HUD updates coronavirus Q&A


Posted On: April 2, 2020

Updated May 21, 2020

In the May 21, 2020, update, HUD adds questions about the following topics to the Multifamily Coronavirus Q & A.

  • Steps to take in the event of confirmed COVID-19 case at a HUD-assisted property (page 4, Q 4)
  • Communications to residents about a positive case (page 4, Q 5)
  • HUD guidance on disinfecting common areas, units and protecting staff (page 6, Q 11)
  • Addressing food insecurity for residents (page 7, Q 14)
  • Whether internet services are allowable expense (page 7, Q 15)
  • Carrying forward late fees, charges initiated prior to CARES Act; Adding additional fees, charges for delinquent rent (page 14, Q 19)
  • Check if a property is covered by CARES Act eviction moratorium (page 14, Q 20)
  • HAP owner third-party RCS (page 16, Q 4)
  • Rent processing without RCS (page 17, Q 7)
  • Audit extensions (page 18, Q 8)
  • FHA-insured PNCA requirement (page 21, Q 12)
  • Temporarily stop reducing vouchers to offset Residual Receipts (page 21, Q 13)
  • HAP effective dates after RAD closing (page 30, Q 6)
  • Lender inability to obtain capital needs inspector (page 38, Q 21)
  • Managing consultation under Section 106 for jurisdictions where these offices have temporarily closed (page 41, Q 1)
  • Flexibility for Phase I ASTM Environment Site Assessments (page 42, Q 4)
  • RAD Conversion Phase I Environmental Site Assessment (ESA) without a physical site inspection (page 43, Q 5)
  • Lead-based paint, asbestos and radon testing reporting (page 44, Q 6)
  • Guidance/relief for RE completing an Environmental Review under Part 58 (page 45, q 7)

Updated May 1, 2020

In the May 1, 2020 update, HUD adds questions about the following topics to the Multifamily Coronavirus Q & A.

  • Food insecurity concerns (page 7)
  • Small Business Administration Paycheck Program loans (Q2, page 9)
  • Household Payments under the CARES Act (Q5, page 10)
  • Implementation of Forbearance Provisions under the CARES Act (pages 10-12)
  • Eviction for domestic violence or criminal activity, or for other lease violations (Q 17, page 13)
  • Income deduction for childcare expenses (Q 9, page 18)
  • Vacancy Claims (Q 14, page 20)
  • Unit voucher to allow family extended time to collect belongings of deceased tenant (Q 16, page 21)
  • Using project funds for direct services for residents (Q 22, page 22)
  • Purchasing masks using project funds (Q 23, page 22)
  • Lenders waiving retaining on pre-purchased materials (Q 14, page 34)
  • Section 223(f) market rate transactions and Debt Service Reserves (Q 18, page 35)
  • Section 223(f) market rate transactions and repairs (Q 19, page 35)
  • Section 223(f) market rate transactions Cash Out Refinance Transactions (Q 20, page 35)
  • Delaying preparation of a Capital Needs Assessment (Q 21, page 36)
  • Signing requirements during restrictions against gatherings (Q 24, page 37)

Updated April 16, 2020

In this latest update, HUD addresses the CARES Act stimulus checks and whether they should be counted as income.

Are household payments under the CARES Act reportable as tenant income?

Household stimulus payments of up to $1,200 (which is technically an advance tax credit) and the temporary $600 per week federal enhancement to unemployment insurance provided by the CARES Act are not to be included in calculations of income. However, HUD notes that regular payments of unemployment insurance (issued by the state) are treated as income, as is customary under program rules.

You can view all the latest changes/updates by clicking the button below.

Updated April 14, 2020

HUD issued another new update to the Multifamily Coronavirus Q & A this morning. There are a number of changes and additions specific to the CARES Act. You can view the latest document using the button below.

The latest update includes answers to the following questions, as well as others, about the CARES Act:

Are property owners and lenders able to access additional sources of government assistance for covering losses during the COVID-19 crisis, for example, Community Development Block Grant funds available from local and state governments?

HUD encourages borrowers and lenders to access any available Federal assistance or other resources, as may be necessary, to assist in meeting project operations and debt service. It is important to note that some forms of Federal assistance may come with requirements for recipients to ensure that they do not receive multiple forms of Federal assistance that serve duplicative purposes, as required under the Stafford Act.

Did the Coronavirus Aid, Relief and Economic Security (CARES) Act provide additional funding to HUD Multifamily Housing program?

Yes. Congress appropriated additional funding for several Multifamily Housing programs through the CARES Act, most of which is designated for increased rental subsidy in HUD- assisted housing to cover tenants’ loss of income during the COVID-19 National Emergency. Through the CARES Act, HUD is also authorized to use designated funding to take necessary actions to respond to situations resulting from the COVID-19 National Emergency, including addressing unusual operating costs such as increased cleaning costs.

Under the CARES Act, Congress provided the following additional funding:


  •   $1 billion to support Project-based Rental Assistance properties (Section 8 project-based properties),
  •   $50 million to support Section 202 Supportive Housing for the Elderly properties (with$10 million of that amount for additional service coordinator support), and
  •   $15 million for Section 811 Supportive Housing for Persons with Disabilities properties.


Updated April 02, 2020

HUD issued a new update to the Multifamily Housing Coronavirus Q & A this morning. Here are the latest changes, including what may be the largest addition to date regarding annual recertification and interim certification.

You can download the latest document using the button below.


EMERGENCY PREPAREDNESS
What emergency preparedness steps does HUD recommend or require property owners and agents take?

Owners and agents should generally follow CDC guidelines and the directions given by local health officials for emergency preparedness. Chapter 38 of Handbook 4350.1, Emergency and Disaster Guidance, should also be consulted.

The CDC provides guidance for communities, businesses and schools that can assist housing providers. The CDC has also provided specific guidance for retirement communities and independent living facilities, including federally assisted independent housing with support
services for older adults. Please see the following information as well regarding Emergency Preparedness, Planning, Identification and Messaging for Aging and Disabled Networks:
https://www.naccho.org/uploads/downloadable-resources/Capacity-Building-Toolkit-for-Agingand-Disability-Networks-2-5-19.pdf
(Updated on 4/2/20)

POLICY AND OPERATIONS
Asset Management
Can HUD provide guidance on who is an “essential” employee in states/localities that have strict stay-at-home or shelter-in-place requirements for all persons not deemed “essential”?

Quarantine and travel restrictions are being set by state and local governments, with many variations and daily revisions. Many of these rules provide exceptions for staff supporting operations at residential properties. On March 28, 2020, the Department of Homeland Security
Cybersecurity & Infrastructure Security Agency (CISA) published an Advisory Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response. State, local, tribal, and territorial governments are responsible for implementing and executing response activities, including decisions about access and reentry in their communities. Therefore, HUD recommends that building owners consult with their local counsel to determine
whether building employees are considered “essential.” (Updated on 4/2/20)

POLICY AND OPERATIONS
Asset Management
Will impacted residents still have to complete annual recertification and interim certification for lost income?

HUD statute and regulations require family income to be reviewed at least annually to determine the amount paid by the family for the assisted unit. Owners must continue to perform annual and interim recertifications, as requested by tenants, within the required
timeframes and using current/anticipated data. Annual recertifications must not use previous year’s income to determine rent and assistance, except in instances when using streamlined income determinations.

Considering the current COVID-19 emergency, there may be extenuating circumstances that impede owners and tenants from complying with interim and annual recertification requirements. When the use of traditional procedures is not possible, the extenuating
circumstance instructions provided in this document, HUD Handbook 4350.3, REV-1, and the TRACS MAT Guide should be used. HUD considers the CDC’s recommendations for controlling the spread of the virus as well as shelter-in-place and similar orders as qualifying as an
extenuating circumstance.

It is recommended the owner begin, and if possible, complete, the recertification actions within 90 days of being advised of the extenuating circumstance. When an extenuating circumstance is
present, there is no change to the tenant’s recertification anniversary date. The Total Tenant Payment/Tenant Rent and the assistance payment are effective retroactively to the recertification anniversary date.

Use of Tenant Self-Certifications for Interim and Annual Recertifications
HUD will allow assisted tenants that may have lost income due to COVID-19 to self-certify for annual or interim recertifications. Acceptable methods of verification of income for all recertifications, in order of acceptability, are provided in HUD Handbook 4350.3, paragraph 5-13, B and Appendix 3.

Family certification can be used if the information cannot be verified by another acceptable verification method. When family certification is used, owners must document the tenant file to explain why third-party verification was not available. During the COVID-19 National
emergency, this certification can be provided to the owner by other means such as mail or email. The owner may consider collecting the original documents from the family at a later date.

Signatures
For owners or tenants impacted by the COVID-19 virus, HUD will allow alternate signatures (e.g. copies or images of signatures sent by email, fax, or other electronic means) as long as original, “wet” signatures are obtained at a later date. Forms that will require original, “wet” signatures to be obtained at a later date include, but are not limited to, form HUD-9887/9887-A (“Applicant’s/Tenant’s Consent to the Release of Information”), form HUD-50059 (“Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures”), lease agreements/addendums, family certifications of income (unemployment, zero income, etc.), and state lifetime sex offender forms.

Form HUD-9887/9887-A and Form HUD-50059
When a tenant’s “wet” signature cannot be obtained on form HUD-9887/9887-A or on form HUD-50059, due to extenuating circumstances, the forms, and HUD Handbook 4350.3, REV-1, paragraph 5-21.C (for HUD-9887/9887-A) and paragraph 5-31.F (for HUD-50059) , instruct the
owner to document the tenant file with the reason for the delay and the specific plans to obtain the signature(s) as soon as possible. Please note that form HUD-9887/9887-A remains in effect for 15 months after signature.

Documentation for Certifications
Tenants experiencing extenuating circumstances due to the COVID-19 virus can provide the owner with documentation for the recertification by email or other electronic delivery at the
owner’s discretion. Documentation includes, but is not limited to, paystubs, (Social Security) SS/Supplemental Social Security (SSI)/State Supplemental Program (SSP) awards, bank statements, and public assistance documents. If electronic documentation is received by the
owner, and original documents are required by HUD Handbook 4350.3, REV-1, the owner must collect the original documents from the tenant at a later date.

Tenant Rental Assistance Certification System (TRACS)
When an extenuating circumstance is present due to the COVID-19 virus, the owner must submit the Interim Recertification (IR) or Annual Recertification (AR) to the TRACS (via the Contract Administrator or directly to TRACS, as appropriate) using one of the following three (3) extenuating circumstances codes:
1 = Medical (medical staff have quarantined the tenant)
2 = Late annual certification due to accommodation or extenuating circumstances.
10 = Other

A correction certification to remove the extenuating circumstance code must be submitted to TRACS once the appropriate signature(s) is obtained on form HUD-50059.

Owners are reminded to maintain at least 90% of their certifications in an active status in TRACS to maintain subsidy payments. TRACS users experiencing technical issues can continue to submit requests through the system’s Help Desk.

Please note that this guidance updates earlier guidance on interim and annual recertification as published on 3/16/20 and 3/24/20.
(Updated on 4/2/20)

POLICY AND OPERATIONS
Asset Management
Are costs directly related to safety or preventative equipment for staff use in response to COVID-19, including maintenance staff, eligible costs of residual receipts funds for PBRA projects?

Yes, costs directly related to the safety or preventative equipment for staff in response to COVID-19 are considered project expenses and are eligible costs with prior HUD approval. (Updated on 4/2/20)

POLICY AND OPERATIONS
Asset Management
Can property owners with FHA-insured mortgages with reserve for replacement
accounts access those funds to pay debt service?

Owners should request any reserve for replacement account releases from their Account Executive and local field office using the form HUD-9250. The request should include evidence of the causes of the cash shortfall and a promise to repay the funds to the reserve for
replacement account. HUD field staff will expeditiously review such requests and consider the cash flow of the property, the amount in the reserve account, and the borrower’s current compliance with HUD’s business agreements. (Added 4/2/20)

POLICY AND OPERATIONS
Asset Management
Is Handbook 4350.1 Multifamily Asset Management and Project Servicing, Chapter 38 Multifamily Emergency/Disaster Guidance applicable with the FEMA Declarations for COVID19?

Yes, MFH authorizes the use of guidance in this chapter for program participants under the Emergency Declaration for COVID-19. Note, however, the statutory and regulatory displaced person/family occupancy preference for properties with insured mortgages under Sections 221(d) and 236 and the refinance of Sections 221(d) and 236 mortgages under Section 223(a)7 of the National Housing Act as amended, only applies to states that are subject to a presidential
Major Disaster declaration. (Added on 4/2/20)

POLICY AND OPERATIONS
Asset Management
Is MFH collecting potential resource information, which tracks vacant units in multifamily properties, at this time?

MFH is not currently collecting potential resource information nationally as it has done in the past in response to disaster events. However, Regional Directors may request potential resource information for specific jurisdictions at their discretion. (Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
What impact does the COVID-19 emergency have on owner-architect agreements, owner-general contractor (GC) agreements and similar contracts associated with FHA insured loans?

There is no impact on the validity or enforceability of contracts among parties to a HUD insured loan and any associated construction except insofar as any provisions that the contracts may provide in the event of emergencies. HUD cannot change any provision of existing
agreements or alter the mutual obligations of any of the parties. In the present COVID-19 emergency situation, each party must endeavor to perform its obligations under these existing agreements, and if unable to do so, they must follow all contract notice and hold harmless provisions. Communication between the parties, and with HUD, is important as is the need for all parties to mitigate adverse consequences to health and property.
(Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
What should owners, general contractors and subcontractors do if the State or local
government issues a shelter-in-place or similar order that prevents essential workers and materials reaching the job or a stop-work order that forces cessation of work as a result of
COVID-19?

All parties to the transaction and construction should stay engaged and provide regular updates to the lender and to HUD. If a job site is shut down, the general contractor (or in the absence of the general contractor, the owner) must ensure that the site is properly secured and that all completed work and stored materials are protected. If limited work continues, workplace safety procedures and CDC advisories for “social distancing” should be observed.
(Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
What happens to Surety Bond coverage and Builder’s Risk insurance during a work shutdown or slow-down caused by the COVID-19 emergency?

Owners, general contractors, and lenders should proactively assure that Surety Bonds and Builder’s Risk insurance policies will remain in place and will not be impaired by any job slowdown, temporary cessation of work, or any failure to report or communicate emergency
conditions or consequences. (Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
Since the COVID-19 emergency likely will cause numerous delays, if not complete cessation of construction work, how should work progress be managed?

HUD requests that general contractors, owners and supervising architects report construction work status on a monthly basis in connection with their monthly requests for reimbursement of costs and associated inspection trip report. Unlike the typical process where
change orders are submitted on a more frequent basis, during the current emergency, requests for change orders for time extensions should be documented to identify delays resulting from the COVID-19 emergency, and single, time-extension change orders should be submitted on a monthly basis.

While HUD does not normally allow time extensions of Repair Escrows for projects under Sections 223[f] and 223[a][7], it will consider amending the Repair Escrow Agreement in those cases where owners and lenders have documented COVID-19 related delays. Owners/lenders should use a change order request for time extension to report delays due to COVID-19 and request extensions. Such requests must be submitted in the first report period following the
delay. (Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
For new construction or substantial rehabilitation jobs, will requests for reimbursement of the cost of work completed be approved even if the supervising architect and/or the HUD Inspector are not able to conduct an onsite inspection?

Yes. In most cases, reimbursement requests for work completed in the prior period will be approved even when either the supervising architect or the HUD inspector, or both, are unable to conduct an on-site inspection of the property due to the COVID-19 emergency. HUD will accept the supervising architect’s verification of the work completed based on a recorded virtual inspection and virtual site meeting if the supervising architect and/or the HUD inspector are not able to be present onsite.

Enabling virtual inspections and site meetings will require extra initiative and coordination among the supervising architect, HUD Inspector, general contractor and owner’s representative. Notwithstanding this additional flexibility, the contractual responsibility and liability for checking the work and signing off on the reimbursement request remains with the supervising architect. Normally, both the architect and the HUD Inspector must sign a draw
request, but HUD will approve a draw without the HUD Inspector’s signature as a one-time event, provided any work claimed but later disallowed by the HUD Inspector will be subtracted from the draw request for the following month. The general contractor will bear full
responsibility for any costs and delays caused by any reconstruction work required to correct errors in work that is later disallowed.

HUD’s working assumption is that if neither the supervising architect nor the HUD Inspector can inspect the completed work, the most likely cause is that the construction site has been shut down. In the event of a site shutdown, the parties should endeavor to arrange a virtual
inspection as soon as possible in order to establish and verify the extent and amount of work completed but not yet paid.
(Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
If a construction job is shut down as a result of the COVID-19 emergency, but the owner and/or the general contractor have ongoing soft costs or general requirements, will they be reimbursed for these?

Yes. Again, monthly job reports and requests for reimbursements should continue even if little or no work has been completed. Of course, owners and general contractors should proactively mitigate or reduce such costs whenever possible. Question #17 above further
describes change order requests for time related to COVID-19. Owners will be expected to fund change orders that increase costs. (Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
Will HUD reduce or eliminate the requirements for job site inspections by HUD inspectors during the COVID-19 emergency?

No. HUD will not reduce or eliminate its general requirements for job site inspections by HUD Inspectors. However, as noted in the answer to Question #18 in this section, HUD will accept the signature of the supervising architect alone as sufficient for draw requests when the
HUD Inspector is unable to sign the request. HUD will only allow this flexibility for a single month, or for rehab loans that do not have monthly inspections, for a single reporting period.

Additionally, the signature of the HUD Inspector is still required for the last or final request for disbursement.

HUD will accept recorded virtual inspections if and when the parties are able use this option.
(Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
What about Section 223(f) and 223(a)(7) Repair Escrows? Will HUD waive inspection requirements? What if tenant units are involved?

The construction supervision and inspection requirements for Repair Escrows vary by the substance and cost of the repairs and alterations. Regardless, owners currently obligated to complete repairs that require entry to tenant units should delay beginning any such new work. In addition, owners with any current work-in-progress in tenant units should bring it to a prompt conclusion, even if it is not fully completed. They should ensure that they do not leave unfinished work that inhibits tenants’ full and safe use of their units, and communicate to tenants that remaining work, if any, will be completed when feasible to do so based on state and local guidance and guidance from the CDC.

The MAP Guide organizes varied supervision and inspection requirements for repairs and alterations based on the level and extent of these activities as follows:
1) Routine Maintenance (e.g. repairs and replacements of limited extent and cost, no accessibility deficiencies unless they can be easily verified by photography, e.g.accessibility signage)-the owner can self-certify that the work is complete.

2) Repairs and alterations that are accessibility remedies- A supervising architect or HUD Construction Inspector will be assigned, and a single inspection after completion of all remedies will be sufficient barring a re-inspection for work not found to be acceptable on the initial inspection.

3) Repairs and Level 1 alterations up to $15,000/unit with no accessibility repairs -HUD Construction Inspector may be assigned at HUD discretion and if not, then owner may self-certify. If a HUD inspector has been assigned to a job in this category but is
thereafter unable to sign a disbursement request, then the owner may self-certify each request other than the last or final.

4) Repairs and Alterations requiring a Project Architect, i.e. >$15k per unit or Level 2 or Level 3 alterations- HUD Construction Inspector and Supervising Architect must be assigned with the architect’s signature needed for each request for reimbursement and the HUD Construction Inspector normally required to complete at least three inspections. If the HUD Inspector is not able to sign a disbursement request following any but the last required inspection, the signature of the supervising
architect alone will be accepted. If the supervising architect is unable to sign a single disbursement request (other than the final) then the owner may self-certify for that one request.

In the case of numbers 3 and 4 above, there are normally three HUD inspections during the work. These inspections occur at construction completion intervals measured in thirds. When a supervising architect is engaged, the architect typically inspects and signs disbursement
requests on a monthly basis with the HUD Inspector participating every third or fourth month. In all cases a documented, i.e., a recorded, virtual inspection will be acceptable.
(Added on 4/2/20)

POLICY AND OPERATIONS
Multifamily Production
If an owner has assurance of completion funds or a surplus cash hold-back held in escrow pending completion of repairs and alterations and such completion is delayed due to the COVID 19 emergency, will HUD release or reduce these escrows?

In cases where HUD inspection is needed but is delayed indefinitely by the COVID-19 emergency, HUD will consider release of surplus cash held back pending completion of repairs, provided that available evidence is sufficient to establish that all repairs and alterations have
been satisfactorily completed. However, HUD will not release the assurance of completion funds until all required HUD inspections are completed.
(Added on 4/2/20)

POLICY AND OPERATIONS
Recapitalization And Rental Assistance Demonstration
Public Housing Authorities (PHAs) and their development teams are currently implementing renovations and tenant moves to facilitate construction. How should property owners reconcile the construction schedule with COVID-19 concerns?

PHAs and their Rental Assistance Demonstration (RAD) development partners should consider the health and well-being of the residents and the public as the first priority and use CDC guidance and guidance from state and local health officials. In doing so, RAD development
teams should consider the impact of their renovation activities on the potential to exacerbate or mitigate exposure to the virus, particularly among vulnerable populations. Every construction project is different – in the vulnerability of the residents, the extent of tenant relocation, the extent of construction, the timing of construction and the deadlines created by natural conditions or financing sources. In all cases, development teams should follow the instructions of applicable governmental authorities (such as a government-issued shelter-in-place or similar order).
(Added on 4/2/20)

POLICY AND OPERATIONS
Recapitalization And Rental Assistance Demonstration
How will HUD handle delays in the completion of construction required by the RAD Conversion Commitment (RCC), including increases in costs, modification of resident relocation? How will it approve periods for rehab assistance payments?

HUD will approve extensions to the rehab period and rehab assistance payments. Such requests can be made through the RAD Resource Desk. Note that the RAD construction deadlines do not supersede other parties’ requirements, so development teams should also consult with their lenders, investors, and other stakeholders as applicable when modifying the construction schedule. Increases in costs should be reflected on the sources and uses log on the RAD Resource Desk. HUD encourages PHAs to maintain routine communication with residents whose length of relocation may be impacted and to alert HUD if
relocation plans change such that resident relocation will exceed 12 months.
(Added on 4/2/20)

POLICY AND OPERATIONS
Recapitalization And Rental Assistance Demonstration
Where can a PHA or owner find guidance regarding PBRA or PBV program requirements that customarily involve in-person meetings?

Guidance is available and will be continually updated at www.hud.gov/coronavirus. Guidance for PBRA can be found within this FAQ document (“FAQ for Multifamily Housing Providers”). For PBV, please see “FAQs for Public Housing, Housing Choice Voucher, Project-based Voucher Program, and Native American Programs.”
(Added on 4/2/20)

POLICY AND OPERATIONS
Recapitalization And Rental Assistance Demonstration
How should PHAs communicate with residents about the RAD conversion process, respond to resident questions, and solicit feedback when in-person resident meetings are not possible due to the recent COVID-19 outbreak?

The health and safety of residents, PHA and Owner staff, and other program partners is paramount. PHAs that continue with public meetings should follow the latest CDC, state, or local health department guidance relative to holding public meetings. However, it is still critical for PHAs and owners to keep residents informed about any changes to their housing, their rights, and the timing of key events related to the conversion and for residents to have the
opportunity to provide comments as required at different stages of a RAD conversion.

Required resident meetings. The RAD Notice requires PHAs and owners to hold resident meetings and to receive and provide response to comments during those meetings. In lieu of community meetings held in common areas, PHAs and owners may hold meetings remotely
using videoconferencing or teleconferencing technology provided that they can:
 Accept and respond to answers to questions submitted during the meeting;
 Maintain an attendance log in order to track if residents are able to participate successfully;
 Accommodate the needs of persons with disabilities or with limited English proficiency (LEP) through the meeting format. In selecting the host technology, PHAs must ensure they can comply with Section 504 of the Americans with Disability Act; and
 Provide residents with a follow-up notice after the meeting with a summary or reproduction of presented information and a means to ask additional questions related to the conversion.

In selecting among alternative meeting methodologies, PHAs and owners should be attentive to the nature of technology which residents are likely to have in their homes. When submitting
their Financing Plan or Conversion Plan and (for public housing conversions) their RAD application, PHAs and owners must provide the date(s) of any remote resident meetings and a record of the responses (written or oral, or in subsequent actions) to resident comments on the proposed conversion and scope of work that were received in connection with such meetings. HUD may request follow-up measures on a case-by-case basis.

Effectively communicating during this period may take more time than previously and PHAs and owners may determine that additional meetings are necessary in order to ensure that you are reaching all residents. Please keep your RAD point of contact updated in the event that an extension to existing deadlines is needed.

Ongoing resident engagement. Beyond the required resident meeting and comment period, HUD recommends that PHAs and owners develop an alternative communication plan that is sustainable for at least 8 weeks or more and that achieves the goals of providing Residents relevant information about the RAD conversion, particularly more complex transactions with significant construction and/or relocation. PHAs may develop a process that includes various forms of alternative communication methods so that all residents can receive information and participate in the process regardless of their individual circumstances. Below are some suggested methods by which to share information with residents:
 Set up teleconference calls in the place of in-person meetings, ensuring that residents
have enough prior notice and receive clear directions (particularly those with limited
technological access/abilities).
 Provide flyers/notices to residents at each unit with updates about how information can
be obtained regarding the RAD process.
 Post notices in common areas of the property.
 Provide letter updates in resident mailboxes.
 Provide text and/or email updates to residents.
 Share a sign-up sheet with residents to meet 1-on-1 with office staff or by phone.
 Create online materials (video or other) available to all residents.
 Create and distribute a survey for residents to gather information about their questions, experience, and preferences.
 Ensure that all residents have contact information (phone and email) for PHA staff should they have questions.
(Added on 4/2/20)

PROPERTY REVIEWS, INSPECTIONS, AND APPRAISALS
Recapitalization And Rental Assistance Demonstration
Will HUD relax its RAD Capital Needs Assessment inspection requirements for RAD conversions?

The Capital Needs Assessments are a core part of the RAD review process, as they are used to establish a basis on which to project the property’s 20-year capital needs. As such, unless constructed within the past ten years, all properties will require a complete inspection in
compliance with the MAP Guide. For properties built within the last ten years, HUD may approve the inspection of only vacant or model units. The Office of Recapitalization will extend milestones and deadlines on a case-by-case basis if the capital needs inspection cannot be completed at this time due to COVID-19. Recap is also considering other approaches to avoid delays caused by inspectors having more limited access to sites at this time.
(Updated on 4/2/20)

PROPERTY REVIEWS, INSPECTIONS, AND APPRAISALS
Multifamily Production
Will MFH Production relax its site visit requirements for third parties and lenders?

If a third-party capital needs inspector cannot physically inspect the required sample of units due to COVID-19 concerns, the Regional Production Director may waive the sampling requirements in favor of inspecting only vacant and model units on a case-by-case basis for
recently built insured properties (within 10 years of submission) or non-insured properties built within the past five years. All other properties will require a complete inspection prior to
issuance of the firm commitment.
(Updated on 4/2/20)

PROPERTY REVIEWS, INSPECTIONS, AND APPRAISALS
Multifamily Production
Given current travel restrictions, must appraisers conduct both an on-site visit and unit inspections to complete the appraisal report?

HUD requires that lender or third-party appraisers inspect the property and the subject comparables in accordance with MAP Guide requirements to insure the credibility of the resulting valuation conclusion. To the extent that the contracted appraiser cannot physically inspect the site, the appraiser should contract with a local, appropriately credentialed appraiser to perform the site inspection in his/her stead. In this situation, the report must identify the appraiser conducting the site visit, their credentials, and a certification regarding the limit of their inspection, if any.

When appraisers are unable to inspect units on-site due to COVID-19 concerns, they should consider the following options:
 Conduct inspections of vacant units. If vacant units are the only ones inspected, the appraiser should make an extraordinary assumption that the sample units viewed are representative of all the units. The inspector should provide a detailed review of the differences between these units and the others considered for the valuation.
 Use of construction drawings and other available documentation to supplement their physical inspections
 Use of information from CoStar or other reporting services and other available documentation to supplement their physical inspections.
 Note any previous inspections, if applicable.
Any/all sources of information used for valuation purposes must be documented, and multiple sources of information on interior site conditions are preferable to enhance the reliability and credibility of the valuation, in lieu of an actual physical inspection.

Appraisers and lenders should contact the HUD field office that will be processing the application for additional guidance.
(Updated on 4/2/20)

ENVIRONMENTAL REVIEW
General MFH
Will MFH allow any additional flexibility, specifically around requirements for on-site surveys or testing related to asbestos, lead-based paint, and radon considering the COVID-19 emergency?

A: Production: For MF FHA-insured lending, in situations where interior access to the subject property is limited, and the asbestos surveys, lead-based paint hazard evaluations, and/or radon testing cannot be completed prior to application submittal, MFH Production will allow lenders to submit applications without these reports. However, MFH Production will require these reports before issuing a Firm Commitment. For new construction and substantial rehabilitation properties where asbestos clearance sampling, lead clearance examinations, or radon testing takes place after construction, all mitigation reports, including follow-up sampling, examinations, or testing, must be submitted to HUD staff at the final completion inspection, before occupancy.

Recapitalization: For RAD conversions, MFH Recapitalization (Recap) is developing instructions for the completion of asbestos surveys, lead-based paint surveys, and/or radon testing in situations where COVID-19 considerations impact site visits. Recap is also developing instructions regarding Section 106 consultation in light of the closure of some State Historic Preservation (SHPO) and Tribal Historic Preservation (THPO) offices. However, MFH Recap will require these reports before issuing a RAD Conversion Commitment. These instructions will be available in a future Q&A supplement.
(Added on 4/2/20)

ENVIRONMENTAL REVIEW
Multifamily Production
Will MFH Production relax its site visit requirements for FHA site inspections as part of the environmental review process?

HUD currently requires a site inspection for all environmental reviews. Each Regional Production Director can waive this requirement on a case-by-case basis for currently insured or
non-insured applications (for refinance or new construction) for which an environmental report has been submitted in HEROS with no significant issues. Examples of significant issues include but are not limited to Underground Storage Tanks (UST); site contamination, onsite or adjacent floodplain or floodways, above-ground tanks within the acceptable separation distance, and noise levels greater than 65db that would require mitigation.

If a property meets the criteria for a significant issue, HUD will continue processing the application without a site visit, but must have a HUD site inspection prior to the issuance of the firm commitment. In the event that a property is not able to be accessed for a prolonged period due to COVID-19 concerns, HUD may consider alternatives to site inspections on a case-by-case basis.
(Updated on 4/2/20)

ENVIRONMENTAL REVIEW
Multifamily Production
Will MFH Production allow any additional flexibility for compliance with the requirements for site reviews for Phase I ASTM Environment Site Assessments considering the COVID-19 emergency?

Yes, HUD will provide some flexibility as outlined below, depending on the type of assessment.

Interior assessments: For Phase I Environmental Site Assessments (ESAs) performed on projects where the preparer is unable to access the interior of the building due to COVID-19, HUD will permit an exterior only inspection provided the ESA is conducted in accordance with ASTM E1527-13 (or most recent version) and the ESA preparer has another adequate means of viewing the interior (e.g. an onsite rep live streams a facility walk-through.)

Exterior assessments: If traveling to the site is not practicable (e.g. due to governmental restrictions on travel or shelter in place/quarantine orders), HUD will accept the ESA without a visit to the site for projects already in HUD’s portfolio or new to HUD’s portfolio with up to Level 3 repairs as long as the site is considered low risk based on current and historical uses. Sites with past, current or adjacent uses that include but are not limited to underground storage tanks, contaminated soil or groundwater, dumps, solid or hazardous waste landfills, brownfields or superfund sites require an in-person site visit by the ESA preparer.
ESA reports without a physical site visit must:
 Explain the reason why a site visit did not take place,
 Meet the ASTM E1527-13 standard (or most recent version), and
 Include adequate means of viewing the interior and exterior (e.g. an onsite rep could live stream a walk-through of the facility and grounds, send photos and video of the site and grounds.)

For all new construction and substantial rehabilitation projects, and 223(f)s that do not meet the low risk criteria, the ESA preparer must conduct an in-person site visit. However, HUD will accept a draft ESA report that includes all information except the physical site visit (the
preparer must view the interior and exterior by other means) for purposes of submitting the pre-application or application. The final ESA with the site visit must be submitted before HUD will issue a Firm commitment.
(Added on 4/2/20)

WAIVERS, EXTENSION, AND OTHER RELIEF
General MFH
Is there new guidance for forbearance of FHA-insured or Risk Share multifamily loans?

Lenders should use all available tools to work with borrowers facing payment challenges as a result of this emergency, just as they would in any other situation. Lenders should use HUD’s existing systems and procedures to promptly report loans that are delinquent or in default and request extensions of the election to assign loans in default to FHA. Additional HUD MFH guidance related to the provisions on forbearance included in the Coronavirus Aid, Relief and Economic Security (CARES) Act is forthcoming. Ginnie Mae recently published a blog post on forbearance as it relates to its issuers, which can be found here:
https://ginniemae.gov/newsroom/GinnieInBrief/Pages/Post.aspx?PostID=40
(Added on 4/2/20)

CONTINUITY OF MFH OPERATIONS WITH STAFF WORKING REMOTELY
Recapitalization and Rental Assistance Demonstration
Will HUD office closures impact RAD closings?

Office of Recapitalization closing coordinators and Office of General Counsel field counsel will continue to perform their standard duties. HUD anticipates arranging for execution and notarization of documents that need to be recorded in public records and distribution to escrow agents, subject to compliance with applicable governmental orders and the availability of overnight courier services. It is possible that there may be fewer signing dates per month as HUD works through logistical constraints. HUD is also aware that some recorders’ offices around the country have closed. HUD will work with the transaction teams to maximize the ability of transactions to move forward consistent with applicable conditions. Documents that
do not require notarization will be distributed electronically.
(Updated on 4/2/20)

CONTINUITY OF MFH OPERATIONS WITH STAFF WORKING REMOTELY
Multifamily Production
Is MFH Production delaying endorsing loans that involve in-place rehabilitation and/or tenant relocation, as well as loans to properties that are located in areas have mandated shelter-in-place orders?

HUD may temporarily pause initial endorsement of new construction and /or substantial rehabilitation loans that involve either tenant in-place rehabilitation and/or tenant relocation, as well as endorsement of loans for properties that are located in areas that have mandated
shelter-in-place orders.

There have been multiple instances where construction/rehabilitation has been significantly delayed or completely stopped due to either an inability to enter units to conduct repairs, or unavailability of construction staff due to state or local restrictions. HUD will issue a firm commitment and grant appropriate extensions until work can be resumed such that the loan may be closed and construction can be completed without unnecessary delay. For projects that have time sensitive restrictions or contractual obligations (e.g. delivery of Low Income Housing Tax Credits) that will expire if endorsement is delayed, HUD will close the loan on condition that mitigants are in place to offset unplanned construction delays.
(Updated on 4/2/20)

How does a HUD-assisted property learn about a positive COVID-19 case impacting its residents, staff, or the community?

Owners/agents will learn about COVID-19 cases and activities in the community from their local health departments. They should communicate with their local health department if they are concerned that residents or staff might have COVID-19. (Added on 3/24/20)

In the event of a confirmed COVID-19 case at a HUD-assisted property, what steps should property owners and managers take to protect residents, staff, and the community? How should the owner/agent share this information?

MFH suggests property owners and agents follow Center for Disease Control (CDC) guidelines and the direction of local health officials, especially in the event of property quarantine.

HUD recommends that owners/agents create communication plans for distributing timely and accurate information during an outbreak. First, they should identify everyone in their chain of communication (for example, staff, volunteers, key community partners and stakeholders, and clients) and establish systems for sharing information. After identifying this information, they should maintain up-to-date contact information for everyone in the chain of communication as well as identify platforms, such as a hotline, automated text messaging, and a website to help disseminate information to those inside and outside of their organizations.

Owners/agents can provide notification of positive COVID-19 cases without giving the name/apartment number/other personally-identifiable information to their residents and staff. HUD reminds them that they continue to remain subject to HIPAA and other privacy laws. (Added on 3/24/20)

How would a HUD-assisted property owner/agent message to residents and staff when there is a positive COVID-19 case among their community?

CDC COVID-19 communication resources in both print and digital form are available at:
https://www.cdc.gov/coronavirus/2019-ncov/communication/index.html
(Added on 3/24/20)

Does HUD have guidance on disinfecting common spaces and units, including how to protect our staff?

See these links from the CDC for recommendations on cleaning and disinfecting:
• Environmental Cleaning and Disinfection Recommendations, which provides recommendations on the cleaning and disinfection of rooms or areas of those with suspected or with confirmed COVID-19 have visited: (https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/cleaningdisinfection.html)
• Disinfecting Your Facility if Someone is Sick, which provides concise information on how to clean and disinfect facilities, from surfaces to electronics to laundry, in order to protect individuals from COVID-19.
(https://www.cdc.gov/coronavirus/2019-ncov/prepare/disinfecting-buildingfacility.html, which provides)
(Added on 3/24/20)

The Department of Housing and Urban Development (HUD) has updated the “resident health” section of the Multifamily Housing Coronavirus Q & A this week. Here’s a list of the latest changes:



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