Stephanie my apologies for the earlier answer, here are guidelines I found from Fannie Mae regarding property eligibility.
Environmental Hazards: Eligible Properties
Fannie Mae purchases or securitizes mortgage loans secured by properties affected by environmental hazards if:
- the effect of the hazard is measurable through an analysis of comparable market data as of the effective date of the appraisal, and
- the appraiser reflects in the appraisal report any adverse effect that the hazard has on the value and marketability of the subject property or indicates that the comparable market data reveals no buyer resistance to the hazard.
Environmental Hazards: Ineligible Properties
In rare situations, a particular environmental hazard may have a significant effect on the value of the subject property, although the actual effect is not measurable because the hazard is so serious or so recently discovered that an appraiser cannot arrive at a reliable opinion of market value because there is no comparable market data; such as sales, contract sales, or active listings available to reflect the effect of the hazard.
In such cases, the mortgage will not be eligible for delivery to Fannie Mae