conducting your own mor - mahma to succeed at... · pbca ‘s and ca’s are waiting for hud to...
TRANSCRIPT
www.nhcinc.org 1
HOW TO SUCCEED AT YOUR
MANAGEMENT AND OCCUPANCY
REVIEW (MOR)
Presented By:
Rose Dubin National Housing Compliance
MAHMA Regional Affordable Housing Conference 2014
Raising The Bar In Compliance
AN EXAMPLE OF EVERYONE’S GOALS
National Housing Compliance
Raising The Bar In Compliance
OVERVIEW
Frequency of Reviews
Rewards and consequences
HUD form 9834
The three parts of a MOR:
I. Desk Review
II. On-site Review
III. Summary Report
Industry Best Practices for Owners, & Agents and Managers
4
FREQUENCY OF MANAGEMENT REVIEWS
PBCA ‘s and CA’s are waiting for HUD to determine if MOR’s will be
performed on an annual basis or risk based. If risk based is
chosen, the MOR ‘s performed will be based on the last MOR
rating:
o Unsatisfactory/Below Average – Every -year
o Satisfactory - Every Other Year
o Above Average & Superior - Every Three 3 Years (Anticipated)
Each Year – Full Mark-2-Market
5
FREQUENCY OF MANAGEMENT REVIEWS
Handbook 4350.1, Chapter 6, Par. 6-4 – Conducting Management
Reviews:
o After a project commences occupancy, and following a change
in project ownership/management;
o When physical, financial or management problems exist;
o When deficiencies have been identified at other projects of the
same owner/management agent;
o Prior to granting preliminary approval of a transfer of physical
assets (TPA) proposal; and,
o As necessary to monitor the owner/agent’s implementation of
any required corrective actions or project improvement efforts. 6
REWARDS OF COMPLIANCE
No additional action is needed if there are no findings.
More confident employees.
Possible lower repair & maintenance costs based
on good management skills.
Ability to continue participating in the program.
Ultimately, (hopefully) monetary gains due to
“Superior” property management practices
and physical condition.
7
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CONSEQUENCES OF NON-COMPLIANCE
HUD Administrative Actions:
o Subsidy assistance abatement or suspension.
o Sanctions – e.g. loss of future participation.
o Replacement of the management agent.
o Flag in Active Partners Performance System (APPS).
o Referral to Departmental Enforcement Center (DEC).
8
THE PURPOSE OF FORM 9834
HUD Form 9834 – Implementation by 3-4-13:
o Developed to ensure compliance with terms & conditions of
HUD agreements.
o Determines the level of compliance with HUD’s business
agreement.
o Designed to assess management & oversight of MF housing
projects.
o Monitors for HUD’s Office of Fair Housing & Equal Opportunity
(FHEO).
9
THREE PARTS OF FORM 9834
The Management Review consists of three parts:
I. Desk Review
II. On-Site Review, which includes:
o Addendum A – Tenant File Review Worksheet.
o Addendum B – FHEO (Sections I, II & III).
o Addendum C – Document to be made available.
o Addendum D – State Lifetime Sex Offender Statistics.
III. The Summary Report
10
PART I
DESK REVIEW
11
DESK REVIEW
Can be completed prior to conducting the on-site review or while on
site:
o Provides a well-rounded view of the project.
o Identifies potential issues or problems.
Includes a:
o Review of Financial Assessment (FASS) & Score, (HUD only).
o Review of policy & procedures documents.
o Review of REAC inspections.
o Review of prior MORs.
12
REVIEW OF DOCUMENTS
The following documents can be requested and reviewed prior to
MOR being conducted
o Tenant Selection Plan (TSP)
o Application & attachments (HUD Form 92006)
o Current lease & addendums
o House Rules/Handbook
o Pet Rules
o EIV policy & procedures
o *Affirmative Fair Market Housing Plan
(required in some states) 13
TENANT SELECTION PLAN (TSP)
TSP must be developed according to HUD’s guidance to include
required and recommended contents.
TSP should be reviewed at least annually.
HUD or Contract Administrator does not
approve the TSP.
TSP must be available to tenants, applicants and the public.
14
TENANT SELECTION PLAN (TSP) TSP’s required contents according to HUD 4350.3:
1. Project’s eligibility requirements
2. Citizenship Requirements
3. Social Security Requirements
4. HUD Income limits
5. Procedures for taking applications/pre-applications and
selecting from the waiting list
6. Occupancy Standards
7. Unit Transfer Policies
8. Policies to comply with 504 of the rehabilitation act, fair
housing act, and civil rights act
15
TENANT SELECTION PLAN (TSP) TSP’s required contents according to HUD 4350.3:
9. Policies for opening & closing the waiting list.
10. Policies for applying Violence Against Women’s Act (VAWA)
(VAWA) policies.
11. Preferences and application of preferences.
12. Other allowable applicant screening criteria.
13. EIV Existing Tenant Search.
14. Income Targeting.
15. Procedure for rejecting ineligible applicants.
16
AFHMP (FORM 935.2A) AFHMP is not required of projects built before February 1972,
unless substantially rehabilitated.
A new form HUD 935-2A was posted to HUDCLIPS on 1-16-2014.
Must be approved by HUD or State Finance Agency.
O/A must comply with the requirements of AFHMP.
O/A must be able to provide documentation of marketing activities
consistent with the AFHMP.
O/A must review AFHMP:
o At least every 5 years, or
o When community development jurisdiction’s consolidated plan
is updated. 17
APPLICATION & ATTACHMENTS
An Application is required for all households, and must be signed and dated
by tenant and time and date posted by management when received. HUD or
the CA does not approve applications.
HUD does not have a specific application format; however, a list of the
following information must be requested on the application:
Supplement to Application for Federally Assisted Housing , HUD form
92006.
Must have language regarding state lifetime sex offender registration.
Request all states lived in for all Household members.
Space for disclosure of Social Security Number for all household
members except those who do not contend eligible immigration status.
Information on applicants 62 or older as of January 31, 2010 who do not
have a SSN, if they were receiving assistance as of January 31, 2010.
18
HUD RECOMMENDED DATA
Data that should be requested on the application:
o Household characteristics of each HH member.
o General household contact information.
o Identification of approved preferences.
o Sources and estimates of household income & assets.
o Citizenship declaration.
o Marketing information; how applicants heard about the
property.
o Screening information consistent with the TSP.
19
CURRENT LEASE Use HUD Model Lease under your specific Sec. 8 program.
May be modified only with prior approval from HUD. Management
should be sure to keep the approval letter/email from HUD.
Cooperatives may use HUD approved Occupancy Agreements in
lieu of the HUD Model Lease.
Required attachments must be kept in the tenant file with the
lease.
The landlord, head of household, spouse, co-heads, and all adult
members of the household must sign and date the lease.
Initial term of the lease must be the lesser of one year, or the
remaining term of the HAP contract.
20
REQUIRED ATTACHMENTS
The following attachments to the lease are required:
o HUD form 50059/A signed/dated by landlord & tenant.
o Move-in Inspection signed and dated by landlord and tenant.
o House rules, if they have been developed by the landlord.
o Lead-based paint disclosure form, if applicable.
o VAWA Lease Addendum.
o Pet rules, if applicable.
o Live-in aide addendum, if applicable.
21
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EIV POLICY & PROCEDURES
EIV policy & procedures are required by HUD for the site staff to
follow when:
o Using EIV as 3rd. party verification of employment & income,
and
o Using other EIV reports.
To ensure that applicants and tenants are:
o Treated fairly, and
o Not being discriminated against.
Does not have to be approved by HUD but is reviewed at time
of/or prior to MOR.
22
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EIV POLICY & PROCEDURES
EIV policy & procedures recommended contents are:
o Process for obtaining a signed HUD form 9887/A for family members turning 18 between certifications.
o Policy indicating that EIV income report will be accessed for tenants within 90 days after move-in.
o A list of all EIV reports, and when they will be run.
o Policy for running the no-income reports at events other than recertification.
o Procedure for using EIV as 3rd. party verification.
o Procedures regarding authorized use of EIV.
23
HOUSE RULES
House rules are beneficial for identifying allowable
and prohibited behavior for your tenants.
House rules are developed by the owner.
HUD does not need to review or approve but they are reviewed by
HUD/PBCA at MOR to determine what is “reasonable”.
Must be consistent with HUD requirements for operating HUD
subsidized projects and Fair Housing
Must not infringe on tenants’ civil rights.
24
PET RULES /POLICY
Pet Rules in HUD 4350.3 apply only to elderly and disabled
households. Family housing is not required to allow pets.
They do not apply to assistance animals and their owners.
Must not conflict with applicable state or local laws or regulations.
Must include mandatory rules regarding:
o Inoculations and Sanitary standards
o Pet restraints
o Registration
o Notification to pet owners for failing to register
Assistance animals are exempt from the pet deposit.
25
PRIOR MORS
Review at least the two most recent MOR to:
o Understand the issues, conditions and challenges facing the
project.
o Ensure that findings were in fact addressed and corrected.
o Procedures are corrected, currently in place, and are being
followed.
o Be on the lookout for reoccurring findings. Those may show up
in the Summary Report as “Repeat Findings”.
26
INDUSTRY BEST PRACTICES
Develop methods to obtain the latest information on HUD program
changes through expert trainers and offered webinars.
Review your internal policy and procedures documents at least
annually, making sure all changes are consistently disseminated
throughout your portfolio of properties
Seek legal and industry expert consultants as necessary.
Receive HUD Listserv emails
Subscribe to industry relevant
newsletters.
27
PART II
ON-SITE REVIEW
28
ON-SITE REVIEW
Categories
1. General Appearance & Security
2. Follow-up and Monitoring of Project Inspections
3. Maintenance & Standard Operating Procedures
4. Financial Management/Procurement
5. Leasing & Occupancy
6. Tenant/Management Relations
7. General Management Practices
29
APPEARANCE & SECURITY
General appearance includes a review of:
o Project’s exterior & common areas for cleanliness and
damage.
o Areas of concerns are; grounds, landscaping, hallways,
stairways, laundry rooms, etc…
Security includes frequency of events such as break-ins,
vandalism, theft, assaults, arrests & drug activities.
Corrective actions and measures taken by the O/A, and
Whether rents were increased due to the cost of O/A’s actions and
other security measures.
30
PROJECT INSPECTIONS
Follow-up on REAC / EH&S to determine if:
o EH&S deficiencies have been corrected and documented
according to the O/A’s certification.
o All other deficiencies noted on the REAC inspection have been
corrected, or if there is a schedule for completing deficiencies
within a reasonable timeframe.
o There are repetitive or systematic problems.
o There is a “Lead-Based Free” certification for projects
constructed prior to 1978.
31
MAINTENANCE & PROCEDURES
Determine if the project has a/an:
o Schedule for preventive maintenance & servicing.
o Inventory system to account for tools, equipment, supplies and
keys.
o Written procedures for;
1. inspecting units (at least annually) using
a detailed checklist.
1. completing work orders, &
2. handling emergency work orders.
o Documentation by unit to track the date of purchase,
manufacturer, model & serial numbers for appliance purchases. 32
MAINTENANCE & PROCEDURES
(Continued)
Determine the number of:
o Vacant units.
o Units ready for occupancy.
o Units not ready for occupancy.
Identify factors contributing to the vacancy problems.
What actions are being taken by the O/A to fix vacancy problems.
e.g. are you asking HUD for waivers in extenuating circumstances?
Are you actively seeking new HUD/State programs to assist with
filling vacancies?
33
FINANCIAL MANAGEMENT
This category is conducted by HUD & carries 25% weight of the
MOR overall rating.
Review the following areas:
o Budget management
o Cash controls
o Cost controls
o Procurement controls
o Accounts receivable/payable
o Accounting & Bookkeeping
34
HUD FORM 92006
Supplement to Application – HUD Form 92006 :
o Must be presented to all new applicants.
o Applicants are not required to fill out; however
o Applicants must check the box, and sign the form.
o May be used to contact an individual or organization to assist
to provide any delivery of services or special care to applicants
who become tenants and to assist with resolving any tenancy
issues arising during tenancy.
Best Practices:
o Gives to all your tenants to fill out
o Update information annually
35
LEASING & OCCUPANCY
Application Processing & Tenant Selection
(Continued)
Review to determine if:
o There is a written tenant selection plan that
contains all of the required information
o The project maintains a waiting list.
o Applicants are selected from the waiting list in the proper order.
Are your preferences clearly identified?
o There is documentation to demonstrate compliance with
income targeting (40% @ 30%), including marketing & outreach
efforts. 36
LEASING & OCCUPANCY
Application Processing & Tenant Selection
(Continued)
Review to determine if:
o Advertising program complies with the existing Affirmative Fair
Housing Marketing Plan (AFHMP).
o The fair housing logo is included in published advertising
material.
o The fair housing sign is posted in the rental office.
37
LEASING & OCCUPANCY
Leases & Deposits
o Review to determine if:
o Modifications have been made to the model lease, & if HUD
approval was obtained.
o Other charges are assessed in addition to rent & security
deposit & if HUD approval was obtained.
o Policy on late fee assessment in compliance.
o Damages by tenants are charged to the tenants.
38
LEASING & OCCUPANCY
Evictions & Termination of Assistance
Review to determine if:
o Tenants are notified of evictions or terminations according to
HUD rules.
o Eviction or termination is pursued for all sex offenders admitted
erroneously after 6-25-01.
o Addendum-D identifies evictions of sex offenders in the last 12
months.
39
LEASING & OCCUPANCY
Tenant File Security
Review to determine if:
o Tenant files and files containing EIV reports are locked and
secured.
o Documentation relating to VAWA cases are kept in a separate
file in a secure location from other tenant files.
o Access to tenant files is limited to authorized staff only.
o Tenant files retention and disposal are carried out according to
HUD rules.
40
LEASING & OCCUPANCY
Summary of Tenant File Review
Review tenant files to determine if:
o Files are organized & contain all required back-up documents to
demonstrate eligibility.
o Applications are in the files; signed & dated by the applicant.
o Screening is done according to project’s TSP.
o Unit size is appropriate with household composition.
o Households are eligible at move-in.
o Have you received 4350.3, Change 4 training?
41
LEASING & OCCUPANCY
Summary of Tenant File Review
(Continued)
Review tenant files to determine if:
o The correct model lease is being used.
o Leases & appropriate addendums are signed & dated by all
required parties.
o The correct amount of security deposits is collected, (refer to
HUD 4350.3, Fig. 6-7 on Pg. 6-34).
o If a move-in file had a corrections, was the security deposit
changed?
42
LEASING & OCCUPANCY
Summary of Tenant File Review
(Continued)
Review tenant files to determine if all acknowledgements are
signed, & copies of documents indicate receipt of the following:
o HUD-9887
o Fact Sheet – How Your Rent Is Determined
o Lead-Based Paint Disclosure (if applicable)
o Resident Right & Responsibilities Brochure
o EIV & You Brochure
43
LEASING & OCCUPANCY
Certification/Recertification Activities
Review tenant files to determine if:
o Recertification notices are issued according to HUD
requirements.
o Certifications are completed on time, and 30-day notices were
given for rent increases.
o All verifications are completed & documented, within 120 days,
of receipt.
o EIV income reports are used as third party verifications.
o Income & assets are calculated correctly.
44
LEASING & OCCUPANCY Certification/Recertification Activities
(Continued)
Review tenant files to determine if:
o Deductions are correct & allowable.
o Information on the certification agrees with verified information.
o Third party verification is used when EIV reported income is
disputed.
o Appropriate action is taken to resolve income discrepancies,
and documented.
o Repayment agreements are in accordance with HUD
requirements. 45
LEASING & OCCUPANCY
Certification/Recertification Activities
(Continued)
Review tenant files to determine if:
o Notices for rent increase are provided to tenants.
o Correct gross rents & utility allowance are being used.
o Utility reimbursement checks are distributed to tenants within
five (5) business days from receipt of subsidy payment.
46
LEASING & OCCUPANCY Move-in & Move-out Files
Review tenant files to determine if:
o Correct income limits are used at move-in.
o Move-in/move-out inspections are in the files, signed/dated.
o Move-in files after 1-31-10 indicate that EIV existing tenant
search is being utilized for all household members. This
includes children.
o Tenants submitted a written notice to vacate.
o Security deposits refunded in 30 days or as required by state
law.
o Tenants are provided a list of charges and billed when charges
exceed security deposits.
47
LEASING & OCCUPANCY Application Rejection Files
Review tenant files to determine if:
o Applicants are denied according to project’s TSP.
o Rejection letters provide;
1. the reason for rejection,
2. applicants’ right to appeal within 14 days, and
3. persons with disabilities the right to request reasonable
accommodation.
o Appeals are reviewed by someone other than the original
person who made the original decision.
o Decisions are made within 5 days of the meeting. 48
TENANT MANAGEMENT RELATIONS
Tenant Concerns
Review the policy & procedures to determine if:
o Procedures are in place to resolve tenants concerns.
o Procedures adequately cover appeals.
o The project has an active tenant organization.
o Tenants involvement in project operations is encouraged.
49
GENERAL MANAGEMENT PRACTICES
General Operations
Review general operations to determine if:
o Staff is able to adequately perform management and
maintenance functions.
o Complaints are resolved satisfactorily.
o There is a process to implement HUD changes.
o A formal ongoing training program exists.
50
INDUSTRY BEST PRACTICES
When reviewing the AFHMP (every 5 years), the census should be
reviewed to determine if demographics have/not changed.
Demographics should always be printed and retained as evidence
of no changes.
Move-in inspections must be signed/dated by the tenant and
management. Even if the move-in form is dated on top, the
signature must be dated. Modify your form if necessary to include
space for the date.
House rules should be signed/dated by the tenant. Include the
date when the house rules were last updated on the bottom of the
house rules. This ensures that the tenant has received the most
current version.
51
INDUSTRY BEST PRACTICES
(Continued)
Be sure that your waiting list can be easily followed for anyone
reviewing it. Make sure that your comments section clearly
explains what actions were taken and, if someone was housed
prior to the person before them on the waiting list. Document why
this occurred.
Review your TSP at least annually and updated it as needed, or
when HUD changes require that new data is included.
52
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PART III
SUMMARY REPORT
53
SUMMARY REPORT
MOR Categories & Weighted Percentage
The MOR consists of seven (7) categories and each is assigned
a weighted percentage of the overall rating:
54
Category Percentage of Overall Rating
1. General Appearance and Security 10%
2. Follow-up and Monitoring of Project
Inspections 10%
3. Maintenance and Standard Operating
Procedures 10%
4. Financial Management/Procurement 25%
5. Leasing and Occupancy 25%
6. Tenant/Management Relations 10%
7. General Management Practices 10%
Total 100%
SUMMARY REPORT
Performance Indicators
Performance indicators are ratings assigned to each category of
the MOR to determine O/A’s compliance with HUD requirements:
o Superior
o Above Average
o Satisfactory
o Below Average
o Unsatisfactory
55
SUMMARY REPORT Superior Rating
Assigned if O/A’s performance consistently exceeds statutory,
regulatory and handbook requirements:
o Policy & procedures are highly successful in carrying out HUD’s
objectives.
o O/A strictly adheres to procedures.
o In compliance with HUD’s lead-based paint rules.
o The property is in an exceptional physical condition.
o Few errors found & no major adverse findings.
o O/A demonstrates that AFHMP is periodically updated &
followed by staff. 56
SUMMARY REPORT
Above Average Rating
Assigned if O/A’s performance occasionally exceeds statutory,
regulatory and handbook requirements:
o Policy & procedures are successful in carrying out HUD’s
objectives.
o O/A adheres to procedures with very few exceptions.
o In compliance with HUD’s lead-based paint rules.
o Property is in good physical condition with minor deficiencies.
o Minimal errors found & no major adverse findings.
o AFHMP is approved & staff trained to implement it.
57
SUMMARY REPORT Satisfactory Rating
Assigned if O/A’s performance meets statutory, regulatory and
handbook requirements:
o O/A successfully carries out HUD’s objectives.
o Policy & procedures are not always adequate to prevent errors.
o Lead hazard control plan is pending HUD approval.
o Some EH&S and major deficiencies observed, but many have
already been corrected by O/A.
o O/A & staff deviated from established policies; however, minor
errors found can be easily corrected.
o Approved AFHMP is available and followed by staff. 58
SUMMARY REPORT
Below Average Rating
Assigned if O/A’s performance rarely meets statutory, regulatory
and handbook requirements:
o Policy & procedures are ineffective or inappropriate, do not
meet HUD requirements, resulting in frequent failure to comply.
o Repeat major adverse findings.
o Open findings from prior year’s MOR.
o Lead hazard control plan does not comply with HUD’s approved
plan.
59
SUMMARY REPORT
Below Average Rating
(Continued)
o Substantial number of EH&S and major deficiencies observed &
very few corrected.
o Significant changes to existing policy & procedures and staff
training is required to cure deficiencies.
o Approved AFHMP is available but not utilized by staff.
60
SUMMARY REPORT
Unsatisfactory Rating
Assigned if O/A’s performance does not meet statutory, regulatory
and handbook requirements:
o O/A’s actions have frustrated the achievements of housing
objectives.
o Major adverse findings in financial management & procurement
processes such as mortgage default, failure to fund R&R,
failure to report, etc…
o Repeat major adverse findings.
o Open findings from prior year’s MOR.
61
SUMMARY REPORT Unsatisfactory Rating
(Continued)
o Failure to submit a Lead hazard control plan to HUD.
o Many EH&S and major deficiencies observed & none have been
corrected.
o O/A’s failure to meet state & local housing code.
o Policy & procedures are ineffective or lacking, resulting in
frequent and often serious failures to comply.
o No HUD approved AFHMP in the office.
62
SUMMARY REPORT
Performance Indicator Values
When each of the categories is rated, one of the following
performance indicator values is used:
63
Performance Indicator Performance Indicator Value
Superior 90 – 100
Above Average 80 – 89
Satisfactory 70 – 79
Below Average 60 – 69
Unsatisfactory <=59
SUMMARY REPORT Overall Rating
When rating all categories:
64
Performance
Indicator
Performance
Indicator
Value
Percentage
of Overall
Rating
Calculation
General Appearance and Security Superior 94 10% 9.4
Follow-up and Monitoring of
Project Inspections Superior 94 10% 9.4
Maintenance and Standard
Operating Procedures Above Average 82 10% 8.2
Financial
Management/Procurement Above Average 82 25% 20.5
Leasing and Occupancy Above Average 82 25% 20.5
Tenant/Management Relations Above Average 82 10% 8.2
General Management Relations Above Average 82 10% 8.2
Totals 100% 84.4
Overall Rating 84
SUMMARY REPORT Overall Rating
Limited review ratings:
65
Performance
Indicator
Performance
Indicator
Value
Percentage
of Overall
Rating
Calculation
General Appearance and Security Superior 94 10% 9.4
Follow-up and Monitoring of
Project Inspections Superior 94 10% 9.4
Maintenance and Standard
Operating Procedures Above Average 82 10% 8.2
Financial
Management/Procurement Not Rated 0 0% 0
Leasing and Occupancy Above Average 82 25% 20.5
Tenant/Management Relations Above Average 82 10% 8.2
General Management Relations Above Average 82 10% 8.2
Totals 75% 63.9
Overall Rating 85
INDUSTRY BEST PRACTICES
Conduct your own MOR.
Owner/Supervisory Staff should get involved & attend the MOR.
Use a checklist & a standard file organization to;
o eliminate missed/lost documents,
o reduce errors, and
o facilitate the review process.
Use an independent third party to spot-check
your files.
Conduct frequent physical inspections of the
property and units.
66
INDUSTRY BEST PRACTICES
Attend regulatory meetings to learn about new program changes.
Update your policy & procedures immediately to implement
changes, and communicate with staff.
O/A & staff should frequently attend industry training to improve
their knowledge base & skills.
Conduct your business every day as if your next MOR is scheduled
for “tomorrow”.
Communicate with onsite staff regarding implementation
procedures. 67
THANK YOU AND ENJOY THE REST OF THE CONFERENCE!
National Housing Compliance
www.nhcinc.org
68 Raising The Bar In Compliance