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Real Estate Assessment Center: Preserving America's Housing
What Public Housing Agencies and Multi-family Owners Need to Know
HUD PROPERTY INSPECTIONS

HUD Property Inspection Program
Nearly 4 million families live in rental housing that is owned, insured or subsidized by the U.S. Department of Housing and Urban Development. To ensure that these families have housing that is decent, safe, sanitary and in good condition HUD directed its new Real Estate Assessment Center (REAC) to develop and implement nationwide, annual property inspections. The inspections, begun in 1998, represent the first time HUD has inspected all public and HUD assisted housing properties and provided owners with detailed condition reports.

Changes That Make a Difference
The new annual property inspection process improves HUD's oversight capability in several important ways. First, because HUD believes that all families are entitled to decent housing the same uniform, objective inspection criteria is applied to properties regardless of size, location or program.
Additionally:
Inspection contractors must complete HUD approved training.
Inspections are conducted using hand-held computers.
Inspection data is electronically scored to eliminate subjectivity.

In addition to a numeric score indicating the overall condition of the property, the inspection report lists any life threatening health and safety deficiencies.
PHAs and owners must correct these life threatening deficiencies within 72 hours of the inspection.

Scoring and Enforcement
Scoring of inspection results identifies those properties that do not meet HUD's standard for delivery of decent, safe and sanitary housing and allows the Department to focus its resources where they are most needed. For example, troubled public housing agencies are referred to a Troubled Agency Recovery Center (TARC) where experienced HUD staff work with the PHA to resolve problems. Within a year, the PHA must show substantial improvement or be referred to HUD's new Departmental Enforcement Center (EC).

Troubled multifamily properties are also identified for specialized assistance by HUD staff. Very high-risk multifamily properties may be referred to the EC. The goal of the EC is to improve the overall quality of the Nation's rental housing by enforcing housing standards and contractual aqreements.

Role of PHA and Multifamily Owners
HUD staff, inspection contractors, public housing agencies and multifamily owners all play important roles in ensuring the success of the property inspection program. Exactly
what can PHAs and multifamily owners expect?

• You can expect to receive an introductory letter from REAC prior to the inspection, followed by a call from an inspection contractor to schedule an inspection date.
  
• About ten days prior to the inspection you will receive a confirmation letter from the contractor. That is your signal to notify all tenants of the inspection date to ensure that all tenants know that their unit may be inspected.
  
• An authorized representative must be available on the day of the inspection to provide access to all common areas and the units for inspection.
  
• At the conclusion of the inspection, the representative must sign, to acknowledge receipt of a list of any life threatening, health and safety items, if any were identified by the inspector. These items must be corrected immediately.
  
• Inspection results will be electronically uploaded to REAC for scoring. Scores and detailed reports are posted on the REAC Internet site for viewing by authorized users.
  
• After reviewing the results, multifamily owners must correct deficiencies noted in the inspection and, in cases where scores are below acceptable thresholds, must develop written plans to ensure repairs are completed. PHAs use inspection results as a management tool to plan ongoing maintenance and repair programs.

Frequently Asked Questions… and Answers
Q: What if the date requested by the inspector is not convenient for the owner or property manager?
A: Inspection contractors try to offer scheduling options. However, since HUD must complete nearly 40,000 inspections annually, dates in your geographic area may be limited. Any authorized representative may accompany the inspector, it need not be the owner or manager.

Q: How long does the physical inspection take?
A: The length of the on-site inspection depends on the size and configuration of the property. Generally speaking inspections average between 4 and 6 hours.

Q: Why do all residents have to be notified?
A: The actual apartments to be inspected are not selected until the day of the inspection. The selection is done by computer based on statistically valid, random sampling and may include any occupied unit in the development.

Q: Why do inspectors note deficiencies for easily correctable items? It doesn't seem fair.
A: The purpose of the inspection is to get an objective picture of the overall condition of the property based on the condition of randomly selected units. Allowing inspectors to make subjective judgments about whether to include or exclude certain deficiencies, undermines the credibility of the inspection process and invalidates the sampling.

Q: Are scores available immediately?
A: Reports listing life threatening, health and safety concerns, if any, are issued on the day of the inspection. All other results are not immediately available, nor are inspectors able to answer questions. The observations made by the inspector are uploaded to the REAC central computer. Scores are calculated electronically then reviewed by REAC and field program staff. Scores and detailed reports will be available via the Internet approximately 30 days after the inspection.

Q: What if I think the inspector made a mistake?
A: If you believe the inspector made a mistake, REAC wants to hear from you. We want to stress that while REAC has included many quality assurance features in the property inspection process, no system is error-proof. A May 13, 1999 Federal Register Notice explains the circumstances under which PHAs may request a "Technical Review" of an inspection. A proposed rule published November 26, 1999 explains the process through which Multifamily Owners may request a Technical Review. These notices are available on the REAC Webpage at www. hud.gov/reac.

You may also contact the: REAC Technical Assistance Center 1-888-245-4860 www.hud.gov/reac

What Else Does REAC Do?
The Real Estate Assessment Center-REAC-is a key element of the HUD 2020 Management Reform Plan. REAC works to restore confidence in our nation's public housing and other HUD housing programs. REAC's mission is as important as it is broad: to improve housing quality and ensure the public trust by providing timely, accurate, and objective assessments of HUD's real estate portfolio. In addition to the property inspection program, REAC provides HUD with a new level of management capability by consolidating and significantly expanding HUD's oversight of:

• The financial soundness of public and assisted housing.
  
• Resident satisfaction at public housing.
  
• The management capability of pubic housing agencies.
  
• Income eligibility of rental subsidy recipients.
  
• FHA single family appraisal quality.

Using state of the art technology, REAC evaluates the condition of the department's real estate portfolio and the quality of single-family appraisals based on fair, uniform and objective criteria. Assessment data is analyzed and scored electronically and results are delivered to HUD's housing partners via secure Internet connections. Through REAC, HUD is a leader in harnessing technology to make the vision of decent, safe and sanitary housing a reality for millions of American families.

US Department of Housing and Urban Development
Equal Housing Opportunity
HUD Your Community Partner

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