Federal programs & compliance
Part 58 environmental review
NEPA clearance for HUD-assisted projects by state or local 'responsible entities' under 24 C.F.R. Part 58 — no choice-limiting actions until funds are released.
Definition
Part 58 is the framework under which state and local "responsible entities" assume HUD's NEPA duties for assisted projects — HOME, CDBG, HTF and most grant programs — under HUD's environmental regulations at 24 C.F.R. Parts 50–58 (Part 50 is HUD's in-house version, used for FHA insurance). The review classifies the project (exempt, categorically excluded, environmental assessment, EIS), folds in the related federal laws — Section 106 historic preservation, floodplains, noise, site contamination — and concludes with a release of funds.
The choice-limiting-action rule is the teeth: once HUD assistance is in play, neither the applicant nor its partners may acquire, demolish or begin construction on the site before clearance — and committing non-federal funds to those actions counts.
Why it matters in an underwrite
This rule threatens funding, not just schedule: closing on land or starting demolition before the release of funds can disqualify the project from the federal money it applied for. Structure accordingly — option contracts with environmental contingencies instead of early closings, no early site work, and the review started as soon as the funding application is real, since an environmental assessment with publication and comment periods adds months. FHA-insured deals run the parallel Part 50 process inside MAP underwriting.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.