HUD has been under increasing pressure from negative news publications, OIG (Office of Inspector General), and Congress to make serious changes to their protocol. Although there appears to be much more to come, here are their most recent published changes:
14-Day Notification of the REAC Inspection – Applicable to ALL properties that are NOT a HUD loan (so far)
- Officially went into effect Monday, March 25, 2019 and will be enforced in the next auction (expected April 13).
- The 14-day notification is CALENDAR days, not business days.
- Inspection dates are no longer “negotiable.”
- The inspector will have filled out their calendars and submitted them to HUD with 2 potential dates for your inspection.
- 14 calendar days prior to the inspection, the inspector will attempt to call you to notify you of the inspection. You do NOT have to acknowledge this date (i.e. the inspector could just leave you a voicemail).
- The inspector can email you the inspection date if they cannot reach you and/or is unable to leave a voicemail.
- If you cannot or do not want to accept this date, you get a second chance within 7 calendar days of the initial notification…but you don’t get to choose the next date. The inspector has already notified HUD of your “Second Inspection Opportunity” (see 1.c)
- You cannot change your mind and accept the initial date again because the inspector has already recorded this as your “first refusal.”
- If you do not accept the second date, you will receive a 0 as your inspection of record and HUD wants you to know you could be referred to DEC (Departmental Enforcement Center) or have your subsidy payments withheld.
- If your property is currently undergoing or you intend to start “major rehab,” the local HUD office will ONLY approve the postponement of the inspection if you have notified them BEFORE receiving notification of an inspection date. To qualify for “Major Rehab,” the total cost of the rehabilitation must be $15,000 per unit or more (calculated by Total Cost of Repairs ÷ Total Units = Total Cost Per Unit).
- Do not accept any advance notification that your property is up for inspection. HUD will no longer be posting which properties are in an upcoming auction on their website. Contractors and inspectors are strictly forbidden from giving you advance notice that your property was in the auction.
Carbon Monoxide Testing by Inspectors
- Officially goes into effect Monday, April 1, 2019. (No, this is not an April Fool’s joke!)
- This is applicable to all properties that have fuel-fired appliance and/or an attached garage to the unit.
- Missing or inoperable carbon monoxide detectors are NON-SCORING
- HUD is currently in the data-collection mode. There is NO requirement to repair or remedy and damaged/missing CO detectors at this time