Reminder about REAC Inspection Delays

Posted On: July 31, 2023

In the constantly changing world of real estate, it is vital to prioritize the safety and quality of housing. The Real Estate Assessment Center (REAC) is responsible for conducting inspections to evaluate the condition of properties, which is crucial. Recently, there has been a modification to the rehabilitation threshold for deferring inspections. This change acknowledges the necessity for a significant renovation.

Previous Threshold and Its Limitations

In March 2019, a REAC memo stated that if the renovation cost per unit was $15,000 or more, owners could delay inspection. Although this rehabilitation threshold was effective for a while, HUD officials realized they needed to revise it to keep up with the changing economic climate and increasing rehabilitation costs.

The New Threshold: Housing Notice 2023-04

Implemented April 7, 2023, Notice 2023-04, created a significant change to the Substantial Rehabilitation Threshold. The new base amount per dwelling unit is now $18,392. Keep this in mind. The new threshold is subject to an annual adjustment based on inflation. HUD will use data from the Bureau of Labor Statistics or other inflation cost indices.

Rendering Previous Dollar Amount Thresholds Obsolete

Due to the new rehabilitation threshold, all previous dollar amount thresholds for inspection delays are no longer valid. This change is a positive move towards covering actual rehabilitation costs and improving living conditions for residents.

Applicability and Impact

The latest update pertains to all properties, regardless of insurance status. The revised rehabilitation threshold dictates whether an owner can delay inspection. This guarantees that all properties maintain consistent standards of safety and quality.

Future Adjustments and Preparedness

Property owners need to be ready for yearly changes to the per-unit substantial rehabilitation threshold. This is because HUD will recalculate the threshold to reflect shifts in inflation rates and other economic factors, keeping it in line with the current state of the housing market.

Reach Out for Clarifications

If you’re a property owner and have questions or need clarification regarding housing regulations, HUD recommends reaching out to Latosha Morris-Byrd at

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