Management and Occupancy Review

HUD has established goals for Section 8 project-based properties, as described in the October 2003 Summary for Property Owners of HUD Handbook 4350.3: “HUD-subsidized multifamily properties represent an important and valuable resource in addressing the nation’s affordable housing needs. The successful delivery of this housing resource to the people who need it depends on effective occupancy policies and procedures.  HUD’s occupancy requirements and procedures ensure that eligible applicants are selected for occupancy in proper order, that tenants receive the proper level of assistance, and that tenants are treated fairly and consistently, are provided with decent, safe and sanitary housing.” The Management and Occupancy Review (MOR) is HUD’s primary tool to monitor how well a Section 8 property is meeting these goals.  L.A. LOMOD conducts an MOR for every property annually.  Our goal for the MOR process is to help owners and agents identify areas for improvement so that the properties are in compliance with HUD rules and regulations.

Preparing for the Review

The MOR is not a secret process.  The MOR form (Form HUD-9834) provides information on all of the areas reviewed by LOMOD, as the PBCA, and those areas reviewed only by HUD.  Here’s a summary: What L.A. LOMOD reviews:

  • General Appearance and Security: Crime data and Security measures
  • Follow-up of Project Inspections:  REAC/EHS
  • Maintenance and Related Standard Operating Procedures:  Maintenance schedule, inventory, inspections, turn-over, work orders and energy conservation
  • Leasing and Occupancy Issues: EIV reports, income/asset/deduction calculations, HUD required documents completed and in compliance
  • Tenant/Management Relations:  Grievance policy, tenant services
  • General Management Practices:  Response to tenant complaints, staff development, Office signs and emergency numbers posted, staffing and personnel practices

What HUD reviews (for PBCA properties):

  • Financial management and procurement
  • General Management Practices:  Staff reporting, insurance, Owner/Agent Participation

The HUD-9834 provides information on what we review before our on-site visit (Desk Review:  pages 1-7), the questions we will ask during the on-site visit (pages 8-25), and what we will review in the tenant files (Addendum A:  Tenant File Review Worksheet).  The leasing and occupancy area is the heart of the MOR and has the greatest impact on the overall rating.  Performance in this area is based almost entirely on the results of the review of tenant files.  You can prepare for the MOR by using the Tenant File Review Worksheet to assess the quality of your files. One way to prepare for the Management Review is to conduct a mini-audit of your property using the HUD-9834 Management Review Report, including the Addendum A of HUD-9834 to ensure that all required documents are in each tenant file. Reviewing the MOR checklists which will be used to review the documents requested during the MOR is another way to prepare. We suggest that the previous year’s Management Review Report be reviewed to ensure that all Findings/Required Corrective Actions have been adequately addressed. Also review the property’s last physical inspection report (REAC Report) and ensure that any deficiencies noted have been corrected. On the day of the Management Review on-site visit, please have the appropriate staff available for the entrance and exit interview and prepared to answer any questions from the Compliance Specialist.

Appeal Process

Owner/Agents may appeal their evaluation only when they receive a rating of either Below Average or Unsatisfactory on the overall rating.  There are two opportunities for appeal:  (1) the First Level Appeal, and (2) the Second Level Appeal. First Level Appeal The First Level Appeal must be received by LOMOD within 30 days of the MOR report date. A decision on the Initial Appeal and transmittal to the Owner/Agent will be sent within 45 days of the receipt of the appeal. Second Level Appeal The Second Level Appeal must be forwarded to HUD within 15 days of receipt of the First Level Appeal determination, rendered by the PBCA, and must include additional documentation to support changes to the Overall and/or Categorical Ratings. Example Timeline When the MOR is completed and the report indicates an Overall Rating of Below Average or Unsatisfactory, the Owner/Agent who elects to appeal must submit their appeal package to the PBCA to ensure it is received within 30 days of the report date. Report Date: March 31, 2009 Appeal Due: April 30, 2009 The PBCA will complete its review of the First Level Appeal and render a decision and transmit to the Owner/Agent within 45 days of receipt of the appeal. Appeal Received: April 30, 2009 Decision Due: June 14, 2009 If the Owner/Agent chooses to pursue a Second Level Appeal, all additional documentation to support their appeal must be received by HUD within 15 days of the date of the determination in the First Level Appeal. Decision Received: June 14, 2009 Second Level Appeal Due: June 29, 2009

How to Close Out Findings

A Finding is an area identified during the Management Review that requires action on the part of the property. Findings are listed in the first section of the Management Review Report and consist of the following components:

  • Condition (outlines the problem/deficiency, or area of non-compliance)
  • Criteria (the statutory, regulatory or administrative requirement that was not met)
  • Cause (why the condition occurred)
  • Effect (what may happen because of the condition)
  • Corrective Action (the action that must be taken to regain compliance)

The Corrective Action portion of the Finding outlines the specific action you must take to address the noted deficiency. When responding to Findings, read the Condition and Corrective Action thoroughly and carefully.  Complete the Corrective Action in its entirety (i.e. provide all requested written certifications and accompanying documents).

  • Ensure that items are properly completed, and if necessary, signed and dated.
  • Ensure that all written certifications are signed, and on company letterhead. Be careful when rewording requested written certifications, as many certifications contain specific language related to HUD regulations.
  • Do not provide certification to anything that is not true. LOMOD staff will follow-up on the Corrective Action during the next Management Review, and repeat areas of non-compliance may affect the property’s rating.

Submit a formal, written, signed response to each Finding, to support that the action has been taken, within 30-days.  If additional time is needed to mitigate a finding, please state the projected date of the finding to be completed in your response. Affirmative Fair Housing Marketing Plan The Affirmative Fair Housing Plan (AFHP) is required by HUD to ensure that federally insured and subsidized Owners and Managers are taking necessary steps to eliminate future discriminatory practices and to overcome the effects of past discriminatory practices.  Properties will not receive funding without a HUD approved and current AFHM Plan.

REAC Physical Inspections

L.A. LOMOD performs preliminary follow-up on Real Estate Assessment Center (REAC) Uniform Physical Conditions Standards (UPCS) Inspections that the REAC inspectors have conducted on properties in its portfolio to help ensure that all residents receive the benefit of safe, decent and sanitary housing. During a REAC physical inspection, the REAC inspectors might provide a Notification of Exigent and Fire Safety Hazards Observed Citation. The owner is required to correct cited violations immediately, but no later than three (3) business days from the date of the inspection and submit the completed certification to HUD.

Enterprise Income Verification (EIV)

EIV is a federal database that provides quick, easy access to resident income information to streamline and simplify the income verification process at the time of recertification. The EIV system is a tool to help assure that the “right benefits go to the right persons.”  Effective January 31, 2010, owners/agents are required to implement and use HUD’s EIV system as a third-party source to verify tenant income information during any recertification/reexamination. EIV will enable owners/agents to:

  • Identify cases of unreported or under-reported resident income
  • Identify potential cases of current residents who are receiving HUD subsidy under multiple rental housing assistance programs
  • Check whether an applicant is already receiving rental housing assistance from another subsidized source

To obtain access to HUD’s EIV system, visit External (Non-HUD Coordinator/User) Instructions for Applying for EIV Access for Multifamily Housing Programs and follow the required steps for sign-up. Questions regarding accessing EIV can be submitted to HUD’s Multifamily Help Desk at 1-800-767-7588 or