New Protocol for Telling Site Owners About Inspection Scores Ranging from 31 to 59

February 16, 2010
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HUD has issued Notice H2010-04, which revises the protocol for placing flags in the Active Partners Performance System (APPS) when a property receives a physical inspection score that is below 60 but above 30, to ensure that those flags are true indicators of potential risk.

Under the old protocol, a flag was placed in APPS when a property received a physical inspection score that was below 60 to alert HUD staff that there may be a potential risk that should be evaluated if that property’s owner applies to do new business with the Department. The former protocol also required that a Hub or Program Center resolve the flag if the property received a physical inspection score of 31 to 59 after it was re-inspected. However, in many cases, this protocol hindered some new business from taking place because the Department could not complete a timely re-inspection of the property, even though the property owner certified that he or she identified all the deficiencies and completed all the repairs.

Under the new protocol, which became effective January 22, 2010, Hub and Program Center staff will no longer be required to place a flag in the APPS system when a property receives a physical inspection score below 60 but above 30 on the first inspection. Instead, the staffer will try to meet with the owner in person or by phone and issue a notice of violation or default for substandard physical condition within 10 days of the release of the physical inspection report. The notice will: require the owner to conduct a survey of the entire project and identify all physical deficiencies; correct all of the deficiencies; and deliver the “Project Owner’s Certification that the Physical Condition of the Project is in Compliance with HUD Contracts and the Physical Condition Standards of 24 C.F.R. §5.703” and the survey to the HUD office cited in the notice within 60 days.

If the owner complies within the 60-day timeframe, a flag will not be placed in APPS, but the site will be inspected the following year. If the property receives another score below 60 the following year, then a flag will be placed in the APPS system, and a new notice of violation or default will be issued.

If the owner does not comply within the 60-day timeframe, a flag will be placed in APPS.

If a property received a physical inspection score from 31 to 59 and was referred to the DEC before this notice went into effect, then the Hub or Program Center will continue to process the referral using the old protocol. If a property received a score from 31 to 59 but was not referred to the Department of Enforcement Center (DEC), then the Hub or Program Center will remove the flag and follow the new protocol.

PRACTICAL POINTER: This new protocol applies only to physical inspection scores that are between 31 and 59. Properties that receive a physical inspection score of 30 or below will continue to be automatically referred to the DEC and a flag will automatically be recorded in APPS.