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Notice of Demonstration To Assess the National Standards for the Physical Inspection of Real Estate and Associated Protocols

On August 21, 2019, HUD published a set of proposed rules in the Federal Register " Notice of Demonstration To Assess the National Standards for the Physical Inspection of Real Estate and Associated Protocols " 24 CFR Parts 5 and 200; [Docket No. FR–6160–N–01]. This publication outlines the demonstration (pilot) program for NSPIRE, which is to start 60 days from this publication and extend for an unspecified amount of time. The stated goal is to perform at least one test inspection on 4,500 properties nationwide. In much of the publication, there are references to making the inspection requirements smaller and more focused on Quality and Livability. When reading these goals and aspirations of this reform, it is important to understand that streamlined does not mean easier; these new standards appear to have a broader and more expansive evaluation of HUD financed and assisted properties. 100% Annual Owner/Agent Self-Inspections ​​​​​​ "For the first time, [HUD NSPIRE] will incorporate comprehensive, annual self-inspections by property management staff. The methods and results of which will be an integral part of HUD's real estate inspection process. By making these regular, comprehensive self-inspections a part of HUD's physical assessment regimen, property managers will be more engaged in the process and more vested in the outco...
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HUD Notice on Processes to Delay REAC Inspection Scheduling

On March 21, 2019, HUD Released a Notice titled " Approving the Delay of a Physical Inspection Beyond the New Real Estate Assessment Center (REAC) Inspection Notification Timelines ". There are restrictions on what will be allowed to delay REAC Inspections which are procured through the Reverse Auction Program (this does not apply to FHA-Insured Assets). ​ Major Rehab: The HUD Field Office may only approve the delay of an inspection for major rehabilitation if the owner/agent informed the Field Office of the rehabilitation  before receiving notification of an inspection date   [Major Rehab is defined as] Major recapitliation such as refinance or allocation of LIHTC where the total cost is more than $15,000 per unit. Presidential Disaster Declaration (PDD): The project is located in an area/county covered by a PDD during the period an inspector is trying to schedule an inspection. Other Emergency: An emergency such as a fire or water damage occurred that was beyond the owner's control occurred that effects more than 30% of the units. HUD Approved Repair Plan: The project has a HUD approved repair plan as a result of prior score(s) below 60 and it covers the period during which HUD or an inspector are trying to schedule an inspection. National Leased Housing Association (NLHA) provided a notice regarding the Pilot P...
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Preparing for New REAC Realities: A Time to Re-Exam Your Policies and Procedures

With the onset of the new 14-day notice REAC Inspection rule; it is time for management companies and owners to develop new metrics for physical compliance. A large portion of the intent of the new HUD initiative is to end what they refer to as "Just in Time" repairs and the practice of owners/agents simply operating their properties under the guise of preparing for the exam, instead of looking at the quality of their communities. While the presumption that the entire industry operated their properties in this manner is deeply flawed, the perception has resulted in a set of new challenges for the industry. At this moment, owner/agents need to develop a new set of metrics and operating standards to address REAC readiness on an everyday basis. Many in the industry have developed procedures that rely on the last REAC score to determine if a property is ready or in need of additional attention. However, many REAC Inspections were deeply flawed due to poor quality and inconsistent results, making these inspections a poor standard for risk rating. We, at US Housing Consultants, are working with a number of companies who are now developing new maintenance operating procedures. These policies procedures are creating new standards and policies for physical compliance, creating: Layers of internal inspections Quality control procedures RE...
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New Scheduling Rules for REAC Inspection Released 

HUD Released new rules for inspectors participating in the Reverse Auction Program in a document titled " UPCS Inspection Services Purchase Order Terms and Conditions ". These new rules will go into effect on March 25, 2019. Much of the document deals with federal contractor payment and performance requirements for REAC Inspectors, but there are elements of this document which directly affect owners and agents of Multifamily and Public Housing Properties. Scheduling Methodology : REAC Inspectors will create a schedule of properties and the dates that the inspectors have assigned the properties prior to notifying any of the owner/agents. One of those dates will be fourteen days from the initial notification date and the second date will be a final date within seven days of the first inspection date if the first inspection is unsuccessful. Notification Procedure : REAC Inspectors must call ​ ​the  owner /agent exactly 14 calendar days prior to the inspection to notify the owner/agent of the inspection date and then send an email confirmation as well. A confirmation by the owner/agent is not required to proceed with the scheduled date.  If there is a holiday, the contractor should notify the property the day proceeding or following the holiday, thus providing a 13-day or 15-day notification to the property . Non-Complianc...
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New US Housing Consultants Compliance Portal

On February 5, 2019, US Housing Consultants released a new private portal site for our File Review/Approval and HAP Processing Clients.  This new portal site replaces our previous portal which was managed through Salesforce's native environment. This new portal is designed for our clients to start new file review cases and upload resident files, add comments, requests, and review past cases. This new portal has more functionality, a modern look and feel, and a design which will allow us to add a lot more features, including reporting, greater security, and billing tracking for our file review/approval service. This new site can be found at https://portal.us-hc.com   Regional and Corporate users can log-in to view all of their properties (assets) with a single login. Up to eight contacts can be assigned to each property Users can add files in one single workflow when adding a case. There is an easy to use search option to quickly search through all previous and current cases. Users will be able to view information about their property, including income limits and other documents that our analysts have stored about the property. For system administration users, we will be adding a view to the portal where you will be able to see orders for each transaction

HUD REAC Presentation Recap March 9, 2017

HUD has released a new PowerPoint presentation as of March 9, 2017, as part of their Dine & Learn series. Many of these clarifications are reiterations of existing rules. Many of the rules that need clarification and reinforcement are a little surprising, as the issues are not new and the clarifications are really reinforcing basic rules. It appears that these clarifications are the result of some observations made through reviews of photographs from REAC Inspections as well as observations made by Quality Assurance REAC Inspectors. Recording Same Issue Twice : For example, if a bedroom door was missing the hardware, some inspectors were recording both Level 2 for inoperable hardware and Level 3 for surface damage because there was a hole greater than 1". They are to record one of the two deficiencies, and they must choose the higher-level deficiency, in this example: The Level 3 hole. Two Issues on Exterior Walls in Same Vicinity: Much like the doors, building exterior walls were another discussion in the webinar with REAC. When there are both cracks and gaps, and missing pieces/holes/spalling in one area of an exterior wall, the inspectors are to only record one of the two deficiencies and choose the highest severity level; the only time in which two to record two is if there is an associated Health and Safety deficiency. ...
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HUD Notice 2016-03 Clarifications & Student Tips for Compliance

Over the last month we have received many questions about the new HUD notice regarding additional scrutiny on the quality of repairs. While many of the questions also expressed a lot of dismay at the stark change of direction, we were able to clarify a number of concerns. Has this changed all of the deficiency standards? No, nothing really has changed here in terms of what makes something a deficiency. Everything you learned about REAC before is true. What has changed is an evaluation of how things are repaired. Essentially the previous standard of (for example) "Is that wall cracked" has been replaced by, "Has this wall been properly repaired". Every Inspector is different - How can I possibly prepare? Don't personalize your inspections. Your inspection is according to a single set of standards - not Bob or Larry or Susan's standards. If you properly identify issues and repair them professionally, you will be fine. Preparing professionally basically means: don't use spray foam to fit a pothole, or cold patch asphalt to fix a stone retaining wall - don't take the easiest approach. As far as inspectors being different, this is true and always has been. We look at it as there being the industry standards approach, and then the not so by the book approach. So, long story short: if you properly prepare for an inspection, the variabl...
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HUD HOME Program Updates

Important HUD HOME Program Changes It's finally spring in the Northeast, and with the change in temperatures, inevitably you'll take some time to do some spring-cleaning. With that in mind, this month we'll discuss getting your HOME in order – HOME-assisted units that is. There are a number of recent changes to the HOME Program and it's important to review your practices. Recent Changes and Updates to Compliance with the HOME Program It's finally spring in the Northeast, and with the change in temperatures, inevitably you'll take some time to do some spring-cleaning. With that in mind, this month we'll discuss getting your HOME in order – HOME-assisted units that is. Q&A About HOME Where can I find HOME regulations? In July 2013 HUD published the HOME final rule with a number of changes for both existing and newly funded HOME projects. The Final Rule and charts indicating applicability can be found here: https://www.hudexchange.info/home/home-final-rule/ Who monitors compliance of my HOME-assisted units? Your Participating Jurisdiction (PJ) is responsible for overseeing compliance. This is frequently the HFA, but may be another government entity. Do HOME regulations apply to all of my units? HOME requirements apply to HOME-assisted units only. How do I know which units are HOME-assisted? Every assisted project will have a HO...
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REAC Inspection Required Documentation

What Documents Are Required on REAC Inspection The initial part of the REAC inspection is a review of documentation with the REAC Inspector. All of this documentation, with the exception of the generator run-up records, does not impact your overall score and is recorded mostly as a survey and direction for the REAC Inspector. It is a great way to start your day to ensure that you have all of this documentation neatly organized and ready for the REAC Inspector. Systems and Safety Certificates A good portion of the required documentation consists of information about the property's systems and safety documentation, this will include copies of recent inspection certificates, including: Fire alarm inspection reports from within the last 12 months Sprinkler inspection reports within the last 12 months For backup generators, you should provide a maintenance/test log dating back 12 months without any dates missing Boiler Inspection Certificates Elevator inspection Certificates Copy of Inspection Report for Call For Aide System if it is monitored by a third party Information About Your Property After the review of your recent inspection and certificate documentation, there are a number of items about your property that the inspector will need to review. Some of these items can be maintained from one inspection to the next, as the inform...
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Leaking Diverter Valves Issues

One of the most common issues that we have been asked about recently is inspectors who are citing "leaking diverter valves" on shower bathtub faucet assemblies. This refers to a condition where the lower faucet in a shower continues to drip or leak water once the switch (diverter) for the shower-head has been engaged. When you turn on your shower-head, the lower faucet should not run any water at all; if it is does, it will be considered "leaking". This is a Level 3 deficiency, as it represents hardware that has failed and is no longer operating as intended. In many cases, this can carry a significant point loss, and if this is present in a large number of units, it can have a significant effect on your score. What if all my diverter valves leak "a little"? Many shower assemblies are considered to be working "as designed" if they are allowing a small stream or slow drip of water once the shower-head has been engaged. If you have these sort of showerheads in your units, you can tell the inspector that this is the case and that he/she will see the same condition in all of the units that they will inspect. Many inspectors will not cite you for a deficiency if you are able to show them that the condition is normal by evidence of the condition being present in all units. If the inspector does not accept this, you will be able to crea...
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Latest Blogs

24 August 2019
REAC Inspections
On August 21, 2019, HUD published a set of proposed rules in the Federal Register "Notice of Demonstration To Assess the National Standards for the Physical Inspection of Real Estate and Associated Protocols" 24 CFR Parts 5 and 200; [Docket No. FR–6...
21 August 2019
REAC Inspections
On August 20, 2019, HUD released the first of the new NSPIRE protocols which will be expected to become active once the pilot/demonstration program has concluded. This is a first look at what deficiencies will look like under NSPIRE, the inspection ...
16 July 2019
REAC Inspections
July 8, 2019 HUD's Office of Multifamily Housing Asset Management and Oversight released a memorandum reiterating the rules surrounding notice prior to entering resident's units, availability of documentation for residents to review, and clarificati...
09 July 2019
REAC Inspections
The House Financial Services Committee passed a bill - the Safe Housing for Families Act of 2019 (H.R. 1690), and it will likely move forward to a full vote in the near future. The bill provides $300 million over three years to fund the installation...
05 June 2019
REAC Inspections
Enter your text here ...HUD REAC Released a PowerPoint document (Click here) in an email to REAC Inspectors. This presentation is intended to provide clarify to sometimes subjective interpretations of what is considered to be "Non-Industry Standard"...

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