Implementation of National Standards for the Physical Inspection of Real Estate (NSPIRE) Administrative Procedures  

CARH’S BROADCAST E-MAIL – Regulatory Alert

July 6, 2023

On June 30, HUD posted Notice PIH 2023-16/H 2023-07 entitled, Implementation of National Standards for the Physical Inspection of Real Estate (NSPIRE) Administrative Procedures.

The purpose of the Notice is to implement portions of the final rule, Economic Growth Regulatory Relief and Consumer Protection Act: Implementation of National Standards for the Physical Inspection of Real Estate (NSPIRE), that was published in the Federal Register on May 11, 2023. Implementation of the NSPIRE final rule is intended to ensure that residents of HUD housing live in safe, habitable dwellings, and the items and components located inside, outside, and within the units of HUD housing are functionally adequate, operable, and free of health and safety hazards. The Notice covers the process and operational requirements for Public Housing programs (programs for housing assisted under the U.S. Housing Act of 1937 other than Section 8 of the Act), and Multifamily Housing assistance programs covered by the final rule, including Section 202 Supportive Housing for the Elderly, Section 811 Supportive Housing for Persons with Disabilities, Section 202 direct loan program, and housing with mortgages insured or held by HUD as listed in 24 CFR 5.701.

The Notice includes policies and procedures for properties participating in inspections, submitting evidence of deficiency correction, submitting technical reviews, administrative review, and other administrative requirements changing with the NSPIRE final rule. In addition, it outlines roles and responsibilities for HUD’s Real Estate Assessment Center (REAC), HUD field office staff, and property representatives from Public Housing Authorities (PHAs) and Property Owners and/or Agents (POAs). This notice also references existing requirements for inspectors performing inspections for REAC under contract.

The effective date of the notice will be done in phases. However, for the Multifamily Housing programs, HUD (or the Servicing Mortgagee, as applicable) will begin inspections for participants in the NSPIRE Demonstration beginning July 1, 2023, and for all other properties starting October 1, 2023. As announced through Notice in the Federal Register on January 25, 2023, NSPIRE Demonstration Multifamily Housing participants will receive an inspection of record through the NSPIRE Demonstration unless they opted out by March 1, 2023, in which case they will receive an inspection of record under Uniform Physical Condition Standards (UPCS). UPCS inspections for these participants commenced in March 2023.

For Multifamily Housing properties that participated in the NSPIRE Demonstration, REAC will consider the prior UPCS score and the date of the inspection under the Demonstration for future inspection scheduling as described in 24 CFR 5.705(c). However, HUD intends to conduct subsequent inspections on each of these properties by the end of 2025 and may adjust scheduling accordingly to fulfill that objective.

For the Housing Choice Voucher, Project Based Voucher programs, and the programs managed by HUD’s Office of Community Planning and Development, the NSPIRE final rule will be effective October 1, 2023. Inspections of housing under those programs before this effective date will be conducted in accordance with the Housing Quality Standards in effect at 24 CFR 982.401.

The point of contact for the posted Notice is Tara J. Radosevich, Real Estate Assessment Center, Office of Public and Indian Housing, Department of Housing and Urban Development, 550 12th Street SW, Suite 100, Washington, DC 20410-4000, telephone number 612-370-3009 (this is not a toll-free number), or email NSPIRERegulations@hud.gov.

For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.