eligibility Requirements 

(1) All applicants must meet the 

respective (Section 515 or 514 Off-FLH) 

requirements for initial and/or current 

(continuing) borrower eligibility and 

program participation. Initial eligibility 

will be determined as of the date of the 

application filing deadline. The Agency 

reserves the right to discontinue 

processing any application due to 

material changes in the applicant’s 

status occurring at any time after the 

initial eligibility determination. 

(2) Eligibility also includes the 

continued ability of the borrower/ 

applicant to provide acceptable 

management and will include an 

evaluation of any current outstanding 

deficiencies. Any outstanding violations 

or extended open operational findings 

associated with the applicant/borrower 

or any affiliated entity having an 

identity of interest (IOI) with the project 

ownership and which are recorded in 

the Agency’s automated Multi-Family 

Information System (MFIS), may 

preclude further processing of any MPR 

applications unless there is a current, 

approved workout agreement in 

accordance with § 3560.453 in place and 

the plan has been satisfactorily followed 

for a minimum of six (6) consecutive 

months, as determined by the Agency. 

(3) In the event of an MFH transfer, 

the proposed transferee must submit 

evidence of site control together with a 

copy of the borrower’s written request 

signed by both the proposed buyer and 

the seller describing the general terms of 

the proposed transfer. Evidence may 

include a valid and unexpired Purchase 

Agreement, Letter of Intent, or other 

documentation acceptable to the 

Agency. Transfers will be processed in 

accordance with the guidelines of 

§ 3560.406. 

(4) All applicants are subject to the 

applicable requirements of the Office of 

Management and Budget (OMB)- 

approved USDA Suspension and 

Debarment, and Drug-Free Workplace 

Certifications as prescribed under Title 

2 CFR parts 417 and 421. 

C. Project Eligibility Requirements 

(1) Project loans must have been 

obligated on or after October 1, 1991. 

Any projects with a loan(s) obligated 

prior to October 1, 1991, are not eligible 

for this MPR demonstration program. 

(2) Projects must have open physical 

finding(s) identified by a recent physical 

inspection and recorded by the Agency. 

Furthermore, the open physical 

finding(s) of record must be the result of 

circumstances beyond owner and/or 

management control and/or must be 

uncorrected due to insufficient 

operating income/reserve funds 

necessary to address the outstanding 

physical need(s) of the project. Any 

projects with open physical findings 

resulting from deferred maintenance, as 

recorded by the Agency, are not eligible 

for this MPR demonstration program. 

Physical deficiencies identified by the 

Agency or another lending organization 

(i.e., HUD, Housing Finance Agency, 

etc.) or reported by local code 

enforcement of imminent threats to the 

health and safety of tenants that have 

not been recorded but are documented 

by the applicant and provided as part of 

the application, may be considered 

when determining project eligibility. 

D. Key Priority Eligibility 

For an application to be deemed 

eligible, applicants must also meet the 

criterion of at least two of the Agency’s 

three key priorities (COVID–19, Equity 

and Climate). To help with your 

understanding of the Key Priorities and 

how your property could qualify, please 

refer to the key priority eligibility 

information below, and then on the 

following website for details: https://

www.rd.usda.gov/priority-points. Please 

note for purposes of this NOSA, the Key 

Priorities as described below and on the 

website, are being used solely for 

eligibility purposes and no points will 

be awarded. All eligible applications 

will be accepted. 

(1) COVID–19—the project must be 

located in or serving one of the top 10% 

of counties or county equivalents based 

upon the county risk score in the United 

States. The dashboard located at https:// 

www.rd.usda.gov/priority-points will be 

used to determine if a project is eligible 

to apply based upon its location. 

Applicants must use the dashboard to 

verify if the project is located within 

one of the top 10% of counties or 

county equivalents based upon the 

county risk score in the United States 

and provide documentation from the 

dashboard within the application to 

verify the location in order to be 

eligible. 

(2) Equity—the project must be 

located in or servicing a community 

with a score of 0.75 or above on the CDC 

Social Vulnerability Index. The 

dashboard located at https://

www.rd.usda.gov/priority-points will be 

used to determine if a project is eligible 

to apply based upon its location. 

Applicants must use the dashboard to 

verify if the project is located in or 

servicing a community with a score of 

0.75 or above on the CDC Social 

Vulnerability Index and provide 

documentation from the dashboard 

within the application to verify the 

location in order to be eligible. 

(3) Climate Impacts—applicants may 

be eligible through one of two methods: 

a. The project must be located in or 

serving coal, oil and gas, and power 

plant communities whose economic 

well-being ranks in the most distressed 

tier of the Distressed Communities 

Index. The dashboard located at https:// 

www.rd.usda.gov/priority-points will be 

used to determine if a project is eligible 

to apply based upon its location. 

Applicants must use the dashboard to 

verify if the project is located within or 

serving coal, oil and gas, and power 

plant communities and whose economic 

well-being ranks in the most distressed 

tier of the Distressed Communities 

Index and provide documentation from 

the dashboard within the application to 

verify the location in order to be 

eligible. 

b. demonstrate through a written 

narrative how proposed climate-impact 

projects improve the livelihoods of 

community residents and meet 

pollution mitigation or clean energy 

goals. 

III. Application and Submission 

Information 

A. Submission Process 

(1) All materials must be submitted 

via CloudVault. 

(2) The process for submitting an 

electronic application to RHS via 

CloudVault is outlined below: 

a. At least three business days prior to 

the application deadline, the applicant 

must email RHS a request to create a 

shared folder in CloudVault. The email 

must be sent to the following address: 

RD.MPR@usda.gov. The email must 

contain the following information: 

(i) Subject line: MPR NOSA 

Submission. 

(ii) Body of email: Applicant Name, 

Applicant Contact Information, Project 

State, Project Name, and Project City. 


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(iii) Request language: ‘‘Please create 

a shared CloudVault folder so that we 

may submit our application 

documents.’’ 

(b) Once the email request to create a 

shared CloudVault folder has been 

received, a shared folder will be created 

within two business days. When the 

shared CloudVault folder is created by 

RHS, the system will automatically send 

an email to the applicant’s submission 

email with a link to the shared folder. 

All required application documents in 

accordance with this NOSA must be 

loaded into the shared CloudVault 

folder. When the submission deadline is 

reached, the applicant’s access to the 

shared CloudVault folder will be 

removed. Any document uploaded to 

the shared CloudVault folder after the 

application deadline will not be 

reviewed or considered. 

B. Submission Requirements 

(1) The applicant must upload a Table 

of Contents for the documents that have 

been uploaded to the shared CloudVault 

folder. 

(2) Applications must include all 

applicable information requested on the 

MPR application form (Form Approved: 

OMB No. 0575–0190) to be considered 

complete. The application form can be 

found at http://www.rd.usda.gov/ 

programs-services/housingpreservation-revitalizationdemonstration-loans-grants. Click on 

the To Apply tab to access the ‘‘Fiscal 

Year 2022 Application for MFH 

Preservation and Revitalization 

Demonstration Program (MPR).’’ 

(3) Responding entity’s Dun and 

Bradstreet Data Universal Numbering 

System (DUNS) number, registration in 

the System for Award Management 

(SAM) prior to submitting an 

application pursuant to 2 CFR 25.200(b), 

and other supporting information to 

substantiate their legal authority and 

good standing. Applicants can receive a 

DUNS number at no cost by calling the 

dedicated toll-free DUNS Number 

request line at (866) 705–5711 or via the 

internet at http://www.dnb.com/. 

Additional information concerning this 

requirement can be obtained on the 

grants.gov website at http://

www.grants.gov. All applicants must be 

registered in SAM prior to submitting an 

application, unless determined exempt 

under 2 CFR 25.110. Federal award 

recipients must maintain an active SAM 

registration during which time they 

have an active Federal award or an 

application under consideration by the 

Agency. The applicant must ensure that 

the information in the database is 

current, accurate, and complete. 

Applicants must ensure they complete 

the Financial Assistance General 

Certifications and Representations in 

SAM. Similarly, all recipients of Federal 

financial assistance are required to 

report information about first-tier subawards and executive compensation in 

accordance with 2 CFR part 170, so long 

as an entity respondent does not have 

an exception under 2 CFR 170.110(b), 

they must have the necessary processes 

and systems in place to comply with the 

reporting requirements should the 

responding entity receive federal 

assistance. See 2 CFR 170.200(b). 

(4) Applicant must provide a narrative 

describing the transaction in detail of 

how the deferral-only MPR tool will 

benefit their transaction. List any 

adverse impacts or physical failures 

(i.e., natural causes not foreseen, 

damage not reimbursable by insurance 

or disaster loan or grant, etc.) 

(5) Applicant must complete the Form 

SF 424, ‘‘Application for Federal 

Assistance,’’ which can be found and 

completed online at the following 

website: https://apply07.grants.gov/ 

apply/forms/readonly/SF424_2_1- 

V2.1.pdf. 

(6) Provide evidence of site control for 

all transfers of ownership. 

(7) For Section 515 projects, the 

average physical vacancy rate for the 12 

months preceding this Notice’s 

application submission date can be no 

more than 10 percent for projects 

consisting of 16 or more revenue units 

and no more than 15 percent for projects 

less than 16 revenue units. If the 

applicant is seeking an exception to this 

requirement or there are concerns about 

the market, the applicant must submit 

an explanation as to the circumstances 

affecting the vacancy rate. The Agency 

will request additional information if 

the vacancy rates along with a current 

market study to support the need of the 

project and its continued financial 

feasibility. The Agency will request 

additional information if the vacancy 

rates exceed the percentages stated 

above, which may include a current 

market study, to assess the need of the 

project and its continued financial 

feasibility. To further demonstrate there 

is a continuing need for the RHS project, 

the Agency may request waiting lists 

and/or confirmation of a housing 

shortage by local housing agencies. The 

market data must show a clear need and 

demand for the project. The Agency will 

determine whether the proposal has 

market feasibility based on the data 

provided by the applicant. Any costs 

associated with the completion of the 

market data is NOT an eligible program 

project expense. If a project 

consolidation is involved, the 

consolidation will remain eligible so 

long as the average vacancy rate for each 

individual project meets the occupancy 

standard noted in this paragraph each 

project must meet the average vacancy 

rate outlined above. 

(8) For Sections 514/516 Off-FLH 

projects, since this program is typically 

seasonal which affects the vacancy rate, 

rather than an average physical vacancy 

rate as noted in section (ii) above, a 

positive cash flow for the previous full 

three (3) years of operation is required 

unless an exception applies as described 

section III(A)(3), above for projects with 

an approved work out plan. 

(9) Submit a current (no older than six 

months from the date of issuance) 

combination comprehensive credit 

report for both the entity and the actual 

individual principals, partners, 

members, etc. within the applicant 

entity, including any sub-entities, who 

are responsible for controlling the 

ownership and operations of the entity. 

Although a commercial credit report for 

a new entity may have limited 

information available, a combination 

report ties the entity and individual 

principal(s) together under the 

applicant/borrower name based on the 

credit report agency’s ability to provide 

a single reporting source. However, if 

any of the principals in the applicant 

entity are not natural persons (i.e., 

corporations, other limited liability 

companies, trusts, etc.) separate 

commercial credit reports must be 

submitted on those organizations as 

well. Individual personal consumer 

credit reports are not required if a 

combination report is being provided. 

Only Credit reports provided by 

accredited major credit bureaus will be 

accepted. In the past, the Agency has 

required the applicant to submit the 

credit report fee. In lieu of the applicant 

submitting the fee, the Agency will 

require the applicant to provide the 

credit report. It is the Agency’s 

expectation that this change will create 

an efficiency in the application process 

that did not exist, which should assist 

with streamlining the application 

process for the applicant. 

Failure to submit all required 

documents, forms and information prior 

to the deadline will result in an 

incomplete application, the application 

will be rejected and the applicant will 

be notified of appeal rights under 7 CFR 

part 11. Applicants are reminded that 

all submissions must be received by the 

deadline. Applications received after 

the deadline will not be evaluated. 

Upon request, RHS will provide the 

responding entities with a written 

acknowledgement of receipt. 


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IV. Agency Review and Selection 

Information 

The Agency will conduct an initial 

screening for eligibility within 90 

business days of the NOSA closing 

deadline. Transfer applicants must meet 

Agency eligibility, application, and 

approval process requirements outlined 

in HB–3–3560, Chapter 7. 

Eligibility determination is not an 

award or commitment for federal 

assistance. If the application is not 

accepted for further processing due to 

being incomplete or ineligible, the 

applicant will be notified of appeal 

rights under 7 CFR part 11. Applications 

that are deemed eligible but are not 

selected for further processing (i.e., 

financially infeasible, etc.) will be 

withdrawn from processing and the 

applicant will be notified of appeal 

rights under 7 CFR part 11. 

Eligible applicants accepted for 

further processing that do not include a 

project transfer (stay-in owner) will be 

required to submit a CNA in accordance 

with 7 CFR 3560.103(c) and the 

addendum at the end of this NOSA. The 

timeframe for submitting the CNA will 

be included in the applicant’s selection 

letter. The CNA will be used to 

underwrite the proposal to determine 

financial feasibility. The CNA must be 

approved by the Agency prior to the 

Agency underwriting the transaction. 

Stay-in owner applicants can use 

property reserve account funds to pay 

for CNA costs if approved by the 

servicing specialist assigned to the 

property. Servicing specialist 

assignments by property can be found 

at: https://www.sc.egov.usda.gov/data/ 

MFH.html. A CNA is comprised of nine 

main sections: 

• Definitions; 

• Contract Addendum; 

• Requirements and Statement of 

Work (SOW) for a CNA; 

• The CNA Review Process; 

• Guidance for the Multi-Family 

Housing (MFH) CNA Recipient 

Regarding Contracting for a CNA; 

• Revising an Accepted CNA During 

Underwriting; 

• Updating a CNA; 

• Incorporating a Property’s 

Rehabilitation into a CNA; and 

• Repair and Replacement Schedule. 

Additionally, there are seven 

attachments which accompany the CNA 

addendum identified as follows: 

• Attachment A, ADDENDUM TO THE 

CAPITAL NEEDS ASSESSMENT 

CONTRACT 

• Attachment B, CAPITAL NEEDS 

ASSESSMENT STATEMENT OF 

WORK 

• Attachment C, FANNIE MAE 

PHYSICAL NEEDS ASSESSMENT 

GUIDANCE TO THE PROPERTY 

EVALUATOR 

• Attachment D, CNA e-Tool Estimated 

Useful Life Table 

• Attachment E, CAPITAL NEEDS 

ASSESSMENT REPORT 

• Attachment F, SAMPLE CAPITAL 

NEEDS ASSESSMENT REVIEW 

REPORT 

• Attachment G, CAPITAL NEEDS 

ASSESSMENT GUIDANCE TO THE 

REVIEWER 

Transfer applicants must comply with 

the requirements of 7 CFR 3560.406 and 

Chapter 7 of HB–3–3560, including all 

Agency approval and closing conditions 

prior to closing the MPR debt deferral. 

The Agency will provide additional 

guidance to the applicant and request 

information and documents necessary to 

complete the underwriting and review 

process within 45 days of the Agency’s 

selection letter. Since the character of 

each application may vary substantially 

depending on the type of transaction 

proposed, additional information may 

be requested as appropriate. 

V. Agency Processing Information 

A. Feasibility and Structure 

The feasibility and structure of each 

proposal will be based on the Agency’s 

underwriting and the following 

parameters: 

(1) For applications submitted under 

this Notice, the Agency will conduct 

eligibility determinations and eligible 

applicants will be processed 

accordingly. 

(2) Applications marked as any of the 

following will be prioritized for the 

initial review and processing. Priority 

projects will have an initial review 

completed within 30–60 business days 

of the NOSA closing deadline: 

a. ‘‘Deferral needed as part of a 

pending transfer’’ 

b. ‘‘stay-in owner transaction with 

third-party funding that will expire 

within 120 days’’ 

c. ‘‘project with urgent health/safety/ 

accessibility issues to address’’ 

d. ‘‘projects with an average physical 

vacancy rate of no more than 5% for the 

12 months preceding this Notice’s 

application submission date with a 

demonstrated waiting list’’ 

e. ‘‘projects that meet all three of the 

Agency’s key priorities (COVID–19, 

Equity and Climate)’’. 

(3) Upon completion of RHS 

underwriting, MPR debt deferral offers 

will be presented to successful 

applicants as a conditional commitment 

(CC) and the Letter of Conditions (LOC). 

These documents will outline the 

borrower’s requirement for executing 

and recording an Agency-approved 

Restrictive-Use Covenant (RUC) for a 

period equivalent to the remaining term 

of any non-deferred existing loan or the 

remaining term of any existing RUC, 

whichever ends later. 

(4) Stay-in-owner applicants that have 

secured third party funding that will 

add new hard debt in an amount more 

than the amount approved to be 

deferred, will require an appraisal to 

ensure the property remains secure 

before the transaction will be approved. 

(5) Transfer applicants requesting 

MPR debt deferral will be presented an 

opportunity to accept or reject the 

offered terms and conditions for such 

deferral in the MPR CC. Additional 

transfer requirements will be outlined in 

a Transfer Letter of Conditions. 

(6) If no offer is made or if the 

applicant fails to accept or reject the 

offer presented, the application will be 

rejected, and appeal rights will be given. 

(7) Closing of MPR offers will occur 

within six months of the accepted MPR 

CC unless extended in writing by the 

Agency. 

(8) Applicants will be informed of any 

proposals that are determined to be 

financially infeasible. Any proposal 

denied by the Agency will be returned 

to the applicant, and the applicant will 

be given appeal rights pursuant to 7 CFR 

part 11. 

(9) Any MPR applications not 

approved one year from the selection 

notice date will be withdrawn, unless 

an extension is approved by the Agency. 

Applicants may reapply for federal 

assistance under future Notices as they 

may be made available. 

B. Third Party Funding Sources 

If third party funding sources have 

not yet been committed, the Agency 

may issue a conditional approval 

contingent upon receipt of firm funding 

commitments consistent with the terms 

used in the PAT attached to the 

Conditional Commitment to underwrite 

the transaction. Agency approval will be 

withdrawn if a satisfactory firm 

commitment is not received as the 

transaction cannot close until a firm 

commitment is provided. Any changes 

to the proposed sources that cause 

substantial material changes will require 

re-evaluation of the transaction by the 

National Office Underwriter and, in 

some cases, may cause approval to be 

rescinded and/or a new concurrence to 

be issued. 

VI. Other Information 

A. Paperwork Reduction Act 

The information collection 

requirements contained in this Notice 

have received approval from the Office 


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of Management and Budget (OMB) 

under Control Number 0575–0190. 

B. Non-Discrimination Statement 

In accordance with Federal civil 

rights laws and U.S. Department of 

Agriculture (USDA) civil rights 

regulations and policies, the USDA, its 

Mission Areas, agencies, staff offices, 

employees, and institutions 

participating in or administering USDA 

programs are prohibited from 

discriminating based on race, color, 

national origin, religion, sex, gender 

identity (including gender expression), 

sexual orientation, disability, age, 

marital status, family/parental status, 

income derived from a public assistance 

program, political beliefs, or reprisal or 

retaliation for prior civil rights activity, 

in any program or activity conducted or 

funded by USDA (not all bases apply to 

all programs). Remedies and complaint 

filing deadlines vary by program or 

incident. 

Program information may be made 

available in languages other than 

English. Persons with disabilities who 

require alternative means of 

communication to obtain program 

information (e.g., Braille, large print, 

audiotape, American Sign Language) 

should contact the responsible Mission 

Area, agency, or staff office; the USDA 

TARGET Center at (202) 720–2600 

(voice and TTY); or the Federal Relay 

Service at (800) 877–8339. 

To file a program discrimination 

complaint, a complainant should 

complete a Form AD–3027, USDA 

Program Discrimination Complaint 

Form, which can be obtained online at 

https://www.ocio.usda.gov/document/ 

ad-3027, from any USDA office, by 

calling (866) 632–9992, or by writing a 

letter addressed to USDA. The letter 

must contain the complainant’s name, 

address, telephone number, and a 

written description of the alleged 

discriminatory action in sufficient detail 

to inform the Assistant Secretary for 

Civil Rights (ASCR) about the nature 

and date of an alleged civil rights 

violation. The completed AD–3027 form 

or letter must be submitted to USDA by: 

(1) Mail: U.S. Department of 

Agriculture, Office of the Assistant 

Secretary for Civil Rights, 1400 

Independence Avenue SW, Washington, 

DC 20250–9410; or 

(2) Fax: (833) 256–1665 or (202) 690– 

7442; or 

(3) Email: program.intake@usda.gov. 

Addendum: Capital Needs Assessment 

Process 

A Capital Needs Assessment (CNA) 

provides a repair schedule for the 

property in its present condition, 

indicating repairs and replacements 

necessary for a property to function 

properly and efficiently over a span of 

20 years. 

The purpose of this Addendum is to 

provide clarification and guidance on 

the Rural Development CNA process. 

The document includes general 

instructions used in completing CNA 

reports, specific instructions on how to 

use the expected useful life tables, and 

a set of applicable forms including the 

Terms of Reference form; Systems and 

Conditions forms; and Evaluator’s 

Summary forms. 

1. Definitions 

The following definitions are 

provided to clarify terms used in 

conjunction with the CNA process: 

CNA Recipient: This will be who 

enters into the contract with the CNA 

Provider. The Recipient can be either 

the property owner or applicant/ 

transferee. 

‘‘As-Is’’ CNA: This type of CNA is 

prepared for an existing MFH property 

and reports the physical condition 

including all Section 504 Accessibility 

and Health and Safety items of the 

property based on that moment in time. 

This CNA can be useful for many 

program purposes other than the MPR 

Demonstration program such as: An 

ownership transfer, determining 

whether to offer pre-payment aversion 

incentive and evaluating or resizing the 

reserve account. The ‘‘as-is’’ report will 

include all major repairs and likely 

some minor repairs that are typically 

associated with the major work: Each 

major component, system, equipment 

item, etc. inside and outside; 

building(s); property; access and 

amenities in their present condition. A 

schedule of those items showing the 

anticipated repair or replacement 

timeframe and the associated hard costs 

for the ensuing 20-year term of the CNA 

serves as the basis or starting point in 

evaluating the underwriting that will be 

necessary to determine the feasibility 

and future viability of the property to 

continue serving the needs of eligible 

tenants. 

‘‘Post Rehabilitation’’ CNA: This type 

of CNA builds on the findings of the 

accepted ‘‘as-is’’ CNA and is typically 

prepared for a project that will be 

funded for major rehabilitation. The 

Post Rehabilitation CNA is adjusted to 

reflect the work intended to be 

performed during the rehabilitation. The 

assessment must be developed from the 

rehabilitation project plans and any 

construction contract documents to 

reflect the full extent of the planned 

rehabilitation. 

Life Cycle Cost Analysis (LCCA): A 

LCCA is an expanded version of a CNA 

and is defined at 7 CFR 3560.11. The 

LCCA will determine the initial 

purchase cost, the operation and 

maintenance cost, the ‘‘estimated useful 

life’’, and the replacement cost of an 

item selected for the project. The LCCA 

provides the borrower with the 

information on repair or replacement 

costs and timeframes over a 20-year 

period. It also provides information that 

will assist with a more informed 

component selection and can provide 

the borrower with a more complete 

financial plan based on the predictive 

maintenance needs associated with 

those components. If the newly 

constructed project has already been 

completed without any previous LCCA 

requirements, either an ‘‘as-is’’ CNA or 

LCCA can be provided to establish 

program mandated reserve deposits. An 

Architect or Engineer is the best 

qualified person(s) to prepare this 

report. 

Consolidation: In some 

circumstances, RD may permit two or 

more properties to be consolidated as 

defined in 7 CFR 3560.410 when it is in 

the best interests of the Government. 

The CNA Recipient must consult with 

the RD loan official before engaging the 

CNA Provider in any case where the 

CNA intends to encompass more than a 

single (one) existing RD property to 

determine if a consolidated CNA may be 

acceptable for RD underwriting. 

2. Contract Addendum 

RD uses a Contract Addendum to 

supplement the basic CNA Agreement 

or ‘‘Contract’’, between the CNA 

Recipient and CNA Provider, with 

additional details and conditions. It can 

be found in Attachment A, Addendum 

to Capital Needs Assessment Contract 

and must accompany all contracts 

executed between the CNA Recipient 

and CNA Provider for CNAs used in RD 

transactions. If any conflicts arise 

between the ‘‘Contract’’ and ‘‘Contract 

Addendum’’, the ‘‘Contract Addendum’’ 

will supersede. 

The Contract Addendum identifies 

the responsibilities and requirements for 

both the CNA Recipient and the CNA 

Provider. To assure proper completion 

of the contract documents the following 

key provisions must be completed: 

a. The Contract Addendum will 

include the contract base amount for the 

CNA Provider’s cost for services on page 

A–2, and provisions for additional 

services to establish the total price for 

the CNA. 

b. Item I e, will require an itemized 

listing for any additional anticipated 

services and their unit costs including 


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future updates and revisions that may 

be required before the CNA is accepted 

by RD. Note: Any cost for updating a 

CNA must be included, in the 

‘‘additional services’’ subpart, of the 

original CNA Contract. 

c. The selection criteria boxes in II a, 

will identify the type of CNA being 

provided. 

d. In III a, the required language for 

the blank on ‘‘report format’’ is: ‘‘USDA 

RD CNA Template, current RD version, 

in Microsoft Excel format’’. This format 

will import directly into the RD 

underwriting template for loan 

underwriting purposes. 

3. Requirements and Statement of Work 

(SOW) for a CNA 

Minimum requirements for a CNA 

acceptable to RD can be found in 

Attachment B, Capital Needs 

Assessment Statement of Work. This is 

supplemented by Attachment C, Fannie 

Mae Physical Needs Assessment 

Guidance to the Property Evaluator. To 

resolve any inconsistency in the two 

documents, Attachment B, the CNA 

SOW, will in all cases prevail over 

Attachment C, Fannie Mae Physical 

Needs Assessment Guidance to the 

Property Evaluator. (For example, on 

page C–2 of Attachment C, Fannie Mae 

defines the ‘‘term’’ as ‘‘term of the 

mortgage and two years beyond’’. For 

USDA, the ‘‘term’’ will be 20 years, as 

defined in the CNA SOW.) 

Attachment B includes the required 

qualifications for the CNA Provider, the 

required SOW for a CNA assignment, 

and general distribution and review 

instructions to the CNA Provider. The 

CNA Providers must be able to report 

the current physical condition of the 

property and not base their findings on 

the financial condition of either the 

property or the CNA Recipient. 

Attachment C is a three-part 

document RD has permission to use as 

reference to the CNA process 

throughout the RD MFH program efforts. 

The three key components of this 

Attachment are: (1) Guidance to the 

property evaluator; (2) expected useful 

life tables; and (3) a set of forms. 

An acceptable CNA must 

appropriately address within the report 

and narrative all Accessibility Laws and 

Requirements that apply to Section 515 

and Sections 514/516 MFH properties. 

The CNA Provider must assess how the 

property meets the requirements of 

accessibility to persons with disabilities 

in accordance the Uniform Federal 

Accessibility Standards (UFAS) and 

Section 504 Accessibility Requirements. 

It is the responsibility of the Provider to 

inspect and verify whether all 

accessibility features are compliant. 

4. The CNA Review Process 

A CNA used by RD will be reviewed 

by the designated RD CNA Reviewer 

with experience in construction, 

rehabilitation, and repair of MFH 

properties, especially as it relates to 

repair and replacement. 

A CNA report must be obtained by the 

CNA Recipient from an independent 

third-party CNA Provider that has no 

identity of interest with the property 

owner, management agent, applicant/ 

transferee or any other principle or 

affiliate defined in 7 CFR 3560.11. The 

CNA Recipient will contract with the 

CNA Provider and is therefore the client 

of the provider. However, the CNA 

Recipient must consult with RD, before 

contracting with a CNA Provider to 

review Guidance Regarding Contracting 

for a CNA. The RD CNA Reviewer will 

evaluate a proposed agreement or 

engagement letter between the CNA 

Recipient and the CNA Provider using 

Attachment G, Capital Needs 

Assessment Guidance to the Reviewer, 

prior to reviewing any CNA report. 

Unacceptable CNA proposals, contracts 

or reports will be returned to the CNA 

Recipient for appropriate corrections 

before they will be used for any 

underwriting determinations. 

The CNA Reviewer will also review 

the cost of the CNA contract. The 

proposed fee for the CNA must be 

approved as an eligible housing project 

expense under 7 CFR 3560.103 (c) for 

the agreement to be acceptable and paid 

using project funds. In most cases, the 

CNA service contract amount has not 

exceeded $3,500 based on the Agency’s 

most recent cost analysis. 

Borrowers and applicants are 

encouraged to obtain multiple bids in 

all cases. However, there is no Agency 

requirement to select the ‘‘low bidder’’ 

under this UL and the CNA Recipient 

may select a CNA Provider that will 

provide the best value, based on 

qualifications, as well as price after 

reviewing references and past work. 

If the CNA is funded by the property’s 

reserve account, a minimum of two bids 

is required if the CNA service contract 

amount is estimated to exceed $5,000 as 

specified in HB–2–3560, Chapter 4, 

Paragraph 4.17 B. If the CNA contract 

under this UL is funded by another 

source, or will be under $5,000, a single 

bid is acceptable. 

If the proposed agreement is 

acceptable, the reviewer will advise the 

appropriate RD servicing official, who 

will in turn inform the CNA Recipient. 

If the proposed agreement is 

unacceptable, the reviewer will notify 

the servicing official, who will notify 

the CNA Recipient and the CNA 

Provider in writing and identify actions 

necessary to make the proposed CNA 

agreement acceptable to RD. Upon 

receipt of a satisfactory agreement, the 

RD CNA Reviewer should advise the 

appropriate RD servicing official or 

underwriting official to accept the 

proposal. 

The CNA Reviewer will review the 

preliminary CNA report submitted to 

RD by the CNA Provider using 

Attachment G and write the preliminary 

CNA review report. During the CNA 

review process, the CNA Reviewer and 

underwriter will consult with the 

servicing field office most familiar with 

the property for their input and 

knowledge of the property. Any 

differences of opinion that exist 

regarding the findings must be mutually 

addressed by RD staff. If corrections are 

needed, the loan official will notify the 

CNA Recipient, in writing, of any 

revisions necessary to make the CNA 

report acceptable to RD. The CNA 

Reviewer will review the final CNA 

report and deliver it to the loan official. 

The final report must be signed by both 

the CNA Reviewer and the loan official 

(underwriter). Upon signature by both, 

this report becomes the ‘‘accepted’’ CNA 

indicating the actual condition of the 

property at the time of the CNA 

inspection—a ‘‘snapshot’’ in time—and 

will be marked ‘‘Current Property 

Condition’’ for indefinite retention in 

the borrower case file. 

A CNA Provider should be fully 

aware of the intended use for the CNA 

because it can impact the calculations 

necessary to perform adequate 

accessibility assessments and can 

impact the acceptability of the report by 

RD. Unacceptable reports will not be 

used for any RD underwriting purposes 

even though they may otherwise be 

acceptable to the CNA Recipient or 

another third-party lender or participant 

in the transaction being proposed. 

5. Guidance Regarding Contracting for a 

CNA 

CNA Recipients are responsible for 

choosing the CNA Provider they wish to 

contract with, and for delivering an 

acceptable CNA to Rural Development. 

RD in no way guarantees the 

performance any Provider nor the 

acceptability of the Provider’s work. 

CNA Recipients are advised to request 

an information package from several 

CNA Providers and to evaluate the 

information before selecting a provider. 

At a minimum, the information package 

should include a list of qualifications, a 

list of references, a client list, and a 

sample CNA report. However, the CNA 

Recipient may request any additional 

information they feel necessary to 


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evaluate potential candidates and select 

a suitable provider for this service. 

Consideration for the type of CNA 

required should be part of the CNA 

Recipient’s selection criteria and 

inserted into the contract language as 

well. The necessary skill set to perform 

the ‘‘as-is’’ versus the Post 

Rehabilitation CNA or a LCCA needs to 

be considered carefully. Knowledge of 

the accessibility laws and standards and 

the ability to read and understand plans 

and specifications should also be among 

the critical skill elements to consider. 

Attachment A, Contract Addendum 

must be submitted to RD with the 

contract and signed by the CNA 

Recipient and CNA Provider. The 

proposed agreement with the CNA 

Recipient and CNA Provider must meet 

RD’s qualification requirements for both 

the provider and the CNA SOW, as 

specified in Attachment B, Capital 

Needs Assessment Statement of Work. 

RD must review the proposed agreement 

between the CNA Recipient and the 

CNA Provider, and concur only if all of 

the RD requirements and conditions are 

met. (See the previous Section 3 of this 

UL, The CNA Review Process.) 

Please note: It is in the CNA 

Recipient’s best interest to furnish the 

CNA Provider with the most current and 

up-to-date property information for a 

more comprehensive and thorough CNA 

report. RD recommends that the CNA 

Recipient conduct a pre-inspection 

meeting with the Owner, Property 

Manager, maintenance persons familiar 

with the property, CNA Provider, and 

Agency Representatives at the site. This 

meeting will allow a forum to discuss 

specific details about the property that 

may not be readily apparent to all 

parties involved during the review 

process, as well as making some 

physical observations on-site. Certain 

issues that may not be evident to the 

CNA Provider due to weather 

conditions at the time of review should 

also be discussed and included in the 

report. Additionally, other issues that 

may need to be addressed include 

environmental hazards, structural 

defects, and complex accessibility 

issues. It is imperative that the Agency 

be fully aware of the current physical 

condition of the property at the time the 

CNA is prepared. An Agency 

representative must make every effort to 

attend the CNA Providers on-site 

inspection of the property unless the 

Agency has performed a physical 

inspection of the property within the 

previous 12 months. 

This pre-inspection meeting also 

allows the CNA Provider to discuss with 

the CNA Recipient total number of units 

to be inspected, as well as identifying 

any specific units that will be inspected 

in detail. The minimum number of 

inspected units required by the Agency 

for an acceptable CNA is 50 percent. 

However, inspecting a larger number of 

units generally provides more accurate 

information to identify the specific line 

items to be addressed over the ‘‘term’’ 

being covered by the CNA report. CNA 

Recipients are encouraged to negotiate 

with the CNA Provider to achieve 

inspection of all units whenever 

possible. The ultimate goal for the CNA 

Recipient and CNA Provider, as well as 

the Agency, is to produce the most 

accurate ‘‘baseline or snapshot’’ of 

current physical property conditions for 

use as a tool in projecting future reserve 

account needs. 

6. Revising an Accepted CNA During 

Underwriting (Applies to RD Actions) 

During transaction underwriting and 

analysis, presentation of the information 

contained in the ‘‘accepted’’ CNA may 

need to be revised by RD to address 

financing and other programmatic 

issues. The loan underwriter and the 

CNA Reviewer will work together to 

determine if revisions are necessary to 

meet the financial and physical needs of 

the property, and established RD 

underwriting or servicing standards and 

principals. These may involve shifting 

individual repair line items reported in 

the CNA, moving work from year to 

year, or other adjustments that will 

improve cash flow. The revised 

underwriting CNA will be used to 

establish reserve funding schedules as 

well as operating budget preparation 

and analysis and will be maintained by 

RD as supporting documentation for the 

loan underwriting. 

The initial CNA, prepared by the CNA 

Provider, will be maintained as an 

independent third-party record of the 

current condition of the property at the 

beginning of the 20-year cycle. 

Original CNAs will be maintained in 

the case file, clearly marked as either 

‘‘Current Property Condition’’ (‘‘As-is’’), 

‘‘Post Rehabilitation Condition’’, or 

‘‘Revised Underwriting/Replacement 

Schedule’’, as applicable. Note: The 

CNA Provider is not the appropriate 

party to ‘‘revise’’ a CNA which has 

already been approved by the CNA 

Recipient and concurred with by the 

Agency. The CNA Provider’s 

independent opinion was the basis of 

the ‘‘As is’’ or ‘‘Post Rehabilitation’’ 

CNA. The CNA developed for 

underwriting may only be revised by RD 

staff during the underwriting process or 

as part of a post-closing servicing action. 

7. Updating a CNA (Applies to ‘‘As-is’’ 

and ‘‘Post-Rehabilitation’’ That Have 

Not Been Accepted by RD) 

A completed CNA more than a year 

old at the time of the RD CNA review 

and approval must be ‘‘updated’ prior to 

RD approval. Likewise, if at the time of 

underwriting the CNA is more than a 

year old (but less than two years old), 

it must be updated before the 

transaction can be approved. 

To update a CNA, the CNA Provider 

must review property changes (repairs, 

improvements, or failures) that have 

occurred since the date of the original 

CNA site visit with the CNA Recipient, 

review costs and quantities, and submit 

an updated CNA for approval. However, 

if the site visit for the CNA occurred 

more than two years prior to the loan 

underwriting, the CNA Provider should 

perform a new site visit to verify the 

current project condition. 

Once the CNA has been updated, the 

CNA Provider will include a statement 

noting ‘‘This is an updated CNA of the 

earlier CNA dated lll,’’ at the 

beginning of the CNA’s Narrative 

section. The CNA Provider should 

reprint the CNA with a new date for the 

updated CNA, and provide a new 

electronic copy to the CNA Recipient 

and RD. 

If the CNA age exceeds 2years at the 

time of the RD CNA review and 

approval, the CNA Provider will need to 

repeat the site visit process to reevaluate the condition of the property. 

The original report can remain the basis 

of the findings. 

8. Incorporating a Property’s 

Rehabilitation Into a CNA 

A CNA provides a repair schedule for 

the property in its present condition, 

indicating repairs and replacements 

necessary for a property to function 

properly and efficiently over a span of 

20 years. It is not an estimate of existing 

rehabilitation needs, or an estimate of 

rehabilitation costs. If any rehabilitation 

of a MFH development is planned as 

part of the proposed transaction, a 

rehabilitation repair list (also called a 

‘‘Scope of Work’’) must be developed 

independently based on the CNA repair 

schedule. This rehabilitation repair list 

may be developed by the CNA 

Recipient, a project Architect, or an 

outside party (such as the CNA 

Provider, when qualified) hired by the 

CNA Recipient. 

The CNA Recipient must not use 

repair line-item costs taken from the 

CNA to develop the rehabilitation cost 

estimates for the rehabilitation loan, as 

these costs will not be accurate. The 

repair costs in a CNA are based on 


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estimated costs for the property. 

Typically, these costs include the labor, 

materials, overhead and profit, but do 

not include applicable ‘‘soft costs’’. For 

example, for CNA purposes, the 

probable cost is to send a repairman out, 

remove an appliance, and put a new one 

in its place. For rehabilitation cost 

estimates, the CNA Recipient typically 

intends to hire a general contractor to 

oversee and supervise the rehabilitation 

work, which is then considered a ‘‘soft 

cost’’. The cost of rehabilitation 

includes the costs for that general 

contractor, the general contractor’s 

requirements, the cost of a project 

Architect (if one is used), tenant 

relocation (if needed), and interim 

financing (if used), which are 

considered ‘‘soft costs’’ attributed to the 

rehabilitation costs for the project. 

If a ‘‘Post Rehabilitation’’ CNA is 

required and authorized by RD, a copy 

of the rehabilitation repair list or SOW 

must be provided to the CNA Provider. 

The CNA Provider will prepare a ‘‘Post 

Rehabilitation’’ CNA indicating what 

repairs are planned for the property in 

the coming 20 years based on conditions 

after the rehabilitation is completed. 

Items to be replaced during 

rehabilitation that will need to be 

replaced again within the 20 years, such 

as appliances, will be included in the 

‘‘Post Rehabilitation’’ CNA. Items that 

will not need replacement during the 

coming 20 years, such as a new roof, 

will not need to be calculated in the 

‘‘Post Rehabilitation’’ CNA. The line 

item should not be removed from the 

CNA, but the cost data should be zeroed 

out. Appropriate comments should be 

included in the CNA report to 

acknowledge the SOW or rehabilitation/ 

repairs that were considered. 

9. Repair and Replacement Schedule 

A CNA is not a formal repair and 

replacement schedule and cannot be 

used as an exact replacement schedule. 

A CNA is an estimate of the anticipated 

replacement needs for the property over 

time, and the associated replacement 

costs. The goal of a CNA is to estimate 

the replacement times based on the 

Expected Useful Life (EUL) to assure 

funds are available to replace equipment 

as it is needed. Hopefully, materials will 

be well maintained and last longer than 

estimated in the CNA. However, the 

CNA cannot be used to mandate 

replacement times for the identified 

building components. The RD 

underwriter may find it necessary to 

adjust the proposed replacement 

schedule during the course of the 

underwriting to allow for an adequate 

Annual Deposit to Replacement 

Reserves (ADRR) payment that will 

sustain the property over a 20-year 

period and keep rents below the 

maximum rents that are allowed. 

BILLING CODE 3410–XV–P 


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ADDENDUM TO THE CAPITAL NEEDS ASSESSMENT CONTRACT {Between CNA Recipient and CNA Provider) 

This ADDUNDUM to the CAPITAL NEEDS ASSESMENT (CNA) CONTRACT 

between ____ (CNA Provider) and (CAN Recipient) is entered intothis __ day of_, 20 

__ (the Effective Date) for the property known as __________ (Property). 

DEFINITIONS 

"Acceptance" means the act of an authorized representative of the United States Department of 

Agriculture (USDA), Rural Development by which the representativeapproves the Agreement and this 

Addendum. 

"Agreement" means the contract entered into between the CNA Recipient and the CNA Provider to 

provide a CNA of the property. It includes the original document entered into between the parties, this 

Addendum, and any other document incorporated by the Agreement. 

"CNA Report" means a report in general conformance with the Statement of Work that is attached hereto 

and the Fannie Mae Physical Needs Assessment Guidance to the PropertyEvaluator. 

"CNA Reviewer" means a person assigned to review the CNA report on behalf ofUSDA, Rural 

Development program. 

"CNA Provider" means the person or entity entering into the Agreement with the CNARecipient to 

perfonn all work required to provide a CNA of the property. 

"CNA Recipient" means the person or persons who have or will have legal title and/or ownership of a 

property participating under USDA, Rural Development programs. 

"Program" means any MFHprogram authorized by Section 514 or 515 of the Housing Act of 1949, as 

amended and administered by USDA, Rural Development. 

"Property" means any structure(s), dwelling(s) and/or land that is the subject of any Multi- family 

Housing program administered by the U.S. Department of Agriculture, Rural Development, and for which 

a CNA is required by U.S. Department of Agrieulture,Rural Development. 

"USDA RD" means the United States Department of Agriculture, Rural Development. 

'Work" means the CNA Statement of Work as attached hereto. 

RECITALS 

WHEREAS, the property known as ___________ ~Property is 

included in the program being administered by USDA RD. 

WHEREAS, as a condition of participating in the program, the CNA Recipient is required to 

obtain a CNA for the Property, which has been prepared inaceordance with the Statement of Work; CNA 

Recipient and CNA Provider must agree to a Contract to prepare a CNA for the Property. 

WHEREAS, CNA Provider and CNA Recipient are parties to that certain CNA Contract, dated 

---------------~ 20_, Agreement, pursuant to which the CNA 

Recipient has retained the services of CNA Provider to provide a CNA for the Property for the base 

Contract amount of $. _________ ~and for itemized "Additional 

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Services" as follows: (see listing inspection i.e. below,) in the amount of$ __ per item or service. 

The total Contract amount is$_. 

WHEREAS, the parties hereby wish to incorporate into the Agreement andits Exhibits certain 

additional provisions as set forth below. 

NOW, THEREFORE, in consideration of the promises and mutual covenantscontained herein 

and other good and valuable consideration, the receipt and sufficiency of which are hereby 

acknowledged, the parties agree to the following additional terms and conditions as follows: 

ADDITIONS TO THE AGREEMENT 

{Between CNA Recipient and CNA Provider) 

L CNA RECIPIENT OBLIGATIONS 

a. SUBMISSION OF CONTRACT FOR CONCURRENCE BY USDA RD 

CNA Recipient will promptly submit to USDA RD for review and concurrence a copy of the executed 

Agreement and this Addendum. 

b. NOTIFICATION OF CONCURRENCE OF AGREEMENT BY USDARD 

Upon receiving notification from USDA RD of its concurrence of the Agreement, CNA Recipient will 

promptly furnish CNA Provider with evidence of this acceptance. 

c. ACCESS TO THE PROPERTY 

Owner must allow CNA Provider, CNA Recipient and; if requested, the CNA Reviewer, complete, timely 

and unconditional access to the Property and its premises for the purpose of conducting the inspections 

that are required for preparing the CNA. 

d. FURNISHING PROPERTY INFORMATION 

At least. _________ (.number) day(s) prior to the commencement of the CNA 

inspection, CNA Recipient must furnish to the CNA Provider all information on any recent 

and/or immediate planned capital improvements to the Property,any recent and/or scheduled 

repairs, finalized maintenance schedules, and information on the existence of any known 

environmental hazards at the property. In addition, Owners must provide any available 

information on any current "Transition Plan" and "Self -Evaluation" addressing proposals for 

complying with all applicable Federal accessibility requirements, and other matters relevant to 

the CNA Statement ofWork. 

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Specific items the CNA Recipient should provide the CNA Provider include: 

1. Contact information for the Owner's representative at USDA RD (Name,address, telephone number, 

e-mail address, etc.). 

2. Building-by-building breakdown ofunits by bedroom count and type (i.e.garden, townhouse, fully 

accessible) to aid in selection of units at time of inspection. 

3. Any available plans or blueprints of development (as-built drawingspreferred). 

4. Listing of capital expenditures for the Property over the past three to five yearsand maintenance 

expenditures over the last 12 months. 

5. Maintenance logs to help identify any significant or systemic areas ofconcem. 

6. Copies of invoices for any recently completed capital improvements and/orcopies of quotes for any 

pending/planned capital improvements. 

7. A valid/current Section 504 Accessibility Self Evaluation/Transition Plan (nomore than three years 

old). 

8. Any available capital/physical needs assessments (CNAs/PNAs) that werepreviously completed. 

9. Any available structural or engineering studies that were previouslycompleted. 

10. Any available reports related to lead-based paint testing or other environmental hazards (i.e. asbestos, 

mold, underground storage tanks, etc.) that were previously completed and/or related certifications if 

environmentalremediation has been completed. 

11. Reports including, but not limited to: local Health Department inspections,soils analysis, USDA's last 

compliance review, or USDA's last security inspection. 

12. If the CNA Recipient certifies below that (a) third-party funds have been committed for use in the 

transaction for which the CNA is required; and (b) USDA RD has communicated its acceptance or 

acknowledgement of the availability of these funds ( whether by an award of points in a portfolio 

revitalization program or otherwise); and (c) these funds are to be used towards a rehabilitation 

program at the Property, the CNA Recipient will provide the CNA Provider with a copy of the 

proposed rehabilitation scopeand budget. 

e. ADDITIONAL SERVICES 

When a CNA exceeds the one-year duration beyond the original acceptance dateof the document, 

the report is required to be updated. The Contract should designate anticipated tasks and costs that 

would be necessary to update the CNAafter the one-year or two-year time frames have been 

exceeded. The Contract should include, at a minimum: 

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1. Identify Property where update is required. 

2. Itemized list of possible tasks to be performed to accomplish the update:Time and materials 

Interviews 

Document reviews (photos, construction documents, contracts, etc.). 

Additional site visit as required (travel). 

3. Associated unit costs for each task required for the CNA Update. 

II. CNA RECIPIENT'S CERTIFICATIONS- CNA Recipient hereby certifies asfollows: 

a. STATUS OF PROPOSED CNA (check correct box) 

D CNA Recipient has received a commitment for third-party funding for the revitalization transaction 

for which application was made. The CNAProvider will create the CNA based on existing 

conditions "as is". CNA Recipient is responsible for the Scope of Work and budget for the proposed 

rehabilitation of the Property (typically obtained from a projectArchitect), incorporating any 

requirements of the third-party lender. TheCNA Provider will then revise their CNA based on the 

anticipated conditions "post rehabilitation" of the Property after the rehabilitation. Both CNAs will be 

provided to Rural Development. 

D CNA Recipient has requested or will request third-party funds but has no commitment. lfCNA 

Recipient does not have a commitment of third-party funds, CNA Reviewer agrees that it is within 

USDA RD's sole discretion to determine whether the CNA Provider should consider any 

rehabilitation Scope of Work and budget for a "post rehabilitation" CNA after conducting a CNA 

based on the Property's "as is" condition. USDARD will make such a determination on the 

likelihood of third-party funds being made available. CNA Provider should verify this decision with 

Rural Development prior to performing a "post rehabilitation" CNA. 

D CNA Recipient does not anticipate third-party funds being utilized, or does not anticipate a 

rehabilitation at this time. In this case, the CNAProvider will conduct a normal review of the 

Property, not including/anticipating any rehabilitation, and base the CNA on the existing conditions at 

the Property. 

NOTE: The CNA Recipient will not instruct the CNA Provider to perform a "post 

rehabilitation" CNA without approval from Rural Development. 

b. COMPLIANCE WITH STATEMENT OF WORK 

CNA Recipient must allow the CNA Provider to comply with the Statement of Work in creating and 

developing a CNA report that will incorporate and meet all terms, conditions and requirements as set 

forth in the attached Statement of Work. CNA Recipient must not impede or attempt to influence the 

CNA Provider's impartiality inapplying the CNA requirements and guidelines established by Rural 

Development in describing the physical condition and needs of the Property. 

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Attachment A 

c. AVAILABILITY 

CNA Recipient must be available to promptly discuss any draft or preliminary CNAreport with the CNA 

Provider and must address in writing to the CNA Reviewer anydesired revisions, corrections, comments 

or concerns the CNA Recipient may have relating to such report. 

d. ADDRESSING DEFICIENCIES 

CNA Recipient must promptly furnish to the CNA Provider USDA RD's CNA Review report. CNA 

Recipient will discuss any deficiencies observed by the CNA Reviewer and request that the deficiencies 

be addressed within five (5) wotking days. Should deficiencies not be addressed within five (5) wotking 

days, CNA Recipient may order the CNA Provider in writing to suspend, delay, or interrupt all or any 

part ofthe work under the Agreement that remains to be perfonned for such period of time until 

deficiencies identified by the CNA Reviewer have been satisfied. 

e. PAYMENT 

The CNA Recipient must pay the CNA Provider 50 percent of the negotiated contractamount for the base 

CNA Contract once the Contract for CNA services has been executed. If the CNA Recipient chooses to 

include and pay for additional services from the CNA Provider exceeding the negotiated base CNA 

Contract amount, then these services must be listed and the payment method addressed in the Contract 

between the CNA Recipient and CNA Provider. If funds for additional services will be withdrawn from 

the reserve account, then 50 percent of the base Contract ammmt along with the additional services will 

be paid once the contract for CNA services hasbeen executed. 

Upon concurrence by the CNA Reviewer of the CNA Provider's final report (signatureofReviewer and 

Underwriter required), the CNA Recipient will promptly satisfy and pay the remaining 50 percent balance 

of the base Contract amount and additional services if they are paid for out of the reserve account. Any 

remaining fees and/or dues owed to the CNA Provider pursuant to the terms of the Agreement will also 

be due upon the CNA Reviewer's concurrence of the CNA Provider's final report. Other payments must 

be subject to the schedule identified in the Agreement. 

ill. CNA PROVIDER'S OBLIGATIONS- (applies to "as-is" "updates" and"post rehabilitation") 

a. CNA PROVIDER'S RESPONSIBILITY FOR WORK 

The CNA Provider must furnish all necessary labor, materials, tools, equipment, and transportation 

necessary for performance of the work as described in the Statement ofW ork, which is attached hereto. 

The format utilized for this report must be 

______________ . (Write in "USDA RD CNA 

Template in Microsoft ExcelFom1at" or similar electronicfonnat.) 

b. COMPLIANCE WITH STATEMENT OF WORK 

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CNA Provider will comply with the Statement of Work by creating and developing a CNA report that 

will incorporate and meet all terms, conditions and requirements as setforth in the attached Statement of 

Work. 

c. DELIVERY OF PRELIMINARY CNA REPORT 

CNA Provider must promptly provide to the CNA Recipient and USDA RD apreliminary CNA report. 

d. AVAILABILITY TO DISCUSS CNA REPORTFTNDTNGS 

CNA Provider must take any reasonable measures to be readily available to discuss and respond to any 

findings, concerns, comments, or revisions the CNA Reviewer mayhave regarding the preliminary CNA 

report. 

e. SUBMISSION OF FINAL CNA REPORT 

After receipt of the CNA Reviewer's report, the CNA Provider must promptly providethe CNA Recipient 

and USDA RD with a finalized CNA report. The fmalized report will incorporate observations, comments 

and/or changes identified by the CNA Reviewer. 

IV. CNA PROVIDER'S CERTIFICATIONS CNA Provider hereby certifies 15fgllow5: 

a. LICENSING AND COMPLIANCE 

CNA Provider possesses valid and current licenses and certifications necessary to comply with the 

Statement of Work and as regulated by all applicable State, county,and/or local laws and/or ordinances. 

b. CONFLICTS OF INTEREST 

CNA Provider has no identity of interest as defined in 7 CFRpart 3560 with CNA Recipient or Owner's 

Property or the management agency/company for the Property. 

c. PROPERLY TRAINED 

CNA Provider and any Provider personnel who will have actual responsibility for theProperty inspection 

and preparation of the CNA are properly trained and experienced in evaluating site and building systems, 

health and safety conditions, physical and structural conditions, environmental and accessibility 

conditions, and estimating costsfor repairing, replacing and improving site and building components. 

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Attachment A 

d. PROFESSIONALLY EXPERIENCED 

CNA Provider and any Provider personnel who will have actual responsibility for the Property inspection 

and preparation of the CNA are professionally experienced in preparing and prO\,iding CNA 's for 

multifamily housing properties that are similar in scope and operation to those typically fmanced in 

USDA RD's Multi-Family Housingprogram. 

e. KNOWLEDGEABLE OF CODES 

CNA Provider and any Provider personnel who will have actual responsibility for theProperty inspection 

and preparation of the CNA are knowledgeable about applicable site and building standards and codes, 

including Federal, State and local rcquircmcntson environmental and accessibility issues. 

f. DEBARMENT AND SUSPEKSION 

CNA Provider is not debarred or suspended from participating in Federally assisted programs and will 

comply with the requirements of7 CFRpart 3017 and 2 CFR part 417 or any successor regulation, 

pertaining to debarment or suspension of a personfrom participating in a Federal program or activity. 

g. SIGNED CERTIFICATION 

Include a written and signed certification by the CNA Provider that it meets all of the above qualifications 

for the proposed Agreement with the CNA Recipient for CNA services. fThe CNA Provider's execution 

of this Addendum will constitute its "writtenand signed certification" that it meets these qualifications.] 

V. MISCELLANEOUS 

a. USDA RURAL DEVELOPMENT PROVISIONS 

Upon request of the CNA Provider or CNA Recipient, USDA RD will make availablepertinent project 

data such as the reserve replacements for the last 2-3 years, budget summary of the last two years, and 

copies of Physical Inspections and Supervisory Visits for the Property, if available. 

b. ASSIGNMENT OF CO~TRACT 

CNA Provider must not assign or transfer any interest in or performance of this Contract, without written 

authorization from the CNA Recipient and a USDA RDrepresentative. 

c. ENTIRE AGREEMENT 

If there are inconsistencies between any provision in this Addendum and any provisionin the Agreement, 

the provision in this Addendum must govern. No oral statements orrepresentations or prior written matter 

contradicting this instrument must have any force and effect. 

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d. GOVERNINGLAW 

All matters pertaining to this Addendum (including its interpretation, application, validity, performance 

and breach) in whatever jurisdiction action may be brought, must be governed by, construed and enforced 

in accordance with the laws of the Stateof _________ . (Location of the Property) 

e. HEADINGS 

This Addendum must be governed by and interpreted as part of the Agreement and itsgeneral terms and 

conditions. 

f. TERMS AND CONDITIONS 

Except as expressly stated herein, all other terms and conditions of the Agreementmust remain in full 

force and effect. 

IN WITNESS WHEREOF, the undersigned who are duly authorized to execute andenter into this 

Addendum, intending to be legally bound hereby, have executed this Addendum as of the date first 

written above. 

Project: 

Project Location: 

CNA Recipient CNA Provider 

By its: __________ _ By its: _______ _ 

(Title/Position) (Title/Position) 

Concurred by: 

The United States Department of Agriculture, Rural Development 

Rural Development Representative Title/Position 

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Atta~hment B 

CAPITAL NEEDS ASSESSMENT STATEMENT OF WORK 

Nature of the Work 

A Capital Needs Assessment (CNA) is a systematic assessment to determine a Property's 

physical capital needs over the next 20 years based upon the observed current physical 

conditions of a Property. The CNA report provides a year-by-year estimate of capital 

replacement costs over this 20-year period for use by the CNA Recipient and the U.S. 

Department of Agriculture (USDA) Rural Development (RD) personnel in planning the reserve 

account for replacements and other funding to cover these costs. 

Note: RD will use the CNA report as a key source of information about expected capital needsat 

the Property and the timing of these needs. However, the CNA report is only an estimate of these 

needs and their timing. It should not be viewed as the formal schedule for actual replacement of 

capital items. Replacement of capital items should occur when components reach the end of their 

actual useful life, which may occur earlier or later than estimated in the CNA report. 

Payment 

The CNA Recipient must pay the CNA Provider 50 percent of the negotiated Contract amount 

for the base CNA Contract amount once the Contract for CNA services has been executed. If the 

CNA Recipient chooses to include and pay for additional services from the CNA Provider 

exceeding the negotiated base CNA Contract amount, then these services must be listed and the 

payment method addressed in the Contract between the CNA Recipient and CNA Provider. Tf 

funds for additional services will be withdrawn from the reserve account, then 50 percent of the 

base Contract amount along with the additional services will be paid once the Contract for CNA 

services has been executed. 

Upon concurrence by the CNA Reviewer of the CNA Provider's final report (signature of 

Reviewer and Underwriter required), the CNA Recipient will promptly satisfy and pay the 

remaining 50 percent balance of the base Contract amount and additional services if they arepaid 

for out of the reserve account. Any remaining fees and/or dues owed to the CNA Provider 

pursuant to the terms of the Agreement will also be due upon the CNA Reviewer's concurrence 

of the CNA Provider's final report. Other payments must be subject to the schedule identified in 

the Agreement. 

Qualifications 

The CNA Provider must: 

1. Possess valid and current licenses and certifications necessary to comply with the Statement 

of Work and as regulated by all applicable State, county and/or local lawsand/orordinances. 

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2. Have no identity of interest as defined in 7 CFR part 3560, with CNA Recipient or owner's 

Property, or management agent. An architectural firm performing a CNA whichis also 

involved in the rehabilitation of the Property would be considered an Identity oflnterest. For 

example: the Architect that performs the CNA assessment could overstate the conditions of 

the Property in order to inflate the rehabilitation scope, resulting in an increase to the 

Architect's compensation which is typically a percentage oftheconstruction costs. 

3. Be properly trained and experienced in evaluating site and building systems, health and 

safety conditions, physical and structural conditions, environmental and accessibility 

conditions, and estimating costs for repairing, replacing, and improving site and building 

components. (This applies to the CNA Provider or any Provider personnel who will have 

actual responsibility for the property inspection and preparation of the CNA.) 

4. Be professionally experienced in preparing and providing CNAs for Multi-Family Housing 

properties that are similar in scope and operation to those typically financed in USDA RD' s 

Section 515 program. (This applies to the CNA Provider or any Provider personnel who will 

have actual responsibility for the Property inspection and preparationofthe CNA.) 

5. Be knowledgeable about applicable site and building standards and codes including Federal, 

State and local requirements on environmental and accessibility issues. (Thisapplies to the 

CNA Provider or any Provider personnel who will have actual responsibility for the Property 

inspection and preparation of the CNA.) 

6. Not be debarred or suspended from participating in Federally assisted programs and will 

comply with the requirements of 2 CFR parts 417 and 180 or any successor regulation, 

pertaining to debarment or suspension of a person from participating in a Federal program or 

activity. 

Statement of Work 

The CNA Provider must: 

1. Perform a CNA in general conformance with the document: "Fannie Mae PhysicalNeeds 

Assessment Guidance to the Property Evaluator," except as modified herein. 

2. Inspect the property. A minimum of 50 percent (50 percent if less than 50 units) (45 percent 

if Property includes 50 - 99 units, 40 percent if the Property contains 100 or more units) of 

all dwelling units must be inspected in a non-intrusive manner. Consideration must be given 

to inspecting at least one unit per floor, per building, and per unit type (one-bedroom, twobedroom, etc.) up to the threshold percentage. CNA Providers must ultimately be responsible 

for appropriate unit sampling but are encouraged to consult with site representatives to gather 

adequate information. This willhelp ensure that unit samples represent a cross-section of unit 

types and current physical conditions at the Property and are reflective of substantive 

immediate physical condition concerns. 

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Attachment B 

All site improvements, common facilities (every central mechanical room, every laundry 

etc.), and building exteriors must be inspected. (ASTM guidelines, allowing for 

"representative observations" of major elements are not adequate in this regard. Although 

inspections are "non-intrusive", CNA Providers must include an inspection of crawlspaces 

and attics (when these spaces can be reasonably and safely accessed) in a number sufficient 

to formulate an opinion of the condition of those spacesand any work necessary). All units 

designated as fully accessible for the handicapped must be inspected. The inspection must 

include interviews with the CNA Recipient, applicant/transferee, management staff, and 

tenants as needed. It must also include consideration of all relevant Property information 

provided by the CNA Recipient, including: 

• Contact information for the client's representative at Rural Development (Name,address, 

telephone number, e-mail address, etc.). 

• Building-by-building breakdown of units by bedroom count and type (i.e. garden,townhouse, 

handicap accessible) to aid in selection of units at time ofinspection. 

• Any available plans or blueprints of development (as-built drawings preferred). 

• Listing of capital expenditures for the Property over the past three to five years and 

maintenance expenditures over the last 12 months. 

• Maintenance logs to help identify any significant or systemic areas ofconcem. 

• Copies of invoices for any recently completed capital improvements and/or copies ofquotes 

for any pending/planned capital improvements. 

• A valid/current Section 504 Accessibility Self-Evaluation/Transition Plan (no morethan 

three years old). 

• Any available capital/physical needs assessments (CNAs/PNAs) that were previously 

completed. 

• Any available structural or engineering studies that were previously completed. 

• Any available reports related to lead-based paint testing or other environmental hazards(i.e. 

asbestos, mold, underground storage tanks, etc.) that were previously completed and/or related 

certifications if environmental remediation has been completed. 

• Reports including but not limited to: local Health Department inspections, soilsanalysis, 

USDA's last Civil Rights compliance review, USDA's last security inspection. 

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• If the CNA Recipient certifies that: (a) third-party funds have been committed for use in the 

transaction for which the CNA is required; and (b) USDA RD has communicated its 

acceptance or acknowledgement of the availability of these funds(whether by an award of 

points in a portfolio revitalization program or otherwise); and (c) these funds are to be used 

towards a rehabilitation at the Property, the CNARecipient will provide the CNA Provider 

with a copy of the proposed rehabilitationscope and budget. Attachment J provides more 

rehabilitation requirements. 

3. Prepare a report using forms developed by Rural Development or other similar documents. 

The report must be on an electronic worksheet in excel format commonlyused in the 

industry, or as prescribed elsewhere herein. The report must contain the following 

components, at a minimum: 

a. Project Summary. Identification of the CNA Provider and CNA Recipient, and abrief 

description of the project, including the name, location, occupancy type (family/elderly) and 

unit mix. 

b. Narrative. A detailed narrative description of the Property, including year the property was 

constructed or rehabilitated (of each phase if work completed in multiple phases), interior 

and exterior characteristics, conditions, materials and equipment, architectural and structural 

components, mechanical systems, etc. it must also include: 

1. Number, types, and identification of dwelling units inspected and used as a basisfor the 

findings and conclusions in the report; 

11. An assessment of how the Property meets the requirements for accessibility topersons with 

disabilities; 

a) The report must include any actions and estimated costs necessary to correct deficiencies in 

order for the Property to comply with applicable Federal, State, and local laws and requirements 

on Section 504 accessibility. The report must also include an opinion on the adequacy of any 

existing and approved Transition Plans for the Property in accordance with USDA RD 

requirements. CNA Providers mustnot assume that a Property built in accordance with 

accessibility standards prevailing at the time of original construction is "grandfathered" on 

accessibility requirements. 

b) The CNA Provider must include in the final report an accessibility evaluation in accordance 

with all applicable Federal accessibility requirements and standards. CNA Providers are strongly 

encouraged to review Appendix 5 to HB-2-3560. 

m. An assessment of observed or potential on-site environmental hazards (e.g.,above or below 

ground fuel storage tanks, leaking electrical transformers); 

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Attachment B 

Note: The narrative portion of the report must address and include any existing testing results 

for the presence of radon, lead in water, lead-based paint, and other environmental concerllS. 

CNA Providers are not expected to conduct or commission any testing themselves. However, 

where test results provided by the CNA Recipient qffirmatively point to hazards, the CNA 

Provider must inquire aboutsubsequent remediation steps and include cost allowances for any 

identified hazards not yet remediated. 

iv. Recommendations for any additional professional reports as deemed necessaryby the CNA 

Provider, such as additional investigations on potential structural defects or environmental 

hazards; 

Note: The narrative portion of the report must address each study or report necessary; why, and 

what expertise is needed so that the CNA Recipient can alleviate that issue, including estimates 

for repairs, prior to underwriting. It is not the L'NA Provider 's re~ponsibility to estimate the cost 

of the study or repairs/ remediation necessary. 

v. Needs of the Property funded or to be funded from a third-party (if any), such astax credits, 

including a brief description of the work, the source of funding, the year(s) the work is planned 

to be completed, and the total estimated costs in current dollars; and: 

Note: For projects where the CNA Recipient advises the CNA Provider that third-party funding 

for rehabilitation is committed and the work will begin within 12 months. the L'NA must address 

the existing conditions at the Property, and the "post-rehabilitation" needs at the Property. An 

example would be a CNA Recipient who has submitted a pre-application to Rural Development 

for the Multifamily Preservation and Revitalization (MPR) Demonstration Program where Rural 

Development has awarded points to the application for third-party funding,and it has committed 

third-party funding. Under the MPR, a CNA Recipient who has applied for third-party funding 

for rehabilitation but does not have a commitment for this funding must have the CNA prepared 

based on conditions at the Property "as is, " not ''post rehabilitation". In these cases, consult 

with RuralDevelopment a,; to whether a "post rehabilitation" CNA should he done. When aCNA 

Recipient receives the funding commitment, and rehabilitation is planned within the next 12 

months, the CNA Contract must be renegotiated to indicate thatrehabilitation is planned and 

specify that a ''post rehabilitation" CNA should be prepared 

In preparing CNAs for these properties, the L'NA Provider should undertake the CNA on the 

basis that the third-party funded rehabilitation will occur as describedin the Scope of Work for 

the rehabilitation project provided by the CNA Recipient and determine the Property's ''postrehabilitation" capital needs over the next 20 years. In these cases, the CNA Provider is 

expected tu review and understand the Scope of Work for planned rehabilitation funded from 

third-party sources, but aside from apparent substantive omissions is not required to comment 

on the planned rehabilitation. 

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If there is no evidence that third-party funding for rehabilitation has been committed (e.g., if 

rehabilitation is not indicated in the Rural Development MP R pre-application and/or Rural 

Development has not awarded points for it), then the c-WA Provider must verify with the Rural 

Development contact prior to performinga ''post rehabilitation" CNA. If no funds are 

committed, and Rural Development does not agree to a ''post-rehabilitation" CNA, the CNA 

Provider may note the c-WA Recipients rehabilitation proposal in the c-WA but the report must be 

undertaken as though there will be no immediate rehabilitation. In these cases, theCNA must be 

based on the CNA Provider 's independent professional opinion of current andfuture needs at 

the Property. (For example, if the c-WA Recipient w ishesfor a rehabilitation, but has no funds 

allocated to perform one.) 

vi. Acknowledgments (names and addresses of persons who: performed the inspection, prepared 

the report, and were interviewed during, or as part oftheinspection). 

c. Materials and Conditions. This component must be reported on a Microsoft Office Excel 

©worksheet.The following major system groups must be assessed in the report: Site; 

Architectural; Mechanical and Electrical; and Dwelling Units. ALL materials and systems in the 

major groups must be assessed (not every specific material used in the construction of the 

Property), including the following items: 

1. Item Description; 

ii. Expected Useful Life (EUL). Data entries must be based on the EUL Table included in the 

"Fannie Mae Physical Needs Assessment Guidance to the Property Evaluator'', unless 

otherwise explained in the report based upon the installation or most recent replacement date, 

quality, warranty, degree of maintenance or any other reasonable and documentable basis. 

Any EUL entry that varies from the Table must include an explanation in the "Comments" 

column. Any EUL that varies from the table by 25 percent or more must be adequately 

supported separately from spreadsheet (for example, provide the documentation or 

explanation in the Narrative section); 

iii. Age. The actual age of the material or system; 

iv. Remaining Useful Life (RUL). Any RUL entry that varies from the difference between the 

EUL and age must be explained in the "Comments" column. Any RUL entry that varies 2 

years or more must be adequately supported separately from the spreadsheet (for example, 

provide the documentation or explanation in the "Narrative" section). Variances of more 

than 25 percent will not be accepted; 

v. Condition. The current physical condition (excellent - good - fair- poor) of thematerial or 

system; 

v1. Description of action needed (repair - replace - maintain construct - none); and, 

v11. Comments or field notes that are relevant to the report. 

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Attachment B 

d. Capital Needs. This component must be reported on a Microsoft Office Excel© worksheet. 

This component identifies all materials and systems for each of the four majorsystem groups 

to be repaired, replaced, or specially maintained. It must include the following items for such 

materials or systems: 

1. Year or years when action is needed; 

ii. Number of years to complete the needed action (duration of the repair work); 

iii. Quantity and Unit of Measure. Any data entry that is not from a physical Property 

measurement or observation during the inspection must be explained in the report ( contrary 

to ASTM guidance, lump sum allowancesmust be used only for capital projects, such as 

landscaping, that cannot readily be quantified); and, 

iv. Estimated repair, replacement, or special maintenance unit cost and total cost in current (uninflated) dollars for each line item. The report must identity the source(s) used for the cost 

data. Entries must include estimated costs for materials, labor (union or non-union wages, as 

appropriate), overhead & profit. 

Consultant fees, and other associated costs may be incurred by the CNA Recipient when 

repair or replacement work involves extensive capital activities (e.g., a major landscaping or 

site drainage project). These activities are likely to include design costs, or the involvement 

of general contractors, with associated overhead and profit considerations. If the CNA 

Provider anticipates work will beaffected by these cost factors, notes should be added to the 

CNA spread sheet/report to explain the cost logic. Discussions with the CNA Recipient and 

the Agency will be necessary to confirm the proposed cost of these capital activities. CNA 

Providers using such standard cost sources must use costallocations that include overhead 

and profit. 

Note: An estimated unit cost that is significantly different from an industry standard cost, such as 

R.S. Means or equivalent, must be adequately supported. 

Generally, replacement actions must involve "in-kind" materials, unless a different material is 

more appropriate, approved by the State Historic Preservation Office, if applicable, and 

explained in the report. Exceptions must be made for components that are seen as inadequate 

(e.g. twenty gallon water heaters, prompting resident complaints) or below contemporary design/ 

construction standards (e.g. single- glazed windows in temperate climates). Rural Development 

also encourages the consideration of alternative technology and materials that offer the promise 

of reduced future capital and/or operating costs (more durable and/or less expensive to maintain 

over time, reduce utility expenses, etc.). CNA Providers are not expected to conduct quantitative 

cost-benefit analyses but must use sound professional judgment in this regard. 

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In addition to the exceptions described in the paragraph above, Rural Development may consider 

the inclusion of market-comparable amenities/upgrades ( e.g. air conditioning in wann climates) 

proposed by the CNA Recipient when such features are essential to the successful operational 

and financial perfonnance of the Property. Such items should be identified specifically in the 

CNA report as "CNA Recipient - recommended upgrades" and include an explanation of why 

these upgrades are necessary in supporting the financial and operational performance of the 

Property. Where included, CNA Provider comments on the feasibility and appropriateness of the 

upgrade are required. 

v. The capital needs must be presented in two time frames: 

a) Immediate Capital Needs. All critical health and safety deficiencies (e.g.inoperative elevator 

or central fire alarm system, missing/unsecured railings, blocked/inadequate fire egress, 

property-wide pest infestation) requiring corrective action in the immediate calendar year. 

Separately, the CNA Recipient must provide any repairs, replacements, and improvements 

currently being accomplished in a rehabilitation project, regardless of funding source, and 

anticipated to be completed within 12 months. 

The CNA Recipient will includethe budget for any planned rehabilitation (e.g., rehabilitation 

proposed in the CNA Recipients pre-application to the MPR). CNA Provider can, but is not 

required, to offer comments about the rehabilitation budget. The CNA must notinclude minor, 

inexpensive repairs or replacements that are part of a prudent CNA Recipients operating budget. 

(If the aggregate cost for a material line item is less than $1,000, then the line item must not be 

included in the CNA. 

An aggregate cost for a line item is an item which needs to be replaced in any given year, the 

cost exceeds the $1,000, and the item should be replaced in the one-year duration. Applying a 

duration that exceeds one-year may decreasethe aggregate amount below the $1,000 

threshold, thus circumventing the intent of the threshold to include a particular item in the 

CNA. 

Where immediate rehabilitation is proposed by the CNA Recipient using third-party funds, the 

CNA Provider must note the current condition and remaining effective useful lives of affected 

systems and components in an "as is" CNA. 

b) Capital Needs over the Term. Such capital needs include significant maintenance, repairs, 

and replacement items required during subsequent twentycalendar years to maintain the 

Property's physical integrity and long term marketability. It must include repairs, replacements, 

and significant deferred maintenance items currently being planned and anticipated to be 

completed after the immediate calendar year and corrections for violations of applicable 

standards on environmental and accessibility issues. It must also include the needs described in 

paragraph 3.b.v. above in the appropriate year(s), if any, if these will not be completed within 12 

months from the closing of the program revitalization transaction. The CNA must not include 

minor, inexpensive repairs or replacements that are part of a prudent Property owner's operating 

budget 

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Attachment B 

(If the aggregate cost for a material line item is less than $1,000, then the line item must not be 

included in the CNA. An aggregate cost for a line item is an item which needs to be replaced in 

any given year, the cost exceeds the $1,000, and the item should be replaced in the one-year 

duration. Applyinga duration that exceeds one-year may decrease the aggregate amount below 

the $1,000 threshold, thus circumventing the intent of the threshold to include aparticular item in 

theCNA. 

Exceptions to these exclusions may be appropriate for very small properties, and/or for low 

cost items that may affect resident health andsafety (e.g., a damaged or misaligned boiler 

flue). For example, in smallprojects (total of 12 units or less), items exempted would be for 

materialline items less than $250, not $1,000. The report must be realistic and based on due 

diligence and consideration of the Property's condition, welfare of the tenants, and logical 

construction methods and techniques. The estimated unit costs and total costs to remedy 

the detailed needs must be provided in current (on-inflated) dollars. 

Capital Needs over the term must be based on the actual remaining useful lives of the 

components and systems at hand. Aside from formal work that is accounted for in the 

"Immediate Capital Needs" section, capital activitiesmust not be"front-loaded. 

Note: New components or upgrades addressed in a Property's rehabilitation may have long-term 

capital needs implications as well Those items with expected useful lives of less than twenty 

years (e.g. air conditioners) also will need to be accounted for in Capital Needs over the Term. 

e. Executive Summary. This component must be reported on a MicrosoftOffice Excel © 

worksheet. It must include: 

1. Summary oflmmediate Capital Needs - the grand total cost of all majorsystem groups (in 

current dollars); 

11. Summary of Capital Needs Over the Term -the annual costs and grand totalcost of all major 

system groups (in current and inflated dollars). The inflation rate must be 3 percent; and, 

iii. Summary of All Capital Needs - the grand total costs for the immediate and over the term 

capital needs (in current and inflated dollars). The grand total costs (in current and inflated 

dollars) per dwelling unit must also be included. 

f. Appendices. This component must include a minimum 25 color digital photographs that 

describe: the Property's buildings (interior and exterior) and other facilities, specific material 

or system deficiencies, and the bathrooms and kitchens in the units accessible for the 

handicapped. Include a Property location map and other documentsas appropriate to describe 

the Property and support the findings and summaries in the report. The CNA Provider must 

provide some sort of visual documentation for each line item that cannot be clearly identified 

by a written description alone. 

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For instance,if an entrance needs to become handicap accessible, a picture of the entrance 

will helpthe CNA Recipient understand where the construction should take place. The CNA 

Recipient needs to be able to associate reserve account funds with the correct line items 

during the life of the CNA during the underwriting process. 

4. Deliver the following: 

a. A minimum of one electronic copy of the report must be delivered on a compact disk, or 

other acceptable electronic media, e.g. e-mail, to both the CNA Recipientand USDA RD for 

their review and written acceptance. To the greatest extent possible, delivery must be made 

within 15 business days of execution of the Agreement with the CNA Recipient. 

b. If the report is not acceptable, the CNA Provider must make the appropriate changesin 

accordance with the review comments. A minimum of one electronic Excel copyofthe 

revised report must be delivered on a compact disk or via e-mail to both the CNA Recipient 

and USDA RD for their review and written acceptance. The delivery must be made within 5 

business days of receiving the review comments. 

c. If the revised report is still not acceptable, additional revisions will be made andelectronic 

Excel copies delivered on compact disks or via e-mail to the CNA Recipient and USDA RD 

until the report is acceptable. 

5. Be available for consultation with the CNA Recipient or USDA RD after writtenacceptance 

of the report on any of its contents. 

6. The CNA Provider must NOT analyze the adequacy of the Property's existing or proposed 

replacement reserve account nor its deposits as a result of the capital needsdescribed in the 

report. 

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Attachment C 

FANNIE MAE PHYSICAL NEEDS ASSESSMENTGUIDANCE TO THE 

PROPERTY EVALUATOR 

Used by Permission and Sublicense from Fannie Mae Expected Useful Life Tables and Forms 

Developed for Fannie Mae by On-Site Insight of Needham, MA©© 1991 On-Site Insight, Inc. 

UseReproductionandDistribution of These Materials May be Made Solely in Connection 

with the Implementation of Rural Development's Rural Rental Housing Program or 

Intended Uses within the Rural Rental Housing and Farm Labor Housing Programs Related to: 

1. Transfer of Project Ownership; 

2. Loan Reamortization; 

3. Loan Write-Down; or 

4. Development of an Equity Loan Incentive or Equity Loan for a Sale to a Non-Profit Sponsor. 

5. Facility Rehabilitation, including MPR 

6. New Construction 

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Introduction 

While many factors affect the soundness of a mortgage loan over time, one of the most 

significant is the physical condition of the Property - past, present and future. A prudent lender 

must be concerned with the past maintenance and improvements because they may indicate 

owner and management practices as well as expenses to be incurred in the future. The lender 

must be concerned with the condition of the Property at the time the loan is made, and over the 

term of the loan, because Property conditions may directly impact marketability to prospective 

tenants and the need for major expenditures may impact the economic soundness and value of 

the Property. The lender must also be concerned with the condition of the Property at the end of 

the loan term. If the Property has deteriorated, the owner may not be able to secure sufficient 

financing to pay off the loan at maturity. 

Most lenders have always given some attention to physical conditions and needs of properties in 

their underwriting. However, the amount of attention, the data secured, the quality and analysisof 

that data, and the impact of this information on underwriting has varied widely. Indeed, many 

properties and the loans that they secure are now in trouble because of inadequate consideration 

of physical needs in the underwriting coupled with inadequate attention to Property maintenance 

which has diminished the marketability and overall value of the Property. 

The guidance and forms in this package, together with the guidance provided to our lenders in 

our Delegated Underwriting and Servicing (DUS) and Multifamily Guides, is based upon a 

desire to see a more standardized approach to assessing the physical needs of properties that will 

be securing our loans. These documents attempt to respond to stated desires on the part of our 

lenders for a "level playing field" among competing lenders who may otherwise have different 

notions of the level of data and analysis required to assess a Property's physical condition. 

They also attempt to respond to the needs of Property evaluators who, desiring to produce the 

quantity and quality of information deemed necessary, need specific guidance to avoid the 

appearance of glossing over problems or providing material which is too detailed or complex to 

be usable by the underwriters. 

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Attachment C 

These documents are meant to provide useful guidance and tools to the evaluators. They cannot 

cover all situations and are not meant to be inflexible. They are designed to elicit the judgment of 

the evaluator (in a format which is useful to the underwriter), not to substitute for it. We 

welcome comments from evaluators in the field offices, as we did in developing this package, on 

improving either our forms or guidance so that this package can best serve the needs of both the 

evaluators and our lenders. If you have such comments, please contact: 

April LeClair 

Director of Multifamily Product Management 

3900 Wisconsin Avenue, N.W. 

Washington, D.C. 20016 

(202) 752-7439. 
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Specific Guidance to the Property Evaluator 

The purpose of the Physical Needs Assessment is to identify and provide cost estimates for the 

following key items: 

• Immediate Physical Needs - repairs, replacements and significant maintenance 

itemswhich should be done immediately. 

• Physical Needs Over the Term - repairs, replacements and significant 

maintenance itemswhich will be needed over the term of the mortgage and two years 

beyond. 

As part of the process, instances of deferred maintenance are also identified. 

The assessment is based on the evaluator's judgment of the actual condition of the improvements 

and the expected useful life of those improvements. It is understood that the conclusions 

presented are based upon the evaluator's professional judgment and that the actual performance 

of individual components may vary from a reasonably expected standard and will be affected by 

circumstances which occur after the date of the evaluation. 

This package explains how to use the set of forms provided by Fannie Mae. It is important to 

recognize that the forms are intended to help the evaluator conduct a comprehensive and accurate 

assessment. They also present the results of that assessment in a relatively standard format which 

will be useful to the lender in making underwriting decisions. However, the formsshould not 

constrain the evaluator from fully presenting his or her concerns and findings. The forms should 

be used and supplemented in ways which facilitate the preparation and presentation of 

information useful to the lender regarding the physical needs of the Property. 

The Systems and Conditions forms may be altered and/or computerized to serve the evaluators' 

needs so long as information is provided on the condition and Effective Remaining Life (ERL) 

of all components and the ERL is compared to the standard Expected Useful Life (EUL ). The 

Summary forms may also be extended or computerized so long as the basic format is maintained. 

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Attachment C 

Terms of Reference Form 

The lender completes this form for the evaluator. lt serves as a reference point for the assessment 

and provides the evaluator with basic information about the property and the term ofthe loan. 

Four additional topics are covered: 

• Sampling &pectations - The lender's expectations about the number and/or 

percentage of dwelling units, buildings and specialized systems to evaluate 

may be stated. If there is no stated expectation, the evaluator should inspect 

sufficient units, buildings, and numbers of specialized systems to state with 

confidence the present and probable future condition of each system at the 

Property. The evaluator should provide a separate statement indicating the 

sampling systems used to ensure a determination of conditions and costs with 

acceptable accuracy. If a sampling Expectation is provided by the lender which 

is not adequate to achieve the requisite level of confidence, the evaluator 

should soadvise the lender. 

Considerations in determining an adequate sample size are age and number of buildings 

(especially if the Property was developed in phases), total number of units, and variations in size, 

type and occupancy of units. Effective sampling is based on observing a sufficient numberof 

each significant category. Using the above criteria, categories could include buildings by ageof 

each building ( e.g. inspect buildings in the 8-year old phase and in the I I-year old phase), 

buildings by type ( e.g. rowhouse, L-shaped rowhouse, walkup, elevator) and/or buildings by 

construction materials ( e.g. inspect the garden/flat roof/brick walls section and the 

garden/pitched roof/clapboard walls section). Dwelling units are separate categories from 

buildings. At a minimum, sampling is by unit size (0/1/2/3/4 bedrooms). There may be further 

categories if units are differently configured or equipped, or have different occupants (especially 

family or elderly). Generally, we would expect the percentage of units inspected to decrease as 

the total number of units increases. Systems which are not unit specific, such as boilers, 

compactors, elevators and roofs, will often have a 100 percent sample. 

The overriding objective: SEE ENOUGH OF EACH UNIT TYPE AND SYSTEMTO BE 

ABLE TO STATE WITH CONFIDENCE THE PRESENT AND PROBABLE FUTURE 

CONDITON. 

• Market Issues - In certain instances, market conditions may necessitate action 

on certainsystems. Examples are early appliance replacement or re-carpeting, 

new entry paving, special plantings, and redecorated lobbies. If the owner or 

lender has identified such anaction, the evaluator should include a cost 

estimation for such action and indicate what, if any, other costs would be 

eliminated by such action. 

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• Work In Progress - In some instances, work may be underway (which can be 

observed) orunder contract. When known by the lender, this will be noted. For 

purposes of the report, such work should be assumed to be complete, unless observed 

to be unacceptable in quality or scope. 

• Management-Reported Replacements - In some instances, the Property 

ownership or management will provide the lender with information about prior 

repairs or replacementswhich have been completed in recent years. The lender 

may provide this information to the evaluator to assist in the assessment of 

these components. The evaluator should include enough units, buildings, or 

systems in the sample to reasonably verify thereported repairs or replacements. 

Systems and Conditions Forms 

It is the responsibility of the evaluator to assess the condition of every system which is presentat 

a Property. All conditions, except as noted below, requiring action during the life of the loanmust 

be addressed regardless of whether the action anticipated is a capital or operating expense. 

To assist evaluators in reviewing all systems at a Property, four Systems and Conditions Forms 

are provided. Each lists a group of systems typically related by trade and/or location. The four 

forms are Site, Architectural, Mechanical and Electrical, and Dwelling Units. While the forms 

have several columns in which information may be recorded, in many instances only the.first 

three columns will be completed. If the condition of a system is acceptable, the ERL exceeds the 

term of the mortgage by two years, and no action is required, no other columns need to be 

completed. 

The report is not expected to identify minor, inexpensive repairs or other maintenance items 

which are clearly part of the Property owner's current operating pattern and budget so long as 

these items appear to be taken care of on a regular basis. Examples of such minor operating items 

are occasional window glazing replacement and/or caulking, modest plumbing repairs, and 

annual boiler servicing. However, the evaluator should comment on such items in the report if 

they do not appear to be routinely addressed or are in need of immediate repair. 

The report is expected to address infrequently occurring "big ticket" maintenance items, suchas 

exterior painting, all deferred maintenance of any kind, and repairs or replacements which 

normally involve significant expense or outside contracting. While the evaluator should noteany 

environmental hazards seen in the course of the inspection, environment-related actions, such as 

removal of lead-based paint, will be addressed in a separate report prepared by an environmental 

consultant. 

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Attachment C 

Using the Systems and Conditions Forms 

Purpose 

The forms can be used both to record actual observations at a specific location and for an overall 

summary. For example, the Architectural form can be used for a specific building (orgroup or 

identical buildings) as well as for summarizing all information for buildings at a Property. The 

same is true for the Dwelling Unit form. An unlabeled form is included which can be used as a 

second page for any of the Systems and Conditions Forms. 

In some instances, the evaluator will note components which, while they may continue to be 

functional, may reduce marketability of the Property. For example, single-door refrigerators or 

appliances in outmoded colors may have such an impact in some properties. The evaluator 

should note these items, discuss them with the lender, and provide separate estimates of the cost 

to replace such items if requested. 

Items EUL 

Each of the four forms has a number of frequently-occurring systems and components listed.This 

list represents only the most frequently observed and is not meant to be all inclusive. 

Every system present at the Property must be observed and recorded Any system not listed on 

the form may be included in the spaces labeled "Other". Note that the assessment includes the 

systems and components in both residential and non-residential structures. Thus, garages, 

community buildings, management and maintenance offices, cabanas, pools, commercial space, 

and other non-residential buildings and areas are included. 

The EUL figure which appears in parentheses after the "Item" is taken from the "Expected 

Useful Life Table" provided. This table provides standard useful lives of many components 

typically found in apartment complexes. Where the parentheses do not contain a number, it is 

because there are various types of similar components with differing economic lives. The 

evaluator should turn to the "Expected Useful Life Table" and select, and insert, the appropriate 

EUL number. If the EUL will; without question, far exceed the term of the mortgage plus two 

years, the EUL number need not be inserted. 

Note: It is recognized that the "Expected Useful Life Table" represents only one possible 

judgment of the expected life of the various components. Ifwe receive substantial material to the 

effect that one or more of the estimates are inappropriate, we will make adjustments. Until such 

changes are made, the Tables provide a useful and consistent standard for all evaluators touse. 

They avoid debate on what the appropriate expected life is and permit focus on the evaluator's 

judgment of the effective remaining life of the actual component in place, as discussed below. 

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Age 

The evaluator should insert the actual Age of the component or may insert "OR" for original. If 

the actual age is unknown, an estimate is acceptable. If there is a range in Age (for example, 

components replaced over time), the evaluator may note the range (i.e., 5-7 years) or may use 

several lines for the same system, putting a different Age of that system on each line. 

Condition 

This space is provided to indicate the Condition of the component, generally excellent, good,fair, 

or poor, or a similar and consistent qualitative evaluation. 

Effective Remaining Life 

This space is provided for the evaluator to indicate the remaining life of the component as is.For 

standard components with standard maintenance, the "Expected Useful Life Table" provided by 

the lender could be used to determine ERL by deducting the Age from EUL. However, this 

should not be done automatically. A component with unusually good originalquality or 

exceptional maintenance could have a longer life. On the other hand, if the component has been 

poorly maintained or was of below standard original quality, the useful lifecould be shorter than 

expected. The evaluator applies his or her prqfessional judgment in making a determination qf 

the ERL. 

If the ERL is longer than the term of the loan plus two years, no deferred maintenance exists, 

and no action needs to be taken during the l?fe qf the loan, no other columns need to be filled out. 

The only exception may be Diff'? (Difference), as discussed below. This should be notedwhen 

the evaluator's estimate of the ERL varies by more than two years from the standard estimate. 

Dirr? (Difference) 

The Age of the component should be deducted from the EUL in parentheses and the answer 

compared to the ERL estimated by the evaluator. Where there is a difference of over two years, 

the evaluator should insert a footnote number in the DIFF? (Difference) column and supply, in 

an attached list of footnotes, a brief statement of why, in his or her judgment, the ERL of the 

component varies from the standard estimate. This approach provides consistency among 

evaluators while making best of the evaluators' professional judgment. 

Action 

If any Action is required - immediately, over the life of the loan or within two years thereafter -

the Action should be recorded as repair, replacer or maintain. Repair is used when only a part of 

an item requires action, such as the hydraulics and/or controls of a compactor. Replace is used 

when the entire item is replaced. Maintain is us where special, non0routine maintenance is 

required, such as the sandblasting of a swimming pool. In cases where a repair or maintenance 

may be needed now, and replacement or further maintenance may be needed later, separate lines 

may be used to identify the separate actions and timing. 

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Attachment C 

Now? 

If the item involves a threat to the immediate health and safety of the residents, clearly affects 

curb appeal, will result in more serious problems if not corrected, or should otherwise be 

accomplished as part of an immediate repair, maintenance or replacement program, this space 

should be checked. Replacements which may be needed in year one, but do not require 

immediate attention, need not be checked. 

Deferred Maintenance (DM) 

The DM space is marked in any instances where current management practice is clearly 

inadequate and the owner's attention should be called to the item, even if no major expenditureor 

significant labor may be required. 

Quantity 

For items requiring action, the evaluator should note the "Quantity" of the system, with the 

applicable unit of measure entered ( each, unit, square feet, square yards, linear feet, lump sum, 

etc.). 

Field Notes 

This space, as well as attachments may be used to record the type of component (16cf, fros. free, 

Hotpoint), the problem (valves leaking) or other information (consider replacement for 

marketing purposes, replace 30 percent per year, work in progress, etc.) that the evaluator will 

need to complete the "Evaluator's Summary". 

Sample Form 

The following example from the Dwelling Unit Systems and Conditions form illustrates howthis 

form is properly used. The example presumes an 11 story building containing 1 and 2 bedroom 

units. There are 100 units. The age of the building is 9 years. The term of the proposed loan is 7 

years. 

lTEM(EUL) AGE COND ERL DlFF? ACTION NOW? DM? QUANTITY NOTES 

Countertop/ 9 EX 10+ 1 - - - - ea. Corian 

Sinks (10) Stainless Steel 

Refrigerator 9 Good 6 - REPL - - lO0ea Hot point l 6cf. 

(15) ff20%/yr@ 

YRS 

Disposal (5) 0-9 Good 0-5 - REPL - lO0ea 20%/yr.@ 

YR 1 OPTE 

Bath Fixtures 9 Good 11+ - - - - - Dated Looking 

(20) Repair-Now 

Ceiling 04 9 Hater - - Repair Yes - lOea Plumbing 

Stack () Damage Leak 
Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 14477 


khammond on DSKJM1Z7X2PROD with NOTICESEN15MR22.066</GPH>

Countertop/Sinks are 9 years old. (The entry could also be "OR"). Condition isexcellent, with an 

ERL of 10 years. This is significantly different from the anticipated ERL of 1 (a EUL of 10 years 

minus an Age of9 years). Therefore, there is a footnote entry "1" in the Diff? (Difference) 

column. The footnote willindicate that this item is made of an exceptionally durable material 

(Corian), along with a top quality stainless steel sink. The evaluator's estimate of an ERLof 10 

years + is beyond the term of +2. No capital need would be reported. 

Refrigerators are also original, reported as 16 cf frost free Hotpoint. Replacementis expected 

around the ERL, noted as 20 percent annually and beginning in the fifth year of the loan when 

the refrigerators are 14 years old. 

Disposals range from new to original (Age= 0-9). Twenty percent per year replacements will be 

needed starting in year 1. The evaluator notes that disposalsappear to be replaced as part of the 

project's normal operations. 

Bath.fixtures are original, and in good condition. No replacement is expected to be required 

during the term +2 years. The Notes indicates that they are "datedlooking," which may prompt a 

market consideration for replacement. 

Ceiling is a special entry. The "04" stack of units has experienced water damage to ceiling from 

major plumbing leak. This is noted for repair NOW. As this apparently occurs in all IO units in 

this stack and; therefore, is likely to have morethan a modest cost, this action would be reported 

on the Immediate Physical Needssummary form. 

Evaluator's Summary Forms 

Two separate forms are used to summarize the evaluator's conclusions from the Systems and 

Conditions Forms. One summarizes Immediate Physical Needs and the other summarizes the 

Physical Needs Over the Term +2 years. 

Evaluator's Summary: Immediate Physical Needs 

All of the items for which NOW? is checked are transferred to this form. This form provides for 

the listing of Items, Quantity, Unit Cost and Total Cost of each. The Item and Quantity are 

transferred directly from the Systems and Conditions form. 

C-10 
14478 Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 


khammond on DSKJM1Z7X2PROD with NOTICESEN15MR22.067</GPH>

Attachment C 

Unit Cost - This is the cost per unit (sf, ea, If, etc.) in current dollars to implement the required 

action. The source of the cost estimate should be listed in a separate attachment. The sources 

may include a third-party estimation service ( e.g., R.S. Means: Repair and Remodeling Cost 

Data), actual bid or Contract prices for the property, estimates from contractors or vendors, the 

evaluator's own cost files, or published supplier sources. 

Total Cost - This is the result of multiplying the quantity times the unit cost. It is expressed in 

current year dollars. 

Deferred Maintenance (DM) - If the item evidence deferred maintenance, this column is 

checked. 

Comments - the comments column, or an attachment, should clearly provide information on the 

location and the nature of problem being addressed for each item. The information should be 

adequate for the owner to begin to implement the action. 

Evaluator's Summary: Physical Needs Over the Term 

Those items not listed on the Immediate Physical Needs form, but for which action is anticipated 

during the term of the loan plus two years, are listed on the form. The item and Quantity are 

transferred directly from the Systems and Conditions form. The Unit Cost is calculated in the 

same manner as on the Immediate Physical Needs form. An attachment should be provided 

which gives any necessary information on the location of action items andthe problem being 

addressed for each item. The information should be adequate for the ownerto begin to implement 

the action. 

Cost by Year - the result of multiplying the quantity times the unit cost, in current dollars, is 

inserted in the column for the year in which the action is expected to take place. Generally, the 

ERL estimate provided by the evaluator on the Systems and Conditions will indicate the Action 

year. For example, if the evaluator has indicated that the ERL of the parking lot paving is 4 years, 

the cost, in current dollars, is inserted in Year 4. If the items are likely to be done over a number 

of years, the costs, in current dollars should be spread over the appropriate period. For example, 

if the ERL of the refrigerators is estimated to be 4 years, or 3-5 years, one third of the cost of 

replacing the refrigerators may appear in each of years 3, 4, and 5. 

Total Uninflated- After inserting all of the appropriate action items, the evaluator should totalthe 

items for each year. 

Total Inflated - The evaluator should multiply the Total Uninflated times the factor provided to 

produce the Total Inflated. 

Total Inflated All Pages - On the last sheet, the evaluator should include the Total lnflatedDollars 

for that page and all prior pages. 

C-11 
Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 14479 


khammond on DSKJM1Z7X2PROD with NOTICESEN15MR22.068</GPH>

Cumulative Total All Pages - On the last sheet, the evaluator should insert the Total Inflated 

Dollars of that year and all prior years. 

Special Repair and Replacement Requirements 

While performing a Property Inspection, the evaluator must be aware that certain building 

materials and construction practices may cause properties to experience (or to develop in a short 

time period) problems that can be corrected only with major repairs or replacements. The 

following identifies some specific construction related problems; however, the evaluator must be 

aware that other construction related problems may be found in any Property and should be 

identified. If any of the following requirements are not met or if the evaluator determines that the 

following conditions (or others) are present, the evaluator must contact the lender immediately to 

discuss the timing as well as the cost of the repairs or replacements. The evaluator should ensure 

that any of these conditions are thoroughly addressed in the Physical Needs Assessment. 

Minimum Electrical Capacity - Each apartment unit must have sufficient electrical capacity 

(amperage) to handle the number of electrical circuits and their use within an apartment. 

Therefore, the evaluator must determine, based on referencing the National Electric Code as well 

as local building codes, what is the minimum electrical service needed. In any event, thatservice 

must not be less than 60 amperes. 

Electrical Circuit Overload Protection - All apartment unit circuits, as well as electrical circuits 

elsewhere in an apartment complex, must have circuit breakers as opposed to fuses ascircuit 

overload protection. 

Aluminum Wiring - In all cases, where aluminum wiring runs from the panel to the outlets of a 

unit, the evaluator's inspection should ascertain that the aluminum wiring connections ( outlets, 

switches, appliances, etc.) are made to receptacles rated to accept aluminum wiring or that 

corrective repairs can be done immediately by the owner. 

Fire Retardant Treated Plywood - While performing the roof inspection, the evaluator should 

investigate whether there is any indication that fire-retardant treated plywood was used in the 

construction of the roof (primarily roof sheathing). This inspection should focus on sections of 

the roof that are subjected to the greatest amount of heat (e.g., areas that are not shaded or that 

are poorly ventilated) and; if possible, to inspect the attic for signs of deteriorating fire- retardant 

treated plywood or plywood that is stamped with a fire rating. 

Our concern is that certain types of fire-retardant treated plywood rapidly deteriorates when 

exposed to excessive heat and humidity or may cause nails or other metal fasteners to corrode. 

Common signs of this condition include a darkening of the wood and the presence of a powderlike substance, warping of the roof and the curling of the shingles. Fire-retardant treated plywood 

is most likely to be in townhouse properties or other properties with pitched, shingled roofs that 

were constructed after 1981 and that are located in States east of the Mississippi River and some 

southwestern States. 

C-12 
14480 Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 


khammond on DSKJM1Z7X2PROD with NOTICESEN15MR22.069</GPH>

Attachment C 

Narrative Conclusion and Attachments 

A complete narrative summary of the Property and its components is not required. However, the 

evaluator should supply a concise summary of the conclusions reached concerning the overall 

condition of the Property, its future prospects, and the quality of the current maintenance 

programs. Any items affecting the health and safety of residents should be clearly.flagged 

The summary should include a discussion of the sampling approach used, discussed above, and 

any market issues which the evaluator believes it may be appropriate to address or which were 

noted by the lender. 

The narrative, the forms use and the attachments (footnotes explaining Differences, information 

regarding sources of costs, and, if necessary, information needed to identify the location and type 

of problem addressed in the Evaluator's Summary: Physical Needs Over the Term) shouldbe 

supplied. 

C-13 

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CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

...------------------------be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

3 

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General 

Description 

SubComponent I Component 

3.2.2.1 3.2.2.2 3.2.2.3 3.2.2.4 3.2.2.5 3.2.2.6 3.2.4.1 3.2.4.2 3.2.4.3 3.2.4.4 3.2.4.5 3.2.4.6 3.2.4.7 3.2.4.8 3.2.4.9 

refrigerator.) 

Component Description 

System Description and Observations 

Catch basins, inlets, culverts 

Marine or stormwater bulkhead 

Earthwork, swales, drainways, erosion controls 

Storm drain lines 

Stormwater mgmt ponds 

Fountains, pond aerators 

Asphalt Pavement Asphalt Seal Coat 

Concrete Pavement Curbing, Asphalt 

curbing, Concrete 

Parking, Gravel Surfaced Permeable Paving Systems (brick, concrete pavers) 

Striping and Marking 

Signage, Roadway/ Parking 

Family I 

50 

35 

50 50 50 

15 

25 

5 

50 

25 

50 

15 

30 

15 15 

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CNAeTool Estimated 

Useful Life Table 

Numbering by ASTM 2018-08 Outline 

Overall 

System Sub- General Component Description Description Component 

3.2.4.10 3.2.4.11 3.2.5.1 3.2.5.2 3.2.5.3 3.2.5.4 3.2.6.1 3.2.6.2 3.2.6.3 3.2.6.4 3.2.6.S 3.2.6.6 3.2.6.7 3.2.6.8 3.2.6.9 3.2.6.10 3.2.6.11 3.2.6.12 3.2.6.13 3.2.7.1 3.2.7.2 

This table lists the recommended average useful life of the categories of assets th

Capital Needs Assessment. If an observed item is not listed, it should be assigned 

category. The Standard EUL for a component type is fixed. The user may estimate 

any existing component independent of the Standard EUL by entering the assesse

space on the Components tab of the Excel Assessment Tool and by justifying the a

comment box. When identifying an alternative loan existing component the user 

alternative which differs frorn the Standard EUL for that component type but mus

Notes space on the Alternatives tab of the Tool. Each specific component assessed 

description by the needs assessor and this description is the "component ID" or co

be more specific than the "Component Type", e.g (a particular kind, size, etc of ref

refrigerator.) 

Component Description Fa

Carports, wood frame 

Carports, metal frame 

Asphalt 

Concrete 

Gravel 

Permeable Paving (brick, concrete pavers) 

Fencing, chain-link 

Fencing, wood picket Fencing, wood board (=>l"x 6") Fencing, wrought Iron 

Fencing, steel or aluminum 

Fencing, concrete Masonry unit (CMU) 

Fencing, PVC 

Signage, Entrance/Monument 

Mail Kiosk 

Retaining Walls, heavy block (50-80 lb) 

Retaining Walls, reinforced concrete masonry unit (CMU) 

Retaining Walls, treated timber 

Storage sheds 

Sport Court- asphalt 

Sport Court- synthetic 

EN15MR22.072</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

.--------------------------,be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General 

Description 

SubComponent , Component 

3.2.7.3 3.2.7.4 3.2.7.5 3.2.7.6 3.2.7.7 3.2.7.8 3.2.7.9 3.2.7.10 

3.2.8.2.1 3.2.8.2.2 3.2.8.2.3 3.2.8.2.4 3.2.8.2.5 3.2.8.2.6 3.2.8.2.7 3.2.8.2.8 3.2.8.2.9 3.2.8.2.10 

refrigerator.) 

Component Description 

Sport Court-hardwood 

Tot Lot (playground equipment) Tot Lot- lose ground cover 

Pool Deck 

Pool/Spa Plastic Liner Pool/Spa pumps and equipment Decks-treated lumber Decks-composite 

Electric distribution center Electric distribution lines 

Transformer 

Emergency Generator 

Solar Photovoltaic panels 

Photovoltaic Inverters Pole mounted lights 

Ground lighting 

Building Mounted Lighting Building Mounted High Intensity Discharge (HID) Lighting 

Family 

50 

10 

3 

15 

8 

10 

20 

50 

40 40 

30 

25 

15 10 

25 

10 10 10 

EN15MR22.073</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

.--------------------------,be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General I Component 

Description 

3.3.1.1 3.3.1.2 3.3.1.3 3.3.1.4 3.3.1.5 3.3.1.6 3.3.1.7 

SubComponent 

refrigerator.) 

Component Description 

Slab, reinforced concrete Slab, post tensioned 

Continuous reinforced concrete footer and CMU stem wall 

Piers, reinforced concrete footer and CMU pier 

Piers, treated timber post/pole 

Foundation Waterproofing 

Foundation suction, drainage, groundwater, radon gas controls, pumps, 

sumps, equip. failure alarms 

Family I 

100 100 100 100 

40 40 

I 101 

EN15MR22.074</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

~-----------------------be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General 

Description 

SubComponent I Component 

3.3.2.1.1 3.3.2.1.2 3.3.2.1.3 3.3.2.1.4 3.3.2.1.5 3.3.2.1.6 3.3.2.2.1 3.3.2.2.2 3.3.2.2.3 3.3.2.2.4 3.3.2.2.5 3.3.2.4.1 3.3.2.4.2 3.3.2.4.3 

refrip;erator. 

Component Description 

Wood, timbers, dimensioned lumber, laminated beams, trusses 

Tie downs, clips, braces, straps, hangers, shear walls/panels 

Steel, beams, trusses 

Reinforced concrete Reinforced masonry, concrete masonry units (CM Us) 

Solid Masonry (obsolete) Sealed crawl space system 

Vents, screens, covers Vapor Barrier (VDR) ground or underfloor 

Penetrations, caulking/sealing 

Crawl space, (de)pressurization, fans, pumps, sumps, equipment failure 

alarms 

Caulking and Sealing Concrete/Masonry Sealants 

Wood waterproofing and sealants 

Family I 

100 

75 

100 100 100 100 

40 

30 30 

15 10 15 10 10 

EN15MR22.075</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

-1 

___ N_u_m_b-er-i-ng_b_y_A_S_T_M_2_0_1_8_-0_8_0_u_tl-in-e---lrefrigerator.) 

System 

Description 

Overall 

General 

Description 

SubComponent , Component 

3.3.2.4.4 3.3.2.4.5 3.3.2.7.1 3.3.2.7.2 3.3.2.7.3 3.3.2.7.4 3.3.2.7.5 3.3.2.7.6 3.3.2.7.7 3.3.2.7.8 3.3.2.7.9 3.3.2.7.10 3.3.2.7.11 3.3.2.7.12 

Component Description 

Building wraps & moisture resistant barriers 

Paints and stains, exterior 

Exterior Stairs, wood frame/stringer 

Exterior Stair Tread-wood Exterior Stairs-steel frame/stringer Exterior Stair Tread-metal, concrete filled Exterior Stairs, Concrete Fire escapes, metal 

Balcony/Porch, wood frame Balcony/Porch, steel frame or concrete 

Balcony/Porch, wood decking 

Balcony/Porch, composite decking 

Railings, wood Railings, metal 

Family I 

50 

8 

30 

15 

40 

20 

50 50 

25 

40 

20 

50 

20 

50 

EN15MR22.076</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

-1 

___ N_u_m_b_e_r-in_g_b_y_A_S_T_M_2_0_1_8_-0_8_0_u_t_li_n_e_~lrefrigerator.) 

5 Overall Sub- 

ystem I 

. . General Component Component Component Description Family 

Description . . Description 

3.3.2.7.13 Railings, composite 50 3.3.2.7.14 Canopy, Concrete 50 3.3.2.7.15 Canopy, Wood/Metal 40 3.3.2.8.1 Unit Entry Door, Exterior, solid wood/metal clad 25 3.3.2.8.2 Common Exterior Door, aluminum and glass 30 3.3.2.8.3 Common Exterior Door, solid wood /metal clad 25 3.3.2.8.4 Storm/Screen Doors 5 3.3.2.8.5 Sliding Glass Doors 25 3.3.2.8.6 French or Atrium Doors, wood/metal clad 25 3.3.2.8.7 Automatic Entry Doors 30 3.3.2.8.8 Commercial Entry Systems 50 3.3.2.8.9 Overhead Door 30 3.3.2.8.10 Automatic Opener, overhead door 20 3.3.3.1.1 Aluminum 

-

Siding 40 

3.3.3.1.2 Vinyl Siding 25 3.3.3.1.3 Cement Board Siding 45 3.3.3.1.4 Plywood/Laminated Panels 20 3.3.3.1.5 Exterior Insulation Finishing System (EIFS) 30 3.3.3.1.6 Stucco, over wire mesh/lath 50 3.3.3.1.7 Metal/Glass Curtain Wall 40 3.3.3.1.8 Precast Concrete Panel (tilt-up) 60 

EN15MR22.077</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

~I 

___ N_u_m_b-er-i-ng_b_y_A_S_T_M_2_0_1_8_-0_8_0_u_tl-in-e--~lrefrigerator.) 

System 

Description 

Overall 

General I Component 

Description 

SubComponent 

3.3.3.1.9 3.3.3.1.10 3.3.3.1.11 3.3.3.1.12 3.3.3.1.13 3.3.3.2.1 3.3.3.2.2 3.3.3.2.3 3.3.3.2.4 3.3.3.2.5 3.3.3.2.6 3.3.4.1.1 3.3.4.1.2 3.3.4.1.3 3.3.4.1.4 3.3.4.1.5 3.3.4.2.1 3.3.4.2.2 3.3.4.2.3 3.3.4.2.4 

Component Description 

Brick/block veneer 

Stone Veneer 

Glass Block 

Cedar/Redwood shakes, clapboard 

Pine board, clapboard 

Wood, (dbl, sgl hung, casement, awning, sliders) 

Wood, fixed pane, picture 

Aluminum 

Vinyl Vinyl/Alum Clad Wood 

Storm/Screen Windows 

Asphalt Shingle 

Metal 

Slate shingle 

Clay/cementitious barrel tile 

Wood Shingle, Cedar Shakes/Shingles 

Low slope-Built-up Roof, with gravel finish 

Low slope-Built-up Roof, no mineral or gravel finish 

Low slope-Adhered rubber membrane, (EPDM) Low slope-Thermoplastic membrane, (TPO, vinyl) 

Family 

60 

50 50 50 50 

35 

40 

35 30 

50 

7 

20 

50 

75 

60 

25 20 

10 15 15 

EN15MR22.078</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

~----------------------~ Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General 

Description 

SubComponent , Component 

3.3.4.2.5 3.3.4.3.1 3.3.4.3.2 3.3.4.3.3 3.3.4.3.4 3.3.4.3.5 3.3.4.3.6 3.3.4.3.7 3.3.4.3.8 3.4.1.1.1 3.4.1.1.2 3.4.1.1.3 3.4.1.1.4 3.4.1.1.5 3.4.1.1.6 3.4.1.1.7 3.4.1.1.8 3.4.1.1.9 3.4.1.1.10 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

refrigerator.) 

Component Description Family 

Low slope-Rubberized/elastomeric white/cool roof 15 

I 

Gutters/Downspouts, aluminum 20 Gutters/Downspouts, copper 50 

Low slope-roof drains, scuppers 30 

Soffits, Wood, Vinyl, Metal 20 

Fascia, Wood, Vinyl 20 Roof Hatch 30 

Service Door 30 

Roof Skylight 30 

PVC/CPVC pipe, supply and waste 75 

Copper/brass hard pipe, supply 75 Copper Tube, supply 50 

Galvanized pipe, supply 40 

Cast iron sanitary waste 75 

Domestic Cold Water Pumps 20 

Sewage Ejectors 50 

Commercial Sump Pump 20 

Residential Sump Pump 15 

Water Softener/Filtration 15 

EN15MR22.079</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

Numbering by ASTM 2018-08 Outline 

Overall 

System Sub- General Component Description Description Component 

3.4.1.2.1 3.4.1.2.2 3.4.1.2.3 3.4.1.2.4 3.4.1.2.5 3.4.1.2.6 3.4.1.2.7 3.4.1.2.8 3.4.1.2.9 3.4.1.2.10 3.4.1.2.11 3.4.1.2.12 3.4.1.2.13 3.4.1.2.14 3.4.1.2.15 3.4.1.2.16 3.4.1.2.17 3.4.1.2.18 3.4.1.2.19 3.4.1.3.1 3.4.1.3.2 3.4.1.3.3 3.4.1.3.4 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

refrigerator.) 

Component Description Family 

DHW circulating pumps 15 DHW storage tanks 15 

Exchanger, in tank or boiler 15 External tankless heater, gas or electric 20 

Solar hot water 20 

Residential hot water heater, gas or electric 12 Flue, gas water heaters 35 

Boilers, Oil Fired, Sectional 25 Boilers, Gas Fired, Sectional 25 Boilers, Oil/ Gas/ Dual Fuel, Low MBH 30 Boilers, Oil/ Gas/ Dual Fuel, High MBH 40 Boilers, Gas Fired Atmospheric 25 Boilers, Electric 20 Boiler Slowdown and Water Treatment 25 Boiler Room Pipe Insulation 25 Boiler Room Piping 50 Boiler Room Valves 25 Boiler Temperature Controls 15 

Heat Exchanger 35 Faucets & valves 15 

Bath tubs & sinks, cast iron 75 Bubs tubs & sinks, enameled or stainless steel, fiberglass 40 Bath tubs & sinks, porcelain 50 

EN15MR22.080</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

~----------------------~be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General I Component 

Description 

SubComponent 

3.4.1.3.5 3.4.1.3.6 3.4.1.3.7 3.4.2.1.1 3.4.2.1.2 3.4.2.1.3 3.4.2.1.4 3.4.2.1.5 3.4.2.1.6 3.4.2.1.7 3.4.2.1.8 3.4.2.1.9 3.4.2.1.10 3.4.2.1.11 3.4.2.1.12 3.4.2.1.13 3.4.2.1.14 3.4.2.1.15 3.4.2.1.16 3.4.2.1.17 3.4.2.1.18 3.4.2.1.19 

refrigerator.) 

Component Description 

Toilets/bidets/urinals 

Flush valves 

Tub/shower units or integrated assemblies 

Boilers, Oil Fired, Sectional - Centralized 

Boilers, Gas Fired, Sectional - Centralized 

Boilers, Oil/ Gas/ Dual Fuel, Low MBH - Centralized 

Boilers, Oil/ Gas/ Dual Fuel, High MBH - Centralized 

Boilers, Gas Fired Atmospheric - Centralized 

Boilers, Electric- Centralized Boiler Blowdown and Water Treatment - Centralized 

Boiler Room Pipe Insulation - Centralized 

Boiler Room Piping - Centralized 

Boiler Room Valves - Centralized 

Boiler Temperature Controls - Centralized 

Heat Exchanger - Centralized 

Combustion Air, Duct with Fixed Louvers 

Combustion Air, Motor Louvers and Duct 

Combustion Waste Flue 

Cooling tower Chilling plant 

Steam supply station 

Free standing chimney 

Family 

40 

10 

30 

25 25 

30 

40 

25 20 25 25 

50 

25 

15 

35 30 

25 

40 

25 20 

50 50 

EN15MR22.081</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

.--------------------------,be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General 

Description 

SubComponent , Component 

3.4.2.2.1 3.4.2.2.2 3.4.2.2.3 3.4.2.2.4 3.4.2.2.5 3.4.2.2.6 3.4.2.2.7 3.4.2.2.8 3.4.2.2.9 3.4.2.2.10 3.4.2.2.11 3.4.2.2.12 3.4.3.1.1 3.4.3.1.2 3.4.3.1.3 3.4.3.1.4 3.4.3.1.5 3.4.3.1.6 3.4.3.1.7 3.4.3.1.8 3.4.3.1.9 

refrigerator.) 

Component Description 

Fuel oil/propane storage tanks 

Remediate/remove abandoned tanks/fuel lines 

Fuel transfer system 

Gas/oil distribution lines 

Gas meter 

2 pipe/4 pipe hydronic distribution-above grade 

2 pipe/4 pipe hydronic distribution-in ground 

Hydronic/Water Circulating Pumps Hydronic/Water Controller Radiation-steam/hydronic (baseboard or freestanding radiator) 

Fan Coil Unit, Hydronic 

Central exhaust fans/blowers 

Electric heat pump, condenser, pad or rooftop Electric AC condenser, pad or rooftop 

Electric furnace/air handler 

Gas furnace/air handler 

Hydronic heat/electric AC air handler 

Hydronic feed electric heat pump/air handler 

Wall mounted electric/gas heater 

Electric baseboard heater 

PTAC Thruwall (packaged terminal air conditioning) 

40 

100 

25 

50 

40 

50 

25 20 20 

50 

30 

20 

15 15 

20 20 25 25 25 

30 

15 

EN15MR22.082</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

~----------------------~be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General I Component 

Description 

SubComponent 

3.4.3.1.10 3.4.3.1.11 3.4.3.1.12 3.4.3.1.13 3.4.3.1.14 3.4.3.1.15 3.4.3.1.16 3.4.3.1.17 3.4.3.1.18 3.4.3.1.19 3.4.3.1.20 

refrigerator.) 

Component Description 

Window or thru-wall air conditioners 

Package HVAC rooftop 

Air filtration/humidity control devices (humidifiers, HRV's) 

Duct, rigid sheet metal, insulated if not in conditioned space Duct, flexible, insulated Duct, sealing-mastic or UL 181A or 181B tape. 

Diffusers, registers 

Fireplace, masonry & firebrick, masonry chimney 

Fireplace, factory assembled Fireplace insert, stove 

Chimneys, metal, and chimney covers 

Family 

10 15 

20 

35 

20 20 20 

75 

35 

50 

35 

EN15MR22.083</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

.--------------------------,be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General 

Description 

SubComponent , Component 

3.4.4.3.1 3.4.4.3.2 3.4.4.3.3 3.4.4.3.4 3.4.4.3.5 

3.5.1.1 3.5.1.2 3.5.1.3 3.5.1.4 3.5.1.5 3.5.1.6 3.5.1.7 3.5.1.8 3.5.1.9 3.5.1.10 

refrigerator.) 

Component Description Family 

Switches & outlets 35 

Lighting - exterior entry 15 Lighting- interior common space 25 Lighting- Tenant Spaces 20 

Door bells, chimes 20 

Electrical switchgear 50 Electrical wiring 30 Elevator controller, call, dispatch, emergency 10 Elevator cab, interior finish 10 Elevator cab, frame 35 Elevator, machinery 20 Elevator, shaftway doors 10 Elevator, shaftway hoist rails, cables, traveling 20 Elevator, shaftway hydraulic piston and leveling 20 Escalators 50 

EN15MR22.084</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

.-1 ___ N_u_m_b-er-i-ng_b_y_A_S_T_M_2_0_1_8_-0_8_0_u_tl-in_e __ _,lrefrigerator.) 

5 Overall Sub- 

ystem I 

. . General Component Component Component Description Family 

Description . . Description 

3.6.1.2 Fire pumps 20 3.6.1.3 Fire hose stations 50 3.6.1.4 Fire extinguishers 10 

Ill 

3.6.2.1 Tenant space alarm systems 10 3.6.2.2 Residential smoke detectors 5 

3.6.2.3 Call station 10 

3.6.2.4 Emergency/auxiliary generator 25 3.6.2.5 Emergency/auxiliary fuel storage tank 25 3.6.2.6 Emergency lights, illuminated signs 5 3.6.2.7 Smoke and fire detection system, central panel 15 3.6.2.8 Buzzer/intercom, central panel 20 3.6.2.9 Tenant buzzer/ intercom /secured entry system 20 

3.7.1.1.1 Drywall - Common 35 3.7.1.1.2 Plaster - Common 50 3.7.1.1.3 Paints, stains, clear finishes, interior - Common 15 3.7.1.1.4 Wallpapers - Common 15 3.7.1.1.5 Wall tile, ceramic, glass, natural stone - Common 35 

EN15MR22.085</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

~I 

___ N_u_m_b-er-i-ng_b_y_A_S_T_M_2_0_1_8_-0_8_0_u_tl-in-e--~lrefrigerator.) 

System 

Description 

Overall 

General 

Description 

SubComponent , Component 

3.7.1.1.6 3.7.1.1.7 3.7.1.1.8 3.7.1.1.9 3.7.1.1.10 3.7.1.1.11 3.7.1.2.1 3.7.1.2.2 3.7.1.2.3 3.7.1.2.4 3.7.1.2.5 3.7.1.2.6 3.7.1.2.7 3.7.1.2.8 3.7.1.2.9 3.7.1.3.1 3.7.1.3.2 3.7.1.3.3 3.7.1.3.4 

Component Description 

Floor tile, ceramic, natural stone - Common 

Concrete/Masonry/Terrazzo - Common 

Hardwood floor (3/4" strip or parquet) - Common 

Wood floor, laminated/veneered - Common 

Resilient tile or sheet floor (vinyl, linoleum) - Common 

Carpet - Common 

Interior, hollow core doors - Common 

Interior doors, solid core, wood, metal clad, fire rated 

Door trim - Common 

Wall trim (base, chair rail, crown moldings) - Common 

Passage & lock sets - Common 

Bifold & sliding doors - Common 

Cabinets & vanities - Common 

Tops, granite, natural stone, engineered stone - Common 

Tops, solid surface, stainless steel - Common 

Tops, plastic laminates, wood - Common 

Vanity tops, cultured marble, molded acrylic, fiber 

Refrigerator/freezer - Common 

Range, cook top, wall oven - Common 

Range hood - Common 

Microwave- Common 

Family 

40 

75 

50 

20 

15 

6 

15 

20 

30 

20 

30 

15 15 

20 

50 

40 

15 

20 20 

10 

EN15MR22.086</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

~I 

___ N_u_m_b-er-i-ng_b_y_A_S_T_M_2_0_1_8_-0_8_0_u_tl-in-e--~lrefrigerator.) 

System 

Description 

Overall 

General 

Description 

SubComponent , Component 

3.7.1.3.5 3.7.1.3.6 3.7.1.3.7 3.7.1.3.8 3.7.1.4.1 3.7.1.4.2 3.7.1.4.3 3.7.1.4.4 3.7.1.4.5 3.7.1.4.6 3.7.1.4.7 3.7.1.4.8 3.7.1.4.9 3.7.1.4.10 3.7.1.4.11 3.7.2.1.1 3.7.2.1.2 3.7.2.1.3 3.7.2.1.4 3.7.2.1.5 3.7.2.1.6 

Component Description 

Disposal (food waste) - Common 

Compactors (interior, residential grade) - Common 

Dishwasher - Common 

Clothes washer/dryer - Common 

Interior Mail Facility 

Common area bath accessories (towel bars, grab bars, toilet stalls, etc.) 

Mirrors & medicine cabinets - Common 

Closet/storage specialties, shelving- Common Common area interior stairs Common area railings 

Bath/kitchen vent/exhaust fans - Common 

Ceiling fans - Common 

Window treatments, drapery rods, shades, blinds, etc. - Common 

Indoor recreation and fitness equipment 

Entertainment centers, theatre projection and seating 

Drywall Plaster Paints, stains, clear finishes, interior 

Wallpapers Wall tile, ceramic, glass, natural stone 

Floor tile, ceramic, natural stone 

Family 

7 7 

10 10 

20 

7 

20 20 

50 

15 15 15 15 10 15 

35 

50 

10 10 

30 

40 

EN15MR22.087</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

.--------------------------,be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

Numbering by ASTM 2018-08 Outline 

System 

Description 

Overall 

General 

Description 

SubComponent , Component 

3.7.2.1.7 3.7.2.1.8 3.7.2.1.9 3.7.2.1.10 3.7.2.1.11 3.7.2.1.12 3.7.2.2.1 3.7.2.2.2 3.7.2.2.3 3.7.2.2.4 3.7.2.2.5 3.7.2.2.6 3.7.2.2.7 3.7.2.2.8 3.7.2.2.9 3.7.2.2.10 3.7.2.2.11 3.7.2.3.1 3.7.2.3.2 3.7.2.3.3 3.7.2.3.4 3.7.2.3.5 

refrigerator.) 

Component Description 

Concrete/Masonry/Terrazzo 

Hardwood floor (3/4" strip or parquet) 

Wood floor, laminated/veneered 

Resilient tile or sheet floor (vinyl, linoleum) 

Carpet 

Acoustic tile/drop ceiling 

Interior, hollow core doors Interior doors, solid core, wood, metal clad 

Door trim 

Wall trim (base, chair rail, crown moldings) 

Passage & lock sets 

Bifold & sliding doors 

Cabinets & vanities 

Tops, granite, natural stone, engineered stone 

Tops, solid surface, stainless steel 

Tops, plastic laminates, wood 

Vanity tops, cultured marble, molded acrylic, fiber glass 

Refrigerator/freezer Range, cook top, wall oven 

Range hood 

Microwave Disposal (food waste) 

Family 

75 

50 

15 15 

6 

15 

20 

30 

20 25 

12 12 

20 

50 

40 

15 

25 

12 15 15 

10 

7 

EN15MR22.088</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

.-1 ___ N_u_m_b-er-i-ng_b_y_A_S_T_M_2_0_1_8_-0_8_0_u_tl-in_e __ _,lrefrigerator.) 

System 

Description 

Overall 

General 

Description 

4.2.1 4.2.2 4.2.3 

I 

I 

I 

SubComponent , Component 

3.7.2.3.6 3.7.2.3.7 3.7.2.3.8 3.7.2.4.1 3.7.2.4.2 3.7.2.4.3 3.7.2.4.4 3.7.2.4.5 3.7.2.4.6 3.7.2.4.7 3.7.2.4.8 

4.2.2.1 4.2.2.2 

Component Description 

Compactors (interior, residential grade) 

Dishwasher 

Clothes washer/dryer 

Bath accessories (towel bars, grab bars, etc.) 

Mirrors & medicine cabinets 

Closet/storage specialties, shelving 

Interior stairs 

Stair and loft railings 

Bath/kitchen vent/exhaust fans 

Ceiling fans 

Window treatments, drapery rods, shades, blinds, etc. 

LBP inspection 

Lead based paint abatement 

LBP encapsulation (abatement) LBP removal 

Lead based paint interim controls 

Family 

7 

10 10 

7 

15 15 

50 

20 

15 10 10 

I 1001 

I 201 

I 1001 

EN15MR22.089</GPH>khammond on DSKJM1Z7X2PROD with NOTICES

CNAeTool Estimated 

Useful Life Table 

This table lists the recommended average useful life of the categories of assets that shou

Capital Needs Assessment. If an observed item is not listed, it should be assigned to the m

category. The Standard EUL for a component type is fixed. The user may estimate the Re

any existing component independent of the Standard EUL by entering the assessed RUL in 

space on the Components tab of the Excel Assessment Tool and by justifying the assessed 

comment box. When identifying an alternative toan existing component the user may spe

alternative which differs from the Standard EUL for that component type but must enter a

Notes space on the Alternatives tab of the Tool. Each specific component assessed is give

description by the needs assessor and this description is the "component ID" or compone

be more specific than the "Component Type", e.g (a particular kind, size, etc of refrigerato

,...I ___ N_u_m_b_e_r-in_g_b_y_A_S_T_M_2_0_1_8_-0_8_0_u_t_li_n_e_---,lrefrigerator.) 

overall 

System I General I Sub- Component Component Description Description Component Description 

Family 

4.2.3.1 LBP hazard interim control 6 4.2.3.2 

4.2.4 I 

LBP Encapsulation (interim control) 

Asbestos 

6 

4.2.4.1 Asbestos encapsulation (abatement) 10 4.2.4.2 Asbestos Removal 100 

Owner provided item(s) (specify) 

Owner provided$ allowance (specify) 
Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 14501 


khammond on DSKJM1Z7X2PROD with NOTICESEN15MR22.090</GPH>

Attachment E 

CAPITAL NEEDS ASSESSMENT REPORT 

GENERAL NOTES: 

A Reviews of preliminary Capital Needs Assessment (CNA) reports should be based on: 

1. The Statement of Work referenced in the written Agreement with the Provider. 

2. Rural Development case file, such as property records and inspection reports. 

3. Latest available cost data published by RS Means. 

4. Rural Development guidelines. 

5. Fannie Mae guidelines. 

B The reviewer should give special attention to the line items with the highest total costs. 

C The reviewer should be careful to note whether all systems or components that should be 

included have indeed been included in the report. 

D If all review items are answered "YES", the Provider should be advised to finalize the CNA 

with no or only a few minor changes. 

E Any review items answered ''NO" should be explained in writing to the Provider in 

sufficient detail for clarity and appropriate actions taken. 

F The final report should be reviewed to verify that any minor changes and items answered with a 

"NO" in the first review have been satisfactorilv addressed or corrected. 

G When item "D" is completed, the CNA Reviewer should advise the appropriate Rural 

Development official that the CNA should be accepted as the final report. 

PRIMARY 

REVIEW ITEMS: BASIS* YES NO 

1 Is the report in the required format? 1 

2 Does the report fully describe the property'? 1 

3 Are photographs provided to generally describe the property's 1 

buildings and other facilities? 

4 Docs the report identify who performed the on-site inspection? 1 

5 Does the report identify who prepared the report? 1 

6 Was an adequate number of dwelling units inspected? 1 

7 Is the length of the study period adequate? 1 

8 Is the list of property components complete? 5 

9 Is the list divided into the appropriate major system groups? 1 

10 Are the existing property components accurately described? 2 

11 Are the expected useful lifetimes of the components reasonably 5 

accurate? 

12 Are the reported ages of the components reasonably accurate? 2 

13 Is the current condition of each component accurately noted? 2 

14 Are the effective remaining lifetimes of components correctly 5 

calculated? 

15 Are proposed corrective actions appropriately identified? 1 

16 Are critical immediate repairs appropriately identified? 1 

17 Are items being replaced with "in-kind" materials when 1 

anuropriate? 
14502 Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 


khammond on DSKJM1Z7X2PROD with NOTICESEN15MR22.091</GPH>

18 Are the component quantities reasonably accurate? 2 

19 Are photographs provided to describe deficiencies? 1 

PRIMARY 

REVIEW ITEMS: BASIS* YES NO 

20 Does the report adequately address environmental 1 

hazards and other relevant environmental issues? 

21 Does the report adequately address accessibility issues? 1 

22 Does the report address any existing accessibility 1 

transition plans and their adequacy? 

23 Are photographs provided to describe existing kitchens 1 

and bathrooms in the fully accessible units? 

24 Are the proposed years for repair or replacement 5 

reasonable? 

25 Are the repair/replacement durations appropriate and 5 

reasonable? 

26 Are the detailed estimated repair and replacement costs 1 

calculated in current dollars? 

27 Are the estimated repair and replacement costs 3 

reasonable? 

28 Are the sources for cost data explained in the report? 1 

29 Is the projected inflation rate appropriate? 1 

30 Have the costs in current and inflated dollars been 1 

totaled for each year? 

31 Have the costs for each year and grand totals been 5 

correctly calculated? 

32 Does the data in the report narrative and summary charts 5 

match? 

33 Does the report exclude routine maintenance, operation, 4 

and low cost expenses? 

34 Does the report include all deficiencies known to Rural 2 

Development? 

35 Does the report include all other relevant data or 2 

information known to Rural Development? 
Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 14503 


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SAMPLE CAPITAL NEEDS ASSESSMENT REVIEW REPORT 

[Review of Preliminary/Final CNA Report] 

Property Name and Location: 

CNA Provider: 

CNA Reviewer: 

Date of Preliminary / Final CNA Report: 

Date of Review: 

Reviewer's Comments: 

• 

• 

• 

Purpose / Intended Use / Intended User of Review: 

• The purpose of this CNA review assignment is to render an opinion as to the 

completeness, adequacy, relevance, appropriateness, and reasonableness of the 

workunder review relative to the requirements of Rural Development. 

• The intended use of the review report is to help meet Rural Development 

loan underwriting requirements for permanent financing under the Section 

515 l\.1PRdemonstration program. The review is not intended for any other 

use. 

• The intended user of the review is only Rural Development. 

Scope of Review: 

The scope of the CNA review process involved the following procedures: 

Attachment F 

• The review included a reading/analysis of the following components from the 

CNAreport and the additional due diligence noted. The contents from the CNA 

work filewere not reviewed. The components that were reviewed are: 

• Date of the Report 

• Narrative 

• Description oflmprovements 

• Photographs of the Subject Property 

F-1 
14504 Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 


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• Capital Needs Summary 

• Systems and Conditions Forms 

• Critical Needs Forms 

• Capital Needs over the Term Forms 

• This is a desk review, and the reviewer has not inspected the subject Property. 

• The reviewer has/has not confirmed data contained within the CNA report. 

Review Conclusion: 

In the reviewer's opinion, given the scope of the work under review: 

• The subject CNA meets/does not meet the reporting 

requirements ofRural Development. 

• The data appears/does not appear to be adequate and relevant. 

• The CNA methods and techniques used are/are not appropriate. 

• The analyses, opinions, and conclusions are/are not appropriate and reasonable. 

• This is a review report on a preliminary/final CNA report. The preliminary/final 

CNA report is subject to review discussions between Rural Development and the 

CNA Recipient of the subject Property and between the CNA Recipient and the 

CNAProvider. The CNA Recipient is the CNA Provider's client, and only the 

client can instruct the CNA Provider to revise the preliminary/final report. To be 

acceptable to Rural Development, the final CNA report should address any errors 

or deficiencies identified in the Reviewer's Comments section of this review 

report. 

CNA PROVIDER TO INSERT IN MEMO FORMAT THEIR WRITTEN REPORT AND 

THEN HA VE SIGNATURE PAGE BELOW FOR REVIEWER AND 

UNDERWRITER/LOAN OFFICIAL TO SIGN. 

Signed by: 

(CNA Reviewer) (Underwriter/ Loan Official) 

(Please note: for the CNA Review Report of the preliminary CNA, only the CNA Reviewer needs 

tosign the report on behalf of Rural Development. For the CNA Review Report of the final CNA, 

the CNA Reviewer and the Underwriter/Loan Official must sign the report. This is to encourage 

discussion between the Agencies parties, so that both the CNA Reviewer and the Underwriter are 

involved in the process of accepting the final CNAfor the Property.) 

F-2 
Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 14505 


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Attachment G 

Capital Needs Assessment Guidance to the Reviewer 

AGREEMENT TO PROVIDE CAPITAL NEEDS ASSESSMENT 

GENERAL NOTES: 

A Reviews of proposed agreements for Capital Needs Assessments (CNA) should be based on 

Rural Development and other Rural Development -recognized guidelines. 

B If all review items are answered "NO", the reviewer should advise the appropriate Rural 

Development official that the Agreement should be accepted. 

C Any review items answered with a ''YES" should be explained in writing to the proposed 

Provider in sufficient detail for clarity and appropriate actions to be taken. 

D If all review items answered with a ''YES" are satisfactorily addressed or corrected by the 

proposed Provider, the reviewer should advise the appropriate Rural Development official that 

the Agreement should be accepted. 

E If any review items answered with a ''YES" cannot be satisfactorily addressed or corrected by 

the proposed CNA Provider, the reviewer should advise the appropriate Rural Development 

official that the Agreement should NOT be accepted. 

REVIEW ITEMS: YES NO 

1 Does the proposed Agreement omit Rural Development's Addendum to CNA 

Contract? 

2 Does the proposed Agreement omit Rural Development's CNA Statement of 

Work? 

3 Is there any evidence or indication that the proposed CNA Provider has an 

identity of interest, as defined in 7 CFR part 3560? 

4 Is there any evidence or indication that the proposed CNA Provider is NOT 

trained in evaluating site and building systems, and health, safety, physical, 

structural, environmental and accessibility conditions? 

5 Is there any evidence or indication that the proposed CNA Provider is NOT 

trained in estimating costs for repairing, replacing, and improving site and 

building components? 

6 Is there any evidence or indication that the proposed CNA Provider is NOT 

experienced in providing CNAs for MFH properties that are similar to those in 

the Section 515 Program? 

7 Is there any evidence or indication that the proposed CNA Provider is NOT 

knowledgeable of site. building and accessibility codes and standards? 

8 Is there any evidence or indication that the proposed CNA Provider is debarred 

or suspended from participating in Federally-assisted programs? 

9 Does the proposed fee appear to be unreasonable? 
14506 Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 


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CAPITAL NEEDS ASSESSMENT REPORT 

GENERAL NOTES: 

A Reviews of preliminary Capital Needs Assessment (CNA) reports should be based on: 

1. The Statement of Work referenced in the written agreement with theprovider 

2. Rural Development case file, such as property records and inspectionreports 

3. Latest available cost data published by RS Means 

B The reviewer should give special attention to the line items with the highest total costs. 

C The reviewer should be careful to note whether all systems or components that should be 

included have indeed been included in the report. 

D If all review items are answered ''YES", the Provider should be advised to finalize the CNA 

with no or onlv a few minor changes. 

E Any review items answered with a ''NO" should be explained in writing to the Provider in 

sufficient detail for clarity and annropriate actions taken. 

F The final report should be reviewed to verify that any minor changes and items answered with a 

''NO" in the first review have been satisfactorily addressed or corrected. 

G When item "D" is completed, the CNA Reviewer should advise the appropriate Rural 

Development official that the CNA should be accepted as the final report. 

PRIMARY 

REVIEW ITEMS: BASIS* YES NO 

1 Is the report in the required format? 1 

2 Does the report fully describe the property? 1 

3 Are photographs provided to generally describe the property's 1 

buildings and other facilities? 

4 Does the report identify who performed the on-site inspection? 1 

5 Does the report identify who prepared the report? 1 

6 Was an adequate number of dwelling units inspected? 1 

7 Is the length of the study period adequate? 1 

8 Is the list of property components complete? 5 

9 Is the list divided into the appropriate major system groups? 1 

10 Are the existing property components accurately described? 2 

11 Are the expected useful lifetimes of the components reasonably 5 

accurate? 

12 Are the reported ages of the components reasonably accurate? 2 

13 Is the current condition of each component accurately noted? 2 

14 Are the effective remaining lifetimes of components correctly 5 

calculated? 

15 Are proposed corrective actions appropriately identified? 1 

16 Are critical immediate repairs appropriately identified? 1 

17 Are items being replaced with "in-kind" materials when 1 

annropriate? 
Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 14507 

Joaquin Altoro, 

Administrator, Rural Housing Service. 

[FR Doc. 2022–05252 Filed 3–14–22; 8:45 am] 

BILLING CODE 3410–XV–C 

COMMISSION ON CIVIL RIGHTS 

Notice of Public Meeting of the 

Tennessee Advisory Committee 

AGENCY: Commission on Civil Rights. 

ACTION: Announcement of meeting. 

SUMMARY: Notice is hereby given, 

pursuant to the provisions of the rules 

and regulations of the U.S. Commission 

on Civil Rights (Commission), and the 

Federal Advisory Committee Act 

(FACA) that the Tennessee Advisory 

Committee to the Commission will hold 

two virtual (online) meetings on 

Wednesday, April 13, 2022, at 11:00 

a.m.–1:00 p.m. (CT) and on Wednesday, 

April 27, 2022 at 11:00 a.m.–1:00 p.m. 

(CT). The purpose of the meetings is for 

the Committee to hear testimony 

regarding Voting Rights in the state of 

Tennessee. 

DATES: The meetings will be held on: 

Wednesday, April 13, 2022, 11:00 a.m. 

CT, https://civilrights.webex.com/ 

civilrights/j.php?MTID=m6b44009

fa84fafca92fa4fb38e35cdd6 

Join via phone: 800–360–9505 USA Toll 

Free; Access Code: 2764 248 5508 # 

Wednesday, April 27, 2022, 11:00 a.m. 

CT, https://civilrights.webex.com/ 

civilrights/j.php?MTID=m89025

8a2a8dff46faf2be6ca9d4e1285 

Join via phone: 800–360–9505 USA Toll 

Free; Access Code: 2762 495 9020# 

FOR FURTHER INFORMATION CONTACT: 

Victoria Moreno at vmoreno@usccr.gov 

or by phone at 434–515–0204. 

SUPPLEMENTARY INFORMATION: This 

meeting is available to the public 

through the WebEx link above. If joining 

only via phone, callers can expect to 

incur charges for calls they initiate over 

wireless lines, and the Commission will 

not refund any incurred charges. 

Individuals who are deaf, deafblind and 

hard of hearing may also follow the 

proceedings by first calling the Federal 

Relay Service at 1–800–877–8339 and 

providing the Service with the call-in 

number found through registering at the 

web link provided above for the 

meeting. 

Members of the public are entitled to 

make comments during the open period 

at the end of the meeting. Members of 

the public may also submit written 

comments; the comments must be 

received in the Regional Programs Unit 

within 30 days following the respective 

meeting. Written comments may be 

emailed to Victoria Moreno at 

vmoreno@usccr.gov. All written 

comments received will be available to 

the public. 

Persons who desire additional 

information may contact the Regional 

Programs Unit at (434) 515–0204. 

Records and documents discussed 

during the meeting will be available for 


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18 Are the component quantities reasonably accurate? 2 

19 Are photographs provided to describe deficiencies? 1 

PRIMARY 

REVIEW ITEMS: BASIS* YES NO 

20 Does the report adequately address environmental hazards and 1 

other relevant environmental issues? 

21 Does the report adequately address accessibility issues? 1 

22 Does the report address any existing accessibility transition plans 1 

and their adequacy? 

23 Are photographs provided to describe existing kitchens and 1 

bathrooms in the fully accessible units? 

24 Are the proposed years for repair or replacement reasonable? 5 

25 Are the repair/replacement durations appropriate and reasonable? 5 

26 Are the detailed estimated repair and replacement costs calculated 1 

in current dollars? 

27 Are the estimated repair and replacement costs reasonable? 3 

28 Are the sources for cost data explained in the report? 1 

29 Is the projected inflation rate appropriate? 1 

30 Have the costs in current and inflated dollars been totaled for each 1 

year? 

31 Have the costs for each year and grand totals been correctly 5 

calculated? 

32 Does the data in the report narrative and summary charts match? 5 

33 Does the report exclude routine maintenance, operation, and 4 

low-cost expenses? 

34 Does the report include all deficiencies known to Rural 2 

Development? 

35 Does the report include all other relevant data or information 2 

known to Rural Development?