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HUD Notice on Processes to Delay REAC Inspection Scheduling

This notice established several clarifications for REAC Inspections. Firstly, it defined very specific reasons for delaying REAC inspections. Secondly, it clarified the approval process. The owner will have to receive written approval from HUD prior to any contact with a REAC Inspector. Once the inspector attempts to schedule, it will be too late to delay. Lastly, the notice clarifies that this refers only to inspections procured through the Reverse Auction Program (RAP), not FHA-Insured assets.

Specific Reasons for Approving Delays of REAC Inspections

  • Major Rehab: The HUD Field Office may only approve the delay of a REAC inspection for major rehabilitation if the owner/agent informed the Field Office of the rehabilitation before receiving notification of the inspection date.  [Major Rehab is defined as] Major recapitulation 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 at the time the inspector is trying to schedule an inspection.
  • Other Emergency: An emergency such as a fire or water damage occurred at the property. The damage needs to be beyond the owner’s control, and affect more than 30% of the units.
  • HUD Approved Repair Plan: The project has a HUD-approved repair plan as a result of the prior score(s) below 60 and it covers the period during which HUD or an inspector is trying to schedule an inspection.

HUD NSPIRE Demonstration Program Participation to be Voluntary

 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 [NSPIRE] 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 be voluntary.

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