File compliance continues to be an issue during MORs. Recently, Vickie Bell hit the road to support Navigate’s regional managers. What she discovered offers a powerful reminder: file organization and policy adherence can make or break your next review
Why File Organization Matters
One of the first red flags? Disorganized files. Missing move-in documentation like the Form 50059, lease, or ID verification can lead to findings, or worse. Vickie urges:
- Use five- or six-section folders for clarity.
- Never purge move-in documentation from active files.
- Add Social Security cards, birth certificates, and race/ethnicity forms when adding household members.
Related Video: Tuesday Tip: File Organization
Signature Lines Are Not Optional
When it comes to file compliance, If there’s a signature line, it must be signed. From owner/agent approvals to resident forms, missing signatures can be costly. This simple oversight is still a common issue across many sites.
EIV Errors Can Lead to Findings
EIV compliance remains a pain point. Vickie saw files that:
- Lacked existing tenant search documentation
- Missed EIV summaries and income reports
- Were outdated by more than 120 days
Remember: if your policy says to pull reports monthly or quarterly, follow that policy. HUD will hold you to it.
Disability Verification & Deductions
Disability deductions require third-party verification, even if no medical details are disclosed. If the head, spouse, or co-head is over 62 or disabled, they must receive the $400 elderly deduction.
When Files Go Missing, Residents Must Be Told
In three properties, files requested during the MOR were not on-site. That’s a violation—and if there’s a potential breach of resident information, HUD requires that residents be notified immediately.
Waiting List Issues Can Invite Fair Housing Claims
If a resident’s name isn’t on the waiting list—or lacks a documented timestamp—you may be out of compliance. This opens the door for fair housing violations.
The Addendum C: Read It, Use It
The Addendum C outlines what will be reviewed during the MOR. Some managers are proactive and submit these items in advance. While not required, it can help avoid surprise findings later.
The HOTMA Hurdle
If you’re implementing HOTMA early, kudos! But HUD requires:
- A written letter in each file noting what HOTMA provisions you’re using
- A HOTMA-updated tenant selection plan
Without both, you’re likely to receive a finding—even if your intentions were good.
Quick Wins with HOTMA:
- Use one bank statement instead of 6
- Only two paycheck stubs required for income
- Allow award letters for the full year
Acknowledgments & Annual Inspections
Every file should include acknowledgments like the EIV & You brochure. Vickie reports that 10 of 15 sites lacked proper annual inspection records. You must document:
- Move-in inspections
- Move-out inspections
- Annual inspections at a minimum
Don’t Blame the Last Owner
If you acquired a property with messy records, document everything. Add clear notes to the file explaining what’s missing and why.
Final Takeaway
Compliance is a team sport. Managers, regional managers, and owners all share responsibility. The good news? Being proactive works.
🔗 Go in-depth: HUD Handbook 4350.3
