How to Prepare for a REAC Inspection
You’ve received notice from the U.S. Department of Housing and Urban Development (HUD) that your affordable housing community is scheduled to undergo an inspection from HUD’s Real Estate Assessment Center (REAC). This is not the time to panic. Taking a few extra hours in advance to prepare for the visit can result in you passing the REAC inspection with higher marks and maintaining your federal funding.
One of the primary goals of REAC is to ensure safe, decent and sanitary conditions for low income residents living in housing supported by federal funds. The safety and maintenance of all HUD properties is safeguarded by physical inspections by either HUD inspectors or HUD-approved, privately-owned inspection companies.
HUD sets strict standards for quality assurance. The site assessment will include all building exteriors, building systems, common areas and all building units. Following the assessment, a written response will be provided. Scores are issued on a scale of 0 – 100 that reflects the physical condition of the property and determines how often follow-up inspections will occur. Typically, scores are provided as follows:
- Score of 90 or above – best result, return inspection every three years
- Score of 80 to 90 – good result, return inspection every two years
- Score below 80 – some serious infractions, return inspection every year
- Score below 60 – major infractions that may involve fines, immediately mandated repairs within 60 days (in the case of Exigent Health and Safety findings), and a re-inspection will be scheduled; additionally, property may be referred to HUD’s Department of Enforcement Center and a Notice of Default of Housing Assistance Payment may be issued
What is the best way to prepare for a REAC inspection?
As a property manager of 59 caring communities in nine states, Christian Church Homes (CCH) has consistently received high scores of 90 and above because of our excellent maintenance systems. Dedicated to building and managing affordable quality housing, CCH has served more than 100,000 residents during its long history and stands committed to making sure our communities are safe and well maintained.
Based on CCH’s insight spanning more than 50 years of experience, the best way to prepare for a HUD inspection is to regularly conduct a walk-through of your property monthly and to visually check areas such as the boiler room, electrical rooms, storage room and trash room chutes for any necessary maintenance or repairs. During these walk-throughs, bringing along an independent buddy is highly recommended. As the onsite property manager, you may unintentionally overlook a water stain, for example, but it will stand out like a sore thumb to a fresh set of eyes. It is also important to look for external hazards, such as branches or trees touching the building, which should be removed.
Additional pointers to help ensure a successful HUD inspection
- Ensure the boiler room is free of any water leaks from boilers or pipes, etc.
- Inspect electrical panels for any exposed wires or gap space greater than ¼ inch that requires an electrical cover to close the gap
- Create a list of items that require attention and note who will be responsible for the repairs – some items the maintenance crew on site will be able to fix while others may require a professional contractor or parts to be ordered
- When conducting annual apartment building inspections, create a work order for any deficiencies that are found (i.e., damaged front door hardware, appliances not operating properly, broken light fixtures, broken electrical outlets, non-operating smoke detectors, damaged walls or closet doors, tub drainage problems, damaged carpet, etc.) and make repairs within a week of the inspection
- Remember, any item subject to inspection should function as designed by the manufacturer; be sure to physically check all items such as windows, doors, appliances and lighting fixtures to make sure they are working correctly
What is the best way to executive a walk-through with HUD?
On the day of the REAC inspection, listen to the HUD representative and provide the correct documentation requested, such as elevator permits, generator log lists and boiler permits (if required by your city). Pay close attention to the way the inspection is being conducted and offer to assist where needed, such as moving the stove to check oven/burners or testing emergency pull cords. The inspector will announce any noted deficiencies and their severity, from Level 1 (minor), Level 2 (major), Level 3 (severe) and H&S (health and safety). You are allowed to carry a notepad and camera to document any findings and are able to ask questions or clarification, if needed.
If you have done your preparations in advance, you will be well on your way to a successful audit and should not be caught by surprise. For more suggestions, review the REAC inspection checklist on the HUD website for all inspectable items. Another helpful document is the Top 25 Findings published by REAC which is helpful to review when completing a walk-through of your property.