24 CFR 200.857b3

Office of Assistant Secretary for Housing, HUD

§ 200.857

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 des
ignated a standard 3 performing prop
erty. Properties designated as standard
3 performing properties will continue
to undergo an annual physical inspec
tion as currently required under cov
ered HUD programs.
(2) Owners of multifamily housing
properties scoring in a standard 1 or
standard 2 range which have been cited
by the REAC as having a Exigent
Health and Safety (EHS) deficiency(s)
must resolve the deficiency(s), as re
quired by paragraph (c)(2) of this sec
tion, to be classified as standard 1 and
standard 2 properties.
(3) Regardless of the performance
designation assigned to an owner’s
property, an owner is obligated to
maintain its property in accordance
with RUD’s uniform physical condition
standards as required by 24 CFR part 5,
subpart G, the Regulatory Agreement
and/or the Rousing Assistance Pay
ment (RAP) Contract. Good manage
ment principles require an owner to
conduct routine inspections of its
projects, develop improvement plans,
and again, maintain its property to
meet the standard of decent, safe, sani
tary and in good repair.
(c) Owner’s review of physical inspec
tion report and identification of objec
tively verifiable and material error. (1)
Upon completion of a physical inspec
tion of a multifamily housing property,
the REAC will provide the owner or
owner’s representative, on the date of
the physical inspection, notice of any
items classified as EHS deficiencies.
REAC also will provide the owner with
the entire physical inspection report
(electronically through the internet or
by mail approximately 10 working days
from the date of the report), which pro
vides the physical inspection results
and other information relevant to the
inspection, including any items classi
fied as EHS deficiencies and already
provided to the owner, on the date of
the inspection (ERS deficiencies are re
layed by the inspector on the date of
the inspection).

§ 200.857 Administrative process for
scoring and rankiag the physical
condition of multifamily housing
properties.
(a) Scoring and ranking of the physical
condition of multifamily housing prop
erties. (1) RUD’s Real Estate Assess
ment Center (REAC) will score and
rank the physical condition of certain
multifamily housing insured properties
listed in § 200.853 in accordance with
the procedures described in this sec
tion. The physical condition inspection
of the property, upon which REAC
bases its score and ranking, is con
ducted by the responsible entity in ac
cordance with § 200.855.
(2) Depending upon the results of its
physical condition inspection, a multi
family housing property will be as
signed one of three designations—
standard 1 performing, standard 2 per
forming and standard 3 performing—in
accordance with the ranking process
described in paragraph (b) of this sec
tion.
(b) Methodology for Ranking. (1) Mul
tifamily housing properties will be
ranked in accordance with the method
ology provided in this paragraph (b).
Multifamily housing properties are
scored on the basis of a 100 point scale.
Because scores may include fractions, a
score that includes a fraction below
one half point will be rounded to the
next lower full point and a score that
includes a fraction of one half point or
higher will be rounded to the next
higher full point (e.g., 89.4 will be
rounded to 89, 89.5 will be rounded to
90).
(i) Standard 1 Performing Property. If a
property receives a score of 90 points or
higher on its physical condition inspec
tion, the property will be designated a
standard 1 performing property. Prop
erties designated as standard 1 per
forming properties will be required to
undergo a physical inspection once
every three (3) years.
(H) Standard 2 Performing Property. If
a property receives a score of 80 points
or higher but less than 90 on its phys
ical condition inspection, the property
will be designated a standard 2 per
forming
property.
Properties des
ignated as standard 2 performing prop
erties will be required to undergo a

45

Office of the Secretory, HUD

§ 5.703

(2) In approving the amount of
monthly rent payable by security per
sonnel for occupancy of a contract
unit, the contract administrator may
consider whether security services to
be performed are an adequate return
for housing assistance payments on the
unit, or whether the cost of security
services should be borne by the owner
from other project income.
[65 FR 16721, Mar. 29, 2000]
EFFECTIVE DATE NOTE: At 65 FR 16721, Mar.
29, 2000, § 5.661 was added. This section con
tains information collection and recordkeeping requirements and will not become
effective until approval has been given by
the Office of Management and Budget.

Subpart G—Physical Condition
Standards and Inspection Re
quirements
SouRcE: 63 FR 46577, Sept. 1, 1998, unless
otherwise noted.

§ 5.70 1 Applicability.
(a) This subpart applies to housing
assisted under the HUD programs list
ed in 24 CFR 200.853(a).
(b) This subpart applies to housing
with mortgages insured or held by
HUD, or housing that is receiving as
sistance from HUD, under the pro
grams listed in 24 CFR 200.853(b).
(c) This subpart also applies to Pub
lic Housing (housing receiving assist
ance under the U.S. Housing Act of
1937, other than under section 8 of the
Act).
(d) For purposes of this subpart, the
term “HUD housing” means the types
of housing listed in paragraphs (a), (b),
and (c) of this section.
[63 FR 46577, Sept. 1, 1998, as amended at 65
FR 77240, Dec. 8, 2000]

§ 5.703 Physical condition standards
for KUIJ housing that is decent,
safe, sanitary and in good repair
(DSS/GR).
HUD housing must be decent, safe,
sanitary and in good repair. Owners of
housing described in § 5.701(a), mortga
gors of housing described in § 5.701(b),
and PHAs and other entities approved
by HUD owning housing described in
§ 5.701(c), must maintain such housing
in a manner that meets the physical

condition standards set forth in this
section in order to be considered de
cent, safe, sanitary and in good repair.
These standards address the major
areas of the HUD housing: the site; the
building exterior; the building systems;
the dwelling units; the common areas;
and health and safety considerations.
(a) Site. The site components, such as
fencing and retaining walls, grounds,
lighting, mailboxes/project signs, park
ing lots/driveways, play areas and
equipment,
refuse
disposal,
roads,
storm drainage and walkways must be
free of health and safety hazards and be
in good repair. The site must not be
subject to material adverse conditions,
such as abandoned vehicles, dangerous
walks or steps, poor drainage, septic
tank back-ups, sewer hazards, excess
accumulations of trash, vermin or ro
dent infestation or fire hazards.
(b) Building exterior. Each building on
the site must be structurally sound, se
cure, habitable, and in good repair.
Each building’s doors, fire escapes,
foundations, lighting, roofs, walls, and
windows, where applicable, must be
free of health and safety hazards, oper
able, and in good repair.
(c) Building systems. Each building’s
domestic water, electrical system, ele
vators, emergency power, fire protec
tion, HVAC, and sanitary system must
be free of health and safety hazards,
functionally adequate, operable, and in
good repair.
(d) Dwelling units. (1) Each dwelling
unit within a building must be struc
turally sound, habitable, and in good
repair. All areas and aspects of the
dwelling unit (for example, the unit’s
bathroom, call-for-aid (if applicable),
ceiling,
doors,
electrical
systems,
floors, hot water heater, HVAC (where
individual units are provided), kitchen,
lighting, outlets/switches, patio/porcbl
balcony, smoke detectors, stairs, walls,
and windows) must be free of health
and safety hazards, functionally ade
quate, operable, and in good repair.
(2) Where applicable, the dwelling
unit must have hot and cold running
water, including an adequate source of
potable water (note for example that
single room occupancy units need not
contain water facilities).
(3) II the dwelling unit includes its
own sanitary facility, it must be in

111

24 CFR Subtitle A (4—1—18 Edition)

§ 5.705
proper operating condition, usable in
privacy, and adequate for personal hy
giene and the disposal of human waste.
(4) The dwelling unit must include at
least one battery-operated or hardwired smoke detector, in proper work
ing condition, on each level of the unit.
(e) Common areas. The common areas
must be structurally sound, secure, and
functionally adequate for the purposes
intended. The basement/garage/carport,
restrooms, closets, utility, mechanical,
community rooms, day care, halls/cor
ridors, stairs, kitchens, laundry rooms,
office, porch, patio, balcony, and trash
collection areas, if applicable, must be
free of health and safety hazards, oper
able, and in good repair. All common
area ceilings, doors, floors, HVAC,
lighting, outlets/switches, smoke de
tectors, stairs, walls, and windows, to
the extent applicable, must he free of
health and safety hazards, operable,
and in good repair. These standards for
common areas apply, to a varying ex
tent, to all HUD housing, but will be
particularly relevant to congregate
housing, independent group homes/resi
dences, and single room occupancy
units, in which the individual dwelling
units (sleeping areas) do not contain
kitchen and/or bathroom facilities.
(f) Health and safetp concerns. All
areas and components of the housing
must be free of health and safety haz
ards. These areas include, but are not
limited to, air quality, electrical haz
ards, elevators, emergency/fire exits,
flammable materials, garbage and de
bris, handrail hazards, infestation, and
lead-based paint. For example, the
buildings must have fire exits that are
not blocked and have hand rails that
are undamaged and have no other ob
servable deficiencies. The housing
must have no evidence of infestation
by rats, mice, or other vermin, or of
garbage and debris. The housing must
have no evidence of electrical hazards,
natural hazards, or fire hazards. The
dwelling units and common areas must
have proper ventilation and be free of
mold, odor (e.g., propane, natural gas,
methane gas), or other observable defi
ciencies. The housing must comply
with all requirements related to the
evaluation and reduction of lead-based
paint hazards and have available prop-

er certifications of such (see 24 CFR
part 35).
(g) Compliance with State and local
codes. The physical condition standards
in this section do not supersede or pre
empt State and local codes for building
and maintenance with which HUD
housing must comply. HUD housing
must continue to adhere to these
codes.
§ 5.705 Uniform physical inspection re
quirements.
Any entity responsible for con
ducting a physical inspection of HUD
housing, to determine compliance with
this subpart, must inspect such HUD
housing annually in accordance with
HUD-prescribed physical inspection
procedures. The inspection must be
conducted annually unless the program
regulations governing the housing pro
vide otherwise or unless HUD has pro
vided otherwise by notice.
[65 FR 77240, Dec. 8, 2000]

Subpart H—Uniform Financial
Reporting Standards
§ 5.801 Uniform
standards.

financial

reporting

(a) Applicability. This subpart H im
plements uniform financial reporting
standards for:
(1) Public housing agencies (PHA5)
receiving assistance under sections 5, 9,
or 14 of the 1937 Act (42 U.S.C. 1437c,
1437g, and 14371) (Public Housing);
(2) PHAs as contract administrators
for any Section 8 project-based or ten
ant-based housing assistance payments
program, which includes assistance
under the following programs:
(i) Section 8 project-based housing
assistance payments programs, includ
ing, but not limited to, the Section 8
New Construction, Substantial Reha
bilitation, Loan Management SetAside, Property Disposition, and Mod
erate Rehabilitation (including the
Single Room Occupancy program for
homeless individuals);
(ii) Section 8 Project-Based Certifi
cate programs;
(ill) Any program providing Section 8
project-based renewal contracts; and

112