HUD to Replace REAC Inspections With a New Protocol – NSPIRE
The Department of Housing and Urban Development (HUD) is overhauling its Real Estate Assessment Center (REAC) physical inspection protocol due to negative press reports about substandard subsidized properties and HUD's concerns that owners are "gaming the system" to make minimal repairs to pass inspections.
The change is taking place in two phases. First, HUD has reduced the notification time prior to REAC inspections to 14 calendar days for public and subsidized rental housing.
HUD will also replace REAC inspections with a new physical inspection protocol known as the National Standards for the Physical Inspection of Real Estate (NSPIRE), which will feature new standards, protocols and processes that will apply to HUD's public housing, HUD-assisted and FHA-insured multifamily portfolios.
HUD is launching a two-year demonstration program to test and refine the NSPIRE protocols before finalizing them. Major changes to be tested in the NSPIRE demonstration include:
- Requiring property owners and management agents to perform comprehensive annual self-inspections covering all of their units;
- Placing greater weight on health and safety deficiencies than on function and appearance; and
- Adopting a new scoring model that places the most emphasis inside the residents' units.