Prepare for REAC Inspections to Resume
If you manage a blended-occupancy or mixed-finance site that includes LIHTC and Section 8 Project-Based Rental Assistance program compliance, you should know that HUD’s Real Estate Assessment Center (REAC) recently released a memorandum that details the return-to-operations plan for inspections.
The annual REAC inspection is a critical indicator of a federally assisted site's ability to maintain the physical standards established by HUD to ensure that residents are provided with decent, safe, and sanitary housing. Applicable site owners can be contacted to schedule inspections starting on Sept. 21, 2020. With a 14-day notice from that point, physical inspections would resume on or about Oct. 5, 2020.
This memo describes a three-phase process for any site to be inspected, including: (1) prioritization and evaluation; (2) finalization and notification; and (3) inspection and release of results. The goals of the immediate return-to-operations plan are to:
- Identify and implement a strategy to keep all parties involved in the inspection process safe.
- Reduce the backlog of physical inspections for those sites not assessed in the last three years.
- Inspect sites identified as high-risk and maximize the allocation of inspector resources.
- Create innovative inspection types that meet or exceed the quality of inspections before COVID-19.
Prioritizing and Evaluating Sites for Inspection
REAC has prioritized states and localities where inspections are likely to begin or be excluded once inspections resume, based on the latest COVID-19 public health data from Johns Hopkins University and health risk scoring methodology from the Harvard Global Health Institute. REAC has developed a heat map that categorizes states and localities into four risk categories. The heat map can be found at www.hud.gov/program_offices/public_indian_housing/reac.
In addition to using public health data to prioritize sites for inspection, REAC will also assess which sites are most in need of inspection. HUD program offices are in the process of finalizing an internal list of properties that have met certain criteria and can be classified as properties in critical or emergency need of inspection but located in low-risk areas.
REAC also stated that it would defer inspection of sites with elderly, disabled, and other health-compromised populations to a later date. These sites won’t be a part of the initial group of sites to be inspected, even if deemed critical for inspection, unless there are known life-threatening and health concerns.
Notifying Owners of Inspections
Pandemic conditions on the ground may change. If a site is located in a county that moves from Green to Yellow designation after the 14-day notification is given, REAC will postpone the inspection for at least six weeks. This will mean the counties where the sites were located will need to be rated Green for an additional six consecutive weeks or reporting periods before a new 14-day notification can be issued.
In all circumstances, REAC will consider the following factors to determine if an inspection at a site, located in a county that meets the low public health risk criteria during the entirety of the initial 45-day notification period and the subsequent 14-day property-specific notification period, will continue:
- Site is in a jurisdiction currently in a phase of reopening, thus allowing substantial in-person commerce such as inside restaurant dining, in-store shopping).
- COVID-19 cases in the site’s locality have been trending downward and remaining flat for a minimum of 14 days. Related public health data such as ICU beds utilized is similarly positive.
- There are no known and specific COVID-19 issues or outbreaks at the site in question regardless of the locality’s phase of reopening or case trends.
- When a site is within a reasonable distance of a local HUD field office, the Office of Field Policy and Management or General Services Administration has provided guidance to local HUD employees that they may report to the local office.
- Air/rail/car travel to and from the site can be achieved with appropriate safety precautions.
Flexibility in Conducting Inspections
According to the memo, REAC may opt to withhold scores and/or modify the Uniform Physical Condition Standard (UPCS) protocol to exclude units when the inspection can’t be validated as the true condition of the property due to circumstances relating to COVID-19.
The memo states that REAC’s goal is to resume operations and release physical assessment results including property scores on all eligible sites with full consideration of the health and safety of residents, staff, and inspectors. Inspectors will be required to wear face masks and gloves and use hand sanitizer, at a minimum, when conducting inspections.
Owners will be responsible for communicating local restrictions relating to COVID-19 to the inspectors at the time the inspection is scheduled, and HUD will determine if the inspection should be cancelled due to local restrictions or reported COVID-19 cases with guidance from the HUD field office.