HUD REAC Inspection: What You Don’t Know Can Hurt You

Public housing authorities are often concerned about HUD REAC inspections of their properties.

And they should be, since their scores on the Real Estate Assessment Center assessments are tied to HUD funding and eligibility for innovative Housing and Urban Development programs like Moving to Work.

Your PHA starts with 100 points, and it’s your job to keep as many as possible. Here are some simple tips and strategies to ensure successful inspections:

Before the Inspection

Before a REAC inspection takes place, consider having trained agency staff or an outside consultant conduct a pre-REAC inspection. Inspections include five components, and some are weighted more heavily than others:

1. Site
2. Building Exterior
3. Building Systems
4. Common Spaces
5. Units

When you are doing your pre-REAC inspection, remember to ensure all items are functioning as they are meant to. That is a good common indicator across all the REAC components.

For example, a retaining wall must be doing the job of holding something back. If there is a breach, it will cost you points. Depending on the size of the breach, it could cost you a lot of points. Or, inside a unit, a burner on a stove must be working just as intended, or you could lose points.

HUD offers a helpful list of the Top 25 Most Cited Deficiencies for Public Housing and the Top 25 Most Cited Deficiencies for Multifamily Housing. Study the lists and learn from the mistakes of others.

Be Strategic about REAC Inspection Items

Do you know the difference between the most common fail items and the ones that will cost you the most points? Items like missing or cracked cover plates are common, but will they cost you a lot during an inspection? Probably not.

Given limited time and resources, focus on the following make-or-break inspection areas, ranked from most heavily weighted to least:

Site: Items in this category are weighted most heavily and are most likely to result in a poor inspection score. Focus on the following items, which can cost you anywhere from 4 to 8 points depending on the severity of the defect:

• Broken/missing fences especially perimeter; overgrown vegetation on fences
• Cracks and tripping hazards on sidewalks and pavement
• Storm drains that are blocked or partially blocked
• Retaining wall damage
• Sharp objects
• Damage to playgrounds

Exterior: You can lose some serious points in this area, too. Look for the following:

• Damage or holes to exterior door
• Cracks in foundation
• Holes in wall
• Flat roof damage

Building Systems: These have a few items that can be costly:

• Sprinkler damage or not performing as needed
• Elevator not working
• Any electrical issues

Units and Common Spaces: Only after you have covered the three areas above should you move to common spaces and units. The areas listed above have the capacity to hurt your REAC scores much more than the units or common spaces. Once inside, look for the following:

• Electrical issues
• Clogged slow drains
• Blocked egress
• Mold
• Infestation

Bring in a REAC Inspection Consultant

Many PHAs bring in a consultant to help train staff members on how to prepare for REAC inspections. Some larger PHAS hire a consultant not only for pre-REAC preparations, but also to accompany the REAC inspector to make sure they are not calling out items inappropriately.

At a minimum, PHA staff should be trained on REAC inspection criteria, which don’t always seem to make common sense. A trip hazard in a stairwell might cost 0 points, while a trip hazard outside costs 7 points. A missing fire alarm in a unit may not cost any points, while a hole in the ground could cost 5-7 points.

Summary

HUD REAC inspection scores are highly important to PHAS. In many ways, preparing for a REAC inspection means throwing logic out the window.

Knowing the criteria, common deficiencies, and point values — plus bringing in an expert —will help your agency ensure it is ready for the REAC inspection.

Consult a CPA-based advisory firm with PHA expertise for help.