Final - Exhibit C-NSPIRE Final Rule 2023 121025

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DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Parts 5, 92, 93, 200, 570, 574,
576, 578, 882, 884, 886, 902, 965, 982,
983, and 985.
[Docket No. FR–6086–F–03]
RIN 2577–AD05

Economic Growth Regulatory Relief
and Consumer Protection Act:
Implementation of National Standards
for the Physical Inspection of Real
Estate (NSPIRE)
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, U.S. Department of Housing
and Urban Development (HUD).
ACTION: Final rule.
AGENCY:

This final rule establishes a
new approach to defining and assessing
housing quality: The National Standards
for the Physical Inspection of Real
Estate (NSPIRE). This rule is part of a
broad revision of the way HUD-assisted
housing is inspected and evaluated. The
purpose of NSPIRE is to strengthen
HUD’s physical condition standards and
improve HUD oversight through the
alignment and consolidation of the
inspection regulations used to evaluate
HUD housing across multiple programs.
This final rule also incorporates
provisions of the Economic Growth and
Recovery, Regulatory Relief and
Consumer Protection Act that will
reduce administrative burden on small
rural public housing authorities (PHAs).
DATES: This final rule is effective July 1,
2023, except amendments to the
following parts, which are effective
October 1, 2023: 24 CFR part 92
(instructions 4 through 7); 24 CFR part
93 (instructions 9 and 10); 24 CFR part
200 (instructions 12 and 13); 24 CFR
part 570 (instruction 15); 24 CFR part
574 (instruction 17); 24 CFR part 576
(instruction 19); 24 CFR part 578
(instruction 21); 24 CFR part 882
(instructions 23 and 24); 24 CFR part
884 (instruction 26); 24 CFR part 886
(instructions 29 through 31); 24 CFR
part 982 (instructions 45 through 55); 24
CFR part 983 (instructions 57 through
61); and 24 CFR part 985 (instructions
62 through 65). For more information,
see SUPPLEMENTARY INFORMATION.
FOR FURTHER INFORMATION CONTACT: Tara
J. Radosevich, Real Estate Assessment
Center, Office of Public and Indian
Housing, Department of Housing and
Urban Development, 550 12th Street

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SUMMARY:

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SW, Suite 100, Washington, DC 20410–
4000, telephone number 202–708–1112
(this is not a toll-free number),
NSPIRERegulations@hud.gov. HUD
welcomes and is prepared to receive
calls from individuals who are deaf or
hard of hearing, as well as individuals
with speech or communication
disabilities. To learn more about how to
make an accessible telephone call,
please visit: https://www.fcc.gov/
consumers/guides/telecommunicationsrelay-service-trs.
SUPPLEMENTARY INFORMATION:
Effective Dates
This rule has two effective dates:
1. Amendments to 24 CFR parts 5,
902, and 965 are effective on July 1,
2023. These amendments implement the
NSPIRE regulations at 24 CFR part 5,
subpart G and affect the Public Housing
regulations.
2. Amendments to 24 CFR parts 92,
93, 200, 570, 574, 576, 578, 882, 884,
886, 982, 983 and 985 are effective on
October 1, 2023. These amendments
affect the Multifamily Housing
regulations, the Housing Choice
Voucher regulations, the Project-Based
Voucher regulations, Section 8
Moderate Rehabilitation regulations and
the Community Planning and
Development (CPD) programs such as
HOME Investment Partnerships Program
(HOME), the Housing Trust Fund (HTF),
Housing Opportunities for Persons with
AIDS (HOPWA), Emergency Solution
Grants (ESG) and Continuum of Care
(COC) regulations. Participants and
owners subject to these regulations are
subject to the Code of Federal
Regulations as it exists on the
publication date of this rule, and are not
subject to the regulatory changes being
made by this rule on July 1, 2023, until
October 1, 2023.
I. Background
On January 13, 2021, HUD published
the ‘‘Economic Growth Regulatory
Relief and Consumer Protection Act:
Implementation of National Standards
for the Physical Inspection of Real
Estate (NSPIRE)’’ proposed rule
(‘‘proposed rule’’) in the Federal
Register.1 In the NSPIRE proposed rule,
HUD proposed to align and consolidate
its inspection standards and procedures
and incorporate provisions of the
Economic Growth and Recovery,
Regulatory Relief and Consumer
Protection Act (Pub. L. 115–174) for all
of HUD’s programs. Specifically, HUD
proposed to revise 24 CFR part 5 to
become the focal point of consolidated
standards, and proposed changes to
1 86

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FR 2582.

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other regulations to cross-reference to
the new streamlined part 5 standards.
The proposed rule also sought to
consolidate, update, and improve the
Housing Quality Standards (HQS) and
the Uniform Physical Condition
Standards (UPCS) to prevent standards
and procedures from becoming out of
date. In addition, the rule proposed to
implement the Economic Growth and
Recovery, Regulatory Relief and
Consumer Protection Act (‘‘Economic
Growth Act’’) to implement an alternate
performance indicator and rating system
for the Public Housing Assessment
System (PHAS) and Section 8
Management Assessment Program
(SEMAP).
HUD’s proposed rule and this final
rule were informed by HUD’s NSPIRE
Demonstration. On August 21, 2019,
HUD established through notice 2 the
implementation of the NSPIRE
demonstration to develop a new
inspection model for HUD programs.
Through the demonstration, HUD built
updated standards, procedures, and
scoring methodologies. The NSPIRE
Standards and procedures for the
demonstration were first published on
HUD’s website in August 2019 and were
subject to and improved through
stakeholder feedback and test
inspections. The Demonstration will
continue for enrolled properties until
implementation of this rule for the
relevant program, or as otherwise
announced by notice.
For additional background, please see
the proposed rule.
II. NSPIRE Final Rule and NSPIRE
Notices
Consistent with the proposed rule,
this final rule will create a unified
inspection protocol for three different
overarching programs: programs for
housing assisted under the U.S. Housing
Act of 1937 other than section 8 of the
Act (‘‘public housing’’), programs
previously under the Housing Quality
Standards regulations at 24 CFR 982.401
(HQS regulations), and programs
previously covered under 24 CFR part 5,
subpart G (‘‘Multifamily housing’’). CPD
programs and regulations are included
because these programs pointed to the
HQS program regulations. This final
rule maintains a regulatory framework
that streamlines, consolidates, and
aligns inspection standards over 14
sections of regulations for HUD’s
programs. This new framework for
inspection focuses on inside the
building, outside the building and
2 ‘‘Notice of Demonstration To Assess the
National Standards for the Physical Inspection of
Real Estate and Associated Protocols,’’ 84 FR 43536.

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within the units of HUD housing and
ensures that they are ‘‘functionally
adequate, operable, and free of health
and safety hazards.’’ Because of the
scope of changes to the inspection
process, HUD is setting a different
implementation date for HUD’s
programs to create as smooth a
transition as possible.
A. Implementation Timeline
This rule will be implemented in two
phases. On July 1, 2023, Public Housing
will transition to NSPIRE. On October 1,
2023, the Multifamily Housing
programs, Housing Choice Voucher
(‘‘HCV’’) and Project Based Voucher
(‘‘PBV’’) programs, and the CPD
programs included in this rulemaking
will transition to NSPIRE.
Public Housing regulations will be
amended on July 1, 2023, and Public
Housing program participants will be
required to comply with this final rule
and use the NSPIRE standards starting
July 1, 2023. HUD will prioritize PHAs
with a fiscal year end of June 30, 2023,
to receive their next inspection under
the updated regulations. Because the
universe of Public Housing properties is
smaller than those participating in
Multifamily Housing programs, HUD is
better able to prioritize and complete
inspections of these properties first
under NSPIRE, and then launch
inspections in Multifamily Housing
programs in October.
The Housing Choice Voucher (HCV),
Project Based Voucher (PBV), Section 8
Moderate Rehabilitation Program,
HOME, HTF, HOPWA, ESG and CoC
regulations will be amended on October
1, 2023, and program participants will
be required to comply with this final
rule and begin using the NSPIRE
standards on October 1, 2023. These
programs are unique because
inspections are done by PHAs, program
participants, and participating
jurisdictions (PJs) and not by HUD.
These entities will need additional time
to update forms and implement
technological solutions. Therefore,
programs that follow HQS will continue
to follow HQS and will not need to
comply with these regulations until
October 1, 2023.
The Multifamily Housing programs
will also begin to use the NSPIRE
standards starting on October 1, 2023.
After Uniform Physical Condition
Standards (UPCS) inspections were
delayed due to the COVID–19
pandemic, HUD has committed to
providing Multifamily Housing program
participants one more UPCS inspection
before the transition to NSPIRE. HUD
intends to meet this goal by the end of
the 2023 Federal fiscal year. Therefore,

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HUD will transition Multifamily
Housing programs to NSPIRE on
October 1, 2023. Part 5, subpart G, as it
existed before this rule, provided at
§ 5.703 for the physical condition
standards for Multifamily Housing and
authorized HUD at § 5.705 to establish
UPCS through notice. On July 1, 2023,
when Public Housing transitions to
NSPIRE, these regulations will be
overwritten by the new part 5, subpart
G. To enable Multifamily to continue
using UPCS, HUD will delay the
effective date for Multifamily Housing
such that Multifamily Housing program
participants are not subject to the new
part 5, subpart G until October 1, 2023.
Part 5, subpart G as it exists on the
publication date of this rule, prior to the
changes which will be made on July 1,
2023, will apply to Multifamily Housing
until September 30, 2023.
Further transition information will be
provided in three core ‘‘Subordinate
Notices’’ which will follow this final
rule. These core Subordinate Notices are
the NSPIRE Standards notice, the
NSPIRE Scoring notice, and the NSPIRE
Administrative notice. HUD will also
issue additional notices on the NSPIRE
Standards for the HOME, HTF, ESG,
HOPWA, and CoC programs. PIH will
issue additional Departmental notices to
implement the Small Rural Assessment
requirements under part 902, subpart H
and part 985. The function of each of
these notices is provided in more detail
below. All updated Standards and
Scoring methodologies will be
published—as required by this rule—
through a Federal Register notice at
least once every 3 years with the
opportunity for public comment prior to
implementation.
B. NSPIRE Standards Subordinate
Notice
This rulemaking establishes at 24 CFR
5.705(a) that HUD will establish
Standards through a subordinate
Federal Register notice. HUD proposed
standards through notice in the Federal
Register with request for comments on
June 17, 2022 (‘‘Proposed NSPIRE
Standards notice’’).3 These proposed
standards were developed in
consideration of the NSPIRE
Demonstration and feedback received in
response to that demonstration. The
notice sought comments on the
proposed NSPIRE Standards and
included thirteen specific questions for
public input, including questions
related to mold, safe drinking water,
requirements for a permanent heating
3 ‘‘Request

for Comments: National Standards for
the Physical Inspection of Real Estate and
Associated Protocols,’’ 87 FR 36426.

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source, minimum temperature,
electrical outlets, deficiency correction
time frames, and pest infestation. The
individual NSPIRE Standards, posted on
HUD’s website,4 provided detailed
descriptions of housing components and
hazards for inspection with descriptions
of potential deficiencies and correction
timeframes. The notice also proposed an
update to the list of life-threatening
conditions covered by the Housing
Opportunity Through Modernization
Act of 2016 (‘‘HOTMA’’). The comment
period for the Proposed NSPIRE
Standards notice closed on August 1,
2022. HUD will publish the final
NSPIRE Standards notice before the
effective date of this rule, which will
consider feedback received in the
NSPIRE proposed rule, the NSPIRE
Demonstration, and the proposed
NSPIRE Standards.
C. NSPIRE Scoring and Administrative
Subordinate Notices
This rulemaking establishes at 24 CFR
5.705(b) that HUD will establish scoring
methods through a Federal Register
notice. The proposed NSPIRE Scoring
notice was published in the Federal
Register on March 28, 2023.5 It will be
final and effective before HUD begins
inspections under NSPIRE. The NSPIRE
Scoring notice will outline the
methodology for weighting the
deficiencies found during inspections
using the NSPIRE Standards notice and
scoring those deficiencies for each
program . It will discuss the gradations
and severity levels of the new scoring
system, including thresholds for
potential enforcement action.
The NSPIRE Administrative notice
will be published as a final notice
shortly following this final rule. This
notice will replace all UPCS guidance
that HUD’s Real Estate Assessment
Center (REAC) previously issued
including the Compilation Bulletin for
RAPID 4.0, Version 3, Inspector Notices,
and other web-based guidance on
requesting appeals, exigent health and
safety reporting, and other inspection
process topics. This subordinate notice
will outline the updated NSPIRE
process for inspections, submitting
evidence of deficiency correction,
technical reviews, administrative
referrals and other administrative
requirements changing with the final
NSPIRE rule. It will also include the
process HUD will use to gather resident
feedback on property conditions. In an
additional notice, HUD will provide
4 Available at: www.hud.gov/sites/dfiles/PIH/
documents/6092-N-02nspire_propose_
standards.pdf.
5 88 FR 18268.

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guidance for PHAs on the new small
rural assessment processes.
D. NSPIRE Implementation and PHAS
Score Transition for Public Housing
Authorities
With the implementation of the
NSPIRE rule, REAC will begin
performing physical inspections using
the NSPIRE Standards after the effective
date of the rule for each program.
Recognizing that there may be
operational or system transition issues
in the initial year of NSPIRE
implementation, HUD is specifying in
the regulation at § 5.705(c)(1) that an
inspection ‘‘shall be conducted no
earlier than 6 months before and no
later than 6 months after the date
marking the anniversary of the previous
inspection’’ for a period of one year after
the effective date of this rule. After this
transition period, the time frame will
return to ‘‘no earlier than 3 months
before and no later than 3 months after
the date marking the anniversary of the
previous inspection’’ or at a time period
approved by HUD upon a PHA’s or
owner’s good cause request.
For PHAS scores issued after this rule
is effective, REAC will use scores
calculated as described in the
subordinate NSPIRE Scoring notice and
aggregate these scores on a unitweighted basis as described in § 902.25
to create the Physical Assessment Subsystem (PASS) indicator score.
Additional information about NSPIRE
and PHAS Score transition, including
PHAs rated as Troubled, will be
provided in the subordinate NSPIRE
Administrative notice.

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E. Other NSPIRE Notices
HUD’s Office of Community Planning
and Development will issue separate
notices before October 1, 2023, (‘‘CPD
NSPIRE notices’’) to implement the rule
for the individual programs, which
generally do not adopt the methods in
the three ‘‘core’’ Subordinate Notices
discussed above, and provide guidance
for how the NSPIRE Standards cover
differing CPD program situations, such
as homebuyer acquisition or where
assistance is tied to a bedroom in shared
housing. These notices will be
published before the effective date of
the rule. Also with this rule, HUD will
issue a Departmental notice to provide
guidance for the Small Rural PHAS and
SEMAP scoring processes. At a later
date, HUD will publish a third
additional notice to implement a
process for collecting and utilizing
resident feedback as part of the
inspection process.

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III. Changes Made at the Final Rule
Stage
In response to public comments, and
in further consideration of issues
addressed at the proposed rule stage,
HUD is publishing this final rule with
the following changes from the
proposed rule.
Section 5.703 National Standards for
the Condition of HUD Housing
Affirmative Requirements at § 5.703
In the proposed rule, HUD requested
comment on the addition of affirmative
requirements for ground-fault circuit
interrupter (GFCI) outlets, an arc-fault
circuit interrupter (AFCI); heating,
ventilation, and air conditioning
(HVAC) related to a permanent heating
source; guardrails; and interior lighting.
The final rule includes requirements for
GFCI outlets near a water source, a
permanent heating source for certain
climate zones, guardrails, and
permanent lighting in some living areas.
In some cases, these requirements only
apply to habitable rooms of the unit.
HUD defines a habitable room as it is
typically defined in model codes: a
room in a building for living, sleeping,
eating, or cooking, but excluding
bathrooms, toilet rooms, closets,
hallways, storage or utility spaces, and
similar areas. Additional detail on the
affirmative requirements will be
provided in the NSPIRE Standards and
Administrative notices. HUD makes the
following changes from the proposed
rule to the NSPIRE affirmative
requirements:
Application of Affirmative
Requirements to Inside and Outside at
§ 5.703(b) and (c)
In this final rule, HUD is clarifying
that some of the affirmative
requirements not only apply to ‘‘Units’’
but also apply to Inside and Outside
requirements. This final rule applies the
requirements for smoke detectors,
carbon monoxide detectors, GFCI
outlets, guardrails, and lighting to
Inside, and applies the requirements for
GFCI outlets and guardrails to Outside.
HUD also added pipes to the nonexhaustive list of components that
provide domestic water in § 5.703(b).
Smoke Detector Requirement at
§ 5.703(b)(1) and (d)(3)
In the proposed rule, HUD proposed
to require that properties follow the
National Fire Protection Association
Standard (NFPA) 72 or successor
standards, consistent with existing
statutory obligations. This final rule
removes the reference to NFPA 72 and
instead lists requirements consistent

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with NFPA 72. HUD also provides that
following these requirements satisfies
the specifications of NFPA 72. HUD also
adds that properties must follow these
standards and additional standards
established by HUD through Federal
Register notification. This clarifies that
HUD may adjust its Standards to
include additional requirements in the
future, such as future added statutory
requirements.
Safe Water Requirement at § 5.703(d)(1)
HUD is removing the requirement that
water be ‘‘potable’’ from the proposed
rule and instead requiring that water
must be ‘‘safe.’’ After consideration of
comments and further deliberation,
HUD believes that these two words are,
for the purposes of this rule, duplicative
and it is not necessary to use both. HUD
is also clarifying that this ‘‘safe’’
requirement applies to drinking water in
the kitchen and bathroom and clarifies
that the requirement that the unit have
‘‘hot and cold’’ running water applies in
both the bathroom and the kitchen.
Sanitary Facility and Kitchen Area
Requirements at § 5.703(d)(2) & (d)(4)
In the proposed rule, HUD requested
comment on whether to define a
‘‘sanitary facility’’ and ‘‘kitchen area.’’
After considering comments, HUD has
included additional language in the
regulations for both terms at the final
rule stage; this new language serves the
same function as the definition
suggested in the proposed rule for
comment. HUD is requiring that sanitary
facilities (or bathrooms) include a sink,
a bathtub or shower, and an interior
flushable toilet. HUD is removing the
requirement that the sanitary facility be
‘‘adequate for personal hygiene and the
disposal of human waste’’ because
listing these elements adequately covers
this same requirement. HUD is also
requiring that kitchens must include a
sink, cooking appliance, refrigerator,
food preparation area, and food storage
area.
Removal of the Occupancy Requirement
Related to Children of the Opposite Sex
From § 5.703(d)(5)
In this final rule, HUD is removing the
requirement at § 5.703(d)(5) for units
assisted under HCV or PBV that
children of opposite sex may not be
required to occupy the same bedroom or
living/sleeping room. HUD views the
restriction based on gender to be
unnecessary and unrelated to physical
conditions, and wanted to provide more
flexibility to families and PHAs to
determine the number of bedrooms
needed as part of determining the
payment standard. Removal of the term

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‘‘opposite sex’’ is also consistent with
the January 20, 2021, Executive Order
on ‘‘Preventing and Combating
Discrimination on the Basis of Gender
Identity or Sexual Orientation.’’ This
language also avoids the implication
that PHAs must inquire about gender
identity to determine occupancy.
Addition of Carbon Monoxide Detection
Requirement at § 5.703(d)(6)
Section 101, ‘‘Carbon Monoxide
Alarms or Detectors in Federally
Assisted Housing’’ of Title I of Division
Q, Financial Services Provisions and
Intellectual Property, of the
Consolidated Appropriations Act, 2021,
Public Law 116–260, 134 Stat. 2162
(2020) (‘‘2021 Consolidated
Appropriations Act’’) included
amendments to sections 3(a) and 8 of
the United States Housing of 1937 (42
U.S.C. 1437a(a) and 42 U.S.C. 1437f)
(1937 Act), section 202(j) of the Housing
Act of 1959 (12 U.S.C. 1701q(j)), and
Section 811(j) and 856 of the CranstonGonzalez National Affordable Housing
Act (42 U.S.C. 8013(j) and 42 U.S.C.
12905). These amendments, which took
effect on December 27, 2022, concern
the installation of Carbon Monoxide
alarms or detectors in public housing
owned or operated by a PHA, dwelling
units occupied by individuals with
Housing Choice Vouchers, dwelling
units assisted with project-based
vouchers or project based rental
assistance, dwelling units assisted
under the 202 and 811 programs, and
dwelling units assisted under the
HOPWA program. In the proposed rule,
HUD stated its intent to publish a
separate proposed rule concerning the
implementation of requirements to
install carbon monoxide detectors in
HUD-assisted and -insured Housing.
HUD is still considering a proposed rule
which would implement carbon
monoxide detectors beyond what is now
required by statute. In this rule,
however, HUD has determined to make
conforming changes so that the
regulations of the programs covered by
NSPIRE include the new statutory
carbon monoxide detector requirement
for each program. Because these
conforming rule changes merely codify
the new statutory requirements, HUD
has determined that additional notice
and public comment procedure is
unnecessary.
Additionally, HUD notes that the
2021 Consolidated Appropriations Act
only adds carbon monoxide-related
requirements to the HUD programs
listed above and the USDA programs
authorized by sections 514 and 515 of
the Housing Act of 1949. HUD programs
such as HUD-insured housing not

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subject to an assistance contract and the
ESG, CoC, HOME, and HTF programs
are not subject to statutory requirements
concerning carbon monoxide detection.
HUD has made corresponding changes
at the final rule stage in
§§ 92.251(b)(1)(viii), 93.301(b)(1)(viii),
576.403(c), 578.75(b) to clarify that
these units will not be subject to the
new carbon monoxide requirements.
HUD urges grantees, owners,
developers, and project sponsors in
these programs to take action for the
safety of residents and reminds them
that there may be additional property
standard requirements under applicable
State and local laws regarding carbon
monoxide detection.
Finally, HUD notes that this final rule
only implements the statutory carbon
monoxide detector requirement for
programs covered under NSPIRE.
However, programs not covered by
NSPIRE are still subject to the statutory
requirement where applicable.
Specifically, the statutory requirement
covers all of HOPWA, but NSPIRE only
applies where HOPWA funds are used
under § 574.300(b)(3), (4), (5), and (8).
HUD intends to modify the HOPWA
regulations to reflect the existing
statutory requirement in a future
rulemaking related to HOPWA.
Other Changes to § 5.703
Addition of Example Unit Components
at § 5.703(d)
HUD is including balconies, carbon
monoxide devices, and enclosed patio
to the non-exhaustive list of
components which may be included in
a unit.
Addition of ‘‘Structural Soundness’’ and
‘‘Extreme Temperature’’ Health and
Safety Concern Examples at § 5.703(e)(1)
HUD has added structural soundness
to the non-exhaustive list of health and
safety concerns at § 5.703(e)(1)
previously required under
§ 576.403(c)(1).
HUD has also added ‘‘extreme
temperature’’ to the non-exhaustive list
of health and safety concerns at
§ 5.703(e)(1). HUD considers the failure
to provide an adequate heat source to
prevent extreme cold a deficiency as
described in the NSPIRE Standards
notice. By adding this language to the
regulation and NSPIRE Standards, HUD
further implements HOTMA Section
111, which required HUD to publish
model guidelines for minimum heating
requirements for public housing. As part
of the consolidation under NSPIRE,
HUD is removing § 982.401(e) regarding
the thermal environment and making
this addition here. HUD has added

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language from § 982.401(e) prohibiting
the indoor use of unvented fuel-burning
space heaters in § 5.703(b) and (d).
Addition of ‘‘Carbon Monoxide’’ as a
State and Local Requirement at
§ 5.703(f)(1)
At this final rule stage, HUD is adding
‘‘carbon monoxide’’ as an example in its
non-exhaustive list of examples of State
or local requirements that are not
superseded by these regulations. This
change has no substantive effect.
Section 5.705 Inspection
Requirements
Inspection Standards Notice
Clarification at § 5.705(a)(1)
In the final rule, HUD clarifies that in
addition to the standards and
procedures for identifying safe,
habitable housing being set out by the
Secretary and published in the Federal
Register, HUD will also provide the
scoring and ranking for HUD housing by
publication in the Federal Register.
HUD has also added language
identifying the different levels of
deficiency which will be used in the
NSPIRE Standards notice.
Correction of Typographical Error at
§ 5.705(b)(2)
In the final rule, HUD corrects a
citation in the proposed § 5.705(b)(2)
which cited to ‘‘§ 982.352(b)(iv)’’ but
should have cited to
‘‘§ 982.352(b)(1)(iv).’’ HUD instead cites
to parts 982 and 983 generally.
Timing of Inspections at § 5.705(c)(1)
and (c)(2)
HUD has added language to
§ 5.705(c)(1) clarifying that HUD may
approve extension requests for good
cause as determined by HUD. In HUD’s
experience, inspections occasionally
need to be rescheduled due to events
outside the owner’s or PHA’s control or
for other reasons which would cause the
extension request to be justified. HUD
has also added language making clear
that HUD may extend inspection
deadlines without the PHA or owner’s
request, to account for situations in
which HUD decides to grant a general
extension, such as in an emergency
situation.
HUD is also removing from paragraph
(c)(1) the restriction that inspections
must be done in the calendar year in
which they are due. HUD does not find
that this restriction is necessary or
important to ensuring timely
inspections, nor does it serve another
administrative purpose.
In paragraph (c)(2), HUD proposed a
default annual inspection for
Multifamily and project-based housing,

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with the potential for alternative
timelines for inspection, such that a
property or project may be inspected on
a timeline between two and five years.
After considering comments and
reviewing inspections, HUD believes
that such an extended timeline as four
or five years would, in most cases, be
too long to adequately review HUDassisted housing. HUD believes that the
current ‘‘3–2–1’’ approach utilized in
Multifamily and Public Housing
properly allocates HUD inspection
resources to ensure the regular
inspection of all properties while
prioritizing those properties which
require additional oversight. Properties
of PHAs that meet the definition of
Small Rural under § 902.101 will be
inspected every three years, as
described in § 902.103(b).
Addition of Citation Regarding Small
PHAs at § 5.705(c)
In § 5.705(c)(4), HUD is adding a
citation to § 902.13(a) to clarify that
small PHAs shall continue to be
inspected in accordance with the
relevant regulation, and in paragraph
(c)(8), HUD is adding a citation to
§ 882.516 to clarify that Section 8
Moderate Rehabilitation housing shall
continue to be inspected under its own
regulation.

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Tenant Involvement in Inspections at
§ 5.705(f)
This final rule adds § 5.705(f) stating
that HUD will allow, through notice, for
tenant involvement in the inspection
process of Public Housing and
Multifamily housing programs by
making recommendations regarding
particular units to be inspected. Any
units inspected in addition to the
standard unit sample will not be part of
the property’s score, but the owner or
PHA will be required to repair any
identified deficiencies. HUD has made
this addition after consideration of
public comments regarding tenant
involvement and the aim to balance the
need for tenant input with the
procedural integrity of the inspection
process.
Section 5.707 Uniform Self-Inspection
Requirement and Report
HUD is revising § 5.707 to remove the
electronic reporting requirement of selfinspections, and is instead requiring
that the owner or PHA maintain records
related to the self-inspection for three
years. HUD agrees with commenters
who suggested a universal reporting
requirement for self-inspection results
would pose an additional administrative
burden. Additionally, HUD has removed
language from § 5.707 that offered an

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additional announcement and
opportunity for public comment in the
Federal Register. This language was
removed because HUD will not use the
results of self-inspections as proposed to
determine risk or the frequency of REAC
inspections. The results of selfinspections will also not affect a
property’s score. Because the final
version of the self-inspection
requirement largely reflects current
requirements for Public Housing and
Multifamily programs and properties
that score under 60, there is no need for
additional comment. The process to
perform self-inspections will be in the
NSPIRE Administrative notice, which
will be published without comment. For
properties scoring below 60, HUD
believes that this information would be
uniquely useful as a tool to ensure all
deficiencies are identified and
corrected. HUD is also adding language
to allow properties the option to
perform the self-inspection in
conjunction with the follow up
inspection at § 5.711(c)(2). HUD has
added additional language to
§ 5.711(c)(2) to clarify the postinspection survey process and the selfinspection requirement related to the
inspection score.
Section 5.709 Administrative Process
for Defining and Revising Inspection
Criteria
HUD is amending § 5.709 at the final
rule stage to make two clarifying
changes. First, HUD is distinguishing
between the Standards notice and the
Scoring notice. In the proposed rule,
both were discussed as though they
would be one notice. However,
Standards and Scoring represent two
distinct elements of the assessment of
HUD housing, and HUD is publishing
separate notices. Both notices are
subject to the same procedures.
Second, HUD is clarifying, consistent
with the proposed rule’s discussion of
the matter, that HUD will publish its
Standards and Scoring notices ‘‘at least’’
once every three years, to make clear
that HUD may publish its notices before
it has been three years, at HUD’s
discretion.
Section 5.711 Scoring, Addressing,
and Appealing Findings
Change to the Name of § 5.711
HUD is renaming § 5.711 to more
accurately reflect the purpose of this
section.
Changes to Deficiency Terminology at
§ 5.711(c)
HUD is revising the different levels of
deficiency to Life-Threatening (LT),

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Severe, Moderate, and Low. This change
is reflected in the proposed NSPIRE
Standards notice and HUD is also
amending § 5.709(a)(2)(i) for consistency
with this change. As discussed further
in the NSPIRE Standards and Scoring
notices, Low deficiencies are
deficiencies which are critical to
habitability but do not present a
substantive health or safety risk to a
resident. HUD is requiring that Low
deficiencies be repaired within sixty
days unless specified otherwise in the
NSPIRE Standards.
Meaning of Correction at § 5.711(c)(1)
HUD also amends § 5.711(c)(1) to
require that LT and Severe items must
be ‘‘corrected’’ instead of mitigated. In
the context of § 5.711, ‘‘corrected’’
means the owner or PHA has resolved
or sufficiently addressed the deficiency
in a manner that it no longer poses a
severe health or safety risk to residents.
A correction could include controlling
or blocking access to the hazard by
performing a temporary relocation of the
resident while repairs are made.6 HUD
recognizes that to permanently repair
some deficiencies, the PHA or owner
may need additional time for a licensed
professional, or supplies that may not be
available in a 24-hour timeframe. In
some cases, for lead hazard control
work, exterior paint stabilization can be
delayed due to season conditions, or the
resident family may need to be relocated
temporarily while the work is
completed, and HUD can approve
extensions based on good cause.7
Additional information will be provided
in the subordinate NSPIRE Standards
and Administrative notices. For LT and
Severe defects, HUD expects that
permanent repairs will be completed
expeditiously, and that evidence of the
repair will be provided to HUD as
described in § 5.711(c)(2). HUD has also
removed the word ‘‘contiguous’’ from
paragraph (c)(1) as unnecessary. In
practice, PHAs, owners and HUD all
understand that the 24-hour timeframe
commences immediately upon
notification and does not pause for nonworking hours, including the weekend.
Timeline for Correction at § 5.711(c)(1)
HUD also amends § 5.711(c)(1) to
clarify the timeline for the correction of
health or safety deficiencies. The
6 HUD notes that correction of a LT deficiency has
a specific meaning under HOTMA. § 5.711 does not
apply to HCV or PBV, and therefore this definition
of ‘‘corrected’’ does not apply to HCV or PBV.
7 Relocation for lead hazard control work may be
required under 24 CFR 35.1345 and is subject to the
requirements of the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970,
as amended.

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timeline for correcting LT and Severe
health or safety deficiencies remains 24
hours after the inspection. The timeline
for repairing Moderate and Low
deficiencies has been revised from
‘‘expeditiously’’ to ‘‘within 30 days,’’
consistent with HUD’s intent as stated
in the preamble of the Proposed Rule.
HUD can authorize permanent repair
timelines that exceed 30 days if the
deficiency cannot be permanently
repaired in 30 days.
The NSPIRE Standards provide HUD’s
expectations regarding the timeline for
repair of each type of deficiency. HUD
will not change the requirement that LT
health and safety deficiencies must be
corrected within 24 hours. Under the
NSPIRE Standards, for the Public
Housing and Multifamily housing
programs, Severe will also require
correction in 24 hours.
Post-Report Inspection at § 5.711(c)(2)
HUD is removing the requirement that
owners or PHAs provide electronic
evidence of correction of Moderate
deficiencies as HUD believes, after
considering comments, the burden both
of reporting and processing this
evidence would outweigh the benefit.
Paragraph (c)(1) continues to require
evidence that Severe deficiencies have
been corrected be provided to HUD
within established timeframes. HUD is
also adding a requirement that
properties which score below a 60 must
complete a full self-inspection, and not
the limited self-inspection described in
this regulation for identified
deficiencies in units and areas of the
property not inspected by REAC. This
addition is necessary to ensure that
owners and PHAs survey 100 percent of
their properties when they have poor
physical performance (i.e., scores below
60) in order to identify additional health
and safety defects in the units that were
not part of the inspection sample. PHAs
and owners that conduct a full
inspection after the HUD inspection can
consider this inspection to satisfy the
requirements of § 5.707 for that year.

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Start of the 45-Day Deadline To File a
Request for Technical Review at
§ 5.711(d)(1)
In response to a public comment,
HUD is revising § 5.711(d)(1) to clarify
that the 45-day deadline to file a request
for a technical review begins on the day
the inspection report is provided to the
owner or PHA.
Basis for Technical Review at
§ 5.711(d)(4)
Based on comments received, HUD
revised § 5.711(d)(4) for clarity and

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renumbered the three types of material
errors appropriately.
HUD is also adding in paragraph
(d)(4) the three qualifiers for requesting
a database adjustment previously at 24
CFR 902.24. Commenters noted this was
inadvertently removed, especially the
exclusion of adjustments for
modernization work in progress. At this
final rule, HUD is combining these three
qualifiers for adjustment with the three
bases for technical review. These three
qualifiers will have the same appeal and
review process as the technical review
process for errors. Given these revisions,
HUD is removing paragraph (c)(3) and
removing part of paragraph (e) which
HUD believes is repetitive with revised
paragraphs (d) and (d)(4).
HUD also removed the term ‘‘year
built’’ as an item not scored under
§ 5.711(d)(4)(i), since a visual lead-based
paint evaluation is now part of the
NSPIRE inspection, and the results of
this evaluation will be scored.
Posting on the Availability of Materials
at § 5.711(h)(3)
HUD has revised this section to clarify
that the owner or PHA must post a
notice to residents on the date of
submission to the owner of the
inspection score for the property in
which the residents reside. The notice
must advise the residents of the
availability of the inspection materials
described in 24 CFR 5.711. HUD is also
specifying that the notice must be
translated into other languages if
necessary to provide meaningful access
for limited English proficient (LEP)
individuals, consistent with HUD’s LEP
guidance and Title VI.8
Departmental Enforcement Center (DEC)
Evaluation at § 5.711(i)
HUD is revising the introductory text
of § 5.711(i) to add that HUD will also
take administrative review action
against properties with two successive
scores under 60. HUD also clarifies that
while a score of 30 points or less
automatically leads to DEC referral,
referral is not automatic for the two
successive scores under 60. Regarding
the two successive scores under 60,
HUD recognizes that there may be
mitigating circumstances and HUD will
take other review actions before HUD
decides whether DEC referral is
necessary. As proposed, this regulation
covered both public and Multifamily
housing programs, and HUD has
8 For more information on HUD LEP and Title VI
guidance, see ‘‘Final Guidance to Federal Financial
Assistance Recipients Regarding Title VI
Prohibition Against National Origin Discrimination
Affecting Limited English Proficient Persons’’, 72
FR 2731 (Jan. 22, 2007).

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30447

retained this in the final rule and
clarified applicability. For public
housing properties, HUD recognizes that
there are situations where the
responsible PHA’s PHAS score may
have already triggered other forms of
administrative review, rendering DEC
review repetitive. HUD has also made
other minor, technical changes to this
paragraph.
No Limitation on Existing Enforcement
Authority at § 5.711(j)
HUD has added the term ‘‘grant
agreement’’ as an example of a potential
authorizing authority.
Sections § 92.251 and 93.301 Property
Standards
HUD has removed the clause,
‘‘pursuant to 24 CFR 5.705,’’ from
§§ 92.251(b)(1)(viii), 92.251(c)(3),
92.251(f)(1)(i), 93.301(b)(1)(viii),
93.301(c)(3), and 93.301(e)(1)(i) because
the requirements in 24 CFR 5.705
through 5.713 do not apply to HOME
participating jurisdictions (PJs) under 24
CFR part 92 or HTF grantees under 24
CFR part 93. HUD included the clause
in the proposed rule in these sections of
24 CFR part 92 and 24 CFR part 93 only
to refer to the part in § 5.705 describing
inspection standards and procedures
that would be published in the Federal
Register. However, to avoid further
confusion, HUD is removing the clause.
HUD will publish the specific
deficiencies that must be addressed by
HOME PJs and HTF grantees and
explain how the requirements in 24 CFR
5.703 apply to PJs and HTF grantees in
a standards document published in the
Federal Register. This standards
document for HOME and HTF will be
separate from, although similar to, the
NSPIRE Standards notice and apply
only to HOME and HTF.
HUD is also making changes to these
sections to clarify that ‘‘decent, safe,
sanitary, and in good repair’’ means
compliance with § 5.703 and deleting
‘‘as referenced in § 5.703’’ because
§ 5.703 does not use this term.
HUD is also making clarifying
changes that the affirmative
requirements at § 5.703 apply to singleroom occupancy (‘‘SRO’’) housing
where the housing contains the room or
facility referenced in the affirmative
requirements. This is necessary, for
instance, where the SRO does not
contain its own restroom and therefore
does not need to meet affirmative
requirements related to restrooms.
HUD is also revising §§ 92.251(f)(1)
and 93.301(e)(1) to clarify that any
property standards established by a
participating jurisdiction must
‘‘require’’ instead of ‘‘ensure’’ that the

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owners maintain the housing as decent,
safe, sanitary, and in good repair. HUD
believes that these two words, in this
context, have the same meaning, but has
made the change to make the
requirement clear.

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Sections 92.504 and 93.404 Regarding
Inspectable Areas
HUD has revised the language in
§ 92.504(d)(1)(ii)(D) and
§ 93.404(d)(2)(v) to describe
‘‘inspectable areas for each building
housing HOME-assisted units.’’ The
regulation previously required that for
HOME projects with one-to-four HOMEassisted units, the participating
jurisdiction must inspect ‘‘100 percent
of the HOME-assisted units’’ and 100
percent of the ‘‘inspectable items (site,
building exterior, building systems, and
common areas) for each building
housing HOME-assisted units.’’
However, the parenthetical described
the inspectable areas (e.g., site, building
exterior, building systems, and common
areas) within a HOME project and not
‘‘inspectable items.’’ In this final rule,
HUD is correcting the language to
require that when projects of one-to-four
units are being inspected by the
participating jurisdiction or HTF
grantee, all of the units and 100 percent
of the inspectable areas for each
building must be inspected by the PJ or
HTF grantee.
Section 570.208 Criteria for National
Objectives
This final rule also updates an
outdated citation in § 570.208(b)(1)(iv)
to create a standard for determining
whether Community Development
Block Grant (CDBG) funds were used to
rehabilitate a substandard residential
building. Section 570.208(b)(1)(iv)
describes whether an assisted activity is
considered to have met the public
benefit standard for an activity to
address slum or blight on an area basis.
One of the criteria for determining
whether a CDBG-assisted activity
qualifies as an area benefit standard is
that the assisted activity must eliminate
substandard housing, which is housing
that would also fail to meet the housing
quality standards for the Section 8
Housing Assistance Payments
Program—Existing Housing (24 CFR
882.109).
On April 30, 1998, the final rule
entitled ‘‘Section 8 Certificate and
Voucher Programs Conforming Rule’’
removed and reserved 24 CFR 882.109
as part of comprehensive rulemaking
where HUD revised 24 CFR part 882 to
move requirements applying to the
Section 8 voucher and certificate
programs into 24 CFR part 982 and

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983.9 Therefore, this citation is out of
date. This final rule updates the citation
in § 570.208(b)(1)(iv) from 24 CFR
882.109 to 24 CFR 5.703. This change is
technical in nature, and HUD believes
that this is an appropriate technical
correction to incorporate into this final
rule.
Section 574.310 General Standards
for Eligible Housing Activities
At the final rule stage, HUD is
removing certain housing covered under
HOPWA from applicability from
NSPIRE. Specifically, HUD is removing
from § 574.310(b) NSPIRE’s
applicability to housing for which
HOPWA funds are used under
permanent housing placement to pay an
eligible person’s security deposit, utility
hookup and processing costs, or move
in costs, except rental application and
credit check fees (§ 574.300(b)(7)). HUD
has decided to no longer include standalone permanent housing placement
(§ 574.300(b)(7)) due to the
administrative burden it would place on
HOPWA housing assistance providers
for these one-time costs. Many HOPWA
grantees utilize permanent housing
placement in combination with the
other permanent housing activities that
will be subject to the HUD housing
standards under the NSPIRE rule.
Section 576.403 Shelter and Housing
Standards
For clarity and consistency, HUD is
revising the organizational structure of
the proposed § 576.403 consistent with
the format of § 574.310(b)(2). HUD is
also clarifying in § 576.403(c)(2) that the
exemption from requiring selfinspection prior to move in for the first
thirty days does not exempt the
requirement under part 35 to inspect for
lead-based paint.
Part 880—Section 8 Housing Assistance
Payments Program for New
Construction
In the proposed rule, HUD proposed
to amend § 880.612 to require that
contract administrators inspect projects
to determine compliance with part 5,
subpart G. Since the proposed rule was
published, § 880.612 was modified by
HUD’s ‘‘Streamlining Management and
Occupancy Reviews for Section 8
Housing Assistance Programs’’ rule.10
Because of this change, HUD is now
choosing not to amend § 880.612. Part
880 is already made subject to part 5,
subpart G through § 880.104(d), which
states that ‘‘the provisions of 24 CFR
part 5 apply to all projects [under this
9 63

FR 23826 at 23854.
FR 37990 (June 27, 2022).

10 87

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part.]’’ Therefore, no substantive change
is made by the decision not to amend
§ 880.612.
Section 884.217, 886.123, 886.323
Maintenance, Operation, and
Inspections
HUD is making a technical edit to
§§ 884.217(b), 886.123(b), and
886.323(c). The previous regulation
required the owner and family to certify
before move-in that the unit had been
inspected by both parties and the unit
was decent, safe, and sanitary. The
proposed rule, consistent with other
changes, proposed changing ‘‘decent,
safe, and sanitary’’ to read ‘‘compliant
with part 5, subpart G.’’ HUD does not
intend to require that a family is
familiar with HUD’s housing
requirements to certify compliance.
Therefore, for clarity, HUD has revised
the regulation to require that only the
owner must certify compliance with
part 5, subpart G. Both parties must still
certify that they have each inspected the
unit. Families are still entitled and
encouraged to identify any deficiencies
they believe may exist and, where an
owner fails to make repairs, report those
deficiencies to HUD.
Section 902.3 Definitions
At the final rule stage, HUD is
removing the definition of ‘‘Subarea’’
from § 902.3. As discussed further in
HUD’s proposed Scoring notice, HUD is
not using ‘‘Subareas’’ in NSPIRE. HUD
is also making a technical revision to
the definition of ‘‘Inspectable item’’ to
remove the reference to the ‘‘Item
Weights and Criticality Levels
document’’, which no longer exists (as
discussed in the proposed rule) under
NSPIRE.
Section 902.13 Frequency of PHAS
Assessments
The proposed rule removed from
§ 902.13(b)(2) language relating to
inspection frequency under PHAS and
replaced it with a citation to § 5.705(c).
Incidentally, this change removed
language clarifying that, for properties
with a physical inspection score at or
above 80—i.e., properties scored less
than annually—the most recent physical
inspection would be used in calculating
the overall PHAS physical condition
indicator score for a given fiscal year.
At this final rule stage, HUD has
revised § 902.13(b)(2) to clarify that
HUD will use the most recent physical
inspection score for all properties,
regardless of inspection frequency, in
calculating the PHAS physical
condition indicator score. Section
5.705(c), which provides the
requirements for the timing of

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inspections, does not tie inspections to
a particular fiscal year. Therefore, this
revision makes clear that an inspection
does not have to occur during the PHA’s
assessed fiscal year to be included in
that fiscal year’s PHAS score Troubled
PHAs will continue to be assessed
annually as previously required by
§ 902.13(b)(3).
Additionally, this final rule adds
language to § 902.13(b)(2) regarding the
transition from UPCS-based physical
condition indicator scores to NSPIREbased scores. For simplicity, and to
prevent technical issues related to
calculating scores using both the old
UPCS system and the new NSPIRE
system, HUD will not provide a PHAS
physical condition indicator score that
uses both UPCS scores and NSPIRE
scores in its calculation. Instead,
starting July 1, 2023, PHAs will keep
their most recent physical condition
indicator score until every public
housing property associated with the
PHA has been inspected under NSPIRE.
After every property under a PHA has
received an NSPIRE inspection, the
PHA will receive a new physical
condition indicator score which will
exclusively use NSPIRE inspections in
its calculation. After this transition
period, scores will be calculated using
the normal method laid out in
§ 902.13(b)(2). This exception does not
apply to small PHAs under § 902.13(a)
or to small rural PHAs under part 902,
subpart H. These PHAs have a relatively
small number of buildings compared to
PHAs covered by § 902.13(b)(2) and
inspections of these buildings are
usually more coordinated in a specific
period of time. Therefore, while this
exception does not apply to these PHAs,
HUD intends to ensure that all
properties under small and small rural
PHAs receive an NSPIRE inspection
before calculating a PHA’s new physical
condition indicator score.
Section 902.103 Public Housing
Assessment of Small Rural PHAs
HUD is revising § 902.103(a) to add
one additional point for physical
condition and neighborhood
environment to better align the small
rural PHAS regulation with the ordinary
PHAS assessment. This additional
consideration ensures consistency with
42 U.S.C. 1437d(j)(1), which
acknowledges the differences in the
difficulty of managing individual
projects that result from their physical
condition and their neighborhood
environment. HUD is also revising the
parenthetical examples in paragraphs
(c)(1) and (2) to only provide one
example to avoid implying that the list
of examples is exhaustive.

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Section 902.107 Withholding,
Denying, and Rescinding Troubled
Designation
The final rule includes Conciliation
Agreements as a type of special
agreement with HUD in § 902.107(a)(1)
because a Voluntary Compliance
Agreement refers to agreements under
Section 504, Title VI, and the ADA,
whereas Conciliation Agreement refers
to agreements under the Fair Housing
Act.
Section 983.101
Standards

Housing Quality

In the proposed rule, HUD proposed
to replace all of § 983.101 with a citation
to § 5.703. After further consideration,
HUD has decided, for clarity, to keep
the entirety of § 983.101 in place, and to
revise paragraph (a) to cite to § 5.703.
HUD also makes minor conforming edits
to paragraphs (b) and (c).
Section 985.205 Determination of
Assessment Rating
HUD has revised the proposed
§ 985.205(a)(1)(i) at the final rule stage
to add that a small rural PHA will be
judged based on the last two years of
HCV budget authority data. HUD has
made this change because, for some
PHAs, the sample size would be too
small to rely on one year only as an
accurate picture of the PHA’s
performance. The increased review
period will improve a PHA’s ability to
achieve 98 percent in related indicators.
Conforming Changes
HUD makes the following conforming
changes which do not impose or change
substantive requirements.
Terminology in Part 5
In the proposed rule, in certain places
HUD inadvertently used the term
‘‘owner’’ when the correct term should
have been ‘‘owner or PHA.’’ There are
also instances in the proposed rule
where HUD used the term ‘‘public
housing’’ when the correct term should
have been ‘‘HUD housing’’, which
includes all the programs listed in
§ 5.701(a). HUD has corrected the
terminology, where appropriate, in this
final rule.
Sections 884.217 and 886.123
HUD is also making minor changes to
the proposed §§ 884.217(c) and
886.123(c). HUD is removing language
regarding the sample of units to be
inspected and removing language
regarding the frequency of inspections
to ensure that these paragraphs are
consistent with each other, and
consistent in applying part 5, subpart G.

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Part 965, Subpart I—Fire Safety
This final rule removes part 965,
subpart I regarding fire safety. This
subpart applied fire safety regulations to
public housing. The NSPIRE rule
applies these same requirements to
public housing, rendering this subpart
redundant.
Sections 982.402 and 982.618
This final rule updates part 982 to
remove citations to paragraphs in
§ 982.401 to reflect the update to
§ 982.401.
Part 982, Subpart M—Special Housing
Types
This final rule amends 24 CFR part
982, subpart M, which lays out
alternative and additional requirements
to the Housing Quality Standards. This
final rule makes no substantive changes
to subpart M, but only updates and
removes citations and references to the
Housing Quality Standards consistent
with the changes proposed and now
made. This is consistent with § 5.703(h)
of both the proposed and final rule,
which states that special housing types
under part 982, subpart M are subject to
different and additional requirements.
Part 983—Project-Based Voucher (PBV)
Program
This final rule amends § 983.2(c)(4) to
remove the citation to ‘‘§ 982.401(j),’’
which was removed in both the
proposed and final rule. This does not
change the lead-based paint obligations
which apply to the part 983, as
discussed at § 983.4.
IV. Public Comments
General Support Comments
Several commenters expressed
general support for the changes in the
proposed rule. A commenter stated that
the rule would advance affordable
housing. Another commenter
anticipated a responsive real-life
process to effect improvement in
housing standards. Another commenter
stated that the proposed rule would be
an avenue for managing the workload
and incentivizing properties that
perform well, and also as a way for HUD
to manage its own backlog of
inspections. A commenter stated that
there are many communities that do not
enforce code regulations but having all
agencies on the same platform would
help local officials understand what is
needed. One commenter supported the
decreased subjectivity and increased
accuracy of the proposed rule to achieve
positive outcomes. Commenters also
supported HUD’s NSPIRE
demonstration.

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HUD Response: HUD appreciates this
input and support for the changes in the
rule. HUD agrees that having focused,
objective, accurate and up to date
regulations, processes, and standards
can help achieve positive outcomes for
millions of families while at the same
time improving the way HUD operates.
In this final rule, HUD has largely
maintained the same framework as in
the proposed rule.

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Additional General Support Comments
Commenters expressed support for
HUD’s dedication to seeking stakeholder
feedback. One commenter supported
HUD engaging with the public to
address the industry’s difficulties with
existing inflexibility on technical,
mechanical, and engineering issues that
have limited impact on the safety and
habitability of existing structures but
absorb a disproportionate amount of
time and difficulty on sites. Another
commenter stated that HUD has made
clear that equity and transparency are
key goals for this rule. One commenter
noted that, while it is important that
HUD lays out an expansive framework
at the Federal level, it will be important
that HUD works frequently with public
authorities as they facilitate this
transition to promote efficiency while
limiting administrative burden when
possible. A commenter urged HUD to
expand outreach to include residents,
State and local code enforcement
agencies, legal service attorneys,
housing advocates, public health
advocates, and environmental justice
advocates, to make enforcement
effective and efficient.
HUD Response: HUD thanks
commenters for their input on this
topic. HUD continues to improve
outreach efforts and obtain feedback
from stakeholders and the general
public. HUD agrees that equity and
transparency are key considerations in
this rule. HUD has retained the
requirement at § 5.709(a)(1) to regularly
revisit the requirements through public
comment, allowing all stakeholders an
opportunity to be heard. HUD also
believes outreach efforts should include
residents, State and local code
enforcement agencies, and other
housing stakeholders and advocates and
continues to seek their feedback through
this rulemaking process. The proposed
NSPIRE Standards notice was posted for
comment on June 17, 2022, for 45 days
for public comment. HUD considers
these comments important in finalizing
the Standards notice. To promote
feedback and encourage transparency,
HUD also published information on the
NSPIRE demonstration effort on its

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website and sought feedback from
participants through the demonstration.
Residents of HUD-assisted housing
were encouraged to comment as
members of public, but also through
other available opportunities for
participation. In public housing,
residents can participate in resident
advisory councils and attend regular
meetings held by their Board of
Commissioners. Board members are
typically appointed by elected officials
and include at least one resident
member. All members of the public,
including legal service attorneys and
housing and public health advocates,
can report housing standard violations
or other concerns to HUD offices. A list
of contacts for HUD’s local offices can
be found at https://www.hud.gov/local.
Economic Growth and Recovery Act
Question for Comment #1: Standards for
Small Rural Section 8 Projects and PHA
Public Housing Projects
Commenters recommended that HUD
follow Congress’s intent to provide less
burdensome regulations for small PHA
properties. One commenter supported
HUD’s proposal to align standards for
small rural PHAs. Another commenter
supported taking an expansive view and
defining ‘‘standards . . . for the
acceptable condition of public housing
projects’’ to mean the entire NSPIRE
model. A commenter also recommended
HUD provide more technical assistance
options for small rural PHAs. One
commenter suggested the same
standards should apply to all projects to
ensure fair and equitable living
conditions across PHAs.
A commenter stated that Housing
Quality Standards (HQS) inspections for
Section 8 properties were more
consistent and objective than the
Uniform Performance Condition
Standards (UPCS) inspection protocol
used for their public housing properties,
and therefore small rural agencies
should be allowed to use the HQS
protocol to comply with inspection
requirements. This commenter
recommended that if HUD determines
that maintaining HQS inspection
protocols for small rural agencies is
infeasible, then HUD should allow
public housing units at small rural
agencies to be inspected similar to
Section 8 properties.
HUD Response: Through this rule,
HUD is adopting the statutory
requirement for specific relief for small
rural PHAs but requires that properties
of these PHAs will be assessed using the
NSPIRE standards for physical
conditions in both the Public Housing
and HCV programs. The changes will

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apply to PHAs as described in 24 CFR
part 902, subpart H and 24 CFR part
985, subpart D. HUD declines to
implement the recommendation to
utilize Housing Quality Standards
(HQS) for small rural PHAs. One of
HUD’s objectives is to align standards
across numerous housing portfolios, and
with this rule the HQS regulations
incorporate the NSPIRE standards and
refer to § 5.703. HUD believes that the
NSPIRE standards provide more
consistent and objective criteria with
which to evaluate the safety and
habitability of HUD-assisted housing.
Residents that live in units managed by
small rural PHAs should be provided
the same level of safety and habitability
as residents of other 572 public or HUDassisted housing.
As proposed and now made final,
HUD will make the initial determination
of PHAs that qualify as small rural as
defined in § 902.101 of this title no later
than 120 days after the effective date of
the final rule for Public Housing, or July
30, 2023. Additional deregulation efforts
for other small PHAs are outside the
purview of this rule but could occur
through future rulemaking including
updates to the Public Housing
Assessment System (PHAS). Relief
under this rule is provided in 24 CFR
part 985, subpart D and a new subpart
H under the current 24 CFR part 902.
Section 902.103(b) includes a three-year
cycle for overall scoring based on
physical conditions for non-Troubled
small rural PHAs.
HUD agrees with the need to align
standards for small rural PHAs for
Public Housing and Section 8 properties
with other PHAs, and this rule provides
the framework for this alignment to the
NSPIRE standards. The NSPIRE
standards were proposed for comment
on June 17, 2022, and final standards
will be published before this rule’s
effective date. Additional implementing
information for the new standard,
including the process for PHAS rule and
SEMAP assessments, will be provided
through a Departmental notice. HUD
plans to provide more technical
assistance for small rural PHAs with the
administrative notice.
Section 5.701 Applicability
Commenters stated that the proposed
rule should be broad in scope. Two
commenters suggested expanding
applicability to include tax credit
communities and Section 232
properties. Another commenter
welcomed HUD’s efforts to codify
uniform standards across HUD-assisted
housing, noting that establishing
uniformity will help empower residents
to navigate different HUD assisted

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housing systems over time and also
improve the interface with local code
inspection agencies, who otherwise may
have to navigate conflicting standards
and expectations across HUD programs.
A commenter expressed concern that
the proposed rule does not take into
account the differences between insured
housing and affordable housing,
pointing out that some types of HUDinsured housing, e.g., assisted living and
nursing homes, are subject to various
State-imposed requirements and
regulations. One commenter suggested
that HUD should clearly state which
specific program regulations are
superseded or supplemented elsewhere,
noting that part 5 may become the first
stop a PHA, owner, or owner/agent
(‘‘POA’’), member of the public, or other
interested party makes to find housing
quality regulations, and it may be their
last stop if they are not directed to other
applicable regulations. The commenter
stated that absent this direction,
individuals will have to cross-check
program regulations manually which
could lead to unnecessary confusion.
HUD Response: HUD agrees with the
comments about the scope of the rule
and believes that the rule improves the
consistency and uniformity of housing
standards for HUD-assisted programs
given its broad applicability to all HUDassisted residential properties and units.
In order to ensure regulated parties
know which standards apply to them,
this rule revises specific program
regulations to reference the new NSPIRE
standards. The framework for evaluating
physical condition addresses safety and
habitability regardless of the type of
HUD-assisted housing.
This rule applies to all types of HUD
housing including health care facilities
insured under Section 232 of the
National Housing Act and Low-Income
Housing Credit (LIHTC) properties
receiving some form of HUD assistance
and other properties under a HUDassisted housing contract (e.g., annual
contributions contract). HUD does not
have authority to create rules that apply
to the Department of Treasury’s Internal
Revenue Service LIHTC and therefore
cannot apply this rule to the LIHTC
generally, but can apply this rule
whenever the LIHTC property also
receives some form of HUD-assistance.
HUD will engage other Federal agencies
with potentially overlapping subsidies
to further evaluate the applicability of
the NSPIRE rule to these other Federal
housing subsidy types.
With respect to conflicting standards
and expectations, HUD physical
condition requirements have always
overlapped with State and local
physical condition standards and

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sometimes exceed these standards. In
other cases, State and local standards
exceed HUD standards. This rule does
not change the proposed § 5.703(f)
which states that for all covered
programs, the NSPIRE Standards for the
condition of HUD-assisted housing do
not supersede State and local Housing
codes. This rule establishes nationwide
Federal minimum requirements for
HUD-assisted housing and does not
attempt to unify or preempt State and
local housing standards. Because all
HUD-assisted housing must meet the
NSPIRE rule requirements, residents
and other HUD-assisted housing
stakeholders should have a nationwide
expectation for the safety and
habitability of housing; however, it will
continue to be necessary to review all
other applicable requirements including
Federal accessibility requirements and
State and Local requirements.
Section 5.703

Inspection Standards

Comments Regarding Alignment and
Streamlining of Standards
Commenters expressed support for
the alignment of standards and
inspection processes, stating that this
would have a positive impact on
properties with mixed financing or
subsidy layering, eliminate the need to
subject residents to multiple, separate
oversight mechanisms, and reduce
administrative and cost burden to
owners and agents. Commenters
supported the proposed rule’s
streamlining of the number of
inspection categories and focus on the
condition of individual units and stated
that this approach is more aligned with
municipal laws governing health and
safety in rental housing. A commenter
supported moving away from ‘‘curb
appeal’’ deficiencies toward
‘‘substantial safety deficiencies,’’ while
another commenter supported the
linguistic change from ‘‘exigent health
and safety’’ to ‘‘severe health and
safety’’ deficiency, as reducing bias and
variability in the inspections process.
One commenter noted that federally
assisted rental properties are in varying
states of disrepair with multiple
deficiencies, and suggested that
irrespective of the housing program
HUD might require the same standards
to be applied across the board, and
according to the housing program
requirements, require different levels of
risk management measures or
approaches to address the health and
safety risks posed by the identified
hazards.
One commenter stated that the
proposed rule lacks coherence between
HUD standards and other groups’

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standards. The commenter further stated
that given how housing has been
contracted out and privatized, it can be
more difficult to assess program-assisted
housing.
HUD Response: HUD agrees with
commenters that the regulatory
consolidation, use of consistent
standards across housing program, and
program alignment within this rule will
allow HUD and regulated entities to
realize administrative benefits.
HUD agrees with commenters that the
rule will reduce the administrative and
cost burden to owners while improving
the habitability and safety of HUDassisted properties and units, which are
not mutually exclusive objectives. HUD
evaluated many other third-party
organization standards and believes its
standards are consistent with industry
best practices for residential real estate.
This rule provides a consistent means of
assessing all types of HUD-assisted
housing.
This rule will align all listed HUDassisted programs under the NSPIRE
Standards that were proposed on June
17, 2022 and will be final before the
effective date of this rule. Resolution of
identified deficiencies will be mostly
consistent with resolution of
deficiencies under the UPCS and HQS
standards but scoring and pass/fail
decisions will be driven by the NSPIRE
program requirements and applicable
statutes. With this consolidation, HUD
will better focus on habitability and the
health and safety of residents.
Minimum Habitability Requirements
A commenter agreed with the idea of
reinforcing the importance of minimum
habitability requirements and adding
the word ‘‘safe’’ to the existing rule and
suggested that ‘‘safe’’ take on issues
regarding lead exposure and mean
‘‘protected from the amount of exposure
that will cause harm or damage after
exposure.’’
HUD Response: The term ‘‘safe’’ has
been, and will continue to be, an
important term for HUD inspection
standards. This rule will reinforce the
priority of maintaining a safe and
habitable dwelling. HUD declines to
adopt additional language around lead
exposure in this regulation, as it is
covered by 24 CFR part 35.
Environmental Factors
A commenter noted that ‘‘standard
public health and safety metrics related
to morbidity and mortality’’ are largely
foreign to housing providers, and
whether they align well with the unique
environment of housing maintenance
and management is unknown. This
commenter agreed that the built

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environment’s effect on the health and
safety of residents is more important
than any building damage that is strictly
cosmetic in nature but cautioned that
HUD must ensure that protocols reflect
that PHAs are constrained by funding
and other funding priorities.
A commenter suggested HUD require
inspection of roofs, foundations, storm
water runoffs, trash receptacles, ERV
systems, heat pumps, and air ducts.
This commenter further suggested HUD
require screens to prevent bugs, and
humidity and environmental control to
avoid unnecessary power bills. Another
commenter stated that HUD must
specifically consider hazards created by
the outside environment and their
effects on subsidized properties and on
the low-income tenants who reside in
these developments or are eligible to
live there, and that the comment period
should either be extended, or a new
comment period opened, to specifically
consider these important factors. This
commenter suggested specifically that
HUD should include 24 CFR 982.401(l)
in the regulations, as well as 24 CFR
982.401(h), and other environmental
hazards considerations (e.g., the
proximity of the property to large
polluters and transportation
infrastructure, toxins in the soil and
water, and the area’s air quality).
A commenter proposed several
additions to address general health and
safety concerns. The commenter
suggested that HUD address toxic mold
and indoor air, largely caused by water
leaks and poor ventilation in aging
housing stock, by equipping REAC
inspectors with moisture meters to
detect moisture behind walls that may
signal plumbing or roof leaks that cause
mold. The commenter also suggested
adding and/or revising requirements
around a number of health and safety
issues, including clogged ventilation;
presence of asbestos/radon; presence of
lead-based paint; presence of mice, rats,
bedbugs and roaches. Finally, the
commenter recommended that HUD readjust or remove the Point Loss Caps to
allow for accurate deductions for
deficiencies. The commenter opined
that the practice artificially inflates
REAC scores, negates the point of a
‘‘random sample,’’ and is inherently
biased against the health and safety of
residents.
Commenters also focused on the issue
of water-borne lead poisoning and
provided several lead-related
suggestions, including that HUD update
its lead inspection requirements, by, for
example, no longer allowing visual
inspections to suffice as a valid way to
assess lead risks, and by using a
portable x-ray fluorescence tool, or XRF

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gun to assess lead hazards. A
commenter expressed concern that
HUD’s proposal to make no substantive
changes to the lead-based paint
requirements of its current regulations
misses a critical opportunity to make
long-overdue updates to outdated lead
standards.
HUD Response: HUD appreciates
acknowledgement of the built
environment’s effect on health and
safety of residents; as such this rule
focuses on the built environment
supported by HUD subsidies and/or
assistance, as described in § 5.703 for
outside, inside and units and in the
NSPIRE Standards notice. HUD
acknowledges that capital funding
across both its Public Housing and
Multifamily programs has been limited
in recent years, and this may have
resulted in deferred maintenance and
modernization. However, this cannot
result in units that are unsafe for
residents, and so the NSPIRE program
has made life-threatening conditions a
priority for standards development and
scoring.
Comments concerning the scope of
inspectable items will be addressed
through the subordinate Federal
Register notice on the NSPIRE physical
condition standards, which was
proposed for public comment on June
17, 2022.
In the final NSPIRE Standards notice,
a screen will be considered a
component of the window, and will be
cited if damaged, missing or not
functionally adequate. HUD
acknowledges that some HUD-assisted
housing may be located in areas with
industrial contamination, and takes very
seriously the comment concerning the
risks posed to residents by the external
environment. Contamination can be
addressed as a health and safety concern
under § 5.703(e) of this rule. HUD will
provide additional information about
the applicability of this section in the
NSPIRE Administrative notice. Leadbased paint evaluation and hazard
control is covered under 24 CFR part 35
and is outside the scope of this
rulemaking.
With respect to the dangers posed by
water-borne lead, HUD continues to
work with the Office of Lead Hazard
Control and Healthy Homes and the
Environmental Protection Agency (EPA)
where there are active, environmental
hazards to residents, including lead in
water. More information on the review
of site contamination is available at:
https://www.hudexchange.info/
programs/environmental-review/sitecontamination/.
With respect to other health and
safety issues such as mold, moisture and

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pest intrusion, this rule and the
associated standards cover these
housing-related hazards. The NSPIRE
Standards were proposed on June 17,
2022, for public comment and will be
finalized before this rule takes effect.
NSPIRE will continue to include visual
assessments only, but HUD will
continue to consider other, specialized
inspections for environmental health
issues. The use of a moisture meter to
assess moisture intrusion is one of
several tools HUD has considered and,
because this pertains to inspection
standards, HUD will discuss this further
in the final NSPIRE Standards notice.
HUD will elaborate more on its
scoring methodology in its Scoring
notice. HUD will take these comments
and all additional comments into
consideration before scoring under
NSPIRE commences, including whether
the point-loss cap will be retained.
Affirmative Requirements
A commenter cautioned that several
of HUD’s proposed affirmative safety
requirements would exceed local
building codes and create significant
costs for housing stakeholders and
create unnecessary confusion and urged
HUD to base standards on existing
International Building Code or fire Life
Safety Codes wherever possible. The
commenter suggested that if HUD
proceeds with these affirmative safety
requirements, the agency should be
mindful of these impacts and help
owners defray costs, while allowing
transition times or the possibility to
‘‘earn’’ extra points, rather than lose
points, for new affirmative safety
requirements. The commenter further
suggested that HUD make efforts to
mitigate inconsistencies between
inspectors to the extent possible.
HUD Response: HUD considered the
costs and benefits of this rule and
considered model codes in its
development, where appropriate. The
affirmative requirements in the final
rule at § 5.703 align with the
International Property Maintenance
Code (IPMC) which is currently adopted
for use in 40 States & 1000 plus local
jurisdictions as their housing
maintenance codes. Affirmative
requirements are the basic requirements
for an assisted unit and property that
must be met for participation. These
standards are what HUD considers the
minimum requirements for habitability,
and generally will not be scored for
their presence or absence but will be
designated as pass/fail. If they are not
met, they will be cited, and must be
corrected if the unit is approved for
participation or continued occupancy.
HUD has evaluated the costs of the new

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rule in its Regulatory Impact
Assessment. The NSPIRE Standards
notice was published for comment on
June 17, 2022; additional information
regarding affirmative requirements will
also be included in the forthcoming
Scoring notice.
HUD agrees that inconsistencies
between inspections and inspectors is
an important issue that should be
mitigated and has revised the
requirements for eligibility and ongoing
training as described in the subordinate
NSPIRE Administrative notice which
will be issued soon after this rule. This
notice, and the contract used to procure
REAC inspectors will include
requirements for quality assurance and
control to ensure consistency between
inspectors and inspections.
The NSPIRE scoring methodology will
be published in the Scoring notice. This
Scoring notice will be published for
effect but will seek public comments,
including regarding scoring changes that
reward certain properties for adoption
of affirmative requirements, but HUD
does not plan to award bonus points for
standards that must be met and are not
optional.

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Alternative Standards
A commenter noted that Federal
agencies are required to use voluntary
consensus standards wherever possible
in their procurement and regulatory
activities in lieu of expending public
resources developing government
unique standards and encouraged HUD
to leverage private sector codes by, at
minimum, accepting the IPMC across
HUD’s programs as an optional,
alternative compliance mechanism. The
commenter opined that allowing
adherence to the IPMC to satisfy HUD’s
maintenance requirements would
harmonize these requirements and
standardize practices, and that
inspectors would be more efficient and
effective at implementing a single
maintenance standard than they would
at three or more variations. The
commenter noted the IPMC exceeds
HUD’s standards because HUD’s
standards have not been substantively
updated for decades., while the IPMC is
updated every three years.
HUD Response: HUD considered the
IPMC as a model but believes the
NSPIRE Standards are more appropriate
for HUD programs. To apply the IPMC,
the current inspector workforce would
need to learn a new set of standards in
addition to the statutory requirements
that HUD must oversee that exceed
IPMC. The IPMC also does not publish
standards in areas that are safety
concerns for HUD and is often a

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prescriptive standard that does not
consider current conditions.
Accessibility Compliance
Several commenters recommended
that HUD require that common areas,
indoor mailboxes, parking lots, waste
disposal areas, walkways, and other
areas should be ADA compliant for
persons with disabilities.
HUD Response: Compliance with the
requirements of the Americans with
Disabilities Act (ADA) is already
required for services, programs, and
activities of State or local governments,
as described in 28 CFR part 35. HUDassisted properties must also comply
with Section 504, as described in 24
CFR part 8. The Office of Fair Housing
and Equal Opportunity (FHEO) is
responsible for inspection and
administrative enforcement related to
compliance with accessibility standards
under both the ADA and Section 504, as
well as the Fair Housing Act. Those
regulations are not proposed for
modification through this rulemaking.
The NSPIRE Standards will include
elements of accessibility within the
standards, but these elements are not
the same as the Federal accessibility
standards as they relate to housing.
Compliance with these NSPIRE
Standards does not mean the participant
has complied with the Federal
accessibility standards. HUD also notes
that the NSPIRE standards include
common areas under § 5.703(b), Inside,
and the areas outside the property such
as waste disposal areas, walkways in
§ 5.703(c), Outside.
Area Names and Definitions
A commenter suggested clarifying in
paragraph (a) that ‘‘outside the
building’’ includes the building site.
This commenter also suggested that
paragraph (b) be renamed as ‘‘Inside
common areas,’’ that both mechanical
rooms and utilities rooms be stricken,
and that the definition be qualified as
applying only to areas that are
accessible to residents. With respect to
paragraph (c), the commenter suggested
renaming it to ‘‘Outside areas’’ and that
the definition be qualified as applying
only to areas that are accessible to
residents.
One commenter stated that HUD must
define ‘‘functionally adequate’’ and also
questioned the basis of the universal
habitability requirements and design
specifications.
HUD Response: HUD streamlined the
number of inspection categories (or
areas as previously defined) from five to
three to simplify the inspection program
and improve transparency for all
stakeholders. HUD believes that

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properties should be free from health
and safety hazards, including all of the
areas as described in (b) Outside, (c)
Inside, and (d) Units. Section 5.703(c)
includes the building site, building
exterior components, and any building
systems located outside of the building
or unit. Examples of ‘‘outside’’
components on the site 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.
Regarding ‘‘inside common areas,’’
mechanical rooms and utilities are
included as areas to inspect, regardless
of access because they could present a
safety hazard that could impact units.
For example, combustible materials near
a water heater or furnace in a utility
room could cause a fire that impacts the
entire building. Regarding the definition
of the term ‘‘functionally adequate,’’
each standard in the NSPIRE Standards
notice will define what ‘‘functionally
adequate’’ means for that particular
standard.
Living Rooms as Bedrooms
Commenters suggested that
§ 5.703(d)(5) should not count living
rooms as a bedroom and should be
modified to include Public Housing and
Multifamily housing. A commenter
stated that families with a member who
experiences a disability should not be
forced to use the living areas as a
bedroom in lieu of granting the family’s
reasonable accommodation request for a
larger voucher.
HUD Response: Proposed
§ 5.703(d)(5) included requirements that
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. While HUD
appreciates comments on bedroom
sizes, the regulation has been retained
with a modification to exclude gender
qualifiers but retained language around
age regarding what PHAs could require
for families. The commentor’s concerns,
however, touch also on subsidy
standards in § 982.402, which are not
proposed for revision. The requirements
for family size and composition are not
applied to the Public Housing and
Multifamily housing programs because
those programs did not previously have
strict occupancy requirements linked to
the unit size. Families that include a
person with a disability may request a
waiver of the occupancy requirements
to accommodate their needs as a
reasonable accommodation. The Fair
Housing Act and Section 504 of the
Rehabilitation Act of 1973 each prohibit

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discrimination against persons with
disabilities, and PHAs and owners are
obligated to grant requests for
reasonable accommodation when it may
be necessary to afford a person with a
disability with equal opportunity to use
and enjoy housing. For more
information or to file a complaint, see
www.hud.gov/fairhousing.

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Superseding State and Local Code
A commenter suggested that
§ 5.703(f)(1) should be amended to state
that HUD standards supersede local or
State codes when HUD standards
exceed local or State codes.
HUD Response: HUD declines to state
that HUD’s standards supersede local or
State code. The NSPIRE rule establishes
a standard for housing quality across
covered HUD programs, while allowing
applicability of State/local building
codes that are more protective or
necessary for local conditions.
Superseding State or local code only
where HUD standards exceed that code,
and only for HUD housing, would be
administratively difficult and
unnecessary. HUD Housing is required
to follow both Federal standards and
State and local law.
Application to HCV and PBV Units
Commenters suggested that
§ 5.703(f)(2) should be amended to
require HCV and PBV units (not just
Public Housing and Multifamily
housing) to meet State and local
standards that are greater than those
established by HUD in order to comply
with the subpart. A commenter asserted
that the inapplicability of State and
local housing code to HCV and PBV
units is in opposition of the statute and
HUD’s historical practices and stated
that HCV and PBV units should not pass
inspection if they do not comply with
Federal, State, and local codes, asserting
that voucher families should be able to
benefit from using State and local laws
to improve their housing conditions
without the risk of their losing their
subsidies, and that to the extent HUD is
concerned that State and local codes are
being used to target and exclude
voucher holders, HUD could clarify that
local and State code violations cannot
result in the termination of the subsidy
or used in a manner to penalize the
tenant household. A commenter stated
that HUD must ensure that inspection
standards applicable to the HCV
program do not impose requirements
that exceed typical rental market
standards and unintentionally limit
housing choice or discourage landlords
from participating. The commenter
stated specifically that the standard for
units to have ‘‘a living room and a

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kitchen area’’ should reflect the existing
definitions used in the HCV program
and that the phrase ‘‘other than very
young children’’ must be defined, or it
must be clear that the housing provider
has the discretion to define the age.
HUD Response: HUD believes that the
language under § 5.705(a)(3) is sufficient
to address these concerns. State and
local codes still apply to HUD assisted
housing, but the requirements would
not be incorporated in the NSPIRE
inspection. For the HCV and PBV
programs, PHAs have the ability to
consider variations in local laws and
practices and provide appropriate
flexibility to facilitate the efficient
provision of assistance. Multifamily
owners, managers and PHAs are
encouraged to include State and local
requirements in their annual selfinspections. HUD agrees that the HCV
and PBV program should have certain
flexibilities to ensure that the program
does not unintentionally limit housing
choice or discourage landlords from
participating, while still requiring that
units be healthy and safe for residents.
With respect to definitions of ‘‘living
rooms’’ and ‘‘kitchens,’’ HUD has not
created new definitions for these spaces
in regulatory text, and State/local
standards will continue to apply. In the
Administrative notice, HUD will
include definitions that align with the
American Housing Survey. HUD
appreciates the comment on defining
‘‘very young children.’’ As discussed
elsewhere, HUD removed the regulation
requiring separate bedrooms for
children of the opposite sex, and
therefore the term ‘‘very young
children’’ is no longer used.
Comments Regarding Smoke/Carbon
Monoxide Detectors and Fire
Extinguishers
Commenters had concerns about the
burden associated with providing the
various items. One commenter
suggested that requirements for CO/
Smoke detectors in every sleeping room
be grandfathered to requirements at the
time of construction. The commenter
noted that current regulations and code
require them on each living level but,
unless a minimum threshold is crossed
in rehab/modification in any unit, they
are not required in each bedroom. The
commenter also opined that the
likelihood for tampering and/or removal
will increase by a level times the
number required to be provided.
Another commenter opined that the
proposed change of requiring fire
extinguishers in every unit is a costly
and bad idea to implement, and that it
will be highly difficult to regulate
extinguishers owned by residents, and

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costly in dollars and points to the
project. Another commenter urged HUD
to reconsider the draft standard that
would require a fire extinguisher in
every unit, and to replace it with a
requirement to install extinguishers
regularly at a certain measure
throughout the hallways of properties.
The commenter stated that having a fire
extinguisher in the unit will increase
the likelihood that a resident will
remain in the unit in the case of the fire
and try to extinguish it, instead of
exiting the unit as quickly as possible.
A commenter stated that requiring a
fire extinguisher inside each rental unit
would exceed local requirements and
create administrative burden. Some
commenters supported requiring carbon
monoxide detectors. One commenter
stated that HUD must move quickly to
require the installation of carbon
monoxide detectors in HUD-assisted
and HUD-insured housing, and that,
given that most local codes require the
presence of carbon monoxide detectors,
there is no need for delay. A commenter
noted that HUD did not require carbon
monoxide detectors to be installed
consistent with the 2018 edition of the
International Fire Code but noted that
the IPMC has required carbon monoxide
detectors in each of the last two
editions. A commenter asked if fire
stops could be used in place of fire
extinguisher and noted success in
installing fire stops, which deploy
automatically, above stoves to prevent
kitchen fires, which they found to be
safer than using a fire extinguisher.
HUD Response: Regarding carbon
monoxide detectors, the requirements in
the 2021 Consolidated Appropriations
Act took effect on December 27, 2022.
The Act requires that PHAs adopt the
provisions of the 2018 edition of the
International Fire Code (IFC) Standards,
sections 915 and 1103 (or subsequent
versions if amended) for the covered
programs. The NSPIRE Standards
proposed to incorporate this
requirement, but the statute is
prescriptive for public housing owned
or operated by a PHA, dwelling units
occupied by individuals with Housing
Choice Vouchers, dwelling units
assisted with project-based vouchers or
project-based rental assistance, dwelling
units assisted under the 202 and 811
programs, and dwelling units assisted
under the HOPWA program and
required that units in these covered
programs have carbon monoxide
detection devices installed, effective
December 27, 2022. No action from
HUD was necessary to cause this
requirement to take effect, and HUD is
making these conforming changes at the
final rule stage without notice and

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comment because they only incorporate
these statutory requirements.
Regarding fire extinguishers and other
fire safety requirements, the proposed
NSPIRE Standards notice published on
June 17, 2022, included a fire
extinguisher requirement and HUD will
discuss this requirement, including
comments received on this requirement,
more in the final Standards notice. With
respect to the comment about ‘‘fire
stops,’’ HUD interprets the comment as
actually relating to a ‘‘StoveTop Firestop
system.’’ HUD does not intend to
include such a system as an alternative
manner of compliance because these
systems do not have national standards
and must be acceptable to the local
authority having jurisdiction.

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Other Suggestions
A commenter supported requiring
pictures of failed items and
recommended requiring pictures of
items that are not fails but should
nonetheless be documented. Another
commenter supported current HUD
asbestos abatement standards. Another
commenter urged HUD to provide a
single document with clear and
objective scorable defects and weight of
defects and required condition.
Two commenters suggested that HUD,
in the final rule, refine the
characteristics of some of the identified
unit components, such as adequate heat
(and cooling where appropriate) directly
or indirectly in each room, wellfunctioning windows and doors with
functioning locks, and an adequate
number of electrical outlets and built-in
lighting fixtures.
HUD Response: HUD appreciates the
comments about the need for a clear and
objective scoring methodology. NSPIRE
will require documentation of
deficiencies which inspectors will
upload into a new streamlined system.
Further guidance regarding
documentation of deficiencies will be
published in the final Standards notice,
Scoring notice, and Administrative
notice which will be published before
the effective date of this rule.
The proposed rule did not propose
new standards for asbestos in federally
assisted housing and HUD is choosing
not to do so now. Property owners,
managers and PHAs are advised to
continue to monitor any known or
suspected asbestos containing materials
(ACM) and ensure that they are not
damaged or friable. If ACM will be
disturbed during renovation activities,
follow all applicable OSHA and EPA
laws.

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Comments Regarding Water Safety
(Questions for Comment #1 and #2)
HUD asked several questions about
water safety. HUD received comments
on all of these questions, which are
combined and discussed below. The
first group of questions was directed at
definitional issues, i.e., how should
‘‘safe and potable water’’ be defined and
whether ‘‘safe’’ should mean that a
public water system is in compliance
with the Safe Drinking Water Act?
A number of commenters pointed out
that PHAs are not in a position to
monitor water safety, which is the
responsibility of local water suppliers
and local government agencies.
Commenters also noted that there is an
important distinction, unaddressed in
the proposed rule, between properties
served by public water systems and
those served by well water systems.
Some commenters stated that HUD had
no business attempting to define ‘‘safe
and potable water,’’ with a few
recommending specifically that ‘‘safe’’
be removed. These commenters stated
that this determination is the province
of other State and Federal entities, most
notably the EPA, and that HUD lacks the
requisite expertise with respect to
determinations of water safety.
Many commenters did suggest
definitions for ‘‘safe and potable water.’’
Some commenters suggested keeping
the definitions very basic: ‘‘Running
water with temperatures of hot and cold
running thru the pipes’’; ‘‘water that is
safe to drink and for food preparation’’;
potable water is water that is ‘‘safe to
drink.’’ One commenter suggested that
HUD should define safe water as having
‘‘reasonable certainty that no harm will
result,’’ and that ‘‘there is a reasonable
certainty in the minds of competent
scientists that the substance is not
harmful under the conditions of its
intended use.’’ This commenter, with
respect to ‘‘potable water,’’ suggested
that potable means more than just safe,
and that water can be used for drinking,
cooking, bathing, and other household
needs, and therefore must meet the
required (chemical, biological and
physical) quality standards at the point
of supply to the users, and be of an
acceptable color, odor and taste for each
personal and domestic use. One
commenter stated that ‘‘if water is
coming from a public source, it is safe
to assume the water is fit to drink.’’ A
commenter believed that HUD should
establish a national definition, not
driven by local standards or politics.
Many commenters stated that it is
appropriate for HUD to rely on EPA
determinations under the Safe Drinking
Water Act (‘‘SDWA’’). At least two

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commenters, however, while supporting
a general reliance on EPA’s SDWA
determinations, pointed out that those
determinations are not acceptable in the
presence of lead service lines.
HUD also asked several questions
related to detection and enforcement of
safe water standards, including how
should HUD monitor whether water is
safe; what elements should be reviewed
during a physical inspection to
determine water safety; and whether
inspectors should verify that a
municipal water supply authority is in
compliance with EPA’s Safe Drinking
Water Act?
A number of commenters expressed
an opinion that HUD should not be
involved in ‘‘monitoring’’ water safety;
rather, HUD should defer to the agencies
that currently monitor the water supply
under State and Federal law. One
commenter noted that should HUD
choose to enter this area, participation
should be limited to confirmation that
the property is served by a municipal
water system through a water bill or that
any private well system is monitored
and tested regularly. Another
commenter stated that adding a new
safe water monitoring layer to
something that is already regulated and
monitored on a State and Federal level
seems a bit redundant and unnecessary.
Another commenter offered that if HUD
is concerned about water quality, then
HUD, either internally or through the
EPA, should be able to perform regular,
routine inquiries about public water
systems around the country to ensure
that those systems are in compliance
with the Safe Drinking Water Act.
Similar to monitoring, a number of
commenters expressed an opinion that
HUD should not be involved in
conducting inspections related to water
safety; or, in the alternative, that HUD
conduct only the most cursory
inspection with respect to water safety.
One commenter opined that no
elements should be reviewed during the
physical inspection to determine water
safety; that a PHA has met its
responsibility if there is hot and cold
running water. Another commenter
suggested that HUD’s inspection be
limited to a visual observation of water
for contamination or discoloration.
Other commenters suggested that no
elements should be included by HUD in
requirements for physical inspections
other than a visual inspection for poorly
maintained pipes and valves and
confirmation that water flow is present
and can maintain at least 120 degrees.
One commenter suggested that as one
element of inspection, HUD should seek
to determine that owners are not
delinquent in their water and sewer

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accounts for individual properties, in
order to ensure that properties are not
at risk for service disconnection. Several
commenters suggested that HUD could
review local Water Quality Reports that
are compliant with the U.S. EPA’s
National Primary Drinking Water
Regulation for Consumer Confidence
Reports, and/or other reports provided
by municipalities/water supply
authorities.
Two commenters opined that
inspectors trained in water sampling
techniques could take the water samples
directly and send them to a certify
laboratory for analysis. One commenter
stated that HUD should monitor
drinking water safety by testing housing
facility infrastructure for contamination,
not just public water systems. Another
commenter stated that HUD, either
internally or through the EPA, should be
able to perform regular, routine
inquiries about public water systems
around the country to ensure that those
systems are in compliance with the Safe
Drinking Water Act. If not, the Federal
Government should work with the local
jurisdiction managing the public water
system to ensure those systems are
upgraded and safe. The commenter
noted that HUD can also inform PHAs
in those areas that there may be water
contamination so that they may inform
their residents and provide those
residents options for safe drinking water
if the local or State government has yet
to do so.
One commenter recommended that
HUD must conduct its own monitoring
of water safety in order to ensure that
housing it supports provides safe and
potable water to its residents. The
commenter suggested periodic
monitoring of every unit for lead; PFAS
and other unregulated yet harmful
contaminants; Legionella; and,
objectionable smell, taste, color, or
clarity, and that monitoring and
sampling should be done in accordance
with the best science to achieve accurate
results. The commenter also stated that
HUD must immediately notify residents
of unsafe or unpotable water, what is
being done to rectify the condition, and
when the condition has been resolved.
With respect to whether HUD
inspectors should verify that a
municipal water supply authority is in
compliance with EPA’s Safe Drinking
Water Act, the majority of commenters
replied in the negative with several
noting that building owners have zero
recourse if the water provider is not in
compliance with the Safe Drinking
Water Act. One commenter expressed
that if HUD seeks to verify the
availability of safe and potable water for
residents, the Department should

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communicate with local water system
administrators rather than with property
owners and agents. One commenter
stated that SDWA is designed to
measure a water system’s compliance
with Federal standards, which the
commenter finds lacking in several
respects. This commenter stated that
Federal lead standards, EPA enforceable
limits, and maximum SDWA
contaminant levels are out of date and
do not reflect latest scientific evidence,
with the result that some dangerous
contaminants can be present in water
within homes even though the water
provided by the water system is free of
the bacteria.
Some commenters supported the
notion that HUD should verify SDWA
compliance; one commenter strongly
supported this idea. This commenter
stated that HUD should create a uniform
standard of water safety monitoring at
HUD facilities nationwide. Another
commenter opined that water safety
should be determined using the
guidelines of the EPA’s Safe Drinking
Water Act and that an inspector needs
to ensure that the local municipal water
supply authority is in compliance.
Those commenters who did suggest
physical inspection criteria offered a
number of recommendations. Multiple
commenters suggested primary reliance
on official reports from other
governmental entities; one of these
suggested that where there is no public
water supply HUD’s inspection should
rely on appearance, odor and/or taste.
Another commenter suggested that a
basic turbidity test from randomly
selected units at the property might give
some immediate feedback for an
inspection report about whether a
plumbing issue might be impacting the
potable drinking water, and that an
inspector could also take a quick pH test
at the same source. This same
commenter suggested that privately
sourced water could be sent to a
laboratory for testing.
A commenter suggested that any Point
of Use or Point of Entry treatment
device should be identified and
inspected to ensure it is properly
installed and maintained, and that hot
water tanks be inspected and drained, as
appropriate. This commenter
recommended inspection criteria for
well water systems, including well
inspection; proximity to and quality of
any onsite or neighboring septic system;
total coliform/microbial testing; lead
and copper testing, and chemical testing
for all known potential chemical
contaminants in the aquifer.
HUD Response: HUD appreciates
comments on how water is monitored,
and the shared responsibility for

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ensuring drinking water safety. HUD
notes that drinking water requirements
are not new to HUD standards.
Requirements already exist within the
HQS and UPCS regulations, with
additional details in the HQS inspection
guidance; the NSPIRE regulations
consolidate and clarify the requirement.
At this final rule stage, HUD is
including a requirement that the unit
provide safe drinking water, regardless
of the source (well vs. municipal water
supply). Additional information about
this requirement is provided in the
NSPIRE Standards notice proposed for
comment on June 17, 2022.
When there is public health risk
related to drinking water from a public
source, the public water system is
required under US Environmental
Protection Agency (EPA) regulations 11
to notify its customers. Notice typically
includes local media alerts, postings on
public water system websites and alerts
in water bills. Given this, HUD expects
that PHAs, residents and landlords
participating in the Section 8 programs
will have a minimal burden to monitor
public water safety. If a local public
water system notifies a landlord or PHA
that the public water is contaminated
and recommends action, landlords
participating in the Section 8 program
are already expected to ensure that the
action is taken. This same expectation
applies to PHAs operating public
housing. This rule standardizes both
regulations to a single requirement and
adopts the existing approved
acceptability criteria for drinking water
for all applicable programs.
HUD adopted the term ‘‘safe’’ to align
its regulations with the term used under
the Safe Drinking Water Act, as well as
to support the broad HUD-wide goal to
provide safe, habitable housing for
residents. Water for drinking, bathing
and other activities must be available to
residents. After consideration of public
comments, HUD has decided to
continue to defer to EPA’s
determinations for allowable levels of
drinking water contaminants, and what
is considered safe. HUD expects that
landlords, PHAs, and residents will be
advised by a public water system, State
or local health departments, or the EPA
when the public water is unsafe and can
rely on this determination without
further testing. These alerts will be
distributed through local media alerts,
the public water system website or
within water bills. PHAs and owners
should be aware of local water safety
alerts and take action to either
implement recommendations or
provided an alternate source of safe
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water, such as bottled water. Often, the
impacted jurisdiction will provide
bottled water for free. For more
information about requirements for
public notification, see https://
www.epa.gov/dwreginfo/lead-andcopper-rule. Regarding the suggestion of
a visual inspection for contamination or
discoloration, this observation would
not indicate if the water had high levels
of lead. Additional details about the
water inspection process will be
provided in the NSPIRE Standards
notice.
The NSPIRE rule, and the REAC
physical inspection, does not require
detailed reviews of documentation, and
there is no current HUD regulatory
requirement that PHAs and property
owners maintain documentation of
water and sewer payments or local
water quality reports. This would be a
substantial new administrative burden
not contemplated in the proposed rule.
Additionally, since this information is
not federally standardized, it would add
a significant time burden to the
inspection. HUD has consulted with the
EPA on whether it could monitor
reporting in the Safe Drinking Water
Information System (SDWIS), but the
information reported is delayed, and
may not indicate whether there is a
current exposure risk. For example,
when lead is identified through routine
system monitoring, the public water
supply can take actions to alter water
chemistry to reduce leaching. In HUD’s
administrative notice, HUD intends only
to include a requirement that PHAs and
landlords be aware of local drinking
water alerts that are already required
under EPA regulations and to take
action to implement an acceptability
criteria variation (e.g., point of use water
filtration) when necessary. These alerts
are issued when actions taken by the
public water system are not sufficient
and there may be a risk of exposure.
HUD also continues to evaluate means
of using publicly available data to keep
residents safe.
HUD declines to include a
requirement under NSPIRE for
inspection of water treatment devices,
point of use filters, well systems, or
water testing. Section 5.703(d)(1)
requires that the unit include an
adequate source of safe water and does
not specify or establish different
contaminant standards for whether the
source is municipal or well. As
discussed above in the preamble, HUD
has removed the term ‘‘potable’’ and has
clarified that safe drinking water must
be provided in the kitchen.

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Question for Comment #3: Site and
Neighborhood Standards
HUD asked 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 asked whether all
of the explicit standards should be
included or if there are certain site and
neighborhood standards that HUD
should consider changing. HUD
received the following comments in
response.
Site & Neighborhood Standards
Generally
Several commenters stated that PHAs
should be held responsible for
environmental conditions within their
control and that the standards remain
relevant because it may sometimes be
necessary to invoke site and
neighborhood standards when
conditions are genuinely unsafe,
especially for children. A commenter
stated that site and neighborhood
standards have historically been
important to ensure a balanced
distribution of public housing projects
within a locality.
A commenter suggested that a
regulation for a site & neighborhood
inspection is unnecessary because most
of the facilities already follow the HUD
and Tax Credit guidelines to not build
in areas of industry, railroad tracks or
traffic congestion; another noted that it
would not make sense to include these
standards in the regulation when the
vast majority of inspection standards
will not be in the regulation. Another
commenter pointed to the difficulty
inspectors would have enforcing local
site and neighborhood standards.
Commenters cautioned that these
standards could be prejudicial against
older housing and transit-oriented
properties and suggested that historical
buildings should be exempted from the
testing standard to preserve the rarity
and quality of materials and finishes in
these buildings.
Commenters expressed concerns that
site and neighborhood standards can be
subjective and very hard to judge,
unless an area clearly represents a
serious health hazard or safety concern.
Thus, commenters urged HUD to
provide explicit standards and to clarify
how it determines whether there is a
danger because it is important for HUD
to provide specific and measurable
guidance so that PHAs are able to
incorporate any changes into existing
processes. A commenter urged HUD to
write the regulations to specify that
properties must be ‘‘reasonably free’’ of
‘‘serious adverse environmental

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conditions’’; another suggested HUD
add ‘‘landslide’’ and ‘‘hill slide’’ to the
term ‘‘mudslide’’ and cited to examples
of HUD-assisted properties being
vacated due to hill slide events in both
public housing and project-based
housing.
With respect to the Section 8 program,
where there is no scoring system similar
to the PHAS system, a commenter
suggested HUD clarify whether these
items require failure of an HQS
inspection.
One commenter opined that the site
and neighborhood standards should be
included in the inspection standards
and the regulation, because there are no
qualifications for inspectors and leaving
enforcement to individuals who can
only rely on instructions provided by
their locality would defeat the
implementation of establishing a
uniform standard. This commenter also
opposed giving these inspectors
discretion, which the commenter said
would effectively render them
legislators.
HUD Response: HUD appreciates the
comments related to the importance of
site and neighborhood standards to the
NSPIRE rule. HUD believes that
expanding the existing HQS site and
neighborhood standards from
§ 982.401(l) to apply to additional
programs would negatively impact
existing properties for circumstances
beyond their control and threaten
already scarce affordable housing
resources. With this final rule, the
original text of § 982.401 is removed and
the regulation refers to § 5.703. Site is
included as the example ‘‘building site’’
at § 5.703(c). Neighborhood conditions
are not directly included in § 5.703(c).
The listed elements of the outside must
be functionally adequate, operable, and
free of health and safety hazards. The
final subordinate NSPIRE Standards
notice, to be published before this rule
is effective, will provide more details on
areas and components inspected. HUD
will continue to update and publish
guidance on other environmental
hazards that are not fully addressed by
NSPIRE, such as radon, lead-based
paint, carbon monoxide, and other
environmental health hazards. The
NSPIRE inspection is not intended to
serve as the only way HUD assesses
compliance with all environmental
health laws and related requirements.
Compliance is verified through other
oversight processes performed by
different HUD staff. For example, radon
is considered as part of certain
environmental reviews conducted under
24 CFR parts 50 and 58. Because the
revised § 982.401 will refer to the new
§ 5.703, the term ‘‘mudslide’’ is no

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longer in regulation, and there is no
need to add ‘‘landslide’’ or ‘‘hill slide’’
as examples in regulatory text. Finally,
NSPIRE inspections will include the
elements identified as ‘‘outside,’’
including the site as provided in the
NSPIRE Standards notice. But the
NSPIRE inspection will not include
environmental sampling. The focus of
NSPIRE is more toward residents’ units,
where residents spend the most time.
Inspectors using the NSPIRE
standards will be trained in the
standards and have experience in
performing housing inspections. The
final NSPIRE Standards notice will
provide guidance on what to evaluate,
and the NSPIRE Scoring notice will
provide factors for scoring. A software
tool will be available to inspectors and
PHAs to help ensure assessments are
consistent and accurate. Property
owners and managers will continue to
have a process to appeal physical
inspection scores to HUD, and REAC
will continue to have a quality
assurance team to monitor inspection
scoring and trends. The process for
appeals is provided in this final rule at
§ 5.711(c), (d) and (e) and the
Administrative Procedures notice.

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Environmental Conditions
Many commenters stated that the
property or PHA should not be held
accountable for adverse environmental
conditions outside of its control, such as
flooding, poor drainage, sewage hazards,
mudslides, air pollution, smoke or dust,
excessive noise of vehicular traffic, and
issues with adjacent lots or buildings. A
commenter noted that property owners’
ability to address these issues may be
restricted by local laws. Another noted
that fire hazards, garbage and
infestations can be the result of tenant
behaviors within their units, common
areas or the site grounds.
Commenters pointed out that if
properties are penalized for these issues,
the voucher program may have fewer
units available for families as landlords
are increasingly frustrated with the
inspection process. One commenter
stated the neighborhood standards may
also preclude provision of assistance to
existing homeowners in substandard
housing conditions that reside in rural
communities where drainage, streets,
sidewalks and other neighborhood
improvements are not found or also
require improvement.
Commenters suggested that the site
and neighborhood standards should be
considered for properties only at the
time of development, prior to final
endorsement, or prior to entering into a
rental subsidy contract.

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HUD Response: HUD appreciates the
comments regarding site and
neighborhood standards and
environmental conditions that may be
outside the control of the property
owner or PHA. In addition to HUD’s
responses above, NPSIRE inspections
and scoring are more focused on the
units, versus other inside and outside
areas. This is because the unit is where
residents spend most of their time, and
the safety and habitability of the unit is
critical. Additional details on
inspectable areas and deficiencies were
proposed for comment in the
subordinate NSPIRE Standards notice
and will be finalized before the rule is
effective.
Questions for Comment #4–11 on
HOME and HTF
HUD asked a number of related
questions pertaining to minimum
housing condition standards, minimum
deficiencies, and other appropriate
standards across HOME and HTF,
including HOME Tenant-based rental
assistance (TBRA) properties, in a
variety of contexts (e.g., rehabilitation,
rental, home ownership and
affordability period) to solicit feedback
on appropriate standards to ensure that
HOME-assisted and HTF-assisted
housing remains decent, safe, sanitary
and in good repair.
Comments Regarding HOME and HTF
Standards Generally
Across the different scenarios
presented, several commenters
expressed a need for a uniform,
consistent set of standards, not only for
HOME and HTF, but across all federally
assisted housing programs. One
commenter stated that minimum
standards should not be asymmetrical
depending on program or resident type,
but broad sweeping to fit all sorts of
housing units. The same commenter
recommended that inspectors for HOME
and HTF programs be provided clear
definitions to limit firsthand
interpretations of the guidance as well
as appropriate supplemental training on
future guidance.
HUD Response: HUD appreciates and
agrees with the comment with respect to
consistency and has aligned standards
with only minor exceptions. The
NSPIRE rule aligns HOME and HTF
standards with other HUD-assisted
housing programs subject to NSPIRE.
There will be some differences by
project type in certain cases (e.g., rental
project, homebuyer acquisition, or units
occupied by tenants receiving HOME
TBRA). While the NSPIRE rule aligns
standards for HUD-assisted housing
programs where these programs share

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common attributes (e.g., within the
dwelling unit), HUD agrees with
comments pointing out that the
minimum deficiencies that must be
corrected in a HOME- or HTF-assisted
project should vary in certain cases.
This is because NSPIRE includes
standards for areas or components of a
Multifamily building that do not exist in
a single unit assisted with HOME TBRA
or HOME or HTF-assisted single-family
housing of one to four units. In addition,
HOME and HTF may be used to assist
a homebuyer to acquire housing, which
is a fundamentally different type of
housing project compared to the HUD
rental programs for which NSPIRE is
designed. HUD is concerned that
unduly onerous property standards may
severely limit the choice of unit for an
individual or family receiving assistance
for homebuyer acquisition. It is HUD’s
intent to impose property standards that
ensure both HOME- or HTF-assisted
homebuyer acquisition projects are
decent, safe, sanitary and in good repair
but also sustainable so that the
homebuyers are not subject to the
financial burden of a system
replacement or major repairs soon after
acquisition.
Consequently, HUD has determined
that it is necessary to impose HOME and
HTF minimum property standards
consistent with NSPIRE’s focus on
safety and habitability, but which vary
based on project type to balance the
need for both quality and availability of
housing. As requested by commenters,
HUD will provide additional guidance
and training to ensure that all PJs and
HTF grantees understand the property
standards requirements. HUD’s Office of
Community Planning and Development
(‘‘CPD Office’’) will issue an NSPIRE
notice describing the applicability of the
NSPIRE Standards for HOME and HTF.
Comments Regarding Minimum
Housing Condition Standards for HOME
and HTF Housing
Some commenters discussed the
suitability of the current HQS as an
appropriate standard to ensure that the
housing remains decent, safe, sanitary
and in good repair. One commenter
believed that HQS in and of itself could
apply across the programs covered by
the proposed rule. Another commenter
stated that HQS, in combination with
the current HomeFirst inspection form,
would establish a robust minimum
housing condition standard.
One commenter recommended
adoption of International Residential
Code (IRC) for single family new
construction projects and rehabilitation
projects. With respect to rehabilitation,
the commenter further recommended

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inclusion of minimum health and safety
standards in addition to IRC, as not all
health and safety concerns are
addressed by IRC rehabilitation
requirements.
With respect to HOME TBRA
specifically, the commenter urged HUD
to consider that many participants elect
to reside in single-family housing that
may not meet the requirements set forth
for HOME rental properties and
expressed an opinion that existing
Housing Quality Standards are well
suited to both homebuyer, acquisition
only, and HOME TBRA projects.
A commenter recommended that HUD
include § 982.401(l) and (h) and other
environmental hazard considerations.
HUD Response: HUD understands
that some commenters prefer HQS as a
standard for ensuring that HOME- and
HTF-assisted housing is decent, safe,
sanitary and in good repair upon
completion and throughout the period
of affordability for rental housing. HUD
believes that the transition to NSPIRE
will retain what commenters appreciate
about HQS while accomplishing
NSPIRE’s goal of aligning standards
across HUD programs.
For the HOME and HTF programs,
CPD will issue a notice to implement
the NSPIRE Standards and identify
deficiencies related to the NSPIRE
Standards for these specific programs.
In CPD’s experience with HQS as a
minimum property and inspection
standard for HOME TBRA units and
certain HOME and HTF rental projects,
HOME- and HTF-assisted housing have
different statutory requirements than
other NSPIRE programs and therefore,
other factors that must be considered in
implementing revised property
standards. This rule revises the HQS
regulations at § 982.401 to point to
§ 5.703. Due to this, HUD will
implement requirements for HOME- and
HTF-assisted projects that limit the
applicability of the NSPIRE Standards to
accommodate program-specific
requirements.
HOME and HTF programs are formula
block grants that allow for local
decision-making by the State and local
governments that administer these
programs. Therefore, HOME and HTF
cannot impose property standard
requirements that ignore State and local
codes. This requirement for compliance
with State and local codes is also
statutory under the HOME program.
Consequently, it is not possible for the
NSPIRE Standards to replace State and
local codes in HOME and HTF-assisted
projects. In the absence of applicable
State or local codes, HOME and HTF
program regulations apply the IRC or
International Building Code (IBC) of the

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International Code Council to new
construction projects, as applicable to
the type of housing, and the
International Existing Building Code
(IEBC) of the International Code Council
to rehabilitation projects, as applicable.
References in HOME to § 982.401(l)
and (h) and other environmental hazard
considerations are now covered by
§ 5.703(c) and have been updated. HUD
agrees that elements of § 982.401(l) and
(h) and other environmental hazards are
important and will be addressed in the
supplemental CPD NSPIRE notice that
will apply to HOME and HTF.
Comments Comparing NSPIRE
Standards to HOME and HTF Housing
and Minimum Deficiencies
One commenter, in comparing the
NSPIRE Standards to minimum
deficiencies that must be corrected in
HOME- and HTF-assisted rehabilitation
projects at §§ 92.251(b) and 93.301(b) or
which must be corrected prior to
HOME- and HTF-assisted homebuyer
acquisition of standard housing, opined
that the HomeFirst inspection form
meets or exceeds the NSPIRE standards
for minimum deficiencies that must be
corrected since it incorporates State and
local standards of housing safety and
maintenance. Another commenter stated
that there should not be a minimum or
maximum of deficiencies that must be
corrected during an onsite inspection;
rather, there should be a system in place
by which as many hazards are identified
in a home, evaluated, and prioritized
based on their severity for potential
health and safety outcomes affecting the
occupants. Once there is a prioritized
list, the owner would address those
hazards in the order of outcome
severity. The same commenter
specifically noted that addressing lead
hazards should be part of that high
standard for housing assisted with
HOME or HTF, and that lead hazards
assessed should include lead-based
paint, lead in the drinking water with
point of use testing, and soil
contamination.
With respect to whether HUD should
establish different minimum
deficiencies that must be corrected in
HOME- or HTF-assisted rental housing
and homebuyer or owner-occupied
housing rehabilitation projects at
§§ 92.251(b) and 93.301(b), a commenter
stated that instead of having minimum
deficiencies that must be corrected, the
property owner/manager should address
the hazards based on the severity (i.e.,
extreme, severe, serious, or moderate) of
potential health and safety outcomes
affecting the occupants.
HUD Response: Under the HOME and
HTF regulations, an owner of a rental

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property must immediately correct
health and safety deficiencies. In
addition, the lead-based paint
requirements at 24 CFR part 35 continue
to apply to HOME and HTF-assisted
rehabilitation projects and during the
period of affordability for rental
projects; these regulations are not
proposed for revision and this final rule
includes cross-references to the
applicable sections of part 35, including
subparts B, J, K, M, and R. HUD
disagrees that the programs should not
set minimum deficiencies that must be
corrected following an onsite inspection
of rental housing during the period of
affordability. If HOME or HTF funds are
invested in a rental development
project, HUD must ensure that the
project remains decent, safe, sanitary
and in good repair throughout the
period of affordability. This is a
statutory requirement for HOME.
Furthermore, the HOME and HTF
programs require that PJs and HTF
grantees underwrite a rehabilitation or
new construction rental project to
ensure that funding is available to make
necessary repairs throughout the period
of affordability. Therefore, it is
reasonable to expect HOME and HTF
projects to support necessary repairs to
maintain the housing at a standard that
meets HOME and HTF minimum
requirements and the PJ or HTF
grantee’s ongoing property standards.
HUD does not agree that the HQS, in
combination with the current HomeFirst
inspection form, would meet the new
standards established with the NSPIRE
final rule.
Comments Regarding Minimum
Deficiencies for Small HOME and HTF
Rehabilitation Projects
With respect to whether HUD should
establish different minimum
deficiencies that must be corrected in
large and small HOME- or HTF-assisted
rehabilitation projects at § 92.251(b) and
§ 93.301(b), commenters replied in the
negative, and generally repeated the
feeling that standards should be uniform
across programs and occupancy
categories. With respect to how HUD
should define a large housing project,
one commenter suggested that the
appropriate threshold is 40 or more
units.
HUD Response: HUD agrees with
commenters and will not establish
different minimum deficiencies for large
and small HOME- and HTF-assisted
rehabilitation projects in this final rule.

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Comments Regarding Minimum
Deficiencies That Must Be Corrected for
HOME or HTF Housing
With respect to whether HUD should
establish different minimum
deficiencies that must be corrected for
HOME or HTF-assisted rehabilitation
and homebuyer or owner-occupied
acquisition of standard housing projects
at § 92.251(c)(3) and § 93.301(c)(3), one
commenter opined that no updates to
the minimum deficiency standards are
recommended at this time.
Another commenter responded in the
affirmative, noting that the current
requirement for single-family housing to
meet the requirements of UPCS includes
inspecting for non-applicable items, and
exceeds the standard for other federally
assisted or insured mortgage programs.
The commenter recommended that
units for acquisition be subject only to
homebuyer inspections as required by
FHA financing, and not subject to a
separate standard.
HUD Response: Updates to the
required minimum deficiencies that
must be corrected in a HOME- or HTFassisted rehabilitation or homebuyer
acquisition project are necessary
because the current regulation
references UPCS, which will no longer
exist when this rule becomes effective.
HUD agrees with the commenter that
minimum deficiencies to be corrected
should vary based on project type in
certain cases because not all the
standards of NSPIRE, which was
developed for ongoing inspections of
Multifamily rental developments, will
apply to single-family housing.

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Comments Regarding Minimum HOME
TBRA Written Property Standards
With respect to whether HUD should
establish minimum written property
standards requirements for housing
occupied by tenants receiving HOME
TBRA at § 92.251(f) that exceed or are
different than minimum requirements
for the ongoing condition of HOMEassisted rental housing, one commenter
noted that tenants of HOME TBRA often
reside in single-family housing rather
than in multifamily rental developments
and that the use of a standard that is
heavily focused on large rental
developments, such as UPCS, would
include items that are not present in
single-family housing, and may neglect
to fully inspect for hazards that are
generally only present in single-family
housing.
With respect to whether HUD, in the
alternative, should apply the NSPIRE
standards (not to include the inspection
procedures, administrative processes for
scoring and ranking, or the enforcement

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requirements of NSPIRE) to housing
occupied by tenants assisted with
HOME TBRA at § 92.251(f), one
commenter stated that this was a
reasonable approach. The commenter
stated that HUD can apply NSPIRE
standards but allow local jurisdictions
to establish stronger local standards
which would apply in that jurisdiction.
The NSPIRE standard should be a
minimum, but if there are higher quality
standards that local jurisdictions
establish, those should be allowable as
well. Another commenter replied in the
negative, stating that HUD should treat
this situation consistent with the
proposed rule for HCV and PBV, and
not another standard.
In response to whether another
national housing quality or condition
standard exists that HUD should apply
to housing occupied by tenants assisted
with HOME TBRA, one commenter
recommended the use of the same
standard for HOME TBRA as for the
Section 8 HCV program, even if this
standard is different than the standard
for HOME rental projects. The
commenter reasoned that HOME TBRA
closely mirrors the Section 8 HCV
program, and both programs are often
administered by the same agencies,
allowing them to utilize one common
standard that is most applicable to the
project type.
HUD Response: HUD agrees with
commenters who requested consistency.
The NSPIRE rule establishes standards
that will cover all listed programs, with
exceptions only where there are
differing statutory or programmatic
requirements. For example, the
regulation at § 92.251(b)(1)(viii)
continues to exclude HOME-assisted
projects and units from using the
scoring, item weights, criticality, and
other requirements contained in
§§ 5.705–5.713. Additionally, HOME PJs
must create their own ongoing property
standards for HOME rental housing or
housing occupied by tenants receiving
HOME TBRA, which must comply with
State and local code requirements and
ordinances. Where there are no
applicable State or local code
requirements and ordinances, the
HOME PJ will be required to inspect the
property so that the property does not
contain the specific deficiencies
prescribed by HUD based on the
applicable standards in 5.703 and
published in the Federal Register. By
doing this, HUD is establishing c HOME
PJs require owners maintain the housing
as decent, safe, and sanitary housing in
good repair.

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Question for Comment #12: Special
Housing
HUD asked whether the application of
unique standards to certain specific
special types of housing (i.e., single
room occupancy housing; congregate
housing; shared housing; and
manufactured homes) in the HCV, PBV,
and Moderate Rehabilitation Programs
should be expanded to apply to CoC,
ESG, and HOPWA programs as well.
Two commenters expressed general
agreement with the expansion of the
unique standards; however, one of these
commenters limited endorsement of the
application of the unique standards to
CoC PBRA. One commenter stated that
the unique standards should be
expanded to apply to CoC, ESG, and
HOPWA programs. The commenter
opined that if a recipient of CoC, ESG,
or HOPWA funding determines that
using a special type of housing is the
best course of action for a specific
household, then they should be able to
use that type of housing and not be
penalized through poor inspection
scores based off of standards that do not
make sense for the unit. The commenter
also noted that applying the unique
standards to CoC, ESG, and HOPWA
will help standardize inspection
protocols across HUD programs.
One commenter stated that the unique
standards should apply to CoC, ESG,
and HOPWA programs in order to fulfill
HUD’s intent to align inspection
requirements for all housing assistance
programs to decrease the complexity
and uncertainty associated with
participating in HUD’s programs that
may deter some owners from future
involvement, as well as to decrease
regulatory burden. The commenter
further suggested that HUD consider
other housing types recently
implemented by municipalities to
address their housing crises such as the
approval of Accessory Dwelling Units.
One commenter stated that the
NSPIRE protocol should consider
universally accepted norms associated
with healthcare, assisted living and
memory care occupancies, and that
these should include specific
allowances for egress issues associated
with normal elopement risk reduction
inherent to these facilities. The
commenter further stated that the health
care facility concept of ‘‘RACE’’ (Rescue,
Alarm, Contain and Extinguish) should
be accepted by NSPIRE as a standard
method of fire and life safety within
healthcare and senior facilities, greatly
reducing the necessity of window egress
exits.
One commenter stated that the unique
housing standards in part 982 should

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not be applied to ESG since the
minimum standards for permanent
housing in § 576.403 provide more
flexibility for the program participant
and consistency for the administrator.
The commenter also recommended that
the proposed addition of § 576.403(d)
should be revised to state, ‘‘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)
and § 576.106 to help the program
participant remain in their unit without
inspecting the unit or determining
whether it meets the requirement in this
section.’’ The commenter reasoned that
the payment of rental arrears or rental
assistance under § 576.106 are often
necessary to prevent eviction, and that
requiring the habitability inspection
within 30 days of assistance while also
providing rental arrears or assistance
would decrease the disruptive process
of eviction. The commenter recommend
further that HUD provide guidance
about what resolution is required of a
grantee if the unit that was assisted in
the 30-day period does not meet the
standard but should not require
repayment of assistance provided
during that term.
HUD Response: HUD appreciates the
comments related to special housing
types and the needs of participants in
tenant-based rental assistance, as well as
the feedback about consistent standards
across housing programs, including
expanding unique standards to certain
types of housing within CoC, ESG and
HOPWA programs. The NSPIRE
Standards will apply to these programs,
with some limitations that will be
described in the CPD NSPIRE notices.
For the HCV and PBV programs, Section
982.605 continues to allow for alternate
requirements for sanitary facilities, food
preparation, and space and security if
there is no applicable local code
standard for SRO housing. Housing that
meets the affirmative habitability
standards in § 5.703(d) can be eligible
for HUD assistance, including Accessory
Dwelling Units. With alignment of
housing standards, the Department will
better focus on habitability and the
health and safety of residents.
With respect to universally accepted
norms associated with health care, HUD
evaluated many of these norms
including RACE. Facilities that need to
keep doors or windows locked for
resident safety (e.g., memory care
facilities) or to comply with other legal
requirements, such as Federal civil
rights laws, will be allowed to request
a technical correction and score
adjustment after the inspection. More
information will be in the

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Administrative Procedures notice. In
addition, § 5.703(d) of this rule requires
smoke detectors consistent with the
requirements in NFPA 72, and more
information will be provided in the
NSPIRE Standards notice.
HUD will issue additional guidance
on § 576.403(f) as pertains to payment of
rental arrears or rental assistance and
preventing evictions.
Question for Comment #13: Affirmative
Requirements
HUD asked for input with respect to
the inclusion of certain affirmative
requirements at the final rule stage by
adding deficiencies for the lack of a
presence of certain specific features in
HUD-assisted units. Specifically, HUD
asked for input related to electrical
outlets and switches; GFCIs and AFCIs;
HVAC (permanently installed heating
source); guardrails; and lighting.
General Comments
Two commenters noted their general
agreement with all of HUD’s
suggestions, without providing any
specific comments. Many commenters
sounded a common theme that HUD
should weigh very carefully any attempt
to introduce affirmative requirements
across the entire portfolio of HUDassisted housing, in light of all of the
relevant considerations to the
differences in such housing. One
common theme was centered on the
difference between older and newer
housing. For example, one commenter
noted that most new construction units
have more than enough electrical outlets
in each bedroom and living room.
However, older cities, such as New York
City, have aging housing stock which
might not support multiple new outlets
without upgrading to a new wiring
system. Another commenter opined that
properties built in the 1940s should not
be held to the same standards as those
more recently built, and that even those
that may have undergone some
modernization since initially built were
modernized to the codes and standards
of the time during which they were
modernized. The commenter pointed
out that to hold older properties to the
same standards of recent buildings
would be a financial burden and that
the PHA has neither the funds nor the
staff to stay in compliance and would
discourage private property owners
from participating in HUD programs.
Another common theme related to
suggestions for HUD restraint centered
around the existence of various housing
codes, which commenters argued
obviated the need for HUD to impose
additional requirements. For example,
one commenter pointed out that HUD’s

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proposed requirements would not be in
alignment with local code and would
set higher expectations than local code,
which could have far-reaching
implications on the development and
maintenance of properties and lead to
much higher costs. Another commenter
opined that in some cases the proposed
changes represent very significant
upgrades or overhauls and urged HUD
to either defer to local building codes,
or to slowly phase in the affirmative
safety requirements, as well as to
consider approving additional project or
capital funds to cover the costs of these
upgrades. Two commenters noted that
to the extent that existing properties are
subject to new standards, HUD must
refrain from penalizing (unintentionally
or otherwise) PHAs, owners, and
operators that may not have funds for
upgrades, particularly when those
properties are in compliance with local/
State codes which reflect local needs
and conditions. Commenters suggested
that the electrical requirements should
match the code at the time the building
was built, and that requiring electrical
upgrades to existing building would be
a financial hardship on building owners
unless the building is being renovated.
A commenter expressed that HUD
should align the proposed requirements
to the UCC and PHA’s local codes.
With respect to the proposed addition
of new standards, generally, one
commenter noted that some owners
with older properties may decide not to
participate if HUD requires significant
upgrades to their units that they are not
required to perform if they rent to
someone in the private market. Another
commenter noted that funding to
maintain and improve properties is in
limited supply, and that properties that
are compliant under current standards
should be considered compliant under
the new standards, and that any new
standards should apply only to new
construction and properties that
undergo renovation. One commenter
agreed that all potential deficiencies
that HUD is considering appear to be
reasonable for safety considerations, but
noted that to the extent that existing
properties are subject to new standards,
PHAs, owners and operators should
have an ample notice period to bring
their units into compliance. Another
commenter opined that the proposed
requirements could create new costs for
PHAs and limit the supply of housing
available to voucher holders. As such,
HUD should assess the total cost to
PHAs to comply. One commenter, while
agreeing that the proposed features may
be necessary, cautioned that the cost to
produce the features must be heavily

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weighed in view of additional affordable
units lost versus created or preserved,
and that dollars invested in these
features will ultimately reduce the
available subsidies for those applicants
waiting to be housed, further straining
American’s scarce affordable housing
stock.
HUD Response: HUD appreciates the
comments about differences in housing
stock related to age and location and
reaffirms that the NSPIRE Standards
will balance the need for housing with
the mission to ensure that the housing
is decent, safe, sanitary and in good
repair, as well as the challenge of having
consistent housing standards across
programs with very different levels of
Federal investment and assistance. HUD
recognizes, and agrees with the
commenters, that if inspection
standards and process for tenant-based
programs are onerous and delay lease
up, private landlords may decline to
accept a voucher and lease to other
renters.
HUD also recognizes the challenge of
meeting State or local housing codes for
properties that will be covered by the
NSPIRE Standards. Most importantly,
the forthcoming NSPIRE Standards will
apply nationally and provide standards
for areas where there are no codes or
safety requirements. In other areas, the
State or local requirements may be more
or less stringent. Often, State or local
requirements account for special
conditions in that jurisdiction such as
local climate variation. Where a State or
local requirement is more stringent that
NSPIRE, the property must meet that
requirement as well as the NSPIRE
Standards.
With respect to comments regarding
timelines to correct identified
deficiencies, and the ability of property
owners or PHAs to fund required
renovations, the available time frame for
response will vary depending on the
deficiency, the program, and the
process. In this final rule, HUD has
revised ‘‘severe health and safety’’ to
LT. HUD also developed a secondary
category for other severe, but not LT
deficiencies. Where a LT deficiency as
described in § 5.711(c) is identified, the
owner or PHA must correct it in 24
hours. For the HCV program, response
times for LT deficiencies must be
corrected in accordance with the
HOTMA statute. HUD will discuss this
matter further in the final NSPIRE
standards. Other deficiencies can be
resolved as described in existing
program regulations. Those regulations
are not included in this rulemaking for
revision. HUD recognizes that standards
should include reasonable expectations
for repair, and the need for work to be

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completed quickly and affordably.
These expectations will be described in
the Administrative Procedures notice
which will be published before this
final rule takes effect.
Comments Regarding the Electrical
Outlet and Switch Requirement
Two commenters referred expressly to
the presence of extension cords. One of
them, in agreeing with the proposed
requirement, explained that inadequate
number of outlets within all habitable
rooms leads the occupant to rely on the
usage of power-strips and extension
cords, and that these power strips and
extension cords are often overloaded
with plugs from multiple appliances, a
condition that could lead to overheating
and potential electrical fires. The
commenter further noted that the
presence of such cords is also the cause
of trips and falls hazards which
significantly affect elderly occupants.
The other stated that the proposed
requirement should not be addressed as
an issue unless there are extension
cords that could cause a trip hazard.
Several commenters raised the issues
of the age of the property in question.
One commenter stated that meeting this
requirement may be challenging in older
units that do not have either two
electrical units or an electrical unit and
a permanent light in all habitable rooms,
as older buildings may have to undergo
substantial electrical work on the unit,
adding significant cost and burden to
meeting the standard. Another
commenter stated that many older units
include bedrooms where there is only
one outlet and no overhead lighting.
One commenter specifically noted that
the age of the building should be
considered when determining the
distance of the outlet to the sink. One
commenter felt that establishing
minimum standards to be maintained by
properties that have already been
constructed and under contract as
affordable housing for decades exceeds
the reach of an inspection which is
supposed to ensure the property is being
adequately maintained as safe, decent,
and sanitary, and crosses into the realm
of specifying how that property should
have been constructed instead of
confirming the adequacy of its
maintenance.
Two commenters specifically
expressed concerns with respect to
historic properties. One noted that,
because insured buildings are so diverse
in age and design, to add this
requirement would be a hardship on
owners especially in older historic
occupancies; the other opined that
historic buildings should be exempted
from this proposed requirement in order

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to preserve the high quality of fixtures
and materials.
One commenter expressed that the
rationale in the rule (safety, usability,
and illumination) demonstrates why a
one-size-fits-all approach is
inappropriate and opined that HUD
should attempt to create standards
around safety, usability, and
illumination or demonstrate, with data,
why the proposed requirements are
necessary before adding the proposed
deficiency. One commenter, while
expressing general support for the
proposed requirement, noted that wiring
a second outlet can represent a
significant undertaking, and therefore
urged HUD to incorporate a mechanism
for providing relief for housing under
existing rental assistance contracts
which may not have been built/
renovated to this standard, providing a
grace period until improvements can be
made.
HUD Response: HUD appreciates
feedback about the question of adding a
deficiency for an inadequate number of
outlets. HUD took these comments into
consideration in drafting the proposed
Standards notice and will address this
matter more fully in the final NSPIRE
Standards notice.
Comments Regarding the GFCI & AFCI
Requirement
As with ‘‘electrical outlet and
switch,’’ many of the comments on GFCI
and AFCI centered on issues of existing
codes and/or implementation with
respect to older properties. One
commenter noted that while new and
rehabilitated properties are in
compliance with this standard, older
properties that have not been upgraded
may not be able to comply. Specifically,
a commenter noted that bathrooms in
older properties tend to be smaller and
built before the era of ground fault
indicators, but it is likely that GFCIs
were installed at a later date during an
electrical modernization, and that to
now require that an outlet be located
more than 6 feet from a shower or sink
or be upgraded with a GFCI is not only
unreasonable but unfeasible as well.
Another commenter repeated its
position that imposition of this
proposed requirement crosses into the
realm of specifying how that property
should have been constructed instead of
confirming the adequacy of its
maintenance. Commenters stated that
GFCI outlet requirement should be
grandfathered, i.e., required where
minimum rehabilitation thresholds for
modification have been surpassed and
that, if required in older Section 8 HCV
units, owner participation may be
discouraged due to prohibitive costs to

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modify. One commenter stated that it
does not believe that owners of older
construction (pre-1975) housing units
with proper operating outlets need to be
forced to upgrade to GFCI and AFCI
outlets in order for the unit to pass
inspection and that, if HUD decides to
move forward with this requirement,
additional capital resources should be
made available to convert to this
protection. The commenter further
urged that all NSPIRE inspectors should
be equipped with the proper equipment
to test the GFCI and AFCI outlets and
not be reliant on a visual inspection.
With respect to AFCI in particular,
two commenters noted that AFCI
protection is a newer concept and
would be burdensome and costly to
install in older buildings. Another
commenter, while supporting the GFCI
proposal, distinguished AFCI as a
higher standard that represents a
significant undertaking because it
requires the removal and replacement of
circuit breakers. The commenter
encouraged HUD to defer to local
building code requirements rather than
imposing a blanket AFCI requirement,
and that, if the AFCI requirement is
imposed, HUD should incorporate a
mechanism for providing relief for
housing under existing rental assistance
contracts which may not have been
built/renovated to this standard,
providing a grace period until
improvements can be made.
Several commenters provided
comments with respect to the GFCI
location standard (i.e., within 6 feet of
sinks, tubs, showers; or exterior, garage,
or unfinished basement areas). Two
commenters stated that while it is
reasonable to expect GFCI protection
when an outlet is within 6 feet of water
or on the exterior of the building, it does
not believe it is necessary to require
GFCI protection in garages and
unfinished basement areas.
With respect to refrigerators, a
commenter questioned the need for
GFCI protection as they are often
located within 6 feet of a sink but are
on their own dedicated circuit which
does not have a GFCI installed. The
commenter felt that such a requirement
would be confusing.
HUD Response: HUD agrees that ARC
Fault Circuit Interrupter (AFCI) should
not be required in existing buildings.
The ARC Fault Circuit Interrupter
(AFCI) standard under consideration
does not require the installation of AFCI
breakers where they are not present. The
standard requires the test button, when
present, to function properly when
pressed.
With respect to the physical
placement of Ground Fault Circuit

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Interrupter (GFCI) protected outlets or
breakers, HUD continues to believe that
Ground Fault Circuit Interrupter (GFCI)
protected outlets or breakers should be
a requirement near water sources as
specified in the current Electrical—
Outlet and Switch standard 12 HUD
agrees that major appliances do not
need to be plugged into a GFCI outlet.
HUD will address this matter further in
the final NSPIRE Standards notice. The
requirement for GFCI outlets was added
to the affirmative requirements in
§ 5.703(b), (c) and (d).
Comments Regarding HVAC
(Permanently Installed Heating Source)
Several commenters expressed
general approval of including a
requirement for a permanently installed
heating source and suggested there
should be a deficiency for lack of proper
heating. One commenter opined that
because not having heat could be a lifethreatening situation, not having a
working and reliable heating system
should be a deficiency; another pointed
out that use of a portable heater (with
HUD approval) is generally approved
only in rural areas with warm climates,
and that HUD should include a
requirement for a permanently installed
heat source. Another agreed that all
units should have a heating source but
suggested that HUD define this to
include a properly installed and vented
wood stove as a permanent heating
source. One commenter urged
consideration for existing properties
which do not meet this standard and are
not going through a substantial
rehabilitation and suggested that it
might be appropriate to exclude existing
developments from the proposed
requirement.
Other commenters differed. Two
commenters stated that the requirement
would greatly burden older and historic
homes that do not have permanent heat
sources installed, and that it would be
more reasonable to require heating to be
UL rated for use as a heating device so
long as it is in safe, operable condition.
One commenter pointed out that many
areas do not require the use of HVAC
systems to maintain a living space at a
safe temperature, and that forcing
tropical properties to install heating
equipment and polar communities to
install air conditioning is wasteful and
unnecessarily complicates property
maintenance. The commenter suggested
that establishing that a target
12 Electrical Safety Foundation International
(ESFI), ‘‘Ground Fault Circuit Interrupters:
Preventing Electrocution Since 1973’’ https://
www.esfi.org/ground-fault-circuit-interrupterspreventing-electrocution-since-1971/ (Last accessed
May 2, 2022).

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temperature range be attainable would
be a more cost-effective manner of
protecting stakeholder interests.
One commenter stated that the
heating source requirement is addressed
under flammable materials and that the
proposed requirement would be
redundant and should be eliminated.
HUD Response: HUD agrees with the
comments regarding the importance of
properly functioning heating systems.
Adequate heat is essential for the health
and comfort of residents. The NSPIRE
HVAC standard will include a
deficiency for a minimum temperature
requirement during the winter to
prevent the potential negative health
and safety effects of cold temperatures,
including hypothermia, which can be
fatal. HUD has replaced language
originally in § 982.401(e) regarding the
‘‘thermal environment’’ with a
requirement in § 5.703(e)(1) that the unit
not be subject to ‘‘extreme
temperatures’’ and will finalize
provisions to meet the requirement in
the NSPIRE standards.
HUD appreciates feedback
particularly regarding tropical climates
and will take it into consideration for
future standards iterations. Additional
consideration may be given to areas
with extreme cold weather that falls
within the 3rd standard deviation of
winter temperatures. This will be
revisited in subordinate Standards
notices. HUD agrees that presence of air
conditioning units should not currently
be a requirement. The proposed NSPIRE
HVAC standard does not include a
requirement for air conditioning, just
that installed AC units provide cool air,
which is specified as lower than room
temperature. NSPIRE does not have a
deficiency for a maximum temperature
requirement during the summer that is
analogous to the minimum temperature
winter requirement for heat. Where
State or local jurisdictions have such
requirements, covered programs must
follow the more stringent requirement.
HUD does not agree with commenters
that suggested that portable space
heaters or fireplaces should be
allowable as sources of heat. Portable
space heaters, electric and fuel burning,
have been associated with property fires
and carbon monoxide poisoning. Fires
and carbon monoxide poisoning
resulting from space heater usage have
caused serious injuries and deaths.
Space heaters have also caused
substantial property damage to
properties throughout the United States
sometimes leading to the complete loss
of housing. Residents without adequate
heating have occasionally used gas and
electric ovens to provide heat, which
have resulted in property fires and

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carbon monoxide poisonings as well.
Requiring a properly functioning
permanent heating source as an
affirmative requirement in § 5.703(c)
removes the health and safety risks
associated with portable space heaters.
HUD also does not agree that a
fireplace should be considered as a
permanent heating source. Permanent
heating sources are typically specified
as being self-fueled. They are
permanently affixed within the unit or
building, safely connected to the unit or
building electrical system,
thermostatically controlled by the unit
or building and appropriate for the size
of the unit. The energy source for a
permanent heating system can be
electric, gas or oil. A fireplace does not
meet the self-fueled criteria. Fireplaces
also do not evenly distribute heated air
throughout a property as effectively as
permanently installed heating sources
and are one of the leading causes of
heating system caused fires in
properties.
HUD notes that there have been
instances of properties experiencing a
heating emergency if a boiler or furnaces
fail. In these situations, a temporary,
back up heating source may be
necessary.
Comments Regarding the Guardrail
Requirement
While some commenters supported
the proposed requirement, several noted
the need for additional details. Two
commenters stated that the requirement
needs to have a minimum horizontal
distance associated with it within which
the 30-inch vertical drop exists; one
recommended that HUD better explain
the proposed requirement depending on
site conditions such as hills, slopes, etc.;
otherwise, the requirement could
adversely affect the scoring while
posing no threats to the residents or
general public. One commenter noted
that because a 30″ drop over a 2″ run is
dramatically different from a 30″ drop
over a 20″ run, a better definition of
conditions requiring a railing would be
helpful. The same commenter felt that
the standard for handrails on an exterior
ramp are excessively vague and in need
of clarification about what constitutes a
ramp versus an inclined sidewalk. One
commenter requested additional details
for the design of the railing, such as
height, material, presence of balusters/
spindles, etc.
One commenter stated that guardrails
should be installed in elderly or
disabled facilities only, and not in
family facilities. One commenter
suggested that HUD collect data to
evaluate the costs associated with the
proposed guardrail requirement, as it

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could impose significant financial
burdens on certain properties, and HUD
should perform a comprehensive
assessment of the potential impacts of
this proposal before implementation.
The commenter indicated support for a
guardrail adjacent to a ‘‘walking
surface,’’ but not to an area of raised
grass (e.g., single family home with a
front yard where there is a low retaining
wall by the sidewalk).
HUD Response: HUD appreciates the
commenters’ feedback. Guardrails were
added as an affirmative requirement in
§ 5.703, so they apply to all housing
covered by that section. In addition, all
HUD-assisted housing must comply
with accessibility requirements, where
applicable, including Section 504, the
Americans with Disabilities Act, and the
Fair Housing Act. The Section 504
accessibility standards, which are the
Uniform Federal Accessibility
Standards or the 2010 ADA Standards
for Accessible Design as specified in the
Deeming Notice (79 FR 29,671, May 23,
2014), have certain technical
requirements for guardrails (referred to
as handrails under the Federal
accessibility standards) for ramps. In
general, trip and fall related injuries
occur with high frequency across
multiple age groups throughout the
country. These injuries result in
emergency room visits, life altering
impacts and sometimes death. Installing
guardrails in higher risk walking
locations will decrease the risk for
residents throughout the HUD portfolio.
The deficiency criteria for guardrails are
closely aligned with housing codes
throughout the country. The deficiency
criteria reflect observable conditions
documented during extensive field
testing and demonstration inspections.
HUD is not including specifications for
balusters or spacing for vertical railing
within the guardrail due to variations in
building code requirements over time
across the HUD property portfolio.
Comments Regarding the Interior
Lighting Requirement
Several commenters were in general
agreement with the proposed
requirement. Two commenters
expressed general agreement with the
proposed requirement but opined that
special considerations should be
allowed for historic buildings or other
special circumstances related to older
buildings. One commenter agreed with
the proposed requirement and added
that similar consideration should be
given to adequate illumination on
interior stairs and to some extent on
exterior entrances/stairs. The
commenter further opined that a
standard should be provided with

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respect to what constitutes proper
lighting (e.g., lumens). One commenter
stated that the rule should explicitly
require a light fixture in the bathroom.
One commenter stated that there are
already HUD guidelines for lights
installed in bathrooms and kitchens,
and that they are also included in
building codes. One commenter urged
that if HUD moves forward with this
requirement, consideration be given to
existing properties which do not meet
this standard and are not going through
a substantial rehabilitation.
HUD Response: HUD appreciates the
comments regarding the safety and wellbeing of residents and quality of the
HUD-assisted housing stock. Without
artificial illumination, residents may not
have a means of illumination at night
when natural light is not available.
Lighting is critical for safe egress during
a potentially life-threatening emergency,
allows people to see unsanitary and
unsafe conditions, and thus leads to a
healthier and safer living environment.
Proper lighting also removes usability
barriers allowing people to fully utilize
the features of the built environment.
HUD will take this feedback into
consideration as it drafts the final
Standards notice, which will be subject
to further public comment.
With respect to historic properties,
HUD’s position is that a light source in
the kitchen and bathrooms is the
minimum standard for health and safety
and has added this as an affirmative
requirement in § 5.703. In the rare case
that a historic property designation
would not permit a permanent light
fixture in the kitchen and bathroom, the
PHA or owner may apply to HUD for a
waiver of this affirmative requirement. If
the unit is occupied, HUD will suspend
the correction timeframe until the
waiver is reviewed.
Question for Comment #14: Risk-Based
Annual Inspection Requirement
Expansion
HUD solicited comment on the
proposed risk-based annual inspection
requirement expansion from 2 to 5 years
and received comments both for and
against the proposal.
Several commenters supported the
proposal, noting that most properties are
compliant with inspection standards
and therefore do not need such frequent
inspection. Another noted generally that
the proposed 2–5-year inspection cycle
would be reasonable and welcome.
Several commenters focused on the
relief the proposal would provide to
high performers and low risk properties.
Two commenters noted that the
proposal’s flexibility will allow PHAs to
shift inspection capacity and resources

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to properties, units and households with
the greatest need, with one adding that
the inspection process is very costly for
PHAs and the expansion of the
requirement from 2 to 5 years would be
consistent with the ever-decreasing
funding.
Commenters specifically noted the
appropriateness of the proposal in
connection with self-inspections. Two
commenters, in indicating strong
support for the proposal, opined that
paired with the annual self-inspection
requirement, a risk-based inspection
schedule would provide adequate
oversight over the portfolio. Another
commenter stated since HUD is adding
an annual self-inspection requirement
for its insured multifamily properties,
project-based assisted properties, and
public housing portfolio, this change is
appropriate, and that expanding the
time between risk-based physical
inspections will reward high-performing
properties, alleviate administrative
burdens associated with inspections,
minimize disruptions to residents and
allow HUD to focus its resources on
lower scoring properties that may
require more oversight. One commenter,
while supporting the proposal, urged
HUD to leverage self-inspection
reporting to require onsite inspector
presence less often and recommended
that HUD should maintain portfolio data
through self-inspections that can
continue to insulate against criticism of
the condition of the portfolio.
Conversely, multiple commenters
were opposed to the proposed riskbased annual inspection requirement
expansion from 2 to 5 years, believing
that such a change is not reflective of
HUD’s desire to improve oversight over
assisted properties. These commenters
generally felt that five years is too long
between inspections and suggested a
maximum interval of three years.
Commenters stated that 5 years, and
even 2 years, is a long time and a
property may fundamentally change
within that time, citing potential
adverse occurrences within a five-year
timeframe, including high turnover in
the industry leading to change in
management or ownership, natural
disasters, unexpected capital needs or
discovery of environmental hazards,
mold caused by water line ruptures, fire
hazards, heating/cooling systems
breakdowns, pest infestations, and
hazards resulting from extreme weather
events.
A commenter stated that stretching
REAC inspections out over a five year,
rather than three-year maximum period,
would be an extremely risky move, not
warranted by any evidence that owners
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health and safety codes than they have
been in the past. Another commenter
noted that Public Housing and
Multifamily housing properties are
already in extremely poor condition,
another agreed and stated that even one
property with poor living conditions is
one too many and urged HUD to
catchup on its backlog of inspections
and focus resources on the lowest
performing properties. Another
commenter noted that while inspections
on a more frequent basis are arguably
costly for housing providers, it is
localities that often bear the brunt of the
cost burden when a property is not
adequately maintained—both through
inspection costs and the cost to the
community if residents lose their
housing or are forced to relocate due to
dangerous conditions.
With respect to self-inspections, a
commenter pointed out that selfinspections necessitated by the COVID
pandemic were not appropriately
diligent and that many units failed
subsequent inspections, in some cases
requiring relocation of tenants, and
suggested that all units should have
annual inspections for the first five
years under this system in order to
properly enforce the requirements.
A commenter suggested that for the
Multifamily Section 8 or PBRA
programs, the Contract Administrators
could be a second source to ‘‘inspect’’
or follow-up on the units/property
during years that an official REAC
inspection is not performed and to
verify POA self-inspections and work
order system efficacy, and that the
combination of POA self-inspections
(annually), Contract Administration
MOR inspection/follow-up, and REAC
Inspections would ensure the physical
health of the property and safe,
habitable unit dwellings for the
residents, all within a 3–4 year cycle.
A commenter noted specifically that
the proposed rule also allows for
changes in the inspection protocol to
happen three years after implementation
of previous changes to the inspection
protocol, and that coupling five-year
inspections with changes in the
inspection protocol may result in a
property being inspected under different
protocols, calling into question the
reliability of the assessment of the
property’s physical health.
Several commenters provided mixed
support for the proposal. One
commenter noted that in addition to
providing a strong positive incentive for
POA performance, the prospect of lessfrequent unit inspections is likely to be
attractive for many residents, for whom
the unit inspection can feel invasive and
traumatic but also noted that the criteria

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for determination of inspection
frequency, including the proposed risk
assessment, will be crucial to ensuring
this system both protects residents and
provides incentives for strong
performance and strongly urged HUD to
work closely with stakeholders to
develop these criteria, including
publication of draft criteria for comment
in the Federal Register. This commenter
suggested that such criteria include not
only the recent performance of the
subject property, but also the POA’s
track record of performance at other
HUD-assisted properties as well as the
timespan since the property’s
construction or most recent renovation.
One commenter expressed that
increasing the number of years in
between inspections should be looked at
in the context of the annual selfinspection and how burdensome that
process will be as well as the triggers for
reinspection, and that the proposed rule
is not clear around the reinspection
procedures, and suggested that HUD
should make clear that only an owner or
manager of HUD housing may request a
reinspection and HUD may determine
whether it is advisable and should
specify the grounds on which HUD will
make this determination. Another
commenter expressed general support
for the proposal, suggesting that if the
property is in good shape and has
passed all previous health and safety
inspections the time for the next
inspection should be pushed to 5 years,
while cautioning that inspection
intervals should always be based on the
condition of the property and how well
the inspections are conducted.
Some commenters suggested specific
metrics related to proposal. One
commenter suggested that a property
achieving a score in the 90s could be
inspected every 5 years, in the 80s every
4 years, in the 70s every 3 years, and in
the 60s or below every 2 years. Another
commenter suggested every 5 years for
a score of 96–100; every 4 years for a
score of 90–95, every 3 years for a score
of 80–89, every 2 years for a score of 70–
79 and annually for a score below 70.
Two commenters suggested that 5-year
inspection cycles should be reserved
only for the highest-performing
properties (90–100), with the inspection
frequency increasing as the score drops
by every 10 points. The commenters
further suggested that HUD maintain the
ability to override this schedule if
needed, e.g., in the case of significant
tenant-input to HUD that seems to
indicate a poor building quality.
A commenter noted that the risk of a
major problem increases in older
properties and suggested that an option
may be to require regular inspection

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every 1–2 years for older properties, and
2–3 years for newer constructions and
that, intermingled throughout each
period, it might be convenient to have
less invasive, virtual home assessments
which have the right sensitivity to
capture health and safety hazards
caused by major sudden events in the
home.
One commenter distinguished
between Public Housing and HCV,
recommending that for the former
inspection should occur every other
year on a pass/fail basis, and for the
latter that the interval between
inspections be no more than three years,
and then only for landlords with a good
history of maintaining their units.
One commenter expressed that it
would be best to implement an
inspection schedule based on a riskbased method. Another commenter
suggested that HUD should reform
REAC’s scoring system, improve tenant
participation and otherwise adopt
lessons learned from NSPIRE to secure
housing improvements first, before
considering the relaxation of inspection
protocols.
One commenter opined that HUD
should give PHAs the discretion to
define higher and lower risk categories,
i.e., a PHA should have the ability to
place in the high-risk category those
property owners who consistently take
multiple attempts to pass inspections
and/or have a high number of
abatements while those who
consistently pass on the first attempt
can be placed in a low-risk category.
Three commenters expressed general
support for the proposal but noted the
need for additional details on how it
would be put into practice. One
commenter noted that under the current
scheme properties that score 90 or over
are scheduled for their next inspection
on the 3rd anniversary, while those
scoring 80–89 are inspected on the 2nd
anniversary, and those scoring 79 or less
annually. The commenter questioned
how HUD is proposing to spread the
scores over a 1–5 year period. Another
commenter opined that HUD needs to
provide additional information about
how they would evaluate whether PHAs
qualify for a 2- to 5-year inspection
cycle, and that it would oppose an
extended inspection cycle based on
requirements that include submitting all
self-inspection results and related work
orders to HUD, which would likely
negate any resource savings achieved
through an extended inspection cycle.
Another commenter expressed that
determining the criteria that HUD will
use to decide whether a PHA qualifies
for a longer inspection time period or
not must be clear and attainable, and

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that if the criteria for a longer inspection
time period is too stringent then the
incentive PHAs have for expanded
inspection periods would be decreased.
HUD Response: HUD appreciates the
comments on the timeline for
inspections, and has gained valuable
insight into this issue as a result of the
ongoing COVID–19 pandemic. REAC
UPCS inspections resumed in June of
2021 and the almost two-year break in
third-party inspections proved to be too
long for some properties with
performance issues. Five years is a very
long period of time to go without
visiting a property and presents a risk to
the tenants and the Department—even a
high-quality property could degrade in
that time. Therefore, HUD supports
maintaining the current risk-based
inspection requirements ranging from 1
to 3 years (3–2–1).
For small rural PHAs the statute
requires a three-year inspection cycle
unless the PHA is Troubled. For PHAs
that will continue to be assessed under
PHAS and for multi-family properties,
the inspection frequency would be
either a 3-, 2-, or 1-year cycle based on
the anniversary of the last inspection.
HUD will continue to evaluate efforts to
provide administrative relief to high
performing properties, including the
circumstances under which selfinspections may be accepted, through
subordinate notices and additional
public comment.
With respect to the suggestion that the
entire portfolio of Public Housing and
Multifamily assisted housing be
inspected annually for the first five
years under NSPIRE, HUD does not
consider it feasible to do so with current
resources. Because HUD is declining to
adopt an extended timeline of two to
five years for physical inspections, there
is no need to provide information about
how properties will be assessed, the
process for implementation, and what
information will be considered to allow
less frequent inspections of up to five
years. HUD notes that small rural PHAs
that are not troubled under 902.105 will
be inspected every three years.
HUD appreciates the feedback
regarding self-inspections as it relates to
risk-based annual inspections. HUD’s
risk-based approach seeks to balance
administrative burden on owners and
management and HUD will continue to
review the appropriateness of selfinspection processes for its public
housing and project-based portfolios in
context with inspection timing. For the
requirement for self-inspection
reporting at § 5.705, HUD has limited
the collection of these reports to those
properties that receive a score of less
than 60. This aligns with the current

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process for Multifamily Housing
programs. HUD will continue to rely on
the results of independent, HUD-funded
inspectors for scoring and to determine
inspection frequency.
Question for Comment #15: Tenant
Involvement
HUD solicited comments on how
tenants could be involved in identifying
poor performing properties.
Commenters asked HUD to provide
more context around these ideas and
how HUD would use these ideas so that
the industry can respond in a more
productive way. Some commenters
opposed resident involvement in the
inspection process, noting that tenant
reviews, like consumer reviews, could
be biased and unreliable and that
disgruntled tenants may unduly
influence inspection results, analogizing
to disproportionate numbers of 1- or 5star reviews for restaurants and
products online. Commenters stated that
tenant involvement would complicate
the tenant-landlord relationship. For
example, a tenant may give an unearned
good review to gain favor with a
landlord, or urge residents to participate
in a survey prior to inspection could
obligate property staff to please
residents to get a positive review.
Several commenters opined that
tenant involvement in the inspection
process is simply not needed, noting
that inspectors are the best, most
reliable source for inspecting and
reporting on the property, that residents
have always had the ability to notify
HUD when their work orders or repairs
are not completed in a timely manner,
that owners are already required to
inform residents of their rights to notify
HUD of any such concerns, and that
tenants are already adequately protected
by local landlord tenant laws, by the
REAC process generally and by the
residents’ relationship with the HUD
Account Executive. As an alternative to
an added review program, commenters
urged that HUD make sure that the
reporting systems work well to inform
the appropriate HUD staff of conditions
and to ensure that these resources are
fully staffed and communicated to
residents through multiple channels.
Another alternative offered was that
HUD explore ways to facilitate and
clarify this complaint/enforcement
process through the NSPIRE
demonstration and intervene to enforce
its physical standards and compel
owner/agents (OAs) to resolve identified
issues.
Several commenters focused on the
appropriate weight that should be
assigned to tenant input, suggesting that
resident reviews should not be given so

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Federal Register / Vol. 88, No. 91 / Thursday, May 11, 2023 / Rules and Regulations
much weight as to disrupt the value of
the random selection of units under the
current scheme; that creating a separate
inspection agenda that does not
contribute to the final inspection result
would create confusion; and that the
results of tenant surveys should not
increase or alter sample size, or affect
the frequency of inspections.
Commenters cautioned that an
inspection not based on a statistical
random sample is not a legitimate
representation of the property’s physical
condition. A commenter noted that
residents would only want units
inspected that they feel illustrate
deficiencies, another noted that preidentifying units to be inspected would
allow prior targeting of those units
either by OAs or residents to influence
scoring.
Two commenters urged HUD not to
turn the REAC inspection into a
complaint-based inspection scheme and
suggested investigation of tenant
complaints should remain outside the
purview of the REAC inspector.
HUD received a large number of
comments with respect to the use of
tenant surveys, with several
commenters suggesting that a proper
survey to all tenants could yield higherthan-average concerns about specific
deficiencies which HUD could treat as
a factor among others in determining
inspection frequency or intensity.
Commenters advocating the use of
surveys sounded several common
themes: that HUD or its contract
administrators administer the tenant
survey to ensure confidence in the
survey’s independence; that tenantbased questions should not be
subjective and should include clear
definitions for a rating system with
significant training and administrative
system to avoid subjectivity; that
surveys solicit specific information so
responses would be less subjective; that
surveys include random, anonymous
questionnaires to residents; and that the
survey be accessible to persons with
disabilities and include a paper option.
Some commenters suggested a single,
targeted question or short series of
questions asked by inspectors to some
residents during inspection, while
another suggested an annual mailing to
residents with a request to rate specific
performance issues. A commenter
suggested a simple, accessible tenant
inspection form uploaded in a similar
manner to owner self-inspection and on
the same frequency/timeline. A
commenter supported REAC’s initial
protocols (dropped in early 2000s),
which required a Tenant Survey, by
mail, of a sample of REAC-inspected
properties; however, another commenter

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opined that this resident questionnaire
was not representative of the property.
Commenters recommended tenant
surveys include questions about health
and safety generally, water leaks, mold,
insects such as bedbugs, rodents, leadbased paint, smoke detectors, carbon
monoxide detectors, and other
environmental hazards, management
performance and treatment of tenants,
the right to organize, and the existence
of a working stove. A commenter
suggested anonymized survey data be
provided to properties to permit
responses with respect to identified
issues. Commenters suggested that
tenant survey data (together with REAC
scores) could be used by HUD to
evaluate the accuracy of selfinspections. A commenter suggested
that survey information that identifies a
life-threatening condition(s) should
trigger an inspection.
Commenters also suggested that
tenants be allowed to recommend their
unit for inspection. Commenters
recommended adding five units to
REAC’s random selection if requested
by a tenant organization. A commenter
suggested that residents should be
allowed to recommend homes for
inspection as they are best positioned to
direct HUD to conditions on the
property, another opined that allowing
tenants to designate substandard units
for inspection will help offset the ‘‘point
loss cap’’ bias built into the REAC
system. A commenter suggested that an
additional procedure to account for
extra units inspected per resident
request could be developed; one
commenter suggested a resident council
could work to ensure adding a more
representative group of individuals’
units to the inspection sample. A
commenter supported the inclusion of
units/issues subject to such enforcement
action within the sample for the next
REAC/NSPIRE inspection, to ensure
ongoing compliance.
HUD Response: HUD appreciates the
comments related to tenant involvement
in the NSPIRE inspection process. HUD
regularly hears from groups representing
tenants about how residents can be
more engaged in the inspection process
and sought comment through the
proposed rule as a way of advancing
this conversation and agrees that HUD
should consider working through
resident councils and tenant
organizations, for example. HUD’s
process will be addressed further in a
subordinate notice specifically on
tenant engagement.
HUD does not intend for resident
feedback to supersede trained
inspectors, nor does it intend to use
resident ratings to score properties.

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HUD’s intent in proposing a rating of 1
(poor) through 5 (excellent) was to
provide a mechanism for residents to
identify additional units for inspection;
however, HUD does not intend for these
units to comprise part of the property
score. HUD can direct owners and PHAs
to repair identified deficiencies even if
those deficiencies are not scored,
because the requirement for housing to
be maintained in accordance with 5.703
always applies. Based on public
comment and other analysis, HUD will
further evaluate scaled 1 to 5 responses
as suggested in the question and other
means of collecting tenant feedback.
This aligns with comments about
eliminating as much subjectivity as
possible. HUD will also continue to
explore tenant participation in an
accessible manner to align feedback
with potential deficiencies. The NSPIRE
Scoring notice will provide more
information about the sample that will
be considered for the score. HUD agrees
that professional inspectors are the most
reliable source for assessing property
conditions but believes tenant
involvement in NSPIRE and feedback
about the condition of properties is also
very meaningful and should be taken
seriously. HUD will continue to
evaluate how the NSPIRE inspection
process design best results in
independent assessments of property
condition while balancing a desire for
more tenant feedback about property
condition. HUD does not consider these
two objectives mutually exclusive.
HUD takes into account the potential
administrative burden on both the
owners and the residents and plans to
add additional units to the NSPIRE
inspection if they are requested by the
residents. Additional details will be
provided in the Administrative Notice.
With respect to tenant-selected units in
the sample biasing an inspector, HUD
will consider ways to protect anonymity
of personally identifying factors, such as
unit address and number. HUD will also
consider the suggestion that an
inspection be triggered or when a survey
identifies the existence of a lifethreatening condition.
HUD agrees with the comments
regarding existing channels for tenants
to report property conditions and
engage with OAs and HUD Account
Executives. HUD will look at ways to
strengthen the existing operational
protocols while exploring ways to
expand tenant engagement in the
NSPIRE process. Residents can also
contact the State HUD field office.
HUD appreciates the feedback
suggesting strengthening existing
procedures before adding tenant
participation into the unit selection

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process. HUD agrees that more robust
communication about REAC processes
and final scores could improve overall
conditions of HUD-assisted properties.
HUD also agrees with the sentiment of
improving REAC through NSPIRE—and
the demonstration program—to compel
OAs to resolve identified issues. HUD
believes that NSPIRE’s focus on health
and safety of the residents will lead to
better living conditions and outcomes.
NSPIRE procedures for inspections,
scoring, and collection of residentnominated units will be in the NSPIRE
Administrative notice.
With respect to comments about
tenant-selected units influencing the
overall inspection outcome and
potential to turn into an alternative
complaint process, HUD does not intend
for tenant feedback to HUD to supersede
existing work order and tenant
complaint processes. HUD sees tenant
involvement in the inspection process
as an additional means to improve the
overall quality of HUD-assisted housing
by bringing the resident’s voice to the
table. HUD sees this as useful where
random sampling falls short—e.g., it’s
possible that a random sample could
completely miss units with infestation,
and where pests are active only at night.
Tenant involvement also provides an
opportunity for HUD to ensure that
known deficiencies raised by tenants are
corrected. HUD will take into
consideration the suggestions to engage
Tenant Organizations, resident councils
and other means to allow residents to
select certain units to be included in the
inspection sample, but these units will
not impact the overall score, unless they
were already randomly selected as part
of the REAC inspection sample. HUD
considered the suggestion that tenants
to designate certain units for the
inspection could help offset the ‘‘point
loss cap’’ for system-based scoring and
ensure accurate deductions for
deficiencies, but determined that
resident-selected units would not be
scored unless randomly selected as part
of the inspection performed by HUD.
Additionally, as provided in the
proposed Scoring notice, 88 FR 18268
(Mar. 28, 2023), HUD is proposing to
eliminate point-loss caps allowed under
UPCS.
Other Suggestions
HUD received a number of additional
comments regarding tenant involvement
that relate to current REAC processes.
Commenters recommended tenants be
notified about REAC matters and results
and given the opportunity to comment
and that HUD remove the current 60day limitation on the availability to
tenants of REAC Reports, scores, and

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related correspondence. Commenters
also suggested REAC inspectors should
access local code reports in localities if
available online, as well as summary
work order reports that many
management companies maintain to
provide a REAC inspector with a quick
overview of how many repairs were
reported, how long it took to complete
them, and tenant satisfaction.
Commenters requested HUD require a
meeting between a REAC inspector and
any legitimate tenant organization
before starting an inspection and allow
a representative of any legitimate tenant
organization to accompany an inspector
if a tenant organization requests, but not
into an individual unit unless invited by
a tenant. Commenters also suggested
that tenants should have the
opportunity to trigger a REAC
inspection when at least 25 percent of
the residents, or the local government,
request one.
Other comments related to tenant
involvement include a suggestion that
HUD develop a separate and distinct
program, with allocated funding and
resources, to engage residents in
evaluating their housing experience and
the quality of their housing; that HUD
require owners and agents to make
tenants aware of reporting options, for
example by requiring the phone
number(s) to be posted or distributed
with lease documents; and that HUD
support tenants’ right to organize and
support building tenant association
capacity by making $10 million
annually in Section 514 funding to local
nonprofit tenant assistance
organizations. In connection with the
last suggestion, commenters noted that
Congress has made available funding
through Section 514 of MAHRAA to
provide for tenant organizing and
capacity building, and HUD currently
has available funding for this purpose.
A commenter suggested that HUD
resident feedback measures adopted for
Multifamily and Public Housing could,
in principle, be extended to any HUDsupported apartment complex,
including RAD converted properties,
Mod Rehab and PBVs.
HUD Response: HUD appreciates
feedback regarding communication with
residents regarding the REAC inspection
results, including the opportunity to
comment and suggested participation of
tenant organizations. HUD regularly
publishes its REAC physical inspection
scores on its website and will continue
to do so. Tenants also have the
opportunity to review the REAC
inspection report after the score is
finalized. The owner must make the
physical inspection report and all
related documents available to residents

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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. HUD will take this
feedback into consideration as it seeks
to improve communication with HUDassisted residents.
The comment suggesting a separately
funded tenant evaluation program in
parallel with the REAC NSPIRE
inspection process is outside the scope
of this rulemaking.
With respect to the suggestion that
management provide HUD and REAC
inspectors with summary work order
reports for evaluation, HUD and/or its
Performance Based Contract
Administrators currently review work
order processes as a component of their
management reviews. HUD will take
into consideration the suggestion to
include evaluation of local code
violations.
Regarding the comment suggesting
that HUD require owners to inform
residents about their rights and
responsibilities, specifically in regard to
complaints and physical conditions,
HUD programs already require Owner/
Agents to inform residents of the
procedures for raising complaints and
the various appeals available if the
landlord, management agent, or Housing
Authority is unresponsive. HUD will
nonetheless take this feedback into
consideration as it looks at ways to
reinforce tenant education.
HUD appreciates comments on
tenants’ right to organize and supports
building tenant association capacity but
has not proposed changes in this
rulemaking. Additional information
about resident opportunities to provide
HUD feedback will be provided in the
NSPIRE Administrative notice and in a
subsequent notice once HUD considers
public and stakeholder burden.
Comments about expanding resident
feedback to other HUD-assisted
programs, such as RAD conversions,
Mod Rehab and PBVs, were shared with
the program offices. At this time, HUD
is not planning to require a resident
feedback requirement in properties not
inspected by REAC, as that would be
new requirement and burden on PHAs
and other owners that was not
proposed. HUD will also take into
consideration comments suggesting that
appropriate triggers for an inspection
should include when 25 percent of
tenants request one.

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Section 5.705 Inspection
Requirements
Comments Regarding § 5.705(a),
Procedures
A commenter suggested HUD extend
the exception for Section 8 housing in
proposed § 5.705(a)(3) to public
housing, and that PHAs should be able
to use variant inspection standards
based on local building codes;
otherwise, a PHA’s inspection score
may be adversely impacted even though
the condition comports with local codes
and has been determined to be safe.
HUD Response: HUD appreciates this
feedback. With NSPIRE, HUD intends to
further align the inspection standards
for the Public Housing and Multifamily
portfolios, while acknowledging the
Housing Choice Voucher and ProjectBased Voucher programs have some
unique qualities that are taken into
consideration with variant inspection
standards in § 5.705(a)(3), as these are
privately owned properties. HUD does
not support expanding those to public
housing because public housing does
not have these unique qualities and
under the U.S. Housing Act must meet
HUD-defined standards for decent, safe,
sanitary and in good repair. HUD
recognizes that there may be situations
in which a property comports with local
codes, but still does not meet the
standard for public housing. In those
instances, HUD believes that the public
housing must meet the higher NSPIRE
standards.

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Comments Regarding § 5.705(b), Entity
Conducting Inspections
A commenter stated that in
§ 5.705(b)(2), the reference to the
voucher regulation should be corrected
to reference § 982.352(b)(1)(iv).
HUD Response: HUD thanks the
commenter and has made this
correction in this final rule.
Comments Regarding § 5.705(c), Timing
of Inspections
A commenter suggested revising
paragraph (c)(6) regarding Section 232
facilities to require a case-by-case
analysis, remove a ‘‘complaint’’ as a
basis of information received, and take
into consideration whether the physical
integrity of the project is at risk.
Another commenter objected to
changing the timing of inspection from
being linked to the previous inspection
date to being linked with the property’s
anniversary date. This commenter
recommended amending paragraph (c)
such that, during the transition from the
current timing protocol to the proposed
timing protocol, HUD requires the
inspection to take place on the earliest

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of either the previous inspection date or
the property’s anniversary date, rather
than delaying the inspection.
HUD Response: While HUD
appreciates the commenters’ concern
about the quality of assisted living,
board and care, and intermediate care
facilities, HUD does not agree with these
suggested revisions to § 5.705(c)(6). This
final rule tracks with current policy and
allows flexibility where needed for
special circumstances, such as
complaints about assisted living and
care facilities. HUD has the authority to
inspect properties where there are
concerns about the safety of residents or
project preservation.
With respect to the suggestion
regarding inspection timing, HUD
believes that the commenter
misunderstood the meaning of
‘‘anniversary’’ in the proposed rule.
This was meant to still be linked to the
previous inspection date, not to any
other date. With the exception of small
PHAs as described in § 902.13(a), public
housing properties will no longer be
scored based on the fiscal year end for
the portfolio and previous PHAS score,
and properties will be assessed based on
the anniversary and score of the
previous inspection.
Comments Regarding § 5.705(d),
Inspection Costs
Two commenters, while supporting a
reinspection fee to increase
accountability, urged HUD to clarify
that it is not establishing a new
reinspection protocol, only the ability
for a fee to be imposed if the work that
was reported complete is not in fact
complete. The commenters further
urged HUD to establish and maintain
caps or benchmarks on reinspection fees
to encourage reasonableness and
standardization and to clarify whether
the fee is authorized for Video Remote
Inspections or only for onsite
inspections.
Another commenter suggested
limiting the reinspection payment to an
amount no more than $500, and also
allowing such payment to be passed on
to the household residing in the unit
when the tenant has caused the damage
at issue. A commenter noted that
paragraph (d) does not provide for the
imposition of such a reinspection fee on
PHAs and suggested that the language
should be amended to include PHAs.
HUD Response: HUD appreciates the
commenters’ recommendations
regarding reinspection fees but is not
making these changes in this final rule.
A fee cap could be problematic if this
requirement is in place indefinitely and
does not allow for inflation.
Additionally, landlords and PHAs can

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30469

collect fees for tenant-caused damages
in accordance with their lease and
policies and existing regulations.
Adjusting a fee at the time it is assessed
would create an additional burden.
However, HUD took these comments
into consideration in the subordinate
notice for Administrative Procedures,
which will specify the circumstances
and details for re-inspections. For units
in the HCV and PBV programs, HOTMA
Section 101(a)(3) allows for the PHA to
consider tenant-caused damage as a
factor for HQS enforcement.
Comments Regarding § 5.705(e), Access
to Property for Inspection
Commenters stated that giving a PHA
a physical condition score of zero if the
inspector is unable to access even one
unit is unreasonably punitive, is a
higher standard than the standard
placed on other POAs and could lead to
penalization for actions of residents
beyond the PHA’s control, such as
where a tenant prevents an inspection
or is ill. Another commenter suggested
that HUD should not require access to
an apartment where there is a sufficient
number of similar apartments that the
inspector can visit as alternates, as it is
unreasonable to require all households
to either stay home all day or have an
adult present throughout the inspection,
and that, in the alternative, inspectors
should select a higher sample and larger
number of alternate apartments or visit
any additional units to reach the sample
size required before providing a
physical condition score of zero for the
project. Another commenter suggested
amending paragraph (e) to require
reasonable advance notice of an
inspection to the property owner.
A commenter noted that the opening
paragraph of § 5.705(e) refers to HUD
inspections of ‘‘HUD housing,’’ yet
paragraph (e)(2) provides important
details applicable only to public
housing. The commenter suggested that
paragraph (e)(2) should be revised to
apply to all HUD housing.
HUD Response: HUD thanks the
commenters for feedback concerning
access to the property, advance notice
and conformity of language concerning
HUD housing. Because these matters are
related to scoring methodology, HUD
will further specify its scoring
methodology including how access to
the property impacts the methodology
by which HUD scores or assesses
property condition through the
forthcoming NSPIRE Scoring notice.
HUD continues to believe, however, that
property access is a fundamental
component of independent assessment.
HUD will similarly address the notice of
inspections requirements for its NSPIRE

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inspections under the forthcoming
subordinate Administrative Procedures
notice, but believes its recent, existing
notice period (ranging from 14–28 days)
is reasonable. HUD declines the
suggestion to include language in
§ 5.705(e) requiring reasonable advance
notice of an inspection to the owner in
regulation and will continue to provide
advance notice of inspections to allow
PHAs and owners may comply with
lease agreements that require reasonable
notice for residents. In this final rule
HUD has, where appropriate, revised
‘‘public housing’’ where it meant to
state ‘‘HUD housing’’ in the proposed
rule.
Section 5.707 Uniform Self-Inspection
Requirement and Report
Question for Comment #16 and
Question for Comment 17 Regarding
Self-Inspection
HUD solicited comment on how the
clarification to self-inspect all HUD
housing units in certain programs would
impact operations.

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Comments Supporting Requiring SelfInspection
Many commenters supported annual
self-inspections, noting that this
requirement is a generally accepted best
practice and it is good for HUD to make
it a formal requirement. A commenter
supported extending this requirement to
any programs that do not currently
require them; another noted that
expanding the scope of the inspection
across all the three inspectable areas
will promote increased confidence in
the self-inspection process, on the
whole. Commenters noted that the selfinspection process has the potential
advantage of decreasing the financial
cost to HUD or the PHA of conducting
a physical inspection.
A commenter stated that the time cost
to the property was worth it because
self-inspections allow staff to catch
maintenance issues that might
otherwise go unnoticed or unreported
by the tenant. This commenter noted
that if the maintenance problem is
severe or persistent it could negatively
impact the health of the tenant or cause
long-term physical maintenance issues
for the building.
Another commenter noted that a
random unit selection like that used in
a housing inspection cannot capture all
maintenance issues, so it is important
that the managing agent sees each unit
firsthand annually.
HUD Response: With respect to the
self-inspection requirement, HUD notes
that an annual self-inspection was
already required for the Public Housing

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program at 42 U.S.C. 1437d(f)(3), and
the requirement in the proposed rule
was intended to mitigate gaps in
inspections with the 2–5-year REAC
inspection time frame, to ensure that
unit conditions do not deteriorate in
between inspections. HUD has retained
the regulation that added this
requirement to properties participating
in Multifamily Housing programs. HUD
considered the burdens associated with
submission of self-inspection results of
all properties and decided not to
implement the proposed regular
submission of self-inspection results for
all properties. The full process for
conducting self-inspections according to
the NSPIRE standards will be detailed
in the NSPIRE Administrative notice.
Comments Regarding Third Party SelfInspections
A commenter cautioned against
allowing a third party to complete selfinspections because allowing properties
to shop for a friendly inspection
company defeats the purpose of this
potentially eye-opening tool.
Conversely, another commenter
suggested HUD require that annual
inspections be conducted by a neutral
third party, which often motivates PHAs
and owners to finally address long
overdue maintenance.
HUD Response: HUD appreciates
these observations concerning the pros
and cons of third-party self-inspections
and will take this feedback into
consideration as it further refines and
details the NSPIRE self-inspection
requirements in subordinate
implementing notices. HUD will design
quality assurance processes to achieve a
high degree of confidence in the quality
and objectivity of all types of
inspections conducted under NSPIRE.
Comments Regarding Implementation
and Enforcement of a Self-Inspection
Requirement
Commenters had several questions
about how HUD would implement a
self-inspection requirement.
Commenters suggested HUD provide a
user-friendly and intuitive public
software tool to perform the inspections
at the property level. A commenter
suggested including a mechanism for
triggering a direct electronic report to
HUD where an inspection revealed
serious deficiencies. Another
commenter asked what computer
hardware would be required to perform
the inspection and advised against
requiring expensive hardware.
A commenter asked how property
staff would be able to know all the rules
that REAC NSPIRE inspectors are
required to know, which the commenter

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stated may require training and
technical knowledge.
A commenter suggested selfinspection should be waived on years
that an NSPIRE inspection is due to
occur. A commenter asked how the
requirements of a self-inspection
approach align with a potential riskbased model.
Commenters urged HUD to provide
details regarding the submission
methods and self-inspection criteria that
will be expected of owners and agents
and urged HUD to carefully consider the
feasibility of the new reporting
requirements. A commenter cautioned
that the process will not be efficient if
owners aren’t providing HUD with
sufficient information in a usable
format. A commenter noted that owners
currently inspect different components
of the unit during self-inspections, and
flexibilities for COVID–19 have further
adjusted self-inspection techniques. A
commenter urged HUD to be transparent
about what the submitted data/
information will be used for and how it
will be handled by the agency. A
commenter urged the self-inspection
protocol be as simple and intuitive as
possible. A commenter recommended
safe harbor guidelines around unit
inspections, since issues such as tenants
not allowing access often arise.
A commenter urged HUD to weigh the
benefits of a standardized approach,
which would supply data to the agency
and allow HUD to compare ‘‘apples to
apples’’ in terms of the state of the
portfolio, vs. the ease of submission or
completion of this requirement. This
commenter urged HUD to maintain the
lowest lift possible for owners to
complete the self-inspection and
reporting requirements.
A commenter urged HUD to make
clear that the self-inspections can take
place at any point throughout the year
instead of all at once.
Commenters suggested HUD could
seek to rely on local code enforcement
history for a property, which is
frequently complaint driven. A
commenter suggested HUD should also
accept complaints by local legal aid
offices, public health officers, or other
entities who have observed poor
housing conditions or potential
violations of State or local code
violations. This commenter supported
the NSPIRE demonstration’s
requirement that local code violations
must be reported to HUD by participants
and suggested HUD expand it to other
complaints received.
A commenter urged HUD to utilize
systems already in place for submitting
information to HUD (e.g., the annual
recertification process) or conducting

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oversight (for example file reviews)
instead of creating new systems for
properties to submit self-inspection
results to HUD. This commenter noted
that if communities could simply
document in the file that they have
inspected 100 percent of units at any
point throughout the year, or if they
could submit a certification to that effect
during the annual recertification
process, it would eliminate the need to
create new processes and systems.
A commenter asked what
ramifications a property would face for
failing to complete an inspection to
REAC’s expectations and how REAC
would know if a 100 percent inspection
is valid and reliable statistically.
A commenter asked how HUD will
use information gathered from the selfinspections and what penalties housing
providers could face as a result of the
information obtained.
Another commenter suggested HUD
make clear that any submitted results of
self-inspections do not have any bearing
on a property’s official property
inspection score. A commenter urged
that the REAC inspection should be the
central evidence for that claim.
A commenter suggested a selfinspection requirement must be coupled
with an auditing process to verify the
veracity of self-inspection reports. A
commenter asked whether HUD has
sufficient staff to review annual
submissions from all covered properties.
A commenter suggested HUD or PHAs
verify self-inspection results when
available, potentially every other year,
but noted the administrative cost of
doing so.

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Comments Regarding Self-Inspection in
Particular Programs
Commenters urged HUD to consider
the differences between inspection
requirements for the Public Housing
program and the HCV, PBV, Mod Rehab,
and CPD programs. A commenter stated
that HCV landlords, especially small
landlords, would be unable to absorb
the cost of additional self-inspection.
A commenter suggested that the HCV,
PBV, Mod Rehab, and CPD programs,
which currently do not require selfinspection, should benefit from a
reduction in risk-based annual
inspections, similar to the 2–5-year
inspection time period proposed for the
Public Housing program. Other
commenters stated that because these
projects have annual or biennial unit
inspections, they should not also have
self-inspection requirements. A
commenter stated it appeared that 232
health care facilities would have
NSPIRE inspections waived and asked if

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they would still be required to perform
the annual 100 percent inspections.
A commenter asked who HUD
believes would be responsible for selfinspections of voucher holder units.
Commenters noted that since CoCfunded rental assistance projects have
annual unit inspections, an additional
self-inspection is onerous on the
subrecipient as well as the PHA that
would have to track and monitor
subrecipients’ compliance to this new
requirement and recommended HUD
not extend the self-inspection
requirement to CPD programs.
A commenter advised against
requiring self-inspections in the HOME
program, which has a significantly
different regulatory framework than the
covered programs.
HUD Response: HUD notes that the
requirement for a self-inspection was
already a statutory requirement for
public housing under 42 U.S.C.
1437d(f)(3) and was proposed to be
extended to other programs under
NSPIRE, except for owners participating
in the HCV, PBV, and Moderate
Rehabilitation Programs under proposed
§ 5.707. The final regulations include
edits to clarify HUD’s expectations for
electronic submission only for
properties scoring under 60 and retains
the language that provides for additional
notice with public comment before
implementation. Generally, results of
self-inspections will be used by HUD to
monitor resolution of deficiencies and
ongoing compliance with the NSPIRE
Standards in failing properties, or those
that score under 60 points. Requiring
them broadly for all properties will help
PHAs and Multifamily Housing owners
ensure properties are regularly
monitored and maintained. Reducing
reporting burden for these inspections
serves to align the Public Housing
program with existing procedures in
Multifamily Housing Programs.
HUD appreciates comments regarding
the use of technology to facilitate selfinspection and swift transfer of
information between the property and
HUD. The Department is in the process
of developing technology solutions and
will take this feedback into
consideration. Regarding concerns about
the cost of hardware, HUD is developing
a technology solution based off of the
Salesforce platform. Inspection results
will be uploaded via a phone, tablet, or
computer—no specialized equipment
will be necessary for the inspection,
except a moisture meter as proposed in
the NSPIRE Standards notice, if
finalized. HUD also appreciates
concerns regarding methods for
uploading/transferring inspection data
to HUD, inspectable areas, how data

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will be used, timing, and user
experience of inspection reporting
systems. HUD’s REAC is developing
new technology to help facilitate easy
transfer of the inspection results
without any specialized hardware.
HUD agrees that adding this burden to
small landlords participating in tenantbased programs may discourage
landlords from accepting residents
participating in the programs. PBV and
moderate rehabilitation units are
already subject to frequent inspections
by the PHA, including PHA inspections
resulting from tenant complaints.
Additionally, the HCV, PBV, and
Moderate Rehabilitation inspections are
not numerically scored. Section 5.707
exempts owners participating in the
HCV, PBV, and Moderate Rehabilitation
Programs from self-inspection
requirements. HUD declines to include
Healthcare Programs, CPD-funded
programs and Office of Multifamily
properties that do not have an assistance
contract at this time. The requirement to
perform and upload an NSPIRE
inspection would be a new burden for
these programs.
When HUD implements the selfinspection requirements, training
opportunities will be provided along
with the implementing notice. Selfinspections performed to comply with
§ 5.707 shall be done in accordance with
the NSPIRE Standards.
With respect to the comment about
waiving self-inspections on the same
year as the NSPIRE inspection of record,
HUD has not allowed this flexibility
under the NSPIRE rule because it would
conflict with the statutory requirements
for public housing under 42 U.S.C.
1437d(f)(3). Revisions to § 5.711(c)(2)
allow PHAs and owners to fulfill this
requirement in conjunction with the
follow-up already required under that
regulation.
With regard to the comments
regarding local code violations or input
from local organizations, HUD
continues to seek ways to facilitate
information sharing with local
authorities. HUD-assisted housing will
continue to be subject to local code
requirements as covered in the
regulations, but local code violations
will not be included in the NSPIRE
Standards or scoring at this time.
Comments Regarding How To Involve
Residents in Self-Inspection
Commenters urged HUD to require the
self-inspection be reported to residents
and provided at no cost and also to add
a provision providing a formal
mechanism for residents to raise
challenges to the HUD Field Office that
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Field Office staff, requiring owners to
cure any material deficiencies.
A commenter suggested that the
tenant and the landlord walk the unit
together and sign certifying the results,
which would allow PHAs to have a
reward program for tenants and
landlords with good track record of
completing the universal inspection
certification (UIC). Another commenter
urged HUD to make clear that selfinspections do not need to have a tenant
signature attesting to the inspection,
because many inspections occur while
the residents is outside the unit.
A commenter urged HUD to
implement the system allowing tenants
to provide a ‘‘1–5’’ rating of their units,
applied to categories including
‘‘HVAC,’’ ‘‘water,’’ and ‘‘electrical,’’ and
recommended HUD aggregate these
ratings for multi-unit properties to
identify common issues at a single
location. This commenter further
recommended allowing feedback to be
submitted both electronically and via
regular mail to ensure involvement of
all age demographics and avoid
technological barriers.
A commenter requested HUD require
PHAs and Owners provide at least 48
hours advance notice of inspections and
notice of the completion of the
inspection to residents and any present
tenant organization, with information
about the inspection that is accessible to
the family.
A commenter recommended that
during COVID the resident can do a selfevaluation inspection distributed by the
management/owner with work orders
being generated for completion, noting
that it would cost less money to know
that repairs are done immediately and
not allowed to cause further damage.
HUD Response: HUD appreciates the
suggestions related to tenant
involvement in self-inspections but
declines to implement them at this time.
The self-inspection process will be
spelled out in the NSPIRE
Administrative notice, and HUD will
provide an opportunity for tenant
feedback in other areas of NSPIRE.
There are formal procedures in place for
residents to submit complaints
regarding their property or unit and
residents of HUD-assisted housing may
call their local HUD office when they
are unsure of how to navigate this
process, as it varies by program. Public
housing and HCV program residents can
also bring concerns to their Board of
Commissioners and attend board
meetings. PHA Boards of
Commissioners usually include at least
one resident member. HUD also has
field office coverage for every State and
territory, see www.hud.gov/local.

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Comments Opposing the Self-Inspection
Standard and Suggesting Alternatives
Commenters stated that a selfinspection requirement is unnecessary,
stating that most owners already do selfinspections and take good care of their
property, rendering a requirement
unnecessary and burdensome for
owners and managers as they familiarize
themselves with yet another protocol of
inspection and reporting, especially if
the owner chooses to hire a third party;
that there is no convincing rationale for
why REAC needs this level of
information or how they plan to use it;
and that HUD’s assumption that a
universal self-inspection requirement
would increase the quality of HUDassisted housing is false because, were
it true, there would be substantial
differences in inspections scoring
between Public Housing where selfinspections are required and other
programs that do not require selfinspections. One commenter urged
against new requirements being merely
a ‘‘signal’’ and suggested new
requirements must lead to improved
outcomes which are predicted by data,
particularly when there is no direct
statutory basis for the requirement.
Other commenters opposed the selfinspection requirement as too costly,
noting the increase in administrative
burdens on staff and the PHA itself.
Commenters expressed concerns that a
self-inspection requirement would
cause capacity constraints to private
landlords that rent to voucher holders,
threaten the ability to recruit and retain
landlords, and prevent these landlords
from urgently addressing move in
inspection issues A commenter opposed
the requirement on the grounds that an
annual self-inspection requirement
might also be overly intrusive to tenants
who are able to successfully care for
their units, especially since many
tenants in tax-credit properties also
undergo inspections as part of tax-credit
compliance.
Other commenters expressed an
inability to assess the magnitude of the
proposed requirement without
understanding the parameters of the
self-inspection or self-reporting
requirements.
Commenters also stated that the
proposed requirement would go beyond
the Housing Act, which requires that
PHAs ‘‘shall make an annual inspection
of each Public Housing project to
determine whether units in the project
are maintained in accordance with’’
housing quality standards and noted the
statute does not require that PHAs
inspect each unit annually. A
commenter noted that in a HUD Public

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Housing Management E-newsletter in
January 2012, HUD recognized that
Congress did not intend that every unit
be inspected every year, and noted that
using another method, such as
inspecting a representative sample of
units or inspecting historically
problematic units more frequently
allows PHAs to ‘‘free up resources,
especially those necessary to provide
unit maintenance.’’
As an alternative, a commenter
suggested HUD work with Congress to
remove the annual self-inspection
requirement to be replaced by the riskbased inspection protocol as established
by HUD to further deregulate and
devolve control of public housing units
to their owners.
Finally, commenters expressed
concern that a self-inspection may not
be effective if the inspector is not
qualified to conduct a proper inspection
and therefore will likely miss or
misreport important issues. A
commenter additionally expressed
concern that housing providers might
falsely self-certify compliance with
lead-based paint certification and the
remediation of defects.
HUD received the following
comments in response to HUD’s request
for alternatives to the self-inspection
protocol.
Two commenters stated that the
current annual self-inspection is
adequate. Another suggested HUD
require PHAs to inspect each public
housing unit once every two years,
rather than annually.
A commenter suggested HUD allow a
documented entry for a maintenance
purpose, during which a smaller scale
inspection for safety hazards is
conducted, to count as a self-inspection.
A commenter recommended
implementing a Quality Control
program that would provide Healthy
Homes Assessment capacity to PHAs to
ensure uniformity/consistency in the
way the PHAs identify, evaluate,
prioritize, and manage the hazards
found in the home and provide random
QC-checks to inspected homes using a
combination of on-site and virtual home
assessments.
Commenters suggested making the
self-inspection protocol less
burdensome. One recommended
creating a self-inspection protocol that
is the least burdensome possible,
including no more than three categories,
less than 5 sub-categories, and either
paper or electronic submissions; another
suggested HUD allow properties to
simply document the inspections and
work orders in the file instead of
requiring the actual submission of an
electronic report until requested by

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Federal Register / Vol. 88, No. 91 / Thursday, May 11, 2023 / Rules and Regulations
HUD or monitored in an MOR. A
commenter expressed concern over the
submission of a self-inspection report,
or a requirement that all a property’s
work order receipts for a rolling year be
provided, as overly burdensome to
property owners, and questioned what
role the information will play in the
REAC inspection or scoring.
Commenters suggested that HUD limit
the reporting requirement so that
properties will only report on the Health
and Safety Risks identified and
corrected at property within a given
year. These commenters noted a
narrower scope will ensure that the
NSPIRE requirements are practicable
while providing HUD with data on each
property’s most critical maintenance
activities.
A commenter suggested that owners
should not be allowed to self-certify that
they have addressed severe health and
safety citations on the grounds that HUD
should not trust the certification.
Commenters suggested giving
autonomy or options to residents to
minimize the inconvenience or trauma
of unit inspections, such as requiring 48
hours notice to residents before selfinspection, as well as allowing residents
to opt in to doing a self-inspection,
potentially with photo or video
documentation. A commenter suggested
allowing a resident to opt into less
frequent inspections where historically
the unit has been in very good
condition. A commenter urged HUD to
require that the annual inspections be
no more than annual.
HUD Response: HUD appreciates the
thoughtful feedback regarding selfinspections, and that property owners,
managers and PHAs understand their
obligation to provide decent, safe,
sanitary housing in good repair at all
times. HUD agrees that regular
inspections should be occurring in wellmanaged properties, and that annual
self-inspections should result in
improved conditions and outcomes.
The United States Housing Act of
1937 requires that all PHAs ‘‘make an
annual inspection of each Public
Housing project to determine whether
units in the project are maintained in
accordance with the requirements.’’ 13
The requirement to perform an annual
self-inspection in public housing did
not change with the NSPIRE rule;
however, in this rule, HUD has added a
requirement for self-inspections for
housing participating in Multifamily
Housing programs, and a new regulatory
requirement to electronically transmit
the results of self-inspections for all
properties that score less than 60.

Collecting self-inspections of every unit
is consistent with current Multifamily
Housing policy.14 HUD disagrees that
self-inspections are overly burdensome
and unnecessary and reminds PHAs and
owners that they should not rely solely
on HUD’s inspections to manage their
properties. If self-inspections are
occurring as part of routine operations,
or for compliance with the Housing Act,
a new regulation clarifying this
requirement is not a new burden.
HUD clarifies that self-inspections
submitted to HUD should include all
units. Inspecting every unit during a
self-inspection (vs. sampling) was
discussed in the preamble to the
‘‘Uniform Physical Condition Standards
(UPCS) and Physical Inspection
Requirements for Certain HUD
Housing’’ rule published on September
1, 1998.15 While this final rule requires
self-inspections for all properties on an
annual basis, only properties scoring
below 60 will be required to transmit a
report with the results of the inspection
to HUD. Self-inspections submitted to
HUD must also adhere to the NSPIRE
standards. The process for performing a
self-inspection and transmitting it to
HUD will discussed in detail in a
subordinate notice.
HUD is aware of the obligation on
owners to certify to lead-based paint
compliance through other processes and
its limitation. These requirements are
not included or changed in the NSPIRE
rule. HUD agrees that results of selfinspection will not be used as part of
calculating the physical inspection
score, and instead will be part of the
follow up HUD performs on properties
that are failing, i.e., score below 60. This
requirement creates an incentive for
PHAs and owners to ensure their
properties are maintained and in good
repair. If HUD program offices or the
DEC are following up on results, they
may request additional documentation,
such as work orders, but the regulation
at § 5.707 does not require that. For selfinspections, HUD continues to allow the
use of remote video inspections as
described in PIH Notice 2020–31, which
could be done in coordination with the
resident. PHAs and owners should
continue to follow lease agreements for
notice to residents before an inspection
occurs.
HUD understands that residents are
interested in the results of NSPIRE
inspections and self-inspections, but
because inspections contain detailed
information down to the unit level, they
may contain sensitive information. For
14 See

Housing Notices H 2015–02 and H 2018–

08.
13 42

U.S.C. 1437d(f).

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example, residents with pest
infestations may not want that
information made public along with
their unit number. Information from
REAC-performed inspections will be
available to residents as described in
§ 5.711(h).
HUD acknowledges the suggestion to
include Mod Rehab, PBVs and other
CPD-funded programs in the selfinspection requirement but declines to
include such a requirement at this time.
First, these properties are not scored as
Multifamily Housing and Public
Housing programs. Secondly, for the
PBV and Mod Rehab programs, these
owners work directly with PHAs and do
not submit reports to HUD. Moreover,
under CPD-funded programs such as
HOME and HTF, grantees already have
the flexibility to require self-inspection
as part of their ongoing property
standards. To minimize the burden of
inspections, HUD has allowed flexibility
to PHAs and owners to combine the
self-inspection requirement in the years
HUD performs an inspection with the
follow up inspection in § 5.711(c)(2).
With respect to ‘‘Healthy Homes
Assessments’’ and their use to identify,
evaluate, prioritize, and manage the
hazards found in the home, REAC
collaborates with HUD’s Office of Lead
Hazard Control and Healthy Homes to
help ensure inspections include hazards
that can cause death, illness, and injury
in residents, and intends to include
many elements of a health and safety
assessment in the NSPIRE Standards
notice. HUD will require that selfinspections use the NSPIRE Standards
so that results are consistent and can be
compared to inspections performed by
REAC. For quality assurance, HUD will
provide information on the
qualifications and training
recommended for persons performing
self-inspections. Additional details
about the self-inspection process will be
discussed in detail in the
Administrative notice. This process will
also allow PHAs and owners additional
time to establish or modify a selfinspection program.
Section 5.709 Administrative Process
for Defining and Revising Inspection
Criteria
Comments Regarding Updating
Revisions to Inspection Procedures
Every 3 Years
Commenters supported revisions of
standards every three years to allow
HUD to respond to the changing needs
of an evolving housing portfolio. One
commenter opposed any new changes to
inspection standards and requirements

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that are made outside of the Federal
Register.
Some commenters cautioned that
HUD should avoid upending inspection
standards every three years. One
commenter, while supporting the
transparency behind continual updates
to standards on a 3-year cycle, noted
concerns with respect to the impact on
building systems and suggested that
HUD should be mindful of costs and
impacts on housing owners, managers,
and tenants caused by significant
updates and changes. Commenters
suggested HUD adopt advisory scores
and transition times for major changes
to standards, and support properties as
they make significant new upgrades,
including when new standards are first
implemented, and that stakeholders be
given ample time to comment and
understand the guidelines. A
commenter recommended 30 days’
notice prior to new procedures
becoming effective.
HUD Response: HUD believes that a
periodic scheduled review of the
Standards and Scoring Model will allow
for iterative improvements to the
NSPIRE inspection process, adapting to
changing technologies and
circumstances in our portfolio. The
routine triennial revision process will
allow for a public comment period of no
less than 30 days in the Federal
Register. HUD will take feedback related
to advisory scores and transition times
for major changes into consideration.
Scoring under PHAS may have a
transition period to be announced at a
later date. Additional guidance will be
in subordinate notices which will be
published in the Federal Register and
available for public comment.
Comments Regarding Emergency
Revisions to the NSPIRE Standards
Some commenters opposed the
proposed changes to § 5.709(a)(2),
which would allow HUD to publish a
notice implementing changes to the
inspection standards without public
comment in an emergency, defined as
‘‘a significant health hazard, a new
safety concern due to changing
construction technology, or another
event as defined by the Secretary.’’ One
commenter stated that HUD did not
provide an example of what changes
would constitute an emergency under
this definition, and urged HUD to
provide a comment period for all
significant changes made to the
standards so that various stakeholders
have an opportunity to weigh in.
Another commenter suggested that no
type of severe health or safety
deficiencies, new safety concerns, or
other events would necessitate the

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Secretary to publish a final notice
without 30 days of public comment in
the case of an emergency that
permanently changes inspection
standards and scoring methodology.
This commenter suggested that the
regulation should be amended to make
it clear that any regulations published
without notice and comment will be
implemented on an emergency basis,
time-limited, and subject to notice and
comment prior to final implementation.
Another commenter suggested that if
HUD decides to proceed with
emergency provisions without such a
comment period, there must be a graceperiod of at least 30 days for inspections
that occur immediately following the
release of the emergency revision, and
that such deficiencies should not
negatively impact a property’s score for
the first inspection which such
emergency revisions are included. A
commenter expressed preference for a
30-day public comment period on all
published notices but understood health
and safety emergencies require swift
action.
Commenters also noted that
§ 5.709(a)(2) concerning emergency
revisions refers only to public housing
and suggested that the provision in the
final rule should include all HUD
housing.
HUD Response: HUD thanks
commenters for their suggestions about
the process to announce and implement
emergency provisions without public
comment. HUD believes that there are
types of LT and Severe concerns that
would require an emergency notice, and
as written in the final rule the provision
is available for ‘‘HUD housing’’, or
programs covered by this rule. When a
significant health or safety hazard
exists, allowing 30 days for public
comment before taking corrective action
may cause severe injury or loss of life.
HUD intends to weigh the exigency of
the situation in advance of decisions
and limit provisions to a reasonable
timeframe, or to the duration of the
declared emergency. HUD may also
consider notices that are final upon
issuance but still include an option for
comment.
Question for Comment #18: Definitions
for Kitchens and Sanitary Facilities
HUD sought input on whether and
how it should define kitchens and
sanitary facilities. HUD received the
following responses.
Comments Regarding Whether To
Define Kitchens and Sanitary Facilities
Many commenters supported
definitions for both kitchens and
sanitary facilities, stating that

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definitions would ensure everyone is
inspecting and providing the same
standard across the board and that doing
so would help eliminate ambiguity
during inspections.
Other comments opposed defining
these facilities, suggesting they are
already adequately represented by local
building codes and any effort to
standardize these definitions nationally
could result in a discrepancy between
HUD’s definitions and State or local
approaches. A commenter cautioned
that defining these rooms could limit
the number of units available to voucher
holders and may risk owner
participation in the HCV program if
units do not meet HUD’s proposed
specifications.
Other commenters had suggestions for
both standards. Commenters suggested
that HUD defer to local code or go no
further than local code. One commenter
stated that a definition should be
defined by the number of fixtures,
another stated that definitions should
apply only to new construction or
properties that are renovated, and only
if the definitions match current building
code. A commenter recommended that
if HUD decides to amend or change
these definitions, HUD do so in a
uniform manner across programs;
another suggested that the definitions
used in the HCV program are reasonable
and should be used as a guide for the
purposes of NSPIRE.
A commenter suggested that the
definitions be broad enough to account
for different types and eras of housing,
such as variations in SROs, microstudios, and older housing. This
commenter noted the NSPIRE standards
currently require kitchen ventilation or
a range hood that filters air to the
exterior, a building design that is
uncommon in older homes and
apartment buildings and which could be
costly for some owners to upgrade.
Comments Regarding How To Define
Kitchen and Sanitary Facilities and
Their Related Components
Commenters supported defining a
kitchen and its related components.
Commenters recommended that a
kitchen be defined as having an
approved cooking appliance (such as a
stove or oven with overhead vent fan,
range, or heating plate), a sink (with hot
and cold running water), a refrigeration
unit, and a garbage disposal, sufficient
light and ventilation, and a minimum
clear working space of 30 inches. A
commenter cautioned that HUD should
keep in mind the size of the units. A
commenter recommended using the
IPMC.

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A commenter cautioned that HUD
should not define ‘‘functional
adequacy’’ to allow stoves and
refrigerators when they have outlived
their ‘‘useful life’’ because residents
should not be saddled with outmoded,
unsightly, antiquated appliances that
send a message that HUD tenants are
‘‘second class citizens’’ or that that HUD
tenants do not deserve the best.
A commenter recommended HUD
provide some flexibility to ensure that
units, like SROs for example, that do not
have cook tops or other components
typically associated with kitchens are
not penalized if the unit does not come
equipped with those components. A
commenter urged HUD not to regulate
by equipment type.
Commenters supported defining a
sanitary facility and its related
components, noting that the quality of
these facilities in closely tied to the
ability of residents to be safe and
healthy in their homes, and HUD should
clearly identify its expectations for these
critical facilities. A commenter stated
that because bathrooms are more
standard than kitchens, it is appropriate
to define a bathroom in the standards.
Commenters suggested HUD require a
toilet, sink, and bathtub or shower in
sanitary, safe working condition. A
commenter noted that this would be
consistent with the IPMC. A commenter
noted that the bathroom should have
hot and cold running water.
Some commenters recommended a
ventilation requirement to avoid mold.
Another comment noted that many
building codes across the country do not
require bathroom ventilation, and as
such ventilation should not be
considered a component required for
functional adequacy unless it is
required by local codes.
A commenter suggested standards
should reflect appropriate standards for
compact and micro units. A commenter
suggested that a bathtub be replaced
with only a way of washing that is not
necessarily a shower or bathtub
depending on the size of the unit.
Another commenter suggested a sanitary
facility should also provide privacy to
those using the facility.
A commenter opposed adding a
definition for sanitary facility and stated
that the inspectors are trained
professionals and based on general HUD
guidance should be able to assess each
component/fixture normally tested
during the NSPIRE inspection.
HUD Response: HUD appreciates the
diverse comments received on kitchens
and sanitary facilities and agrees that
there are variations in different types
and eras of housing, and that some level
of definition is needed. HUD will

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include definitions that align with the
American Housing Survey in the
Administrative notice. Further, all HUDassisted units should meet a minimum
standard for habitability, but this
definition could allow for some
flexibility. HUD also reviewed how
kitchens and sanitary facilities are
defined in the American Housing
Survey. As provided in the final
regulation at § 5.703(d) as an affirmative
habitability requirement, kitchens must
have a sink with hot and cold water, a
cooking appliance, a refrigerator, food
preparation area and a food storage area.
Sanitary facilities must have a sink with
hot and cold water, a bathtub or shower,
interior flushable toilet and be usable in
private. For the HCV and PBV programs,
the regulations for Special Housing
Types at part 982 subpart M will
continue to apply.
Outside of the minimum affirmative
habitability requirements, the NSPIRE
standards will also account for health
and safety concerns related to kitchens
and bathrooms, such as minimum
ventilation and mold. Additional
information on the individual
components, their definition and
functionality will be in the NSPIRE
Standards notice, within the relevant
standard (e.g., Bathtub and Shower
Standard, Kitchen Countertop
Standard).
Section 5.711 Scoring, Ranking
Criteria, and Appeals
Comments Regarding § 5.711(a),
Applicability
A commenter recommended HUD
include a cross-reference to the Section
Eight Management Assessment Program
regulations in § 5.711(a).
HUD Response: HUD notes that this
cross-reference already existed in HUD’s
proposed rule. HUD is keeping this
cross-reference at the final rule stage.
Comments Regarding § 5.711(c)(1),
Inspection Requirements
A commenter objected to expanding
what qualifies as an exigent health and
safety deficiency in need of a 24-hour
work order as unnecessary.
A commenter urged HUD to provide
a formal mechanism for residents to
raise challenges to the certification and
supporting evidence to the HUD Field
Office that must be investigated and
addressed.
Commenters noted that the proposed
rule’s preamble stated that severe health
or safety deficiencies would have to be
addressed within 24 hours, while other
deficiencies would need to be corrected
within 30 days, but the text of paragraph
(c)(1) only discusses severe health or

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safety deficiencies that must be
‘‘mitigated’’ within 24 hours and
paragraph (c)(2) merely directs an owner
to correct non-life-threatening severe
health and safety deficiencies
‘‘expeditiously’’—not within 30 days.
Commenters urged HUD to clearly
require an owner to correct non-lifethreatening severe health and safety
deficiencies within 30 days. A
commenter noted that establishing clear
timelines for redressing deficiencies is
paramount to health and safety of
citizens, and noted that deficiencies
may be regionally contextual, such as
the failure of HVAC in a warm climate
in summertime.
Commenters objected to the term
‘‘mitigated’’ as it does not mean to
eliminate or abate and recommended
HUD use ‘‘corrected or resolved or
sufficiently abated.’’
A commenter recommended that HUD
should state the party responsible for
the physical inspection will provide the
owner and PHA with the entire physical
inspection report (electronically through
the internet or by mail), which provides
the physical inspection results and
other information relevant to
inspections, including all deficiencies,
similar to the language currently in
§ 200.857(c)(1).
HUD Response: HUD is designing its
NSPIRE standards with the goal of
prioritizing the health and safety of
residents. In this final rule, the term
‘‘Severe Health and Safety’’ is revised to
LT to better align NSPIRE to the
terminology and correction time frames
in HOTMA. As described in the NSPIRE
Standards notice, LT deficiencies are
those that, if evident in the home or on
the property, present a high risk of
death or severe illness or injury to a
resident. For the HCV and PBV
programs, HOTMA also defines the
response times for LT deficiencies to be
corrected within 24 hours, and for all
other deficiencies to 30 days. Because
different deficiencies will have different
ways to resolve the deficiency, the
expectation for what can be completed
in these time frames will be adjusted,
while still allowing for some local
flexibility and discretion. For a LT
deficiency in the context of Multifamily
and Public Housing, ‘‘corrected’’ means
that the PHA or owner has either
completed all repairs, or at least
controlled or blocked access to the
hazard in a manner that it no longer
poses a severe health or safety risk to
residents of the property. HUD
recognizes that to permanently repair
some deficiencies, the PHA or owner
may need additional time for a licensed
professional or specialized supplies that
may not be available in a 24-hour

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timeframe. Guidance for correction
timeframes and evidence that correction
is complete is in the Administrative
notice. Repairs will vary by the
component and level of deficiency, and
some mitigations will be approved on a
case-by-case basis to meet the statutory
and regulatory timeframes. For example,
if a PHA has to procure specialized or
certified trades professionals, it may
take 30 days just to prepare a request for
proposals and get approval from the
Board of Commissioners.
HUD does not agree that all non-lifethreatening deficiencies can be
completely resolved in 30 days or less
and wants to retain the flexibility
already available. Some deficiencies
may be property-wide, require special
expertise, and/or the services may not
be readily available to fully address the
deficiency. HUD also appreciates that
some deficiencies may be exacerbated
by local conditions, especially local
climates, and this should be considered
to ensure the health and safety of
residents. For LT deficiencies, HUD has
used the term ‘‘corrected’’ to align with
HOTMA. If the PHA or owner at least
prevents or blocks potential harm to
residents in 24 hours, more extensive
repairs can be done over a longer time
frame, with approval from HUD and as
described in the NSPIRE Administrative
notice. HUD can also allow temporary
relocation of residents as a method to
prevent harm to residents while repairs
are completed. In some cases, temporary
relocation of residents is required.16
Under § 5.711(c)(1), the deficiency must
be corrected, and owners and PHAs
cannot simply block access in
perpetuity. With respect to comments
about providing the owner with a copy
of the inspection report, HUD is
developing technology solutions to
provide quick, seamless transmittal of
results to owners and agents.
Comments Regarding § 5.711(c)(2), PostReport Inspection
A commenter stated that submitting
all work orders related to an NSPIRE
inspection would be an unnecessary
administrative burden and noted HUD
did not provide a rationale for requiring
this data or plan for how HUD would
use it. This commenter questioned
whether HUD has the capacity to review
and respond to such a data flood
effectively and consistently and asked if
HUD is going to require PHAs/POAs to
use a specific type of maintenance work
order reporting platform.
A commenter suggested § 5.711(c)(2)
should be modified to remove the extra
post-inspection 100 percent self16 See,

e.g., § 35.1345(a)(2).

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inspection, noting that this is now a
second 100 percent self-inspection and
a REAC inspection in one year, and that
three inspections in one year is
burdensome to owners and managers.
HUD Response: At the final rule stage,
HUD has changed the reporting
requirement to only apply to LT and
Severe deficiencies, and offered
flexibility to combine the self-inspection
under § 5.707 with the post-report
inspection described in § 5.711(c)(2).
Comments Regarding § 5.711(c)(4),
Technical Review of Inspection Results
Commenters noted in § 5.711(c)(4) the
language references ‘‘four sources of
error’’ but there appear to be only three
sources. Commenters supported making
the ‘‘fourth source of error’’ the
currently entitled ‘‘database
adjustment’’ and suggested it should be
moved to this section.
A commenter recommended HUD
indicate that the basis for a technical
review is a material error associated
with the physical inspection score, and
that building data errors, unit count
errors, and non-existent deficiency
errors are types of material errors.
A commenter suggested that
paragraph (c)(4)(ii) be amended such
that HUD’s system of records do not
actually need to be updated, but the
owner only needs to notify HUD and
request that HUD’s system of records is
updated, to account for situations in
which it is not the owner’s fault that the
system is not updated.
HUD Response: HUD agrees that the
numbering of this part of the proposed
rule was incorrect. HUD has corrected
this numbering. HUD is also amending
the final rule to restore the language for
database adjustments in §§ 902.24 and
200.857.
Comments Regarding § 5.711(d),
Technical Reviews
A commenter supported the extension
of technical review submission from the
current 30 days to 45 days and the
ability for electronic submissions.
Another commenter opposed the change
because the increased time period to
submit a request for a technical review
would unduly delay the remediation of
deficiencies at properties, particularly
in light of HUD not including a time
period for which a PHA or owner must
complete its survey of the property and
remediation of any non-life threatening
severe health and safety defects. This
commenter also asked HUD to define
what day will be considered the ‘‘day of
release’’ of the physical inspection
report.
HUD Response: In this final rule,
HUD has retained 45 days in § 5.711(d)

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for technical reviews. The technical
review process should not delay the
process to remediate deficiencies. LT
conditions will still require correction
in 24 hours. With regard to ‘‘day of
release,’’ HUD has revised this term to
be ‘‘the day the inspection report is
provided to the owner or PHA.’’
Comments Regarding § 5.711(d)(2),
Request for Technical Review
A commenter noted that currently
REAC can issue a new physical
condition score or keep the same
physical condition score and asked why
HUD needed to change this option. This
commenter stated that in order to fully
comment on this HUD should provide
the parameters pursuant to which REAC
will make these determinations and
urged that REAC should only undertake
a new inspection if the owner requests
it. Another commenter urged HUD to
accept for review any property’s
technical review regardless of the
number of points at stake for any
individual property.
HUD Response: HUD appreciates the
feedback and will discuss this matter in
the subordinate Administrative
Procedures notice.
Comments Regarding § 5.711(d)(3),
Burden of Proof That Error or Adverse
Conditions Occurred
A commenter agreed that the burden
of proof should rest with the PHA/POA,
but noted HUD has the obligation to
carefully consider the evidence
presented, to research and carefully
examine the protocol, guidance and
precedent, and to provide a response
that lists what was considered and the
reasoning for the decision so that the
response serves as a teaching tool,
providing insight about the deficiency
in question, not just to those who
requested the technical review, but to
others as well.
A commenter suggested all technical
reviews and decisions need to be
available and accessible to the public to
provide residents the ability to know
more about the final result of the
inspection, serve as a teaching tool for
PHAs/POAs who can see if there is any
precedent for a deficiency they are
attempting to appeal, and ensure a more
consistent application of the protocol by
inspectors who will be able to see if
they are citing deficiencies that are nonexistent. This commenter noted that
REAC has rejected documentation and
arguments that they previously accepted
without any explanation as to the
change in standards.
A commenter recommended HUD
should revise ‘‘owner’’ to read ‘‘owner
or PHA’’ in § 5.711(d)(3) for clarity.

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HUD Response: Details regarding
burden of proof are included in the
Administrative Procedures notice which
will be published before this final rule
is effective. HUD regularly used
‘‘owner’’ for either the PHA or
Multifamily owner entity but has
revised the regulations that apply to
both PHAs and owners to indicate
applicability more clearly.

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Comments Regarding § 5.711(d)(5),
Significant Improvement
A commenter asked how ‘‘significant
improvement’’ is to be interpreted and
noted that for any one property, even a
1–5 point improvement in a score might
not move that property’s ranking from
one level (such as standard) to another
(high performer), but can collectively
within a portfolio improve the PHA’s
overall PHAS score.
HUD Response: HUD agrees that
moving a ranking level up (e.g.,
substandard vs. standard) is significant.
The term ‘‘significant improvement’’
was included to ensure that PHA, owner
and government resources are used
efficiently. Additional details about the
technical review are in the
Administrative Procedures notice.
Comments Regarding § 5.711(d)(6)
Reinspection
A commenter believed that HUD
should bear the expense from
reinspection where HUD determines
that the reinspection is required, and
suggested that if there is a threat to the
inspecting party of bearing the cost if
the new inspection score results in a
significant improvement, then that
inspection will not be impartial. This
commenter also noted that if a PHA/
POA has the threat of bearing the cost
if no significant improvement occurs,
that will have the effect of discouraging
them from requesting the technical
review even if they strongly believe
there was an error.
A commenter cautioned that an
inspector could fail a site to get
additional money from reinspection,
and also that tenant-induced damage or
a tenant’s refusal to allow access could
lead to a fail that management does not
deserve.
Commenters asked for clarification on
what HUD considers a reasonable
inspection fee. A commenter opposed
HUD determining whether a
reinspection is appropriate and
suggested that the inspection occur only
upon request from an owner or manager,
and that HUD should make the
inspection within 30 days of the
owner’s request.
HUD Response: HUD appreciates the
comments on issues surrounding

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reinspection and cost, but has decided
not to change this language at the final
rule stage. 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, 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. Owners and PHAs can
collect reasonable fees for tenant
damages through lease enforcement.
Comment Regarding § 5.711(d)(7),
Deficiencies
A commenter suggested § 5.711(d)(7)
is punitive and the triple point
deduction should be removed as it
would bar earnest owners and managers
from appealing or requesting
reinspection.
HUD Response: HUD appreciates the
commenter’s feedback and accepts this
recommendation. The regulations
include other enforcement mechanisms
to ensure that deficiencies are corrected.
Comments Regarding § 5.711(e)
Independent HUD Review
A commenter also suggested that
‘‘modernization work in progress,’’
which is a common ground for appeal
for aged properties undergoing moderate
substantial rehabilitations, should be
grounds for independent HUD review. A
commenter noted the language in the
proposed text mirrors 24 CFR
200.857(e)(1), but the proposed language
does not include ‘‘owners’’ and
recommended HUD include ‘‘owners’’
in the proposed language along with
PHAs to ensure clarity. A commenter
also urged HUD to include the process
and timing for requesting a score
adjustment in the final rule for clarity.
HUD Response: Modernization work
in progress was previously included in
§ 902.24(c) and was not included in the
proposed rule. HUD has added this
language at the final rule stage. The final
rule keeps the proposed rule’s
requirement that a score adjustment
request be made no later than the 45th
calendar day following the release of the
inspection report. Because the basis for
the technical correction may be
complicated, HUD has not provided a
limit on the time it may take to review
these requests. HUD intends to provide
additional information on this issue in
guidance.

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Comment Regarding § 5.711(f)
Responsibility of Final Score and
Publication of Scores
A commenter stated there should be
no reinspection mandated by HUD
outside of the 2–5-year range or as
required by statute and only the owner
should be able to request reinspection.
This commenter also suggested HUD
should have clear guidelines around
when and how it will grant a
reinspection to requesting parties and
noted that the new inspection score
should be considered the final score
only if the owner requested it.
HUD Response: HUD appreciates the
feedback but disagrees with the
commenter’s perspective. Reinspection
can be a necessary tool for HUD to
review score disputes and to conduct
oversight at properties and ensure
compliance with the regulatory
agreement at the property. While having
some guidelines around how
reinspections will be conducted is
appropriate, HUD needs to have the
flexibility to make dynamic decisions to
reinspect in response to emergency
situations. Once a reinspection occurs
the resulting score will become a score
of record and will be made available to
the owner.
Comments Regarding § 5.711(g)
Issuance of Final Score and Publication
of Score
A commenter stated it is unclear
whether posting of the final score will
be publicly available and suggested
HUD must maintain confidentiality in
terms of providing access to reports or
ownership information and this should
be clarified. Another commenter
requested HUD correct § 5.711(g)’s two
references to paragraph (c), stating that
both of these references should be
references to paragraph (e).
HUD Response: The final rule keeps
the proposed rule’s language at
§ 5.711(g) that HUD will make final
scores public on HUD’s internet site or
other appropriate means. Section
5.711(h) also provide a process for
owners, managers or PHAs to notify
residents of inspections and make the
results available. HUD regularly
publishes its REAC inspection scores on
the HUD website for both Public
Housing and Multifamily properties:
www.huduser.gov/portal/datasets/
pis.html. HUD program areas also
maintain websites with certain data.
The Office of Multifamily Housing
regularly publishes REAC inspection
scores here: www.hud.gov/program_
offices/housing/mfh/rems/
remsinspecscores/remsphysinspscores.

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Under § 5.711(h)(2), tenants may
request to view inspection reports after
the 45-day appeals process is complete.
Section 5.711(h) is based on and
replacing the old Multifamily Housing
requirement which was previously
included in 24 CFR 200.857(g). HUD has
corrected the citation to paragraph (c) to
paragraph (e) and thanks this
commenter for identifying this incorrect
citation.
Comments Regarding Paragraph (h)(1),
Notification to Residents
Commenters suggested HUD require
7-days notice to residents before an
inspection, with a minimum notice of
48 hours, or at least the time period
proscribed by State and local law. A
commenter noted that the current 24
hours is not enough time for residents
to prepare their units or make
appropriate arrangements.
Commenters suggested owners be
required to explain to residents the
details about the inspection such as why
it is happening, residents must be
informed of their right to be present
during an inspection, to identify
problems to the inspector, to meet with
the inspector prior to its start, and to
designate a tenant representative to
accompany the inspector on their
rounds. Commenters recommended
HUD prescribe specific, plain language
for owners to utilize regarding REAC
inspections, as it does for Section 8 Opt
Out Notices, to mitigate this problem.
A commenter suggested that HUD
clarify that notification to residents
must be done in accordance with the
resident lease.
HUD Response: HUD appreciates the
feedback but declines to expand the
language in this provision to include a
48-hour to 7-day notification window
for unit/property inspection.
Notification requirements are already
included in leases and will vary by
owner and program. In the Public
Housing program, for example, the
model lease requires at least 48-hours
notice. HUD therefore declines to revise
this requirement in this rulemaking.
With respect to additional tenant
guidance regarding the inspection
process, this final rule does require
owners and PHAs to post in the
management office and on common
bulletin boards availability of the final
inspection report for review along with
supporting documents and
correspondence as specified in
§ 5.711(h)(2). HUD continues to seek
avenues to expand tenant participation
in the NSPIRE inspection process which
will be addressed in subordinate notices
via the Federal Register and available
for public comment.

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HUD supports the suggestion to
include language that notification
should also be in accordance with the
resident lease, as this is consistent with
current practices.
Comments Regarding Paragraph (h)(2),
Availability of Documents for Review
Commenters recommended that these
documents should be provided at no
additional cost. A commenter
recommended HUD specify that
documents available for review,
including but not limited to the REAC
inspection Report and related
correspondence and the results of any
re-inspection and appeals, should be
available for residents to copy during
normal business hours upon request.
Commenters recommended owners
and agents should be required to retain
these documents for inspection or
review by tenants or the tenant
association for five years, not just the
current 60-day limitation. A commenter
stated this would echo the five-year
retention and availability provision of
the statute creating the Comprehensive
Housing Affordability Strategy (CHAS),
one of the statutory underpinnings of
the Consolidated Plan. Another
commenter recommended removing the
time limit requirement entirely.
HUD Response: As stated in
§ 5.711(h)(2)(i) of this rule, tenants of
HUD housing have a right to review and
copy the final inspection report and
related documents upon reasonable
request during regular business hours.
There is no cost associated with
reviewing the documents. The rule
language specifies related documents
include the owner’s survey plan, plan of
correction, certification, related
correspondence, appeals, reinspection,
etc.
HUD declines to mandate a longer
document tenant-review period.
Program record retention periods are
determined in accordance with agency
document retention policies and
applicable Federal law. Because
property conditions can change over
time, inspections that are four or five
years old may not still be current.
Members of the public interested in
older property inspection information
from REAC can submit a Freedom of
Information Act (FOIA) request to HUD.
Comments Regarding Paragraph (h)(3)
A commenter asked for more details
regarding the required date on which
the notice must be posted and the
duration of the posting.
Commenters recommended HUD add
that the materials provided by the
owner for resident inspection should
include the owner’s certification that

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severe health and safety deficiencies
have been abated within three days and
the owners’ materials should also be
provided to any legitimate tenant
association, as defined by HUD at 24
CFR part 245, subpart B.
Commenters also recommended HUD
require that the notices in § 5.711(h)(3)
should encourage residents to comment
directly to the HUD Field Office with
the name of the responsible Field Office
staff and their direct phone number and
email address, and Field Office staff
must acknowledge receipt of comments
from residents with seven days of
receipt and respond substantively
within 14 days.
HUD Response: HUD agrees and
added a requirement that owners and
PHAs post this notice within three days
of the inspection. HUD also appreciates
the feedback that the rule should require
owner certification that severe health
and safety deficiencies have been
corrected. This final rule keeps language
from the proposed rule that states that
certification must be made available for
tenant review and copying, which
would include severe health and safety
certification. HUD believes the final rule
language addresses the commenters’
concerns by keeping language from the
proposed rule that requires that the
owner’s posts include the name, work
address and telephone number of the
HUD Account Executive and tenants are
encouraged to contact HUD with any
concerns or noted discrepancies.
Comments Regarding § 5.711(i)
Administrative Review of Properties
Commenters recommended residents
should receive notice and DEC should
be obligated to consult residents when
evaluating the property.
Commenters recommend that HUD
add that owners must post the notice
regarding submission of the property for
DEC evaluation and enforcement to
tenants explaining what a below 30
score means, why the property has been
referred, and what that implies. A
commenter suggested the explanation
must state that transfer of the file does
not mean the subsidy will be terminated
but is a process to address concerns and
bring the property into compliance. A
commenter suggested tenants and their
representatives should be encouraged to
submit their own comments to DEC, if
they choose. A commenter noted it has
often been the efforts of residents and
advocates that have resulted in the
preservation of assisted properties and
improved housing conditions for
families.
A commenter recommended HUD
amend paragraph (i) to clarify that
documents, reports and correspondence

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Federal Register / Vol. 88, No. 91 / Thursday, May 11, 2023 / Rules and Regulations
between the owner and DEC shall be
made available to residents and their
representatives, with the aim of
including their input in DEC’s analysis,
recommendations and remedial action,
before final decisions are made,
consistent with Housing Notice 2018–8.
Commenters supported paragraph
(i)(2) but stated that DEC’s analysis
‘‘may’’ include input from tenants,
along with HUD, elected officials and
others and requested should be changed
to ‘‘shall’’, and that any subsequent site
visit by DEC to the property include a
meeting with residents and/or the
legitimate tenants association, if any.
A commenter recommended HUD
clarify that ownership and management
need 2-week advance written notice of
DEC evaluation site visits.
A commenter noted that the proposed
rule did not incorporate important
language about DEC’s compliance and
enforcement from 24 CFR 200.857(h)(2)
and (i) and urged HUD to include it,
especially regarding supporting and
relevant information and
documentation, and the development of
a compliance plan.
A commenter suggested HUD should
make information regarding
enforcement actions taken by HUD
publicly available and noted proactive
residents and local advocates are
essential to the type of efficiency HUD
says it is seeking, such that HUD must
publicly provide property-level
information regarding conditions,
mortgage maturity dates, housing
assistance payment contract expiration
dates, and HUD’s actions to enforce its
programmatic requirements.
HUD Response: Referrals to the DEC
will be automatic for Public Housing
and Multifamily Housing properties that
score 30 or below. Properties receiving
two successive scores of less than 60
may also be referred. Additional
information about this process will be in
the Administrative notice including a
requirement that the PHA, owner or
agent must provide a copy of
notification of referral to the Department
Enforcement Center to residents and
certify it has done so by reasonable
means such as leaving a notice under
each door, posting in a mail room and
on each floor, which is consistent with
past practice outlined in Housing Notice
2018–08. HUD is not planning any
additional notice or communication to
residents or the public about referrals to
the DEC, or information about the
investigation and follow up, but the
public has the right to submit a Freedom
of Information Act Request. If a DEC
review includes unit inspections,
residents will receive notification in
accordance with their lease. HUD

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declines to include a two-week
notification requirement to owners and
PHAs in regulation for site visits. HUD
acknowledges the role tenants and
advocates play in identifying conditions
in housing and advocating for repair
and preservation of existing affordable
housing but declines to require that all
administrative reviews include tenant
input by adding ‘‘shall.’’ HUD believes
that the addition of tenant participation
into the REAC inspection process via
the NSPIRE final rule gives residents a
substantive feedback apparatus and that
additional tenant participation during a
DEC referral should be at the discretion
of the DEC after consultation with
program offices. Additional
administrative procedures will be
provided in a subordinate notice. This
notice will include guidance on
supporting and relevant information
and documentation and the
development of a compliance plan.
Other Comments Regarding § 5.711
A commenter suggested HUD remove
‘‘significant’’ from ‘‘significant
improvement’’ in paragraphs (c)(3) and
(d)(2), and other instances. This
commenter stated there is no intent to
waste the Department’s time with
appeals and to make an appeal takes
time and resources from the owner or
manager appellant, such that this is a
sufficient bar to frivolous appeals. This
commenter noted that under the current
scoring system, it is not simple to
ascertain whether different appeals will
result in improvements to the score and
going from a 29 score to a score of 32
may not be ‘‘significant’’ in terms of
scoring, but is significant enough to
withdraw a trigger for DEC referral. This
commenter noted that increasing your
score from a 59 to a 61, while not being
a ‘‘significant’’ improvement in score,
does take an owner or manager from
‘‘failing’’ to ‘‘passing.’’
A commenter recommended generally
that tenants, legitimate tenant
associations, and their representatives
be given Notice, Comment and Appeal
rights parallel to owners and agents, at
each step of the REAC process and
requested that HUD recognize this
explicitly at each step, and allow
tenants to post comments and photos
electronically and/or in writing, in
response to each stage, from initial
inspection report; a final report after
technical appeals; and an owners
certification that severe health and
safety citations have been addressed.
A commenter recommended HUD set
a stationary scoring threshold to be used
to refer properties to the Departmental
Enforcement Center (DEC) and retain
HUD’s ability to send properties scoring

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higher than the stationary threshold to
DEC so that HUD sets clear expectations
for the owner, residents, and advocates
regarding what will trigger HUD’s
enforcement action. This commenter
noted HUD’s current enforcement
practices for specific properties are
often inaccessible or unknown to
residents and advocates. This
commenter stated that the stationary
scoring threshold should not be lower
than 30 and suggested HUD also
consider if properties scoring at the
specified threshold generally have
numerous life-threatening severe health
and safety deficiencies, have difficulty
correcting the defects within the HUD
given timeframe, have difficulty
substantially raising their score in the
subsequent inspection, and have
numerous State or local code violations.
HUD Response: HUD appreciates the
feedback but declines to implement the
suggested revisions with respect to use
of the term ‘‘significant’’ in paragraphs
(c)(3) and (d)(2). This language was
added to discourage owners and PHAs
from requesting technical reviews that
will likely not result in substantial
change to the score. In drafting this
regulation, HUD considered current
Federal resources and the
administrative burden that technical
reviews require and establishes a basis
for HUD to decline a request.
With regard to expanding tenant
participation in the appeals process,
HUD will continue to explore the
appropriate ways in which to engage
tenants in the NSPIRE inspection
process outside of what is already
included in § 5.711(i)(2). Adding a
required tenant element to this process
would be administratively challenging
for HUD, the DEC, PHAs and owners
and could delay case resolution.
Consultation with residents will remain
as an option under the regulations.
Tenant participation outside of
administrative referrals will be outlined
in future subordinate notices published
in the Federal Register.
The scoring threshold for DEC
referrals will be 30 and under, and
properties that score under 60 in two
successive inspections. The language in
§ 5.711(i)(1) and (3) has been revised to
reflect that this process will include
both Multifamily housing programs and
Public Housing and the relevant HUD
program offices. The addition of
properties with scores of less than 60 in
two successive inspections matches the
current process outlined in Housing
Notices H 2015–02 and 2018–08. HUD
notes that an administrative referral to
the DEC is not the only way HUD’s
program offices follow up on physical
deficiencies. Staff in HUD’s program

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offices, field offices and the
Performance-based Contract
Administrators (PBCAs) also do this
oversight and follow-up. HUD will take
this feedback into consideration as it
details administrative procedures in
subordinate notices.

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Question for Comment #19: How To
Approach Tenant-Induced Damage
HUD solicited comment on how to
fairly approach tenant-induced damage
and received the following responses.
Comments Regarding Problems Caused
by Tenant-Induced Damage
Commenters noted that tenantinduced damages can be expensive and
often go unreimbursed. A commenter
stated that HUD has long been aware of
the problem of tenant-induced damage
and should have acted long ago.
Commenters noted HUD’s intended
update to inspectable areas would
increase the weight of in-unit scoring,
which has the potential to significantly
increase the impact of tenant-induced
damage on the scoring.
Commenters stated that the biggest
problem with tenant-induced damage
isn’t the cost of repair but being
penalized by HUD for the damage. A
commenter noted that most repairs can
be easily handled in due course, another
noted that tenant-induced damage can
be inside and outside the unit.
Commenters noted that properties are
often not aware of tenant-induced
damage and that scoring physical
deficiencies caused by tenants forces
owners to invade residents’ privacy to
check for tenant-induced damage.
A commenter identified the following
as types of tenant-induced damage: (i)
deficiencies for blocked egress where a
tenant has moved furniture in front of
doors and windows, even after owner or
its agent has requested that the item be
moved and verified that it was moved;
(ii) resident installed fans and air
conditioning units; (iii) improper
storage of items in the oven by
residents; and (iv) condition of tenant
owned appliances over which the owner
has no control.
A commenter stated that owners and
managers often use ‘‘tenant induced
damage’’ as an excuse to avoid
responsibility for ordinary wear and
tear, or other damage not induced by the
tenant to pass along charges to tenants,
and to harass tenants. This commenter
noted that owners and agents blame
tenants for mold in their units, when the
mold is due to the presence of moisture
caused by water leaks and poor
ventilation. This commenter stated that
owners and managers seek to foist on
residents charges through questionable

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Support for HUD’s Current Method of
Handling Tenant-Induced Damage

HUD guidance in caring for and
maintaining units.
HUD generally agrees with the
sentiment that damage, regardless of the
source, must be addressed and that
excessive tenant-induced damage may
also indicate problems with property
management and enforcement of lease
provisions and house rules. Lease
agreements and security deposits are
essential vehicles for managing these
issues.

Commenters stated that HUD should
not treat tenant-induced damage
differently because tenant-induced
damage is still damage and an indicator
of a problem that needs to be addressed
by property management.
Commenters stated that sufficient
protections are already in place, noting
that: tenant-induced damages are
already addressed by current regulatory
provisions under family obligations
which covers disincentives and program
termination; the owner already has the
right to pursue damages against the
tenant; many housing authorities
already include tenant damage charges
in their ACOP and in their standard
leases; properties can collect security
deposits, and properties can have
systems in place to deal with
extraordinary damage caused by
tenants.
HUD Response: HUD understands the
commenters’ concerns about the
potential impact of tenant-induced
damage on costs, scoring, and the
burden of additional owner/
management inspections. The
Department also appreciates the
comments and concerns about normal
wear and tear and ownership
responsibilities of maintaining units.
PHAs and landlords can use policies
and lease enforcement to prevent and
collect fees for tenant damages. With the
addition of affirmative habitability
requirements in § 5.703(d) there is a
clear expectation that the landlord is
responsible for certain elements of the
unit. If there are tenant-owned items
cited in the inspection, the PHA or
owner can request a technical review.
For units in the HCV and PBV
programs, HOTMA provides that if a
PHA determines that any damage (other
than any damage resulting from
ordinary use) was caused by the tenant,
the agency may waive the applicability
of the housing quality standards, except
as it applies to the tenant. As HUD
progresses with notices around Scoring
and Standards, the Department will
continue to seek to strike a balance to
hold all parties accountable to their
responsibilities outlined in their
respective contractual documents and

Comments Regarding Incentives
Several commenters stated that
landlords should use existing tools to
handle tenant-induced damage.
Commenters suggested that property
owners should hold residents
accountable for severe damage to units
by issuing lease violations, going
through mediation, charging for the
damages, terminating the tenancy, and
evicting tenants. Commenters
recommended that properties use
minimum monthly repayment
agreements. Commenters suggested that
providing a list of potential charges at
move-in might help discourage a tenant
from damaging the unit beyond normal
wear and tear; one commenter suggested
properties serve a 3-day notice to quit in
situations where the amount of damage
is equal to a year of rent.
Commenters recommended several
incentives to tenants for maintaining
their units, including: a gift card for the
best kept unit administered by the
management/owner, yearly community
awards, privileges, recognition
ceremonies for the apartment/unit/
block/building kept in best conditions,
rent incentives, a small saving account
with deposits for taking care of units, or
a new microwave. Other commenters
noted that the incentive to maintain the
unit should be the opportunity to live in
the unit, and most do maintain their
units. A commenter suggested that
owners and PHAs can establish
incentive programs if they want to.
A commenter noted that non-MTW
PHAs do not have funding flexibility to
provide creative incentives outside of
current regulatory provisions and
funding levels; another noted a
disincentive requiring residents to pay
additional charges due to damage and
neglect would not work because
residents would not be able to afford to
pay.
HUD Response: HUD agrees that
owners and agents must abide by their
rights and responsibilities which
includes enforcing lease provisions and
house rules and PHA policies alongside
of their responsibilities to maintain the
physical condition of the property.
PHAs and owners can ensure that

‘‘House Rules’’ for items which should
be part of the ordinary maintenance of
the property such as lightbulb or lock/
key replacement. This commenter
recommended HUD investigate this
matter further and carefully construct
future rules on this matter with
consultation from tenant leaders and
legal service agencies.

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residents are aware of policies,
understand their responsibilities, and
collect reasonable fees for damages.
PHAs and owners can also stay abreast
of property conditions with regular
inspections and the annual selfinspection process included in NSPIRE.
HUD also agrees that additional
punitive financial charges above what is
allowed in the lease provisions and
security deposit administration would
likely not be an effective means to
discourage tenant-induced damage.
Comments Regarding How Inspections
Should Take Into Account TenantInduced Damage
Commenters stated that tenantinduced damage should not be scored
against an owner or PHA. One
commenter stated, in the alternative,
that tenant-induced damage should
result in the minimum point deduction;
another suggested that tenant-induced
damage should count only if the PHA
failed to address it. Commenters
suggested adding an appeal option to
allow demonstrating that damage is
repeatedly caused by tenants and
repaired by the owner. A commenter
suggested that if the owner can show the
tenant caused the damage, the owner
should not be sanctioned or see score
reductions through the NSPIRE process.
Commenters suggested that HUD
should use an advisory approach which
allows properties to remove deficiencies
for superficial damage that is likely to
have occurred in the days immediately
preceding the inspections, or if the
damage was not reported to the property
by the tenant, if the owner submits work
orders showing the repairs within a
certain number of days following the
inspection. A commenter suggested that
inspectors negate any point deductions
where the housing authority can
provide documentation to substantiate
resident noncompliance as is often
required when these lease infractions
are taken before local courts.
A commenter suggested that HUD
allow a property to negate points if they
can identify a significant number of
such deficiencies attributable to an
individual unit that are not present in
other units in the sample and are
otherwise unreflective of the property
condition. A commenter suggested an
inspector should be given latitude to
assign blame for damage to a resident
and not the property management.
Another commenter suggested that a
property could gain points back based
on especially pristine condition of a
property.
HUD Response: HUD appreciates the
feedback but disagrees with the
comments suggesting that tenant-

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induced damage not be scored as part of
an inspection. HUD believes this
approach would be overly subjective as
it is not always clear what damage may
be tenant-induced versus normal wear
and tear. Additionally, inspectors would
not be able to account for poor property
management or other potential factors.
Scoring should reflect the overall
condition of the property regardless of
the source of the damage, and inspectors
will not be able to fully assess and
determine responsibility for damages
while onsite. With respect to the
comment regarding pristine properties,
HUD believes NSPIRE will result in
scores that accurately reflect the health
and safety of a property. If a property is
pristine, it will be reflected in the
inspection score.
Other Suggested Changes
Commenters recommended that HUD
support lessor rights under the lease.
Other commenters recommended that
the HUD lease be modified to include
language such that the lease is more
enforceable regarding property damage.
Commenters made several additional
specific recommendations with respect
to tenant-induced damage, including:
that HUD clearly define ‘‘tenantinduced damage,’’ provide guidance on
what timeline is appropriate for tenantinduced damage, and provide guidance
on what legal recourse is available to the
owner; that HUD make distinctions
between tenant-induced damage and
wear-and-tear and provide clear
examples; and that tenants receive
training on how to maintain their home
and how the condition of their home
impacts their health and safety.
Commenters recommended HUD
allow the collection of a security deposit
or increased security deposit that can
cover damages, with one commenter
noting that many programs currently
have a limit on what can be collected.
A commenter requested that HUD
permit payment of surety bonds in
programs where payment of security
deposits is an eligible program expense
which would result in a cost-savings to
the tenant and the program, and would
protect the asset to a greater degree for
less cost than a traditional security
deposit.
A commenter suggested that tenantinduced costs should be reportable
similar to debts owed to PHAs.
Commenters suggested that tenantinduced damage could be a sign that the
tenant needs additional resources from
HUD such as resident service
coordinator assistance, or help with
behavioral or other problems.
Commenters suggested that PHAs
should have the discretion to disallow

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transfers both within the program and
between programs (from Public Housing
to HCV for example) if the tenant has
caused damage. A commenter suggested
HUD explore reduced utility
reimbursements, or ineligibility to
receive utility reimbursements, for
tenants who cause damage.
A commenter recommended that HUD
require notice and opportunity to
respond, with copies to HUD, to tenants
who are assessed charges or fees for
alleged ‘‘tenant-induced’’ damage. A
commenter suggested HUD conduct
listening sessions with both tenant and
owner stakeholders on this topic to
determine the best path forward.
HUD Response: Regarding comments
on lessors and the lease, HUD supports
a balanced approach where all parties to
the lease agreements understand their
rights and responsibilities. HUD
appreciates the feedback on providing
further clarification and guidance on
tenant-induced damage. Regarding
HUD’s ability to provide guidance on
legal recourse, State and local
jurisdictions administer landlord-tenant
laws and eviction processes vary by
jurisdiction.
Regarding resident training or service
coordinators, HUD encourages
Multifamily owners and agents to speak
with their Account Executive about
service coordinator funding
opportunities and eligibility. HUD also
encourages owners and agents to
explore local social service providers
who may help assisted residents with
housekeeping skills. Any participation
with social services must be voluntary,
and providers must comply with
nondiscrimination laws.
With respect to suggestions related to
security deposits, surety bonds, debt
reporting, and punitive responses to
tenant-based damage, HUD believes
these program issues are beyond the
scope of this rule.
Insufficient Information
A commenter stated that due to the
weight HUD will place on unit
condition, there is insufficient
information about how HUD will
address tenant-created issues.
HUD Response: REAC inspectors will
not consider whether tenants caused the
damages that lead to the deficiency,
because they will not be able to fully
assess and determine responsibility for
damages while onsite. For the HCV and
PBV programs, however, the PHA may
provide more flexibility to owners as
provided in a future HOTMA
rulemaking. HUD will publish a Scoring
notice before this final rule becomes
effective.

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Question for Comment #20: Scoring
Threshold for Referring Properties to the
DEC
HUD sought input on the scoring
threshold to use for referring a property
to the Departmental Enforcement
Center. HUD received the following
responses.

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Factors To Consider
Commenters recommended HUD
periodically review its referral system,
and a commenter recommended this
review be in consultation with tenants
and other stakeholders. A commenter
recommended HUD develop a threshold
that includes automatic referral to the
DEC when certain significant issues are
discovered, such as: structural concerns,
severe roof conditions, foundation
failure, significant water intrusion, or
severe exterior dilapidation or
deterioration. Another commenter
recommended that HUD consider
building code violations, abatements
and emergency fail items.
A commenter recommended that HUD
elaborate that the DEC may include
input from residents in its analysis of
the property, noting that tenants have
not been able to consult with the DEC
recently and that FOIA requests to the
DEC for a copy of REAC report and
scores have denied on the grounds that
the referral is a ‘‘judicial proceeding.’’
This commenter noted that this type of
consultation is important to ensure that
HUD pursues the proper remedies and
pursues termination or abatement only
as a last resort option, by seeking input
from residents as to the most
appropriate remedy.
HUD Response: HUD will take the
input regarding its referral system and
factors that it should evaluate in its
administrative referrals to the DEC into
consideration. The basis for referrals
under NSPIRE will be the property
score. More information on the scoring
process will be provided in the NSPIRE
Scoring notice. Section 5.711(i) covers
administrative enforcement of the
NSPIRE Standards and regulations,
which may include elements of
structural concerns, severe roof
conditions, foundation failure. Other
building code violations that are not in
the NSPIRE Standards would not be
enforced by HUD unless specified in
HUD program regulations (e.g. 24 CFR
part 92 for HOME and 24 CFR part 93
for HTF). HUD will consider better
information sharing with State and local
code enforcement agencies. Regarding
sharing of information under review by
the DEC, many areas of enforcement are
exempted under FOIA. HUD will
provide other avenues for resident input

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and notification through its field offices.
Where there are direct impacts to
residents—such as a need for temporary
or permanent relocation, there are other
resident notification processes in other
HUD regulations. That process is not
part of the NSPIRE rulemaking.
Point Based Referrals
Commenters recommended that HUD
keep the DEC threshold as stable as
possible and maintain the 30-point
automatic referral and the 31–59
optional referral, paired with the
additional requirements of owners
below the 60-point threshold.
A commenter urged HUD to adopt the
recommendations put forth by the
Government Accountability Office in
their 2019 report titled ‘‘Real Estate
Assessment Center: HUD Should
Improve Physical Inspection Process
and Oversight of Inspectors’’ (GAO–19–
254) to strengthen its oversight
mechanisms and ensure adequate
quality of life in HUD-assisted
communities. The 2019 report calls
attention to the discrepancy between the
2017 and 2018 Consolidated
Appropriations Acts (which stipulate
that HUD must provide a notice to
owners of properties that score 60 or
below on the REAC physical
inspection), and current and longstanding HUD practice (which is to send
notices at scores 59 and below). The
report also discusses the sampling
margin of error, in particular instances
in which the longer range of the margin
could encompass scores of 59 or below,
and yet because the score itself is above
60, no administrative consequence
results. The report states that ‘‘If REAC
were to resume reporting on sampling
errors and develop a process to address
properties that fall below certain cutoff
scores when the sampling error is taken
into account, it would have the
information it needs to identify
properties that may require more
frequent inspections or enforcement
actions’’.
HUD Response: HUD evaluated the
GAO Report as part of its efforts to
identify mechanisms to improve its
inspection program under NSPIRE. HUD
will take this input into consideration as
part of the Administrative Procedures
notice. This notice will include
information about its sampling
methodology. For administrative
referrals, HUD clarifies in this final rule
that these referrals will be essentially
consistent for both Public Housing and
Multifamily housing programs.

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Suggested Standards for Referring
Properties to the DEC
Commenters suggested that a property
should be referred to the DEC only
when there is blatant disregard for the
property condition and/or the
significant presence of health and safety
issues. Commenters noted that an
inspection can have as little as 5–6
specific deficiencies, some of which
could be fixed in seconds or are
unknown to property staff and fail the
UPCS inspection. Another commenter
noted that some repairs may be
expensive but not relevant to
maintaining a safe living environment.
A commenter noted that an agency may
not be aware of all tenant-induced
damage on their property.
Several commenters stated that HUD
should refer a property to the DEC only
where there are multiple low scores or
repeat failures on the same issue.
Commenters expressed that due to the
wide variance in how HUD inspectors
evaluate properties, a single score, that
could be an outlier, should not trigger
corrective action.
Commenters suggested DEC referrals
should be reserved for serious cases of
malfeasance or misappropriations of
funds that rise to potential violations of
the law. A commenter noted that DEC
does not have the resources to be
utilized as an additional entity
providing oversight to the physical
condition of assisted properties and
inspection scoring should be considered
as one element in determining if referral
to the enforcement center is warranted;
another stated that HUD should
consider the history and condition of
other properties in an owner’s portfolio
before referral.
Commenters suggested that, if a
property is about to undergo a
renovation (or is in the midst of a
renovation) which will address the
factors leading to a score which might
otherwise lead to its referral to DEC,
HUD should factor the renovation scope
into its decision as to whether to refer.
A commenter suggested lenience for
older properties regarding certain areas
that are not avoidable and are not
necessarily health and safety issues.
HUD Response: Properties that score
under 60 under the NSPIRE Standards
will have health and safety hazards that
merit follow up, and in some cases,
administrative review by the DEC or
HUD. The method for scoring properties
under NSPIRE will be discussed further
in the NSPIRE Scoring notice. HUD’s
process regarding administrative or DEC
referrals will be for properties that score
30 or less or have two successive scores
of under 60, as described in Housing

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notices 2015–02 and 2018–08. The DEC
can also investigate cases under the
False Claims Act, including situations
when a PHA or owner certifies that
deficiencies have been corrected when
they have not. Additional information
on administrative referrals will be
provided in the NSPIRE Administrative
notice.
Regarding scores that did not consider
renovations, owners or PHAs can
request a technical review of the
inspection to determine if the
inspection considered these factors. If
these conditions would raise a score
over 30 or 60, HUD would consider that
significant. For tenant-induced
damages, REAC inspectors will not
attempt to determine this at the site, and
owners and PHAs already have options
under their lease and policies to
discourage damage and collect fees.
Timeline for Repair of Severe Health
and Safety Defects
A commenter suggested that the
requirement of severe health or safety
defects being repaired within 24 hours
should be conditional on what the
deficiency is, and that replacing a
smoke detector battery on 5–10 units is
reasonable to perform in 24 hours, but,
in cases where some disagreement exists
as to whether a fix is required due to the
potential for an appeal or local code
allowances, an alternative to this
requirement should be in place. This
commenter also suggested that, for
issues found outside of normal resident
access areas, especially in cases
requiring the use of qualified
professionals outside of the property for
proper repair, there should be
alternative requirements for repair
timelines.
This commenter stated that the
requirement of all non-life-threatening
defects to be repaired within 30 days is
burdensome because certain capital
improvements may require time to
analyze, budget, and obtain bids for and
complete. This commenter noted that
areas affected by natural disasters
frequently have labor shortages that
need to be considered, and noncatastrophic repairs of roofing, siding,
trip hazards or repairs associated with
concrete or asphalt repairs may be
delayed or made impossible by seasonal
weather delays.
HUD Response: HUD appreciates this
feedback about the timeline of
correcting severe health and safety
defects, now referred to as LT to align
the NSPIRE rule with HOTMA statute.
Under HOTMA Section 101(a)(3) life
threatening conditions must be
corrected within 24 hours after such
notice has been provided, and non-life-

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threatening conditions within 30 days
after such notice has been provided or
such longer period as the PHA may
establish. Because NSPIRE is aligning
requirements across its programs, these
timeframes will also apply to Public
Housing and Multifamily housing
programs, except that Severe
deficiencies for Public Housing and
Multifamily housing will require 24
hour repairs, HUD will provide
additional flexibility for Public Housing
and Multifamily housing programs on
what is considered an acceptable
correction within the timeframes for
other programs covered by this
rulemaking. HUD understands that in 24
hours, PHAs and owners may only be
able to prevent exposure to a hazard and
that some permanent repairs may take
longer, and also that that some repairs
may require specialized services that
will need to be procured, or
professionals that may not be
immediately available. These
determinations will be made case-bycase, with the understanding that HUD
can allow flexibility on what is
acceptable given the time frame,
provided the immediate hazard is
corrected. PHAs and owners should
avoid relying on ‘‘quick fixes’’ and plan
for effective or permanent repair (e.g., at
least 20 years) where possible, so that
hazards do not re-develop. More detail
about correcting deficiencies will be
published in the subordinate NSPIRE
Administrative notice.
Not Enough Information To Respond
Commenters responded that this
question cannot be adequately
commented upon until the scoring
model is released because it is known
that it will be different from the model
currently in existence, and therefore
using the current model to assess
findings under an unknown model is
incomplete and unreliable.
HUD Response: HUD appreciates this
feedback. The NSPIRE Scoring notice
will be final before this regulation is
effective. More detail about correcting
deficiencies will be published in
subordinate notices.
Section 5.713 Second- and ThirdParty Rights
Commenters opposed the proposed
exclusion of third-party beneficiary
rights to tenants and others regarding
enforcement of HUD contracts with
owners or PHAs. A commenter noted
that when HUD or owners fail to enforce
standards, tenants should have the
opportunity to pursue remedies in
court. This commenter also noted that
some HUD Multifamily programs, such
as Mark Down to Market, already

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include tenant third-party rights and
HUD has not been overburdened with
frivolous claims.
Another commenter suggested there is
no need to include this language in 24
CFR part 5 because the ability to assert
second- or third-party beneficiary status
is already prohibited because many, if
not all, of the regulatory agreements and
subsidy contracts already include a
clause disclaiming third-party
beneficiary status to residents. This
commenter suggested removing secondand third-party beneficiary status in part
5, and other changes in Part A of this
notice, are just a continuation of HUD’s
‘‘old’’ business approach and stated that
HUD’s clients are the families assisted
through these programs and statutory
and regulatory law has consistently
included the identification of poor
physical conditions and maintenance
concerns as an area in which active
resident participation is critical. This
commenter stated that HUD continues
to hamper residents’ ability to be a
partner to HUD and housing providers
by making HUD’s enforcement actions
opaque to residents, and by limiting
residents’ rights that they normally
should have as direct beneficiaries of
the contracts between HUD and its
housing providers. This commenter
noted the slow pace in which HUD
often holds PHAs and owners
accountable for gross and flagrant
violations of housing condition
standards, and that HUD should not be
concerned about getting sued for failure
to act because HUD is already being
sued.
HUD Response: HUD declines to
make revisions to § 5.713 in this final
rule. This regulation acknowledges that
covered programs have different
mechanisms for addressing second- and
third-party beneficiary status, as it can
be covered in the Annual Contributions
Contract (ACC), Housing Assistance
Payments (HAP) agreement subsidy
contracts, and regulatory agreements.
The NSPIRE rule is not intended to
override existing program requirements.
Tenant participation and feedback is
already included in many areas of these
regulations.
Addition of Part 902, Subpart H and
Part 985, Subpart D Regarding Small
Rural PHAs
Question for Comment #21: Threshold
for Troubled PHAs Under the Small
Rural Assessment
HUD sought comment on the proper
threshold for troubled PHAs under the
small rural assessment. A commenter
recommended that HUD assure that if a
reduced score would result in action by

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HUD that would affect a resident’s
occupancy, the action should not be
taken until HUD has provided an
alternative housing option to the tenant.
Another commenter suggested that
adding a second property below 70
percent creates a more accurate picture
of whether an agency is troubled or not
as it shows a pattern of struggling
developments. Multiple commenters
responded that without details of the
scoring protocol, commenters could not
provide informed input as to the
threshold for designation a troubled
agency regardless of size.
HUD Response: HUD acknowledges
the impact reduced assessment scores
may have on a resident and the need for
alternative housing. Residents of HUDassisted housing are protected by the
Uniform Relocation Assistance and Real
Property Acquisition Policies Act of
1970, as amended (42 U.S.C. 4601 et
seq.) (URA) and other HUD
requirements. A failing inspection or
PHAS score would not displace
residents, as PHAs are provided time to
correct the deficiency. When a public
housing property is approved for
demolition or disposition under Section
18 of the 1937 Act (42 U.S.C. 1437p),
residents must be offered comparable
housing or provided a tenant protection
voucher. As provided in the final rule
at § 902.103, small rural PHAs shall be
assessed and scored based only on the
physical condition of their public
housing properties, which will include
all projects. Additional information
about the scoring protocol will be
provided in the Scoring notice.
Question for Comment #22: Indicators
To Determine if the PHA is Failing To
Fulfill Its Responsibilities, Small Rural
PHA Assessment
HUD requested 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.
Two commenters supported the
proposed indicators. A commenter
stated that a score of 70 or better to
prevent being designated as troubled
seemed lofty and suggested using the
current level. This commenter
expressed that the HQS system for
Section 8 HCV has worked well since
inception and any additional
requirements added to those in place for
owners will likely discourage
participation.
A commenter responded that the
threshold HUD proposed to determine if
the PHA has passed or failed the

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indicator is overly stringent because
provisions in HOTMA allow agencies to
move families into Section 8 units
before a unit inspection occurs if there
was an inspection before like LIHTC or
one that is as stringent as HQS and
requiring 98 percent of all units to be
inspected before a tenant moves into the
unit defeats this flexibility. This
commenter also expressed concern
about the provision requiring 98 percent
of units to be inspected every 3 years
because if HUD provides the HCV
program the flexibility to have riskbased assessments every 2 to 5 years,
then this acts as a disincentive for
agencies to benefit from 5-year
inspection time periods. This
commenter recommended either
reducing the 98 percent threshold for
those provisions or including a caveat
for units with non-HQS inspections
before move-in to count toward the
threshold and changing language to note
that 98 percent of units are inspected in
the time period they should be
inspected, as specified by HUD criteria.
A commenter proposed the following
Indicators: (1) Failing to recognize
hazards with potentially extreme or
severe outcomes; (2) Failing to evaluate
and prioritize the hazards; (3) Failing to
recommend adequate housing measures
to address hazards; (4) Failing to
develop a comprehensive, integrated,
and prescriptive scope of work that can
be effectively used by subcontractors
installing the measures.
A commenter responded that it is
difficult to comment on the indicators
without knowing how deficiencies will
be rated or scored.
HUD Response: HUD appreciates
comments on the Small Rural PHA
Assessment program for SEMAP
indicators and PHAS scoring. The
NSPIRE standards, as proposed, will
include the list of ‘‘life threatening’’
conditions, which were proposed as
severe health and safety deficiencies so
that the NSPIRE regulations are
consistent with HOTMA. With this final
rule, the NSPIRE standards are the
applicable housing quality standards for
the HCV and PBV programs, and these
define the deficiencies. HCV and PBV
housing inspections will still be on a
pass/fail rating system and not scored.
The Standards notice affirmed the
elective allowance under HOTMA to
have residents move into units with
only non-life-threatening conditions is
retained, and the proposed time frame
of risk-based inspections every 2 to 5
years does not apply to the HCV and
PBV programs. Section 5.705(c)(4) and
(5) reference existing regulations for the
timing of inspections. Section
985.203(c)(2) accounts for the PHA

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initial inspection option for non-life
threatening deficiencies or alternative
inspections. Alternative inspections will
be accepted by HUD if they meet the
NSPIRE standards for health and safety.
HUD acknowledges the comment
about a score of 70 or better to prevent
being designated as Troubled for public
housing, which is referencing the score
of 60 or less used as the Troubled
standard for other PHAs. HUD declines
to revise § 902.105(a) to 60 at this time.
Small Rural PHAs will be assessed for
physical conditions only and will no
longer be scored under the financial,
management and Capital Fund
indicators of 24 CFR part 902. Removing
this administrative burden of managing
performance of other indicators will
offer Small Rural PHAs more time to
focus on improving the physical
conditions of their properties. A score of
70 or better should be easily attainable
for all HCV programs. For SEMAP, the
indicators in part 985 are provided as
pass/fail. HUD retained the language
that a PHA that failed any of the four
indicators under § 985.201 will be
designated as troubled, as these
indicators measure compliance with the
program regulations, are required
activities, and rarely missed. The final
rule also retains indicator levels at 98
percent to be consistent with the
SEMAP ratings for PHAs that are not
small rural. Achieving 98 percent for
these indicators is the norm for PHAs
regardless of size. To provide more
flexibility, under § 985.205(a)(i), HUD
will consider budget authority
utilization based on the most recent two
calendar years prior to the assessment.
HUD generally appreciates the
proposal to revise the indicators to be
more focused on hazards, but did not
include these revisions for small rural
PHAs to remain consistent with the
SEMAP regulations for other PHAs,
which are not proposed for revision
with this rule. HUD will consider these
comments for future revisions to the
SEMAP regulations for all PHAs.
With respect to the suggestion to
create an integrated scope of work
(SOW) that could be used by
subcontractors, HUD does not prescribe
the methods by which the PHA resolves
issues identified during the inspection.
It is the PHA’s responsibility to repair
the deficiencies by either using its
maintenance staff, external vendors or
contracts, or other means. Any
identified life-threatening deficiencies
are required to be mitigated within 24
hours. Regarding how deficiencies will
be rated or scored, the NSPIRE
Standards notice will provide the
standards and the pass/fail rating
already in place for HCV and PBV

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programs. Individual HCV and PBV
properties will not be scored under
NSPIRE, per § 5.711(a).
Question for Comment #23: Criteria To
Determine if the PHA is a High
Performer or a Standard Performer,
Small Rural PHA Assessment Under
SEMAP
HUD asked for comment on the
criteria for determining if a PHA is a
high performer or a standard performer.
Commenters supported the current
scoring system. A commenter supported
recognizing the challenging
environment in which small rural HAs
operate HCV programs by
predominantly focusing the ratings on
the functions under the control of the
PHA.
Commenters noted that there is a
small margin for error for small PHAs,
which have up to 550 combined Public
Housing and HCV units, and suggested
that the scoring percentage should be
widened, with two commenters
suggesting moving from 98 percent to 90
percent, and one of these commenters
suggesting this move for small HCV
programs (250 or fewer units). A
commenter noted that small agencies
may have difficulty achieving high
performer status if it is predominately
based on funding utilization and
pointed out that voucher program
utilization can fluctuate because of
housing availability and fair market rent
(FMR) fluctuations, and that this can be
especially true in rural areas where
there is often a lack of decent, affordable
rental housing available. A commenter
noted this is unfair and contrary to
Congress’ deregulatory goals. A
commenter urged HUD that Housing
availability and FMR fluctuations,
which are outside of the control of
PHAs, should not be held against an
agency. This commenter also noted that
special-purpose vouchers, like HUD–
VASH can also be challenging to meet
utilization thresholds—especially in
rural areas and recommended excluding
special-purpose vouchers for the
utilization rate requirement. Another
commenter suggested there should be
more differentiation on point scoring
between the High Performer status and
Troubled status.
Commenters also advised that without
understanding the property inspection
scoring protocol, it is hard to evaluate
the Public Housing Assessment System.
HUD Response: For small rural
agencies, Public Housing, HCV and PBV
properties will be inspected using the
NSPIRE Standards. The proposed
indicators for Small Rural SEMAP are
retained in the final rule to remain
consistent with the SEMAP program for

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other PHAs. However, Small Rural
PHAs will undergo a SEMAP
assessment only every three years as
provided in § 985.207, and indicators
will be evaluated only on a pass/fail
basis. Individual properties will not be
scored under NSPIRE.
Other Small Rural Comments
A commenter expressed concern that
updating the small rural PHA list every
three years may add undue uncertainty
to PHAs that qualify as small rural as
there is a chance their status may
change depending on factors outside of
their control such as population growth
or changes to regulations at the CFPB.
This commenter recommended that
HUD allow for agencies determined to
be small rural to be grandfathered into
the small rural definition, unless there
is significant and substantial change to
the agency, to provide additional
consistency to small rural agencies so
that they do not have to worry about
their inspection protocol potentially
changing every three years.
Alternatively, this commenter suggested
at least allowing an agency to be
grandfathered in for one additional 3year period after falling outside of the
definition of ‘‘small rural’’ to ensure the
agency would have ample time update
their inspection process and prepare for
the new inspection protocol.
HUD Response: HUD appreciates the
commenter’s concern regarding the
definition of small rural PHAs and the
timeframe for updates to the list of every
three years. HUD does not expect that
the list will change from year to year
given the relatively stable indicators
provided in statute and § 902.101, but
HUD did not have discretion on this
definition as it is statutory. All PHAs
will be provided time before the final
rule is effective, and small rural PHAs
will have an additional 120 days after
the rule is effective for HUD to designate
small rural status per § 902.101(b).
Insufficient Information To Provide
Meaningful Opportunity To Comment
Several commenters stated that they
were unable to provide meaningful
comments on the proposed rule because
information had not been released.
Commenters stated that they lacked key
information about: NSPIRE Standards;
NSPIRE scoring methodologies; Criteria
to qualify for longer risk-assessment
inspection periods; Electronic data
collection of self-inspections; List of
deficiencies including severe health and
safety deficiencies and which of those
deficiencies are life-threating and which
are not; Deficiencies and methodologies
to use for scoring and ranking HUD
housing; Factors for HCV unit pass/fail;

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Specific minimum project and unit
deficiencies for multiple programs,
including HOME and homeownership;
Minimum property standards
deficiencies; Submission of PHA
certifications for small rural PHAs;
Calculation for determining excess HAP
reserve for small rural PHAs; the criteria
required for PHAs to qualify for a longer
inspection cycle; and flexible protocols
to accommodate the unique
circumstances of each program and
housing type.
A commenter urged HUD to provide
detail about whether REAC will begin to
provide the necessary information
regarding deferred maintenance as
required by investors who provide
liquidity to the market.
A commenter noted that they are
unable to consider HUD’s HOTMA
rulemaking and the NSPIRE rulemaking
for lack of information about the new
NSPIRE inspection model.
A commenter noted that they lacked
key information about the status of
electronic submission, the result of
reducing inspectable areas, how the new
deficiencies improved inspector
objectivity, and how inspection results
compare to past inspections.
Because of the lack of information
available, commenters requested
extension. Commenters suggested HUD
extend the demonstration period until
scoring methodologies can be
incorporated into the Standards notice
so reviewers can weigh all factors before
commenting. Commenters suggested
that the demonstration has not been able
to provide as much information due to
the COVID–19 pandemic.
HUD Response: HUD appreciates this
feedback. The NSPIRE Standards were
proposed on June 17, 2022, and the
NSPIRE Scoring notice was proposed on
March 28, 2023, for public comment.
HUD will consider additional comment
before making these requirements final,
and NSPIRE inspections will not begin
until after HUD publishes final NSPIRE
Standards and Scoring notices. HUD
does not have details regarding deferred
maintenance as required by investors
who provide liquidity to the market, as
that is outside the scope of this
rulemaking. Information about the
status of electronic submission will be
provided in a notice to implement the
new self-inspection requirements in
§ 5.707. Information on inspectable
areas and deficiencies will be in the
NSPIRE Standards notice. Information
on improved inspector objectivity is
discussed above in this preamble.
Information on how NSPIRE inspection
results compare to past inspections
performed under UPCS is not yet
available. Additional notices and rules

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under HOTMA since the NSPIRE
proposed rule and notices were
published. HUD will consider
comments on Standards and Scoring
before they are final and effective for
HUD housing.
Environmental Justice Issues
Two commenters asked, pursuant to
the January 20, 2021, Regulatory Freeze
Pending Review memorandum from
Ronald A. Klain, Assistant to President
Biden and White House Chief of Staff,
(‘‘Klain memo’’) which was published
in the Federal Register on January 28,
2021,17 for an extension until such time
as there can be further consideration of
environmental justice issues and the
impact of the outdoor environment on
the residents who live in HUD-assisted
housing. These commenters noted that
statutes and implementing regulations
have largely failed to address the
common environmental risks present in
the outdoor environment surrounding
HUD-assisted housing, unless an
environmental review has been
triggered under the National
Environmental Policy Act. 42 U.S.C.
4321 et. seq. (1969). This commenter
noted that on February 21, 2021, HUD’s
Office of Inspector General (HUD OIG)
issued a report, Contaminated Sites
Pose Potential Health Risks to Residents
at HUD funded properties, in which
HUD OIG found that HUD’s current
approach to identifying and addressing
contaminated sites has resulted in
federally-assisted housing residents
experiencing prolonged exposure to
toxic contamination, including
dangerously high level of lead and
proximity to Superfund sites that
continue to present significant risks to
human health. This commenter noted
that the proposed rule was silent on the
issue of inspecting the outdoor
environment at HUD-assisted sites,
including inspecting adjacent soil or the
proximity of the housing to Superfund
sites.
HUD Response: HUD notes that the
NSPIRE final rule is one rulemaking and
one component of HUD’s broader
approach to addressing environmental
justice, which involves other offices
within HUD as well as coordination
with other Federal agencies such as
EPA. HUD does not view this proposed
rule as requiring regulatory freeze. The
regulations at § 5.703(c) include the
building site, and § 5.703(e) affirms that
the outside must be free of health and
safety concerns. Additional information
is in the NSPIRE Standards notice
17 https://www.whitehouse.gov/briefing-room/
presidential-actions/2021/01/20/regulatory-freezepending-review/ (86 FR 7424).

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published on June 17, 2022, for public
comment. HUD’s regulations at 24 CFR
parts 50 and 58 include a process for
considering site contamination and are
not within the scope of this rulemaking.
Additional information about HUD’s
efforts with EPA on HUD-assisted sites
and Superfund sites will be made public
as part of that effort, and not within the
context of the NSPIRE rulemaking. HUD
will take the commenters’ feedback into
consideration and encourages additional
public comment on subsequent NSPIRE
Subordinate Notices and other HUD
rulemaking or policymaking concerning
environmental justice.
Other Comments
Resident Rights
Several commenters expressed that
inspection information should be made
available for comment to residents and
their representatives. Such information
noted by commenters included severe
health and safety citations, notice before
inspections, notice regarding
submission of the property for DEC
evaluation and inspection, certification
and supporting evidence of repairs
within 3 days of when a severe health
and safety risk has been corrected, and
notification of inspection.
Commenters requested that the
information provided include a named
HUD contact official with their contact
information, include tenant
organizations, be accessible, be posted
in the owners’ management office and
bulletin boards in common areas, at no
cost to residents, be in plain language,
provide information about what is
happening and why.
HUD Response: REAC inspection data
is available online at www.huduser.gov/
portal/datasets/pis.html, and NSPIRE
inspection data will also be online once
inspections commence. Residents will
be provided notice before inspections in
accordance with their leases, and PHAs
and owners will make inspection
information available per § 5.711(h). All
information collected by HUD is
available through FOIA, and residents
can contact their local HUD office (see
https://www.hud.gov/local) to seek more
information or for complaints.
Information related to enforcement
referrals and actions is usually
confidential until the matter is closed
and exempted from FOIA. Because of
the many ways residents are kept
informed of the NSPIRE process, HUD
does not agree that resident rights must
be included the NSPIRE regulations.
HUD has sought public comment on
tenant participation in the NSPIRE
inspection process and will continue to
explore ways to engage residents.

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Initially, this will include inspecting
additional units recommended by
residents or resident groups. Additional
details regarding resident engagement in
forthcoming subordinate notices
published in the Federal Register and
available for public comment.
Requests Due to the Coronavirus
Pandemic
A commenter urged HUD to waive the
shortened physical inspection
notification timeframe (14 days) for
assisted housing properties, as
announced on February 22, 2019,
through PIH Notice 2019–02 and return
to the 30-to-60-day timeframe to ensure
the maximum safety of residents,
management staff, and inspectors.
A commenter noted that during the
COVID–19 pandemic, personnel have
had to meet difficult standards at risk to
their own personal health, and some
residents have been hesitant to allow
facility personnel into their dwelling
units for fear of infection, and therefore
owners and managers have fallen
behind on unit repairs that will take
several months to catch up with. This
commenter cautioned that NSPIRE’s
scoring methodology more heavily
scrutinizes and penalizes in-unit
deficiencies, which owners and
managers need time to catch up on. This
commenter therefore called for HUD to
suspend REAC inspections in elderly
facilities, specifically those inspections
under the new NSPIRE standard, for a
minimum of one year. This commenter
also noted that many of the reports of
poor assisted housing focused on certain
pockets of the US, and many focused on
the property portfolios of specific
owners/management agents. This
commenter urged HUD not to punish
other regions and properties.
Commenters urged HUD to learn from
the pandemic and expand electronic
communication and remote listening
sessions to gather stakeholder feedback
video remote inspections to HUD
Multifamily properties, utilize
properties’ existing software
mechanisms to check work orders and
proof of annual self-inspections, and
examine how ventilation and other
health retrofits are incorporated into
physical condition standards for HUDassisted housing.
HUD Response: Adjustment of
inspection notification timeframes due
to COVID–19 is an issue outside of this
final rule. HUD can adjust certain
requirements when there is a national
emergency in effect. Inspection
administration protocol will be outlined
in subordinate notices that will be
published in the Federal Register and
available for public comment.

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On June 1, 2021, the Secretary
announced that REAC inspections
would resume after a 15-month pause
due to the COVID pandemic. While the
NSPIRE Demonstration is underway,
HUD continues to use UPCS to conduct
inspections of record. Inspections under
the NSPIRE Standards will not phase in
until the Standards and Scoring notices
are final, and the rule is effective. HUD
takes the health and safety of residents
and property staff very seriously and
has strict protocols in place.
In response to the pandemic and in
preparation for future concerns, HUD
issued a notice on Remote Video
Inspections, PIH Notice 2020–31. HUD
is also developing new technology
solutions to facilitate convenient
transfer of information including
inspection findings, photographic
evidence and certification of completion
of repairs. Regarding time for PHAs,
owners and agents to inspect and
update units after the pandemic, HUD
resumed REAC inspections on June 1,
2021, and has not observed a significant
reduction in scores. The timeline
discussed earlier in this preamble, will
give PHAs, owners, and agents
additional time to prepare for the
transition. PHAs are reminded that the
requirement for self-inspections was in
place before the NSPIRE regulation, and
owners may commence self-inspections
at any time.
HUD has considered the comments
about retrofits for health and well-being
in light of the pandemic and resident
health and safety were a key
consideration in developing the NSPIRE
Standards.
Additional Suggestions
A commenter urged HUD to build
robust oversight systems and consider
accountability and feasibility. This
commenter urged HUD to consider cost
and time impacts of newly required
technical/building upgrades; the
breadth and scope of inspections, paired
with the staffing capacity at HUD and at
HUD-assisted communities; and the
impact of inspections on residents’ lives
and private living spaces.
A commenter asked HUD to consider
integrating or coordinating revisions
with the Management and Occupancy
Review (MOR) process so that these two
monitoring tools are complementary.
A commenter suggested that PHAs
and owners/agents should be
incentivized or rewarded for
maintaining a higher level of on-going
maintenance of the property/units, as
determined by REAC scoring and
ranking of covered units.
One commenter noted that consistent
with the notion of fairness to parties not

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responsible for adverse conditions, third
party management companies should be
rated based on the performance of their
duties in the context of the resources
provided, and that management
companies with no identity-of-interest
relationship to the owner should be able
to note their performance in the context
of resources made available to them by
the ownership. The commenter further
suggested while decent, safe and
sanitary housing must be provided,
administrative conclusions, sanctions
and ‘‘flags’’ should be sensitive to the
owner’s performance based on the
possible available funding and
recapitalization alternatives where all
funds were efficiently spent on
operations.
A commenter cautioned that HUD
should avoid setting new requirements
for the sake of alignment where it lacks
statutory authority.
A commenter applauded the
alignment of inspections in projects
with multiple HUD funding and/or
subsidy sources and recommended the
same alignment of inspections in
circumstances involving funding
sources outside of HUD, e.g., State or
Federal historic preservation funds.
HUD Response: HUD appreciates the
additional suggestions on its oversight
systems, and accountability and
feasibility. The NSPIRE rule did not
propose revisions to the Management
and Occupancy Review (MOR) process,
but HUD appreciates comments to
streamline oversight processes. PHAs
and owners/managers that have higher
assessment scores will be rewarded with
reduced inspection frequency under
NSPIRE. High performing PHAs may
receive additional funds under the
Public Housing Capital Fund program.
The comments on fairness to parties not
responsible for adverse conditions and
third-party management companies are
noted but are outside the scope of the
regulations. The NSPIRE Standards will
include information on the deficiencies,
and the NSPIRE Scoring notice will
cover how properties will be scored,
regardless of management type. With
respect to the comments about statutory
authority, HUD has ensured that this
rulemaking is consistent with its
authority as provided by Congress and
the relevant statutes.
HOME/HTF
A commenter suggested that, because
the Housing Trust Fund regulations
were modeled on the HOME
regulations, §§ 93.301(c)(3) and
93.301(e)(1)(i) should be modified to
provide cross-references back to the
regulations at § 5.703 that would, under

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the proposed rule, govern HOME, as
well as a specific reference to NSPIRE.
HUD Response: HUD appreciates the
comment and has made changes as
appropriate in the final rule.
Inspector Issues
Comments Regarding Inspector
Qualifications
Several commenters noted problems
with inconsistent or subjective
inspections that could not be effectively
appealed. Commenters cautioned
against punishing agencies due to
growing pains associated with a new
program. A commenter suggested
dedicating substantial time and effort to
training inspectors in NSPIRE before
implementing the new inspection
protocol; another recommended HUD
itself train inspectors. A commenter
recommended requiring inspector
certification with availability of
voluntary training with a link and
phone number.
Several commenters suggested HUD
require a level of training or
qualification for inspectors. A
commenter recommended at least basic
standards such as the current Inspector
Qualifications for REAC UPCS Inspector
Certification Training candidates.18
A commenter noted that since 1970,
State licensure of home inspectors has
expanded and 36 States regulate home
inspectors, requiring education, field
training, and a number of supervised
inspections.
A commenter recommended
inspectors have two years of experience
in the last four years as a full-time
combination inspector or similar
government-certified position, or two
years of full-time experience as a
licensed Home Inspector, or in States
without licensing, two years within the
last four years of full-time experience
and documentation of passage of the
National Home Inspector Examination.
This commenter recommended
inspectors be required to have
completed a minimum of 250 physical
commercial real estate or residential
inspections as sole inspector. The
commenter recommended FEMA
inspections, termite inspections,
appraisals, and site visits not be
included. This commenter also
recommended HUD require providing
25 inspections completed on an excel
spreadsheet, inspectors be required to
possess general computer skills, and
inspectors be required to possess a high
school education or equivalent.
18 See: UPCS Inspection Certification Training,
Page 2, (1) B. https://www.hud.gov/sites/dfiles/PIH/
documents/UPCSInspectorCertification
Training.pdf).

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A commenter cautioned that
inspectors not familiar with the
property and local codes may not follow
the HUD inspection standards and
noted that the owner/agent may pay for
pre-inspection by a third party.
A commenter stated that inspectors
are corrupt and in league with property
management teams, thereby ignoring
clear maintenance issues, and that
landlords ignore tenant complaints and
seek to constructively evict complaining
tenants.
HUD Response: HUD appreciates the
comments regarding inspector
qualifications, experience, and training.
Inspections performed by REAC will
continue to include contract-based
inspectors for the Public Housing and
Multifamily housing programs. In
addition to revising the inspections
standards and scoring, REAC will revise
the contract model to include
performance expectations and metrics
and require that awarded firms have an
internal quality assurance and training
program. These requirements will
supplement the technical assistance and
oversight performed by HUD’s Quality
Assurance (QA) division. These
enhancements will help ensure that
inspectors are experienced at hire and
will become proficient through training
so they can consistently assess and
score properties against the NSPIRE
standards. Knowledge of local code
requirements of the building are not
necessary if the inspector is adhering to
the NSPIRE standards, but this
information could be assessed as part of
self-inspections. REAC’s goal is to
ensure that contract inspectors will have
experience in home inspections but will
become proficient in the NSPIRE
Standards through training and handson field work. Licensed and/or certified
home inspectors will qualify for hire
and complete training on the NSPIRE
standards before performing inspections
of records. HUD agrees that the model
followed by State-licensed home
inspectors is valuable and will consider
that for the new contract requirements.
The recommendations for minimum
hours and inspections completed is also
very helpful and a model REAC will
consider in the contract design. Lastly,
with the new system supporting
inspection data and scoring, HUD QA
staff will be better able to see and act on
scoring anomalies, and perform
enhanced monitoring.
HUD’s expectations for inspector
training and qualifications will be
detailed in the Administrative notice
issued with this rule so that PHAs and
external firms can mirror their own
programs on the REAC model. The
NSPIRE Standards and system will be

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available in electronic format for public
use before the requirements are
effective.
With respect to the comment about
perceived bias of housing inspectors,
HUD’s oversight of the physical
inspection process and resolution
should help curb anomalies and abuse.
Residents can continue to report
concerns to HUD offices at hud.gov/
local. Residents of HUD-assisted
properties are protected from retaliation
by their lease and HUD regulations.
Program terminations must be for cause,
and residents in many programs have
grievance rights available to review
terminations in advance of eviction.
HUD is aware that properties may
employ outside inspectors to review
their property before a REAC inspection.
This practice could be used to help
satisfy the requirements of the selfinspection, where required, if the
inspection follows the NSPIRE
standards. While the NSPIRE
regulations do not require a review for
local codes, combining this with a
regular inspection could reduce
administrative burden on PHAs and
owners.
Comments Regarding an Inspector
Shortage
A commenter advised that its pool of
inspectors certified to conduct a REAC
inspection is so minimal that it is
impossible for all lenders to complete
their REAC inspection responsibilities
within the current prescribed
timeframes. This commenter therefore
opposed the current rule that an
inspection must be conducted within
three months before the Ideal Future
Date (IFD) and three months after the
IFD.
A commenter recommended adopting
a version of the GSEs’ current
certification standards and processes to
not further shrink the pool of FHA
inspectors and create further timing and
cost issues.
A commenter recommended allowing
servicing mortgagees (SMs) or their
inspection contractors to set up a
parallel program of inspector training
including the ability to recruit
candidates, submit them to HUD for
approval and then facilitate their
training until they are certified. This
commenter noted that, since REAC is
moving away from training inspectors,
SMs need the ability to train inspectors
to use to perform NSPIRE (and UPCS)
inspections, and if REAC requires an
associated Quality Control program
developed like what it requires for HUD
Contracted companies, SMs should be
allowed to do so. This commenter
suggested SMs can develop their QC

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program in a parallel fashion to assure
inspector and inspection validity and
reliability, and whatever privileges that
are given to HUD Contractors working
in the Public/Multi-Family side to
recruit and train inspectors should be
extended to the SM community.
A commenter noted that because of
the alignment between programs, more
new inspections may fall under HUD’s
consolidated inspection protocol than
were covered previously and cautioned
that HUD should be clear about how it
will handle the additional inspections
and who will be conducting them.
Another commenter urged HUD to
consider the impacts of additional
inspections under REAC’s umbrella, and
to be clear about workload adjustments
and capacities, noting that more new
inspections may fall under HUD’s
consolidated inspection protocol than
were covered previously.
HUD Response: HUD appreciates the
comments with respect to inspector
shortages, inspector management and
administration. HUD’s requirement that
all REAC inspectors be certified through
the current process helped contribute to
the inspector shortage. HUD also agrees
that a regulatory requirement that
inspections be completed within three
months before the anniversary (or Ideal
Future Date (IFD)) and three months
after the IFD in the same calendar year
is restrictive and removed ‘‘calendar’’
from the regulation and added language
to reflect the current process of allowing
extensions for good cause. Additionally,
HUD may need more time to meet this
schedule in the first year of NSPIRE
implementation, and so the final rule
allows for up to six months in the initial
year of NSPIRE implementation. With
respect to comments about servicing
mortgagees establishing training
programs, at this time HUD is not
planning to review or recognize other
organizations’ training programs. HUD’s
NSPIRE Standards, scoring and system
will be publicly available, and HUD will
also make its own training programs
available. This will also help PHAs
establish and manage their own
inspector programs for the HCV and
PBV programs. HUD has provided more
details on inspector administration and
oversight in the NSPIRE Administrative
notice.
With respect to additional inspections
and who will be conducting them, the
NSPIRE rule aligns the different HUD
assistance programs but does not change
the organization responsible for
performing the inspection. For example,
PHAs will continue to inspect HCV and
PBV units, and PJs will continue their
normal inspection processes.

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V. Findings and Certifications

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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 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 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.
HUD prepared a Regulatory Impact
Analysis (RIA) that addresses the costs
and benefits of the final rule. HUD’s RIA
is part of the docket file for this rule at
http://www.regulations.gov. HUD
strongly encourages the public to view
the docket file at www.regulations.gov.
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 rule does not

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change the substantive requirement that
HUD program participants are required
to maintain the physical condition of
HUD housing. The rule also, in most
cases, maintains the same level of
review for compliance in the form of
physical inspections. Regulatory relief
would also be provided to small rural
PHAs, which would only be subject to
triennial inspections under PHAS and
SEMAP. Accordingly, the undersigned
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities.
Environmental Impact
A Finding of No Significant Impact
(FONSI) 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 FONSI is available
through the Federal eRulemaking Portal
at http://www.regulations.gov. The
FONSI is also 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.
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 rule merely
revises 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
does 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 rule does not
impose any Federal mandates on any
State, local, or Tribal governments, or
on the private sector, within the
meaning of the UMRA.

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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.
Generally, the information collection
requirements contained in this rule have
already been approved by OMB under
the Paperwork Reduction Act and
assigned OMB control numbers, but
these final regulations include
additional requirements not previously
considered. Given that, HUD will
consolidate existing information
collections into a new collection for the
NSPIRE final rule prior to the effective
date of the new requirements. The
information collection requirements
when approved will be assigned an
OMB approval number and the public
will be notified of this number.
Related collections that will be
incorporated include 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)), 2577–0169 (HCV Program
and Tribal HUD–VASH), 2577–0289.
HUD estimates that the burden under
2502–0369 (Uniform Physical Standards
and Physical Inspection Requirements)
will be approximately the same as
described in the proposed rule. The
inspection time burden will slightly
increase from the proposed rule’s
estimate because inspection sample may
also include up to five units
recommended by residents, which was
not considered during the proposed
rule. The Self-inspection burden will be
substantially less than in the proposed
rule, however, as HUD will only collect
results for properties that score 60 and
below, instead of all properties.
Additionally, in the proposed rule,
HUD requested comment on how HUD
could utilize tenant feedback to better
achieve its goals of identifying poor
performing properties. In the PRA
package associated with this final rule,
HUD is including an additional
information collection for resident
feedback. HUD will request that the
property representative identify the
resident council or tenant organization
for the property. HUD will communicate
with that resident group to ask about
housing conditions and ask the group to

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identify additional units for HUD to
inspect. HUD expects that it will add up
to five resident-nominated units
regularly scheduled inspections. HUD
anticipates the burden of this additional
collection will be minimal at about five
minutes for the property representative
per property and about thirty minutes
for each resident group that chooses to
respond.
The collection requirements will be
amended to reflect the altered burden
contained in this final rule.
List of Subjects

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 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 576

24 CFR Part 92
Administrative practice and
procedure, Low and moderate income
housing, Manufactured homes, Rent
subsidies, and Reporting and
recordkeeping requirements.

Grant programs—housing and
community development, Homeless,
Lead poisoning, 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.

Grant programs—housing and
community development, Rent
subsidies, Reporting and recordkeeping
requirements, and Rural areas.

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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 882

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 965

24 CFR Part 570
Administrative practice and
procedure, American Samoa,
Community development block grants,
Grant programs—education, Grant
programs—housing and community
development, Guam, Indians, Loan
programs—housing and community

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Community facilities, Grant
programs—housing and community
development, Grant programs—social
programs, Homeless, and Reporting and
recordkeeping requirements.

24 CFR Part 884

24 CFR Part 200
Administrative practice and
procedure, Claims, Equal employment
opportunity, Fair housing, Housing
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.
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development, Low and moderate
income housing, Northern Mariana
Islands, Pacific Islands Trust Territory,
Puerto Rico, Reporting and
recordkeeping requirements, Student
aid, Virgin Islands.

Government procurement, Grant
programs—housing and community
development, Lead poisoning, Loan
programs—housing and community
development, Public housing, Reporting
and recordkeeping requirements,
Utilities.
24 CFR Part 982
Grant programs—housing and
community development, Grant
programs—Indians, Indians, Public

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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 amends 24 CFR parts 5,
92, 93, 200, 570, 574, 576, 578, 882, 884,
886, 902, 965, 982, 983, and 985 as
follows:
PART 5—GENERAL HUD PROGRAM
REQUIREMENTS; WAIVERS
1. The authority for 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.

2. Effective July 1, 2023, 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.
5.709 Administrative process for defining
and revising inspection criteria.
5.711 Scoring, addressing, and appealing
Findings.
5.713 Second- and third-party rights.

Subpart G—Physical Inspection of
Real Estate
§ 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 24 CFR part
983 (referred to in this part as the HCV

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and PBV programs, or HCV and PBV
housing);
(3) All project-based Section 8
programs;
(4) Section 202 Supportive Housing
for the Elderly (Capital Advances);
(5) Section 811 Supportive Housing
for Persons with Disabilities (Capital
Advances);
(6) Section 202 direct loan program
for projects for the elderly and persons
with disabilities as it existed before
October 1, 1991 (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. 1701 et
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 HUDassisted programs listed in paragraph (a)
of this section. 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

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the program. When there is a conflict
between the regulations of this subpart
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.
§ 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, PBV, and
Moderate Rehabilitation 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 subsidized
unit.
(b) Inside. Inside of HUD housing (or
‘‘inside areas’’) 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 such as pipes,
electricity, elevators, emergency power,
fire protection, HVAC, and sanitary
services. The inside area must meet the
following affirmative requirements:
(1) The inside area must include at
least one battery-operated or hard-wired
smoke detector, in proper working
condition, on each level of the property.
The Secretary may establish additional
standards through Federal Register
notification;
(2) Except for housing subject to this
subpart only through § 5.701(a)(6) or (7),
or housing otherwise exempt from this
requirement as provided elsewhere in
this title, the inside area must meet or
exceed the carbon monoxide detection
standards set by the Secretary through
Federal Register notification;

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(3) For the inside area, any outlet
installed within 6 feet of a water source
must be ground-fault circuit interrupter
(GFCI) protected;
(4) The inside area must have a
guardrail when there is an elevated
walking surface with a drop off of 30
inches or greater measured vertically;
(5) The inside area must have
permanently mounted light fixtures in
any kitchens and each bathroom; and
(6) The inside area may not contain
unvented space heaters that burn gas,
oil, or kerosene.
(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. The outside area
must meet the following affirmative
requirements:
(1) For the outside area, outlets within
6 feet of a water source must be GFCI
protected; and
(2) The outside area must have a
guardrail when there is an elevated
walking surface with a drop off of 30
inches or greater measured vertically.
(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
balcony, bathroom, call-for-aid (if
applicable), carbon monoxide devices,
ceiling, doors, electrical systems,
enclosed patio, floors, HVAC (where
individual units are provided), kitchen,
lighting, outlets, smoke detectors, stairs,
switches, walls, water heater, and
windows. The unit must also meet the
following affirmative requirements:
(1) The unit must have hot and cold
running water in both the bathroom and
kitchen, including an adequate source of
safe drinking water in the bathroom and
kitchen;
(2) The unit must include its own
bathroom or sanitary facility that is in
proper operating condition and usable
in privacy. It must contain a sink, a
bathtub or shower, and an interior
flushable toilet;
(3) (i) The unit must include at least
one battery-operated or hard-wired

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smoke detector, in proper working
condition, in the following locations:
(A) On each level of the unit;
(B) Inside each bedroom;
(C) Within 21 feet of any door to a
bedroom measured along a path of
travel; and
(D) Where a smoke detector installed
outside a bedroom is separated from an
adjacent living area by a door, a smoke
detector must also be installed on the
living area side of the door.
(ii) If the unit is occupied by any
hearing-impaired person, the smoke
detectors must have an alarm system
designed for hearing-impaired persons;
(iii) The Secretary may establish
additional standards through Federal
Register notification;
(iv) Following the specifications of
National Fire Protection Association
Standard (NFPA) 72 satisfies the
requirements of this paragraph (d)(3);
(4) The unit must have a living room
and a kitchen area with a sink, cooking
appliance, refrigerator, food preparation
area, and food storage 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;
(6) Except for units subject to this
subpart only through § 5.701(a)(6) or (7),
or housing otherwise exempt from this
requirement as provided elsewhere in
this title, the unit must meet or exceed
the carbon monoxide detection
standards set by HUD through Federal
Register notification;
(7) The unit must have two working
outlets or one working outlet and a
permanent light within all habitable
rooms;
(8) Outlets within 6 feet of a water
source must be GFCI protected:
(9) For climate zones designated by
the Secretary through notice, the unit
must have a permanently installed
heating source. No units may contain
unvented space heaters that burn gas,
oil, or kerosene;
(10) The unit must have a guardrail
when there is an elevated walking
surface with a drop off of 30 inches or
greater measured vertically; and
(11) The unit must have a
permanently mounted light fixture in
the kitchen and each bathroom.
(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, electrical hazards, extreme
temperature, flammable materials or
other fire hazards, garbage and debris,
handrail hazards, infestation, lead-based
paint, mold, and structural soundness.

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(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 24 CFR part 35). 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 24 CFR part 35
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, carbon monoxide, 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 codes in order to comply
with this subpart.
(3) State and local code compliance is
not part of the determination of 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
§ 5.705(a)(3)).
(g) Use of an alternative inspection or
additional standard for HCV and PBV
programs. A PHA is not subject to the
standards set by this section when the
PHA is relying on an alternative
inspection in accordance with 24 CFR
982.406. 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
or HAP Contract as provided in 24 CFR
part 983.
(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.
§ 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 and score 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 § 5.711. The
entity conducting the inspection shall
identify each deficiency as ‘‘Life

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Threatening’’, ‘‘Severe,’’ ‘‘Moderate’’, or
‘‘Low.’’
(2) Inspection scope. The inspection
requirement for HUD housing generally
requires the inside, outside and unit to
be inspected, in accordance with
§ 5.703. The inspection requirement for
the tenant-based HCV program and the
unit inspection for the PBV and
Moderate Rehabilitation programs only
applies to units occupied or to be
occupied by HCV, PBV, and Moderate
Rehabilitation 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.
(ii) Acceptability criteria variations
may only be approved by HUD pursuant
to paragraph (a)(3)(i) of this section 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.
(iv) Approved variations must be
added to the Administrative Plan as
described in 24 CFR 982.54(d)(21).
(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

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unit receiving assistance under section
8(o) of the 1937 act must be inspected
by an independent entity as specified in
24 CFR parts 982 and 983. 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 24 CFR 882.412, in
which case HUD is responsible for the
inspections in accordance with 24 CFR
882.516(d).
(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 there is
a program specific exception to this
requirement. 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, except that
inspections due on or before July 1,
2024, shall be conducted no earlier than
6 months before and no later than 6
months after the date marking the
anniversary of the previous inspection.
HUD may approve requests by an owner
or PHA for extensions of the deadline
for an inspection for good cause as
determined by HUD and HUD may
extend inspection deadlines without
owner request, as deemed necessary by
the Secretary.
(2) Extended inspection cycle. HUD
housing, except as specified below,
shall be scored and ranked in
accordance with the methodology
provided through Federal Register
notification.
(i) Standard 1 performing property. If
a property receives a score of 90 points
or higher on its physical condition
inspection, the property will be
designated a standard 1 performing
property. Properties designated as
standard 1 performing properties will be
required to undergo a physical
inspection once every three (3) years.
(ii) Standard 2 performing property. If
a property receives a score of 80 points
or higher but less than 90 on its physical
condition inspection, the property will
be designated a standard 2 performing
property. Properties designated as
standard 2 performing properties will be
required to undergo a physical
inspection once every two (2) years.
(iii) Standard 3 performing property.
If a property receives a score of less than
80 points, the property will be
designated a standard 3 performing

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property. Properties designated as
standard 3 performing properties will
continue to undergo an annual physical
inspection as currently required under
covered HUD programs.
(3) Triennial cycle for small rural
PHAs. Small rural PHAs as defined in
24 CFR 902.101 shall be assessed in
accordance with part 902, subpart H of
this title.
(4) Triennial cycle for small PHAs.
Small PHAs as defined in 24 CFR
902.13(a) shall be assessed in
accordance with 24 CFR 902.13(a).
(5) Housing choice vouchers. PHAs
must inspect units subject to part 982 of
this title in accordance with the
frequency described in 24 CFR 982.405.
(6) Project based vouchers. PHAs
must inspect units subject to 24 CFR
part 983 in accordance with the
frequency described in 24 CFR 983.103.
(7) 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.
(8) Section 8 Moderate Rehabilitation
program. PHAs must inspect units
subject to the Moderate Rehabilitation
program under 24 CFR part 882 in
accordance with the frequency
described in 24 CFR 882.516.
(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.
Nothing in this subpart shall restrict the
right of HUD, or an entity contracted by
HUD, to inspect a property. All owners

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and PHAs are required to provide HUD
or its representative with full and free
access to all HUD-assisted properties.
All owners and PHAs are required to
provide HUD or its representative with
access 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 owner or PHA did not obtain keys.
In the event that an owner or PHA fails
to provide access as required by HUD or
its representative, the owner or PHA
shall be given a physical condition score
of zero for the project or projects
involved. A score of zero for an owner
or PHA shall be used to calculate the
physical condition indicator score and
the overall assessment score for that
owner or PHA.
(f) Tenant involvement in inspections.
HUD will establish, through notice, a
procedure for tenants to recommend to
HUD particular units which HUD may
choose to inspect either during or
separate from its standard inspection.
HUD will evaluate the condition of
these units and issue a report on
findings, but they will not be included
in the official score unless they were
randomly selected independent of the
tenant’s recommendation. The owner or
PHA is required to correct any
deficiency HUD identifies within the
timeframes HUD has established for the
identified deficiency.
§ 5.707 Uniform self-inspection
requirement and report.

All PHAs and owners of HUD housing
subject to an assistance contract, other
than owners participating in the HCV,
PBV, and Moderate Rehabilitation
programs, are required to annually selfinspect their properties, including all
units, to ensure the units are maintained
in accordance with the standards in
§ 5.703. The owner or PHA must
maintain the results of such selfinspections for three years and must
provide the results to HUD upon
request. This self-inspection is
independent of other HUD inspections
discussed in § 5.705. The owner or PHA
may choose to conduct this inspection
after a HUD inspection to satisfy this
requirement and the post-report survey
requirement at § 5.711(c)(2)
simultaneously.
§ 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

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comment, a standards notification with
a list of deficiencies and the relative
severity of these deficiencies to use for
inspecting HUD housing. This Federal
Register document will also include the
factors for determining if an HCV, PBV,
or Moderate Rehabilitation unit passes
or fails the inspection. The Secretary
will also publish in the Federal
Register, following notice and
opportunity to comment, a scoring
notification containing the
methodologies to use for scoring and
ranking HUD housing. After considering
the public comments received on these
Federal Register documents, the
Secretary will publish documents
announcing the new inspections
standards and scoring methodologies,
and the date on which these
notifications become effective.
(1) Revisions. The Secretary will issue
a notification in the Federal Register
published for at least 30 days of public
comment making any revisions to the
inspection and scoring procedures HUD
deems necessary, at least once every
three years, or three years after the most
recent revision, whichever is later.
(2) Emergency revisions. The
Secretary may publish a notification
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 HUD housing,
after HUD makes a documented
determination that such action is
warranted due to:
(i) A Life-Threatening deficiency or
Severe deficiency and other significant
risks to safety as outlined in § 5.703;
(ii) A new safety concern due to
changing construction technology; or
(iii) Other events as determined by the
Secretary.
(b) [Reserved]

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§ 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, PBV or Moderate
Rehabilitation programs. 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 with 24 CFR
part 985, and PHAs administering the
Moderate Rehabilitation programs are
subject to HUD review in accordance
with 24 CFR 882.517.
(b) Scoring and ranking of HUD
housing—(1) General. HUD’s Real Estate
Assessment Center (REAC), or the
appropriate entity either as described in
§ 5.705(b), or as identified in the

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regulator agreement or contract for the
property as described in § 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 § 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)
Life-Threatening deficiencies and
Severe 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
§ 5.705(b), will provide the owner or
PHA or owner’s representative, a notice
of any items classified as LifeThreatening or Severe deficiencies. All
Life-Threatening items must be
corrected within 24 hours of receipt of
notice of these items, unless HUD
approves a variation. All Severe items
must be corrected within 24 hours of
receipt of notice, unless indicated
otherwise within the individual
inspection standards published in the
Federal Register with notice and the
opportunity for comment, or HUD
approves a variation. The owner or PHA
or owner’s representative must
electronically certify and provide
supporting evidence within 2 business
days after the deadline to correct the
Life-Threatening and Severe items that
the items have been resolved or
sufficiently corrected such that they no
longer pose a severe health or safety risk
to residents of the property, or that the
hazard is blocked until permanent
repairs can be completed. If permanent
repair will take longer than the
allowable time in the relevant standard
for the deficiency, the owner or PHA
must provide HUD a timeframe for
completing permanent repairs for HUD
approval.
(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. Moderate deficiencies must be
corrected within thirty days and Low
deficiencies must be corrected within
sixty days, unless indicated otherwise
within the individual inspection
standards published in the Federal
Register with notice and the
opportunity for comment or within such
other reasonable time prescribed by a
HUD notice to the owner or PHA. For
properties that scored at or above 60, the
survey may be limited to inspecting for
deficiencies based on the inspecting
entity’s inspection findings. For
properties that scored below 60, the
owner or PHA must conduct a survey of

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the entire project, including all units,
inside areas, and outside areas, for any
deficiency, and must electronically
submit a copy of the results of the
survey to HUD.
(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 day the inspection
report is provided to the owner or PHA.
(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 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’s 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 or PHA. The burden of proof rests
with the owner or PHA 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 or PHA 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. An
objectively verifiable material error
must be present, or an adjustment to the
score must be necessary, to allow for a

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technical review of inspection results.
The basis for a technical review must
not be due to the fault of the owner or
PHA and must exhibit specific
characteristics and meet specific
thresholds. The applicable types of
material errors and bases for adjustment
are as follows.
(i) 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 or PHA 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 and
building name would not be considered
material.
(ii) 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.
(iii) 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.
(iv) Adjustments for factors not
reflected or inappropriately reflected in
physical condition score. HUD may
determine it is appropriate to review the
results of a property’s physical
inspection if facts and circumstances
affecting the owner’s or PHA’s property
are not reflected in the inspection or are
reflected inappropriately in the
inspection. The circumstances
addressed in this may include
inconsistencies between local code
requirements and the HUD physical
inspection protocol; conditions that are
permitted by local variance or license or
which are preexisting physical features
that do not conform to, or are
inconsistent with, HUD’s physical
condition protocol; or the project or
PHA having 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.
(v) Adjustments for adverse
conditions beyond the control of the
owner or PHA. HUD may determine that
certain deficiencies that adversely and
significantly affect the physical
condition score of the project were

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caused by circumstances beyond the
control of the owner or PHA. The
correction of these conditions, however,
remains the responsibility of the owner
or PHA. The circumstances addressed
by this paragraph may include, but are
not limited to, damage caused by third
parties (such as a private entity or
public entity undertaking work near a
Public Housing project that results in
damage to the project) or natural
disasters.
(vi) Adjustments for modernization
work in progress. HUD may determine
that occupied dwelling units or other
areas of a property, which are subject to
physical inspection, and which are
undergoing modernization work, require
an adjustment to the physical condition
score. An occupied dwelling unit or
other areas of an owner’s or PHA’s
property undergoing modernization are
subject to physical inspection; the
unit(s) and other areas of the property
are not exempt from physical
inspection. All elements of the unit or
of the other areas of the owner or PHA’s
project that are subject to inspection and
are not undergoing modernization at the
time of the inspection (even if
modernization is planned) will be
subject to HUD’s physical inspection
protocol without adjustment. For those
elements of the unit or of the property
that are undergoing modernization,
deficiencies will be noted in accordance
with HUD’s physical inspection
protocol, but the owner or PHA may
request adjustment of the physical
condition score as a result of current
modernization or rehab work in
progress.
(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).
(e) Independent HUD review. Under
certain circumstances, HUD may find it
appropriate absent an owner or 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.
(f) Responsibility for the cost of a new
inspection. If a new inspection is

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30495

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
or PHA, is not an eligible 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 (e) of this
section. If the owner or PHA files a
request for technical review or score
adjustments in accordance with
paragraphs (d), or there is a HUD review
under paragraph (e) 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 properties of the owners
and PHAs 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 or PHA 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 or PHA 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 or PHA’s survey plan, plan of
correction, certification, and related
correspondence.
(ii) Once the owner’s final inspection
score is issued and published, the
owner or PHA must make any
additional information, such as the
results of any reinspection or appeal
requests, available for review and
copying by its residents upon
reasonable request during regular
business hours.
(iii) The owner or PHA must maintain
the documents related to the inspection
of the property, as described in
paragraphs (h)(2)(i) and (ii) of this
section, for review by residents for a

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period of 60 days from the date HUD
provides the inspection score for the
property in which the residents reside.
(3) Posting on the availability of
materials. The owner or PHA must post
a notice to the residents in the owner’s
or PHA’s management office and on any
bulletin boards in all common areas on
the date of submission to the owner of
the inspection score for the property in
which the resident resides that advises
residents of the availability of the
materials described in this section. The
notice must be translated into other
languages if necessary to provide
meaningful access for limited English
proficient (LEP) individuals. The notice
should include, where applicable, the
name, address, and telephone number of
the HUD field office contact.
(4) Residents are encouraged to
comment on this information provided
by the owner or PHA and submit any
comments directly to the applicable
HUD field office or responsible entity.
Should residents discover the owner or
PHA 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, or
two successive scores under 60, on its
inspection will be subject to additional
administrative review. Properties that
receive two successive scores under 60
may be referred to HUD’s Departmental
Enforcement Center (DEC) for
evaluation. Properties that receive a
score of 30 points or less shall be
automatically referred to the DEC for
evaluation.
(1) Notification to owner of
submission of property file to the DEC.
Upon referral to the DEC, the
Department will provide for notification
to the PHA or 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 DEC’s evaluation period, the DEC
will perform an analysis of the property,
which may include input from tenants,
HUD officials, elected officials,
maintenance staff 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. The DEC’s

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evaluation may include a site visit to the
PHA’s or owner’s property.
(3) Continuing responsibilities of HUD
program offices and mortgagee. During
the period of DEC evaluation, HUD’s
program offices continue to be
responsible for routine business,
oversight, and monitoring. In addition,
during this period of evaluation, the
mortgagee, as applicable, 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 HUD program offices,
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 HUD program
office with respect to resolving
identified physical deficiencies and
owner or PHA noncompliance.
(j) No limitation on existing
enforcement authority. The
administrative process provided in this
section does not prohibit HUD from
taking whatever action may be
necessary (notwithstanding the
commencement of this process), as
authorized under existing statutes,
regulations, contracts, grant agreements
or other documents, to protect HUD’s
interests in HUD housing properties and
to protect the residents of these
properties.
§ 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 PHA, to require enforcement
of the standards required by this subpart
or to assert any claim against HUD or
the PHA for damages, injunction, or
other relief for alleged failure to enforce
the standards.
PART 92—HOME INVESTMENT
PARTNERSHIPS PROGRAM
3. The authority for part 92 continues
to read as follows:

■

Authority: 42 U.S.C. 3535(d), 12 U.S.C.
1701x and 4568.
§ 92.2

[Amended]

4. Effective October 1, 2023, amend
§ 92.2 by removing the definition of
‘‘Uniform Physical Condition Standards
(UPCS)’’.

■

5. Effective October 1, 2023, amend
§ 92.209 by revising paragraph (i) to
read as follows:

■

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§ 92.209 Tenant-based rental assistance:
Eligible costs and requirements.

*

*
*
*
*
(i) Housing standards. Housing
occupied by a family receiving tenantbased rental assistance under this
section must meet the participating
jurisdiction’s property standards under
§ 92.251. The participating jurisdiction
must inspect the housing initially and
re-inspect it annually.
*
*
*
*
*
■ 6. Effective October 1, 2023, amend
§ 92.251 by:
■ a. Revising paragraphs (b)(1)(viii) and
(c)(3);
■ b. Removing and reserving paragraph
(d); and
■ c. Revising the paragraph (f) heading
and paragraphs (f)(1) introductory text
and (f)(1)(i).
The revisions read as follows:
§ 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,
and in good repair. This means that the
HOME-assisted project and units will
meet the standards in 24 CFR 5.703,
except that the carbon monoxide
detection requirements at 24 CFR
5.703(b)(2) and (d)(6) shall not apply.
For all HOME-assisted projects and
units, the requirements at 24 CFR 5.705
through 5.713 do not apply. At
minimum, the participating
jurisdiction’s rehabilitation standards
must require correction of the specific
deficiencies published in the Federal
Register for HOME-assisted projects and
units. For SRO housing, 24 CFR 5.703(d)
shall only apply to the extent that the
SRO unit contains the room or facility
referenced in 24 CFR 5.703(d).
*
*
*
*
*
(c) * * *
(3) Existing housing that is acquired
for homeownership (e.g., downpayment
assistance) must be decent, safe,
sanitary, and in good repair. 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
established by HUD based on the
applicable standards in 24 CFR 5.703
and published in the Federal Register

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Federal Register / Vol. 88, No. 91 / Thursday, May 11, 2023 / Rules and Regulations
for HOME assisted projects and units.
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
require that owners maintain the
housing as decent, safe, sanitary, and 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
deficiencies established by HUD based
on the applicable standards in 24 CFR
5.703 and published in the Federal
Register for rental housing (including
manufactured housing) and housing
occupied by tenants receiving HOME
tenant-based rental assistance. The
requirements in 24 CFR 5.705 through
5.713 do not apply to the participating
jurisdiction’s ongoing property
standards.
*
*
*
*
*
7. Effective October 1, 2023, amend
§ 92.504 by revising paragraphs
(d)(1)(ii)(D) and (d)(1)(iii) to read as
follows:

■

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§ 92.504 Participating jurisdiction
responsibilities; written agreements; on-site
inspections.

*

*
*
*
*
(d) * * *
(1) * * *
(ii) * * *
(D) Inspections must be based on a
statistically valid sample of units
appropriate for the size of the HOMEassisted project, as set forth by HUD
through a document published in the
Federal Register. For projects with oneto-four HOME-assisted units, a
participating jurisdiction must inspect
all of the HOME-assisted units and all
inspectable areas for each building with
HOME-assisted units.
(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 § 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
8. The authority for part 93 continues
to read as follows:

■

Authority: 42 U.S.C. 3535(d), 12 U.S.C.
4568.

9. Effective October 1, 2023, amend
§ 93.301 by revising paragraphs
(b)(1)(viii), (c)(3), (e)(1) introductory
text, and (e)(1)(i) to read as follows:

■

§ 93.301

Property standards.

*

*
*
*
*
(b) * * *
(1) * * *
(viii) 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. This means
that the HTF-assisted project and units
will meet the standards in 24 CFR 5.703,
except that the carbon monoxide
detection requirement at 24 CFR
5.703(b)(2) and (d)(6) shall not apply.
For all HTF-assisted projects and units,
the requirements at 24 CFR 5.705
through 5.713 do not apply. At
minimum, the grantee’s rehabilitation
standards must require correction of the
specific deficiencies published in the
Federal Register for HTF-assisted
projects and units. For SRO housing, the
requirements at 24 CFR 5.703(d) shall
only apply to the extent that the SRO
unit contains the room or facility
referenced in 24 CFR 5.703(d).
*
*
*
*
*

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30497

(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 established by
HUD based on the applicable standards
in 24 CFR 5.703 and published in the
Federal Register for HTF-assisted
projects and units. The grantee must
inspect the housing and document
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) Ongoing property standards. The
grantee must establish property
standards for rental housing (including
manufactured housing) that apply
throughout the affordability period. The
standards must require that owners
maintain the housing as decent, safe,
sanitary and in good repair. The
grantee’s description of its property
standards must be in sufficient detail to
establish the basis for a uniform
inspection of HTF rental projects. The
grantee’s ongoing property standards
must address each of the following:
(i) Minimum Property Standards. At a
minimum, the grantee’s ongoing
property standards must provide that
the property does not contain the
specific deficiencies established by
HUD based on the applicable standards
in 24 CFR 5.703 and published in the
Federal Register for rental housing
(including manufactured housing). The
requirements in 24 CFR 5.705 through
5.713 do not apply to the grantee’s
ongoing property standards.
*
*
*
*
*
■ 10. Effective October 1, 2023, amend
§ 93.404 by revising paragraph (d)(2)(v)
to read as follows:
§ 93.404 Grantee responsibilities; written
agreements; onsite inspections; financial
oversight.

*

*
*
*
*
(d) * * *
(2) * * *
(v) Inspections must be based on a
statistically valid sample of units
appropriate for the size of the HTF-

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assisted project, as set forth by HUD
through notification published in the
Federal Register. For projects with one
to four HTF-assisted units, the HTF
grantee must inspect all of the HTFassisted units and all inspectable areas
for each building housing HTF-assisted
units.
*
*
*
*
*

11. The authority for part 200
continues to read as follows:

§ 574.310 General standards for eligible
housing activities.

Authority: 12 U.S.C. 1702–1715z–21; 42
U.S.C. 3535(d).

*

12. Effective October 1, 2023, revise
§ 200.850 to read as follows:

■

§ 200.850 Physical condition standards
and physical inspection requirements.

The requirements in 24 CFR part 5,
subpart G, are applicable to the
multifamily properties assisted or
insured that are listed in 24 CFR 5.701.
§§ 200.853, 200.855, and 200.857
[Removed and Reserved]

13. Effective October 1, 2023, remove
and reserve §§ 200.853, 200.855, and
200.857.

■

PART 570—COMMUNITY
DEVELOPMENT BLOCK GRANTS
14. The authority citation for part 570
continues to read as follows:

■

Authority: 12 U.S.C. 1701x, 1701x–1; 42
U.S.C. 3535(d) and 5301–5320.

15. Effective October 1, 2023, amend
§ 570.208 by revising paragraph
(b)(1)(iv) to read as follows:

■

Criteria for national objectives.

ddrumheller on DSK120RN23PROD with RULES2

*
*
*
*
(b) * * *
(1) * * *
(iv) The assisted activity addresses
one or more of the conditions which
contributed to the deterioration of the
area. Rehabilitation of residential
buildings carried out in an area meeting
the above requirements will be
considered to address the area’s
deterioration only where each building
rehabilitated is considered substandard
under local definition before
rehabilitation, and all deficiencies
making a building substandard have
been eliminated. At a minimum, the
local definition for this purpose must be
such that buildings that it would render
substandard would also fail to meet the
standards for the condition of HUD
housing at 24 CFR 5.703.
*
*
*
*
*

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Authority: 12 U.S.C. 1701x, 1701x–1; 42
U.S.C. 3535(d) and 5301–5320.

17. Effective October 1, 2023, amend
§ 574.310 by revising paragraphs (b)
introductory text and (b)(2) and adding
paragraph (b)(3) to read as follows:

■

*

16. The authority for part 574
continues to read as follows:

■

■

PART 200—INTRODUCTION TO FHA
PROGRAMS

§ 570.208

PART 574—HOUSING
OPPORTUNITIES FOR PERSONS WITH
AIDS, SUBPART D—USES OF GRANT
FUNDS

*
*
*
*
(b) * * *. The following standards
apply for all housing for which HOPWA
funds are used under § 574.300(b)(3),
(4), (5), and (8).
*
*
*
*
*
(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
through 5.713 do not apply.
*
*
*
*
*
PART 576—EMERGENCY SOLUTIONS
GRANTS PROGRAM
18. 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
19. Effective October 1, 2023, amend
§ 576.403 by revising paragraph (c) to
read as follows:

■

§ 576.403

Shelter and housing standards.

*

*
*
*
*
(c) Minimum standards for permanent
housing. When ESG funds are used for
permanent housing under 24 CFR

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576.105 or 576.106, the minimum
standards in 24 CFR 5.703 apply, except
that:
(1) Definition of HUD housing. For the
purposes of ESG, ‘‘HUD housing’’ in 24
CFR 5.703 means 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).
(2) Housing inspections. For the first
30 days in which a program participant
receives homelessness prevention
assistance, the recipient or subrecipient
may provide services under 24 CFR
576.105(b) to help the program
participant remain in their unit without
inspecting the unit to determine
whether it meets the minimum
standards identified in this paragraph
(c), except that the recipient or
subrecipient must still comply with the
requirements under 24 CFR part 35.
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 this paragraph (c).
(3) 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.
(4) 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.
(5) Additional standards. The
recipient may also add standards that
exceed these minimum standards.
(6) Other exemptions from 24 CFR
part 5, subpart G. The requirements in
24 CFR 5.703(b)(2) and (d)(6) and 5.705
through 5.713 do not apply.

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26. Effective October 1, 2023, revise
§ 884.217 to read as follows:

PART 578—CONTINUUM OF CARE
PROGRAM

PART 882—SECTION 8 MODERATE
REHABILITATION PROGRAMS

■

20. The authority for 24 CFR part 578
continues to read as follows:

■

22. The authority for part 882
continues to read as follows:

§ 884.217 Maintenance, operation, and
inspections.

■

Authority: 42 U.S.C. 1437f and 3535(d).

Authority: 12 U.S.C. 1701x, 1701x–1; 42
U.S.C. 11381 et seq., 42 U.S.C. 3535(d).

§ 882.404

21. Effective October 1, 2023, amend
§ 578.75 by revising paragraph (b) to
read as follows:

§ 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 24 CFR
5.703, except that the carbon monoxide
detection requirement at 24 CFR
5.703(b)(2) and (d)(6) shall not apply.
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
through 5.713 do not apply.
*
*
*
*
*

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[Amended]

23. Effective October 1, 2023, amend
§ 882.404 by removing paragraph (d).
■ 24. Effective October 1, 2023, amend
§ 882.516 by revising the section
heading and paragraphs (b), (c), and (e)
to read as follows:
■

■

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30499

§ 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 the
contract units in accordance with the
physical inspection requirements under
24 CFR part 5, subpart G, 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 24 CFR part 5, subpart G, 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 24 CFR part 5,
subpart G, 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) or
termination of the Contract on the
affected unit(s) and assistance to the
Family in accordance with § 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
25. The authority for part 884
continues to read as follows:

■

Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), and 13611–13619.

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(a) Maintenance and operation. The
Owner shall maintain and operate the
project consistent with 24 CFR part 5,
subpart G, 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 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. On forms prescribed by
HUD, the Owner and Family shall
certify, that they have inspected the unit
and the owner shall certify that the unit
is compliant with 24 CFR part 5, subpart
G, 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 the contract units
and related facilities in accordance with
the physical inspection requirements in
24 CFR part 5, subpart G, and at such
other times (including prior to initial
occupancy and renting of any unit) as
HUD (or the PHA) may determine to be
necessary to assure that the Owner is
meeting the obligation to maintain the
units in accordance with 24 CFR part 5,
subpart G, 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 24 CFR part 5,
subpart G, 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:

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(1) The unit is restored to in
accordance with 24 CFR part 5, subpart
G;
(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
27. The authority for part 886
continues to read as follows:

■

Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), and 13611–13619.
§ 886.113

[Amended]

28. Effective October 1, 2023, amend
§ 886.113 by removing and reserving
paragraphs (b) and (i).
■ 29. Effective October 1, 2023, revise
§ 886.123 to read as follows:
■

ddrumheller on DSK120RN23PROD with RULES2

§ 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 24 CFR part 5, subpart
G, 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. On forms prescribed by
HUD, the Owner and Family shall
certify that they have inspected the unit,
and the owner shall certify that the unit
is compliant with 24 CFR part 5, subpart
G, 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 the
contract units in accordance with the
requirements in 24 CFR part 5, subpart
G, 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 24 CFR part 5, subpart G, 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

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payments, even if the Family continues
to occupy the unit.

PART 902—PUBLIC HOUSING
ASSESSMENT SYSTEM

§ 886.307

■

[Amended].

30. Effective October 1, 2023, amend
§ 886.307 by removing and reserving
paragraphs (b), (i), and (m).
■ 31. Effective October 1, 2023, revise
§ 886.323 to read as follows:
■

§ 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 24 CFR part 5,
subpart G, 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 24 CFR part 5, subpart
G.
(c) Owner and family inspection. Prior
to occupancy of any vacant unit by a
Family, the Owner and the Family shall
inspect the unit. The Owner shall certify
that they have inspected the unit, and
the owner shall certify that the unit is
compliant with 24 CFR part 5, subpart
G. 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 24 CFR part 5, subpart
G, 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 24
CFR part 5, subpart G, 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 24 CFR part 5, subpart
G, 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.

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32. Effective July 1, 2023, the
authority for part 902 is revised to read
as follows:

Authority: 42 U.S.C. 1437d(j), 42 U.S.C.
3535(d), 1437z–10.

33. Effective July 1, 2023, amend
§ 902.3 by:
■ a. Removing the definition of
‘‘Criticality’’;
■ b. Revising the definitions of
‘‘Dictionary of Deficiency Definitions’’,
‘‘Inspectable areas (or area)’’, and
‘‘Inspectable item’’; and
■ c. Removing the definitions of ‘‘Item
Weights and Criticality Levels
document’’, ‘‘Normalized weights’’,
‘‘Score’’, ‘‘Severity’’, ‘‘Statistically valid
sample’’ and ‘‘Subarea’’.
The revisions read as follows:
■

§ 902.3

Definitions.

*

*
*
*
*
Dictionary of Deficiency Definitions
means the documents published in the
Federal Register that contain the
inspection standards and scoring values
pursuant to 24 CFR part 5, subpart G.
*
*
*
*
*
Inspectable areas (or area) mean any
of the three major components of public
housing that are inspected, which are:
inside, outside, and unit.
Inspectable item means the individual
parts, such as walls, kitchens,
bathrooms, and other things, to be
inspected in an inspectable area.
*
*
*
*
*
■ 34. Effective July 1, 2023, amend
§ 902.13 by revising paragraph (b)(2) to
read as follows:
§ 902.13

Frequency of PHAS assessments.

*

*
*
*
*
(b) * * *
(2) The physical condition score for
each project will determine the
frequency of inspections of each project
in accordance with the inspection cycle
laid out in 24 CFR 5.705(c). The PHAS
physical condition indicator score for an
assessment period shall be calculated by
taking the unit-weighted average of the
most recent physical condition score for
each project, except that, starting July 1,
2023, no new physical condition
indicator will be issued for a PHA until
every project under the PHA has been
inspected on or after July 1, 2023.
*
*
*
*
*
§ 902.20

[Removed and Reserved]

35. Effective July 1, 2023, remove and
reserve § 902.20.
■ 36. Effective July 1, 2023, revise
§ 902.21 to read as follows:
■

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Federal Register / Vol. 88, No. 91 / Thursday, May 11, 2023 / Rules and Regulations
§ 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 24 CFR
part 5, subpart G.
■ 37. Effective July 1, 2023, revise
§ 902.22 to read as follows:
§ 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 24 CFR part 5, subpart G, to ensure
projects meet acceptable basic housing
conditions. Mixed-finance projects will
be subject to the physical condition
inspections.
§ 902.24

[Removed and Reserved]

38. Effective July 1, 2023, remove and
reserve § 902.24.

■

§ 902.26

[Removed and Reserved]

39. Effective July 1, 2023, remove and
reserve §§ 902.24, 902.26, and 902.68.

■

§ 902.68

[Removed and Reserved]

40. Effective July 1, 2023, remove and
reserve §§ 902.24, 902.26, and 902.68.
■ 41. Effective July 1, 2023, 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.

Subpart H—Assessment of Small Rural
Public Housing Agencies

ddrumheller on DSK120RN23PROD with RULES2

§ 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 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
1026.35(b)(2)(iv)(A).
(b) Determination. (1) HUD will make
the initial determination of PHAs that

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qualify as small rural as defined in this
section no later than October 30, 2023.
(2) HUD will determine if a PHA
qualifies as a small rural PHA under
paragraph (a) of this section 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.
§ 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 § 902.101 shall be assessed and
scored based only on the physical
condition of their public housing
properties in accordance with 24 CFR
part 5, subpart G, except that properties
that meet the definition specified in
§ 902.44(b) of physical condition and
neighborhood environment shall receive
one additional point for physical
condition and neighborhood
environment. Such agencies shall not be
subject to PHAS except as noted below.
(b) Triennial assessment. Public
housing programs operated by small
rural PHAs will be assessed no more
than once every three years, except that
a small rural PHA shall be subject to
annual inspection if it is designated by
the Secretary as troubled as defined in
§ 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).
(2) For PHAs not subject to small PHA
deregulation, the first inspection is
based on the PHA’s overall weighted
project physical condition indicator
score (e.g., a PHA with a physical
condition indicator score of 90 or
greater would receive the first
inspection three years after most recent
PHAS assessment).
§ 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

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30501

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 a 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 § 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 part 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

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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
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. 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.
(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 courtordered 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. 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

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a PHA is in a troubled performer status,
all services to residents will continue
uninterrupted.
§ 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 nontroubled performer designation, in the
case of a PHA that:
(1) Is operating under a special
agreement with HUD (e.g., a civil rights
Conciliation or Voluntary 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 nontroubled 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.

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§ 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)
through (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 nontroubled 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 § 902.66 may make a
written request for reinstatement within

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Federal Register / Vol. 88, No. 91 / Thursday, May 11, 2023 / Rules and Regulations
30 days of notification by HUD of the
denial or rescission of the designation to
the Assistant Secretary, and the request
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 another
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.

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§ 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
§ 902.108 will be the same as those
sanctions for PHAs assessed under
PHAS as described in § 902.83.
§ 902.113 Incentives for small rural PHAs
high-performers.

(a) High performer. PHAs with a
weighted average score for all

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inspections of at least 90 percent of all
available points will be considered high
performers and will be eligible for
benefits as described in § 902.113(b) and
§ 905.400(l) of this chapter.
(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 § 902.71.
PART 965—PHA-OWNED OR LEASED
PROJECTS—GENERAL PROVISIONS
42. The authority for part 965
continues to read as follows:

■

Authority: 42 U.S.C. 1437, 1437a, 1437d,
1437g, and 3535(d). Subpart H is also issued
under 42 U.S.C. 4821–4846.

the results of each such inspection to
the family and the PHA.
*
*
*
*
*
Subpart I—Dwelling Unit: Housing
Quality Standards, Subsidy Standards,
Inspection and Maintenance
47. Effective October 1, 2023, revise
§ 982.401 to read as follows:

■

§ 982.401

§ 982.402

43. Effective July 1, 2023, remove and
reserve subpart I, consisting of
§§ 965.800 and 965.805.

■

PART 982—SECTION 8 TENANTBASED ASSISTANCE: HOUSING
CHOICE VOUCHER PROGRAM
44. The authority for part 982
continues to read as follows:

■

Authority: 42 U.S.C. 1437f and 3535(d).

Subpart A—General Information
45. Effective October 1, 2023, amend
§ 982.4 in paragraph (b) by revising the
definition of ‘‘Housing quality standards
(HQS)’’ to read as follows:

■

§ 982.4

Definitions.

*

*
*
*
*
(b) * * *
Housing quality standards (HQS). The
minimum quality standards developed
by HUD in accordance with 24 CFR
5.703 for the HCV program or the HUD
approved alternative standard for the
PHA under 24 CFR 5.703(g).
*
*
*
*
*
Subpart H—Where Family Can Live
and Move
46. Effective October 1, 2023, amend
§ 982.352 by revising paragraph
(b)(1)(iv)(A)(3) to read as follows:

■

§ 982.352

Eligible housing.

*

*
*
*
*
(b) * * *
(1) * * *
(iv) * * *
(A) * * *
(3) To inspect the unit for compliance
with the HQS in accordance with
§§ 982.305(a) and 982.405. The
independent entity shall communicate

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Housing quality standards.

As defined in § 982.4, housing quality
standards (HQS) refers to the minimum
quality standards developed by HUD in
accordance with 24 CFR 5.703 for
housing assisted under the HCV
program or a HUD approved alternative
standard for the PHA under 24 CFR
5.703(g).

Subpart I—[Removed and Reserved]
■

30503

[Amended]

48. Effective October 1, 2023, amend
§ 982.402 in paragraph (b)(2) by
removing ‘‘§ 982.401(d)’’ and adding in
its place ‘‘§ 982.401’’.
■ 49. Effective October 1, 2023, amend
§ 982.405 by revising paragraph (a) to
read as follows:
§ 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 § 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 § 902.101 of this chapter must inspect
a unit during occupancy at least once
every three years.
*
*
*
*
*
Subpart M—Special Housing Types
50. Effective October 1, 2023, amend
§ 982.605 by revising paragraph (a) to
read as follows:

■

§ 982.605

SRO: Housing quality standards.

(a) HQS standards for SRO. As
defined in § 982.4, housing quality
standards (HQS) refers to the minimum
quality standards developed by HUD in
accordance with 24 CFR 5.703 for
housing assisted under the HCV
program or a HUD approved alternative
standard for the PHA under 24 CFR
5.703(g). However, the standards in this
section apply in place of standards
related to sanitary facilities, food
preparation and refuse disposal, and
space and security. Since the SRO units
will not house children, the standards at
24 CFR part 35, subparts A, B, H, and

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R, applying to the PBC program,
concerning lead-based paint, do not
apply to SRO housing.
*
*
*
*
*
■ 51. Effective October 1, 2023, amend
§ 982.609 by revising paragraph (a) to
read as follows:
§ 982.609 Congregate housing: Housing
quality standards.

(a) HQS standards for congregate
housing. As defined in § 982.4, housing
quality standards (HQS) refers to the
minimum quality standards developed
by HUD in accordance with 24 CFR
5.703 for housing assisted under the
HCV program or a HUD approved
alternative standard for the PHA under
24 CFR 5.703(g). However, the standards
in this section apply in place of
standards related to food preparation
and refuse disposal. Congregate housing
is not subject to the requirement that the
dwelling unit must have a kitchen area.
*
*
*
*
*
■ 52. Effective October 1, 2023, amend
§ 982.614 by revising paragraphs (a) and
(b)(1) to read as follows:
§ 982.614 Group home: Housing quality
standards.

(a) Compliance with HQS. The PHA
may not give approval to reside in a
group home unless the unit, including
the portion of the unit available for use
by the assisted person under the lease,
meets the housing quality standards. As
defined in § 982.4, housing quality
standards (HQS) refers to the minimum
quality standards developed by HUD in
accordance with 24 CFR 5.703 for
housing assisted under the HCV
program or a HUD approved alternative
standard for the PHA under 24 CFR
5.703(g).
(b) * * *
(1) The standards in this section apply
in place of standards in 24 CFR 5.703
that relate to sanitary facilities, food
preparation and refuse disposal, space
and security, structure and materials,
and site and neighborhood.
*
*
*
*
*
■ 53. Effective October 1, 2023, amend
§ 982.618 by revising paragraphs (b) and
(c) to read as follows:
§ 982.618 Shared housing: Housing quality
standards.
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*

*
*
*
*
(b) Applicable HQS standards. As
defined in § 982.4, housing quality
standards (HQS) refers to the minimum
quality standards developed by HUD in
accordance with 24 CFR 5.703 for
housing assisted under the HCV
program or a HUD approved alternative
standard for the PHA under 24 CFR

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5.703(g). However, the HQS standards
in this section apply in place of
standards related to space and security
in 24 CFR 5.703.
(c) Facilities available for family. The
facilities available for the use of an
assisted family in shared housing under
the family’s lease must include (whether
in the family’s private space or in the
common space) a living room, sanitary
facilities in accordance with the
standards set in 24 CFR 5.703, and food
preparation and refuse disposal
facilities in accordance with 24 CFR
5.703.
*
*
*
*
*
■ 54. Effective October 1, 2023, amend
§ 982.621 by revising the introductory
text to read as follows:
§ 982.621 Manufactured home: Housing
quality standards.

As defined in § 982.4, housing quality
standards (HQS) refers to the minimum
quality standards developed by HUD in
accordance with 24 CFR 5.703 for
housing assisted under the HCV
program or a HUD approved alternative
standard for the PHA under 24 CFR
5.703(g). A manufactured home also
must meet the following requirements:
*
*
*
*
*
■ 55. Effective October 1, 2023, amend
§ 982.628 by revising paragraph (a)(4) to
read as follows:
§ 982.628
units.

Homeownership option: Eligible

(a) * * *
(4) The unit satisfies the HQS (see 24
CFR 5.703 and § 982.631).
*
*
*
*
*
PART 983—PROJECT-BASED
VOUCHER (PBV) PROGRAM
56. The authority for part 983
continues to read as follows:

■

Authority: 42 U.S.C. 1437f and 3535(d).
§ 983.2

[Amended]

57. Effective October 1, 2023, amend
§ 983.2 in paragraph (c)(4) by removing
‘‘§ 982.401(j)’’ and adding in its place
‘‘§ 982.401’’.
■ 58. Effective October 1, 2023, amend
§ 983.3 in paragraph (b) by revising the
definition of ‘‘Housing quality standards
(HQS)’’ to read as follows:
■

§ 983.3

PBV definitions.

*

*
*
*
*
(b) * * *
Housing quality standards (HQS). The
minimum quality standards developed
by HUD in accordance with 24 CFR
5.703 for the PBV program or the HUD

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approved alternative standard for the
PHA under 24 CFR 5.703(g).
*
*
*
*
*
■ 59. Effective October 1, 2023, amend
§ 983.10 by revising paragraph (b)(2)(ii)
to read as follows:
§ 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
24 CFR part 35, subparts A, B, H, and
R of this title, apply to the PBC program.
*
*
*
*
*
■ 60. Effective October 1, 2023, amend
§ 983.101 by revising paragraphs (a)
through (c) to read as follows:
§ 983.101

Housing quality standards.

(a) HQS applicability. As defined in
§ 983.3, housing quality standards
(HQS) refers to the minimum quality
standards developed by HUD in
accordance with 24 CFR 5.703 of this
title for housing assisted under the PBV
program or a HUD approved alternative
standard for the PHA under 24 CFR
5.703(g).
(b) Requirements for special housing
types. For special housing types assisted
under the PBV program, HQS applies to
the PBV program except as specified in
24 CFR part 982, subpart M. Provisions
contained within 24 CFR part 982 that
are inapplicable to the PBV program
pursuant to § 983.2 are also inapplicable
to special housing types under the PBV
program.
(c) 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
24 CFR part 35, subparts A, B, H, and
R, apply to the PBV program.
*
*
*
*
*
■ 61. Effective October 1, 2023, amend
§ 983.103 by revising the paragraph (d)
heading and adding paragraph (d)(4) to
read as follows:
§ 983.103

Inspecting units.

*

*
*
*
*
(d) Periodic inspections. * * *
(4) Instead of at least biennially, a
small rural PHA as defined in § 902.101
of this chapter must inspect the random
sample of units in accordance with
paragraph (d)(1) of this section at least
once every three years.
*
*
*
*
*

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Federal Register / Vol. 88, No. 91 / Thursday, May 11, 2023 / Rules and Regulations
PART 985—SECTION 8 MANAGEMENT
ASSESSMENT PROGRAM (SEMAP)
AND SMALL RURAL PHA
ASSESSMENTS
62. Effective October 1, 2023, the
authority citation for part 985 is revised
to read as follows:

■

Authority: 42 U.S.C. 1437a, 1437c, 1437f,
1437z–10, and 3535(d).

63. Effective October 1, 2023, revise
the heading of part 985 to read as set
forth above.
■ 64. Effective October 1, 2023, amend
§ 985.1 by revising paragraph (b) and
adding paragraph (c) to read as follows:
■

§ 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 chapter), the project-based voucher
program (part 983 of this chapter) 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 selfsufficiency program (FSS) (part 984 of
this chapter).
(c) Small rural PHA assessments.
Subpart D of this part covers the HCV
and PBV assessment for a small rural
PHA as defined in § 902.101 of this
chapter. Section 985.3 and subparts B
and C of this part do not apply to small
rural PHAs.
■ 65. Effective October 1, 2023, 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.

Subpart D—Small Rural PHA
Assessment

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§ 985.201

Applicability.

(a) This subpart applies to small rural
PHAs as defined in § 902.101 of this
chapter.
(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.
§ 985.203 Assessment indicators and HUD
verification methods.

(a) This section describes the
performance indicators used to assess a

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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
applied the correct inspection standards
to HCV and PBV unit inspections.
(2) HUD verification method. The
PHA’s assessment certification and onsite 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-lifethreatening 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 shows, for units that have
been under HAP contract for at least
three years, whether the PHA reinspected 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 the percentage of units
that have been under HAP contract for
at least three years that have been reinspected 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 that have been under HAP
contract for at least three years have
been re-inspected within the required
three-year period from the last
inspection. The PHA fails the indicator

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30505

if fewer than 98 percent of these units
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 §§ 982.404
and 983.103 of this chapter. 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. (§ 982.404 of this chapter)
(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 percent 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 notification, 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 being designated as troubled under
the small rural PHA assessment.
§ 985.205
rating.

Determination of assessment

(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 § 985.203 and the PHA:
(i) Has utilized at least 98 percent of
its HCV budget authority in the two
most recent calendar years, or the
percent of HCV units leased by renters
or occupied by homeowners in the two
most recent calendar years was at least
98 percent;
(ii) Did not end that calendar year
with excess HAP reserves; and

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(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 reserves in
the Federal Register, and such
calculation shall provide for public
comment before becoming effective.
(b) Standard performer designation. A
PHA that passed all four 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 § 985.201 is designated as a
troubled PHA under the small rural
PHA assessment.
§ 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 qualify for
SEMAP 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 § 985.209.
(b) [Reserved]
§ 985.209

Troubled small rural PHAs.

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(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

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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 the 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 a 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 CAA when
HUD determines the PHA is no longer
troubled;
(11) Provide that in the event of
substantial noncompliance by the PHA
under the CAA, 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;

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(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
CAA 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 designated as
troubled may not use any part of the
administrative fee reserve for other
housing purposes (see § 982.155(b) of
this chapter).
(f) Upgrading poor performance
rating. HUD shall change a 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 CAA as
required by HUD constitutes a default
under the ACC.
§ 985.211
records.

Small rural PHA assessment

HUD shall maintain small rural PHA
assessment files, including designations,
notifications, appeals, corrective action
agreements, and related correspondence
for at least 3 years.
Adrianne Todman,
Deputy Secretary.
[FR Doc. 2023–09693 Filed 5–9–23; 8:45 am]
BILLING CODE 4210–67–P

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