Is a RAD Property Condition Assessment (RPCA) required on the Section 221(d)(4) transaction?
No, an RPCA narrative report is not required on any 221(d)(4) transaction.
However, the RPCA Excel tool is required on all 221(d)(4) sub-rehab projects where the scope of rehab does not include "the removal and replacement of substantially all interior finish surfaces exposing the underlying building frame (i.e. gut rehab).
For those non-gut rehab transactions, the RPCA tool will be required 1) to size the project's reserve for replacement account's deposit, and 2) to capture it's utility consumption baseline data.
The required portions of the RPCA tool which must be completed include:
a) Utility Baseline - Summary
b) Utility Baseline - Monthly
c) Cap Needs Input
For FHA 221(d)(4) new construction and gut rehab transactions, Lenders should use the FHA Section 221(d)(4) formulas to size the reserve for replacement account deposit.