HUD Housing Rehabilitation Guidelines Quiz

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Questions and Answers

What is the primary requirement for a property to be classified as a Group A Property?

The property must have two consecutive REAC scores less than 60.

The property must have a REAC score less than 30. (correct)

The property must have owner contributions over $3,000 per unit in the last year.

The property must have an Operating Cost Coverage Ratio less than 1.0.

What is the primary requirement for a property to be classified as a Group B Property?

The property must have a REAC score between 30 and 59.

The property must have a vacancy rate greater than or equal to 25% for 24 months.

The property must have owner contributions over $1,500 per unit in the last year.

The property must have a Debt Service Coverage Ratio less than 1.0. (correct)

Which of the following is a requirement for a property to be classified as a Group C Property?

The property must have a REAC score between 30 and 69.

The property must have a vacancy rate greater than or equal to 15% for 24 months.

The property must have a substantial open code violation issued by the local government.

All of the above are requirements for a property to be classified as a Group C Property. (correct)

What is the purpose of the appendix provided in the text?

To provide a visual representation of the text contained in the Group Status definitions. Signup and view all the answers

What is the primary purpose of the Section 8 Renewal Guide mentioned in the text?

To provide guidance on the renewal requirements and contract forms for Option 3B HAP Contracts. Signup and view all the answers

What is the primary requirement for a property to be classified as a Group D Property?

The property must be eligible for the Multifamily Property Disposition Center. Signup and view all the answers

When is an Owner eligible to request a second BBRA for the same Property?

At least three months after HUD published a notice permitting eligible properties to request a BBRA Signup and view all the answers

What must an Owner do if they fail to implement the rehabilitation as required in the Closing documents?

HUD may take legal action against the Owner Signup and view all the answers

What is the Owner required to do regarding the affordability and use restrictions?

Extend the affordability and use restrictions by 20 years Signup and view all the answers

For an Owner with a HAP Contract for which rent levels were set at the time of its initial renewal under Section 514(g)(1), what must they do during the extended term?

Renew the HAP Contract under Section 524 of MAHRA Signup and view all the answers

For an Owner with a HAP Contract for which rent levels were set at the time of its initial renewal under Section 514(g)(2), what must they do during the extended term?

Renew the HAP Contract under Section 524 of MAHRA Signup and view all the answers

After the affordability and use restrictions have been maintained for what period of time can an Owner with a HAP Contract under Section 514(g)(1) or 514(g)(2) renew the HAP Contract under Section 524 of MAHRA?

30 years Signup and view all the answers

What is the purpose of the Mark-to-Market program according to the text?

To adjust the rents to market levels on certain projects Signup and view all the answers

What is the main purpose of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA)?

Preserve the affordability of low-income multifamily rental properties with FHA-insured loans Signup and view all the answers

Which entities are involved in processing budget-based rent adjustments for Mark-to-Market properties according to the text?

Performance Based Contract Administrators Signup and view all the answers

What type of housing assistance payment (HAP) contracts are subject to budget-based rent adjustments?

Section 8 project-based rental assistance (PBRA) HAP contracts Signup and view all the answers

What is one of the key features of the Mark-to-Market program?

Adjusting rents down to market on certain projects Signup and view all the answers

Why was the M2M program established according to the text?

To preserve the affordability of low-income multifamily rental properties with FHA-insured loans Signup and view all the answers

Study Notes

HAP Contracts and M2M Use Agreement

HAP Contracts must be coterminous with the M2M Use Agreement.
For renewal requirements and contract forms, refer to Chapter 5 of the Section 8 Renewal Guide.

Group Status Definitions

Group A Properties: Must meet one of the following criteria
- REAC score < 30
- 2 consecutive REAC scores < 60
- Operating Cost Coverage Ratio < 1.0
- Owner Contributions of over $3,000 per unit in the last year or a 3-year record of Owner Contributions over $1,500 per unit per year
- Property is with the Multifamily Property Disposition Center
- Vacancy Rate >= 25% for 24-months
Group B Properties: Must meet two of the following criteria
- REAC score is 30-59
- Debt Service Coverage Ratio < 1.0
- Owner Contributions of over $1,500 per unit in the last year or a 3-year record of Owner Contributions over $750 per unit per year
- 25% > Vacancy Rate >= 15% for 24-months
- Substantial open code violation issued by the local government
- Pass-through due to disaster
- 20% of residents displaced due to disaster
- Property identified by HUD staff as severely damaged due to disaster and repairs are in progress
Group C Properties: Must meet three of the above criteria

Budget-Based Rent Adjustments (BBRAs)

An Owner may not request a second BBRA for the same Property unless at least three months have passed since HUD published a notice permitting all eligible properties to request a BBRA.
A second BBRA request must comply with any prioritization in effect at that time.

Rehabilitation and Affordability

The scope of work identified in the Closing documents must be completed.
In the event the Owner fails to implement the rehabilitation as required in the Closing documents, HUD may take such action against the Owner as allowed by law.
The Owner agrees to extend the affordability and use restrictions required under Section 514(e)(6) of MAHRA for an additional twenty years.

HAP Contract Renewal

An Owner with a HAP Contract for which rent levels were set at the time of its initial renewal under Section 514(g)(1) may renew the HAP Contract under Section 524 of MAHRA for and during such extended term.
An Owner with a HAP Contract for which rent levels were set at the time of its initial renewal under Section 514(g)(2) shall renew the HAP Contract under Section 524 of MAHRA for and during such extended term.

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Test your knowledge on HUD housing rehabilitation guidelines including rules for requesting a second BBRA and completing the scope of work in closing documents.