1. Presented by Larry D. Davis Terrence J. Kelley Michelle DeVastey
Passing REAC
Presented by
Larry D. Davis
Terrence J. Kelley
Michelle DeVastey

2. What is REAC? Real Estate Assessment Center (REAC)
REAC’s mission is to provide and promote the effective use of accurate, timely and reliable information, assessing the condition of HUD’s portfolio; to provide information to help ensure safe, decent and affordable housing; and to restore the public trust by identifying fraud, abuse and waste of HUD resources.

3. What Happens Depends on your Score?
Next REAC Inspection
90 – 100
3 Years
80 – 89
2 Years
60 – 79
1 Year
59 or Below
Fail
Properties scoring 59 or below are automatically referred to HUD’s Departmental Enforcement Center (DEC) for corrective enforcement and re-inspection. For properties which receive physical re-inspection scores below 60, the possible courses of action to be taken include the following:
1. Foreclosure
2. Prepayment
3. Abatement/termination of the Section 8 HAP Contract
4. Mortgage sale of the Note
5. Restructuring by OMHAR (Office of Multi Housing Assistance
Restructuring)
6. Transfer of Physical Assets (TPA)

4. Now do you think REAC is Important?

5. Preparing for REAC All Year
Walk you property thoroughly
Identify problems in the early stages
Plan and budget for repairs and seasonal work with RPM and/or Owner approval

6. REAC Notification
REAC Inspection can take place 90 days before or after the anniversary date of the previous REAC
REAC Inspection for new properties can be any time after development closes
Notification can be 30 days to as little as 2 weeks prior to inspection

7. REAC Resources Your Regional Property Manager
Your Senior Vice President
EMC Specialists
Frank Martin, Jamal Abdul-Wali, Frank Winston, Boo Nickel and Team
Property Owner
Properties under the same ownership in near proximity to your property

8. What do you do when you get the call from HUD or assigned inspection company informing you of the REAC?
Do not panic
Do not agree to date without clearing with your RPM or Senior VP
Once date is agreed upon with management team, call HUD or inspection company and confirm date
Now you need to step up your plan and completion date

9. How to Achieve the Best Possible REAC Score, it is not just about $$$

10. How to Achieve the Best REAC Score
Focus on big point items and health and safety (H&S) deficiencies
Health and safety deficiencies can reduce the overall property score by a substantial amount due to their great importance to the well being of residents
The presence of H&S deficiencies is highlighted in the score by the addition of a letter to the numeric score (“a” for no H&S, “b” for non-life threatening H&S or “c” for exigent, calling for immediate attention or remedy, or fire safety H&S; for example, 75c)
Health and safety includes a blocked egress (including windows), blocked fire exits, improperly stored flammable materials, pest control
Management is responsible to address all exigent health and safety deficiencies within 72 hours of the inspection

11. Project Owners Certification
Upon completion of exigent Health and Safety deficiencies a Project Owner’s Certification That All Exigent Health and Safety items have been corrected.
The form on the next slide needs to be filled out by the Regional Property Manager and then forwarded to the Owner for signature. The only time this form may be executed by the agent, on behalf of the Owner is if the Owner cannot execute the form in a timely manner.
Upon completion of the forma and signature by Owner, Certification must be sent to the local HUD office or the performance based contractor.
DO NOT SEND THIS FORM TO REAC.

13. How to Achieve the Best REAC Score
Most points are lost in common areas
Total REAC Score breakdown:
15% Site
15% Building Exterior
20% Building Systems
15% Common Areas
35% Dwelling Units

14. Common Area Deductions
Broken Thermopane Seal on Window
Missing Knob on Heater

16. How to Achieve the Best REAC Score
Manager, Maintenance Supervisor and RPM need to walk ALL common areas
Common areas include grounds, building exteriors, roofs, storage areas, sheds, maintenance/electrical rooms, office, community centers, pool area, elevator rooms, basements, etc.
If it is on your property… INSPECT IT

17. What are you looking for on this group walk?

18. Sidewalk w/ Crack/Rise
Grounds
Damaged or missing signs
Sidewalks with over ¼” crack or rise
Exterior lighting
Trees touching building
Erosion including holes
Issues with Globes or Exposed Wires
Curb Stops
Hand rails and handicapped ramps-FHEO
Broken or damaged fences
Broken glass on grounds
Damaged or missing asphalt or concrete including curbs and brick pavers
Damaged dumpster enclosures, lids and trashcans
Low tree limbs
Dead plant material
Sidewalk w/ Crack/Rise

19. Playgrounds Benches with missing slats Handicap accessibility Erosion
Graffiti
Damaged equipment / loose bolts or screws, sharp edges, etc.

20. Building Exterior Broken/fogged window glass
Exposed wiring (including cable and telephone)
GFI’s with Cover (test)
Photocells and building lights
Damaged balcony/patio railings
Peeling or flaking paint
Graffiti
Damaged or missing brick/siding
Exterior disconnect box secured shut (bolted, screwed, locked or zip tied)
Mailbox damage (missing door)
Missing or Damaged screens
Clogged, damaged or missing gutters/downspouts
Damaged or missing roof shingles
Missing or damaged shutters
Expansion joints
Damaged HVAC grill covers
Missing doors or door hardware
Flat roof damage including standing/ponding water, vent motors not running, missing china caps/vent covers, drain covers, connected lightening rods, loose or missing coping or flashing

21. Fire Extinguisher w/ Tag
Hallways
Fire extinguishers charged (not overcharged) and date tag not over one year old
Sprinkler heads completely free of paint
Broken electrical outlets
Smoke detectors
Cracked/peeling paint
No tripping hazards – Carpet, Stair treads, etc….
Broken /fogged glass
Window balances must hold window in open position
Missing vent covers
Missing knobs for fan units
Emergency lighting – check to make sure working (push the test button)
Exits lights
All doors are clearly marked
Damaged drywall
All door hardware working – Doors must latch under their own power
Check light globes and or diffusers
Mailboxes must have properly working doors and locks
Fire Extinguisher w/ Tag
Emergency Exit Sign

22. Maintenance and Storage Rooms and Sheds
Peeling / cracked paint
No hazardous materials, i.e gas
Empty all gas from gas powered equipment stored inside
Flammable items in fire cabinet
Door hardware
Cove base – no missing pieces
Damaged drywall
Water damage spots
All GFI’s tested and working properly
No empty or untagged fire extinguishers
Fire Safety Cabinet

23. Pool House No leaking pumps No tripping hazards No standing water
Light fixtures working
Outlets and covers in place
All GFI’s tested and working properly
Check all electrical connections to pumps, etc....

24. Electrical and Mechanical Rooms
Cracked peeling paint
No hazardous materials
Working door hardware/Door must latch under its own power
Smoke detectors
No empty breaker slots in panel
Breaker panel doors operational
No exposed wiring
Disconnect boxes secured
No trip hazards
Breaker Box/Panel
Disconnect Box

25. Laundry Room Dryer vents secured and have no lint
Exhaust fan operational
If gas equipped – carbon monoxide detector
If electric – smoke detectors
220v outlets secured with covers
No leaking pipes
No visible signs of water damage
No trash or debris behind washers/ dryers
Fire extinguisher – current inspections – not undercharged or overcharged
Operational door hardware
Hot water heater drip legs (6” or less to floor) check local codes
Dryer Vents
Drip Leg

26. Office and Community Service Space
All electrical outlets and switches working
Fire extinguisher – current inspections – not undercharged or overcharged
Peeling / cracked paint
No broken / fogged glass in windows
Smoke detectors
Tripping hazards
Exit signs
Emergency Lights - test

31. Final REAC Checklist Remember this is due to Jamal no less than 3 days prior to inspection

32. REAC Requirements and Standards are subject to change

33. Web Links for Additional Resources
Real Estate Assessment Center (REAC)
HUD Physical Assessment Subsystem (PASS)
Edgewood Management Corporation Intranet

34. Thank you for joining us during the presentation of Passing REAC
This presentation was provided as an assistance tool and does not list all items pertinent to a REAC Inspection