Course 5 CNA Report and CNA e-tool

Question 1

What is the underwriter’s role in the CNA process?

Answer 1

Assessor: Focuses strictly on physical condition of property; Reviews the physical condition going out 20 years and states the uninflated needs for each year of the 20 year period. Estimates the costs of the repairs.

Lender: Responsible for reviewing the CNA e-tool; Determines, with help of borrower, when repairs will likely be completed. Determine the initial deposit and annual deposit, interest rate, inflation rate and minimum balance; Complete the Replacement Reserve Schedule (Funding).

Question 2

What attachments are required to the CNA?

Answer 2

1. Brief Narrative
2. Property Description
3. Executive Summary in PDF
4. Annotated photo log including all sites and buildings
5. Additional required stand-alone engineering reports
6. Location Map
7. Aerial photograph or satellite view of site
   USGS Seismic Risk Score Report from online USGS website
8. Certificate of Occupancy / Final Inspection Report
9. Municipal Code Violation / Clear Report
10. Fire Marshall’s Violation / Clear Report
11. As-built plans, if available
12. Municipal / County Health Officer’s Report for properties with private water supply or septic systems
13. Bids for immediate repairs over $25,000
14. O&M plans for hazardous materials, if applicable
15. Resume or statement of qualifications
16. Utility Benchmarking Report (SEP / SEDI)

Question 3

What standards does the CNA need to follow?

Answer 3

The property’s condition at a minimum must meet requirements of ASTM E2018-15.

Question 4

What is the difference between remaining useful life and standard useful life?

Answer 4

Estimated Useful Life” (EUL) refers to a period of years in which a property of average conditions of use may be expected to remain serviceable for its intended purpose.

Remaining Useful Life” (RUL) is the result obtained by subtracting the age of the property from its estimated useful life.

Remaining Economic Life” (REL) is the span between the appraisal and the date a property improvement will cease to have any economic value.

Question 5

What are the regulatory guidelines multifamily housing must conform to?

Answer 5

ADA- January 26, 1992 Public accessibility; only applies to public areas, not individual dwelling units , ADA Title III applies to public accommodations and commercial facilities and to any such portion of a multifamily property; however not the inside of dwelling units.

FHA- Protection against discrimination; The Fair Housing Act applies to all covered multifamily dwellings built for first occupancy after March 13, 1991. FHA deal with design issues and discrimination against families and protected minorities. This requirement does not apply to buildings converted to multifamily use from any other use if occupied prior to March 13, 1991.

UFAS- Public assistance Section 8 housing. UFAS, Section 504 of the Rehabilitation Act of 1973, deals with design standards for properties that receive public assistance such as Section 8 housing; mortgage insurance alone does not trigger this act. Owners of federally assisted projects built prior to July 11, 1988 that became assisted after they were built have an obligation to make housing and facilities readily accessible. 5% of units must be fully accessible; 2% of units must be equipped for A/V impaired individuals.