Raising The Bar In Compliance

Transcription

1 Presented By: Rose Dubin Senior Compliance Manager National Housing Compliance Raising The Bar In Compliance

2 Session Overview 1. Rewards and consequences 2. HUD form 9834 (Implementation by ) 3. The three parts of a MOR: I. Desk Review II. On-site Review III. Summary Report 4. Industry Best practices for owners & agents

3 Rewards of Compliance a) No additional action is needed if there are no findings. b) No MORs for the next two years, based on new ACC. if you have received an above average or superior on the last MOR conducted. a) Generally, monetary gains due to your extraordinary property management and physical condition. b) Continued participation in the program.

4 Consequences of Non-Compliance HUD Administrative Actions: a) Subsidy assistance abatement or suspension b) Sanctions e.g. loss of future participation c) Replacement of the Management Agent d) Flag in Active Partners Performance System (APPS) e) Referral to Departmental Enforcement Center (DEC)

5 The Purpose of Form 9834 New Form 9834 Implementation by Developed to ensure compliance with terms & conditions of HUD agreements. 2. Determines the level of compliance with HUD s business agreement. 3. Designed to assess management & oversight of MF housing projects. 4. Monitors for HUD s Office of Fair Housing & Equal Opportunity (FHEO).

6 Three Parts of Form 9834 The management review consists of three parts: I. Desk Review II. III. On-Site Review, which includes: 1. Addendum A Tenant File Review Worksheet. 2. Addendum B FHEO (Sections I, II & III). 3. Addendum C Document to be available. 4. Addendum D State Lifetime Sex Offender Statistics. The Summary Report

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8 Desk Review Completed prior to conducting the on-site review to: a) Provide a well-rounded view of the project. b) Identify potential problems. And includes a: 1. Review of Financial Assessment (FASS) & Score, applicable only to MORs performed by HUD. 2. Review of policy & procedures documents. 3. Review of last REAC inspection. 4. Review of prior MORs.

9 Review of Documents Review the following documents: 1) Tenant Selection Plan 2) Application & attachments 3) Current lease & addendums 4) House Rules 5) Pet Rules (if applicable) 6) EIV current policy & procedures

10 Tenant Selection Plan (TSP) 1. TSP must be developed according to HUD s guidance for required and recommended contents. 2. Must include a description of: a) Eligibility requirements b) Income limits for admission c) Elderly restriction or preference 3. HUD or NHC does not approve the TSP. 4. O/A should review the TSP at least annually. 5. TSP must be available to the public.

11 Tenant Selection Plan (TSP) (Continued) TSP s required contents according to HUD : 1. Project s eligibility requirements. 2. Income limits. 3. Procedures for taking applications and waiting list. 4. Policies for opening & closing the waiting list. 5. Eligibility of students. 6. Occupancy standards. 7. Unit transfer policy. 8. Policies for the rehabilitation act, fair housing act, and civil rights act. 9. Policies for using EIV as part of the screening criteria.

12 AFHMP (Form 935.2A) 1. AFHMP is required of projects substantially rehabilitated or built since July 1972, unless required by the HAP contract. 2. Must be approved by HUD. 3. O/A must comply with the requirements of AFHMP. 4. O/A must be able to provide documentation of marketing activities consistent with the AFHMP. 5. O/A must review AFHMP: a) Every 5 years, or b) When community development jurisdiction s consolidated plan is updated.

13 Application & Attachments 1. Required for all households, and must be signed. 2. Must include the Supplement to Application HUD form The Race & Ethnic Data Reporting HUD form H must be provided to applicants & tenants. 4. HUD does not have any specific form or contents requirements, but has a list of data that should be requested to determine tenant eligibility (HUD ). 5. HUD does not approve the applications.

14 HUD Recommended Data Data that should be requested on the application: 1. Household characteristics of each HH member. 2. General HH contact information. 3. Identification of approved preferences. 4. Sources and estimates of HH income & assets. 5. Citizenship declaration. 6. Marketing information; how applicants heard about the property. 7. Screening information consistent with the TSP.

15 Current Lease 1. Use HUD Model Lease under your specific Sec. 8 program. 2. May be modified only with prior approval from HUD. 3. Cooperatives may use HUD approved Occupancy Agreements in lieu of the HUD Model Lease. 4. Required attachments must be kept in the tenant file with the Lease. 5. The landlord, HOH, spouse, co-heads, and all adult members of the HH must sign the Lease. 6. Initial term of the lease must be the lesser of one year, or the remaining term of the HAP contract.

16 Required Attachments The following attachments to the lease are required: 1. HUD form signed/dated by landlord & tenant. 2. HUD form A signed/dated by landlord and, if needed by the tenant. 3. Move-in Inspection signed and dated by landlord and tenant. 4. House rules, if developed by owner. 5. Lead-based paint disclosure form, if applicable. 6. Pet rules, if applicable. 7. Live-in aide addendum. 8. VAWA Lease Addendum.

17 House Rules 1. House rules are beneficial in keeping the property a) Safe & Clean. b) More appealing & livable for tenants. 2. House rules are developed by the owner. 3. HUD does not need to review or approve. 4. Must not be too restrictive. 5. Must be reasonable. 6. Must not infringe on tenants civil rights. 7. Have the tenants sign and date the House Rules

18 Pet Rules 1. Pet Rules apply only to elderly and disabled households. 2. Must not apply to assistance animals and their owners. 3. Must not conflict with applicable state or local laws or regulations. 4. Must include mandatory rules regarding: a) Inoculations and Sanitary standards b) Pet restraints c) Registration d) Notification to pet owners for failing to register

19 EIV Policy & Procedures 1. EIV policy & procedures are required by HUD for the site staff to follow when; a) using EIV as 3rd. party verification of employment & income, and b) using other EIV reports. 2. To ensure that applicants and tenants are; a) treated fairly, and b) not being discriminated against. 3. Does not have to be reviewed or approved by HUD.

20 EIV Policy & Procedures (Continued) EIV policy & procedures recommended contents are: 1. Process for obtaining a signed HUD form 9887/A for family members turning 18 between certifications. 2. Policy indicating that EIV income report will be accessed for tenants within 90 days after move-in. 3. A list of all EIV reports, and when they will be run according to HUD requirements. 4. Policy for running the no-income reports at events other than recertification. 5. Procedure for using EIV as 3rd. party verification. 6. Procedures regarding authorized use of EIV.

21 REAC Inspections Review of last three REAC Inspections for: 1) Repetitive or systematic patterns. 2) Failure to correct REAC report deficiencies.

22 Prior MORs Review at least the last most recent MOR to: 1) Understand the issues, conditions and challenges facing the project. 2) Ensure that findings were in fact addressed and corrected. Is same staff still in place? 3) Procedures are corrected, currently in place, and are being followed. 4) Be on the lookout for same findings that may be recurring.

23 Extra-Ordinary Practices 1. Develop methods to ensure you obtain the latest information on HUD program changes; listserves, HUD Website, subscriptions. 2. Review your internal policy and procedures documents at least annually, making sure all changes are consistently disseminated throughout your portfolio. 3. Seek legal and industry expert consultants as necessary.

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25 On-Site Review Categories A. General Appearance & Security B. Follow-up and Monitoring of Project Inspections C. Maintenance & Standard Operating Procedures D. Financial Management/Procurement E. Leasing & Occupancy F. Tenant/Management Relations G. General Management Practices

26 Appearance & Security A. General appearance includes a review of: 1) Project s exterior & common areas for cleanliness and damage. 2) Areas of concerns are; grounds, landscaping, hallways, stairways, laundry rooms, etc B. Security includes frequency of events such as breakins, vandalism, theft, assaults, arrests & drug activities. C. Corrective actions and measures taken by the O/A, and D. Whether rents were increased due to the cost of O/A s actions and other security measures.

27 Project Inspections Follow-up on EH&S - REAC to determine if: 1) EH&S deficiencies have been corrected and documented according to O/A s certification. 2) All other deficiencies noted on the REAC inspection have been corrected, or 3) There is a schedule for completing deficiencies within a reasonable timeframe. 4) There are any repetitive or systematic problems. 5) There is a Lead-Based Free certification for projects constructed prior to 1978.

28 Maintenance & Procedures Determine if the project has a/an: 1) Schedule for preventive maintenance & servicing. 2) Inventory system to account for tools, equipment, supplies and keys. 3) Written procedures for; a- inspecting units (at least annually), b- completing work orders, & c- handling emergency work orders. 4) Documentation by unit to track the date of purchase, manufacturer, model & serial numbers for appliance purchases.

29 Maintenance & Procedures (Continued) A. Determine the: 1) Number of vacant units. 2) Number of units ready for occupancy. 3) Number of units not ready for occupancy. B. Identify factors contributing to the vacancy problems. C. What actions are being taken by the O/A to fix vacancy problems. E.g. are you asking HUD for age waivers if extenuating circumstances?

30 Financial Management A. This category is conducted by HUD & carries 25% of MOR overall rating. B. Review the following areas: 1) Budget management 2) Cash controls 3) Cost controls 4) Procurement controls 5) Accounts receivable/payable 6) Accounting & Bookkeeping

31 Leasing & Occupancy Application Processing & Tenant Selection Review to determine if: 1) The application asks if anyone in the applicant s HH is subject to lifetime state sex offender registration program in any state. HUD Notice (H ) 2) The application asks for a listing of states where everyone in the applicant s HH have resided. 3) Form HUD Supplement to Application is being used as an attachment to the application. HUD Notice (H )

32 HUD Form Supplement to Application HUD Form (updated). a) HUD effective date is b) New expiration date of c) Must be presented to all new applicants. d) Applicants are not required to fill out; however e) Applicants must check the box, and sign the form.

33 Leasing & Occupancy Application Processing & Tenant Selection Review to determine if: (Continued) 4) The O/A has a written tenant selection plan. 5) The project maintains a waiting list. 6) Applicants are selected from the waiting list in the proper order. Are your preferences clearly identified? 7) O/A maintains documentation to demonstrate compliance with income targeting 30%), including marketing & outreach efforts.

34 Leasing & Occupancy Application Processing & Tenant Selection (Continued) Review to determine if: 8) Advertising program complies with the existing Affirmative Fair Housing Marketing Plan (AFHMP). 9) The fair housing logo is included in published advertising material. 10) The fair housing sign is posted in the rental office.

35 Leasing & Occupancy Leases & Deposits Review to determine if: 1) Modifications have been made to the model lease, & if HUD approval was obtained. 2) Other charges are assessed in addition to rent & security deposit, & if HUD approval was obtained. 3) Policy on late fee assessment in compliance. 4) Damages by tenants are charged to the tenants.

36 Leasing & Occupancy Evictions & Termination of Assistance Review to determine if: 1) Tenants are notified of evictions or terminations according to HUD rules. 2) O/As pursue eviction or termination for all sex offenders admitted in error after ) Addendum-D identifies evictions of sex offenders in the last 12 months.

37 Leasing & Occupancy Enterprise Income Verification (EIV) Review to determine if: 1) O/A has access to, and is using EIV. 2) Coordinator has owner s approval letter on file. 3) Each EIV coordinator has a Coordinator Access Approval Form (CAAF) on file. 4) Each EIV user has a User Access Approval Form (UAAF) on file. 5) Signed EIV Rules of Behavior for individuals without EIV access on file.

38 Leasing & Occupancy Enterprise Income Verification (EIV) (Continued) Review to determine if: 6) Staff with access to EIV has taken annual security awareness training. 7) Security measures are in place to limit access to EIV data to authorized persons only. 8) O/A terminates access within 30 days to persons who no longer have need to access EIV data. 9) O/A has procedures in place to document & report occurrences of all improper disclosure of EIV data.

39 Leasing & Occupancy Enterprise Income Verification (EIV) (Continued) Review to determine if: 10) There is evidence that individuals are sharing IDs & Passwords. 11) EIV data is improperly being shared with other entities, such as LIHTC. 12) A signed Tenant Consent for Disclosure if EIV information is in the tenant file.

40 Leasing & Occupancy Enterprise Income Verification (EIV) (Continued) Review to determine if: 13) O/A has policy & procedures in place explaining the use of EIV employment data and EIV reports. 14) O/A is using the EIV reports, and taking appropriate action to correct discrepancies. 15) EIV reports are retained according to HUD requirements.

41 Leasing & Occupancy Review to determine if: Tenant File Security 1) Tenant files and files containing EIV reports are locked and secured. 2) Documentation relating to VAWA cases are kept in a separate file in a secure location from other tenant files. 3) Access to tenant files is limited to authorized staff only. 4) Tenant files retention and disposal are carried out according to HUD rules.

42 Leasing & Occupancy Summary of Tenant File Review Review tenant files to determine if: 1) Files are organized & contain all required back-up documents to demonstrate eligibility. 2) Applications are in the files; signed & dated by the applicant. Time and date received on application. 3) Screening is done according to project s own TSP. 4) Unit size is appropriate with HH composition. 5) Households are eligible at move-in.

43 Leasing & Occupancy Summary of Tenant File Review (Continued) Review tenant files to determine if: 6) Correct model lease is being used. 7) Leases & appropriate addendums are signed & dated by all parties. 8) Correct amount of security deposits is collected.

44 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: a. HUD-9887 Fact Sheet b. Lead-Based Paint Disclosure (if applicable) c. Resident Right & Responsibilities Brochure d. EIV & You Brochure e. Fact Sheet How Your Rent Is Determined f. Race/Ethnicity Form

45 Leasing & Occupancy Certification/Recertification Activities Review tenant files to determine if: 1) Recertification notices are issued according to HUD requirements. 2) Certifications are completed on time, and 30-day notices were given for rent increases. 3) All verifications are completed & documented, within 120 days as applicable. 4) EIV income reports are used for 3rd. party verifications. 5) Income & assets are calculated correctly.

46 Leasing & Occupancy Certification/Recertification Activities (Continued) Review tenant files to determine if: 6) Deductions are correct & allowable. 7) Information on the certification agrees with verified information. 8) 3rd. party verification is used when EIV reported income is disputed. 9) Appropriate action is taken to resolve income discrepancies, and documented. 10) Repayment agreements are in accordance with HUD requirements.

47 Leasing & Occupancy Certification/Recertification Activities (Continued) Review tenant files to determine if: 11) Notices for rent increase are provided to tenants. 12) Correct gross rents & utility allowance are used. 13) Utility reimbursement checks are distributed within 5 business days.

48 Leasing & Occupancy Move-in & Move-out Files Review tenant files to determine if: 1) Correct income limits are used to determine income eligibility at move-in. 2) move-in/move-out inspections are in the files, and signed/dated. 3) Move-in files after indicate that O/A utilizes EIV existing tenant search for all HH members. 4) Tenants submitted a written notice to vacate. 5) Security deposits refunded in 30 days or as required by state law. 6) Tenants are provided a list of charges, and billed when charges exceed security deposits.

49 Leasing & Occupancy Application Rejection Files Review tenant files to determine if: 1) Applicants are denied according to project s TSP. 2) Rejection letters provide; a) the reason for rejection, b) applicants right to appeal within 14 days, and c) persons with disabilities the right to request reasonable accommodation. 3) Appeals are reviewed by someone other than the original person who made the original decision. 4) Decisions are made within 5 days of the meeting.

50 Tenant-Mgmt. Relations Tenant Concerns Review the policy & procedures to determine if: 1) Procedures are in place to resolve tenants concerns. 2) Procedures adequately cover appeals. 3) The project has an active tenant organization. 4) Tenant involvement in project operations is encouraged.

51 General Mgmt. Practices General Operations Review general operations to determine if: 1) Complaints are satisfactorily resolved. 2) Staff is able to adequately perform management and maintenance functions. 3) How O/A implements HUD changes in policy & procedures. 4) O/A has a formal ongoing training program.

52 Extra-Ordinary Practices 1. When reviewing the AFHMP every 5 years, management should review the census to determine if demographics have changed in their neighborhood. Always print out the demographics as evidence of no changes. 2. Move-in inspections must be signed and dated by the tenant and management. Even if the move-in form is dated on top, the signature must be dated. HUD sample form does not include a space for the date, but the specifies date. Modify your form if necessary to include space for the date. 3. The house rules should be signed and 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.

53 Extra-Ordinary Practices (Continued) 4. The waiting list should be easy to follow. Make sure that your comment section clearly explain what actions were taken and, if someone was housed prior to the person before them on the waiting list, why this occurred? 5. Review your TSP at least annually and updated it as needed, or when HUD changes require that new data is included.

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55 Summary Report MOR Categories & Weighted Percentage The MOR consists of seven (7) categories and each is assigned a weighted percentage of the overall rating: Category Percentage of Overall Rating A. General Appearance and Security 10% B. Follow-up and Monitoring of Project Inspections C. Maintenance and Standard Operating Procedures 10% 10% D. Financial Management/Procurement 25% E. Leasing and Occupancy 25% F. Tenant/Management Relations 10% G. General Management Practices 10% Total 100%

56 Performance Indicators Performance indicators are ratings assigned to each category of the MOR to determined O/A s compliance with HUD requirements: A. Superior B. Above Average C. Satisfactory Summary Report D. Below Average E. Unsatisfactory

57 Summary Report Superior Rating Assigned if O/A s performance consistently exceeds statutory, regulatory and handbook requirements: a) Policy & procedures are highly successful in carrying out HUD s objectives. b) O/A strictly adheres to procedures. c) In compliance with HUD s lead-based paint rules. d) The property is in an exceptional physical condition. e) Few errors found & no major adverse findings. f) O/A demonstrates that AFHMP is periodically updated & followed by staff.

58 Summary Report Above Average Rating Assigned if O/A s performance occasionally exceeds statutory, regulatory and handbook requirements: a) Policy & procedures are successful in carrying out HUD s objectives. b) O/A adheres to procedures with very few exceptions. c) In compliance with HUD s lead-based paint rules. d) Property is in good physical condition with minor deficiencies. e) Minimal errors found & no major adverse findings. f) AFHMP is approved & staff trained to implement it.

59 Summary Report Satisfactory Rating Assigned if O/A s performance meets statutory, regulatory and handbook requirements: a) O/A successfully carries out HUD s objectives. b) Policy & procedures are not always adequate to prevent errors. c) Lead hazard control plan is pending HUD approval. d) Some EH&S and major deficiencies observed, but many have already been corrected by O/A. e) O/A & staff deviated from established policies; however, minor errors found can be easily corrected. f) Approved AFHMP is available and followed by staff.

60 Summary Report Below Average Rating Assigned if O/A s performance rarely meets statutory, regulatory and handbook requirements: a) Policy & procedures are ineffective or inappropriate, do not meet HUD requirements, resulting in frequent failure to comply. b) Repeat major adverse findings. c) Open findings from prior year s MOR. d) Lead hazard control plan does not comply with HUD s approved plan.

61 Summary Report Below Average Rating (Continued) Assigned if O/A s performance rarely meets statutory, regulatory and handbook requirements: e) Substantial number of EH&S and major deficiencies observed & very few corrected. f) Significant changes to existing policy & procedures and staff training is required to cure deficiencies. g) Approved AFHMP is available but not utilized by staff.

62 Summary Report Unsatisfactory Rating Assigned if O/A s performance does not meet statutory, regulatory and handbook requirements: a) O/A s actions have frustrated the achievements of housing objectives. b) Major adverse findings in financial management & procurement processes such as mortgage default, failure to fund R&R, failure to report, etc c) Repeat major adverse findings. d) Open findings from prior year s MOR.

63 Summary Report Unsatisfactory Rating (Continued) Assigned if O/A s performance does not meet statutory, regulatory and handbook requirements: e) Failure to submit a Lead hazard control plan to HUD. f) Many EH&S and major deficiencies observed & none have been corrected. g) O/A s failure to meet state & local housing code. h) Policy & procedures are ineffective or lacking, resulting in frequent and often serious failures to comply. i) No HUD approved AFHMP in the office.

64 Summary Report Performance Indicator Values When each of the categories is rated, one of the following performance indicator values is used: Performance Indicator Performance Indicator Value Superior Above Average Satisfactory Below Average Unsatisfactory <=59

65 Summary Report When rating all categories: Overall Rating 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 Maintenance and Standard Operating Procedures Financial Management/Procurement Superior 94 10% 9.4 Above Average 82 10% 8.2 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

66 Summary Report Limited review ratings: Overall Rating 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 Maintenance and Standard Operating Procedures Financial Management/Procurement Superior 94 10% 9.4 Above Average 82 10% 8.2 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

67 Industry Best Practices 1. Conduct your own MOR. 2. Senior management should get involved & attend the MOR. 3. Use a checklist & a standard file organization to; 1. eliminate missed/lost documents, 2. reduce errors, and 3. facilitate the review process. 4. Use a 3rd. party to spot-check your files. 5. Conduct frequent physical inspections of the property and units.

68 Industry Best Practices (Continued) 6. Attend regulatory meetings to learn about new program changes. 7. Update your policy & procedures immediately to implement changes, and communicate with staff. 8. O/A & staff should frequently attend industry training, to improve their knowledge base & skills. 9. Conduct your business every day as if your next MOR is scheduled for tomorrow.

69 National Housing Compliance Raising The Bar In Compliance