[Federal Register Volume 86, Number 8 (Wednesday, January 13, 2021)]
[Proposed Rules]
[Pages 2582-2607]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00098]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 /
Proposed Rules
[[Page 2582]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5, 92, 93, 200, 574, 576, 578, 880, 882, 884, 886,
902, 982, 983 and 985
[Docket No. FR-6086-P-01]
RIN 2577-AD05
Economic Growth Regulatory Relief and Consumer Protection Act:
Implementation of National Standards for the Physical Inspection of
Real Estate (NSPIRE)
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Office of the Assistant Secretary for Community Planning
and Development, Office of the Assistant Secretary for Public and
Indian Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: This rule proposes a new approach to defining and assessing
housing quality: The National Standards for the Physical Inspection of
Real Estate (NSPIRE). This proposed rule is part of a broader effort
across HUD to revise the way HUD-assisted housing is inspected and
evaluated. The purpose of NSPIRE is to reduce regulatory burden and
improve HUD oversight through the alignment and consolidation of the
inspection regulations used to evaluate HUD housing across multiple
programs, which are currently evaluating housing quality through
differing standards, protocols, and frequencies. The goal of this
alignment and consolidation is to create a unified assessment of
housing quality. In advancement of HUD's mission to create quality
affordable housing and strong, sustainable, and inclusive communities,
this rule would establish the method HUD will use for the
implementation of specific NSPIRE standards, scoring, and processes
through Federal Register notices. Additionally, the proposed rule seeks
to apply a ``safe, habitable dwellings'' standard; reduce the
categories of current inspectable areas for physical condition
standards for covered housing programs from five to three; implement a
new annual self-inspection and reporting requirement for certain HUD
housing; establish an administrative process for the treatment of
health and safety deficiencies; and incorporate provisions of the
Economic Growth and Recovery, Regulatory Relief and Consumer Protection
Act that will reduce administrative burden on small rural PHAs.
DATES: Comment Due Date: March 15, 2021.
ADDRESSES: Interested persons are invited to submit comments to the
Office of the General Counsel, Rules Docket Clerk, Department of
Housing and Urban Development, 451 Seventh Street SW, Room 10276,
Washington, DC 20410-0001. Communications should refer to the above
docket number and title and should contain the information specified in
the ``Request for Comments'' section. There are two methods for
submitting public comments.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500. Due to security measures at all federal
agencies, however, submission of comments by mail often results in
delayed delivery. To ensure timely receipt of comments, HUD recommends
that comments submitted by mail be submitted at least two weeks in
advance of the public comment deadline.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
http://www.regulations.gov. HUD strongly encourages commenters to
submit comments electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a comment,
ensures timely receipt by HUD, and enables HUD to make comments
immediately available to the public. Comments submitted electronically
through the http://www.regulations.gov website can be viewed by other
commenters and interested members of the public. Commenters should
follow instructions provided on that site to submit comments
electronically.
Note: To receive consideration as public comments, comments must be
submitted through one of the two methods specified above. Again, all
submissions must refer to the docket number and title of the notice.
No Facsimile Comments. Facsimile (fax) comments are not acceptable.
Public Inspection of Comments. All comments and communications
submitted to HUD will be available for public inspection and copying
between 8 a.m. and 5 p.m. weekdays at the above address. Due to
security measures at the HUD Headquarters building, an advance
appointment to review the public comments must be scheduled by calling
the Regulations Division at (202) 708-3055 (this is not a toll-free
number). Copies of all comments submitted are available for inspection
and downloading at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Timothy Weese and Samuel Franco, Real
Estate Assessment Center, Office of Public and Indian Housing,
Department of Housing and Urban Development, 550 12th St SW, Suite 100,
Washington, DC 20410-4000, telephone number 202-708-1112 (this is not a
toll-free number). Individuals with hearing or speech impediments may
access this number via TTY by calling the Federal Relay during working
hours at 800-877-8339 (this is a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
There are currently two inspection models used across the majority
of HUD housing programs: The Housing Quality Standards (HQS) developed
in the 1970s, which are currently found at 24 CFR 982.401, and the
Uniform Physical Condition Standards (UPCS) developed in the 1990s,
which are currently found at 24 CFR 5.703. Both remain largely
unchanged since their inception. The housing portfolio that was once
dominated by government-owned properties has changed in the past two
decades to become largely increasingly owned by private entities. This
shift has caused Congress and HUD's evolving list of stakeholders to
demand revisions to the physical inspection products and services that
will both provide reliable evaluations of housing conditions and
protect residents.
HUD analyzed the way inspections are conducted under both models to
[[Page 2583]]
better understand how housing quality regulations needed to evolve. HUD
found that both inspection models can sometimes provide inaccurate and
inconsistent results and can prevent HUD from effectively evaluating
housing across programs. HUD determined that while the models are well-
intentioned in design, neither model currently aligns with HUD's
priorities, the state of the housing industry and improvements in
technology. This is partly because neither model includes mechanisms
for continual update. This analysis also identified a disproportionate
emphasis around the appearance of items that are otherwise safe and
functional and paid inadequate attention to the health and safety
conditions within the built environment. HUD has concluded that
existing housing standards need to focus on habitability and the
residential use of the structures, and most importantly, the health and
safety of residents.
To this end, HUD announced the implementation of NSPIRE through the
publication of an August 21, 2019, notice,\1\ which described the
development of a new inspection model for HUD programs. HUD began
building the updated standards, procedures, and scoring methodologies,
which will to be refined through a multistage NSPIRE demonstration. The
demonstration will test and HUD will further refine the future state of
HUD's physical inspection model to best serve residents. NSPIRE
programmatic provisions will be published in the Federal Register and
will provide an opportunity for public comment.\2\ The improvements
being refined through the NSPIRE demonstration are intended to occur in
parallel to support and reinforce the changes being proposed by this
rule.
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\1\ 84 FR 162.
\2\ https://www.federalregister.gov/.
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Regulatory Consolidation and Alignment
As noted above, the proposed rule would consolidate and align
housing quality requirements and associated inspection standards across
programs wherever possible. To achieve this, housing quality
regulations across HUD programs would be consolidated into one location
at 24 CFR part 5. HUD understands, however, that regulations must be
flexible enough to accommodate each program's unique circumstances.
Where differing statutory requirements or public policy considerations
prevent alignment to 24 CFR part 5, those program-specific requirements
would be maintained in their respective program regulations and would
supersede or supplement 24 CFR part 5.
Current program regulations governing housing quality and
inspections have a large regulatory footprint. Rather than being in a
single location, they are located under 24 CFR part 5 and part 200 for
programs governed by Uniform Physical Condition Standards (UPCS); 24
CFR 982.401 for programs governed by HQS; and within each program's
individual regulations in 24 CFR parts 92, 93, 200, 574, 576, 578, 880,
882, 884, 886, 902, 982, 983, and 985. This means that finding and
understanding the requirements across programs--even those governed by
the same standard--is often cumbersome. Instead, this rule would
consolidate 14 dispersed sections which are spread across 24 CFR, into
7 consecutive sections.
Further, there are often minor, unnecessary discrepancies in
language across regulations. The use of ``decent, safe, and sanitary''
is a good example. The physical condition standards applicable to
Public Housing and HUD's Multifamily Housing program outlines that
housing must be ``decent, safe, sanitary, and in good repair.'' \3\ The
Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) program
regulations state housing must be ``decent, safe, and sanitary rental
housing of a modest (non-luxury) nature with suitable amenities.'' \4\
Meanwhile, regulations for the Home Investment Partnerships (HOME)
program state housing be ``decent, safe, sanitary and affordable.'' HUD
believes that all standards governing HUD housing are equivalent in
that they mandate safe, habitable housing for residents. An alignment
of these standards would create a single expectation of housing quality
across these programs and remove these unnecessary discrepancies.
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\3\ 24 CFR 5.703.
\4\ 24 CFR 982.1(a)(1).
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Finally, programmatic alignment and consolidation is increasingly
important as HUD's inspection portfolio has shifted to include greater
numbers of mixed finance properties which are subject to multiple
inspection standards by the nature of their financing. A similar
challenge is faced by PHAs and owners whose portfolio includes multiple
HUD program types or that convert from one funding stream to another,
such as through the Rental Assistance Demonstration (RAD) program. HUD
acknowledges that the challenges a PHA faces are not always the same
challenges that owners face, but in both cases, the lack of aligned
requirements unduly increases the complexity and uncertainty associated
with participating in HUD's programs and may deter some owners from
future involvement.
Programmatic and Statutory Limits on Alignment
Part of this alignment will consolidate and align the regulations
governing the physical condition of HUD housing to create a shared
expectation of housing quality across a wide array of distinct
programs. The remainder of the alignment centers around program
administration: Inspection protocols, processes, and procedures.
Regarding these inspection protocols, processes, and procedures,
the majority of the alignment that HUD is proposing involves the
program regulations for the public housing and multifamily programs.
However, given the unique nature of some HUD programs and the limits
posed by existing statutory requirements, it is not possible for HUD to
align all program administration regulations across all programs under
this proposed rule.
Within this proposed rule, the Housing Choice Voucher (HCV)
program, comprised of the Project Based Voucher (PBV) and Tenant Based
Voucher (TBV) programs, has been aligned with other HUD programs to the
maximum extent possible, while also acknowledging that varying types of
rental housing and unique geographic features conditions nationwide
necessitate separate requirements in certain areas. HUD's approach for
aligning these programs accounts for the:
Unique statutory requirements related to the standards of
individual units rather than the project as a whole; \5\
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\5\ U.S.C. 1437f(o)(8)(C).
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Nature of the entity responsible for conducting
inspections \6\ (the PHA rather than HUD);
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\6\ U.S.C. 1437f(o)(8)(C).
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Relationship of housing quality standards to State and
local codes; \7\
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\7\ U.S.C. 1437f(o)(8)(G).
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Pass/fail nature of inspections; and
Frequency of inspections.\8\
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\8\ U.S.C. 1437f(o)(8)(D)(i).
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All of these differ greatly from other HUD programs, particularly
project-based assistance programs.\9\
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\9\ Important to note that PBVs are part of the HCV program and
PBV units under section 8(o)(13) are subject to the requirements
under section 8(o)(8), thus, using the Housing Quality Standards
similar to tenant-based voucher units. Thus, key elements of
physical standard requirements for the PBVs align with the HCV
program and by virtue of section 8(o)(8) will be distinct and
separate from PBRA and public housing.
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[[Page 2584]]
Similarly, while the proposed rule aligns the Office of Community
Planning and Development (CPD) programs whenever possible, CPD programs
pose unique challenges to alignment, both across HUD and within CPD.
CPD programs provide housing assistance, one-time or time-limited
assistance (such as mediation with a property owner or a one-time
payment of rental arrears to help a family avoid eviction from their
existing housing, or payment of rental application fees to help a
person in shelter get back into housing), and special housing needs
programs. CPD programs also fund various services, such as legal
assistance and mediation to prevent eviction and housing search and
placement, for special needs populations. The variety of housing
assistance and services offered through CPD programs required HUD to
adopt, as proposed here, unique inspection frequencies and protocols
that account for the needs of these different programs and assistance
types. Furthermore, this alignment accounts for the fact that CPD
programs are administered differently. For example, CPD's formula
grant-based programs are provided to States, eligible units of local
government, the District of Columbia, U.S. Territories and Tribal
governments, which often follow local code requirements.
Through the rulemaking process, HUD invites recommendations on
opportunities to further consolidate similar regulatory provisions.
With regard to consolidation, HUD is requesting public comments on
the following questions:
Question for Comment #1: The Economic Growth and Recovery Act
mandates that for small public housing agencies, the same standards
apply to small public housing agencies for the acceptable condition of
public housing projects also apply to projects assisted under Section
8. Is there a preferable approach to implementing the statutory
provision that requires the same standards for small rural Section 8
projects and PHA public housing projects? If so, how should the
standards for and small rural PHA Section 8 projects and public housing
projects differ from the standards employed for all other public
housing and HCV units while ensuring that all HUD housing must be free
of health and safety hazards?
Why HUD Is Implementing NSPIRE Through Rulemaking
As previously noted, the current regulatory footprint of all
housing standards is sprawling. HUD believes that consolidating these
standards--a total of 16 regulations containing many administrative and
procedural differences--is required to reduce administrative burden and
increase resident safety.
While some of the programmatic modifications made by this proposed
rule could have been implemented without formal rulemaking, proceeding
with this proposed rule provides a framework for continued stakeholder
engagement and ensures transparency throughout the process.
During the NSPIRE implementation and in parallel to formal
rulemaking, HUD plans to draft Federal Register notices that would
outline the specific standards, scoring, and protocols under NSPIRE.
All updated standards and scoring methodologies would be published--as
required by this proposed rule--through a Federal Register Notice at
least once every 3 years with the opportunity for public comment prior
to implementation. This would provide opportunity for both industry
stakeholders and the general public to examine the proposed changes,
provide pertinent comments, and suggest the inclusion of any relevant
industry best practices. This would also allow HUD to be more
responsive to the changing portfolio and evolving needs in the field
and would allow HUD to further ensure resident safety remains at the
forefront.
II. The Proposed Rule
There are three sections under this heading representing the four
types of changes this rule is making: Section A covers amendments and
additions to 24 CFR part 5, which make up the bulk of the changes
proposed;'' Section B covers HUD's implementation of its statutory
mandate regarding Small rural PHAs;'' and Section C discusses other
changes which the proposed rule would make to regulations for programs
which are being integrated under NSPIRE.
A: Amendments and Additions to 24 CFR Part 5
Amending 24 CFR part 5 would allow HUD to consolidate multiple
physical condition requirements into a single regulation. This would
align overarching policies related to the frequency of inspections, the
method of appealing results, and the actors responsible for conducting
inspections. It would also make several technical modifications to
other regulations. These changes would ensure transparency, consolidate
regulatory sprawl, and reduce overall burden for PHAs and owner/agents.
HUD's consolidation and alignment of the inspections regulations
under this part broadly fall into two categories. First, amended and
aligned Sec. 5.703 would generally apply across all HUD programs
covered under the proposed rule. These regulations are meant to convey
clear expectations of housing quality and maintenance requirements
across HUD programs, ensuring residents have a shared expectation of
safe, habitable housing regardless of program type. Second, changes and
alignment in Sec. 5.705 through Sec. 5.713 are generally only
applicable to the public housing and multifamily programs as they deal
with administrative procedures and scoring for HUD-conducted
inspections. To clarify, by nature of their differing statutory
requirements and programmatic considerations, Sec. 5.705 through Sec.
5.713 in part 5 generally do not apply to Section 8(o) programs (HCV
and PBV), Moderate Rehabilitation, or certain CPD programs (i.e., HOME
and Housing Trust Fund (HTF)).
HUD proposes the following amendments and additions to 24 CFR part
5:
a. Section 5.701 Applicability
The current regulations at Sec. 5.701 state that the physical
condition standards in 24 CFR part 5 apply to Public Housing and
certain programs administered under HUD's Office of Multifamily
Housing, including all project-based Section 8 programs and any housing
with mortgages insured or held by HUD or receiving insurance from HUD.
Amended Sec. 5.701 would extend this subpart to the HCV (part 982)
and PBV programs (part 983). CPD programs would adopt these standards
by reference in the applicable CPD regulations to include: The HOME
Program (part 92); HTF) (part 93); Housing Opportunities for Persons
with Aids (HOPWA) (part 574); Emergency Solutions Grants (ESG) Program
(part 576); and Continuum of Care (CoC) (part 578).
b. Section 5.703 National Standards for the Condition of HUD Housing
HUD's housing condition standards are located in two areas in the
regulations today: Existing Sec. 5.703 applies to public housing,
multifamily, and some CPD programs while existing Sec. 982.401 applies
to HCV and PBV, and to some other CPD programs via cross-reference. CPD
programs do not apply any scoring, weighting, ranking or enforcement
from Part 5. This is outlined in the CPD program rules (e.g., HOME rule
at 24 CFR 92.251(f)(1)(i).)). CPD programs are fundamentally different
than many of the programs subject to REAC inspections as they are
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programs administered by local governments subject to local decision
making. CPD programs have their own means of enforcement specified in
each program regulation. These functions are instead performed by HUD
CPD staff, and can include requiring the participating jurisdiction or
grantee repaying the full amount of subsidy provided to the project.
Amended Sec. 5.703(a) through (e) consolidates and replaces both Sec.
5.703 and Sec. 982.401. These provisions parallel the specific
directives at 42 U.S.C. 1437(f)(2) and 42 U.S.C. 1437(o)(8)(B) that
require the Secretary to establish quality standards that ensure
housing is safe and habitable. In these provisions, HUD proposes to
define ``safe, habitable dwellings'' as those for which ``the items and
components located inside the building, outside the building, and
within the units of HUD housing . . . [are] functionally adequate,
operable, and free of health and safety hazards.'' HUD believes the
requirement of ``functionally adequate, operable, and free of health
and safety hazards'' is generally equivalent to ``decent, safe, and
sanitary.'' The intentional shift in language would serve as a uniting
phrase across programs. Additionally, the shift would help the public
differentiate between the old and the new regulatory frameworks. It
would further allow HUD to establish clear, objective, and aligned
property inspection standards (described later in this rule at Sec.
5.705(a) and Sec. 5.709) by creating identifiable limits that are
comparable across housing programs. For example, the terms
``functionally adequate'' and ``operable'' may be defined based on
universal habitability requirements and design specifications for an
item or component. In contrast, ``decent,'' is a highly subjective
term. Perceptions of decency vary from person to person and location to
location. The terms ``health'' and ``safety'' can also be measured
universally and quantitatively by using standard public health and
safety metrics related to morbidity and mortality. ``Health'' as used
here would be inclusive of ``sanitary;'' HUD believes that term
``health'' would be more useful for assessment of a broader range of
impacts. HUD intends this new description to make clear that the built
environment's effect on the health and safety of residents is more
important than any building damage that is strictly cosmetic in nature.
The new definition would also simplify the way in which this rule names
the inspectable areas of a property by reducing the number of areas
from five to three. This change is intended to increase readability,
streamline the inspection process, and emphasize to stakeholders the
importance of resident units.
Section 5.703(a) would limit the ways in which the quality
requirements apply to units occupied by HCV and PBV participants, as
well as common areas and exterior areas which either service or are
associated with such units. This limitation is generally derived from
the unique statutory requirements for these programs related to the
application of housing quality standards to units (as opposed to
projects). Other factors that make this limitation appropriate is the
entity responsible for conducting the inspections (the PHA), the
relationship of the housing quality standards to local codes, and the
frequency of those inspections.
HUD also proposes to consolidate into Sec. 5.703(d) several
provisions currently found in one section of the regulations but
implied in others. For example, the proposed rule would make it clear
that certain unit features, like having a kitchen area, are minimum
habitability requirements across programs. Most renters would expect to
have the ability to store and prepare food in their home. While not new
requirements, they reinforce the importance that this rule places on
residents' units and the primarily residential nature of HUD housing.
Similarly, amended Sec. 5.703(d) would add the word ``safe'' to the
current requirement that units have an adequate source of potable
water. ``Safe'' in this context would be defined by HUD through future
rulemaking after receiving public comments.
This portion of the rule would also incorporate requirements
currently described more clearly by the HCV regulations for smoke
detectors, including those for hearing impaired persons and the
requirement for hot and cold running water, and would replace current
paragraph (f) concerning health and safety concerns. So that all the
habitability provisions are in one place, paragraph (e)(2) would
maintain language found in the current regulation at Sec. 5.703(f)
regarding lead-based paint but would add information on applicability.
The remaining provisions in (f) through (h) discuss the
relationship of local codes to HUD housing and identify when
alternatives to Sec. 5.703 would apply.
New paragraph (g) would clarify that Sec. 5.703 may be replaced or
supplemented by a state or local standard under the HCV and PBV program
in line with the statutory exception for those programs found at 42
U.S.C. 1437f(o)(8)(B). Additionally, for special housing types, such as
Single Room Occupancies or congregate housing, that may have
incompatible design requirements, like shared bathroom or kitchen
facilities, paragraph (h) would clarify that the provisions in Sec.
5.703 may be modified by program specific requirements which would
continue to be found in the same program-specific sections of the
regulations as they are today.
With regard to standards, HUD is requesting public comments on the
following questions:
Question for Comment #2: HUD has the following questions regarding
water safety:
(a) How can HUD best define what is meant by safe or potable water?
(b) Should ``safe'' mean water provided by a public water system
that is in compliance with the Safe Drinking Water Act (42 U.S.C. 300f
et seq.) as implemented by the EPA?
(c) How should HUD monitor whether water is safe?
(d) What elements should be reviewed during the physical inspection
to determine water safety?
(e) Should inspectors verify that a municipal water supply
authority is in compliance with EPA's Safe Drinking Water Act? How
would they best do this?
Question for Comment #3: HUD is specifically seeking comment on
whether the site and neighborhood standards as found in 24 CFR
982.401(l), should be included in the regulation or only in the
inspection standards? HUD also seeks comments on whether all of the
explicit standards should be included or if there are certain site and
neighborhood standards that HUD should consider changing?
Question for Comment #4: The proposed rule would establish a subset
of minimum NSPIRE standards to apply to rehabilitation of rental and
owner-occupied or homebuyer housing and homebuyer acquisition of
standard housing (i.e., down payment assistance) assisted with HOME or
HTF at Sec. Sec. 92.251(b) and (c)(3) and Sec. Sec. 93.301(b) and
(c)(3), and to HOME- and HTF-assisted rental projects throughout the
affordability period at Sec. 92.251(f) and Sec. 93.301(e), and for
units occupied by tenants receiving HOME Tenant-based rental assistance
(TBRA) in accordance with Sec. 92.251(f)What minimum housing condition
standards should HUD apply to HOME- and HTF-assisted rehabilitation
activities for rental or owner-occupied housing and what minimum
condition standard should apply to HOME-assisted homebuyer acquisition
activities at completion to ensure that the housing is decent, safe,
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sanitary and in good repair? In addition, what minimum housing
condition standards should HUD apply throughout the affordability
period to HOME- and HTF-assisted rental projects and units occupied by
tenants receiving HOME TBRA to ensure that the housing remains decent,
safe, sanitary and in good repair?
Question for Comment #5: How do the NSPIRE standards in this
proposed rule compare to minimum deficiencies that must be corrected in
HOME- and HTF-assisted rehabilitation projects at Sec. 92.251(b) and
Sec. 93.301(b) or which must be corrected prior to HOME- and HTF-
assisted homebuyer acquisition of standard housing (i.e., down payment
assistance) to ensure that upon completion the housing is decent, safe,
sanitary and in good repair?
Question for Comment #6: Should HUD establish different minimum
deficiencies that must be corrected in HOME- or HTF-assisted rental
housing and homebuyer or owner-occupied housing rehabilitation projects
at Sec. 92.251(b) and Sec. 93.301(b)? If so, what should HUD consider
when establishing minimum standards for the rehabilitation of rental
housing, homebuyer housing, or owner-occupied housing?
Question for Comment #7: Should HUD establish different minimum
deficiencies that must be corrected in large and small HOME- or HTF-
assisted rehabilitation projects at Sec. 92.251(b) and Sec.
93.301(b)? If so, what should HUD consider when establishing minimum
standards and what should HUD define as a large housing project?
Question for Comment #8: Should HUD establish different minimum
deficiencies that must be corrected for HOME or HTF-assisted
rehabilitation and homebuyer or owner-occupied acquisition of standard
housing (i.e., down payment assistance) projects at Sec. 92.251(c)(3)
and Sec. 93.301(c)(3)? If so, what should HUD consider when
establishing minimum standards for rehabilitation projects and
homebuyer acquisition projects?
Question for Comment #9: Should HUD establish minimum written
property standards requirements for housing occupied by tenants
receiving HOME TBRA at Sec. 92.251(f) that exceed or are different
than minimum requirements for the ongoing condition of HOME-assisted
rental housing? Should HUD establish a list of minimum deficiencies
that must be corrected if found during an onsite physical inspection of
HTF-assisted rental housing? If so, what elements should be required in
the written property standards?
Question for Comment #10: Alternatively, should HUD apply the
NSPIRE standards established in accordance with this proposed rule (not
to include the inspection procedures, administrative processes for
scoring and ranking, or the enforcement requirements of NPSIRE) to
housing occupied by tenants assisted receiving HOME TBRA at Sec.
92.251(f)? HUD could require inspection of the assisted unit; the items
and components within the primary and secondary means of egress from
the unit's entry door(s) to the public way; the common features related
to the residential use of the building (e.g., the laundry room,
community room, mail room); and, the systems equipment that directly
services the unit similar to the exceptions that are included in the
proposed rule for HCV and PBV. Is there another national housing
quality or condition standard that HUD should apply to housing occupied
by tenants assisted with HOME TBRA?
Question for Comment #11: Should HUD establish a list of minimum
deficiencies that must be corrected if found during an onsite physical
inspection of HOME- or HTF-assisted rental housing or housing occupied
by a tenant receiving HOME TBRA at Sec. 92.251(f)? If so, should HUD
establish separate lists for HOME and HTF-assisted rental housing and
housing occupied by a tenant receiving HOME TBRA? What should HUD
consider in the development of such lists of deficiencies?
Question for Comment #12: Section 5.703(h) of the proposed rule
identifies unique standards to special types of housing--single room
occupancy (SRO) housing; congregate housing; group home; shared
housing; manufactured home; cooperative housing; and homeownership--but
applies this section only to the HCV, PBV, and Moderate Rehabilitation
Programs. Should any of these unique standards--specifically SRO,
congregate housing, shared housing, and manufactured homes--apply to
the CoC, ESG, and HOPWA programs?
Question for Comment #13: HUD is considering adding certain
affirmative requirements at the final rule stage. Currently under
consideration are related to ground-fault circuit interrupter (GFCI),
an arc-fault circuit interrupter (AFCI); Heating, ventilation, and air
conditioning (HVAC); Guardrail; and Lighting-Interior. In alignment
with HUD's prioritization of resident safety, HUD welcomes public
comment on all issues, but is specifically seeking feedback regarding
implementing the following:
a. Electrical Outlet and Switch--HUD is considering adding a
deficiency under the Electrical Outlet and Switch Standard regarding an
inadequate number of outlets (i.e., either 2 working outlets or 1
working outlet and a permanent light) within all habitable rooms due to
potential safety hazards, usability barriers, and inadequate
illumination.
b. GFCI & AFCI--HUD is considering adding a deficiency under the
GFCI & AFCI Standard regarding the lack of GFCI protection where
required (e.g., within 6 feet of sinks, tubs, showers; or exterior,
garage, or unfinished basement areas) due to potential safety hazards,
such as shock or electrocution.
c. HVAC--HUD is considering adding a deficiency under the HVAC
Standard regarding the lack of a permanently installed heating source
due to potential health safety hazards, such as fire or carbon monoxide
exposure.
d. Guardrail--HUD is considering adding a deficiency under the
Guardrail Standard to require a guardrail when there is an elevated
walking surface with a drop off of 30 inches or greater measured
vertically.
e. Lighting--Interior--HUD is considering adding a deficiency under
the Lighting--Interior Standard regarding the absence of a permanently
mounted light fixture in the kitchen or bathroom due to potential
safety hazards and inadequate illumination.
c. Section 5.705 Inspection Requirements
The current Sec. 5.705 states that entities must inspect covered
HUD housing programs annually in accordance with HUD-prescribed
physical condition standards unless program regulations or HUD provide
otherwise. Amended and expanded Sec. 5.705 would align inspection
standards (including provisions pertaining to frequency), would
identify entities responsible for conducting inspections, would outline
timing of inspections and reinspection fees, and would mandate access
to properties. Centralizing these standards would provide greater
clarity and ease of access for stakeholders and oversight authorities.
Section 5.705(a)(1) continues to require that any entity
responsible for conducting an inspection of HUD housing determine
compliance with this subpart. However, (a)(1) would require that
entities must inspect such HUD housing in accordance with the standards
and procedures set out by the Secretary and published in the Federal
Register as described in Sec. 5.711, and would allow HUD to establish
aligned
[[Page 2587]]
inspection standards across HUD programs.
New paragraph (b)(1) would incorporate existing provisions from
Sec. 200.855 describing the entity responsible for inspecting HUD
housing. New paragraph (b)(2) would provide an exception for the HCV,
PBV and Mod rehab programs in cases where the PHA is required to
conduct the inspection.
New subparagraph Sec. 5.705(c)(1) would pull elements from
existing regulations which outline that a property must be inspected
before the property is approved for participation in any of the HUD
housing programs under this part unless the property is already a
participant in another HUD program under this part. It would also
continue to require that an entity responsible for conducting an
inspection of HUD housing must determine compliance with this subpart
and must inspect such housing annually, unless otherwise specified
below.
Current inspection requirements for public housing and multifamily
programs are risk-based with frequencies ranging from annually to once
every three years. The proposed rule would maintain risk-based annual
inspection requirements. The proposed rule would expand this time
period to between 2 and 5 years. The criteria under which a PHA or
owner/agent may qualify for a longer inspection cycle would be
described in a future Federal Register Notice and will be based on a
risk assessment. This change in inspection frequency would further
incentivize performance without any anticipated degradation in housing
quality as it would not obviate the expectation of continuous
compliance with housing quality requirements. Further, since proposed
Sec. 5.707 would require properties to conduct an annual self-
inspection and submit results to HUD, the Agency believes that
submission of self-inspection results and status of repair would
mitigate risk associated with longer inspection frequencies. In all
cases, HUD housing would be required to remain in compliance with all
applicable laws and regulations, including the quality standards in
Sec. 5.703, regardless of the date of the next inspection.
Due to different statutory and programmatic requirements,
requirements surrounding inspections frequencies for some programs
would continue to be governed by current applicable regulations,
including HCV, PBV, and Moderate Rehabilitation. Further, small rural
PHAs would be exempted from the annual inspection requirement and would
instead follow provisions of the Economic Growth and Recovery Act
outlined later in this notice. Finally, HUD may exempt assisted-living
facilities, board and care facilities, and intermediate care
facilities, and any other Section 232 facilities if they meet certain
criteria as outlined in the regulation.
New paragraph (d) would incorporate and align existing language
regarding reinspection costs from the public housing and multifamily
regulations. The proposed rule would allow, but not require, the
responsible entity (as identified in proposed Sec. 5.705(a)(1)) to
charge a property owner (including PHAs) a reasonable reinspection fee
when an owner notifies the responsible entity that a repair has been
made, or the allotted time for repairs has elapsed, and a reinspection
reveals the deficiency was not corrected.
New paragraph (a)(3) would outline variants in inspection standards
for the HCV and PBV programs by incorporating existing regulations at
Sec. 982.401(a)(ii). As required by statute, the proposed rule would
continue to give PHAs the ability to consider variations in local laws
and practices and provide appropriate flexibility to facilitate the
efficient provision of assistance.\10\
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\10\ 42 U.S.C. 1437(f)(o)(8)(g).
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With regard to inspection, HUD is requesting public comments on the
following questions:
Question for Comment #14: HUD is soliciting comment on the risk-
based annual inspection requirement expansion from 2 to 5 years. Is a
different range merited? If so, what should HUD consider in setting and
adjusting the ranges?
Question for Comment #15: HUD is soliciting comment on how to
involve tenants in helping REAC identify poor performing properties.
For example, could tenants provide a ``1-5 rating'' of their units with
``1'' being ``poor'' and ``5'' being ``excellent?'' Could tenants
recommend their units for inspection separate from the statistical
sample for scoring purposes to inform HUD's risk analysis of the
property?
d. Section 5.707 Uniform Self-Inspection Requirement and Report
While 42 U.S.C. 1437(d)(f)(3) requires that each PHA inspect all
public housing projects annually, current regulations governing other
covered HUD housing programs, such as those for Multifamily Housing, do
not explicitly require an annual self-inspection of all units. The
proposed rule would add a new regulation at Sec. 5.707 which would
explicitly require annual self-inspections of all units in a project
and would add a new electronic reporting requirement. The results of
the electronic reporting requirement would be an integral part of HUD's
real estate inspection process. With advances in technology, HUD
believes it is now possible and practical to collect this type of
property data electronically. The procedures for this reporting would
be outlined in a future Federal Register Notice with an opportunity for
public comment.
By making regular, comprehensive self-inspections and reporting a
part of each covered property's physical assessment regimen, HUD would
once again signal a focus on identifying and mitigating risks to
resident health and safety. Self-inspections are a key component of
ensuring properties are maintained year-round and encourage regular,
preventative maintenance rather than ``just in time'' repairs ahead of
HUD-conducted inspections.
It should be noted that due to the unique statutory requirements of
the HCV, PBV, and CPD programs, they would be exempted from this
electronic reporting requirement. Additionally, Moderate Rehabilitation
would continue to follow program requirements described in the current
regulations.
With regard to self-inspection, HUD is requesting public comments
on the following questions:
Question for Comment #16: HUD is soliciting comment on how the
clarification to self-inspect all HUD housing units in certain programs
to ensure that units are being maintained in accordance with HUD
housing quality standards will impact the operations of PHAs, owners
and agents? What advantages and disadvantages would arise from
extending this self-inspection requirement to the programs that do not
explicitly require an annual self-inspection of all units (such as HCV,
PBV, Moderate Rehabilitation, and CPD programs)?
Question for Comment #17: Is there an alternative to the self-
inspection protocol (Sec. 5.707 Uniform self-inspection requirement
and report) that would allow HUD to achieve the objective that families
live in safe and habitable units, and what are the risks and benefits
of that alternative?
e. Section 5.709 Administrative Process for Defining and Revising
Inspection Criteria
The proposed rule would add Sec. 5.709 which would require HUD to
establish an administrative process for regularly receiving public
comments on scoring and ranking criteria through Federal Register
notices.
[[Page 2588]]
New paragraph (a)(1) would establish a timeframe for revisions of
standards of every 3 years, or every 3 years after the most recent
revision, whichever is later. The inclusion of this regulation would
allow HUD to respond to the changing needs of an evolving housing
portfolio and technological changes that may impact the inspections
process. This proposed rule would mandate that the Agency update the
scoring and ranking criteria regularly and would further demonstrate
HUD's commitment to ensure scoring is reasonable, responsive, and
current.
New paragraph (a)(2) would allow HUD to publish a notice without 30
days of public comment in the case of an emergency. For Sec. 5.709, an
emergency would be defined as a significant health hazard, a new safety
concern due to changing construction technology, or another event as
determined by the Secretary. This section would further highlight the
Secretary's commitment to being responsive to the needs and safety of
residents.
Question for Comment #18: In alignment with HUD's desire to
increase clarity and decrease ambiguity, HUD is considering definitions
for kitchens and sanitary facilities. HUD seeks public input on the
following:
a. Should HUD define what constitutes a kitchen and its related
components required for functional adequacy (e.g., cooking appliance,
means of refrigeration, food preparation and storage)?
b. Should HUD define what constitutes a sanitary facility and its
related components required for functional adequacy (e.g., bathtub or
shower, toilet, ventilation, sink)?
f. Section 5.711 Scoring, Ranking Criteria, and Appeals
The proposed rule would add a new regulation at Sec. 5.711 which
would incorporate and streamline existing regulations governing the
scoring and ranking of covered properties, chiefly multifamily and
public housing properties. Further, it would include the
responsibilities of PHAs and owner/agents after an inspection and
outline the process for appealing inspection results. Proposed Sec.
5.711 would also incorporate and replace the current scoring and
ranking process under Sec. 200.857 as well as the prior appeals
process for physical inspections under the Public Housing Assessment
System (PHAS) at Sec. Sec. 902.22, 902.24, 902.26, and 902.68. By
aligning similar language across programs, HUD believes the proposed
rule will increase clarity and ease of compliance while creating a
standardized set of expectations.
New paragraph (a) would exempt the HCV and PBV programs which would
continue to be assessed under the Section Eight Management Assessment
Program (SEMAP) as well as small rural PHAs which would be assessed
under new subpart D of 985. As part of the streamlining in the proposed
rule, new paragraph (b) moves the existing regulation at Sec.
200.857(a)(1) to part 5.
New paragraph (b)(2) would clarify that Public Housing projects
would continue to be scored and ranked under the Public Housing
Assessment System (PHAS) outlined in part 902. New paragraph (c)(1)
would introduce the category of severe health or safety (SHS)
deficiencies which are the most serious types of conditions that can be
cited as violations of Sec. 5.703 and replaces the current exigent
health and safety (EH&S) category of deficiencies found in Sec.
902.22. Similar to the use of new language in Sec. 5.703, the change
in terminology would serve as a visual marker to help a reader
differentiate between the existing and proposed regulations. It would
also help to minimize confusion across the aligned programs. The term
``exigent health and safety'' has been associated with more than one
definition in the past and has been confused with the term ``life-
threatening.'' For example, HUD's notice at 76 FR 10055 employed EH&S
and life threatening synonymously despite the different meanings.\11\
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\11\ ``The UPCS physical inspection emphasizes health and safety
(H&S) deficiencies because of their crucial impact on the well-being
of residents. A subset of H&S deficiencies is exigent health and
safety (EHS) deficiencies. These are life threatening (LT) and
require immediate action or remedy. EHS deficiencies can
substantially reduce the overall project score.'' See, 76 FR 10055
https://www.federalregister.gov/documents/2011/02/23/2011-2633/changes-to-the-public-housing-assessment-system-phas-physical-condition-scoring-notice.
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While generally equivalent in purpose to the way EH&S is being used
today, the new phrase, ``severe health or safety'' would provide a
clear expression of the seriousness of these types of issues which
would also be reflected in the proposed default timeframe of repair of
24 hours. HUD acknowledges that current regulations are inconsistent in
describing how soon an EH&S deficiency must be corrected, establishing
a singular provision at Sec. 5.711(c)(1) for the correction of SHS
deficiencies for most programs would address these inconsistencies.
Additionally, the Housing Opportunity Through Modernization Act of
2016 (HOTMA) limited HUD's flexibility in defining the timeframes for
repair of deficiencies in the HCV or PBV programs. That act requires
that life threatening conditions be addressed in 24 hours and all other
deficiencies within 30 days. In order to accommodate that statutory
constraint, HUD would identify in the notice described in Sec. 5.709
which of the SHS deficiencies are life threatening and which ones are
non-life threatening. Section 5.711 would also require the correction
of non-SHS health or safety deficiencies within 30 days, for all
programs.
Further, proposed Sec. 5.711 would incorporate and condense the
administrative review and enforcement action provisions found at Sec.
200.857(h) and Sec. 200.857(i) to align with HUD's current procedures
and eliminate inconsistencies with Section 219, Title II, Division H of
the Consolidated Appropriations Act, 2020, Public Law 116-94, December
20, 2019. As previously noted, CPD programs do not apply any scoring,
weighting, ranking or enforcement from Part 5. This is outlined in the
HOME rule at 24 CFR 92.251(f)(1)(i). CPD programs are fundamentally
different than many of the programs subject to REAC inspections as they
are programs administered by local governments subject to local
decision making. CPD programs have their own means of enforcement
specified in each program regulation. These functions are instead
performed by HUD CPD staff, and can include requiring the participating
jurisdiction or grantee repaying the full amount of subsidy provided to
the project. New paragraph (d)(2) would consolidate current regulations
governing the process for technical reviews into one section with an
aligned set of procedures applicable to properties inspected by HUD.
With regard to tenant-induced damage, HUD is requesting public
comments on the following questions:
Question for Comment #19: HUD is soliciting comment on how to
fairly approach tenant-induced damage to units and properties in such a
way that it will have a positive impact on HUD-assisted properties.
What could be used as incentives or disincentives to discourage tenant-
induced damage?
Question for Comment #20: HUD seeks input on the scoring threshold
that should be used to refer a property to the Departmental Enforcement
Center (DEC): What factors should be considered by HUD in setting the
threshold, and whether should this be a stationary threshold or one
that is updated periodically?
[[Page 2589]]
g. Section 5.713 Second- and Third-Party Rights
The proposed rule would add new Sec. 5.713, which would
incorporate and modify existing language at Sec. 982.407 on
enforcement of inspection requirements. The new regulation would mirror
existing regulations in place for the HCV and PBV programs--which in no
way create any right to assert any claim against HUD or the PHA for
damages, injunction, or other relief for alleged failure to enforce
inspection standards, and would expand it to other programs under
NSPIRE.
B: Addition of Part 902, Subpart H and Part 985, Subpart D Regarding
Small Rural PHAs
Small rural PHAs generally operate in a very different financial
environment and rental housing market than larger PHAs in major
metropolitan areas. These PHAs often have less access to private
capital and their small size typically means that they operate with
fewer staff and outside consulting services. Accordingly, regulatory
burden often falls more heavily on small rural PHAs, reducing their
ability to serve low-income families.
On May 24, 2018, President Trump signed the Economic Growth and
Recovery, Regulatory Relief and Consumer Protection Act (``Economic
Growth Act'') into law. Section 209 of the Act added section 38 to the
United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) and made
several amendments pertaining to small rural PHAs. Certain statutory
amendments made by section 209 became effective 60 days after
enactment, and HUD published a notice in the Federal Register on
February 14, 2019,\12\ which, read together with the statutory
language, was intended to aid HUD program participants and the public
in understanding the reasons for deferred action with respect to
specific statutory provisions. HUD published a notice in the Federal
Register on February 27, 2020,\13\ explaining how HUD designates small
rural PHAs and described which 209 provisions were being implemented.
The notice also stated that HUD would undertake future rulemaking for
full implementation of other provisions, including defining small rural
PHAs in the regulations. This proposed rule would implement this
definition of small rural PHA as well as a new assessment system for
their public housing and HCV programs. HUD believes that the Economic
Growth Act's focus on inspections and the directive to follow the same
standards for small, rural public housing as that for projects assisted
under Section 8 make the inclusion of the act's provisions in this rule
a logical fit.
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\12\ 84 FR 4097, February 14, 2019.
\13\ 85 FR 11381, February 27, 2020.
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The proposed rule would create new Subpart H under the current 902
regulations for the Public Housing Assessment System (PHAS). Section
209(a)(2) of the Economic Growth Act defined ``small public housing
agency'' and directed HUD to use the existing definition of ``rural
area'' contained in the regulations governing the Consumer Financial
Protection Bureau (CFPB) at 12 CFR 1026.35(b)(2)(iv)(A). In the
February 27, 2020 notice, HUD further refined this definition by
defining PHAs that ``predominantly operate in a rural area'' and
clarifying that these PHAs would be referred to as ``small rural PHAs''
to avoid confusion with other small PHA designations employed by HUD.
The proposed rule would fully implement these definitions through Sec.
902.101. A small rural PHA would be defined as a PHA that administers
550 or fewer combined public housing and Section 8 voucher units and
either has a primary administrative building with a physical address in
a rural area or more than 50 percent of its combined public housing
units and voucher units in rural areas. The methodology for identifying
a small rural PHA was identified in the February 27, 2020 notice and
Sec. 902.101(b) would require that HUD make this determination once
every three years. PHAs would have the ability to appeal this
determination in accordance with Sec. 902.101(c).
The proposed rule would amend the current regulations for the
Public Housing Assessment System (PHAS) to exempt small rural PHAs and
would instead implement an alternate performance indicator and rating
system. Under proposed Sec. 902.103, small rural PHAs would be
assessed based on the physical condition of their public housing
properties. Proposed Sec. 902.103(b) would establish an assessment
frequency of no more than once every three years, as required under
Section 209(c)(1)(A) of the Economic Growth Act, except that a troubled
small rural PHA would be subject to an annual assessment.
A small rural PHA's public housing program would be designated as
troubled under Sec. 902.105 if:
The weighted average score of all property inspections is
below 70 percent of the total available points; or
If a the PHA has a weighted average score of between 70
and 80 percent of the total available points and has at least one
property that receives fewer than 70 percent of the total available
points.
Troubled small rural PHAs would be referred to their local field
office or other designated HUD office(s) for remedial action,
oversight, and monitoring. HUD would negotiate and develop a Corrective
Action Agreement (CAA) as described in Sec. 902.105(c) within 30 days
of the PHA's notification of their designation as troubled. Section
902.105(c) through (i) would outline the requirements and process for
the CAA. Proposed Sec. 902.107 would describe the situation under
which HUD may withhold, deny, or rescind a troubled designation.
Conditions for appealing troubled designations are outlined in proposed
Sec. 902.109. Sanctions for small rural PHAs that remain troubled as
well as incentives for small rural PHAs that are high performers would
remain the same as those currently described in the PHAS regulations.
The Economic Growth Act provides that HUD may designate a small
rural PHA as a troubled PHA with respect to its HCV program if HUD
determines the agency has failed to comply with HCV inspection
requirements, HUD is proposing to add a new subpart D to 24 CFR part
985, Section 8 Management Assessment Program (SEMAP).
Under proposed Sec. 985.201, PHAs that meet the definition of
small rural under Sec. 902.101 would no longer be subject to SEMAP
requirements but would instead be assessed on the basis of the
performance indicators and rating system under subpart D. In assessing
whether a small rural PHA's HCV program is a high performer, standard
performer, or troubled, HUD would take four indicators into
consideration, all of which are related to the small rural PHA's
compliance with the inspection requirements. Each indicator would be
scored on a pass/fail basis. The inspection indicators described in the
proposed Sec. 985.203 include:
Inspection standards which would confirm the PHA is
applying the applicable NSPIRE standards to HCV or PBV-assisted units
or a HUD-approved variation under Sec. 5.703. The PHA would pass the
indicator if all HCV and PBV units were inspected using the correct
standards;
Initial unit inspections which would validate the PHA is
conducting initial inspections within the appropriate timeframes. The
PHA would pass the indicator if at least 98 percent of newly leased
units passed inspection prior to the beginning of assistance;
Frequency of HQS inspections which would verify the PHA
inspects tenant-based units under HAP contract and the required sample
of PBV units at least once during the three-year period
[[Page 2590]]
from the last PHA inspection. The PHA would pass the indicator if at
least 98 percent of the units were inspected; and
Unit condition enforcement would confirm the PHA is taking
corrective action as required in cases where the owner fails to correct
an identified unit deficiency in accordance with HUD requirements. The
PHA would pass the indicator if 98 percent of inspections with
identified life-threatening or other deficiencies were corrected within
the required timeframe.
In order for the small rural PHA to be designated as a high
performer, additional requirements related to funding would also apply.
Proposed Sec. 985.205(a) would state that for a PHA to be designated
as a high performer, the PHA must:
Either utilize at least 98 percent of its HCV budget
authority for the most recent calendar year or the percent of HCV units
leased by renters or occupied by homeowners for the most recent
calendar year must be at least 98 percent;
Not end the calendar year with excess HAP reserves; and
Not end the calendar year in a funding shortfall or
receive shortfall prevention funding from HUD.
If the small rural PHA passes all four inspection indicators and
meets the funding criteria listed above, the PHA is designated as a
high performer. If a PHA passes all four inspection indicators but does
not meet the funding criteria listed above, the PHA will be designated
as a standard performer. If the small rural PHA fails any one of the
four inspection indicators, regardless of whether or not it meets the
funding requirements, the PHA is designated as troubled.
In accordance with statutory requirements contained in the Economic
Growth Act, proposed Sec. 985.207 would establish an assessment
frequency of no more than once every three years, except that a
troubled small rural PHA would be subject to an annual assessment in
accordance with Sec. 985.204.
Proposed Sec. 985.209 would cover requirements that apply to small
rural PHAs designated as troubled, including the statutorily mandated
appeals process and the required corrective action agreement.
Proposed Sec. 985.211 would state that HUD would maintain small
rural PHAs' assessment files, including designations, appeals, and
agreements, for at least 3 years.
With regard to small rural PHAs, HUD is requesting public comments
on the following questions:
Question for comment #21: HUD is considering establishing the
threshold for troubled PHAs under the small rural assessment as a PHA
that either has a weighted average of less than 70 percent of all
available points on physical inspections, or a PHA that has a weighted
average of between 70 and 80 percent of all available points and that
also has at least one property that received a score of less than 70
percent of available points. HUD is seeking comment on how this
threshold will impact PHAs and residents, and what alternative
thresholds HUD should use to define a troubled PHA?
Question for comment #22: HUD is specifically seeking comment on
the four indicators proposed to determine if the PHA is failing to
fulfill its responsibilities for unit inspections under the HCV program
and the method by which HUD is proposing to determine if the PHA has
passed or failed the indicator. Are the indicators proposed to make
such determination appropriate? If not, are there better alternatives?
Question for comment #23: HUD is specifically seeking comment on
the criteria it is proposing to determine if the PHA is a high
performer or a standard performer. Are the conditions related to
funding utilization appropriate? If not, are there better alternatives?
Should HUD be considering other criteria besides utilization to
designate a PHA a high performer as opposed to a standard performer? If
so, what other performance measures should be taken into account? How
would HUD verify the PHA's performance on any suggested additional or
alternative performance criteria, keeping in mind HUD's preference to
move away from reliance on self-certifications wherever possible and to
not require PHAs to report or submit data for PHA assessments that is
not already collected as part of normal HCV PHA operations and HUD
oversight?
Question for comment #24: What specifically should be required in
the corrective action agreement?
C: Other Regulatory Changes
As discussed above, Sec. 5.701 would expand the scope of part 5,
subpart G. Therefore, this proposed rule would amend regulations for
the HCV (part 982), PBV (part 983), HOME (part 92), HTF (part 93),
HOPWA (part 574), ESG (part 576), and CoC (part 578).
The proposed rule would align HOME property standards requirements
for housing with the requirements for ongoing property condition
standards of rental housing at Sec. 92.251(f). Participating
jurisdictions would be required to establish written property standards
for housing occupied by tenants that meet minimum requirements at Sec.
92.251(f) including compliance with State and local codes and
ordinances, health and safety, and lead-based paint requirements.
While most participating jurisdictions are subject to State and
local building or rehabilitation codes, many are not subject to
comprehensive property condition or habitability codes. The program
regulations at Sec. 92.251(f) do not provide a uniform standard for
housing that is decent, safe, and sanitary and in good repair where
State and local codes are absent. HUD is proposing a uniform standard
for what must be inspected during, and corrected as the result of, an
ongoing physical inspection of HOME-assisted rental housing during the
period of affordability or an annual inspection of housing occupied by
a resident.
Also under the proposed rule, the Housing Trust Fund (HTF) program
regulations would be revised to make conforming changes to the HTF
property standards requirements at Sec. 93.301(b)(1)(viii), (c)(3),
and (e)(i). The specific deficiencies will be a subset of the
deficiencies defined for NSPIRE and published in the Federal Register
in accordance with Sec. 5.705.
The proposed rule would also make conforming changes to apply Sec.
5.703 to the Housing Opportunities for Persons with AIDS (HOPWA),
Continuum of Care (CoC), and Emergency Solutions Grants (ESG) programs.
The rule proposes to amend the HOPWA regulations at Sec. 574.310; the
CoC regulations at Sec. 578.75; and the ESG regulations at Sec.
576.403 to cite to Sec. 5.703. The CoC regulations at Sec. 578.75(b)
regarding lead-based paint requirements would be amended only to apply
Sec. 5.703 where Sec. 982.401 currently applies; this proposed rule
makes no substantive changes to the lead-based paint requirements. The
ESG regulations would be amended to include Sec. 5.703 in the minimum
standards for permanent housing but not emergency shelters.
These amendments are intended to replace program-specific standards
with references to part 5. Further, Sec. 5.711 would incorporate and
condense the administrative review and enforcement action provisions at
Sec. Sec. 200.857(h) and 200.857(i) to align with HUD's current
procedures and to eliminate inconsistencies with Section 219, Title II,
Division H of the Consolidated Appropriations Act, 2020, Public Law
116-94, December 20, 2019.
HUD is also proposing technical changes for HAP contracts at
Sec. Sec. 880.612, 884.217, 886.123 and 886.323 to require
[[Page 2591]]
annual compliance with the expanded part 5, subpart G.
Under this proposed rule, the Moderate Rehabilitation program
regulations at Sec. 882.516(b) would be revised to clarify that PHAs
must inspect (or cause to be inspected) units at least annually and at
other times as necessary in accordance with the NSPIRE standards
established under Sec. 5.703. HUD would continue to conduct the
inspections in accordance with the NSPIRE standards for mod rehab
projects that are managed by the PHA as provided under Sec.
882.516(d). In addition, the proposed rule would change the title of
Sec. 882.516(c) from ``Units not decent, safe, and sanitary'' to
``Units with health and safety hazards'' and add a title to Sec.
882.516(e) for clarity.
D. Other Rulemakings
HUD notes that there is some overlap in the proposed changes with
HUD's Housing Opportunity Through Modernization Act of 2016:
Implementation of Sections 102, 103, and 104 proposed rule (84 FR
48820). HUD further notes that HUD intends to publish a proposed rule
concerning the implementation of requirements to install carbon
monoxide detectors in HUD-assisted and -Insured Housing, which would
also overlap with this proposed rule. At the final rule stage, HUD will
make any changes necessary to address any conflicts between these
rules.
III. NSPIRE Improvements Beyond This Rule
In addition to the regulatory changes being proposed by this rule,
HUD is making other improvements to its physical inspection program.
HUD is committed to extending the same principles reflected in this
rule to other aspects of the NSPIRE effort. HUD has continued to move
forward with the ``top-to-bottom review'' of its inspection process
directed by the Secretary to ensure taxpayer-supported housing is
healthy, safe, and habitable for the millions of families HUD serves.
The regulation will signal to the public HUD's clear intent to change
its business approach. HUD is proactively aligning Public Housing, HCV,
and other programs, through establishing an approach to revise and
publish inspection standards, testing and validating a new inspection
scoring model, and continuously engaging with the public in HUD's
improvement efforts.
To ensure stakeholders can provide input on all aspects of NSPIRE,
HUD launched listening sessions about making improving HUD's
inspections better. That approach of early and often feedback has
continued. For example, in the development of the physical inspection
standards, HUD published drafts on the NSPIRE website for public
input.\14\ For reference, these are the standards which will apply to
all inspections (see Sec. 5.705(a)) and will be published formally for
public comment prior to implementation (see Sec. 5.709). HUD has
received hundreds of suggestions on the draft NSPIRE standards and has
closely reviewed all the comments. The majority were successfully
incorporated into revisions. HUD's analysis, supported by stakeholder
feedback, has identified that the current Uniform Physical Condition
Standards (UPCS) and Housing Quality Standards (HQS) specifications do
not always clearly identify or explain the particular harm or hazard
that HUD is trying to avoid. To address this concern, HUD applied best
practices from risk analysis frameworks that feature predominantly in
the public health discipline to help all stakeholders understand the
``why'' or the ``rationale'' for each deficiency. A ``rationale'' is a
plainly written risk-based assessment that describes the harm or
negative result that could occur if that issue were to be present at a
property. It justifies why that issue is critical to housing quality.
By taking this approach, HUD can ground each standard in a clear and
defensible explanation based in sound science.
---------------------------------------------------------------------------
\14\ U.S. Department of Housing and Urban Development. (2019).
National Standards for Physical Inspection of Real Estate (NSPIRE)
Standards. Retrieved from: https://www.hud.gov/program_offices/public_indian_housing/reac/nspire/standards.
---------------------------------------------------------------------------
Given the approach described above--and because it is important to
ensure the standards remain up to date--HUD is working to establish an
``infrastructure of partnerships'' to provide continuous technical
input and scientific guidance for standards development. HUD started
this effort by collaborating with partners across the public and
private sectors--including other Federal agencies--and academic and
non-profit organizations. HUD anticipates that the continued expansion
of these relationships will help to provide the input into the three-
year updates to which HUD commits in this rule.
Along with the efforts already described, HUD has launched two
demonstrations: (1) The Demonstration to Assess the National Standards
for the Physical Inspection of Real Estate (84 FR 43536) and (2) the
Demonstration to Test Proposed New Method of Assessing the Physical
Conditions of Voucher-Assisted Housing (81 FR 26759). These
demonstrations are among the first steps in implementing an aligned
inspection protocol for public housing, multifamily housing, and
voucher programs. More information about those demonstrations can be
found on the NSPIRE \15\ and ISDV \16\ websites.
---------------------------------------------------------------------------
\15\ U.S. Department of Housing and Urban Development. (2019).
The Demonstration to Assess the National Standards for the Physical
Inspection of Real. Estate Retrieved from: https://www.hud.gov/program_offices/public_indian_housing/reac/nspire/demonstration.
\16\ U.S. Department of Housing and Urban Development. (2019).
The Demonstration to Test Proposed New Method of Assessing the
Physical Conditions of Voucher-Assisted Housing. Retrieved from:
https://www.hud.gov/sites/dfiles/PIH/documents/upcsvdemoparticpation.pdf.
---------------------------------------------------------------------------
Strategically, the demonstration programs give HUD and properties
an opportunity to ``stress test'' processes in a real-world setting to
ensure they are stable and ready to scale out to the full population of
Property Owner Agent (POA). In addition to being reasonable, HUD wants
to ensure that its inspection standards are performable across a wide
variety of inspectors. The demonstrations allow HUD the ability to make
sure its administrative processes that support physical inspections are
efficient and responsive. HUD is also leveraging technology to
eliminate manual processes and to realize the benefits of having
aligned programs.
The information coming out of both demonstrations also informs the
development and refinement of property scoring approaches. HUD has
worked diligently to identify the most appropriate scoring models to
improve the accuracy, objectivity, and consistency of assessment across
different property configurations. Along with modifications to the
current model, HUD is currently exploring alternative scoring models
based instead on data-driven methodologies, including those based on
probabilistic approaches.
Finally, aligning HUD's oversight to property risk will benefit
both HUD and the POAs. For example, HUD has proposed in this rule that
a risk model inform the extension of the frequency of inspections up to
5 years in some programs. Taking a risk-based oversight approach allows
high-performing properties to continue to do those things that make
them successful while ensuring struggling properties are able to get
the attention needed. While HUD will maintain a ``pass/fail'' result
for HCV and PBV inspections as required by statute, moving to NSPIRE
with consistent inspection standards allows large volumes of inspection
and housing quality data to be compared across programs for the first
time. HUD believes that better data will lead to the
[[Page 2592]]
development of more refined risk models and also allow rigorous
assessment of the impacts of deficiencies, individually and in
combination, on residents.
IV. Findings and Certifications
Regulatory Review--Executive Orders 12866 and 13563
Pursuant to Executive Order 12866 (Regulatory Planning and Review),
a determination must be made whether a regulatory action is significant
and therefore subject to review by the Office of Management and Budget
(OMB) in accordance with the requirements of the order. Executive Order
13563 (Improving Regulations and Regulatory Review) directs executive
agencies to analyze regulations that are ``outmoded, ineffective,
insufficient, or excessively burdensome, and to modify, streamline,
expand, or repeal them in accordance with what has been learned.''
Executive Order 13563 also directs that, where relevant, feasible, and
consistent with regulatory objectives, and to the extent permitted by
law, agencies are to identify and consider regulatory approaches that
reduce burdens and maintain flexibility and freedom of choice for the
public.
HUD believes that this proposed rule, by consolidating physical
condition inspection standards into a streamlined format and utilizing
improved technology and methods will aid all parties--PHAs, property
owners, agents, and inspectors--in complying with HUD's physical
condition standards creating a smaller burden while maintaining or
increasing the effectiveness of HUD's physical condition requirements.
The proposed rule has been determined to be a ``significant regulatory
action,'' as defined in section 3(f) of the Order, but not economically
significant under section 3(f)(1) of the Order. The docket file is
available for public inspection online at www.regulations.gov.
Executive Order 13771, Regulatory Costs
Executive Order 13771, entitled ``Reducing Regulation and
Controlling Regulatory Costs,'' was issued on January 30, 2017. This
proposed rule is expected to be an Executive Order 13771 deregulatory
action. The requirements this proposed rule would place on the public
are comparable to pre-existing requirements. This rule would also
provide relief to small rural PHAs and certain qualifying properties
and would provide relief by removing inconsistencies across HUD's
programs, reducing compliance costs.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
There are 2,297 small PHAs all of which will be affected; however, the
economic impact will not be significant.
The economic impact will not be significant because the proposed
rule would not change the substantive requirement that HUD program
participants are required to maintain the physical condition of HUD
housing. The proposed rule would also, in most cases, maintain the same
level of review for compliance in the form of physical inspections.
Regulatory flexibility would be increased by allowing HUD to require
less frequent inspections for high-performing PHAs under PHAS.
Regulatory relief would also be provided to small rural PHAs, which
would only be subject to triennial inspections under PHAS. Accordingly,
the undersigned certifies that the proposed rule will not have a
significant economic impact on a substantial number of small entities.
Notwithstanding HUD's determination that this rule will not have a
significant effect on a substantial number of small entities, HUD
specifically invites comments regarding any less burdensome
alternatives to this rule that will meet HUD's objectives as described
in the preamble to this rule.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant
Impact is available for public inspection between the hours of 8 a.m.
and 5 p.m. weekdays in the Regulations Division, Office of General
Counsel, Room 10276, Department of Housing and Urban Development, 451
Seventh Street SW, Washington, DC 20410-0500. The FONSI is also
available through the Federal eRulemaking Portal at http://www.regulations.gov.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either: (i) Imposes substantial direct compliance costs on State and
local governments and is not required by statute, or (ii) preempts
State law, unless the agency meets the consultation and funding
requirements of section 6 of the Executive Order. This proposed rule
would merely revise existing Federal standards in a way which would not
increase or decrease compliance costs on State or local governments and
therefore does not have federalism implications and would not impose
substantial direct compliance costs on state and local governments or
preempt state law within the meaning of the Executive Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on State, local, and
tribal governments, and on the private sector. This proposed rule would
not impose any Federal mandates on any State, local, or tribal
governments, or on the private sector, within the meaning of the UMRA.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501-3520), an agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information, unless the
collection displays a currently valid Office of Management and Budget
(OMB) control number. Except for the self-inspection report
requirements, the information collection requirements contained in this
proposed rule have been approved by OMB under the Paperwork Reduction
Act and assigned OMB control numbers 2502-0369 (Uniform Physical
Standards and Physical Inspection Requirements), 2577-0241 (Exigent
Health and Safety Deficiency Correction Certification), 2577-0257
(Public Housing Assessment System (PHAS) Appeals, Technical Reviews and
Database Adjustments), 2577-0289 (National Standards for the Physical
Inspection of Real Estate (NSPIRE)), and 2577-0169 (HCV Program and
Tribal HUD-VASH). The collection requirements will be amended to
reflect the altered burden contained in this proposed rule. The current
PRA ``HCV Program and Tribal HUD-VASH'' (OMB 2577-0169) authorizes
collection of unit inspection data from PHAs as part of their
participation in the HCV and PBV programs. This proposed rule will not
require a modification to this approved collection.
[[Page 2593]]
The current PRA package ``National Standards for the Physical
Inspection of Real Estate (NSPIRE)'' (OMB 2577-02890) authorizes
collection of self-inspection data from properties participating in
HUD's NSPIRE Demonstration. As NSPIRE moves from demonstration to
implementation, the number of responses will increase to accommodate
the full portfolio of properties required to submit self-inspection
results to HUD.
The current PRA package ``Administrative Process for Scoring,
Ranking, and Appeals'' (OMB 2577-0257) authorizes the collection of
data associated with data base adjustments, technical reviews, and
appeals (Public Housing only) for Multifamily and Public Housing
properties. HUD anticipates this number to remain constant upon
implementation of NSPIRE.
The current PRA package ``Uniform Physical Standards and Physical
Inspection Requirements'' (OMB 2502-0369) authorizes the collection of
data associated with inspections of HUD-insured mortgages. HUD expects
this number to increase slightly due to higher unit sampling as part of
the NSPIRE protocol.
The current PRA package ``Other Reporting Requirements'' (OMB 2577-
0241) only authorizes the collection of electronic certifications by
PHAs for corrected/mitigated Exigent Health and Safety (EH&S)
deficiencies. The new number of responses and burden reflect the
inclusion of all programs, beyond Public Housing, that will now be
required to submit electronic closeout of all health and safety
deficiencies, not just EH&S deficiencies.
The burden of the information collections in this proposed rule is
estimated as follows:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of responses Burden hours per Total annual cost
-------------------------- response Hourly -----------------------------------
Information collection ---------------------- cost *
Current New Current New Current New
--------------------------------------------------------------------------------------------------------------------------------------------------------
Inspection Reporting (HCV) (OMB 2577-0169)............... 3,680,527 3,680,527 .44 .44 $34 $55,060,684.00 $55,060, 684.00
Self-inspection Reporting (OMB 2577-0289)................ 4,500 38,000 2.7 2.7 34 413,100.00 2,335,176.00
Administrative Process for Scoring, Ranking, and Appeals 1,510 1,510 7.7 7.7 34 51,366.00 51,366.00
(OMB 2577-0257..........................................
Uniform Physical Standards and Physical Inspection 12,100 12,100 6.0 8.0 34 2,468,400.00 3,291,200.00
Requirements (OMB 2502-0369)............................
Other Reporting Requirements (OMB 2577-0241)............. 971 16,000 .28 1.0 34 9,244.00 544,000.00
----------------------------------------------------------------------------------------------
Totals............................................... 3,699,608 3,748,137 ......... ......... ......... 58,002,794.00 61,282,426.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Estimates assume a blended hourly rate that is equivalent to a GS-12, Step 5, Federal Government Employee.
In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments
from members of the public and affected agencies concerning the
information collection requirements in the proposed rule regarding:
(1) Whether the proposed collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the
proposed collection of information;
(3) Whether the proposed collection of information enhances the
quality, utility, and clarity of the information to be collected; and
(4) Whether the proposed information collection minimizes the
burden of the collection of information on those who are to respond,
including through the use of appropriate automated collection
techniques or other forms of information technology (e.g., permitting
electronic submission of responses).
Interested persons are invited to submit comments regarding the
information collection requirements in this rule. Under the provisions
of 5 CFR part 1320, OMB is required to make a decision concerning this
collection of information between 30 and 60 days after the publication
date. Therefore, a comment on the information collection requirements
is best assured of having its full effect if OMB receives the comment
within 30 days of the publication. This time frame does not affect the
deadline for comments to the agency on the proposed rule, however.
Comments must refer to the proposed rule by name and docket number (FR-
6123) and must be sent to:
HUD Desk Officer, Office of Management and Budget, New Executive Office
Building, Washington, DC 20503, Fax number: 202-395-6947
and
Colette Pollard, HUD Reports Liaison Officer, Department of Housing and
Urban Development, 451 7th Street SW, Room 2204, Washington, DC 20410
Interested persons may submit comments regarding the information
collection requirements electronically through the Federal eRulemaking
Portal at http://www.regulations.gov. HUD strongly encourages
commenters to submit comments electronically. Electronic submission of
comments allows the commenter maximum time to prepare and submit a
comment, ensures timely receipt by HUD, and enables HUD to make them
immediately available to the public. Comments submitted electronically
through the http://www.regulations.gov website can be viewed by other
commenters and interested members of the public. Commenters should
follow the instructions provided on that site to submit comments
electronically.
List of Subjects
24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Crime,
Government contracts, Grant programs--housing and community
development, Individuals with disabilities, Intergovernmental
relations, Loan programs--housing and community development, Low and
moderate income housing, Mortgage insurance, Penalties, Pets, Public
housing, Rent subsidies, Reporting and recordkeeping requirements,
Social security, Unemployment compensation, and Wages.
24 CFR Part 92
Administrative practice and procedure, Low and moderate income
housing, Manufactured homes, Rent subsidies, and Reporting and
recordkeeping requirements.
24 CFR Part 93
Administrative practice and procedure, Grant programs--housing and
community development, Low and moderate income housing, Manufactured
homes, Rent subsidies, and Reporting and recordkeeping requirements.
24 CFR Part 200
Administrative practice and procedure, Claims, Equal employment
opportunity, Fair housing, Housing
[[Page 2594]]
standards, Lead poisoning, Loan programs--housing and community
development, Mortgage insurance, Organization and functions (Government
agencies), Penalties, Reporting and recordkeeping requirements, Social
security, Unemployment compensation, and Wages.
24 CFR Part 574
Community facilities, Grant programs--housing and community
development, Grant programs--social programs, HIV/AIDS, Low and
moderate income housing, and Reporting and recordkeeping requirements.
24 CFR Part 576
Community facilities, Grant programs--housing and community
development, Grant programs--social programs, Homeless, and Reporting
and recordkeeping requirements.
24 CFR Part 578
Community development, Community facilities, Grant programs--
housing and community development, Grant programs--social programs,
Homeless, and Reporting and recordkeeping requirements.
24 CFR Part 880
Grant programs--housing and community development, Rent subsidies,
and Reporting and recordkeeping requirements.
24 CFR Part 882
Grant programs--housing and community development, Homeless, Lead
poisoning, Manufactured homes, Rent subsidies, and Reporting and
recordkeeping requirements.
24 CFR Part 884
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements, and Rural areas.
24 CFR Part 886
Grant programs--housing and community development, Lead poisoning,
Rent subsidies, and Reporting and recordkeeping requirements.
24 CFR Part 902
Administrative practice and procedure, Public housing, and
Reporting and recordkeeping requirements.
24 CFR Part 982
Grant programs--housing and community development, Grant programs--
Indians, Indians, Public housing, Rent subsidies, and Reporting and
recordkeeping requirements.
24 CFR Part 983
Grant programs--housing and community development, Low and moderate
income housing, Rent subsidies, and Reporting and recordkeeping
requirements.
24 CFR Part 985
Grant programs--housing and community development, Public housing,
Rent subsidies, and Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, HUD proposes to amend 24
CFR parts 5, 92, 93, 200, 574, 576, 578, 880, 882, 883, 884, 886, 902,
982, 983 and 985 as follows:
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
0
1. The authority for 24 CFR part 5 continues to read as follows:
Authority: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437d,
1437f, 1437n, 3535(d); Sec. 327, Pub. L. 109-115, 119 Stat. 2936;
Sec. 607, Pub. L. 109-162, 119 Stat. 3051 (42 U.S.C. 14043e et
seq.); E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; and E.O.
13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273.
0
2. Revise subpart G to read as follows:
Subpart G--Physical Inspection of Real Estate
Sec.
5.701 Applicability.
5.703 National Standards for the Condition of HUD Housing.
5.705 Inspection Requirements.
5.707 Uniform self-inspection requirement and report.
5.709 Administrative Process for Defining and Revising Inspection
Criteria.
5.711 Scoring, Ranking Criteria, and Appeals.
5.713 Second- and Third-Party Rights.
Sec. 5.701 Applicability.
(a) Scope. This subpart applies the national standards for the
physical inspection of real estate standards to the following HUD
programs:
(1) All Public Housing programs (programs for housing assisted
under the U.S. Housing Act of 1937 other than section 8 of the Act);
(2) The Housing Choice Voucher program under section 8(o) of the
U.S. Housing Act of 1937, part 982 of this title and the Project-Based
Voucher program under section 8(o)(13) of the Act and the regulations
at part 983 of this title (referred to in this part as the HCV and PBV
programs, or HCV and PBV housing);
(3) All project-based Section 8 programs;
(4) Section 202 Program of Supportive Housing for the Elderly
(Capital Advances);
(5) Section 811 Program of Supportive Housing for Persons with
Disabilities (Capital Advances);
(6) Section 202 loan program for projects for the elderly and
handicapped (including 202/8 projects and 202/162 projects); and
(7) Housing with mortgages insured or held by HUD, or housing that
is receiving assistance from HUD, under the following authorities:
(i) Section 207 of the National Housing Act (NHA) (12 U.S.C. 1701et
seq.) (Rental Housing Insurance);
(ii) Section 213 of the NHA (Cooperative Housing Insurance);
(iii) Section 220 of the NHA (Rehabilitation and Neighborhood
Conservation Housing Insurance);
(iv) Section 221(d)(3) of the NHA (Market Interest Rate (MIR)
Program);
(v) Section 221(d)(3) and (5) of the NHA (Below Market Interest
Rate (BMIR) Program);
(vi) Section 221(d)(4) of the NHA (Housing for Moderate Income and
Displaced Families);
(vii) Section 231 of the NHA (Housing for Elderly Persons);
(viii) Section 232 of the NHA (Mortgage Insurance for Nursing
Homes, Intermediate Care Facilities, Assisted Living Facilities, Board
and Care Homes);
(ix) Section 234(d) of the NHA (Rental) (Mortgage Insurance for
Condominiums);
(x) Section 236 of the NHA (Rental and Cooperative Housing for
Lower Income Families);
(xi) Section 241 of the NHA (Supplemental Loans for Multifamily
Projects). (Where, however, the primary mortgage of a Section 241
property is insured or assisted by HUD under a program covered in this
part, the coverage by two HUD programs does not trigger two
inspections); and
(xii) Section 542(c) of the Housing and Community Development Act
of 1992 (12 U.S.C. 1707 note) (Housing Finance Agency Risk Sharing
Program).
(b) Conflicts. The regulations in this subpart may be supplemented
by the specific regulations for the HUD-assisted programs listed in
paragraph (a). The program-specific regulations may address the
frequency of inspections, who performs the inspections and whether
alternative inspections are available given the statutory and
regulatory framework for the program. When there is conflict between
the regulations of this subpart
[[Page 2595]]
and the program-specific regulations, the program-specific regulations
govern.
(c) HUD housing. For purposes of this subpart, the term ``HUD
housing'' means the types of housing listed in paragraph (a) of this
section.
Sec. 5.703 National Standards for the Condition of HUD housing.
(a) General. To ensure that all residents live in safe, habitable
dwellings, the items and components located inside the building,
outside the building, and within the units of HUD housing must be
functionally adequate, operable, and free of health and safety hazards.
The standards under this section apply to all HUD housing. HUD housing
under the HCV and PBV programs shall be subject to these standards only
for:
(1) The subsidized unit itself; and
(2) Items and components within the primary and secondary means of
egress from a unit's entry door(s) to the public way, those common
features related to the residential use of the building (e.g., the
laundry room, community room, mail room), and the systems equipment
that directly services the voucher unit.
(b) Inside. Inside of HUD housing refers to the common areas and
building systems that can be generally found within the building
interior and are not inside a unit. Examples of ``inside'' common areas
may include, basements, interior or attached garages, enclosed
carports, restrooms, closets, utility rooms, mechanical rooms,
community rooms, day care rooms, halls, corridors, stairs, shared
kitchens, laundry rooms, offices, enclosed porches, enclosed patios,
enclosed balconies, and trash collection areas. Examples of building
systems include those components that provide domestic water,
electricity, elevators, emergency power, fire protection, HVAC, and
sanitary services.
(c) Outside. Outside of HUD housing (or ``outside areas'') refers
to the building site, building exterior components, and any building
systems located outside of the building or unit. Examples of
``outside'' components may include fencing, retaining walls, grounds,
lighting, mailboxes, project signs, parking lots, detached garage or
carport, driveways, play areas and equipment, refuse disposal, roads,
storm drainage, non-dwelling buildings, and walkways. Components found
on the exterior of the building are also considered outside areas, and
examples may include doors, attached porches, attached patios,
balconies, car ports, fire escapes, foundations, lighting, roofs,
walls, and windows.
(d) Units. A unit (or ``dwelling unit'') of HUD housing refers to
the interior components of an individual unit. Examples of components
included in the interior of a unit may include the bathroom, call-for-
aid (if applicable), ceiling, doors, electrical systems, floors, water
heater, HVAC (where individual units are provided), kitchen, lighting,
outlets, switches, smoke detectors, stairs, walls, and windows. The
unit must also meet the following affirmative requirements:
(1) The unit must have hot and cold running water, including an
adequate source of safe and potable water;
(2) The unit must include its own sanitary facility, it must be in
proper operating condition, usable in privacy, and adequate for
personal hygiene and the disposal of human waste;
(3) The unit must include at least one battery-operated or hard-
wired smoke detector, in proper working condition, on each level of the
unit installed as specified in National Fire Protection Association
Standard (NFPA) 72 or successor standards. If the unit is occupied by
any hearing-impaired person, smoke detectors must have an alarm system,
designed for hearing-impaired persons;
(4) The unit must have a living room and a kitchen area;
(5) For units assisted under the HCV or PBV program, the unit must
have at least one bedroom or living/sleeping room for each two persons.
Children of opposite sex, other than very young children, may not be
required to occupy the same bedroom or living/sleeping room.
(e) Health and safety concerns--(1) General. The inside, outside
and unit must be free of health and safety hazards that pose a danger
to residents. Types of health and safety concerns include, but are not
limited to carbon monoxide, mold, flammable materials or other fire
hazards, electrical hazards, garbage and debris, handrail hazards,
infestation, and lead-based paint.
(2) Lead-Based Paint. HUD housing must comply with all requirements
related to the evaluation and control of lead-based paint hazards and
have available proper documentation of such (see part 35 of this
title). The Lead-based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-based Paint Hazard Reduction Act of 1992
(42 U.S.C. 4851-4856), and the applicable regulations at part 35 of
this title apply.
(f) Compliance with State and local codes. (1) The standards for
the condition of HUD housing in this section do not supersede State and
local housing codes (such as fire, mechanical, plumbing, property
maintenance, or residential code requirements).
(2) All HUD housing other than units assisted under the HCV and PBV
programs must comply with State or local housing code in order to
comply with this subpart.
(3) State and local code compliance is not part of the
determination whether a unit passes the standards for the condition of
HUD housing under this section for the HCV and PBV programs (except in
accordance with Sec. 5.705(a)(3)).
(g) Use of an alternative or additional standard for HCV and PBV
programs. A PHA is not subject to the standards set by this section
when the PHA is approved by HUD to use an alternative standard in
accordance with Sec. 982.406 of this title. PHAs may also elect to
establish additional requirements for quality, architecture, or design
of PBV housing, and any such additional requirements must be specified
in the Agreement to Enter into a HAP Contract (``Agreement'') as
provided in Sec. 983.152(d)(2) of this title.
(h) Special housing types in the HCV, PBV, and Moderate
Rehabilitation programs. part 982, subpart M of this title identifies
special housing types which require standards unique to special types
of housing. Unless modified by program-specific regulations, NSPIRE
Standards will apply for these special housing types.
Sec. 5.705 Inspection requirements.
(a) Procedures--(1) General. Any entity responsible for conducting
an inspection of HUD housing, to determine compliance with this
subpart, must inspect such HUD housing in accordance with the standards
and procedures for identifying safe, habitable housing set out by the
Secretary and published in the Federal Register as described in Sec.
5.711.
(2) Inspection Scope. The inspection requirement for HUD housing
generally requires the inside, outside and unit to be inspected, in
accordance with Sec. 5.703. The inspection requirement for the tenant-
based HCV program and the unit inspection for the PBV program only
applies to units occupied or to be occupied by HCV and PBV
participants, and common areas and exterior areas which either service
or are associated with such units.
(3) HCV and PBV Variant inspection standards. (i) HUD may approve
inspection criteria variations for the following purposes:
(A) Variations which apply standards in local housing codes or
other codes adopted by the PHA; or
(B) Variations because of local climatic or geographic conditions.
[[Page 2596]]
(ii) Acceptability criteria variations may only be approved by HUD
pursuant to paragraph (a)(3)(i) if such variations either:
(A) Meet or exceed the performance requirements; or
(B) Significantly expand affordable housing opportunities for
families assisted under the program.
(iii) HUD will not approve any inspection criteria variation if HUD
believes that such variation is likely to adversely affect the health
or safety of participant families, or severely restrict housing choice.
(b) Entity Conducting Inspections. HUD housing must be inspected by
the appropriate entity as described in paragraph (b)(1) of this
section, except as described in paragraph (b)(2) of this section.
(1) General. The owner, lender, contract administrator, or HUD is
the entity responsible for performing inspections of HUD housing as
provided in this title, or a regulatory agreement or contract. For
properties with more than one HUD-insured loan, only the first mortgage
lender is required to conduct the inspection. The second mortgage
lender will be provided a copy of the physical inspection report by the
first mortgage lender.
(2) Exception. Under the HCV and PBV programs, the Public Housing
Agency is responsible for inspecting HUD housing under those programs,
unless another entity is assigned the inspection by the program
regulations governing the housing, regulatory agreements or contracts.
A PHA-owned unit receiving assistance under section 8(o) of the 1937
act must be inspected by an independent entity as specified in Sec.
982.352(b)(iv) of this title. Under the Moderate Rehabilitation
Program, the PHA is responsible for inspecting the HUD housing unless
the PHA is managing units on which it is also administering the HAP
Contract in accordance with Sec. 882.412, in which case HUD is
responsible for the inspections in accordance with Sec. 882.516(d) of
this title.
(c) Timing of inspections--(1) Generally. A property must be
inspected before the property is approved for participation in any of
the HUD housing programs under this part unless the property is already
a participant in another of the HUD programs under this part. An entity
responsible for conducting an inspection of HUD housing to determine
compliance with this subpart must inspect such housing annually unless
specified otherwise below. An inspection shall be conducted no earlier
than 3 months before and no later than 3 months after the date marking
the anniversary of the previous inspection in the year that the
inspection is due; however, an inspection must be completed before the
end of the calendar year that the inspection is due.
(2) Extended Inspection cycle. HUD housing other than HCV, PBV, and
Moderate Rehabilitation housing shall be subject to annual inspection
as described in paragraph (c)(1) of this section, except that the
Secretary, based on appropriate evaluation of risk, may extend the
inspection cycles of certain qualifying properties for a period between
two and five years, through publication in the Federal Register,
following notice and the opportunity to comment.
(3) Triennial cycle for small rural PHAs. Small rural PHAs as
defined in Sec. 902.101 of this title shall be assessed in accordance
with part 902, subpart H of this title.
(4) Housing Choice Vouchers. PHAs must inspect units subject to
part 982 of this title in accordance with the frequency described in
Sec. 982.405 of this title.
(5) Project Based Vouchers. PHAs must inspect units subject to part
983 of this title in accordance with the frequency described in Sec.
983.103 of this title.
(6) FHA insured mortgages section 232 facilities. HUD may exempt
assisted-living facilities, board and care facilities, and intermediate
care facilities from physical inspections under this part if HUD
determines that the State or local government has a reliable and
adequate inspection system in place, with the results of the inspection
being readily and timely available to HUD. For any other Section 232
facilities, the inspection will be conducted only when and if HUD
determines, on the basis of information received, such as through a
complaint, site inspection, or referral by a State agency, on a case-
by-case basis, that inspection of a particular facility is needed to
assure protection of the residents or the adequate preservation of the
project.
(d) Inspection Costs. The cost of an inspection shall be the
responsibility of the entity responsible for the inspection as
identified in paragraph (a) of this section, except that a reasonable
fee may be required of the owner of a property for a reinspection if an
owner notifies the entity responsible for the inspection that a repair
has been made or the allotted time for repairs has elapsed and a
reinspection reveals that any deficiency cited in the previous
inspection that the owner is responsible for repairing was not
corrected. No fee may be passed along to the household residing in the
unit or units.
(e) Access to property for inspection--(1) HUD Inspections. Nothing
in this subpart shall restrict the right of HUD, or an entity
contracted by HUD, to inspect HUD housing.
(2) Public housing projects. All PHAs are required to provide HUD
or its representative with full and free access to all facilities in
its projects. All PHAs are required to provide HUD or its
representative with access to its projects and to all units and
appurtenances in order to permit physical inspections, monitoring
reviews, and quality assurance reviews under this part. Access to the
units shall be provided whether or not the resident is home or has
installed additional locks for which the PHA did not obtain keys. In
the event that the PHA fails to provide access as required by HUD or
its representative, the PHA shall be given a physical condition score
of zero for the project or projects involved. This score of zero shall
be used to calculate the physical condition indicator score and the
overall assessment score for that PHA.
Sec. 5.707 Uniform self-inspection requirement and report.
All owners of HUD housing, other than owners participating in the
HCV, PBV, and Moderate Rehabilitation Programs, are required to
annually inspect their properties, including all units, to ensure the
units are maintained in accordance with the standards in Sec. 5.703
and electronically report results to HUD, in accordance with the
procedures set out by the Secretary and published in the Federal
Register, following notice and the opportunity to comment. This self-
inspection is independent of other HUD inspections discussed in Sec.
5.705.
Sec. 5.709 Administrative Process for Defining and Revising
Inspection Criteria.
(a) Inspection standards and scoring methodology. The Secretary
will publish in the Federal Register, following notice and the
opportunity to comment, a list of deficiencies and methodologies to use
for scoring and ranking HUD housing. The Federal Register notice will
include the factors for determining if an HCV unit passes or fails the
inspection in addition to the scoring and ranking of other HUD housing.
After considering the public comments received on the Federal Register
notice, HUD will publish a notice announcing the new inspections
procedures, and the date on which the new procedures becomes effective.
[[Page 2597]]
(1) Revisions. HUD will issue a notice in the Federal Register
published for 30 days of public comment making any revisions to the
inspection procedures HUD deems necessary, every three years, or three
years after the most recent revision, whichever is later.
(2) Emergency Revisions. The Secretary may publish a final notice
without 30 days of public comment in the case of an emergency to
protect Federal financial resources or the health or safety of
residents of public housing projects, after HUD makes a documented
determination that such action is warranted due to:
(i) A Severe Health or Safety deficiencies and other significant
risks to safety as outlined in Sec. 5.703;
(ii) A new safety concern due to changing construction technology;
or
(iii) Other events as determined by the Secretary.
Sec. 5.711 Scoring, Ranking Criteria, and Appeals.
(a) Applicability. Administrative process for scoring and ranking
the physical condition of HUD housing properties under this section
does not apply to the HCV or PBV program. PHAs administering HCV and
PBV programs will be assessed under the Section 8 Management Assessment
Program (``SEMAP'') or the small rural PHA assessment in accordance
part 985 of this title.
(b) Scoring and ranking of HUD housing--(1) General. HUD's Real
Estate Assessment Center (REAC), or the appropriate entity either as
described in Sec. 5.705(b), or as identified in the regulator
agreement or contract for the property as described in Sec.
5.705(b)(1), will score and rank the physical condition of HUD housing
properties in accordance with the procedures set out by the Secretary
in Sec. 5.709.
(2) Public Housing programs. PHAs operating Public Housing will be
scored and ranked under the Public Housing Assessment System (``PHAS'')
outlined in part 902 of this title.
(c) Inspection report requirements--(1) Severe health or safety
deficiencies. Upon completion of an inspection, or at the end of each
day on a multiple-day inspection, REAC, or the appropriate party as
described in Sec. 5.705(b), will provide the owner or PHA or owner's
representative, a notice of any items classified as Severe Health or
Safety (SHS) deficiencies. All SHS items must be mitigated within 24
contiguous hours of receipt of notice of these items, and the owner or
PHA or owner's representative must electronically certify and provide
supporting evidence within 3 business days after the end of the
inspection that the SHS items have been resolved or sufficiently abated
such that they no longer pose a severe health or safety risk to
residents of the property. SHS deficiencies (together with other types
of deficiencies) will be fully described in a future Federal Register
notice.
(2) Post-report inspection. The owner or PHA must carefully review
the inspection report and is responsible for conducting its own survey
of the total property based on the inspecting entity's inspection
findings. Non-severe health or safety deficiencies must be corrected
expeditiously, and electronic evidence provided of correction.
(3) Identification of material errors or adverse conditions. If,
after reviewing the inspection results, the owner or PHA reasonably
believes that either an objectively verifiable and material error
occurred in the inspection or that adverse conditions beyond the
owner's or PHA's control negatively impacted the score, and that the
error or adverse condition, if corrected or accounted for, would result
in a significant improvement in the property's overall score, the owner
or PHA may electronically submit a request for a technical review.
(d) Technical review of inspection results--(1) Timing. A request
for a technical review of inspection results must be submitted
electronically and must be received by the inspecting entity no later
than the 45th calendar day following the release of the inspection
report.
(2) Request for technical review. The request must be accompanied
by the owner's or PHA's relevant evidence that an objectively
verifiable and material error occurred or adverse conditions beyond the
owner or PHA's control occurred, which if corrected will result in a
significant improvement in the overall score of the owner's property. A
technical review of the inspection results will not be conducted based
on conditions that were corrected subsequent to the inspection. Upon
receipt of this request from the owner or PHA, the REAC will review the
inspection and the evidence. If the REAC review determines that an
objectively verifiable and material error (or errors) or adverse
condition(s) beyond the owner or PHA's control has been documented and
that it is likely to result in a significant improvement in the
property's overall score, the REAC will take one or a combination of
the following actions:
(i) Undertake a new inspection;
(ii) Correct the original inspection; or
(iii) Issue a new physical condition score.
(3) Burden of proof that error or adverse conditions occurred rests
with owner. The burden of proof rests with the owner to demonstrate
that an objectively verifiable and material error (or errors) or
adverse conditions occurred in the REAC's inspection through submission
of evidence, which if corrected will result in a significant
improvement in the property's overall score. The REAC will apply a
rebuttable presumption that the inspection was conducted accurately. To
support its request for a technical review of the physical inspection
results, the owner may submit photographic evidence, written material
from an objective source with subject matter expertise that pertains to
the item being reviewed such as a local fire marshal, building code
official, registered architect, or professional engineer, or other
similar evidence.
(4) Basis for Technical Review. There are four sources of error
that are associated with an inspection score. After review of each type
of error, the property's score may be adjusted or other action taken.
(i) Material errors. An objectively verifiable material error must
be present to allow for a technical review of inspection results.
Material errors are those that were not due to the fault of the owner
and exhibit specific characteristics and meet specific thresholds. The
three types of material errors are as follows.
(ii) Building data error. A building data error occurs if the
inspector inspected the wrong building or a building that was not owned
by the property, including common or site areas that were not a part of
the property. Incorrect data due to the failure of an owner to ensure
HUD's systems of records are updated cannot form the basis of a review.
Incorrect building data that does not affect the score, such as the
address, building name, year built, etc., would not be considered
material.
(iii) Unit count error. A unit count error occurs if the total
number of units considered in scoring is incorrect due to the fault of
HUD. Since scoring uses total units, REAC will examine instances where
the participant can provide evidence that the total units used was
incorrect and that the results were not representative of the condition
of the property.
(iv) A non-existent deficiency error. A non-existent deficiency
error occurs if the inspection records an observed deficiency that does
not satisfy or does not meet a reasonable interpretation of the
definition of that deficiency as defined by inspection procedures.
[[Page 2598]]
(5) Significant improvement. Significant improvement in the
project's overall score refers to an increase in a score for the owner
or PHA such that the new score crosses an administratively significant
threshold.
(6) Reinspection. If HUD determines that a reinspection is
appropriate, it will arrange for a complete reinspection of the
project(s) in question, not just the deficiencies previously
identified. The reinspection will constitute the final inspection for
the project, and HUD will issue a new inspection report (the final
inspection report).
(7) Deficiencies. If any of the previously identified SHS
deficiencies that the owner certified were corrected, remedied, or
acted upon to abate are found during the reinspection not to have been
corrected, remedied, or acted upon to abate, the score in the final
inspection report will reflect a point deduction of triple the value of
the original deduction, up to the maximum possible points for the unit
or area, and the owner must reimburse HUD for the cost of the
reinspection.
(e) Independent HUD review. Under certain circumstances, HUD may
find it appropriate absent a PHA request for technical review to review
the results of an inspection which are anomalous or have an incorrect
result due to facts and circumstances affecting the inspected property
which are not reflected in the inspection or reflected inappropriately
in the inspection. These circumstances include, but are not necessarily
limited to, inconsistencies between local code requirements and the
inspection standards in paragraph (a); conditions which are permitted
by variance or license or which are preexisting physical features non-
conformities and are inconsistent with the inspection standards in
paragraph (a); or cases where the owner has been scored for elements
(e.g., roads, sidewalks, mail boxes, resident owned appliances, etc.)
that it does not own and is not responsible for maintaining.
(f) Responsibility for the cost of a new inspection. If a new
inspection is undertaken by the inspecting party and the new inspection
score results in a significant improvement in the property's overall
score, then the entity responsible for the inspection shall bear the
expense of the new inspection. If no significant improvement occurs,
then the owner or PHA responsible for the property must bear the
expense of the new inspection. The inspection cost of a new inspection,
if paid by the owner, is not a valid project operating expense. The new
inspection score will be considered the final score.
(g) Issuance of final score and publication of score. (1) The score
of the property is the final score if the owner or PHA files no request
for technical review, as provided in paragraph (d) of this section, or
for other adjustment of the physical condition score, as provided in
paragraph (c) of this section. If the owner or PHA files a request for
technical review or score adjustments in accordance with paragraphs (c)
and (d) of this section, the final inspection score is the score issued
by HUD after any adjustments are determined necessary and made by HUD
at the conclusion of these processes.
(2) HUD will make public the final scores of the owners through
posting on HUD's internet site, or other appropriate means.
(h) Responsibility to notify residents of inspection; and
availability of documents to residents--(1) Notification to residents.
An owner must notify its residents of any planned inspections of their
units or the housing development generally.
(2) Availability of documents for review. (i) Once a final score
has been issued the owner must make the physical inspection report and
all related documents available to residents during regular business
hours upon reasonable request for review and copying. Related documents
include the owner's survey plan, plan of correction, certification, and
related correspondence.
(ii) Once the owner's final inspection score is issued and
published, the owner must make any additional information, such as the
results of any reinspection, appeal requests, available for review and
copying by its residents upon reasonable request during regular
business hours.
(iii) The owner must maintain the documents related to the
inspection of the property, as described paragraphs (i) and (ii) above,
for review by residents for a period of 60 days from the date of
submission to the owner of the inspection score for the property in
which the residents reside.
(3) The owner must post a notice to the residents in the owner's
management office and on any bulletin boards in all common areas that
advises residents of the availability of the materials described in
this section. The notice should include, where applicable, the name,
address, and telephone number of the HUD Project Manager.
(4) Residents are encouraged to comment on this information
provided by the owner and submit any comments directly to the
applicable HUD Field Office or responsible entity. Should residents
discover the owner provided HUD with a false certification during the
review they are encouraged to notify the applicable HUD Field Office
where appropriate inquiry and action will be taken.
(i) Administrative review of properties. The file of a property
that receives a score of 30 points or less on its inspection will be
referred to HUD's Departmental Enforcement Center (DEC) for evaluation.
(1) Notification to owner of submission of property file to the
DEC. The Department will provide for notification to the owner that the
file on the owner's property is being submitted to the DEC for
evaluation. The notification will be provided at the time the REAC
issues the inspection report to the owner or at such other time as a
referral occurs.
(2) Evaluation of the property. During the evaluation period, the
DEC will perform an analysis of the property, which may include input
from tenants, HUD officials, elected officials, and others as may be
appropriate. Although program offices will assist with the evaluation,
the DEC will have primary responsibility for the conclusion of the
evaluation of the property after taking into consideration the input of
interested parties as described in this paragraph (h)(2). The DEC's
evaluation may include a site visit to the owner's property.
(3) Continuing responsibilities of Housing Program Offices and
Mortgagee. During the period of DEC evaluation, HUD's Housing offices
continue to be responsible for routine asset management tasks on
properties and all servicing actions (e.g., rent increase decisions,
releases from reserve account approvals). In addition, during this
period of evaluation, the mortgagee shall continue to carry out its
duties and responsibilities with respect to the mortgage.
(4) Enforcement action. Except as otherwise provided by statute,
if, based on the DEC's evaluation and in consultation with Housing, the
DEC determines that enforcement actions are appropriate, it may take
those actions for which the DEC has delegated authority and/or make
recommendations to Housing with respect to resolving identified
physical deficiencies and owner noncompliance.
(j) No limitation on existing enforcement authority. The
administrative process provided in this section does not prohibit HUD,
to take whatever action may be necessary when necessary
(notwithstanding the commencement of this process), as
[[Page 2599]]
authorized under existing statutes, regulations, contracts or other
documents, to protect HUD's financial interests in HUD housing
properties and to protect the residents of these properties.
Sec. 5.713 Second- and Third-Party Rights.
Nothing in this subpart is intended to create any right of the
family residing in HUD Housing or any party, other than HUD or a Public
Housing Authority, to require enforcement of the standards required by
this subpart or to assert any claim against HUD or the Public Housing
Authority for damages, injunction, or other relief for alleged failure
to enforce the standards.
PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM
0
3. The authority for 24 CFR part 92 continues to read as follows:
Authority: 42 U.S.C. 3535(d), 12 U.S.C. 1701x and 4568.
Sec. 92.2 [Amended]
0
4. Amend Sec. 92.2 by removing the definition of ``Uniform Physical
Condition Standards''.
0
5. In Sec. 92.209, revise paragraph (i) to read as follows:
Sec. 92.209 Tenant-based rental assistance: Eligible costs and
requirements.
* * * * *
(i) Housing quality standards. Housing occupied by a family
receiving tenant-based assistance under this section must meet the
participating jurisdiction's property standards under Sec. 92.251. The
participating jurisdiction must inspect the housing initially and re-
inspect it annually.
* * * * *
0
6. Revise Sec. 92.251 by:
0
a. Revising paragraphs (b)(1)(viii) and (c)(3);
0
b. Removing and reserving paragraph (d); and
0
c. Revising paragraph (f)(1) introductory text, and paragraph
(f)(1)(i).
The revisions read as follows:
Sec. 92.251 Property standards.
* * * * *
(b) * * *
(1) * * *
(viii) HUD housing standards. The standards of the participating
jurisdiction must be such that, upon completion, the HOME-assisted
project and units will be decent, safe, sanitary, as referenced in 24
CFR 5.703. The requirements of 24 CFR 5.705-5.713 do not apply. At
minimum, the specific deficiencies proscribed by HUD and published in
the Federal Register must be corrected under the participating
jurisdiction's rehabilitation standards. HUD will establish the minimum
deficiencies based on the applicable standards for the condition of HUD
housing set out by the Secretary and published in the Federal Register
pursuant to 24 CFR 5.705.
* * * * *
(c) * * *
(3) Existing housing that is acquired for homeownership (e.g.,
downpayment assistance) must be decent, safe, sanitary, and in good
repair as referenced in 24 CFR 5.703. The participating jurisdiction
must establish standards to determine that the housing is decent, safe,
sanitary, and in good repair. At minimum, the standards must provide
that the housing meets all applicable State and local housing quality
standards and code requirements and the housing does not contain the
specific deficiencies proscribed by HUD and published in the Federal
Register. HUD will establish the minimum deficiencies based on the
applicable standards for the condition of HUD housing (National
Standards for the Physical Inspection of Real Estate (NSPIRE)) set out
by the Secretary and published in the Federal Register pursuant to 24
CFR 5.705. The participating jurisdiction must inspect the housing and
document this compliance based upon an inspection that is conducted no
earlier than 90 days before the commitment of HOME assistance. If the
housing does not meet these standards, the housing must be
rehabilitated to meet the standards of this paragraph (c)(3) or it
cannot be acquired with HOME funds.
* * * * *
(f) Ongoing property condition standards: Rental housing and
housing occupied by tenants receiving HOME tenant-based rental
assistance--(1) Ongoing property standards. The participating
jurisdiction must establish property standards for rental housing
(including manufactured housing) that apply throughout the
affordability period and for housing occupied by tenants receiving HOME
tenant-based rental assistance. The standards must ensure that owners
maintain the housing as decent, safe, and sanitary housing in good
repair. The participating jurisdiction's description of its property
standards must be in sufficient detail to establish the basis for a
uniform inspection of HOME rental projects and housing occupied by
tenants receiving HOME tenant-based rental assistance. The
participating jurisdiction's ongoing property standards must address
each of the following:
(i) Compliance with State and local codes, ordinances, and
requirements. The participating jurisdiction's standards must require
the housing to meet all applicable State and local code requirements
and ordinances. In the absence of existing applicable State or local
code requirements and ordinances, at a minimum, the participating
jurisdiction's ongoing property standards must provide that the
property does not contain the specific minimum deficiencies proscribed
by HUD and published in the Federal Register for rental housing
(including manufactured housing) and housing occupied by tenants
receiving HOME tenant-based rental assistance. HUD will establish the
minimum deficiencies based on the applicable standards for the
condition of HUD housing set out by the Secretary and published in the
Federal Register pursuant to 24 CFR 5.705. The participating
jurisdiction's property standards are not required to use any
inspection procedures, including scoring, item weight, or level of
criticality required in 24 CFR 5.705-5.713.
* * * * *
0
7. In Sec. 92.504, revise paragraph (d)(1)(iii) to read as follows:
Sec. 92.504 Participating jurisdiction responsibilities; written
agreements; on-site inspections.
* * * * *
(d) * * *
(1) * * *
(iii) Annual inspections. Tenant- based rental assistance (TBRA).
All housing occupied by tenants receiving HOME tenant-based rental
assistance must meet the property standards of Sec. 92.251. The
participating jurisdiction must perform annual on-site inspections of
rental housing occupied by tenants receiving HOME-assisted TBRA to
determine compliance with these standards.
* * * * *
PART 93--HOUSING TRUST FUND
0
8. The authority for 24 CFR part 93 continues to read as follows:
Authority: 42 U.S.C. 3535(d), 12 U.S.C. 4568.
0
9. In Sec. 93.301, revise paragraphs (b)(1)(viii), (c)(3), and
(e)(1)(i) to read as follows:
Sec. 93.301 Property standards.
* * * * *
(b) * * *
(1) * * *
[[Page 2600]]
(viii) HUD housing standards. The standards of the grantee must be
such that, upon completion, the HTF-assisted project and units will be
decent, safe, sanitary, and in good repair and meet the standards in 24
CFR 5.703. The requirements of 24 CFR 5.705-5.713 do not apply. At
minimum, the specific deficiencies proscribed by HUD and published in
the Federal Register must be corrected under the grantee's
rehabilitation standards. HUD will establish the minimum deficiencies
based on the applicable standards for the condition of HUD housing set
out by the Secretary and published in the Federal Register pursuant to
24 CFR 5.705.
* * * * *
(c) * * *
(3) Existing housing that is acquired for homeownership (e.g., down
payment assistance) must be decent, safe, sanitary, and in good repair.
The grantee must establish standards to determine that the housing is
decent, safe, sanitary, and in good repair. At minimum, the standards
must provide that the housing meets all applicable State and local
standards and code requirements, and the housing does not contain the
specific deficiencies proscribed by HUD and published in the Federal
Register. HUD will establish the minimum deficiencies based on the
applicable standards for the condition of HUD housing set out by the
Secretary and published in the Federal Register pursuant to 24 CFR
5.705. The grantee must inspect the housing and document this
compliance based upon an inspection that is conducted no earlier than
90 calendar days before the date of commitment of HTF assistance. If
the housing does not meet these standards, the housing must be
rehabilitated to meet the standards of this paragraph or it cannot be
assisted with HTF funds.
* * * * *
(e) * * *
(1) * * *
(i) At a minimum, the grantee's ongoing property standards must
provide that the property does not contain the specific minimum
deficiencies proscribed by HUD and published in the Federal Register.
HUD will establish the minimum deficiencies based on the applicable
standards for the condition of HUD housing set out by the Secretary and
published in the Federal Register pursuant to Sec. 5.705 of this
title. The grantee's property standards are not required to use any
inspection procedures, including scoring, item weight, or level of
criticality required in Sec. Sec. 5.705-5.713 of this title.
* * * * *
PART 200--INTRODUCTION TO FHA PROGRAMS
0
10. The authority for 24 CFR part 200 continues to read as follows:
Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).
0
11. Revise Sec. 200.850 to read as follows:
Sec. 200.850 Physical condition standards and physical inspection
requirements.
The requirements in part 5, subpart G of this title are applicable
to the multifamily properties assisted or insured that are listed in
Sec. 5.701 of this title.
Sec. Sec. 200.853, 200.855, and 200.857 [Removed and Reserved]
0
12. Remove and reserve Sec. Sec. 200.853, 200.855, and 200.857.
PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS, SUBPART D--
USES OF GRANT FUNDS
0
13. The authority for 24 CFR part 574 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 3535(d) and
5301-5320.
0
14. In Sec. 574.310, revise paragraph (b) introductory text and
paragraph (b)(2), and add paragraph (b)(3) to read as follows:
Sec. 574.310 General standards for eligible housing activities.
* * * * *
(b) * * *. The following standards apply for all housing for which
HOPWA funds that are used under Sec. 574.300(b)(3), (4), (5), and (8),
and when HOPWA funds are used under Sec. 574.300(b)(7) to pay an
eligible person's security deposit, utility hookup and processing
costs, or other move-in costs, except rental application and credit
check fees.
* * * * *
(2) HUD housing standards. Except for such variations as are
proposed by the grantee and approved by HUD, the housing must meet the
standards for HUD housing in 24 CFR 5.703, except that:
(i) As applied to HOPWA, ``HUD housing'' in 24 CFR 5.703 means the
units eligible persons occupy or will occupy, systems equipment that
directly services those units, items and components within the primary
and secondary means of egress from those units' doors to the public
way, and common features related to the residential use of the building
(e.g., the laundry room, community room, mail room).
(ii) Housing that continues to meet the HOPWA housing quality
standards that applied when the eligible person(s) moved into that
housing shall not be required to meet new or different standards under
24 CFR 5.703.
(3) The requirements of 24 CFR 5.705-5.713 do not apply.
* * * * *
PART 576--EMERGENCY SOLUTIONS GRANTS PROGRAM
0
15. The authority for 24 CFR part 576 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 11371 et seq.,
42 U.S.C. 3535(d).
Subpart E--Program Requirements
0
16. In Sec. 576.403, revise paragraph (c) and add paragraphs (d)
through (f) to read as follows:
Sec. 576.403 Shelter and housing standards.
* * * * *
(c) Minimum standards for permanent housing. When ESG funds are
used for permanent housing under 24 CFR 576.105 or 576.106, the minimum
standards in 24 CFR 5.703 apply to the program participant's unit,
systems equipment that directly services those units, items and
components within the primary and secondary means of egress from those
units' doors to the public way, and common features related to the
program participant's use of the building (e.g., the laundry room,
community room, mail room). The recipient may also add standards that
exceed these minimum standards. The requirements in 24 CFR 5.705-5.713
do not apply.
(d) Housing inspections. For the first 30 days in which a program
participant receives homelessness prevention assistance, the recipient
or subrecipient may provide services under 576.105(b) to help the
program participant remain in their unit without inspecting the unit or
determining it meets the requirement in this section. Before otherwise
using ESG funds under 24 CFR 576.105 or 576.106 to help a program
participant remain in or move into specific housing, however, the
recipient or subrecipient must inspect that housing to confirm that it
meets the requirements in this section. In addition, recipient or
subrecipient must inspect the housing at least once every 12 months
during the period of assistance to confirm the housing continues to
meet the minimum standards in paragraph (c) of this section.
[[Page 2601]]
(e) Correction of deficiencies. If an inspection reveals one or
more deficiencies that prevent the housing from meeting the
requirements in this section, ESG funds must not be used under 24 CFR
576.105 or 576.106 with respect to that housing unless the owner
corrects the deficiencies within 30 days from the date of the initial
inspection and the recipient or subrecipient verifies that all
deficiencies have been corrected.
(f) Rental arrears. Housing for which rental arrears are paid is
only subject to the requirements in this section, if a program
participant is seeking to stay in that housing.
PART 578--PROGRAM REQUIREMENTS
0
17. The authority for 24 CFR part 578 continues to read as follows:
Authority: 12 U.S.C. 1701x, 1701x-1; 42 U.S.C. 11381 et seq.,
42 U.S.C. 3535(d).
0
18. In Sec. 578.75, revise paragraph (b) to read as follows:
Sec. 578.75 General operations.
* * * * *
(b) Housing standards. Housing leased with Continuum of Care
program funds, or for which rental assistance payments are made with
Continuum of Care program funds, must meet the applicable standards
under 5.703 of this title. For housing that is occupied by program
participants receiving tenant-based rental assistance, 24 CFR part 35,
subparts A, B, M, and R apply. For housing rehabilitated with funds
under this part, the lead-based paint requirements in 24 CFR part 35,
subparts A, B, J, and R apply. For housing that receives project-based
or sponsor-based rental assistance, 24 CFR part 35, subparts A, B, H,
and R apply. For residential property for which funds under this part
are used for acquisition, leasing, services, or operating costs, 24 CFR
part 35, subparts A, B, K, and R apply. Additionally, for tenant-based
rental assistance, for leasing of individual units, and for sponsor
based rental assistance where not all units in a structure are or will
be assisted, the standards apply only to the unit itself, and to the
means of ingress and egress from the unit to the public way and to the
building's common areas.
(1) Before any assistance will be provided on behalf of a program
participant, the recipient, or subrecipient, must physically inspect
each unit to assure that the unit meets 24 CFR 5.703. Assistance will
not be provided for units that fail to meet 24 CFR 5.703, unless the
owner corrects any deficiencies within 30 days from the date of the
initial inspection and the recipient or subrecipient verifies that all
deficiencies have been corrected.
(2) Recipients or subrecipients must inspect all units at least
annually during the grant period to ensure that the units continue to
meet 24 CFR 5.703.
(3) The requirements in 24 CFR 5.705-5.713 do not apply.
* * * * *
PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW
CONSTRUCTION
0
19. The authority for 24 CFR part 880 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
0
20. In Sec. 880.612, revise paragraph (a) to read as follows:
Sec. 880.612 Reviews during management period.
(a) After the effective date of the Contract, the contract
administrator will inspect the project and review its operation at
least annually to determine whether the owner is in compliance with the
Contract and the assisted units comply with the standards under part 5,
subpart G of this title.
* * * * *
PART 882--SECTION 8 MODERATE REHABILITATION PROGRAMS
0
21. The authority for 24 CFR part 882 continues to read as follows:
Authority: 42 U.S.C. 1437f and 3535(d).
Sec. 882.404 [Amended]
0
22. In Sec. 882.404, remove paragraph (d).
0
23. In Sec. 882.516, revise paragraphs (b), (c) and (e) to read as
follows:
Sec. 882.516 Maintenance, operation and inspections.
* * * * *
(b) Periodic inspection. In addition to the inspections required
prior to execution of the Contract, the PHA must inspect or cause to be
inspected each unit under Contract in accordance with the standards
under part 5, subpart G of this title at least annually and at such
other times as may be necessary to assure that the Owner is meeting the
obligations to maintain the units so they are compliant with part 5,
subpart G of this title, and to provide the agreed upon utilities and
other services. The PHA must take into account complaints and any other
information coming to its attention in scheduling inspections.
(c) Units with health and safety hazards. If the PHA notifies the
Owner that the unit(s) under Contract are not being maintained in
compliance with the standards under part 5, subpart G of this title and
the Owner fails to take corrective action (including corrective action
with respect to the Family where the condition of the unit is the fault
of the Family) within the time prescribed in the notice, the PHA may
exercise any of its rights or remedies under the Contract, including
abatement of housing assistance payments (even if the Family continues
in occupancy), termination of the Contract on the affected unit(s) and
assistance to the Family in accordance with Sec. 882.514(e).
* * * * *
(e) Periodic reviews. Periodic PHA audits must be conducted as
required by HUD, in accordance with 2 CFR part 200, subpart F.
PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS
0
24. The authority for 24 CFR part 884 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
0
25. Revise Sec. 884.217 to read as follows:
Sec. 884.217 Maintenance, operation and inspections.
(a) Maintenance and operation. The Owner shall maintain and operate
the project consistent with part 5, subpart G of this title, and shall
provide all the services, maintenance and utilities which the Owner
agrees to provide under the Contract, subject to abatement of housing
assistance payments or other applicable remedies if he fails to meet
these obligations.
(b) Inspection prior to occupancy. Prior to occupancy of any unit
by a Family, the Owner and the Family shall inspect the unit and both
shall certify, on forms prescribed by HUD, that they have inspected the
unit and have determined it to be compliant with part 5, subpart G of
this title and the criteria provided in the prescribed forms. Copies of
these reports shall be kept on file by the Owner for at least 3 years,
and may be required to be electronically submitted to HUD.
(c) Periodic inspections. HUD (or the PHA, as appropriate) will
inspect or cause to be inspected each Contract unit and related
facilities in accordance with the physical inspection requirements in
part 5, subpart G of this title, and at such other times (including
prior to initial occupancy and renting of any unit) as HUD (or the PHA)
may
[[Page 2602]]
determine to be necessary to assure that the Owner is meeting his
obligation to maintain the units in accordance with part 5, subpart G
of this title and to provide the agreed upon utilities and other
services.
(d) Units with health and safety hazards. If HUD (or the PHA, as
appropriate) notifies the Owner that the Owner has failed to maintain a
unit that in accordance with part 5, subpart G of this title and the
Owner fails to take corrective action within the time prescribed by
notice, HUD (or the PHA) may exercise any of its rights or remedies
under the Contract, including abatement of housing assistance payments,
even if the Family continues to occupy the unit. If, however, the
Family wishes to be rehoused in another unit with Section 8 assistance
and HUD (or the PHA) does not have other Section 8 funds for such
purposes, HUD (or the PHA) may use the abated housing assistance
payments for the purpose of rehousing the Family in another unit. Where
this is done, the Owner shall be notified that the Owner will be
entitled to resumption of housing assistance payments for the vacated
unit if:
(1) The unit is restored to in accordance with part 5, subpart G of
this title;
(2) The Family is willing to and does move back to the restored
dwelling unit; and
(3) A deduction is made for the expenses incurred by the Family for
both moves.
PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL
ALLOCATIONS
0
26. The authority for 24 CFR part 886 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
Sec. 886.113 [Amended]
0
27. In Sec. 886.113, remove and reserve paragraphs (b) and (i).
0
28. Revise Sec. 886.123 to read as follows:
Sec. 886.123 Maintenance, operation, and inspections.
(a) Maintenance and operation. The Owner shall maintain and operate
the project so as to provide housing that is compliant with part 5,
subpart G of this title, and the Owner shall provide all the services,
maintenance and utilities which the Owner agrees to provide under the
Contract, subject to abatement of housing assistance payments or other
applicable remedies if the Owner fails to meet these obligations.
(b) Inspection prior to occupancy. Prior to occupancy of any unit
by a Family, the Owner and the Family shall inspect the unit and both
shall certify, on forms prescribed by HUD that they have inspected the
unit and have determined it to be compliant with part 5, subpart G of
this title and with the criteria provided in the prescribed forms.
Copies of these reports shall be kept on file by the Owner for at least
three years.
(c) Periodic inspections. HUD will inspect or cause to be inspected
a reasonable sample of contract units according to the requirements in
part 5, subpart G of this title and at such other times as may be
necessary to assure that the owner is meeting contractual obligations.
(d) Units not free of health and safety hazards. If HUD notifies
the Owner that the Owner has failed to maintain a unit that is
compliant with the requirements in part 5, subpart G of this title and
the Owner fails to take corrective action within the time prescribed by
notice, HUD may exercise any of its rights or remedies under the
Contract, including abatement of housing assistance payments, even if
the Family continues to occupy the unit.
Sec. 886.307 [Amended].
0
29. In Sec. 886.307, remove and reserve paragraphs (b), (i), and (m).
0
30. Revise Sec. 886.323 to read as follows:
Sec. 886.323 Maintenance, operation, and inspections.
(a) Maintain housing free of health and safety hazards. The owner
shall maintain and operate the project so as to be compliant with part
5, subpart G of this title, and the owner shall provide all the
services, maintenance, and utilities which the Owner agrees to provide
under the contract and the lease. Failure to do so shall be considered
a material default under the contract and Regulatory Agreement, if any.
(b) HUD inspection. Prior to execution of the contract, HUD shall
inspect (or cause to be inspected) each proposed contract unit and
related facilities to ensure that they comply with the requirements at
part 5, subpart G of this title.
(c) Owner and family inspection. Prior to occupancy of any vacant
unit by a family, the owner and the family shall inspect the unit, and
both shall certify that they have inspected the unit and have
determined it to be compliant with part 5, subpart G of this title.
Copies of these reports shall be kept on file by the owner for at least
3 years.
(d) Periodic inspections. HUD will inspect the project (or cause it
to be inspected) in accordance with the requirements in part 5, subpart
G of this title and at such other times as HUD may determine to be
necessary to assure that the owner is meeting the Owner's obligation to
maintain the units and the related facilities in accordance with part
5, subpart G of this title and to provide the agreed-upon utilities and
other services.
(e) Failure to maintain housing. If HUD notifies the owner that he/
she has failed to maintain a unit that is compliant with part 5,
subpart G of this title, and the owner fails to take corrective action
within the time prescribed in the notice, HUD may exercise any of its
rights or remedies under the contract, or Regulatory Agreement, if any,
including abatement of housing assistance payments (even if the family
continues to occupy the unit) and rescission of the sale. If the family
wishes to be rehoused in another unit, HUD shall provide assistance in
finding such a unit for the family.
PART 902--PUBLIC HOUSING ASSESSMENT SYSTEM
0
31. The authority for 24 CFR part 902 is revised to read as follows:
Authority: 42 U.S.C. 1437d(j), 42 U.S.C. 3535(d), 1437z-10.
0
32. Amend Sec. 902.3 by:
0
a. Removing the definition of ``Criticality'';
0
b. Revising the definitions of ``Dictionary of Deficiency Definitions''
and ``Inspectable areas (or area)''; and
0
c. Removing the definitions of ``Item Weights and Criticality Levels
document'', ``Normalized weights'', ``Score'', ``Severity'',
``Statistically valid sample'', and ``Unit-weighted average''.
The revisions read as follows:
Sec. 902.3 Definitions.
* * * * *
Dictionary of Deficiency Definitions means the document published
in the Federal Register that contains the inspection standards and
scoring values pursuant to part 5, subpart G of this title.
* * * * *
Inspectable areas (or area) mean any of the three major components
of public housing that are inspected, which are: Inside, outside, unit.
* * * * *
Sec. 902.20 [Removed and Reserved]
0
33. Remove and reserve Sec. 902.20.
0
34. Revise Sec. 902.21 to read as follows:
[[Page 2603]]
Sec. 902.21 Physical condition standards for public housing.
Public housing must be maintained in a manner that meets the
physical condition standards set forth in part 5, subpart G of this
title.
0
35. Revise Sec. 902.22 to read as follows:
Sec. 902.22 Inspection of PHA projects.
The PHA's score for the physical condition indicator is based on an
independent inspection of a PHA's project(s) provided by HUD and using
the requirements and timelines laid out in part 5, subpart G of this
title, to ensure projects meet acceptable basic housing conditions.
Mixed-finance projects will be subject to the physical condition
inspections.
Sec. Sec. 902.24, 902.26, and 902.68 [REMOVED AND RESERVED]
0
36. Remove and reserve Sec. Sec. 902.24, 902.26, and 902.68.
0
37. Add subpart H to read as follows:
Subpart H--Assessment of small rural Public Housing Agencies
Sec.
902.101 Definitions of small rural PHAs.
902.103 Public Housing assessment of small rural PHAs.
902.105 Troubled Small rural PHAs.
902.107 Withholding, denying, and rescinding troubled designation.
902.109 Right to petition and appeal troubled designation.
902.111 Sanctions for troubled small rural PHAs.
902.113 Incentives for small rural PHAs high-performers.
Authority: 42 U.S.C. 1437d(j), 42 U.S.C. 3535(d), 1437z-10.
Sec. 902.101 Definition of small rural PHAs.
(a) Definition. A PHA is a small rural PHA if it administers 550 or
fewer combined public housing units and vouchers under section 8(o),
and either:
(1) Has a primary administrative building as determined with a
physical address in a rural area as described in 12 CFR Sec.
1026.35(b)(2)(iv)(A); or
(2) More than 50 percent of its combined public housing units and
voucher units under section 8(o) are in rural areas as described in 12
CFR Sec. 1026.35(b)(2)(iv)(A).
(b) Determination. (1) HUD will make the initial determination of
PHAs that qualify as small rural as defined in Sec. 902.101 of this
title no later than [insert 120 days after the effective date of the
final rule].
(2) HUD will determine if a PHA qualifies as a small rural PHA
under paragraph (a) every 3 years.
(c) Appeals. A PHA may challenge HUD's determination concerning
whether the PHA qualifies as small rural PHA by presenting an
objectively verifiable material error which resulted in the incorrect
determination, or by presenting information showing that the status of
the PHA has changed to justify a redetermination.
Sec. 902.103 Public housing assessment of small rural PHAs.
(a) Small rural Public Housing Assessment. The public housing
program of small rural PHAs as defined in Sec. 902.101 shall be
assessed and scored based only on the physical condition of their
public housing properties in accordance with part 5, subpart G of this
title. Such agencies shall not be subject to PHAS except as noted
below.
(b) Triennial assessment. Public Housing programs operated by small
rural Public Housing Authorities will be assessed no more than once
every three years, except that a small rural Public Housing Authority
shall be subject to annual inspection if it is designated by the
Secretary as troubled as defined in Sec. 902.105.
(c) Initial Public Housing assessment. (1) For PHAs subject to
small PHA deregulation, the first assessment and inspections will be
determined based on the PHA's next scheduled PHAS assessment (e.g., a
higher performing PHA would receive the first inspection 3 years after
the most recent PHAS assessment, a standard or substandard performer
would receive the first inspection 2 years after the most recent PHAS
assessment, etc.).
(2) For PHAs not subject to small PHA deregulation, the first
inspection is based on the PHA's overall weighted project PASS score
(e.g., a PHA with a PASS score of 90 or greater would receive the first
inspection three years after most recent PHAS assessment, a PHA with a
PASS score of 80-89 would receive the first inspection two years after
most recent PHAS assessment, etc.).
Sec. 902.105 Troubled small rural PHAs.
(a) Definition of Troubled Small rural PHA. A small rural PHA will
be determined to be troubled under the public housing program if the
weighted average score of all property inspections is below 70 percent
of the total available points, or if a small rural PHA has a weighted
average score of between 70 and 80 percent of the total available
points, and has at least one property that receives fewer than 70
percent of the total available points.
(b) Referral to the Local Field Office. Upon a PHA's designation as
a troubled performer HUD must notify the PHA and shall refer the
troubled performer PHA to the PHA's field office, or other designated
office(s) at HUD, for remedial action, oversight, and monitoring. The
actions to be taken by HUD and the PHA will include statutorily
required actions, and such other actions as may be determined
appropriate by HUD.
(c) Corrective Action Agreement (CAA). Within 30 days of
notification of a PHA's designation as a troubled performer, HUD will
initiate activities to negotiate and develop an CAA. A CAA is required
for a troubled performer. The final CAA is a binding contractual
agreement between HUD and a PHA. The scope of the CAA may vary
depending upon the extent of the problems present in the PHA. The term
of the CAA will not exceed one year, and is subject to renewal at the
discretion of HUD if HUD determines that the circumstances requiring
the CAA still exist at the expiration of the term of the CAA based on
the annual assessment frequency as included in Sec. 902.103. It shall
include, but not be limited to:
(1) Baseline data, which should be data without adjustments or
weighting but may be the PHA's score identified as a deficiency;
(2) Performance targets for such periods specified by HUD (e.g.,
annual, semiannual, quarterly, monthly), which may be the attainment of
a higher score or the description of a goal to be achieved; however,
safety, health, and environmental performance targets and deadlines
otherwise specified by regulation, including the lead safety
regulations at 24 CFR 35, are not superseded by the CAA performance
targets;
(3) Strategies to be used by the PHA in achieving the performance
targets within the time period of the CAA, including the identification
of the party responsible for the completion of each task and for
reporting progress;
(4) Technical assistance to the PHA provided or facilitated by HUD;
(5) The PHA's commitment to take all actions within its control to
achieve the targets;
(6) The consequences of failing to meet the targets; and
(7) A description of the involvement of local public and private
entities, including PHA resident leaders, in carrying out the agreement
and rectifying the PHA's problems. A PHA shall have primary
responsibility for obtaining active local public and private entity
participation, including the involvement of public housing resident
leaders, in assisting PHA improvement efforts. Local public and private
entity participation should be premised upon
[[Page 2604]]
the participant's knowledge of the PHA, ability to contribute technical
expertise with regard to the PHA's specific problem areas, and
authority to make preliminary commitments of support, financial or
otherwise.
(d) PHA review of the CAA. The PHA will have 10 days to review the
CAA. During this 10-day period, the PHA shall resolve any claimed
discrepancies in the CAA with HUD, and discuss any recommended changes
and target dates for improvement to be incorporated in the final CAA.
Unless the time period is extended by HUD, the CAA is to be executed 30
days following issuance of the draft CAA.
(e) Maximum recovery period. (1) Upon the expiration of the one-
year period that started on the date on which the PHA receives initial
notice of a troubled performer designation, the PHA shall improve its
performance in order to no longer be considered troubled under the
assessment.
(2) [Reserved].
(f) Parties to the CAA. A CAA shall be executed by:
(1) The PHA Board Chairperson (supported by a Board resolution), or
a receiver (pursuant to a court-ordered receivership agreement, if
applicable) or other AME acting in lieu of the PHA Board;
(2) The PHA Executive Director, or a designated receiver (pursuant
to a court-ordered receivership agreement, if applicable), or other
AME-designated Chief Executive Officer; and
(3) The field office.
(g) Involvement of resident leadership in the CAA. HUD encourages
the inclusion of the resident leadership in the execution of the CAA.
(h) Failure to execute CAA or make substantial improvement under
CAA. (1) If a troubled performer PHA fails or refuses to execute an CAA
within the period provided in paragraph (d) of this section, or a
troubled performer PHA operating under an executed CAA does not achieve
a passing physical inspection score, as provided in paragraph (e) of
this section, the field office shall refer the PHA to the Assistant
Secretary to determine such remedial actions, consistent with the
provisions of the ACC and other HUD regulations, including, but not
limited to, remedies available for substantial default.
(i) Continuation of services to residents. To the extent feasible,
while a PHA is in a troubled performer status, all services to
residents will continue uninterrupted.
Sec. 902.107 Withholding, denying, and rescinding troubled
designation.
(a) Withholding designation. In exceptional circumstances, even
though a PHA has satisfied the requirements for high performer or non-
troubled designations, HUD may conduct any review as it may determine
necessary, and may deny or rescind incentives or high performer
designation or non-troubled performer designation, in the case of a PHA
that:
(1) Is operating under a special agreement with HUD (e.g., a civil
rights compliance agreement);
(2) Is involved in litigation that bears directly upon the physical
performance of a PHA;
(3) Is operating under a court order;
(4) Demonstrates substantial evidence of fraud or misconduct,
including evidence that the PHA's certifications, submitted in
accordance with this part, are not supported by the facts, as evidenced
by such sources as a HUD review, routine reports, an Office of
Inspector General investigation/audit, an independent auditor's audit,
or an investigation by any appropriate legal authority; or
(5) Demonstrates substantial noncompliance in one or more areas of
a PHA's required compliance with applicable laws and regulations,
including areas not assessed under the small rural assessment. Areas of
substantial noncompliance include, but are not limited to,
noncompliance with civil rights, nondiscrimination and fair housing
laws and regulations, or the ACC. Substantial noncompliance casts doubt
on the capacity of a PHA to preserve and protect its public housing
projects and operate them consistent with federal laws and regulations.
(b) High performer and standard designations. If a high performer
designation is denied or rescinded, the PHA shall be designated either
a non-troubled performer, or troubled performer, depending on the
nature and seriousness of the matter or matters constituting the basis
for HUD's action. If a non-troubled performer designation is denied or
rescinded, the PHA shall be designated as a troubled performer.
(c) Effect on score. The denial or rescission of a designation of
high performer or non-troubled performer shall not affect the PHA's
numerical small rural assessment score, except where the denial or
rescission is under paragraph (a)(4) of this section.
Sec. 902.109 Right to petition and appeal troubled designation.
(a) Appeal of troubled performer designation and petition for
removal of troubled performer designation. A PHA may take any of the
following actions:
(1) Appeal its troubled performer designation;
(2) Petition for removal of troubled performer designation; and
(3) Appeal any refusal of a petition to remove troubled performer
designation.
(b) Appeal of small rural Assessment score. (1) If a PHA believes
that an objectively verifiable and material error(s) exists in its
small rural assessment score, which, if corrected, will result in a
significant change in the PHA's score and its designation, the PHA may
appeal its score in accordance with the procedures of paragraphs (c),
(d), and (e) of this section. A significant change in a score is a
change that would cause the PHA's score to increase, resulting in a
higher designation for the PHA (i.e., from troubled performer to non-
troubled performer, or from non-troubled to high performer).
(2) A PHA may not appeal its score or designation based on the
subsequent correction of deficiencies identified as a result of a
project's physical inspection.
(c) Appeal and petition procedures.
(1) To appeal a troubled performer designation or petition for the
removal of a troubled performer designation, a PHA must submit a
request in writing to the Deputy Assistant Secretary of the Real Estate
Assessment Center, which must be received by HUD no later than 30 days
following the issuance of the score to the PHA.
(2) To appeal the denial of a petition to remove a troubled
performer designation, a PHA must submit a written request to the
Deputy Assistant Secretary of the Real Estate Assessment Center, which
must be received by HUD no later than 30 days after HUD's decision to
refuse to remove the PHA's troubled performer designation.
(3) An appeal of a troubled performer designation or an appeal of
the denial of a petition for removal of a troubled performer
designation must include the PHA's supporting documentation and reasons
for the appeal or petition. An appeal of an assessment score must be
accompanied by the PHA's evidence that a material error occurred. An
appeal or petition submitted to HUD without supporting documentation
will not be considered and will be returned to the PHA.
(d) Denial, withholding, or rescission. A PHA that disagrees with
the basis for denial, withholding, or rescission of its designation
under Sec. 902.66 may make a written request for reinstatement within
30 days of notification by HUD of the denial or rescission of the
designation to the Assistant Secretary, and the request
[[Page 2605]]
shall include reasons for the reinstatement.
(e) Consideration of petitions and appeals. (1) Consideration of a
petition or the appeal of a final overall assessment score, of a
troubled performer designation, or of a petition to remove troubled
performer designation. Upon receipt of such an appeal or a petition
from a PHA, HUD will evaluate the appeal and its merits for purposes of
determining whether a reassessment of the PHA is warranted. HUD will
review the PHA's file and the evidence submitted by the PHA to
determine whether an error occurred.
(2) Consideration of an appeal of refusal to remove a troubled
performer designation. Upon receipt of an appeal of refusal to remove a
troubled performer designation, HUD will evaluate the appeal and its
merits for the purposes of determining whether a reassessment of the
PHA is warranted. The HUD staff initially evaluating an appeal of
refusal to remove a troubled performer designation will not be the same
HUD staff who evaluated the PHA's petition to remove the troubled
performer designation. The Assistant Secretary will render the final
determination of such an appeal.
(f) Notice and finality of decisions. (1) If HUD determines that
one or more objectively verifiable and material error has occurred, HUD
will undertake a new inspection of the project, adjust the PHA's score,
or perform other reexamination of information, as appropriate in light
of the nature of the error that occurred. A new score will be issued
and an appropriate performance designation made by HUD. HUD's decision
on appeal of an assessment score, issuance of a troubled performer
designation, or refusal to remove a troubled performer designation will
be final agency action. No reconsideration will be given by HUD of such
decisions.
(2) HUD will issue a written decision on all appeals and petitions
made under this section.
Sec. 902.111 Sanctions for troubled small rural PHAs.
The sanctions for small rural PHAs with troubled public housing
programs that remain troubled as required by Sec. 902.108 will be the
same as those sanctions for PHAs assessed under PHAs as described in
Sec. 902.83.
Sec. 902.113 Incentives for small rural PHAs high performers.
(a) High performer. PHAs with a weighted average score for all
inspections of at least 90 percent of all available points will be
considered high performers and will be eligible for benefits as
described in Sec. 902.110(b) and Sec. 905.400(l) of this title.
(b) Incentives. High performer small rural PHAs under the public
housing program will be eligible for the same incentives as high
performer PHAs under PHAS as described in Sec. 902.71.
PART 982--SECTION 8 TENANT-BASED ASSISTANCE: HOUSING CHOICE VOUCHER
PROGRAM
0
38. The authority for 24 CFR part 982 continues to read as follows:
Authority: 42 U.S.C. 1437f and 3535(d).
0
39. In Sec. 982.4, amend paragraph (b) by revising the definition of
``Housing quality standards (HQS)'' to read as follows:
Sec. 982.4 Definitions.
* * * * *
(b) * * *
Housing quality standards (HQS). ``The minimum quality standards
developed by HUD in accordance with Sec. 5.703 of this title for the
PBV program or the HUD approved alternative standard for the PHA under
Sec. 5.703(g) of this title.''
* * * * *
0
40. In Sec. 982.352, revise paragraph (b)(1)(iv)(A)(3) to read as
follows:
Sec. 982.352 Eligible housing.
* * * * *
(b) * * *
(1) * * *
(iv) * * *
(A) * * *
(3) To inspect the unit for compliance with the HQS in accordance
with Sec. 982.305(a) and Sec. 982.405. The independent agency shall
communicate the results of each such inspection to the family and the
PHA.
* * * * *
0
41. Revise Sec. 982.401 to read as follows:
Sec. 982.401 Housing quality standards.
As defined in Sec. 982.4, housing quality standards (HQS) refers
to the minimum quality standards developed by HUD in accordance with
Sec. 5.703 of this title for housing assisted under the HCV program or
a HUD approved alternative standard for the PHA under Sec. 5.703(g).
0
42. In Sec. 982.405, revise paragraph (a) to read as follows:
Sec. 982.405 PHA initial and periodic unit inspection.
(a)(1) General Requirements. The PHA must inspect the unit leased
to a family prior to the initial term of the lease, at least biennially
during assisted occupancy, and at other times as needed, to determine
if the unit meets the HQS. (See Sec. 982.305(b)(2) concerning timing
of initial inspection by the PHA.)
(2) Small rural PHAs. Instead of biennially, a small rural PHA as
defined in Sec. 902.101 of this chapter must inspect a unit during
occupancy at least once every three years.
* * * * *
PART 983--PROJECT-BASED VOUCHER (PBV) PROGRAM
0
43. The authority for 24 CFR part 983 continues to read as follows:
Authority: 42 U.S.C. 1437f and 3535(d).
0
44. In Sec. 983.3, amend paragraph (b) by revising the definition of
``Housing Quality Standards (HQS)'' to read as follows:
Sec. 983.3 PBV definitions.
* * * * *
(b) * * *
Housing quality standards (HQS). ``The minimum quality standards
developed by HUD in accordance with Sec. 5.703 of this title for the
PBV program or the HUD approved alternative standard for the PHA under
Sec. 5.703(g) of this title.''
* * * * *
0
45. In Sec. 983.10, revise paragraph (b)(2)(ii) to read as follows:
Sec. 983.10 Project-based certificate (PBC) program.
* * * * *
(b) * * *
(2) * * *
(ii) Lead-based paint requirements. The Lead-based Paint Poisoning
Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-based Paint
Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing
regulations at part 35, subparts A, B, H, and R of this title, apply to
the PBC program.
* * * * *
0
46. Revise Sec. 983.101 to read as follows:
Sec. 983.101 Housing quality standards.
As defined in Sec. 983.3, housing quality standards (HQS) refers
to the minimum quality standards developed by HUD in accordance with
Sec. 5.703 of this title for housing assisted under the HCV program or
a HUD approved alternative standard for the PHA under Sec. 5.703(g) of
this title.
0
47. In Sec. 983.103, revise the heading of paragraph (d) and add
paragraph (d)(4) to read as follows:
Sec. 983.103 Inspecting units.
* * * * *
(d) Periodic inspections. * * *
(4) Instead of biennially, a small rural PHA as defined in Sec.
902.101 of this title
[[Page 2606]]
must inspect the random sample of units in accordance with paragraph
(d)(1) at least once every three years.
* * * * *
PART 985--SECTION 8 MANAGEMENT ASSESSMENT PROGRAM (SEMAP) AND SMALL
RURAL PHA ASSESSMENTS
0
48. The authority citation for 24 CFR part 985 is revised to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437z-10, and
3535(d).
0
49. Revise the heading of Part 985 to read as set forth above.
0
50. In Sec. 985.1, revise paragraph (b) and add paragraph (c) to read
as follows:
Sec. 985.1 Purpose and applicability.
* * * * *
(b) Applicability. This rule applies to PHA administration of the
tenant-based Section 8 rental program (part 982 of this title), the
project-based voucher program (part 983 of this title) to the extent
that PBV family and unit data are reported and measured under the
stated HUD verification method, and enrollment levels and contributions
to escrow accounts for Section 8 participants under the family self-
sufficiency program (FSS) (part 984 of this title).
(c) Small rural PHA assessments. Subpart D covers the HCV and PBV
assessment for a small rural PHA as defined in Sec. 902.101 of this
title. Section 985.3 and subparts B and C of this part do not apply to
small rural PHAs.
0
51. Add subpart D to read as follows:
Subpart D--Small rural PHA Assessment
Sec.
985.201 Applicability.
985.203 Assessment indicators and HUD verification methods.
985.205 Determination of assessment rating.
985.207 Frequency of assessments.
985.209 Troubled small rural PHAs.
985.211 Small rural PHAs assessment records.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437z-10, and
3535(d).
Sec. 985.201 Applicability.
(a) This subpart applies to small rural PHAs as defined in Sec.
902.101 of this title.
(b) Small rural PHAs shall be assessed and rated on the indicators
and methodology of this subpart and shall not be subject to the SEMAP
requirements.
Sec. 985.203 Assessment indicators and HUD verification methods.
(a) This section describes the performance indicators used to
assess a PHA's designation as troubled resulting from the small rural
PHA assessment. HUD will use the verification method identified for
each indicator. The four indicators are determined on a pass or fail
basis.
(b)(1) Inspection standards. This indicator shows whether the PHA
applies the correct inspection standards to HCV and PBV unit
inspections
(2) HUD verification method. The PHA's assessment certification and
on-site HUD review when applicable.
(3) Rating. The PHA passes the indicator if it applied the correct
inspection standards for all unit HCV and PBV unit inspections
conducted during the assessment period. If the PHA applied the
incorrect inspection standards for any HCV or PBV unit inspection
during the assessment period, the PHA fails the indicator.
(c)(1) Initial unit inspections. This indicator determines if the
PHA conducted the initial HQS inspections within the required time
period.
(2) HUD verification method. HUD systems show percent of newly
leased units where the beginning date of the assistance contract is
before the date the unit passed the initial unit inspection or, if the
PHA employed the PHA initial inspection option for non-life threatening
deficiencies or alternative inspections, the timing requirements for
the applicable PHA initial inspection option.
(3) Rating. The PHA passes the indicator if at least 98 percent of
units placed under HAP contract during the assessment period passed the
initial PHA HQS inspection within the required time period. If fewer
than 98 percent of units placed under HAP contract during the
assessment period passed the HQS inspection within the required time
periods, the PHA fails the indicator.
(d)(1) Frequency of HQS inspections. This indicator determines, for
units that have been under HAP contract for at least three years,
whether the PHA re-inspected tenant-based units under HAP contract and
the required sample of PBV units at least once during the three year
period from the last PHA inspection.
(2) HUD verification method. HUD systems show that the percentage
of units above that have been re-inspected within the required three-
year period from the last inspection.
(3) Rating. The PHA passes the indicator if at least 98 percent of
the units described above have been re-inspected within the required
three-year period from the last inspection. The PHA fails the indicator
if fewer than 98 percent of the units described above have been re-
inspected within the required three-year period.
(e)(1) Unit condition enforcement. This indicator shows whether,
following the inspection of a unit under contract where the unit fails
to meet the required standards, any cited life-threatening and non-life
threatening deficiencies are corrected within the required cure period
in accordance with Sec. Sec. 982.404 and 983.103 of this title. In
addition, if HQS deficiencies are not corrected timely, the indicator
shows whether the PHA stops (abates) housing assistance payments
beginning no later than the first of the month following the specified
correction period or terminates the HAP contract or, for family-caused
defects, takes prompt and vigorous action to enforce the family
obligations. (Sec. 982.404 of this title)
(2) HUD verification method. The PHA certification and on-site HUD
review (if performed), and HUD system data.
(3) Rating. In order to pass the indicator, the applicable
verification method, which may include sampling, determines that the
PHA took corrective action within the required timeframes for at least
98% of inspections with identified life-threatening or other HQS
deficiencies.
(f)(1) PHA submission of certifications. The PHA must submit its
certifications for the applicable indicators within the designated
timeframe required by HUD, and in the form and manner as required by
HUD. HUD will issue instructions on the submission of PHA
certifications by Federal Register notice, which will be subject to
public comment.
(2) Failure to submit. Failure of the PHA to submit any
certification in accordance with this paragraph will result in the PHA
failing the indicator and the PHA will be designated as troubled under
the small rural PHA assessment.
Sec. 985.205 Determination of assessment rating.
(a) High performer designation. (1) A PHA is designated a high
performer under the small rural PHA assessment if the PHA has passed
all four indicators identified in Sec. 985.203 and the PHA has:
(i) Utilized at least 98 percent of its HCV budget authority based
on the most recent calendar year data or the percent of HCV units
leased by renters or occupied by homeowners for the most recent
calendar year was at least 98 percent;
(ii) Did not end that calendar year with excess HAP reserves; and
[[Page 2607]]
(iii) Did not end that calendar year in a funding shortfall or
receive shortfall prevention funding from HUD.
(2) HUD shall publish the calculation for determining excess HAP
reserve in the Federal Register, and such notice shall provide for
public comment before becoming effective.
(b) Standard performer designation. A PHA that passed all for
indicators but did not meet the funding utilization criteria for a high
performer designation in paragraph (a) is designated as a standard
performer.
(c) Troubled PHA designation. A PHA that failed any of the four
indicators under Sec. 985.201 is designated as troubled PHA under the
small rural PHA assessment.
Sec. 985.207 Frequency of assessments.
(a) Frequency of small rural PHA assessments. (1) Initial
Assessment. The initial small rural PHA assessment will be effective
when the PHA's next SEMAP assessment would have been applied. For PHAs
that under SEMAP qualify for biennial review as a small PHA (less than
250 assisted units), the transition to the small rural PHA assessment
will occur when the PHA's next biennial SEMAP assessment is required.
(2) Triennial assessments. HUD shall assess small rural PHAs no
more than once every three years, except that a troubled small rural
PHA shall be subject to an annual assessment in accordance with Sec.
985.204.
Sec. 985.209 Troubled small rural PHAs.
(a) Appeals--(1) HUD action. HUD must review, consider, and provide
a final written determination to a small rural PHA that appeals its
designation as a troubled PHA.
(2) Deciding HUD official. The HUD decision on the PHA appeal shall
be made by a HUD official who has not been involved in and is not
subordinate to any person who has been involved in the original
determination to designate the PHA as a troubled PHA under the small
rural PHA assessment.
(b) Corrective action agreement. No later than 60 days after the
date on which the PHA is designated a troubled PHA, the PHA and HUD
will enter into a corrective action agreement (CAA) under which he PHA
shall take actions to correct the deficiencies upon which the troubled
PHA designation is based. The PHA must comply with HUD requirements for
the submission of the CAA, including but not limited to the date by
which the CAA must be submitted to HUD. The CAA must:
(1) Have a term of one year, and shall be renewable at the option
of HUD;
(2) Specify goals to be achieved;
(3) Identify obstacles to goal achievement and ways to eliminate or
avoid them;
(4) Identify resources that will be used or sought to achieve
goals;
(5) Provide, where feasible, for technical assistance to assist the
PHA in curing its deficiencies;
(6) Identify an PHA staff person with lead responsibility for
completing each goal;
(7) Identify key tasks to reach each goal;
(8) Specify time frames for achievement of each goal, including
intermediate time frames to complete each key task;
(9) Provide for regular evaluation of progress toward improvement;
(10) Provide for the reconsideration of the PHA's designation as a
troubled PHA no less than annually, and provide for the termination of
the agreement when HUD determines the PHA is no longer troubled;
(11) Provide that in the event of substantial noncompliance by the
PHA under the agreement, HUD may (i) contract with another PHA or a
private entity to administer the HCV program; and (ii) withhold funds
otherwise distributable to the troubled PHA;
(12) Be signed by the PHA board of commissioners chairperson and by
the PHA executive director. If the PHA is a unit of local government or
a state, the corrective action plan must be signed by the Section 8
program director and by the chief executive officer of the unit of
government or his or her designee.
(c) Monitoring. The PHA and HUD must monitor the PHA's
implementation of its CAA to ensure performance targets are met.
(d) Annual small rural assessment. A troubled PHA shall be subject
to the small rural assessment on an annual basis.
(e) Use of administrative fee reserve prohibited. Any PHA assigned
designated troubled may not use any part of the administrative fee
reserve for other housing purposes (see Sec. 982.155(b) of this
title).
(f) Upgrading poor performance rating. HUD shall change an PHA's
overall performance rating from troubled to standard or high performer
if HUD determines that a change in the rating is warranted because of
improved PHA performance and a standard or high designation on a
subsequent small rural PHA assessment.
(g) Default under the Annual Contributions Contract (ACC). HUD may
determine that a PHA's failure to correct identified deficiencies
resulting from its small rural PHA assessment or to execute and
implement a corrective action agreement as required by HUD constitutes
a default under the ACC.
Sec. 985.211 Small rural PHA assessment records.
HUD shall maintain small rural PHA assessment files, including
designations, notifications, appeals, corrective action agreements, and
related correspondence for at least 3 years.
Brian D. Montgomery,
Deputy Secretary.
[FR Doc. 2021-00098 Filed 1-12-21; 8:45 am]
BILLING CODE 4210-67-P