Texas Department of Housing & Community Affairs - Building Homes and Strengthening Communities
 

Compliance: Frequently Asked Questions (FAQs)

2nd Edition - HOME Program Question and Answer Guide (PDF)

HUD – Reasonable Accommodations Under the Fair Housing Act (PDF)

HOME Program Contact List - Contact information for TDHCA HOME eligible applicants (municipalities; nonprofit and for profit entities; and public housing agencies).

Compliance Monitoring Newsletters: Compliance Monitoring Policies and Procedures and other information important to TDHCA funded multifamily properties. Newsletters are provided in PDF format.

Select from the following list of frequently asked questions:

Construction Inspections (go to section)

Tenant Selection Criteria (go to section)

Affirmative Marketing Requirements (go to section)

Eligibility (go to section)

Compliance Monitoring Physical Inspections (go to section)

 


Construction Inspections

Q. If I am designing a property for new construction and have unit type(s) that are normally exempt from the Fair Housing Act accessibility requirements (i.e. single family and/or townhomes), how is the 20% requirement applied?
A.
Development Accessibility Requirements for Fair Housing Act Guidelines (FHAG) Exempt Unit Type(s) chart (PDF) (Top)

 


Tenant Selection Criteria

Q. A family of three adults lives in a 3 bedroom , two adults decide to move out, there are no 1 bedroom units available, there are no vacancies, do we have to terminate or non-renew?
A.
If a Development has an occupancy standard, 10 TAC 10.610(b)(8) states that this standard can be no less than two persons (over the age of six) per bedroom. This in no way limits the minimum number of people that can live in the unit. In this example, if the Development's occupancy standard is no more than 2 persons per bedroom, then maximum number of people that could live in the unit is 6 people (3 bedrooms x 2 people). It is when there are more than 6 people in the unit that there could be an issue under the Development’s occupancy standards. (Top)

Q. How does 504 and VAWA effect the wait list, and is there specific wording that we need to use? Are they a priority on the list and what is the wording on the criteria that they take priority over other wait list applicants?
A.
Neither persons protected under VAWA nor persons with disabilities are always required to be prioritized on the waitlist under 10 TAC 10.610. However, for 504 HUD states, “When an accessible unit becomes vacant, before offering the unit to an individual without, offer the unit: first, to a current occupant of the project requiring the accessibility feature and, second, to an eligible qualified applicant on the waiting list requiring the accessibility features.” Also, VAWA may require that existing tenants be given priority for transfers, but this should be a case by case analysis, under the law. (Top)

Q. Can a waiting list be maintained electronically?
A.
Yes. Records can be maintained electronically as long as they are available for review upon request. (Top)

Q. Can TAA Red Book forms for non-renewal and lease termination still be used?
A.
The TAA Advance Notice of Lease Termination at End of Lease Term or Renewal Period appears to only allow the owner to notify the household of when the lease ends and that the lease will not be renewed. It does not allow for the owner to state the specific reason for the termination or non-renewal as required in 10 TAC§10.610(d)(3).Staff has not reviewed all TAA Red Book forms. TAA forms should be reviewed for compliance with the rule. (Top)

Q. Can we keep the denied applications electronically?
A.
Yes. Records can be maintained electronically as long as they are available for review upon request.(Top)

Q. Can you go more into detail regarding women who are pregnant (needing proof of pregnancy)?
A.
Your application must include a question regarding anticipated changes in household size within the next 12 months. If an applicant indicates that there will be a change because they are having a baby, do not ask for proof of pregnancy. (Top)

Q. Did I understand correctly when you said we could list all possible reasons for denial on criminal/credit on a separate document that can be shown to applicant prior to signing release? This document does not have to be given to each applicant as long as they are given the opportunity to read over, correct?
A.
Reasons for criminal/credit denial may be listed on a separate document, such as a screening criteria packet or application packet, as long as this information is given to the tenant. As a reminder, new provisions in §10.617(f)(4) will require a development to accept mailed applications; the development should consider how these items will be made available to tenants who apply via mail. Additionally, language such as "including but not limited to" may be used to describe common circumstances for denial; however, if a development routinely sees that tenants are being denied for criteria that is not listed as part of reasons for criminal/credit denial, the development should add these items to lists used to describe common circumstances for denial. (Top)

Q. Did you say we are now required to "rescreen" all renewals?
A.
10 TAC 10.610 does not require owners to "rescreen". (Top)

Q. Do current tenants have priority on the waitlist if they request a transfer vs. a new applicant?
A.
No. The waitlist should function without regard for where the applicant currently lives. As a reminder, if the transfer request is related to a reasonable accommodation or due to protections under VAWA , the owner would need to consider the transfer separately from the waitlist. (Top)

Q. Do we have to have copies of the denied background or credit reports in denied files along with the letter outlining the denial reasons?
A. The rule is not specific to this but it would be a good practice to keep the documentation for the reason for the denial together with the denial letter sent to the applicant. If the management company organizes their records in a different manner, that is fine as long as an owner is able to locate the support documentation that corresponds to a particular denial. (Top)

Q.Do we need to list applicants that have cancelled on their own on the denial List?
A.
No, but as a recommended practice an owner should be maintaining records on who cancels, especially if they have paid an application fee because that fee would need to be included when calculating the actual out of pocket cost to support charges. The Department may request those records for other compliance provisions. (Top)

Q. Does a disabled head of Household only need to make 2 times the rent amount?
A.
The minimum income standard is related to the gross income of the household. The rule does not require a minimum income standard for each person of the household. (Top)

Q. What is rental assistance information? Is rental assistance referring to Section 8 Housing?
A.
Rental assistance is related to assistance received under the HOME Tenant Based Rental Assistance Program, the housing choice voucher program under Section 8, United States Housing Act of 1937 (42 U.S.C. §1-437), or other federal, state, or local government rental assistance programs. Rental assistance is not limited to Section 8. (Top)

Q. For the denial log that we create should we input all the denied applicant information prior to 4/1/15 or just for those denied applicants 4/1/15 forward?
A.
Some Department programs (such as the HOME program) have always required owners to provide written notices to applicants regarding the reasons for denial. For all other Developments, the rule is effective April 1, 2015. (Top)

Q. For unit transfers based upon a reasonable accommodation request, who is financially responsible for the unit transfer?
A.
Please see 10 TAC§1.204 for guidance on reasonable accommodations. (Top)

Q. Does the new tenant selection criteria rule apply to Housing Tax Credit properties? What if your Housing Tax Credit property has no waitlist, would the waitlist procedures still apply?
A.
Yes. This rule applies to Housing Tax Credit Program (HTC); The HOME Investment Partnerships Program (HOME); The Tax Exempt Bond Program (Bond); The Housing Trust Fund Program (HTF); The Tax Credit Assistance Program (TCAP); The Tax Credit Exchange Program (Exchange); The Neighborhood Stabilization Program (NSP); and Section 811 Project Rental Assistance (PRA) Program. Even if the Development currently has no need for a waitlist because it is not 100% occupied, the owner must create waitlist procedures to address how the Development will handle applicants in the event that the Development is completely leased up. In addition, even if there is no waitlist to move on to the property, you must create a waitlist procedure for existing households to be re-designated to a lower income/rent restrictions. (Top)

Q. I understand pet restrictions don't apply to service animals but can we still require residents to follow the pet rules of picking up after the animal and leash rules?
A.
Pet rules do not cover the behavior of service animals. The best authority on this guidance is HUD Notice FHEO-2013-01 (PDF), which shares HUD and DOJ guidance on applying various service animal laws. This Notice states that under Section 504 and the Fair Housing Act, service/assistance animals must be permitted to accompany the individual with the disability to all areas of a Development where persons are normally allowed to go unless: 1) the specific animal in question poses a direct threat to the health or safety of others that cannot be reduced or eliminated by another reasonable accommodation; or 2) the specific animal in question would cause substantial physical damage to the property of others that cannot be reduced or eliminated by another reasonable accommodation. If a property has extended a reasonable accommodation and a pet's behavior rises to the level that HUD's guidance has considered in the notice, the Development, on a case by case basis should meet with the tenant to discuss the issue where possible, submit a notice to the tenant regarding the service animal's behavior, and may request modifications in behavior or assurances that behavior will not reoccur as a condition to retaining the accommodation for the service animal. The referenced notice also provides that a housing provider may require a tenant to cover the cost of housing repairs for damage the animal causes to the dwelling unit or common areas, reasonable wear and tear excepted, if it is the provider's practice to assess tenants for any damage they cause to the premises. As a reminder, however, no deposits may be charged for a reasonable accommodation and no pet deposits may be charged for service animals. (Top)

Q. If our waiting list is maintained by a housing authority does the property still need to keep a denial log?
A.
A log of all denied applicants that completed the application process must be maintained and available for review upon request. Where it is maintained is up to the owner. (Top)

Q. If the property has screening practices at renewal and a resident is now ineligible based on a new tenant selection criteria, is it a MAY or a MUST to issue a non-renewal?
A.
The rule only provides parameters under which an owner could rescreen an existing household's current credit and/or criminal for consideration of continued occupancy. You are not required to do so. If you choose to do so, be sure to apply the criteria consistently and in compliance with state and Federal fair housing laws. (Top)

Q. If we have in our tenant selection criteria that you must make 2 times the rent, are we allowed to apply that case by case?
A.
The criteria described in the Tenant Selection Criteria, must not discriminate against protected classes. Depending on the specific facts, owners could consider exceptions for reasonable accommodation, because of VAWA protections, or because of participation in a referral program. However, the written tenant selection criteria should explain such criteria. (Top)

Q. In regards to requesting medical records - tenants who ask out of their lease due to medical reasons. In this case, it is allowed?
A.
Yes. (Top)

Q. Is the Written Leasing Criteria, in the HTC program, going to be eliminated now that the Tenant Selection Plan is effective?
A.
The Tenant Selection Criteria and the Written Leasing Criteria are generally the same document. (Top)

Q. Is there a time limit on the criminal background, meaning how far back can we go and still deny?
A.
The rule does not restrict the timeframe you can use; however, the timeframe that you use must be included in the Tenant Selection Criteria. (Top)

Q. If an applicant is denied due to credit for example they have 13 trade lines and 12 are in collections which is considered high risk do we have to explain what the credit score has to be?
A.
If you are basing the denial on the specifics of the actual credit accounts and not the aggregate credit score, then it would appropriate to state that the denial is based on the number of accounts in collections versus the total number of accounts rather than the actual credit score. You should be detailing why an applicant is denied based on your Tenant Selection Criteria. (Top)

Q. Please clarify the occupancy standards with the age of 6 years.
A.
HUD's notice of reasonable occupancy standards considers the fact that a prescriptive 2 person per bedroom occupancy standard that does not consider the age of young children may be used to unnecessarily exclude families with children. In the revised §10.610, the rule sets a reasonable occupancy standard with the understanding that one size does not always fit all in regards to property needs or local codes. However, there was concern during the public comment process that the proposed rule might be read in a way that would lead Owners and Managers to set occupancy standards for two persons per bedroom, which is not consistent with HUD's "reasonableness" guidance related to young children. This language was included in the rule in response to public comment. Owners and Agents can choose to proceed on the basis of setting a requirement of two persons per bedroom (over the age of six) unless otherwise directed by building code or safety regulations or unless a written justification is provided. TDHCA does not set a maximum requirement for occupancy. (Top)

Q. Beginning in April 2015, will we need to rewrite the criteria to include the new rules?
A.
Yes. An owner must review the criteria and determine whether revisions need to be made to be compliant with the rule. This rule is effective April 1, 2015. (Top)

Q. Are we able to use third party verifications for special accommodations or is the special Needs certification sufficient?
A.
Third party verifications for reasonable accommodations can be used. See the HUD-DOJ Joint Memo on the Fair Housing website for more details: http://www.hud.gov/offices/fheo/library/huddojstatement.pdf (Top)

Q. Do residents with assistance animals have to pick up pet waste? Residents with service animals are required to sign the pet addendum, so how is that different?
A.
See items 18 and 28 above. Neither assistance nor service animals are considered "pets" under HUD guidance under Section 504 and the Fair Housing Act. Depending on the language of the addendum, it may not be appropriate for a tenant to sign. (Top)

Q. VAWA- if police are called out for a domestic violence dispute and the police damage the door frame trying to access the unit, are we allowed to charge the tenant for repairing the damage?
A.
This is a rapidly evolving area of law, and owners are highly encouraged to seek out legal counsel. Legal counsel should consider many factors in additional to VAWA including but not limited to the Fair Housing Act, the recent settlement agreement between HUD and the City of Berlin, NH, and Texas Property Code §92.015. (Top)

Q. We are a Participating Jurisdiction and we have few HOME & CDBG funded properties which are layered with Tax Credit funds too. Now my questions to you: what applies to such properties or what does not when it comes to tenant selection Criteria?
A.
This rule applies to Housing Tax Credit Program (HTC); The HOME Investment Partnerships Program (HOME); The Tax Exempt Bond Program (Bond); The Housing Trust Fund Program (HTF); The Tax Credit Assistance Program (TCAP); The Tax Credit Exchange Program (Exchange); The Neighborhood Stabilization Program (NSP); and Section 811 Project Rental Assistance (PRA) Program. (Top)

Q. We are a post 15 property - do we have to have a waitlist? By not being required to do recertification’s - our availability is very limited since we are 100% one program.
A.
Yes. Every property must develop procedures detailing how the Development takes applications and opening, closing, and selecting applicants from the waitlist. (Top)

Q. We are a townhome community, our 2bedroom units (if they are not accessible units) only have the bedrooms & bathroom located upstairs (only common areas downstairs), is this considered an unjust financial burden issue?
A.
This is a very fact specific determination, and the owner should contact a Fair Housing Attorney. (Top)

Q. We are required to list the breed restrictions, pet policy on the rental criteria, correct? Not just the deposit/fees?
A.
An owner should have a Pet Policy. The requirement related to the rule is that Tenant Selection Criteria must describe, pet rules, and pet deposits, along with any specific animals, breeds, numbers, and weight that are restricted. The Pet Policy should state that it will not apply to households having a qualified service/assistance animal(s). (Top)

Q. What documents are required to supplement a waiting list, if any?
A.
None; the waitlist should be self explanatory. (Top)

Q. What if a medical provider provides the disability details even though it was not requested? Should a site request a new verification and destroy the original one that disclosed the nature of the disability?
A.
PIf the medical provider gives details regarding the specific disability, due to privacy issues, you should redact that information so you are not liable for storing private medical information. It is not necessary to obtain a new verification. (Top)

Q. What is the "basic demographic" information that the denied application log must contain?
A.
Basic household demographics are not defined but it could include household size, race and ethnicity. The Owner is to develop procedures to address the manner in which rejections will be handled, including what information should be maintained on the log. If an owner does not currently request basic demographic information as part of the application process, it will not be asked to provide such information on the application log. (Top)

 


Affirmative Marketing Requirements

Q. Under what circumstance should an owner obtain prior approval to use an online application as required in 10TAC§10.617(f)(4)?
A. If the online application is used as more of a “guest card” rather than part of the eligibility process, prior approval is not necessary. In the event that the online application is considered part of the process for determining household eligibility prior approval from the Department is required. (Top)

Q. Are you monitoring for whether or not the owner should have identified an "other" ethnic or religious group to market to?
A. Religion is not a category commonly reported for housing developments and, as a result, there is no data to compare to that of a development to the housing market for a least likely to apply determination. As for “other” ethnic groups, currently, ethnicity is limited to Hispanic or Non-Hispanic. However, if the owner is aware of a disproportionate religious or “other” ethnic population between the development and the housing market, it may be appropriate to affirmatively market to those groups. Please see 10 TAC§10.617(e). (Top)

Q. Does TDHCA envision developing its own AFHMP form?
A.
Not at this time. (Top)

Q. For clarification. Do these new rules, affective 4-1-15, mean that we have to do new plans for our portfolio as of April 1st? If I have an AFHMP that does not expire for 2 years, will I use this method in 2 years, or do I need to re-draft all of my plans for my properties?
A.
An owner should be reviewing your current Affirmative Marketing Plan and determining if it meets the requirements under the new rule. If it does not, then, yes, there would need to be a new plan in place by April 1, 2015. (Top)

Q. I have several properties that are 100% tax credit, does this AFMP apply?
A.
Yes. This rule applies to Housing Tax Credit Program (HTC); The HOME Investment Partnerships Program (HOME); The Tax Exempt Bond Program (Bond); The Housing Trust Fund Program (HTF); The Tax Credit Assistance Program (TCAP); The Tax Credit Exchange Program (Exchange); The Neighborhood Stabilization Program (NSP); and Section 811 Project Rental Assistance (PRA) Program. (Top)

Q. If a project has no HUD funding, only LIHTC, please explain the relevance to the AFHMP to the housing credits. It is my understanding that, IRS does have a "Memo of Understanding" with HUD and DOJ regarding violations of fair housing impacting credits, failure to have an AFHMP is not grounds for loss or recapture of tax credits.
A.
The Department requires that owners market housing options to underrepresented groups so that individuals in the same housing market have available to them a varied range of housing choices regardless of a protected class. The Memorandum of Understanding (MOU) Among Treasury, HUD and DOJ is an effort to promote compliance with the Fair Housing Act. The MOU outlines procedures for notifying parties of charges, lawsuits or other actions under the Fair Housing Act and training requirements. TDHCA is responsible for reporting to the IRS when HUD and/or DOJ finds that a violation of the Fair Housing Act occurred and the noncompliance is subject to recapture. Violations of the Fair Housing Act are reportable to the IRS on Form 8823. Affirmative Marketing is a state requirement. (Top)

Q. If property is receiving section 8 HAP subsidy along with HOME and Tax Credits. Does the development only have to update every five years versus two?
A.
If the property is also funded by HUD or USDA where Affirmative Marketing is a program requriement, compliance with timeframes presribed under those programs with satisfy the plan review requirements outlined in 10TAC§10.617(h). Please note, HUD released a Clarification of Affirmative Fair Housing Marketing Plan Review and Approval Guidance on September 22, 2014 addressing when plan should be updated. Please review this memo to ensure compliance. (Top)

Q. Please clarify -- who is updating the property information? Is this automatically populating out of the TDHCA system, or is the owner doing this manually or through some other system?
A.
The Affirmative Marketing Web Tool pulls the household demographics from the information the owner entered into Unit Status Report (USR) in the Compliance Monitoring and Tracking System (CMTS). For further information on CMTS, please visit: www.tdhca.state.tx.us/comp_reporting.htm. (Top)

Q. Please clarify where the "20%" is coming from?
A.
In many funding NOFAs, HUD uses a 20% threshold for identifying minority or “racially/ethnically-impacted areas”. It uses as a basis of comparison the fact that either the percentage of households in a particular racial or ethnic minority group is at least 20 percentage points higher than the percentage of that minority group for the housing market area or the total percentage of minority persons is at least 20 percentage points higher than the total percentage of all minorities in the housing market area. TDHCA’s 2013 Analysis of Impediments also uses this definition for a minority impacted area. For this rule, the Department inverted this figure and assumed that if 20% higher than the housing market area could be considered a minority impacted area that we could also consider that 20% below the housing market area could be defined as underrepresented. (Top)

Q. Regarding the LEP issue, is the Department following the same benchmarks as HUD does for what threshold means you have to translate documents, etc?
A.
In the Outreach Census Data workbook there is a "Language Tab" that breaks down language spoke on a census track level. You should consider what language is primarily spoken in the area you have targeted for affirmative marketing to ensure that the marketing material used is understood by your target audience. (Top)

Q. Since the AFHM Plan is now required by TDHCA, if the property is NOT a HUD Property, do we still mail the AFHM Plan to our local HUD Office for approval or send it to TDHCA for Approval?
A. Except if required as part of the initial application or as otherwise required by a specific funding source, do not send in the Affirmative Fair Housing Marketing Plan to the Department or to HUD for review. The plan and the marketing materials will be reviewed at the Department’s regular onsite review. (Top)

Q.Since you did not include families with children in your tool, are owners expected to go through the census data on their own to determine if outreach to families with children is required?
A.
Yes. Families with Children are a protected class and, while CMTS is not currently set up to capture this data, an owner has this information available on a development level. The tool is meant to assist in making determinations regarding least likely to apply and not the only resource an owner should use. Families with Children should be considered when identifying populations least likely to apply. (Top)

Q. Since your AFHMP is based on comparing your residents to the market area, how do you determine the least likely to apply in a development that has not been occupied?
A.
10TAC§10.617(d)(2) addresses how to make this determination when the development is located in an MSA and 10TAC§10.617(d)(3) addresses how to make this determination when the development is located outside an MSA. (Top)

Q. So, if we do not use the HUD Form 935.2A Form, we can type up our own Marketing Plan, but just note the least likely to apply groups and how we will market to them?
A.
While the use of the HUD Form 935.2A is not required, it is encouraged. Remember, any version of that form can be used; it does not have to be the newest version (except if required by a funding source). (Top)

Q. The form you are reviewing is the long form for 2013 (which is not yet posted to the HUD site.) We use the previous "short" form. Is this OK (our properties are LIHTC)?
A.
Yes; For LIHTC, any version of the HUD Form 935.2A is acceptable. (Top)

Q. . What will TDHCA accept as specific marketing to "White" "least likely to apply" group? Any outreach wouldn't be specific to "White" ... true?
A.
You should treat this group as any other group that has been determined as least likely to apply and follow the same process for identifying where you intend to focus your marketing efforts. (Top)

 


Eligibility

Q. Can a property monitored by TDHCA use a “flat-rate” utility allowance published by a Public Housing Authority?
A. Certain housing authorities, including "Moving to Work" Housing Authorities have the option of publishing a flat-rate utility allowance instead of publishing an allowance for each utility (electric, gas, water and/or trash). TDHCA is aware that the San Antonio Housing Authority published this type of allowance for their Section 8 voucher program in 2015. Provided that the “flat rate” utility allowance is compliant with HUD requirements, it can be used by a property monitored by TDHCA.

As a reminder, the PHA method is not an option for Rural Housing Services (RHS) buildings, buildings with RHS assisted tenants (10TAC§10.614(c)) and/or a HUD- Regulated building (10TAC§10.614(d)). In addition, there are certain areas of the state where there is no “applicable” housing authority. In general, in those areas developments must use one of the other options for calculating an allowance. Lastly, please note, this may change in the near future for the HOME program pending guidance from the Community Planning and Development (CPD) section of HUD.

(Top)

Q. Can an applicant complete an electronic application?
A. The intent of an application is to allow an applicant to disclose how many members in the household, student status and all sources of income and assets so that onsite staff knows what to verify to establish eligibility. The application must be completed by the applicant. Many owners are looking into having applications completed electronically. An electronic application can be used; however, it is important, as with any type of application, that onsite staff cannot alter the form once completed by the applicant. It will be the owner's responsibility to maintain documentation to evidence that the process is secure and that at no point during the process can staff change the application. (Top)

Q. How do I calculate the annual income of an applicant/resident?
A.
Our housing programs use the rules for calculating annual income set-forth in Chapter 5 of the HUD Handbook 4350.3: Occupancy Requirements of Subsidized Multifamily Housing Programs. To obtain a copy of the Handbook, contact HUDCLIPS on the web http://www.hudclips.org or by phone 1-800-767-7468. (Top)

Q. How do I calculate the cash value of an asset?
A.
The cash value of an asset is the market value minus reasonable costs that would be incurred in selling or converting the asset to cash. The reasonable costs that may be deducted include: (1) penalties for withdrawing funds before maturity, (2) broker/legal fees assessed to sell or convert the asset to cash, (3) settlement costs for real estate transaction, and (4) loans on the asset. (Top)

Q. How do I know if an asset was disposed of for less than market value?
A.
Screen the applicant/resident for assets disposed of for at least $1000 less than market value. (Top)

Q. Can a live-in aid be a relative?
A.
A live-in aid is a person who lives with an elderly, disabled or handicapped individual(s) and is essential to that individual’s care and well-being, not obligated for the individual’s support and would not be living in the unit except to provide the support services. A relative may be considered a live-in aid if the individual meets all of the above requirements, especially the last. (Top)

Q. Is child support counted as income?
A.
Child support payments must be included when determining household eligibility. If a household does not receive the court ordered child support that they are entitled to, the amount must still be included, unless two requirements are met: 1) The household certifies that the support is not being received. AND 2) The household provides documentation that reasonable efforts to collect the support have been made, including filing with courts or agencies responsible for enforcing payments. (Top)

Q. May I use check stubs as income verification?
A.
Yes. Remember that you must use a consistent method for annualizing income from check stubs. (Top)

Q. How do I verify self-employment income if the resident/applicant only recently entered self-employment?
A.
As a case of last resort, the resident/applicant may complete a self-affidavit estimating income for the upcoming twelve months. (Top)

Q. How do I obtain a utility allowance schedule?
A.
The Public Housing Authority (PHA) serving the area where your property is located or the local utility provider can provide a utility allowance. Consult the compliance monitoring rules Section 10.614 (on the Secretary of State Web site) to determine which source is right for your property. A listing of Public Housing Authorities in Texas is also available from the Housing Resource Center. Please visit the Utility Allowance page for addition information. (Top)

Q. How do I determine the cash vale of a whole or universal life insurance policy?
A. The cash value is the surrender value of the policy. This information is available in the policy or from the insurance company. (Top)

Q.Do existing households that transfer to another unit at the property need to be provided the Tenant Rights and Resources Guide?
A.
No. Only households that move in on or after January 8, 2015 must be provided the Tenant Rights and Resources Guide (DOC) and are required to sign the Acknowledgement of Receipt (PDF). Although it is not a requirement to provide the Tenant Rights and Resources Guide to households that transfer, properties are encouraged to so. (Top)

Q. If a household member is added to an existing household, does the new household member need to be provided the Tenant Rights and Resources Guide?
A.
If the person joining the household is considered an adult (and would be signing the Income Certification), then yes, that person must be provided the Tenant Rights and Resources Guide (DOC) and must sign the Acknowledgement of Receipt (PDF). Remember, for most programs, when an adult joins an existing low-income household, you will be screening that person for income and assets, verifying and adding that information to the existing Income Certification form. During this process, but no later than when the new member actually moves into the unit, they should be given the Tenant Rights and Resources Guide. (Top)

Q. Can the Unit Status Report (USR) be made available in Excel?
A.
YES. CMTS has been enhanced to allow for you to view your USR in PDF and Excel. This feature is already available. (Top)

 


Compliance Monitoring Physical Inspections

Q. What is a UPCS inspection?
A. The Uniform Physical Condition Standard (UPCS) inspection protocol was developed by the U.S. Department of Housing and Urban Development's (HUD) Real Estate Assessment Center (REAC) to ensure that housing is “decent, safe, sanitary and in good repair”. REAC conducts approximately 20,000 annual inspections of rental housing that is owned, insured or subsidized by HUD using the UPCS inspection protocol. Visit our listing of related Web sites regarding the inspection process. (Top)

Q. Why does the Texas Department of Housing and Community Affairs use UPCS?
A.
The Internal Revenue Service requires housing agencies to use local health, safety, and building codes or the UPCS to assess the physical condition of Housing Tax Credit developments. In Texas, building codes can vary from city to city and many areas do not have code enforcement at all. To ensure a uniform inspection standard is used state wide, the Department has adopted the UPCS for all programs we administer. (Top)

Q. Who performs the inspections?
A. The Department's Compliance Monitoring Physical Inspections (CMPI) staff will be conducting most of the inspections scheduled. The CMPI staff will perform a range of inspections including UPCS onsite assessments, construction inspections and reviews, and verification of construction and rehabilitation standards of single family structures financed through the HOME program. CMPI staff also supervises and evaluates inspections of our contractors and field inspectors.

Inspectors from On-site Insight and The Inspection Group (Department Contractors) are HUD certified with broad experience in conducting UPCS inspections. Many inspectors live in Texas and all are under the supervision of the contractor's staff. Each contracted inspection firm was selected through a competitive bidding process.

Additionally, in certain circumstances, the Department's Compliance Monitor(s) performing an onsite file review will conduct the physical inspection for a development. (Top)

Q. Who are On-site Insight and The Inspection Group?
A.
On-site Insight is a subsidiary of RECAP Real Estate Advisors, a multidisciplinary consulting firm specializing in asset management, physical inspections and capital needs assessments of multifamily, institutional and commercial real estate.

The Inspection Group was founded in 1998 with the objective of providing various building inspection related services. They have inspected over 100,000 units for more than 185 customers. All inspectors have been certified by HUD/REAC. The Inspection Group, Inc., has been putting to use its experience of performing thousands of HUD REAC protocol inspections nationwide, UPCS training, REAC report reviews and score appeals; advising in preparation for REAC inspections; installing new UPCS inspection systems, including software. (Top)

Q. How does the UPCS differ from individual city and/or HUD Housing Quality Standard inspections made at my development?
A.
UPCS is generally more detailed and thorough than HQS and most city inspections. The UPCS is designed to be more objective than the HQS protocol. UPCS follows Federal requirements at 24CFR 5.703 and addresses a multitude of inspectable items in five major areas: Site, building exteriors, building systems, common areas and dwelling units, . The Dictionary of Deficiency Definitions (see website listing) is a 325 page listing of each inspectable item with a description of the factors that dictate the level of deficiency. HQS does not address the number of inspectable items that the UPCS include and is not as objective when identifying deficiencies. (Top)

Q. How does the inspector know what to look for?
A.
Inspectors have been professionally trained to identify deficiencies based on the UPCS. Additionally, the UPCS inspection is software based. The inspector will generally have a laptop or hand held computer with the UPCS software. The software lists the various inspection items by the five inspectable areas in detail. The inspector notes deficiencies found and assigns a severity level to each deficiency noted during the inspection. (Top)

Q. When will the Physical Inspection be performed?
A.
Usually within 60 days of the Department's on site review. In some cases, such as in rural areas, the delay may be longer. (Top)

Q. What should I expect when the physical inspection is scheduled?
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The inspector should provide adequate notice to the on site manager and staff to allow them to send a notice to the tenants that their unit may be selected for inspection. When the inspector arrives he or she will have a list of the units to be inspected; the site manager will be asked to pull the keys for the units listed. It is recommended that keys for a few extra units be pulled in case a unit on the list cannot be entered. A development staff member is required to accompany the inspector at all times and must enter each dwelling unit with the inspector. The inspector will look at each building on the development and at each unit on the list. (Top)

Q. Can deficiencies be repaired while the inspector is on site?
A.
Yes. The inspector will allow reasonable correction of Exigent and Fire Safety Hazards (commonly known as EH&S) during the inspection--for example, if a tenant has disabled a smoke detector, site staff may repair or replace the smoke detector while the inspector is in the unit if time allows. The deficiency will be recorded and noted as corrected. There is usually not sufficient time for more extensive corrections during an inspection. (Top)

Q. What deficiencies are commonly seen?
A .
Exigent and Fire Safety deficiencies most commonly cited are missing covers or plates in electrical boxes that expose live wires and blocked egress (furniture blocking windows in bedrooms). Other issues reported are entrance door seals damaged, bathroom basin problems (usually stoppers or pop-ups not working or missing), missing splash blocks at gutter downspouts, and damaged or torn refrigerator door gaskets. (Top)

Q. How is the inspection score for the Development, as reported on the cover of the Physical Assessment Report, calculated?
A.
A combination of many factors is used by the software to calculate the final score. A complete discussion is on the HUD website listed in the useful websites. (Top)

Q. If I have deficiencies reported on the Exigent and Fire Safety Hazards Observed form, what is the next step?
A.
The inspector will complete a Notification of Exigent and Fire Safety Hazards Observed form at the conclusion of the inspection with a copy presented to the owner's onsite representative. Development staff must correct the deficiency in 24 hours and notify the Department of the correction within 72 hours (3 work days) of notice. A Certification of Correction Form will be left on site to report corrections and is included in the Forms section of the PMC Web site. Submission of the Certification of Correction may be by fax or email and should be addressed to the Department's inspector or as directed on the Certification of Correction Form.

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Q. How do I receive the inspection report and what should I do?
A.
A letter to the owner contact listed in the Compliance Monitoring and Tracking System (CMTS) will be mailed with a copy of the report. A copy of the letter and the List of Deficiencies section of the report is mailed to the onsite staff and to the management company listed in CMTS. The letter will state whether or not the physical inspection resulted in any findings, the ending date of the corrective action period, and information on how to report corrections. Remember, all deficiencies must be corrected. (Top)

Q. For a tax credit development, if all deficiencies reported are corrected, will a finding still be reported to the IRS on Form 8823?
A.
At the conclusion of the corrective action period, the Department will issue Forms 8823 for each building with a deficiency. The IRS requires all deficiencies to be reported, whether or not corrected (see the IRS 8823 Guide). The finding on the IRS Form 8823 is: “Violation(s) of the UPCS or local inspection standards”. If all deficiencies reported for a particular building are reported corrected during the corrective action period, the Form 8823 will be marked “out of compliance” and “noncompliance corrected”. If not all deficiencies are corrected the Form 8823 will be submitted as “out of compliance”. When documentation of corrections is received for buildings reported out of compliance, additional Forms 8823 will be sent to the IRS reporting the correction(s). (Top)

Q. What does the IRS do when noncompliance is reported?
A.
The Department has no information as to how the IRS will treat the report of noncompliance once received. (Top)