Radon is an odorless radioactive gas produced by uranium decay in soil and rock. It seeps into homes through foundation cracks and gaps. The EPA identifies 4 picocuries per liter (pCi/L) as the action level at which remediation is recommended. Most mortgage programs do not mandate radon testing, but once it appears in a transaction, it has to be handled correctly.
Agency Loan Requirements
FHA does not require radon testing on residential purchase transactions as a standard condition. VA follows the same approach. Conventional loans through Fannie Mae and Freddie Mac do not mandate radon testing. However, if a borrower orders a home inspection and the inspector finds or recommends radon testing, and the results come back above 4 pCi/L, many lenders will condition on mitigation before funding. The issue is not the test itself but what it reveals.
High-Risk States and When to Flag It
Certain states have high radon prevalence due to underlying geology. Pennsylvania, Ohio, Iowa, Montana, and parts of the Midwest and mountain West have elevated average radon levels. In these markets, home inspectors frequently include radon testing as part of their standard inspection package. MLOs working in high-radon areas should factor the possibility of radon conditions into their closing timelines. Testing takes 48-96 hours; mitigation installation adds another week or more.
What Happens When Levels Are Too High
A passive radon mitigation system is typically installed by a certified radon contractor. The system uses a pipe and fan to vent radon gas from beneath the foundation to the exterior of the home. Installation cost generally runs $800 to $2,500 depending on the home's construction type. After installation, a post-mitigation test confirms the level dropped below 4 pCi/L. Most lenders require the post-mitigation test results as part of the closing package. Account for the contractor availability and testing time when setting closing dates in radon-prone markets.
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