AHTCSREACInspectionWebinar2013 Manual

REAC Physical Inspections
Rev. 3 05/13
AHTCS Online Seminar

11 Tamarack Drive, Essex Junction, VT 05452
Phone: 802-598-3464 Fax: 802-879-6338 E-Mail: Info@AHTCSonline.com

Visit us on the Web: www. AHTCSonline.com
Visit us on the Web: www.TRACSExperts.com
Visit us on the Web: www.TRACSExperts.com
Notification All documentation, procedures, and any other material supplied in connection therewith remain the exclusive property of EPS, Inc. or in certain cases, its licensees. Any use or copying of such materials not specifically authorized by the license agreement shall be deemed a violation of the agreement. Such a violation will terminate the licensees right to use such material and may render the licensee liable for both actual and punitive damages. This notification constitutes part of the documentation and accordingly may not be removed therefore. AHTCS Online LLC., SHALL NOT BE LIABLE FOR DAMAGES OF ANY KIND RESULTING FROM ERRORS OR OMISSIONS IN THE TRAINING MATERIALS NOR SHALL AHTCS Online LLC., BE LIABLE FOR ANY DAMAGES RESULTING FROM THE USE OF THE TRAINING MATERIALS OR OTHER INFORMATION CONVEYED AT AN AHTCS Online LLC., COURSE.
Copyright 2013 AHTCS Online LLC. All rights reserved. All other brands and product names are trademarks or registered trademarks of their respective owners. Printed in the United States of America. Notification All documentation, procedures, and any other material supplied in connection therewith remain the exclusive property of EPS, Inc. or in certain cases its licensees. Any use or copying of such materials not specifically authorized by the license agreement shall be deemed a violation of the agreement. Such a violation will terminate the licensees right to use such material and may render the licensee liable for both actual and punitive damages. This notification constitutes part of the documentation and accordingly may not be removed therefrom.
Notification All documentation, procedures, and any other material supplied in connection therewith remain the exclusive property of EPS, Inc. or in certain cases its licensees. Any use or copying of such materials not specifically authorized by the license agreement shall be deemed a violation of the agreement. Such a violation will terminate the licensees right to use such material and may render the licensee liable for both actual and punitive damages. This notification constitutes part of the documentation and accordingly may not be removed therefrom.
Copyright AHTCS Online LLC. 2013 Notification
Class Agenda
Part 1 -- Introduction to REAC Physical Inspections Part 2 -- The REAC Physical Inspection Process Part 3 -- The REAC Physical Inspection Report Part 4 -- Correcting Deficiencies Identified in the Physical Inspection Report Part 5 -- Preparing for a REAC Physical Inspection Part 6 Summary and Questions
Copyright AHTCS Online LLC. 2013
Contents
Class Agenda .......................................................................................................................................... 3 Best Practices ......................................................................................................................................... 7 Know and Use Your Resources! ........................................................................................................... 8 TRACS Home Page ....................................................................................................................................... 9 TRACS Discussion Forum ............................................................................................................................ 10 HUD Handbook 4350.3 FAQ ........................................................................................................................ 11 RHIIP Newsletter .......................................................................................................................................... 12 Part 1 -- Introduction to the REAC Physical Inspections ................................................................... 13 REAC Physical Inspections .......................................................................................................................... 13 The Purpose of Physical Inspections ............................................................................................................ 14 HUD Programs Requiring Physical Inspections of the Property .................................................................... 14 The Conducting of Physical Inspections ....................................................................................................... 15 The Timing of Physical Inspections .............................................................................................................. 15 REAC Inspection Scores .............................................................................................................................. 15 Part 2 -- The REAC Physical Inspection Process ............................................................................... 17 The REAC Inspector .................................................................................................................................... 17 Pre-Inspection .............................................................................................................................................. 21 Inspection ..................................................................................................................................................... 22 Post-Inspection ............................................................................................................................................ 25 Part 3 -- The Physical Inspection Scoring System ............................................................................. 26 The Goal: ..................................................................................................................................................... 26 Scoring Methodology .................................................................................................................................... 28 Frequently Cited Deficiencies ....................................................................................................................... 32 The Results of the Inspection ....................................................................................................................... 43 The Physical Assessment Subsystem Process Reporting ............................................................................ 44 Interpreting the Physical Inspection Report .................................................................................................. 46 Part 5 -- Correcting Deficiencies Identified in the Physical Inspection Report ................................ 53 Exigent Health and Safety Items .................................................................................................................. 53 Other Deficiencies ........................................................................................................................................ 53 Summary and Questions .............................................................................................................................. 56 Resources ............................................................................................................................................. 57
Best Practices
Best Practices are defined as practical techniques gained from practical experience that may be used to improve the monthly process. Some examples. ALWAYS make sure that you write everything downwho you spoke to, what the problem was and what the solution was (if there was one). Every one should have a notebook of problems and solutions. Hardware, software, HUD Handbook 4350.3 questions, anything that you feel deserves a section, create one! If the person you are speaking with are belittling you or just being curt, just ask to speak with someone else. If you dont understand what the other person told you, dont be afraid to have them explain it again. Remember, you want the information, no matter what it takes! If you have to leave a message or send a fax, make sure you give them all of the pertinent information, such as your full name, property name, phone number, account ID and times you will or will not be available to receive a return call. Make a backup of your data before you try to fix things on your own or before you call for help. Also remember as frustrated that you are with what you are doing, its usually not the fault of the person trying to help you. As I would not want you to put up with anyone speaking curtly, I would expect you to treat the person on the other end with the same respect. You get more bees with honey!
Know and Use Your Resources!
Please take advantage of the resources that are available to you!! There are a lot of resources that either people are not aware of, or they feel they are too busyI could go on and on. The truth of the matter is, if you dont take the time to acquaint your self with these resources, you could be forever in the dark. If you have ever walked around and thought My co-worker knows everything about TRACS, there is no reason that you cant know just as much if not more. Take the initiative!!
TRACS Home Page
When you call for assistance to the Multifamily Helpdesk, remember they support applications other than just TRACS. TRACS Tenant Rental Assistance Certification System http://www.hud.gov/offices/hsg/mfh/trx/trxsum.cfm DAP Development Application System REMS Real Estate Management System http://www.hud.gov/offices/hsg/mfh/rems/rems.cfm MDDR Multifamily Delinquency and Reporting System http://www.hud.gov/offices/hsg/mfh/gendocs/mddr_urefguide.pdf APPS Active Partner Performance System http://www.hud.gov/offices/hsg/mfh/apps/appsmfhm.cfm These documents can be found by clicking on the Documents link at the TRACS Home page: Social Security Errors Clean-up HUD/Immigration and Naturalization Service (INS) Verification of Non-citizens Transitioning Progress HUD Multifamily Housing Automation Rule Guide to HUD's Online Systems Industry User Guide for TRACS Internet Applications Late Annual Recertifications Industry Quick Reference Guide for TRACS Manual Voucher Submission Monthly Activity Transmission (MAT) User's Guide OMB Mandated Reporting Changes to Ethnicity & Race Categories Security Deposit Logic TRACS Release 202C Industry Specifications TRACS Comparative Analysis Matrix TRACSMail Id Request and Registration Form TRACSMail Interim Industry Specification Document TRACSMail User Manual TRACS Multi-Family Move-Out Request Form TRACS Certification Re-baseline Request TRACS Industry Specification Questions and Responses TRACS Release 202B Industry Specification TRACS 202B Industry Specification Addendum
TRACS Discussion Forum
The Discussion Forum is your lifeline to the industry. Post your questions professionally and you will get a professional response. Industry leaders will typically respond but you dont have to be one to help somebody out. If you know the answer, by all means please help them. Announcements contain postings from the HUD TRACS team. Examples are shown below: Posted January 14, 2008 TRACSMail Down HUD is currently investigating problems with TRACSMail. Customers are reporting errors logging into TRACSMail. We are working as quickly as possible to resolve this issue and will post a message on the Announcement page when the problem has been fixed. We apologize for the inconvenience.
Posted January 15, 2008 TRACSMail Back Up All TRACSMail services are back up. We apologize for the inconvenience.
The Enterprise Income Verification (EIV) link will bring you to the EIV home page. All EIV information can be found at this location: http://www.hud.gov/offices/hsg/mfh/rhiip/eiv/eivhome.cfm You will find the EIV Users Guide to be very helpful. The TRACS Industry Meeting link will give you all of the presentations that were done at past Industry Meetings. There are no note pages but the presentations can still be helpful or at least give you the gist of what was presented. Copyright AHTCS Online LLC. 2013
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HUD Handbook 4350.3 FAQ
http://www.hud.gov/offices/hsg/mfh/rhiip/4350_faqs.pdf
All of the question and answers from this web page have subsequently been included in the new release of the HUD Handbook 4350.3 Check out the document! It is 45 pages long so you may have to load the printer. If your printer has the ability to print on both sides, I would suggest doing just that to save paper.
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RHIIP Newsletter
http://www.hud.gov/offices/hsg/mfh/rhiip/mfhrhiip.cfm
On January 13, 2006, The Office of Multifamily Housing Programs (Headquarters) launched the LISTSERV Multifamily Housing RHIIP Tips (RHIIP LISTSERV), a free mailing list service dedicated to the latest developments in issues related to HUDs multifamily housing. The RHIIP LISTSERV was created to quickly deliver new information to interested stakeholders of the various HUD Multifamily Housing programs. RHIIP LISTSERV Sample Subjects RHIIP Tip: Rental housing occupancy related tips to assist property managers in reducing subsidy calculation errors. RHIIP News: RHIIP related news items. RHIIP Profile: Profile of an individual who is making an impact in the RHIIP Initiative. Other Items of Interest: Information not related to the RHIIP Initiative that will be of interest to our Industry partners. How to subscribe to the RHIIP LISTSERV The RHIIP LISTSERV works just like an automated mailing list. To receive the RHIIP LISTSERV you have to subscribe. Here are the steps: 1.Go to www.hud.gov; 2.Click on the MAILING LISTS link on the lower left hand side of the page; 3.Click the Multifamily Housing RHIIP Tips LISTSERV link in the middle of the page; 4.Enter your email address; 5.Open your email account and respond to a confirmation email within 48 hours to complete your registration.
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Part 1 -- Introduction to the REAC Physical Inspections REAC Physical Inspections

You wouldnt believe how many affordable housing property owners & property managers I have spoken to who were in a state of panic because they were getting ready for their REAC inspection. My advice to those is just be prepared the best you can. Easier said than done, huh? Not really. My first suggestion is to perform your own pre-inspection using your physical inspection check list (make sure to include your maintenance person). When you walk your property, dont walk with your head downlook around at your surroundings, correcting the most visible problems BEFORE the big day. Sometimes there are inconsistencies with the way that the physical inspections are performed and, unfortunately, principles are not always placed before personalities. Lets face it, when we are in a bad mood our job performance can be affected. However that doesnt really help our REAC score, does it? So, again, I can only reiterate that preparation is your best chance of achieving a great score. Speaking of your score, do you know what it is? Here is a link to check your http://www.ahtcsonline.com/reac_score_table.html. Wouldnt be nice if there were some kind of REAC FAQ which would answer some questions regarding REAC Physical Inspections? There isit is called the REAC Compilation Bulletin. This FAQ guide provides answers to the most commonly asked questions from inspectors in the field and clarifies certain areas of inspection protocol. HUDs intent is not to give you a hard time (theory) but to protect the governments financial investment and to make sure that affordable housing families have housing that is decent, safe, sanitary and in good repair. Lets get back to one of my original statements. Perform your own pre -inspection using your physical inspection check list. Affordable housing Owners and Managers must take the ini tiative to conduct these inspections before the REAC inspection takes place. Make sure you conduct a pre-inspection of all of the units, common areas, site, building exterior and mechanical systems. Inspectors are using the Uniform Physical Condition Standard (UPCS) and so should you. Grab your clipboard and use a detailed Physical Inspection Checklist to help you with this process. Document your findings and make repairs well in advance of your scheduled inspectiondont wait to the last minute!! Dont PROCRASTINATE!
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The Purpose of Physical Inspections

1. To make sure that families have housing that is decent, safe, sanitary and in good repair. 2. To protect the government's financial investment.
HUD Programs Requiring Physical Inspections of the Property

1. All Section 8 project-based assistance; 2. Section 202 Program of Supportive Housing for the Elderly (Capital Advances); 3. Section 811 Program of Supportive Housing for Persons with Disabilities (Capital Advances); 4. Section 202 loan program for projects for the elderly and handicapped (including 202/8 projects and 202/162 projects). 5. Housing with mortgages insured or held by HUD, or housing that is receiving insurance from HUD: A. Section 207 -- Rental Housing Insurance; B. Section 213 -- Cooperative Housing Insurance; C. Section 220 -- Rehabilitation and Neighborhood Conservation Housing Insurance; D. Section 221(d)(3) -- Market Interest Rate (MIR) Program; E. Section 221(d)(3) and (5) -- Below Market Interest Rate (BMIR) Program; F. Section 221(d)(4) -- Housing for Moderate Income and Displaced Families); G. Section 231 Housing for Elderly Persons; H. Section 232 Mortgage Insurance for: 1) Nursing Homes, 2) Intermediate Care Facilities, 3) Assisted Living Facilities, and 4) Board and Care Homes; I. Section 234(d) Rental Mortgage Insurance for Condominiums;
J. Section 236 Rental and Cooperative Housing for Lower Income Families); Copyright AHTCS Online LLC. 2013
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K. Section 241-- Supplemental Loans for Multifamily L. Section 542(c) of the Housing and Community Development Act of 1992 -- Housing Finance Agency Risk Sharing Program. M. Properties Owned by Public Housing Authorities (PHAs)
The Conducting of Physical Inspections

1. HUD contracts with private inspection contractors to complete inspections of the properties 2. Inspectors must successfully complete REACs UPCS Inspector Training and Certification Course 3. The REAC Physical Inspection Quality Assurance Division performs quality assurance reviews of certified inspectors
The Timing of Physical Inspections

1. A newly endorsed multifamily propertys first inspection is not earlier than 21 months and not later than 27 months from the date of final endorsement.
REAC Inspection Scores

A. The physical condition of the property will be scored based on the results of the inspection. The scores range from 0 to 100. Based on that score, the property will received one of the following 3 designations: Standard 1 Performing Properties the highest performing score is 90 points or higher. These properties are inspected once every three (3) years. Standard 2 Performing Properties the performing score is 80 to 89 points. These properties are inspected once every two (2) years. Standard 3 Performing Properties the performing score is 79 or less. These properties are inspected annually. Scores Below-60 Properties that receive inspection scores below 60 will be referred to the HUD Departmental Enforcement Center (DEC). B. Physical inspection reports include the level of severity of each deficiency identified during the inspection. The levels range from 1 to 3, with 3 being the most severe. Level 3 also includes non-Exigent Health and Safety deficiencies. Exigent Health and Safety deficiencies are not scored.
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Owner Response
A.
Property Scoring 60 or Above - For properties receiving a REAC score of 60 or above, the Owner is instructed to make the required repairs as indicated by their inspection results as part of their ongoing maintenance program. Property Scoring 59 to 31- Effective November 1, 2002 all Multifamily properties receiving a new REAC physical inspection score below 60, will be referred to Department of Enforcement Center (DEC) and may receive a 2530 flag in the APPS system. At that point the Owner will be contacted by the DEC staff and receive a Notice of Violation (NOV). This notice will address the reason for violation under the specific contractual document you may hold with HUD, the Owner will then have 60 days to make all necessary plans for repairs outlined in the REAC inspection. Within the 60 day timeframe REAC will notify the Owner of a new inspection date. However, the Multifamily HUB Director may exercise discretion to withhold based upon good cause. For example: If the project is currently under an approved HUD work plan, the HUB has received an approval application for transfer of physical assets to a new Owner with sufficient funds to immediately repair the property beginning within 90 days, or the Owner is in the process of refinancing the mortgage with HUD insurance within the next 90 days, and adequate funds will be escrowed, and repairs will be required as part of the transaction. The Owner will be required to submit a certification to Multifamily on a monthly basis stating that all E H& S item have been mitigated and the property is being maintained to standard. Property Scoring 30 or below - When the score is 30 or below, REAC will make an automatic physical referral to the Department Enforcement Center (DEC). While DEC is evaluating the property, the Owner must resolve any EH&S hazards that may exist. DEC action would depend on the Owners response and/or mitigation of the deficiencies.
B.
C.
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Part 2 -- The REAC Physical Inspection Process The REAC Inspector

1. Must perform objective evaluations based on fact. 2. Must comply with and only use the Uniform Physical Condition Standards when performing physical inspections. A. The UPCS provide uniformity and objectivity in the evaluation of the physical condition of HUD properties. B. The UPCS identify the five inspectable areas 1) Site 2) Building Exterior 3) Building Systems 4) Common Areas 5) Units C. The UPCS standardize definitions for the items that are inspected. 1) Site -- the area surrounding the building(s) of a property. a) Fencing and Gates d) Mailboxes/Project Signs b) Retaining Walls e) Market Appeal c) Grounds h) Refuse Disposal f) Parking Lots/Driveways/Roads i) j) Storm Drainage Walkways/Steps
g) Play Areas and Equipment 2) Building Exterior a) Doors b) FHEO Requirements for Physical Accessibility c) Fire Escapes
e) Lighting f) Roofs
g) Walls h) Windows d) Foundations
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3) Building Systems a) Domestic Water b) Electrical System c) Elevators d) Emergency Power 4) Common Areas a) Basement/Garage/Carport b) Lobby i) c) Closet/Utility/Mechanical Office d) Community Room e) Other Community Spaces f) Day Care j) Pools and Related Structures Halls/Corridors/Stairs h) FHEO Requirements for Physical Accessibility e) Fire Protection f) HVAC
g) Roof Exhaust System h) Sanitary System
k) Restrooms/Pool Structures l) Kitchen Storage
m) Laundry Room n) Trash Collection Area o) Storage
g) Patio/Porch/Balcony
5) Units a) Bathroom b) Kitchen c) Call-for-Aid d) Lighting e) Ceiling f) Outlets/Switches i) j) Electrical System Smoke Detector
k) Floors l) Stairs
m) Hot Water Heater n) Walls o) HVAC System p) Windows
g) Doors h) Patio/Porch/Balcony
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D. The UPCS define all deficiencies, their criticality, and their level of severity: 1) Deficiencies 2) Criticality a) Critical b) Very Important c) Important d) Contributes e) Slight Contribution 3) Severity a) Level 1 -- Least Severe b) Level 2 Severe c) Level 3 Most Severe E. The UPCS define Exigent Health and Safety Hazards: 1) Air Quality 2) Electrical Hazards 3) Elevator 4) Emergency/Fire Exits 5) Flammable Materials 6) Garbage and Debris 7) Hazards 8) Infestation 3. Must conduct inspections according to the Physical Inspection Protocol. A. Pre-Inspection B. Inspection C. Post Inspection
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4. Must abide by the Code of Conduct A. Displaying the HUD-issued photo id during the inspection. B. Dressing appropriately. C. Being courteous and professional. D. Being aware of cultural differences. E. Deferring resident questions concerning maintenance to the property representative. F. Not making promises about inspection results. G. Being aware of potential conflicts of interest. H. Not offering an opinion as to the quality of the site, building or unit. I. Not invading a residents privacy.
J. Not disclosing any information to a third party about the inspection results. K. Not using local HUD, MF, or PHA offices to conduct personal business.
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Pre-Inspection
The inspector receives the Inspection Assignment -- The inspector will still record the deficiency as
an existing condition; however REAC will make an adjustment to the inspection prior to releasing the final inspection results. This process can also take place on projects undergoing modernization work in progress at the time of the inspection. Requests for Pre Inspection Database Adjustments should be submitted well in advance of the inspection to allow sufficient time for processing. The request should be sent with accompanying documentation to the local HUD MFH field office or MFH HUB Center a minimum of eight weeks prior to the scheduled inspection.
1. The Inspector downloads the Property Profile from the REAC Web site directly to the UPCS software on their DCD A. Inspection number. B. Property information C. Participant information D. Building information 2. The Inspector contacts the official property representative to: A. Give an explanation the purpose of the inspection B. Arrange a mutually agreeable time for the inspection C. Inform the parties involved that all inspections must occur in presence of the property representative. D. Notify the Technical Assistance Center if the property owner refuses to permit an inspection. 3. The Inspector sends an Inspection Notification Letter, informing the property representative to: A. Notify all residents of upcoming inspection B. Have available for the inspector on day of inspection: 1) A copy of document notifying residents of the upcoming inspection 2) The total number of buildings and units
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3) The address for each building 4) All applicable certificates 5) Occupancy rate 6) Rent roll 7) Site map or plot of property (if available) 8) Area measures for parking lots/driveways/roads and walkways/steps 4. The Inspector updates the REAC Inspection Schedule
Inspection
1. The Inspector must be physically present to conduct the inspection. 2. The Inspector meets with the property representative and: A. Checks that residents were given written notification of the inspection. B. Discusses the purpose of the inspection with the property representative. C. Explains the sampling process to the property representative. D. Explains how Life-Threatening Health and Safety Hazards will be handled. E. Verifies: 1) The rent roll or other all-inclusive documents to confirm proper building/unit count. 2) If applicable, a list of units relative to 504/FHA/ADA. 3) The occupancy rate F. Authenticates and updates the Property Profile information: 1) Includes information on the property: a) Property name, address and telephone number. b) Scattered site information. c) Total number of buildings and units. 2) Includes information on the participants: a) Participant name. Copyright AHTCS Online LLC. 2013
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b) Participant role (e.g., site manager, owner, etc.) c) Participant organization name. d) Participant address and telephone number. e) Participant e-mail address. 3) Includes information on certificates 4) Includes information on area measures G. The Inspector visually verifies and updates building information 1) Building name and address 2) Building type a) Common Building A detached non-residential structure. b) Duplex A detached residential structure consisting of two units. c) Low-Rise/Garden Apartments A multi-unit residential structure consisting of two and one-half or less floors with a common hall entrance. d) Mid/High-Rise Apartments A multi-unit residential structure consisting of three or more floors with or without elevators. e) Row/Town House A single unit residential structure that is connected to a similar structure by a common sidewall with individual exterior unit entrance. f) Single Family House A detached residential structure consisting of one unit.
3) Building construction year 4) Total number of units 5) For nursing homes, group homes, and assisted living facilities: a) Any room with a bed, or beds, is considered a client room. b) Client rooms are to be inspected and listed as dwelling units. c) Inspectors should change the number of units in the DCD to reflect client rooms. Copyright AHTCS Online LLC. 2013
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H. The Inspector generates sample using the sampling function of UPCS software 3. The inspector conducts the inspection of the property A. Inspectors are required to complete inspections without the assistance of property personnel. B. The Inspector must always be accompanied by the property representative while on the property. C. The Inspector only inspects physical structures and items under the control of the housing provider. D. The Inspector points out all observed deficiencies and their severity level to the property representative as the inspection is performed. E. The Inspector must be alert to any Health & Safety hazards that may exist in an inspectable item. F. The Inspector must follow special guidelines when inspecting units 1) Occupied units a) The Inspector must remind residents of the purpose of the inspection. b) The Inspector must direct specific resident complaints to the property representative. c) The Inspector should not open closed doors within a unit. NOTE: Child-Safety window guards should not be considered as Blocked Egress. 2) Vacant Units 3) Altered Units 4) Non-Revenue Units G. The Inspector uses the UPCS software to automatically review the completed inspection. H. The Inspector documents all life-threatening hazards using the Notification of Exigent and Fire Safety Hazards Observed form. 1) The property representative signs the form 2) A copy of the form, signed by the inspector, must be left with property representative. I. All inspections should be completed in one day.
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1) If the inspection cannot be completed in one day, it must be completed during the next business day before inspector can start a second inspection. 2) If the inspection cannot be completed on contiguous business days, the contract inspector must call their Help Desk 3) If an inspection is going to be continued for more than one day, the EH&S form shall be completed and provided to the property representative at the end of first day and at the end of each successive day until the inspection is completed. J. The Inspector must avoid the common pitfalls that cause variances in inspection scores. 1) Subjectivity 2) Negligence 3) Gaming
Post-Inspection
1. The Inspector must upload completed inspections the REAC within 24 hours. 2. REAC computes the overall inspection score
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Part 3 -- The Physical Inspection Scoring System The Goal:

Assign a score to the overall property condition based on the data collected by the inspector Measure physical condition Objective & consistent Accommodates all property types & configurations
Scoring is based on objective data: The inspector records the existence and the severity of deficiencies according to preset criteria
1. Relative weights are used to determine which items are most important, next most important, and so on. A. The Relative Weights for the 5 Inspectable Areas
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The weights were assigned as part of a consensus process: - Industry stakeholder input a. Multifamily Housing (Owners / Agents) b. Public Housing Authorities c. Trade groups d. PHA industry groups - HUD information - Trade professionals experience
Scoring Methodology
B. Some relative weights for the for inspectable items (8-17 per area) 1) Smoke Detector = 0 2) Missing Toilet = 10 3) Damaged Ceiling = 4.5 4) Misaligned Chimney = 15.5 C. Criticality levels of deficiencies 1) Slight Contribution = 0.5 2) Contributes = 1.25 3) Important = 2.25 4) Very Important = 3.0 Copyright AHTCS Online LLC. 2013
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5) Critical = 5.0 D. Severity levels of deficiencies 1) Least Severe = 0.25 2) Severe = 0.50 3) Most Severe = 1.0 2. Calculating the score A. Scoring a propertys physical condition depends on: 1) The weights for inspectable areas (5 areas) 2) The weights for inspectable items (8-17 per area) 3) The criticality levels of the deficiencies 4) The severity levels of the deficiencies B. The scoring formula that is used is Area Points x Item Weight x Criticality x Severity = Score C. The steps in the process REAC uses to come up with the overall property score: 1) Determine how many points are possible for each area to be inspected. 2) For each area, deduct points for the observed deficiencies. 3) Add up the area scores. 4) Deduct points for H & S deficiencies.
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Scoring
Dwelling Unit: Living Room, Ceiling - Holes/Missing . . . - Level 3
(Item Weight x Criticality x Severity)
4.5 x 3.0 x 1.0 = 13.5%

*Assuming 250 Units (24 Sample Units) (Area Points x Item Weight x Criticality x Severity / # Units)
Point Deduction
35 x 0.045 x 3.0 x 1.0 = 4.725 / 24 = 0.20
Scoring
Building Systems: Domestic Water, Misaligned Ventilation System - Level 3
* EH&S TIC KET ITEM! *

15.5 x 5.0 x 1.0 = 77.5%

*Assuming 5 Buildings (Area Points Item Weight x Criticality x Severity / # Buildings)
Point Deduction
20 x 0.155 x 5.0 x 1.0 = 15.5 / 5 = 3.10
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Scoring
Dwelling Units: Smoke Detector, Missing/Inoperable - Level 3
* EH&S TIC KET ITEM! *

0 x 5.0 x 1.0 = 0 no point deduction

*Assuming 15 Units (10 Sample Units) (Area Points x Item Weight x Criticality x Severity / # Units)
35 x 0 x 5.0 x 1.0 = 0 / 10 = no point deduction
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Frequently Cited Deficiencies

Following are examples of maintenance items that, if repaired prior to inspection, could make a significant difference in your physical inspection score. 1. HVAC the hot water heater Pressure Relief Valve discharge tube must extend to within 18 inches of the floor; 2. Misaligned Chimney the vent stack on gas operated hot water heaters or furnaces must be properly aligned; 3. Missing HVAC Covers there must be covers on all baseboard heaters; 4. Access to the Electrical Panel access to electrical panels must not be blocked by furniture or other items; 5. Open Fuse Ports Open fuse ports must be covered. Replacement covers may be obtained from a local hardware store; 6. Doors Damaged Seals the factory-installed seals on Exterior Doors, such as building or unit doors, must be in place and undamaged; 7. Doors Damaged Hardware Exterior door hardware locks or latches and Fire Doors function as designed; 8. Security Doors security doors must not have dual-side key locks; 9. Kitchen Damaged Stoves/Ovens all stove burners and oven must be working. Check to ensure that pilot lights are lit; 10. Plumbing be sure pipes and faucets are not leaking, and that areas around any leaks have been cleaned up and repaired; 11. Damaged Sinks/Showers be sure that any hardware problems are repaired, diverters are working, drains have stoppers, hot or cold water handles are in place and working. Make sure the water valves located under the sinks are turned on prior to the inspection; 12. Clothes Dryers must be properly vented to the outside from units or laundry rooms; 13. Storm Water Sewers be sure they are not clogged with trash, leaves or other debris; 14. Sanitary Sewer Damaged Covers caps located in the grass on the exterior of the building that have been damaged by a lawn mower should be cleaned out. Replace and mark the areas to prevent further damage; 15. Trash Chutes be sure hardware is in place and the chute door closes and latches properly; 16. Trash Receptacles must not be overflowing and must be of adequate in size for the property;
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17. Auxiliary Lighting the back up lighting must work even if the test light does not work; 18. Leaking Domestic Water Check to ensure that there are no leaks in the domestic water supply. This includes the hose bibs located on the building exterior; 19. Switchplate Covers replace all cracked or broken covers. 20. Call-for-Aid The system must be operational and cords and switches must serve their intended function. 21. Site remove all Tripping Hazards on sidewalks or parking lots; 22. Site maintain fences and gates and ensure that they are in good working condition; 23. Site correct an erosion and/or ruts found the grounds; 24. Fire Extinguishers maintain current certificates and check to ensure that tags/stickers are attached to the extinguisher itself; not located on a fixture or box, or on the wall. When fire extinguishers are removed, be sure that all associated hardware is also removed and any damage is repaired. You may be cited if it appears to the inspector that an extinguisher is missing; 25. Windows Damaged repair broken, cracked or fogged windows ensure that all windows open, close and lock as intended; 26. Roof be sure that mechanical exhaust vents are working and that all drains are free of debris; 27. Damaged Roof ensure that there are no missing shingles and that the rubber membrane is not torn or damaged; 28. GFI outlet make sure that test buttons trip and reset when manually tested; 29. Damaged Walls both exterior and interior walls must be free of damage and the paint on painted walls must be in good condition (not peeling or cracking);
Emergency Egress/Blocked Access items such as Non Breakaway Security Bars or A/C units in windows must be properly installed or removed. If cited as a deficiency during an inspection and you can subsequently provide a letter from the local authority (Fire Marshall) certifying that the condition meets local code, you may have the deducted points returned by submitting a request for a database adjustment if you have a letter from the local Fire Marshall, building code inspector, other local inspector or licensed architect stating that the specific deficiency cited meets all local fire codes.
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Part 4 -- The REAC Physical Inspection Report The Results of the Inspection
1. Scores for each of the five REAC physical inspection areas: A. Site B. Building exterior C. Building systems D. Common areas (if present) E. Units 2. An overall score for the property -- a weighted average of the area scores minus deductions for H & S deficiencies. 3. All of the deficiencies recorded by the inspector, their severity level, and the points deducted for each deficiency 4. The estimated number of H & S deficiencies that would have been found if all buildings and units had been inspected
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The Physical Assessment Subsystem Process Reporting

1. Physical Inspection Reports can only be accessed through the Physical Assessment Subsystem 2. The Physical Assessment Subsystem is a part of HUDs Web Access Secure Systems (WASS) 3. You must register for a User ID and Password in order to use any of WASS subsystems
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Interpreting the Physical Inspection Report

1. Physical inspection scores have both number and letter parts. 2. The number part gives an overall score for the basic physical condition of a property. 3. The letter part specifically indicates that Health and Safety problems were observed during the inspection. A. a -- No Health and Safety deficiencies. B. b -- One or more non-life threatening Health and Safety deficiencies. C. c -- One or more exigent/fire safety Health and Safety deficiencies D. An asterisk after a letter designates that the property has at least one smoke detector deficiency
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Physical inspection scores have both number and letter parts The number part gives an overall score for the basic physical condition of a property
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The letter part specifically indicates that Health and Safety problems were observed during the inspection a -- No Health and Safety deficiencies b -- One or more non-life threatening Health and Safety deficiencies c -- One or more exigent/fire safety Health and Safety deficiencies An asterisk after a letter designates that the property has at least one smoke detector deficiency
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Appealing Physical Assessment Scores

1. There are two Processes available to challenge a physical inspection score - technical reviews and
database adjustments. The criteria for technical reviews and database adjustments are different. Requests for technical reviews must be submitted separately from requests for database adjustments.
A. Database Adjustments 1) Local conditions and exceptions 2) Ownership issues 3) Adverse conditions beyond the owner's control 4) Modernization work in progress B. Technical Reviews 1) Building data errors 2) Unit count errors 3) Non-existent deficiency errors 2. Making an appeal of a physical inspection score Database Adjustments (DBA)
Property Owners/agents must request database adjustments in writing to REAC, Attn: PASS Database Adjustment (with a copy to the Hub and/or the Performance-Based Contract Administrator) within 45 days following issuance of the physical inspection report.. 1. Database adjustments include:

Local Conditions and Exceptions conditions that are allowed by city codes. Ownership Issues - roads and sidewalks owned by the city, or fencing/retaining walls owned by adjoining properties. Adverse Conditions beyond the Owners Control deficiencies caused by natural disaster or a third party.
2. The following do not qualify for a database adjustment: Deficiencies noted during the inspection that were corrected during or after the inspection. Deficiencies caused by the residents. Circumstances addressed in the technical review.
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A. REAC will not accept any database adjustment request without appropriate documentation.
Examples include written materials from the local fire marshal or building code official, photographs with the date that reflect the inspectable item, and videos should include the date and specific location.
1) PHAs must submit the request within 15 days following REAC's submission of the physical inspection report to the PHA. 2) Multifamily Housing must submit a request within 45 days following REAC's submission of the physical inspection report to the owner of the Multifamily Housing property. 3) What to include a) All property identification b) All location information for each deficiency presented in the request for adjustment. c) Documentation to sufficiently support the request. Written Material Photographs VideosB. Technical Reviews - All requests for technical reviews must include documentation to sufficiently support the request. Include only information relevant to your request. Examples of appropriate documentation include: C. Written Materials Letters from tradesmen or coding officials Photographs Site maps Videos
If the REACs evaluation determines that an objectively verifiable and material error has been reasonably documented by the Owner, then the REAC will take one or a combination of the following actions: Undertake a new inspection, correct the inspection report; or issue a new score. A re-inspection is not available for an Owner simply because the Owner believes that the property should receive a higher score or because non-material errors which result in an insignificant improvement can be shown (for example: a property receives a score of 82 and the Owner wants a score of 86). If a re-inspection is required and the new inspection score results in a significant improvement from the original physical inspection score, HUD will pay for the new inspection.
D.
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A request for a technical review of the physical inspection results must be submitted in writing to REAC at the address listed below, along with a copy to the Multifamily Hub Director and/or the Performance Based Contract Administrators. This must be received by REAC within 30 days following REACs submission of the physical inspection report. (1-888-245-4860) PASS Technical Reviews HUD/PIH/REAC 550 12th Street SW, Suite 100 Washington, DC 20410 1) PHAs must submit a request within 15 days following REAC's submission of the physical inspection report to the PHA. 2) Multifamily Housing must submit a request within 30 days following REAC's submission of the physical inspection report to the owner of the Multifamily Housing property. 3) What to include a) All property identification b) All location information for each deficiency presented in the request for review. c) Documentation to sufficiently support the request. Written Material Photographs VideosTenant Involvement A. Once the inspection report is released to the Owner, and for a reasonable time after the inspection has been closed out by the HUD or the Performance-Based Contract Administrator, the Owner must keep, and make available in the property office, during normal office hours, the following, as the documents are developed and issued: EH&S citation, if applicable, and all project/inspection related correspondence The REAC physical report and all project/inspection related correspondence Owners physical survey Owners plan (or MIO Plan) approved by the MFH HUB/Program Center Owners certification(s) Owners and MFH HUB/Program Center project/inspection related correspondence
If the tenants have any questions or concerns, they may contact the local Program Center to make their concerns known to the HUD Project Manager. Owner must post a notice to the residents in the Owners management office and on any bulletin boards in common areas that advise residents of the availability of the materials. The notice should include the name, address, and telephone number of the HUD Project Manager or Performance-Based Contract Administrator. B. E-Mail Notifications to Improve communication
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As you may already be aware, inspection reports are no longer mailed to the Owners/agents via United States Postal Service. The Owners and agents must retrieve their released inspection reports directly from HUDs Secure Systems. PIH-REAC also uses e-mail to notify its industry partners whenever an inspector records an EH&S deficiency during an inspection. The notification will generally be dispatched within 24 hours after the completion of the physical inspection. In addition to the EH&S notice, REAC will also provide electronic notices concerning other important events relating to inspections; e.g., when a physical inspection is accepted, rejected, overdue, un-inspectable or placed on hold for Quality Assurance evaluation. To achieve maximum benefit a property Owner must have established access rights to HUDs Secure Systems. If you do not have access to Secure Systems you can register at the REAC web site at: www.hud.gov/reac. You may also visit this web site for general information concerning REAC or contact you local HUD Field Office.
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Part 5 -- Correcting Deficiencies Identified in the Physical Inspection Report Exigent Health and Safety Items
1. The owner must correct all EHS items immediately, 2. The owner must file a written report with the applicable Multifamily Hub Director within 3 business days of the date of the inspection. A. A certification that the EHS items were corrected; and B. Reasonable evidence that the EHS items have been resolved.
Other Deficiencies
1. Multifamily Properties A. Properties with overall scores of 60 and above self-certify that repairs have been made, the Owner is also instructed to make the required repairs as indicated by their inspection results and as part of their ongoing maintenance program. B. Properties with overall scores below 60 1) Properties scoring between 31 and 59 will be electively referred to the DEC by the local field office/Hub. Effective November 1, 2002 all Multifamily properties receiving a new REAC physical inspection score below 60, will be referred to Department of Enforcement Center (DEC) and may receive a 2530 flag in the APPS system. At that point the Owner will be contacted by the DEC staff and receive a Notice of Violation (NOV). This notice will address the reason for violation under the specific contractual document you may hold with HUD, the Owner will then have 60 days to make all necessary plans for repairs outlined in the REAC inspection. Within the 60 day timeframe REAC will notify the Owner of a new inspection date. However, the Multifamily HUB Director may exercise discretion to withhold based upon good cause. For example: If the project is currently under an approved HUD work plan, the HUB has received an approval application for transfer of physical assets to a new Owner with sufficient funds to immediately repair the property beginning within 90 days, or the Owner is in the process of refinancing the mortgage with HUD insurance within the next 90 days, and adequate funds will be escrowed, and repairs will be required as part of the transaction. The Owner will be required to submit a certification to Multifamily on a monthly basis stating that all E H& S item have been mitigated and the property is being maintained to standard. 2) Properties scoring 30 and under will be automatically referred to the appropriate DEC Satellite Office (DEC-SO). REAC will make an automatic physical referral to the Department Enforcement Center (DEC). While DEC is evaluating the property, the Owner must resolve any EH&S hazards that may exist. DEC action would depend on the Owners response and/or mitigation of the deficiencies.
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a) The DEC-SO will contact the owner and arrange a meeting no later than 10 -15 days after inspection release. b) The owner must certify completion of the repairs no later than 60 days from the meeting date; c) If the owner is not confident of its ability to achieve a score of 60 or above, the owner should immediately explore alternatives such as: A transfer of the physical asset Immediate application for OMHAR restructuring, prepayment, refinancing, etc. Asking HUD to assist in improving the physical plant. d) If the property scores 60 or above after the inspection, then HUD will resume normal monitoring. e) Should the property score under 60 HUD will consider the owner in default and will pursue all available remedies. f) If the owner cannot or will not improve conditions, then HUD will pursue action(s) to ensure the properties are decent, safe, sanitary, and in good repair.
2. Public Housing Properties A. Properties with overall scores of 18 or above are instructed to make required repairs as part of ongoing maintenance program B. Properties with overall scores below 18 are considered troubled properties
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Use Previous Physical inspection Reports to Improve Your Upcoming Inspection Score Real World Example: PHA XY123 1. Physical Inspection Score 13 Troubled Property
2. Maintenance corrections made
3. Following years Physical Inspection Score 25
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Summary and Questions

Inspectors - Reporting - Rude, unprofessional or incompetent inspectors should be reported by calling 202/475-8558 or emailing reac_inspector_admin@hud.gov
PROJECT OWNERS CERTIFICATION THAT ALL EH&S ITEMS HAVE BEEN CORRECTED SEND OR FAX SIGNED COPY TO LOCAL MF OFFICE [Name of Project Owner:] ____________________________________________ (the Project Owner), the owner of [Project Name:] ____________________________, [City:] __________________, [State:] __________ [Project Number:] (the Project), by and through its duly authorized representative identified below, hereby certifies that: 1. All Exigent Health and Safety (EH&S) items at the Project have been corrected. Such EHS items include those identified in the Notification of Exigent and Fire Safety Hazards Observed, dated ____________________. 2. The attached Report accurately identifies the repairs that have been made to correct the EHS items, the location of those repairs, and the date or dates the repairs were made. If repairs were not made, the dangerous condition was eliminated. This certification is made by the Project Owner and is signed by a duly authorized representative of the Project Owner, who is so authorized by reason of his/her position as the [State Fully Relationship Between Signer of Certification and Project Owner:] ___________________________________________________ __________________________________________________________________ _________________________________________________________________. All of the foregoing statements, as well as the date, signature and identifying information of the signer and the Project Owner that follows, are HEREBY CERTIFIED as true and accurate this _____ day of ___________________, 20____. Project Owner: __________________________________ By: Signature: ____________________________ Print Name: ____________________________ Title: ____________________________
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Resources
This is the link to ALL HUD notices:
http://portal.hud.gov/portal/page/portal/HUD/program_offices/administration/hudclips/notices/hsg This is the link to the HUD Notice which revises the current 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. The revised protocol takes effect as of the date of this Notice. Properties that receive a physical inspection score of 30 or below will continue to be automatically referred to the Departmental Enforcement Center (DEC) and a flag will automatically be recorded in APPS.
http://wwwhud.gov/portal/page/portal/HUD/program_offices/administration/hudclips/notices/hsg/files/1 0-04hsgn.doc
Link to the HUD REAC Physical Inspection web site - Every official document that pertains to HUD REAC inspections, contractors, inspectors and more is all listed here. Most useful is the Want More Information/Helpful Tools/Hot Links list on the right side of the page.
http://www.hud.gov/offices/reac/products/prodpass.cfm REAC/PASS Appeal Form

Not happy with the results of your REAC inspection? Well, this form will only help you if the REAC inspector made obvious errors in identifying point-deducted defects. If you are a Public Housing Authority, you will need to use this form and need to get it all submitted within 15 business days of posting on the HUD website. If you are not, you must use a letter format to plea your case, but review the checklist on the center of the page to make sure you included everything you need to win your appeal. Non-PHA properties only get 30 business days from the posting date to submit this documentation, so check the web site daily after your inspection and be ready to roll! Remember the more documents you include the better your chances of being successful, including actual defect definitions, photographs, and a detailed explanation of the situation. All work in progress that the REAC inspector identified as a defect, or all components that were entered as defects that are not under control/ownership of the property are all appealable items and REAC should return the points deducted if documented properly, regardless of paperwork already submitted to HUD.
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REAC Physical Inspections

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Know and Use Your Resources!

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TRACS Home Page

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HUD Handbook 4350.3 FAQ

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Part 1 -- Introduction to the REAC Physical Inspections REAC Physical Inspections

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The Purpose of Physical Inspections

HUD Programs Requiring Physical Inspections of the Property

The Conducting of Physical Inspections

The Timing of Physical Inspections

REAC Inspection Scores

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Part 2 -- The REAC Physical Inspection Process The REAC Inspector

g) Walls h) Windows d) Foundations

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g) Roof Exhaust System h) Sanitary System

k) Restrooms/Pool Structures l) Kitchen Storage

m) Laundry Room n) Trash Collection Area o) Storage

m) Hot Water Heater n) Walls o) HVAC System p) Windows

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Part 3 -- The Physical Inspection Scoring System The Goal:

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(Item Weight x Criticality x Severity)

4.5 x 3.0 x 1.0 = 13.5%

35 x 0.045 x 3.0 x 1.0 = 4.725 / 24 = 0.20

* EH&S TIC KET ITEM! *

15.5 x 5.0 x 1.0 = 77.5%

20 x 0.155 x 5.0 x 1.0 = 15.5 / 5 = 3.10

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* EH&S TIC KET ITEM! *

0 x 5.0 x 1.0 = 0 no point deduction

35 x 0 x 5.0 x 1.0 = 0 / 10 = no point deduction

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Frequently Cited Deficiencies

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