This matrix summarizes the environmental due diligence steps that might be required by a representative lending institution for commercial real-estate loans at various collateral amounts and risk levels.
These thresholds will vary for specific lenders depending on their loan portfolios and risk tolerance, and are based on feedback from lenders.
- Environmental risk questionnaire, typically completed by the loan officer, borrower and/or seller.
- EDR Collateral Screen is an online data service, designed for low-value or low-risk loans, that enables the user to quickly see environmental red flags for a property.
- Desktop review comprises a search of available government environmental records and/or historical environmental information, and is typically used for low-balance or low-risk loans.
- EDR LoanCheck is a powerful desktop tool that provides detailed environmental risk information on a single property and its neighbors. It also includes an environmental risk rating made by a qualified environmental professional.
- Phase I is an environmental site assessment by a qualified environmental professional in accordance with ASTM standards. An ASTM 1527-05 Phase I ESA is required for property owners to claim liability protection under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).