Complete the initial MORs for RAD properties that have not had an initial MOR.
Publication Report
2025-CH-0001 | December 18, 2024
HUD’s Office of Multifamily Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD
HUD’s Office of Housing contracts with performance-based contract administrators to administer the housing assistance payments (HAP) contract with owners. Through RAD, HUD oversees the HAP contracts for converted properties and monitors owners for… moreRelated Recommendations
Housing
- Status2025-CH-0001-001-AOpenClosed
Review the non-life-threatening health and safety and other deficiencies observed by the audit team and ensure that property owners and agents make the necessary corrections to the deficiencies as appropriate.
- Status2025-CH-0001-001-BOpenClosed
Determine the appropriate timeframe for when initial MORs should be completed for all properties that convert under RAD and issue updated guidance that includes a system to track the timeliness of initial MORs.
- Status2025-CH-0001-001-DOpenClosed
Develop and implement a plan to determine how to implement the risk-based approach to review the RAD properties that have not had subsequent MORs in more than 3 years and to require periodic MORs going forward.
- Status2025-CH-0001-001-EOpenClosed
Provide training to field staff members to ensure that they have the skills necessary to complete MORs of converted properties.
- Status2025-CH-0001-001-FOpenClosed
Review the reserve for replacement account balances for the 13 properties (11 underfunded and 2 overfunded) to determine whether the balances are maintained in accordance with the applicable HUD requirements and executed HUD business documents and require owners to fully fund any underfunded reserves and determine whether any overfunded accounts should have the deposits suspended for a specified period.
- Status2025-CH-0001-001-GOpenClosed
Review the HUD business documents, such as the RAD conversion commitment, HAP contract, and regulatory agreement, for the four properties that did not contain consistent reserve for replacement information and update the documents to be consistent as appropriate.
- Status2025-CH-0001-001-HOpenClosed
Issue guidance to RAD property owners clarifying that the owner is responsible to follow both the HUD business documents and the property’s business documents and that the most restrictive document indicates the amount and timing of the annual deposits into the reserve for replacement account.
- Status2025-CH-0001-001-IOpenClosed
Develop and implement a process to ensure that the reserve for replacement requirements in HUD’s business documents are consistent for all converted properties.
- Status2025-CH-0001-001-JOpenClosed
Develop and implement a plan to review the reserve for replacement accounts for all converted properties from the date on which the account was established to the date of the review. Based on the reviews completed, HUD should take appropriate actions to ensure that reserve for replacement accounts are appropriately funded or determine whether overfunded accounts should have the deposits suspended for a specified period.
- Status2025-CH-0001-002-AOpenClosed
Implement adequate procedures and controls to ensure that servicing lenders comply with HUD time requirements in scheduling initial inspections of FHA-insured RAD PBV properties.
- Status2025-CH-0001-002-BOpenClosed
Determine an appropriate timeframe in which non-FHA-insured PBRA properties converted under RAD should be initially inspected, work with REAC to ensure that inspections are ordered and completed within that timeframe, and update HUD’s publicly available and internal guidance to ensure consistent messaging in accordance with HUD’s determination.