fbpx

search

Updated HOME Rules on UPCS

§92.251 Property Standards

The changes to §92.251 reorganize the presentation of the property standards requirements and clarify and update the standards. The reorganization is intended to minimize confusion about the applicability of the codes and standards across different housing activities. It creates separate requirements for projects involving:

  • New construction [§92.251(a)]
  • Rehabilitation [§92.251(b)]
  • Acquisition of standard housing [§92.251(c)]
  • Housing occupied by tenants receiving HOME tenant-based rental assistance [§92.251(d)]
  • Manufactured housing [§92.251(e)]
  • Ongoing property standards for rental projects [§92.251(f)]
  • Inspection procedures [§92.251(g)]

Revisions to the property standards also address the codes cited in the pre-2013 HOME Rule that has been superseded and/or updated. The 2013 Rule provides additional specificity to the rehabilitation standards requirements in order to ensure that adequate improvements are made to support the long-term viability of HOME-funded rehabilitation projects. For new construction and rehabilitation, the 2013 Rule requires a higher degree of oversight by the PJ. It imposes requirements for the PJ to review and approve construction-related documents prior to construction, and to monitor construction progress.

New Construction Projects

§92.251(a)(1) requires new construction projects to meet State and local codes, ordinances, and zoning requirements. This requirement is not new. In the absence of an applicable State or local code for new construction, HOME-assisted projects must meet the International Code Council's (ICC's) International Residential Code or International Building Code, whichever is applicable to the type of housing being developed. In the pre-2013 Rule, PJs were directed to use one of the three national model codes, whose issuing groups merged to form the ICC. (These were the Building Officials and Code Administrators International, Inc.; International Conference of Building Officials; and Southern Building Code Congress International, Inc.)

§92.251(a)(2) incorporates or specifies additional standards:

  • Accessibility requirements as applicable, in accordance with Section 504 of the Rehabilitation Act, the Americans with Disabilities Act, and the Fair Housing Act. These requirements are not new.
  • Disaster mitigation standards, in accordance with State and local requirements or as established by HUD, where they are needed to mitigate the risk of potential disasters (such as earthquakes, hurricanes, flooding, and wildfires). This is a new requirement.

§92.251(a)(iv) and (v) adds requirements for PJs to improve project oversight for new construction. PJs must:

  • Review and approve written cost estimates, construction contracts, and construction documents.
  • Conduct construction progress and final inspections to ensure that work is done in accordance with the applicable codes, the construction contract, and construction documents.
Rehabilitation Projects

Written Rehabilitation Standards

§92.251(b)(1) requires PJs to establish and comply with written rehabilitation standards. The pre-2013 Rule required a written rehabilitation standard but provided minimal regulatory guidance about what this standard needs to address. The 2013 Rule provides specificity about what elements are required in the PJ's rehabilitation standards.

  • The rehabilitation standards must be of sufficient detail to determine the minimal level of work required and the methods and materials for rehabilitation work (either by referring to applicable codes or standards or establishing requirements that exceed the minimum code requirements).
  • The rehabilitation standards must address the following (the new requirements are so noted):
    • Health and safety. The rehabilitation standard must specify the life-threatening deficiencies that must be addressed immediately if a housing unit is occupied. [NEW]
    • Major systems for rental housing. The PJ must require an estimate of the remaining useful life of major systems. [Major systems include structural support, roofing, cladding, and weatherproofing (e.g., windows, doors, siding, gutters), plumbing, electrical and heating, ventilation, and air conditioning.] This must be done with a capital needs assessment for projects with 26 or more units (see last bullet below). If the remaining useful life is less than the affordability period, the PJ must require replacement reserve deposits to ensure that the project's major systems and physical needs can be adequately maintained and addressed throughout the affordability period. [NEW]
    • Major systems, for homeownership housing. The PJ must require that upon project completion, major systems must have a useful life of at least five years. [NEW]
    • Lead-based paint requirements, in accordance with 24 CFR part 35.
    • Accessibility requirements as applicable, in accordance with Section 504 of the Rehabilitation Act, the Americans with Disabilities Act, and the Fair Housing Act.
    • Disaster mitigation standards, in accordance with State and local requirements or as established by HUD, where they are needed to mitigate the risk of potential disasters (such as earthquakes, hurricanes, flooding, and wildfires). [NEW]
    • State and local codes, ordinances, and zoning requirements. In the absence of a State or local building code that applies to rehabilitation, the PJ must use the International Existing Building Code of the ICC. (This is not a new requirement, but the applicable code, absent State, and local codes, has been updated.)
    • Uniform Physical Condition Standards (UPCS), in accordance with 24 CFR 5.703. UPCS is an inspection protocol that is used to evaluate the condition of housing. PJs must use this inspection protocol to establish minimum property condition standards for rehabilitation standards. Note, in general, UPCS, includes a more comprehensive list of inspectable items and areas than Housing Quality Standards, which applied to rehabilitation in the absence of State and local codes in the pre-2013 Rule. [NEW]
      • Note: HUD will issue additional guidance on this requirement. This guidance will establish which critical deficiencies (based on the list of inspectable items and areas of UPCS) must be corrected as a minimum requirement for each type of rehabilitation — rental, homebuyer, and homeowner housing — and, therefore, must be included in the PJ's rehabilitation standards.
    • Capital needs assessment for multifamily rental housing with 26 or more units, to ensure that the PJ determines all work that will be performed and identifies and addresses long-term physical needs of the project. [NEW]

For additional information on how written rehabilitation standards differ from property standards, see HOMEfires Vol. 3, No. 1, January 2001, which is posted on HUD's website at http://www.hud.gov/offices/cpd/affordablehousing/library/homefires/volumes/vol3no1.cfm.

Construction Documents and Work Write-ups

§92.251(b)(2) requires PJs to review and approve work write-ups (i.e., plans and specifications) and written cost estimates. The PJ must determine that the work write-up or plans are in compliance with the PJ's written rehabilitation standards and that costs are reasonable. This provision clarifies this requirement. While these steps were not explicitly required in the pre-2013 Rule, compliance with the existing requirements already necessitated these kinds of review and approval.

Frequency of Inspections

§92.251(b)(3) explicitly requires the PJ to conduct: (1) an initial property inspection to determine deficiencies that must be addressed, (2) progress inspections to monitor construction progress, and (3) a final inspection to ensure that work is done in accordance with the project's approved work write-up or plans. For these inspections, a PJ can either use qualified in-house staff or secure a qualified third party that is independent of the developer. This is a new requirement. HUD plans to provide additional training and guidance in this area.

Acquisition of Standard Housing Property Standards

When HOME funds are used to purchase existing rental housing, such housing must be in good condition or it must be rehabilitated to ensure that the housing is in standard condition at the time of project completion. In the pre-2013 Rule, for the acquisition of property (without rehabilitation) HOME required that housing to be acquired in standard condition must meet State and local housing property standards or codes, or in their absence, Housing Quality Standards. §92.251(c) of the 2013 Rule revises property standards for housing in a standard condition that is acquired using HOME funds.

Newly Constructed or Recently Rehabilitated Housing

§92.251(c)(1) requires that housing that has been newly constructed or rehabilitated within one year of the date of commitment of HOME funds meet the applicable property standards [§92.251(a) for new construction and §92.251(b) for rehabilitation]. If the property does not meet the applicable standard, it cannot be acquired unless it is rehabilitated to meet the rehabilitation standards at §92.251(b). PJs must document this compliance based on a review of approved building plans and certificates of occupancy and a property inspection that is conducted no earlier than 90 days before the commitment of HOME funds. This provision differs somewhat from the pre-2013 Rule in which housing that was acquired (without rehabilitation) with HOME funds needed to meet State and local codes, or in their absence, Housing Quality Standards. However, documentation of compliance with these property standards was not prescribed, and inspections were not required.

All Other Existing Housing – Rental

For all other housing (that is, housing that is not recently rehabilitated or newly constructed) that will be acquired (without rehabilitation) for rental housing, the property must meet the applicable standard for rehabilitation at §92.251(b). The PJ must document compliance based upon a current inspection that is conducted no earlier than 90 days before the date of commitment of HOME assistance, in accordance with the PJ's inspection procedures. If the property does not meet these standards, it cannot be acquired with HOME funds unless it is rehabilitated to meet this standard.

All Other Existing Housing - Homeownership (Downpayment) Assistance

2013 Rule states that the PJ must establish standards to ensure that existing housing that is acquired for homeownership (e.g., down payment assistance) is decent, safe, sanitary, and in good repair. At a minimum, the standards must provide that the housing meets all applicable State and local housing quality standards and code requirements. In addition, the housing must be free of any deficiencies identified by HUD in the UPCS (pursuant to 24 CFR 5.705) based on the inspectable items and inspected areas in HUD-determined physical inspection procedures. If the housing does not meet these standards, the housing must be rehabilitated to meet the standards or it cannot be acquired with HOME funds. Note, HUD will issue guidance that specifies which components of UPCS will apply.

Tenant-Based Rental Assistance Property Standards

§92.251(d) requires that units occupied by households receiving HOME TBRA must meet the Housing Quality Standards at 24 CFR 982.401. This is not a new requirement.

Manufactured Housing Property Standards

The property standards for manufactured housing are now found at §92.251(e). 2013 Rule requires that newly constructed manufactured housing and housing that replaces an existing substandard unit (under the definition of "reconstruction") must be on a permanent foundation. The definition of "permanent foundation" means a foundation system of supports that is capable of transferring all design loads to the ground and meets the requirements of 24 CFR 203.43f(c)(i). This definition is consistent with the FHA mortgage insurance requirements for all manufactured homes.

For all rehabilitated manufactured housing, the foundation and anchoring must meet all applicable State and local codes and other requirements. Foundation systems for existing units must be inspected and meet the applicable State or local codes, subject to the approval of the PJ's building officials. In the absence of local or State codes, the PJ must use the Model Manufactured Home Installation Standards at 24 CFR part 3285.

The other property standards for manufactured housing are consistent with the pre-2013 requirements:

  • All new construction of manufactured housing (including reconstructed units that replace a substandard unit) must meet the Manufactured Home Construction and Safety Standards codified at 24 CFR part 3280.
  • All new manufactured housing (including units that are reconstructed) must, at the time of project completion, be connected to permanent utility hook-ups and be located on land that is owned (or leased for a period at least as long as the affordability period) by the manufactured housing unit owner.
  • Existing manufactured housing that is rehabilitated with HOME funds must meet the property standards applicable to rehabilitation as outlined in §92.251(b). The PJ must document this in its inspections procedures.
Suggested Next Steps for PJs
  1. HUD plans to issue guidance regarding how to incorporate UPCS into the property standards for rehabilitation and acquisition. Until guidance is issued, PJs can begin to update their property standards for new construction by reviewing their applicable State or local property standards for each housing activity type. If there are no State and/or local codes, update the required property standard for new construction to the applicable ICC, or IRC codes.
  2. Develop or review and amend procedures related to inspecting properties to ensure compliance with property standards.
    1. For new construction and rehabilitation, procedures must include:
      1. An initial property inspection to determine the extent of work to be completed, for rehabilitation projects
      2. PJ review and approval of project plans (work write-ups) and cost estimates
      3. Construction progress and final inspections to ensure that work is done in accordance with the applicable codes, the construction contract, and construction documents.
  3. Develop inspection checklists for new construction that reflect the applicable property standards to ensure consistency in implementation among staff and inspectors.
  4. Train staff and program partners in the new construction property standard requirements and the inspection procedures. Identify how staff qualifications will be determined for review and approval of construction documents, as well as inspection work.
  5. Incorporate these new requirements in the written agreements with State recipients; sub-recipients; and project owners, developers, and sponsors, as required by §92.504(c).
  6. Incorporate these requirements in monitoring checklists to ensure that compliance is verified during project monitoring reviews.
  7. See §92.251(d) (below) and §92.504(d) related to project completion inspections and ongoing property inspections for additional guidance in these areas.
  8. Look for additional guidance from HUD on property standards for rehabilitation and acquisition, and update and revise policies and procedures as additional guidance is provided.
Effective Date

January 24, 2015 (The new property standards apply to projects to which funds are committed on or after this date, which is 18 months after publication of the Final Rule.)

Ongoing Property Standards during the Period of Affordability

The 2013 Rule revises the property standard requirements for rental housing during the period of affordability. The new §92.251(f) establishes several new requirements related to ongoing property standards and inspection procedures.

Ongoing Property Standards

The 2013 Rule, at §92.251(f)(1), requires PJs to establish ongoing property standards for rental housing that will apply throughout the affordability period. The PJ's ongoing property standards must be in sufficient detail to establish the basis for a uniform inspection of projects. At a minimum, these standards must ensure that the housing is maintained as decent, safe, and sanitary housing in good repair.

The PJ's ongoing property standards, at a minimum, must state that:

  • Properties must be maintained to meet all applicable State and local codes, if available. This is not a new requirement. However, the 2013 Rule has replaced Housing Quality Standards with UCPS as the standard in the absence of State or local codes (as discussed above under property standards).
  • Housing must be free of all health and safety defects and the PJ must identify life-threatening deficiencies that the owner must correct immediately. [NEW]
  • Housing must meet the lead-based paint requirements in 24 CFR part 35.

Procedures

The PJ is required to establish procedures for inspection and implementation of these requirements. These requirements are all new:

  • The PJ must have procedures in place to ensure that the property owner addresses deficiencies in a timely manner.
  • The PJ must establish written inspection standards that include detailed inspection checklists, a description of how and by whom inspections will be carried out, and procedures for training and certifying inspectors.
  • The PJ must conduct periodic property inspections in accordance with §92.504(d). The PJ's inspection procedures must state how frequently each property will be inspected, consistent with §92.504(d) and, for TBRA units, §92.209. The requirement for a periodic inspection is not new, but the minimum required inspection schedule has been amended; every TBRA units must be inspected annually, and every HOME-assisted rental project must be inspected at least once every three years during the affordability period. [See §92.504(d) for a more detailed discussion of these inspection requirements.]

Suggested Next Steps for PJs

  1. Ascertain which State or local property codes apply to the HOME-assisted rental housing during its affordability period. In the absence of State or local codes, follow the existing regulation until HUD issues guidance on how to implement UPCS for ongoing property standards.
  2. See §92.504(d) related to project completion inspections and ongoing property inspections.
  3. Look for additional guidance in this area from HUD and update and revise policies and procedures as additional guidance is provided.

Effective Date

§92.251 is effective as of January 24, 2015, and applies to projects to which HOME funds are committed after this date (which is 18 months after publication of the Final Rule). The changes to §92.504(d) related to property inspections, such as frequency of inspections and sampling, are effective July 24, 2014 (12 months after publication of the Final Rule). For existing HOME-assisted rental projects and for projects to which funds are committed before the Effective Date of the new ongoing property standards, the inspections should be based on the standards that were in effect at the time the HOME funds were committed. (In other words, the new ongoing property inspection requirements must be implemented by July 24, 2014, but until the new property standards in §92.251 are in effect on January 24, 2015, PJs will use their existing property standards.) 

Bad Techniques for Monitoring REAC Inspectors
PHA Requirement for 100% Unit Inspections Eliminat...

Latest Blogs

13 January 2020
REAC Inspections
Resident Involvement in REAC/NSPIRE Inspection Process​​As part of the NSPIRE pilot process, HUD has announced that additional processes will be added to engage the residents in the REAC/NSPIRE process. You can read the press release on HUD's website...
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...

Blog Archive