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Andrew LaSalla
Andrew LaSalla II is one of the most trusted financial consultants in the residential and commercial lending business. With over seven years of of property loan underwriting experience, Andrew's sole focus is helping clients successfully navigate complex financial laws, terms, rules, paperwork, and transactions necessary to secure loans for new construction, purchase, or refinancing of multifamily, healthcare, affordable housing and student housing properties. Whether it's HUD, FHA, or MAP loans, Andrew is committed to tailoring financial solutions for every client he serves.
The U.S Department of Housing and Urban Development (HUD) conducts Real Estate Assessment Center (REAC) inspections on HUD insured affordable and market rate multifamily apartment communities. The goal of the REAC inspections are to ensure safe conditions for residents and to ensure that the properties are maintained to a certain standard of care. Since HUD insures these properties, it sets strict standards for management and maintenance.
REAC Inspection Checklist
A REAC inspection by a HUD or HUD approved inspector includes the site, building exteriors, all building systems, all common areas and units on the property. A few weeks prior to the REAC inspection, the property manager and a few employees should conduct a walk-through of the property and check the project thoroughly for any maintenance and repairs that are necessary. A list of common deficiencies included on the HUD website are as follows:
- Water Heater - the pressure relief valve discharge tube must extend to within 18 inches of the floor.
- Chimney - the vent stack on gas operated water heaters or furnaces must be properly aligned.
- HVAC Covers - must be present on all baseboard heaters.
- Electrical Panel Access - electrical panels cannot be blocked by furniture or other items not easily removed.
- Electrical Panel Covers - interior covers (aside from the panel lid box itself) must be present to prevent exposure to wire connections.
- Open Breaker/Fuse Ports – all open breaker/fuse ports must be covered.
- Door Seals - the factory-installed seals on exterior doors, such as building or unit doors, must be in place and undamaged.
- Door Hardware – all exterior door hardware must lock or latch properly, and fire doors must function as designed.
- Security Doors – no dual-side key locks are present.
- Kitchen - stove burners are working properly.
- Plumbing - pipes and faucets are not leaking, and areas around any leaks are cleaned up and repaired.
- Damaged Sinks/Showers - any hardware problems are repaired, diverters are working, drains have stoppers, hot and cold-water handles are in place and working.
- Clothes Dryers - are properly vented to the outside from units or laundry rooms.
- Storm Water Sewers - are not clogged with trash or leaves.
- Sanitary Sewer Covers – caps located in the grass with damage from lawn mowers must be repaired and cleaned out.
- Trash Chutes - hardware must be in place and the chute door must close properly.
- Trash Receptacles - are adequate in size for the property and are not overflowing.
- Auxiliary Lighting - the backup lighting must function properly even when the test light does not work.
- Leaking Domestic Water - there are no leaks in the domestic water supply, including the hose bibs located on the exterior of the building.
- Outlet and Switch Plate Covers – must be in place and are not cracked or broken.
The Day Of The HUD REAC Inspection
It is important for the property manager and employees with the most knowledge of the property to escort the HUD or HUD approved inspector throughout the property on the day of the REAC inspection. They should also have the following information available for the inspector:
- Certificates (if applicable) for boilers, fire alarm, building sprinkler system, elevator, and Lead Based Paint Report and Resident Disclosure (if the property has a building built prior to 1978).
- Area Measures of parking lots, driveways, roads, walkways, and steps (square footage).
- Rent Roll current for the day of the inspection, which includes all occupied units, vacant units and non-revenue units.
- Site map (If available) which allows the inspector to navigate the property efficiently.
Proper maintenance and safe conditions are top priority for multifamily apartment owners. By completing the REAC inspection checklist in advance, property managers and staff can ensure their property receives a high inspection score. If you find that your property is in need of improvements, contact LSG Lending Advisors to apply for a 223(f) cash out refinance transaction.
Looking for information about interpreting REAC inspection scores? Read more here.