For Project Development and Preservation

Richard Silverblatt Associates, Inc.
Development Milestones

Fund Reservation

State/Local Approvals

Firm Commitment Application

Pre-Construction Conference

Initial Closing

Construction Period

Rent-Up and Marketing

Pre-Cost Certification Conference

Cost Certification

Project Rental Assistance Contract

Occupancy Requirements

Final Closing


Developing a Strategy for Project

Applying for a Contract Rent

Reviewing Replacement Reserves

Refinancing a Section 202 Direct Loan

Preparing for REAC Inspections

Establishing a Project Library


HUD Bookletters

HUD Forms

HUD Handbooks

HUD Information & Web Sources

HUD Notices

HUD NY HUB Handouts

Practical Guide to 202/811 Terms

Preparing for a REAC Inspection

The project owner is required by HUD to sign a number of documents, such as the Regulatory Agreement and, as appropriate, the Project Rental Assistance Contract (PRAC) or Housing Assistance Payment Contrract (HAP), which states that the project will be maintained in good and tenantable conditon.

HUD's Real Estate Assessment Center, REAC, has established a process for its review of the physical condition of its projects. The inspection involves an onsite review by HUD personnel of the entire property, both outside the structure as well as inside the project building. If REAC inspects and notes elements within the project that can impact on the health and safety of the residents, the property owner has a short time period to address the items listed and appeal the REAC findings if warranted.

The Guide recommends that all property Owners and staff and the management agent involved with ongoing maintenance of the HUD project, review the HUD requirements and be prepared for an on-site inspection. A project owner with a REAC score below 60 that does not address listed deficiencies timley, can result in a number of actions by HUD, to include, attaching a flag in HUD's Active Partners Performance System (APPS) which may affect the ability of the Owner to participate in HUD programs; seeking other remedies, such as abating, suspending or terminating the PRAC ot HAP contract.

REAC will issue a Physical Inspection Summary Report following its visit to the property. Numerical scores will be given as a value from zero to 100 and specifically for inspectable items in the five following areas: the site, building exterior, building systems, common areas and units.

Be mindful of the following further notations to a REAC numerical score which indicate what REAC calls the "serious nature" of health and safety deficiencies: To each numerical score, REAC will also include an asterisk if there were deficiencies related to smoke detectors. A letter "a" is added if there are no health and safety deficiencies other than for smoke detectors. A letter "b" is added if there are one or more non-life threatening health and safety deficiencies, but no issues related to fire safety other than for smoke detectors. A letter "c" is added if one or more exigent/fire safety deficiencies are found which require an immediate remedy and attention.

Being prepared for a REAC inspection can involve the establishment of a comprehensive ongoing review of your property and building systems which can also be a part of your project preventive maintenance program.

The following are recommended for review:

HUD guidance on its website: "Preparing for REAC Inspections":

HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs

HUD Handbook 4381.5, Management Agent's Handbook.

Review the list on this webpage for examples of staff training for REAC inspections. Note the link to the top 25 most cited deficiences for multifamily housing.

Home>Preparing for a REAC Inspection