Does my lender require a Property Condition Assessment?

Requirement by lender type

Lender	PCA required	Notes
SBA 504 / 7(a)	Typically yes	Condition report plus environmental screening per SOP
CMBS / conduit	Yes	E2018 report, reliance letter, reserve schedule required
Life company	Yes	Often prescriptive templates and analysis periods
Agency multifamily (Fannie / Freddie)	Yes	Per-unit reserve figures, unit sampling requirements
Bank / credit union portfolio	Usually	Sometimes waived on small, low-LTV, newer assets
Bridge / debt fund	Usually	Frequently paired with a capex plan review
All-cash purchase	No	Still recommended; the risk did not go away

What the lender does with it

Two things. First, the immediate repair table becomes a condition of closing: most lenders escrow 100 to 125 percent of the estimated immediate cost and require completion within 60 to 180 days. Second, the capital reserve table sets an ongoing replacement reserve, expressed per unit per year on multifamily or per square foot on commercial, which is collected monthly and reduces your distributable cash.

Get the details right at engagement

• Named reliance. The lender must be an intended user, or the report may need to be reissued.
• Analysis period. Ten years is common; some lenders specify twelve or the loan term.
• Template. Agency and life company lenders often require their own format.
• Sampling. Multifamily lenders specify unit sample percentages and require down units be documented.
• Report age. Most lenders will not accept a report older than six to twelve months, so do not reuse a report from a deal that died last year without asking.

Ordering sequence that avoids delay

Order the PCA and, if required, the Phase I ESA as soon as your loan application is in, not after the appraisal comes back. The environmental report is the long pole at fifteen to twenty business days. Waiting on the appraisal before starting diligence is the single most common cause of a missed closing date.

If your lender has not asked yet

They will. Underwriting requests arrive in a batch after credit approval, and by then your contingency period may be half gone. Ask the lender for its third-party report requirements the week you apply, and send them to us so the scope matches the first time.