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 Program discussed for HUD Region 3, it included the following information:

As previously reported, the pilot inspection program will inform future changes to the UPCS protocol. The pilot will include a process whereby the owner/agent submits inspection data for 100 percent of the units annually. HUD has determined it may not require submission of such information without promulgating [making widely known] a rule. Therefore, participation in the portion of the pilot relating to the submission of annual inspections will bevoluntary.
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