HUD Reinstates In-Person Management and Occupancy Reviews

A new HUD memo outlines required and alternative MOR procedures.

HUD’s Office of Multifamily Housing recently issued a memo announcing the reinstatement of in-person Management and Occupancy Reviews (MORs) conducted by Project Based Contract Administrators (PBCA) beginning Jan. 1, 2024.

A MOR provides an assessment of the day-to-day financial management of a Section 8 site. It also assesses management’s ability to maintain a property in a decent, safe, and sanitary condition. HUD uses these reviews to monitor a site to ensure that the owner is complying with its Section 8 Housing Assistance Payment (HAP) contract requirements, management certification, and HUD rules and regulations. MORs also ensure that HUD’s Multifamily Housing programs are administered as intended by identifying deficiencies to eliminate fraud, waste, and mismanagement. MORs are conducted at properties by contract administrators every one to three years on a risk-based schedule.

Pandemic precautions. During the pandemic, HUD made adjustments to MORs to limit the chances for person-to-person interactions during on-site visits. For example, auditors were allowed to enter a vacant unit instead of an inhabited unit, and auditors could receive files virtually ahead of a visit. Now, HUD’s memo, titled “Required and Alternative Management and Occupancy Review Procedures for Performance Based Contract Administrators,” says this new guidance supersedes prior pandemic-era guidance regarding remote MORs.

In HUD’s view, there’s more value with MORs being completed on-site due to the ability to receive feedback from residents, interview staff and owner representatives in-person, observe property conditions in common areas and units, evaluate files and records without opportunity to correct records before the evaluation, and protect tenants’ Personally Identifiable Information. We’ll go over what the memo says about required and alternative MOR procedures.

Required MOR Procedures

Beginning Jan. 1, PBCAs will be required to conduct MORs in the following manner, unless an alternative method is approved by HUD in advance of the scheduled MOR date:

• PBCAs must complete the on-site MOR entrance conference, MOR questionnaire, and exit interview;
• PBCAs must physically enter resident units to conduct follow-up inspections of Exigent Health and Safety (EH&S) issues cited in inspections conducted by the Real Estate Assessment Center (REAC);
• PBCAs must conduct an on-site visual assessment of each building and the property’s grounds to document the physical conditions, general appearance, and security of the property;
• PBCAs must complete on-site reviews of tenant files, tenant selection plan, waiting lists, and Enterprise Income Verification (EIV) master files, as HUD does not authorize the off-site transfer, either electronically or physically, of tenant files, EIV reports, or waiting lists. Tenant files, waiting lists, and EIV master files may be left in a secured on-site location for the PBCA to conduct their reviews.

Alternative MOR Procedures

PBCAs will be required to conduct MORs in-person unless an alternative method is approved by HUD in advance. In some cases, federal or state/local laws, health codes, or other emerging health and safety issues at the site could prevent or prohibit a PBCA from following the required MOR procedures. In these cases, the PBCA must contact their Headquarters Contract Administration Oversight Monitor for a determination on how to proceed to conduct the MOR. The PBCA may conduct any part of the MOR remotely or using other alternative procedures, excluding the tenant file review portion and reviews of EIV master files, and waiting lists, which must be conducted on-site.

For a MOR conducted with alternative procedures, the PBCA must document the following items in the written MOR report:

• Portions of the MOR conducted using HUD-approved alternative procedures;
• The alternative procedure(s) used;
• The reasons(s) why the alternative procedures were necessary; and
• The date that HUD approved the alternative procedure(s).