{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/for-real-estate-included-in-an-acquisition-what-are-the-specific-requirements-for-an-envir","api_url":"https://dealroom.so/api/public/questions/for-real-estate-included-in-an-acquisition-what-are-the-specific-requirements-for-an-envir","question":"For real estate included in an acquisition, what are the specific requirements for an environmental Phase I report?","topic":"Real estate","audience":"borrower","bot_mode":"buyer","short_answer":"A Phase I Environmental Site Assessment must be prepared by an environmental professional in accordance with ASTM E1527 standards and identify any recognized environmental conditions (RECs) on the property.","rule":"The SBA requires environmental due diligence for real estate collateral to identify potential environmental hazards that could devalue the property or impose liability on the borrower or lender. A Phase I ESA must meet industry-standard practices and be performed by a qualified expert.","example":"A Phase I report for a property must include a site visit, historical records review, interviews, and a clear determination of any RECs, such as past underground storage tanks or hazardous material spills.","what_lenders_check":"Lenders rely on a compliant Phase I ESA to assess environmental risk. They carefully review the report's findings, especially any identified RECs, to determine if further investigation (Phase II) or mitigation is needed.","required_facts":["ASTM E1527 standards","Environmental professional","Recognized environmental conditions","Site visit","Historical records review"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"Can I include the purchase of commercial real estate, where the business operates, within the same SBA 7(a) loan for a $2 million deal?","url":"https://dealroom.so/sba-7a/questions/can-i-include-the-purchase-of-commercial-real-estate-where-the-business-operates-within-th"},{"question":"What type of property appraisal is required if my $1.2 million SBA loan includes commercial real estate?","url":"https://dealroom.so/sba-7a/questions/what-type-of-property-appraisal-is-required-if-my-1-2-million-sba-loan-includes-commercial"},{"question":"Can I use an SBA 7(a) loan to purchase the real estate where the business operates?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-purchase-the-real-estate-where-the-business-operates"},{"question":"What happens if the business I am acquiring is located in a leased property?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-business-i-am-acquiring-is-located-in-a-leased-property"},{"question":"What kind of environmental due diligence is required if the business real estate is included in the loan?","url":"https://dealroom.so/sba-7a/questions/what-kind-of-environmental-due-diligence-is-required-if-the-business-real-estate-is-includ"},{"question":"Can an SBA 7(a) loan be used to buy a business that has environmental issues?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-buy-a-business-that-has-environmental-issues"}],"related_terms":[{"term":"Real Estate Acquisition","url":"https://dealroom.so/glossary/real-estate-acquisition"},{"term":"Equity in real estate","url":"https://dealroom.so/glossary/equity-in-real-estate"},{"term":"Commercial Real Estate Acquisition","url":"https://dealroom.so/glossary/commercial-real-estate-acquisition"},{"term":"Real Estate","url":"https://dealroom.so/glossary/real-estate"},{"term":"Phase I environmental report","url":"https://dealroom.so/glossary/phase-i-environmental-report"},{"term":"Real estate entity","url":"https://dealroom.so/glossary/real-estate-entity"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/for-real-estate-included-in-an-acquisition-what-are-the-specific-requirements-for-an-envir","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}