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

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.

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)

Now do you think REAC is Important?

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

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

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

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

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

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

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.

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

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

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

What are you looking for on this group walk?

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

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

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

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

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

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....

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

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

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

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

REAC Requirements and Standards are subject to change

Web Links for Additional Resources Real Estate Assessment Center (REAC) www.fhasecure.gov/offices/reac/   HUD Physical Assessment Subsystem (PASS) www.hud.gov/offices/reac/faqs/pass_faqs.cfm  Edgewood Management Corporation Intranet www.emcnet.biz 

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