A seismic report, also referred to as a seismic assessment, gauges the seismic risk (probability of an earthquake) of a particular property. It may include calculations of the SML (Scenario Expected Loss) and PML (Probable Maximum Loss) consistent with current building codes. Seismic reports are required in Seismic Zones 3 and 4, which consist of all of California, large swaths of Alaska and Hawaii, certain parts of Idaho, Montana, Oregon, Washington, and Nevada, and a small portion of land in Tennessee, Kentucky, Illinois, and Arkansas. Reports involve three stages, which include:

• Tier 1 Evaluation: Initial Screening Phase
• Tier 2 Evaluation: Evaluation Phase
• Tier 3 Evaluation: Detailed Evaluation Phase

Fortunately for borrowers, many properties will not have to go past the first or second stage, depending on the risk profile of the property as assessed by the Seismic Report.

A seismic report provides calculations of the PML (Probable Maximum Loss) and/or the SML (Scenario Expected Loss) based on projections consistent with current building codes. It also gauges the seismic risk (probability of an earthquake) of a particular property. Seismic reports are only required for properties located within Seismic Zones 3 and 4, which consists of all of California, significant parts of Alaska and Hawaii, Oregon, Washington, and Nevada, as well as a small area in the south, including parts of Tennessee, Kentucky, Illinois, and Arkansas. To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form and a HUD lending expert will get in touch.

A seismic report is used to assess the seismic risk (probability of an earthquake) of a particular property. It may include calculations of the SML (Scenario Expected Loss) and PML (Probable Maximum Loss) consistent with current building codes. Seismic reports are only required for properties located in Seismic Zones 3 and 4, which consist of all of California, large swaths of Alaska and Hawaii, certain parts of Idaho, Montana, Oregon, Washington, and Nevada, and a small portion of land in Tennessee, Kentucky, Illinois, and Arkansas. Seismic reports are required for properties applying for a HUD 223(a)(7) refinance, and for properties applying for a HUD 221(d)(4) loan.

Sources:

• Seismic Report Definition
• Telcordia Map
• Seismic Reports and the HUD 221(d)(4) Loan Program
• HUD Seismic Assessments: What You Need to Know
• Terms, Qualifications, and Guidelines
• HUD Multifamily Loans
• HUD Multifamily Construction Loans

The benefits of obtaining a seismic report include being able to assess the seismic risk (probability of an earthquake) of a particular property. It may include calculations of the SML (Scenario Expected Loss) and PML (Probable Maximum Loss) consistent with current building codes. This can help inform decisions about the safety of a property and help to ensure that it meets the necessary building codes. Additionally, for properties located in Seismic Zones 3 and 4, a seismic report is required for HUD multifamily loans and HUD 221(d)(4) construction loans. This map shows the areas that are considered Seismic Zones 3 and 4.

Not obtaining a seismic report can be risky, as it can lead to a property not being up to code in the event of an earthquake. This can lead to costly repairs and potential liability issues. Additionally, not obtaining a seismic report can lead to a loan not being approved, as HUD multifamily loans require a seismic report for properties located in seismic zones 3 and 4. This map shows the seismic zones.

The costs associated with obtaining a seismic report vary depending on the size and complexity of the property. Generally, the cost of a seismic report can range from $2,000 to $10,000. The cost of the report is typically paid by the borrower and is included in the loan amount. Additionally, the cost of the report is typically amortized over the life of the loan. For more information on the cost of a seismic report, please refer to this page.