Is an environmental questionnaire required to be completed on residential real estate taken as collateral for commercial loan purposes?
There's not a federal regulatory requirement for residential properties- that relates to commercial property. Typically environmental questionnaires or surveys are only needed for commercial real estate. There may be a rare case in which the title company is requesting an environmental questionnaire to be completed, but I would consider that out of the ordinary.
Use of an environmental questionnaire isn't required under the federal consumer compliance regulations. That being said, you may want to consider obtaining such information to ensure that you're properly managing any environmental concerns from a safety and soundness standpoint. Since environmental liability is governed by state law you'll want to consult with local counsel should you decide to use such a questionnaire.
As stated in the FDIC's environmental Guidelines, "loans collaterized by 1- to 4-family residences normally have less exposure to environmental liability than loans to finance industrial properties."
A copy of the FDIC policy for Environmental Standards can be found on the FDIC's website, here:
CA also does offer our Environmental Risk Procedures here which may prove helpful: https://www.compliancealliance.com/find-a-tool/tool/environmental-risk-procedures
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