HUD’s overarching mission is to create strong, sustainable, inclusive communities and quality affordable homes which involves HUD entering into business agreements (e.g. use agreement, regulatory agreement, Housing Assistance Payments contract, etc.) with property ownership in order to provide affordable housing to those in need. In return, HUD provides mortgage insurance and/or rental assistance directly to these ownership entities for all units at these developments so that each tenant pays no greater than 30 percent of household income for a dwelling unit. HUD asset management tools such as Real Estate Assessment Center (REAC) inspections as well as Management & Occupancy Reviews (MOR) are leading performance indicators of a project’s ability in delivering safe, clean and decent housing.
HUD uses the Uniform Physical Condition Standard (UPCS) to determine whether a multifamily rental housing project is being maintained in a decent, safe and sanitary condition. The regulations describing the UPCS can be found at 24 CFR Part 5, Subpart G and 24 CFR Part 200, Subpart P. The regulations at 24 CFR Part 5 describe the areas of inspection and define exigent, health, and safety items. The regulations at 24 CFR Part 200 describe the applicability of the protocols to the Section of the Act projects, outline which entity is responsible for an inspection, provides scoring methodology, indicates the frequency of inspections, and defines the appeal process.
The new law set out in the 2014 and 2015 Appropriations Acts requires HUD to take certain steps in cases when a multifamily housing project receives a score of 59 or below.
Additionally, the PBCA is a HUD contractor who primarily provides direct oversight to HUD assisted properties. They serve as the first line of communication for tenants who are experiencing concerns (e.g. maintenance issues, management conflict, health and safety, etc.) Each property management office is to have a flyer with the PBCA's contact information displayed in the office; this same information is made appurtenant to every lease agreement. Foremost, tenants should call the PBCA when they have concerns. The PBCA tracks open cases and reports monthly to HUD. If a case remains open, HUD account executives follow-up and can then perform desk reviews/MORs to resolve persistent concerns.
When an owner is non-compliant to HUD business agreements, a Notice of Violation is issued. The owner has 30 days to cure. An owner often self certifies that all exigent, health and safety citations have been cured. HUD will either schedule a follow up REAC inspection or Management Occupancy Review immediately or the property would receive its next inspection based upon the score’s schedule. If the violation persists, HUD will proceed with enforcement actions such as issuing a Notice of Default to its business agreements. At this point civil money penalties may be assessed and/or termination of HUD business agreements may occur.