Property Condition Reports in Relation to the Freddie Mac SBL Program
A property condition report, which may also be called a physical needs assessment, looks at each part of a multifamily property in order to determine the current condition of each element of the property. The report will examine the site, building exteriors, and unit interiors, looking at components such as landscaping, electrical and HVAC systems, cabinets, appliances, doors, windows, and building foundations. It will also check for obvious structural or safety issues, such as mold or improperly installed fire safety equipment. All needed repairs will be classified into several categories, ranging from urgent to routine. In addition to being required by a lender and Freddie Mac, property condition reports are used to determine the amount of replacement reserves that borrowers will need to allocate on an annual basis.