HUD Housing Notice § 2015-02

              U.S. DEPARTMENT OF HOUSING AND URBAN
                          DEVELOPMENT
                                       WASHINGTON, DC 20410-8000


ASSISTANT SECRETARY FOR HOUSING-
FEDERAL HOUSING COMMISSIONER



                                                               Notice: H 2015-02
Special Attention of:
All Multifamily Hub Directors                                  Issued:   March 2, 2015
All Multifamily Program Center Directors
All Multifamily Operations Officers                            Expires: This notice remains in
All Multifamily Directors of Project Management                         effect until amended,
All Multifamily Field Counsel                                           revoked, or superseded
All Contract Administrators

                                                               Cross References:

Subject: Required Actions for Multifamily Housing Projects Receiving Failing Scores
         from HUD’s Real Estate Assessment Center (REAC)


        Section 230 of the Consolidated Appropriations Act of 2014 and Section 226 of HUD’s
Fiscal Year 2015 Appropriations Act require the Department to take certain steps in cases when
a multifamily housing property receives a score of 59 or below on a Real Estate Assessment
Center (REAC) physical inspection report. This Notice provides guidance to ensure compliance
with these two sections, which are identical.1 This notice identifies where Section 230 of the
Consolidated Appropriations Act, 2014 (“Section 230”) changes the current protocol. The
guidance in this Notice is effective on the issue date noted above. This Notice supplements
Notice H 2012-16 captioned, “Extension of Housing Notice H 2011-24: Reissuance of Revised
Protocol for Placing a Flag in the Active Partners Performance System (APPS) when a Property
Receives a Physical Inspection Score below 60 but Above 30.” Significant changes in process
are highlighted in bold italic type.




1
 Section 226 of Title II of Division K of the Consolidated and Further Continuing
Appropriations Act, 2015 (Pub. L. 113-235, approved December 16, 2014) reiterates the
direction first provided in section 230 of the Consolidated Appropriations Act, 2014 (Public Law
113-76, approved January 17, 2014) for HUD to take certain actions for multifamily projects, as
described in general provision 230, and repeated in general provision 226, that have failing
REAC scores. For the sake of simplicity, both this notice and the attachments thereto use
“Section 230” to refer to the authority in both appropriations acts, as the language other than the
dates is identical.



                                   www.hud.gov        espanol.hud.gov
                                                                                                  2


I. Background and Applicability

       Section 230 directs HUD to take certain procedural steps when certain multifamily
housing projects score 59 or less on the REAC physical inspection. Most of the law codifies the
procedures that Housing and the Departmental Enforcement Center (DEC) already follow.

       A. Projects covered
        Section 230 applies to insured and noninsured projects with project-based assistance
under section 8 of the United States Housing Act of 1937 (“Act”) or a “contract for similar
project-based assistance.” The Department considers “similar project-based assistance” to
include contracts for all multifamily housing projects that use the manual voucher submission
and review process to submit assistance vouchers to the Department’s Tenant Rental Assistance
Certification System (TRACS). In addition to properties with project-based Section 8 assistance,
Section 230 and this Notice apply to properties that are subject to one of the following rental
assistance contracts:
             Rent Supplement Contract
             RAP Contract
             Section 202 Project Rental Assistance Contract
             Section 811 Project Rental Assistance Contract
             Section 202/162 Project Assistance Contract2
             Section 811 Project Rental Assistance
             Senior Preservation Rental Assistance Contract

Section 230(a) states that it does not apply to units assisted under the Section 8 Project-Based
Voucher Program (section 8(o)(13) of the Act) or to public housing units assisted under section 9
of the Act.


       B. Triggers for action

       Section 230(a) requires HUD to take specific actions upon the following triggers:

               When a project “receives a REAC score of 30 or less”;
               When a project “receives a REAC score between 31 and 59” and the owner “fails
                to certify in writing that all deficiencies have been corrected”; or
               When a project “receives a REAC score between 31 and 59” and “receives
                consecutive scores of less than 60 on REAC inspections.”

HUD defines the date the project “receives a REAC score” in each of the foregoing bullets to
mean the date on which HUD releases the REAC inspection report. The release date is the date
the inspection is determined to be “Within Standard” and released to the owner, HUD staff, and



2
 Because section 230(a) states that it applies to multifamily housing projects with a section 8
contract, Section 202/8 Housing Assistance Payments Contracts are also covered.
                                                                                                      3


HUD’s database3. This release date is also noted on the email message that HUD sends to the
owner electronically. Further, the Department notes that the word “receives” appears in Section
230(a) in the present tense. With respect to the third bullet, HUD will therefore consider any
inspection report that was released on or after the date of the law’s enactment (i.e., January
17, 2014) to be the first inspection in any series of inspections that will constitute
“consecutive” scores.

II. Impact on Current Procedures

       A. HUD’s initial notice to owner

         Section 230(b) sets out certain steps that HUD must take if one of the triggers for action
is met. The statute requires the Secretary to notify the owner and provide an opportunity for
response within 30 days. Currently, REAC provides the owner a letter that accompanies the
inspection report notifying the owner of the results of the inspection. This REAC letter fulfills
the initial owner notification requirement in Section 230(b)(1). The letter provides the owner
with an opportunity to respond to the inspection report by requesting a technical review within
30 days of the release date (see 24 CFR § 200.857(d) (1)) or a “data-base adjustment” within 45
days of the release date (see 24 CFR § 200.857(e)(3))4. If, the owner does not submit an appeal
or if the final score, after the appeal process, remains 59 or below, then the Department will
move to take the actions described in II.B below.


       B. HUD’s development of a CDE plan within 60 days of the release date

        Section 230(b)(1) further states: “If the violations remain, the Secretary shall develop a
Compliance, Disposition and Enforcement Plan within 60 days, with a specified timetable for
correcting all deficiencies.” This language requires slight changes to current practices. HUD
interprets this language to mean that if the owner’s appeal to REAC for a technical review or
data-base adjustment did not result in a final score above 59, then the violations remain. HUD
interprets Section 230(b) to require HUD to develop a Compliance, Disposition and
Enforcement Plan within 60 days from the inspection release date. However, in cases where
an owner has sought a technical review or data-base adjustment, the Department will start the
60-day clock upon REAC’s release of the post appeal score, assuming the score is 59 or below
and “violations remain.” In cases where the owner did not submit an appeal, the 60-day clock
will start from the date the inspection was originally released.



3
  An inspection is determined to be “within standard” after it is reviewed for accuracy and
completeness of data. HUD Engineers and Government Technical Monitors (GTMs) review each
inspection uploaded into the Physical Assessment Subsystem (PASS) using the Checklist
Inspection Tool and the Inspection Information Tool.
4
  For instructions on how to submit a technical review or a data-base adjustment visit the REAC
website at:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/reac/products
/pass/pass_guideandrule.
                                                                                                   4


       C. Clarification that NOVs and NODs already effectively contain the Section 230
          Compliance, Disposition and Enforcement (CDE) Plan

        The Department’s current procedure for projects that receive a physical inspection score
less than 60 is to issue the owner a Notice of Violation of Regulatory Agreement (NOV) and/or
Notice of Default (NOD) of HAP (or other subsidy) contract. Such notices require the owner to
survey 100 percent of the project’s units and to take corrective action for all physical
deficiencies5. Although currently not labeled as CDE plans, the NOVs and NODs set forth
instructions to the owner on how to comply with the notice. The notices also state that if the
owner does not comply, HUD will pursue appropriate enforcement and disposition of the project.
As such, HUD considers existing NOVs/NODs as satisfying the requirements of what is
contemplated by the phrase “Compliance, Disposition and Enforcement Plan,” as it appears in
Section 230(b). Compliance, Disposition and Enforcement Plan” (CDE Plan).

        Going forward the Department will clearly label that portion of the NOV/NOD that sets
out the CDE plan and send the owner the CDE plan within 60-days of release of a post appeal
score that is 59 or below or within 60-days of release of the original score in cases where the
owner does not appeal. Accordingly, on NOVs and NODs concerning poor physical condition
of the project, HUD will insert the heading, “Compliance, Disposition and Enforcement Plan”
in the space immediately preceding the NOVs/NODs’ instructions to the owner to:

              Conduct a survey of 100 % of the project, identifying all physical deficiencies;
              Correct the physical deficiencies identified at the project from the survey,
               including, but not limited to, those deficiencies identified in the REAC
               inspection;
              Execute a certification that the project is in compliance with HUD’s physical
               condition standards of 24 CFR § 5.703 and state and local codes; Submit the
               completed survey and certification form to the HUD Account Executive in 60
               days of receipt of HUD’s notice; and
              Provide tenants with a “Notice of Compliance, Disposition and Enforcement
               Plan” for the project and provide HUD with a certification that of compliance
               with this directive.

Should the necessary repairs extend beyond the 60-day cure period specified in the NOV/NOD,
the CDE Plan instructs the owner to submit a repair plan with the completed survey and provide
a reasonable time table for when the deficiencies will be completed, stating the cost and source
of funds to be used for repairs. HUD will work with the owner to determine if the owner’s
request to amend the plan is acceptable and adequately protects the tenants’ interests. Any such
changes to the timetable will be considered amendments to the CDE plan. A sample “Notice of
Default of Housing Assistance Payments (HAP) Contract and Compliance Disposition and
Enforcement (CDE) Plan” is included as Attachment A.

5
 Under the current protocol the Departmental Enforcement Center (DEC) issues NOV/NODs for
projects that receive scores of 30 or below and the Hub Director is responsible for issuing
NOV/NODs for projects that receive scores of 31 to 59. This practice will remain the same. The
only change is that these documents will now include a section called the “CDE Plan.”
                                                                                                 5


       D. Providing “Notice of the CDE Plan”

        Section 230(b)(1) further requires HUD to “provide notice of the Plan to the owner,
tenants, the local government, any mortgagees, and any contract administrator.” This statutory
language adds an additional requirement to HUD’s current practices. Going forward, all
NOVs/NODs containing the “Compliance, Disposition and Enforcement Plan” heading will
also contain instructions to the owner to provide the project tenants with a “Notice of the
Plan.” A form “Notice of a Compliance, Disposition and Enforcement Plan” is attached
hereto as Attachment B. Note, however, HUD is not requiring the owners to provide tenants
with a copy of NOVs/NODs containing the CDE Plan.

       The preparer of the NOV/NOD containing the CDE Plan (either the Multifamily
Housing Account Executive (for scores from 59 to 31) or the DEC Analyst (for scores of 30 or
below) will instruct the owner to deliver the “Notice of a Compliance, Disposition and
Enforcement Plan” to each tenant and provide HUD with a certification that such delivery
has been completed. In addition, the Notice Preparer will send a copy of Attachment B to the
appropriate unit of local government, any lenders (if known to HUD) and any contract
administrator for the project. The Notice Preparer must document the “Comment” section of
the “Physical Inspection Detail” screen in the Integrated Real Estate Management System
(iREMs) to annotate the issuance of these notices to the additional parties.

       E. REAC Re-inspection Requests

        Multifamily Account Executives and DEC Analysts should continue to process requests
for re-inspection following Notice H-2011-24. Notice H-2011-24 states that if the owner of a
project with a score of 31 to 59 responds to an NOV/NOD by providing HUD with a copy of the
100% survey of the project and the Project Owner’s Certification (“Project Owner’s
Certification”) that the project is in compliance with HUD’s physical condition standards and
state and local codes (See Attachment A), then a re-inspection is scheduled one year from the
date of the last inspection. If the owner fails to respond to the NOV/NOD by submitting the
Project Owner’ Certification and the 100% survey of the project’s deficiencies, then HUD strives
to conduct a re-inspection as soon after the 60-day cure period mentioned in the NOV/NOD
expires as possible. Projects that receive a score of 30 or below on a physical inspection will
also be scheduled for a re-inspection as soon as possible after the cure period mentioned in the
NOV/NOD expires regardless of whether they submit the Owner’s Certification and the 100%
survey. In cases where the deficiencies noted on the last REAC inspection report and the
owner’s 100% survey cannot be completed in 60-days, the NOV/NOD (CDE Plan) now
instructs the owner to submit a repair plan with the 100% survey and to request an extension
of time to complete the repairs. This repair plan must provide the cost and source of funds
that will be used to make the repairs. If the repair plan is approved it will serve as an
amendment to the CDE Plan. If the repair plan is not approved a re-inspection will be
scheduled as soon as possible after the 60-day cure period expires.

       Should the results of a re-inspection show that the project continues to be in poor
physical condition (i.e., as reflected by a score of 59 or less), then HUD moves to the next
appropriate steps to enforce compliance. Such actions include considering imposition of civil
                                                                                                  6


money penalties (CMPs), abatement of the Section 8 or other rental assistance subsidy, in whole
or in part, and possible assignment of an FHA loan and/or foreclosure.

       F. Follow-up to REAC Re-inspection Results

        After the DEC issues the NOVs/NODs (CDE Plans), the DEC will keep the physical
referral open until the REAC re-inspection report is released. If the DEC determines that the
project’s physical condition (as reflected by the re-inspection report) demonstrates that the
owner has not complied with an expired CDE Plan, the DEC will alert the MFH Account
Executive and will proceed to handle the matter for imposition of civil money penalties, if
applicable. A subsequent REAC score of 59 or less will be deemed to violate the CDE Plan.

        MFH staff will follow the procedures set out in Notice H-2011-24 concerning the timing
for requesting REAC re-inspections on projects that received NOVs/NODs (CDE Plans) from
MFH. Multifamily Housing will be tracking all REAC inspection scores of properties that
scored 59 or less and if the next REAC re-inspection score is also less than 60 (i.e., “the
project receives consecutive scores of less than 60 on REAC inspections”), MFH will follow
the procedures set out in Section III below. A subsequent REAC score of 59 or less will be
deemed to violate the CDE Plan.


III. Failure to Comply with the Terms of a CDE Plan

       If the owner fails to comply with the terms of the CDE Plan, Section 230(b)(2) allows the
Department to replace project management with a management agent acceptable to the
Secretary and requires the Department to take one or more of the following four actions and
provide notice of these actions to the owner, local government, and any PBCA/contract
administrators and/ or mortgagees:

      Impose Civil Money Penalties. If the project is not already in the DEC for the physical
       deficiencies, MFH staff must make an elective referral to the DEC using iREMS.

      Abate, including partial abatement, any Section 8 Housing Assistance Payments (HAP)
       or other rental assistance contract until all deficiencies have been corrected. The
       Multifamily Housing Account Executive must request approval from the Director,
       Business Relationships and Special Initiatives Division to suspend, abate or terminate the
       HAP contract. If the rental assistance contract is to be terminated, the Hub Director must
       also request approval to relocate the residents.

      Encourage a transfer of the project or transfer and assignment of a HAP Contract to a
       new owner. The Department cannot mandate the transfer of a project and/or assignment
       of a HAP Contract. However, the field office can strongly encourage and owner to
       explore this option in lieu of an enforcement action such as abatement and relocation of
       the residents and/or foreclosure. Field staff may even help facilitate this process by
       contacting potential transferees and holding discussions with the current owner regarding
       a possible transfer. Any formal request for a Transfer of Physical Assets must be
                                                                                                    7


       approved by HUD using the current procedures for doing so found in Chapter 13 of HUD
       Handbook 4350.1, Multifamily Asset Management and Project Servicing.

      Seek judicial appointment of a receiver to manage the property or seek a judicial order
       of specific performance to cure all project deficiencies.

Upon initiating any of the enforcement actions noted above, HUD staff will issue Attachment
C, entitled “Notice of Enforcement Action” to the parties identified in Section II, D. above.
This means, for example, if the DEC issues a Complaint for Civil Money Penalties to the
owner, the DEC will also instruct the owner to provide a “Notice of Enforcement Action” to
all tenants, with the appropriate section marked for the initiation of an administrative
proceeding for civil money penalties. The DEC must also send a similar “Notice of
Enforcement Action” to the local government, lender (if known) and contract administrator.
Similarly, in situations where Multifamily Housing issues the owner an Abatement of the
HAP Contract, the Multifamily Housing Account Executive will instruct the owner to provide
a “Notice of Enforcement Action” to all tenants with the appropriate sections marked. The
Multifamily Housing Account Executive must also send a “Notice of Enforcement Action” to
the local government, lender (if known) and contract administrator.

In addition to these Section 230 actions, the following actions will also be considered:

      In the case of an insured, HUD-Held, Section 202 Direct Loan or Capital Advance or a
       Section 811 Direct Loan or Capital Advance, the Hub Director may also request approval
       from the Director, Business Relationships and Special Initiatives Division, Office of
       Asset Management, to proceed with assignment and/or foreclosure of the loan or capital
       advance following the procedures found in the May 31, 2006 memorandum captioned,
       “Fiscal Year 2006 Property Disposition Program.”

      The Hub Director may recommend that the Department exclude the owner from further
       participation in HUD programs, using a Limited Denial of Participation (LDP), a
       Suspension or a Debarment. (Contact the Compliance Division of the DEC for assistance
       in this regard.)

The Multifamily Hub should discuss with the appropriate DEC Satellite Office which course of
action it intends to take.

IV. Section 230 Reporting Requirements

        Section 230 requires the Department to report to Congress semi-annually. The report
must cover any project that receives a physical inspection score of 30 or less and all properties
that receive consecutive scores of 59 or below. The Business Relationships and Special
Initiatives Division will create a SharePoint site to track this information. Section 230 states
that the report must include, at a minimum, the enforcement actions being taken to address the
poor physical condition (i.e., under a CDE plan, civil money penalties imposed, abatement and
termination of HAP contract, etc.), and all actions being taken to protect the residents.
                                                                                                 8


V Findings and Certifications

   A. Paperwork Reduction Act

        The information collection requirements contained in this document are approved by the
Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520) and assigned control number 2502-0369. In accordance with the Paperwork
Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to,
a collection of information unless the collection displays a currently valid OMB control number.

   A. Environmental Impact

       A Finding of No Significant Impact (FONSI) with respect to the environment has been
made in accordance with HUD regulations at 24 CFR part 50.19(c), which implement section
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)).

       If you have any questions regarding the attached guidance, please contact Brandt Witte,
Housing Program Manager, Business Relationships and Special Initiatives Division, Office of
Multifamily Asset Management at (202) 402-2614.



                                            ______________________________
                                            Biniam Gebre
                                            Acting Assistant Secretary for Housing -
                                              Federal Housing Commissioner

Attachments
                                                                                                  9




ATTACHMENT A

SAMPLE NOTICE OF DEFAULT OF THE HOUSING ASSISTANCE PAYMENTS
(HAP) CONTRACT AND COMPLIANCE, DISPOSITION AND ENFORCEMENT
(CDE) PLAN
[HUD office letterhead with address]

                             [Date]
          CERTIFIED MAIL - RETURN RECEIPT REQUESTED

[Owner’s representative name]
[Owner’s name]
[Owner’s address]

SUBJECT:      Notice of Default of the Housing Assistance Payments (HAP)
              Contract and Compliance, Disposition and Enforcement Plan
              Project Name: [Project Name]
              Project Location: [Project City/Town]
              HAP Contract Number(s): [HAP #(s)]
              iREMS Number: [iREMS #]

Dear [Owner’s representative name]:

      This letter constitutes formal notice by the Secretary of the United States Department of
Housing & Urban Development (“HUD”), that [Owner’s name], (“Owner”), owner of [Project’s
                                                                                                  10


Name] (“Project”), is in default of the HUD Housing Assistance Payments (“HAP”) Contract
effective [original HAP date] with subsequent HAP Renewals, the latest HAP Basic Contract
Multi-year Term Renewal with an effective date of [last renewal date]. Pursuant to paragraph
[2.5(a)- verify paragraph #] of the HAP, the Owner “agrees to maintain and operate the contract
units and related facilities to provide decent, safe and sanitary housing including the provisions
of all the services, maintenance and utilities set forth… ”. [Additionally, pursuant to paragraph
[7(b)- verify paragraph #] of the HAP Renewal, the Owner warrants that the rental units to be
leased by the Owner under the Renewal Contract are in decent, safe and sanitary condition (as
defined and determined in accordance with HUD regulations and procedures) and shall be
maintained in such condition during the term of the Renewal Contract.] This standard is set forth
in HUD regulation 24 C.F.R. § 5.703, et. al.

        On [date of REAC inspection] the Real Estate Assessment Center (“REAC”) inspected
the Project and the Project received a score of [inspection score]. The inspection report
identified serious deficiencies that demonstrate the Owner is in default of the HAP Contract [and
HAP Renewal Contract]. Some of the deficiencies cited in the REAC report include, but are not
limited to the following:

        [Summarize the REAC inspection report here. Identify major health and safety issues from
the Health and Safety Summary. Summarize systemic deficiencies from the Systemic Deficiencies
section of the inspection report. The following is an example from a description used in the pilot:

       Some of the deficiencies cited in the REAC report are Grounds – Overgrown/Penetrating
       Vegetation, Doors – Damaged Frames/Threshold/ Lintels/Trim, Emergency/Fire Exits –
       Emergency/Fire Exits Blocked/Unusable, Infestation – Insects/Roaches, Electrical Hazards
       – Exposed Wires/Open Panels, and Windows – Inoperable/Not Lockable. ]

Compliance, Disposition and Enforcement (CDE) Plan

        Accordingly, the Owner shall take the following corrective action within 60 days of the
date of receipt of this Notice:

               Conduct a survey of 100 % of the Project, identifying all physical deficiencies;
               Correct all of the physical deficiencies identified at the Project from the survey,
                including, but not limited to, those deficiencies identified in the REAC
                inspection;
               Provide tenants with the enclosed “Notice of Compliance, Disposition and
                Enforcement Plan” for the Project.
               Execute the enclosed certification that the Project is in compliance with HUD’s
                physical condition standards of 24 CFR 5.703 and state and local codes and that
                the Owner has provided the tenants with the enclosed “Notice of Compliance,
                Disposition, and Enforcement Plan.”
               Submit the completed survey and certification within 60 days of receipt of
                HUD’s notice to:

                U.S. Department of Housing and Urban Development
                                                                                                  11


                [HUD office address]

                Attention: [Name of Account Executive, Project Manager or DEC Analyst
                handling the matter]

        Unless HUD agrees otherwise in writing, the owner must correct all physical deficiencies
identified in the survey of the Project within 60 days of receiving the CDE Plan. Should the
necessary repairs extend beyond 60 days, the Owner must submit to HUD at the address noted
above, a repair plan with the completed survey and request a reasonable extension of time to
complete the repair of all deficiencies found by the survey, stating the cost and source of funds to
be used for repairs. Any HUD approved extension to the 60-day deadline will be made in
writing and will amend the CDE plan. HUD will work with the owner to determine if the
owner’s request to amend the CDE plan is acceptable and adequately protects the tenants’
interests.

       HUD will re-inspect the Project to confirm that the Owner is in compliance with the HAP
Contract.

       If the Owner fails to take the necessary corrective action, then the Section 8 assistance
may be reduced, suspended, abated, or terminated under the above referenced HAP Contract, and
any other remedies may be taken as provided by the parties' agreement(s) or as otherwise
provided by law.

       For the reasons described in this Notice and Compliance, Disposition and Enforcement
Plan, HUD will flag the Owner in HUD's Active Partners Performance System (APPS). This
flag may adversely affect the Owner's eligibility for participation in HUD programs, under
HUD's Previous Participation Certification procedure, by constituting a standard for disapproval.

        HUD may continue its review of any other contractual agreements between the Owner and
HUD beyond the matters identified in this notice. If HUD determines that there are additional
contractual violations or defaults, HUD's subsequent declaration of any such violations or defaults
will not affect the requirements set out in this notice.

      If there are any questions concerning this Notice, please contact [HUD contact name],
[HUD contact title], at [HUD contact telephone number].
                                            Sincerely,



                                              [Name of signatory]
                                              [Title of signatory]


Enclosures:
                                                                     12


NOTICE OF A COMPLIANCE, DISPOSITION AND ENFORCEMENT (CDE) PLAN FOR
[PROJECT NAME, FHA Number, iREMS Number]
Certification
                                                                                                    13


   PROJECT OWNER’S CERTIFICATION THAT THE PHYSICAL CONDITION OF THE
     PROJECT IS IN COMPLIANCE WITH HUD CONTRACTS AND THE PHYSICAL
                   CONDITION STANDARDS OF 24 C.F.R. § 5.703

[Name of project owner:] ____________________________________________ (the “project
owner”), the owner of [project name:] ____________________________, [City:]
__________________, [State:] ___________, Project No. ___________________ (the
“project”), by and through its duly authorized representative identified below, hereby certifies
that:
    1. All physical deficiencies of the project identified in the HUD inspection(s) of the project
       performed on ___________________ and the attached project owner’s survey of the
       project performed on ___________________ have been corrected, and the project is in
       compliance with the physical condition requirements of all HUD contracts pertaining to
       the project and the physical condition standards of 24 C.F.R. § 5.703. The term “project”
       includes all units, common areas, building(s), grounds, and systems.

   2. To the best of the project owner’s knowledge, the project is in compliance with all state
      and local codes.

   3. All tenants residing at Project have received a “Notice of Compliance, Disposition and
      Enforcement Plan” relating to these physical deficiencies.

    4. This certification is made by the project owner and is signed by a duly authorized
        representative of the project owner, who is so authorized by reason of his/her position as
        the [State fully relationship between signer of certification and project owner:]
        ___________________________________________________
        __________________________________________________________________
        _________________________________________________________________.
        All of the foregoing statements, as well as the date, signature and identifying information
of the project owner and the signer that follows, are HEREBY CERTIFIED as true and accurate
this _____ day of ___________________, 20____.


              Project owner: ______________________________________________

                               BY:     Signature:      ____________________________

                                       Print Name:     ____________________________

                                       Title:          ____________________________

WARNING: Federal statutes and regulations, including but not limited to 18 U.S.C. §§ 287,
1001, 1010 and 1012; 31 U.S.C. §§ 3729 and 3802; and 24 C.F.R Parts 24, 28 and 30, provide
for criminal, civil or administrative penalties, sanctions or other regulatory actions with respect
to false, fictitious, or fraudulent statements or claims presented in a matter within the jurisdiction
of the U.S. Department of Housing and Urban Development.
                                                                                               14


[Attachment B]
Date:
  NOTICE OF A COMPLIANCE, DISPOSITION AND ENFORCEMENT (CDE) PLAN
               FOR [PROJECT NAME, FHA Number, iREMS Number]

Pursuant to Section 230 of the Consolidated Appropriations Act, 2014 , this is a notice from the
United States Department of Housing and Urban Development (HUD) that HUD has issued to
the owner of [project name] (“Project”), a Compliance, Disposition and Enforcement (CDE)
Plan, for the Project.


The CDE Plan instructs the owner to:


              Conduct a survey 100 % of the Project, identifying all physical deficiencies;
              Correct the physical deficiencies at the Project, including, but not limited to,
               those deficiencies identified in the HUD Real Estate Assessment Center (REAC)
               inspection;
              Execute a certification that the project is in compliance with HUD’s physical
               condition standards of 24 CFR 5.703 and state and local codes;
              Submit the completed survey and certification form to the HUD project manager
               within 60 days of receipt of HUD’s notice; and
              Provide this notice to all tenants.

Unless HUD agrees otherwise in writing, the owner must correct all physical deficiencies
identified in the survey of the Project within 60 days of receiving the CDE Plan.

If you are aware of any owner actions contrary to these instructions, contact [EA] at [EA’s
telephone number.]
                                                                                                15


[Attachment C]
Date:
    NOTICE OF AN ENFORCEMENT ACTION AGAINST [PROJECT NAME, FHA
                        Number, iREMS Number]

Pursuant to Section 230 of the Consolidated Appropriations Act, 2014, the United States
Department of Housing and Urban Development (HUD) is providing this notice that HUD has
initiated an enforcement action against the owner of [Project] for the failure to comply with
HUD’s requirements for maintaining the Project in acceptable physical condition.


Specifically, the notice to the owner involved: [check appropriate action]



_____          HUD’s initiation of an administrative proceeding to impose civil money penalties.



_____          HUD’s abatement, including partial abatement, of assistance payments to the
               owner, under the Section 8 contract, until the deficiencies are corrected.



_____          HUD’s filing of a lawsuit before a judge to appoint a receiver to operate the
               Project and correct the deficiencies.



_____          HUD’s filing of a lawsuit before a judge seeking an order for specific
               performance to the owner to correct the deficiencies.


_____          Other