August 21, 2013
Fannie Mae and its DUS Lenders require a Physical Needs Assessment which is their version of the Property Condition Report. The Physical Needs Assessment is defined in the Fannie Mae Delegated Underwriting and Servicing guide, Part 111, Chapter 3, 308. The Physical Needs Assessment is required for Fannie Mae financing on many types of residential properties, including apartment communities, assisted living facilities, skilled nursing facilities, student housing, and manufactured housing communities. The Physical Needs Assessment is similar to an ASTM E2018 Property Condition Assessment in many respects, though there are distinct differences.
Read more about Fannie Mae Physical Needs Assessments.
August 8, 2013
A Property Condition Assessment, also called a Property Condition Report, is an evaluation of the capital expenses that will likely be required to maintain an asset in the short- and long-term.
The standard scope of work for the Property Condition Assessment is defined by ASTM E2018 and includes a walk-through survey of the property to assess the condition of building systems, components and other property improvements, and interviews and documents review regarding the age and condition of property improvements. The Property Condition Report includes tables of the short-term capital expenses (Immediate Repairs Table) and long-term capital expenses (Replacement Reserves Table).
PCAs can help lenders or buyers understand how the condition of the building and site improvements will impact the asset’s financial performance.
Learn more about Property Condition Assessments
Watch a video about Property Condition Assessments