HUD issued a notice regarding a proposed National Standards for Physical Inspection of Real Estate (NSPIRE) physical inspection scoring and ranking methodology on March 28. The NSPIRE scoring methodology will be focused on the health and safety of the housing units where residents live, as well as on the functional defects of buildings, rather than on the appearance of building exteriors. The notice is a request for public comment on the methodology and provides only 30 days to respond: all comments are to be submitted by April 27.
HUD published a proposed NSPIRE rule on January 13, 2021, to formally align housing quality and inspection standards across all HUD programs (see Memo, 1/19/21). The proposed rule has remained with the Office of Information and Regulatory Affairs (OIRA), a division of the Office of Management and Budget (OMB).
The NSPIRE scoring notice applies to all HUD housing currently inspected by HUD’s Real Estate Assessment Center (REAC), including public housing and Multifamily Housing programs such as Section 8 Project-Based Rental Assistance, Section 202 Supportive Housing for the Elderly, Section 811 Supportive Housing for Persons with Disabilities, and FHA-insured multifamily housing. The proposed scoring notice does not apply to the Housing Choice Voucher and Project-Based Voucher programs.
For properties previously subject to the Uniform Physical Condition Standards (UPCS) physical inspection protocol, HUD intends to continue setting the maximum score to 100 for a property with no deficiencies and deducting points based on the scoring methodology. Any score lower than 60 will continue to be considered a failing score. HUD will also supplement this score with letter grades to make clear to residents, public housing agencies (PHAs), property owners/agents (POAs), and other stakeholders the manner in which the numerical score relates to the condition of the property.
HUD intends to score deficiencies based on two factors: (1) the “severity” of the defect and (2) the “location” of the defect (either inside a unit, inside a building (e.g., in corridors, community rooms, or mechanical rooms), or in an outside area (e.g., on a fence, in a parking lot, or on a sidewalk).
The practice of scoring deficiencies based on their severity was previously proposed in the NSPIRE Standards notice, published in the Federal Register on June 17, 2022 (see Memo, 6/27/22). The categories of severity delineated in the notice are:
- Life-Threatening (LT): There is a high risk of death, severe illness, or injury to a resident.
- Severe:
- There is a high risk of permanent disability or serious injury or illness to a resident.
- There are deficiencies that would seriously compromise the physical security or safety of a resident or their property.
- Moderate:
- There is a moderate risk of an adverse medical event requiring a healthcare visit, causing temporary harm, or if left untreated, causing or worsening a chronic condition that may have long-lasting adverse health effects.
- There are deficiencies that would compromise the physical security or safety of a resident or their property.
- Low: There are deficiencies critical to habitability but that do not present a substantive health or safety risk.
The location categories indicated in the NSPIRE proposed rule are as follows: the dwelling unit (e.g., bathrooms, kitchens, electrical systems, walls, windows, carbon monoxide devices, or smoke detectors); the building (e.g., common areas, utility rooms, mechanical rooms, or community rooms); and outside areas (e.g., fencing, mailboxes, play areas, or storm drainage). In-unit deficiencies are to be weighed more heavily.
There are still two situations in which a property will be considered to have failed inspection: (1) when a property receives a score of less than 60; and (2) when a property has 30 points or more deducted due to in-unit deficiencies, even if the property has an overall score greater than 60. The latter situation reflects NSPIRE’s intent to maximize the health and safety of units.
As in the past, NSPIRE will include “non-scored defects,” such as smoke detector defects, which will continue to be indicated by an asterisk (*). For carbon monoxide detector defects, HUD will use an alternate symbol similar to an asterisk (but it is not included in the notice).
HUD will no longer use letter designations (e.g., a, b, c) to indicate the presence of exigent health and safety defects. Instead, HUD will provide a summary table of defect observations by Defect Severity Category: Life-threatening, Severe, Moderate, and Low.
HUD will assign a letter grade to each property inspection score. A table in the notice has six categories showing a property score, a letter grade, and a description of the meaning of the score/grade. For example, a score between 60 and 70 points with a letter grade of D means a property is very challenged and in near-failing condition, with a high prevalence of concerning health and safety defects.
Read the proposed NSPIRE scoring notice at: https://bit.ly/3zekmwC
Read a simpler version of the notice at: https://bit.ly/3lTT63n