REAC program update at RealWorld

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RealPage held its RealWorld user’s group meeting in Orlando, Florida recently. In addition to sessions discussing RealPage’s products, they also held sessions presenting information of interest to the industry in general. One such session covered changes coming to the Affordable Housing market and, particularly, the REAC program.

One important change HUD has made recently is that they have shortened the notice period prior to a property inspection from 90-120 days to only 14 days. The HUD-contracted inspector will contact the property and propose an inspection date and an alternative date. If neither date is acceptable to the property operator, the property will be given a score of “0” and be subject to the HUD enforcement process. This change is considered provisional at this point.

HUD is planning other changes to the REAC program. As the program is currently implemented, HUD believes that it is possible for an inspector to fail all of the units inspected, but for the property to still pass the inspection. To prevent this, HUD is planning to refocus the inspection on the units themselves and on the livability of the property. The appearance of the property will have less impact on its score. The program implementing these changes is called NSPIRE. This two-year voluntary pilot program will roll-out starting in late 2019.

In the NSPIRE inspection model, the property owner/manager will be required to do annual inspections of all units on the property. HUD-contracted REAC inspectors will also inspect a sample of the units on the property at intervals varying from 1 to 3 years. The size of the sample of units inspected will be larger than in the current REAC program. Properties found to be deficient will be subject to inspection by HUD employees.

Inspections will focus most strongly on issues affecting the health and safety of residents. Next in priority will be issues affecting the function and operability of the unit and last in priority will be issues of condition and appearance.

The areas to be inspected, in order of importance, are the units themselves, the inside of the building and the outside of the building.

The NSPIRE program details are currently being worked on by HUD. They are expected to be finalized soon and will be posted to the Federal Register once that happens. The pilot program will go live after a 60-day comment period. Housing providers interested in participating in the pilot program can preregister on the HUD web site. Properties subject to an existing HUD Compliance, Disposition, and Enforcement or Corrective Action Plan are not eligible to participate. Participants will be able to influence the ultimate shape of the final program. The pilot program is expected to run at least 18 months.