Before you begin a project, you’ll want to know exactly how much money you will have to
invest over time to maintain your newly obtained property. This is where a Capital Needs
Assessment comes in – this assessment is designed to give you a cost estimate to work with as you kick off your project.
The assessment can help you develop a budget to use as you tackle some of the immediate needs on the property. A Capital Needs Assessment can also give you a good idea of the condition of the asset, as well as how much money you may need to maintain over time.
How Does a CNA Differ from a PNA?
Some state governments define a Physical Needs Assessment as a necessity, in addition to a CNA. However, the concepts of a PNA are similar to those found in any CNA.
A PNA is typically prepared by a qualified architect or specialist. His or her job is to inspect and identify deficiencies in the property that may not meet state or local codes. Additionally, the professional can determine future needs during a PNA to give the building owner insight into other responsibilities.
The Basics of a CNA
A CNA may consist of an assessment that looks ahead anywhere from five to 30 years. The goal is to give the real estate investor more information into the demands of the project now and in the future.
Some of the features of a CNA may pertain to existing buildings where additions are proposed, minor or substantial building rehabilitation, existing building acquisitions and
new construction. Many states also require CNA providers to be professionally experienced in preparing and providing assessments for multifamily housing properties, or properties similar to the project.
In California, you may need a Green Physical Needs Assessment depending on the
environmental aspect of your project. A GPNA identifies traditional and green building
requirements that may need to be carried out according to regulations set by the California Housing Finance Agency.
Depending on your type of project, it’s best to work with a firm that understands your
industry, as well as your specific project needs as you craft a CNA.
Why You Need a CNA
In addition to complying with the law, there are other reasons why you need a CNA before
launching your project. A CNA is essentially a roadmap to understanding the cost you will
need to put into your property now and in the future. In general, having a CNA can also help you remain compliant with U.S. Department of Housing and Urban Development
regulations.
As you look for a firm to work with to develop your CNA, it’s important to collaborate with
experts who are up to speed on the fast-changing regulations. Essel’s team of professionals are prepared to create a CNA for your project, and you can rest assured that you’re abiding by the law.
Our team is experienced in preparing CNAs that are compliant with HUD, Cal-HFA and
TCAC standards. To learn more about how we can help you, contact Essel at 1-800- 595-
7616.
