HUD to Revise REAC Scoring System

November 19, 2018

As part of its continuing effort to support “decent, safe, and sanitary housing,” HUD announced, in a Multifamily Communications email, that it has been conducting an internal review of the Real Estate Assessment Center’s (REAC’s) physical inspection system. Secretary Carson is leading a re-examination of how HUD conducts inspections to ensure private owners are meeting this standard.   

As part of its continuing effort to support “decent, safe, and sanitary housing,” HUD announced, in a Multifamily Communications email, that it has been conducting an internal review of the Real Estate Assessment Center’s (REAC’s) physical inspection system. Secretary Carson is leading a re-examination of how HUD conducts inspections to ensure private owners are meeting this standard.   

According to the document, many private owners of HUD-subsidized housing have grown accustomed to a 20-year-old inspection regime and, in some cases, are more invested in passing the minimal requirements of a REAC inspection instead of satisfying their contractual obligation to provide housing that’s decent, safe, and sanitary year-round. It states that as HUD continues its internal review of these inspection protocols, HUD is exploring immediate improvements and refinements over the long term. In the end, the goal is to design a new, simplified inspection system more focused on the physical conditions within housing units and to place a greater emphasis on lead-based paint hazards and mold.

Here are some facts the document provides about HUD’s current inspection of privately owned sites:

  • HUD’s Office of Multifamily Housing enters into binding agreements with private owners of more than 17,000 apartment buildings totaling 1.2 million units. Currently, approximately 96 percent of these sites receive passing scores.
  • When a site fails an inspection, HUD demands the owner correct any serious health or safety defects immediately and develop a corrective plan to address all reported poor housing conditions.
  • If the site owner won’t or can’t correct these failing housing conditions, HUD may terminate its contract with the owner and relocate residents to more suitable housing. This is a serious action that creates significant disruptions to residents who are forced to move, in some cases many miles away from their former homes.
  • The number of new failed inspections is on the decline. In 2017, the number of failed inspections was 649; as of Oct. 1, 2018, the number of failed inspections is 563.
  • Included in the total number of “failed properties” are a significant number that are being rehabilitated, sold, terminated, or have opted out of the project-based Section 8 program.

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