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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Proposed Rules
ii Acceptability criteria variations may only be approved by HUD pursuant to paragraph a3i if such variations either:
A Meet or exceed the performance requirements; or B Significantly expand affordable housing opportunities for families assisted under the program.
iii HUD will not approve any inspection criteria variation if HUD
believes that such variation is likely to adversely affect the health or safety of participant families, or severely restrict housing choice.
b Entity Conducting Inspections.
HUD housing must be inspected by the appropriate entity as described in paragraph b1 of this section, except as described in paragraph b2 of this section.
1 General. The owner, lender, contract administrator, or HUD is the entity responsible for performing inspections of HUD housing as provided in this title, or a regulatory agreement or contract. For properties with more than one HUD-insured loan, only the first mortgage lender is required to conduct the inspection. The second mortgage lender will be provided a copy of the physical inspection report by the first mortgage lender.
2 Exception. Under the HCV and PBV programs, the Public Housing Agency is responsible for inspecting HUD housing under those programs, unless another entity is assigned the inspection by the program regulations governing the housing, regulatory agreements or contracts. A PHA-owned unit receiving assistance under section 8o of the 1937 act must be inspected by an independent entity as specified in 982.352biv of this title. Under the Moderate Rehabilitation Program, the PHA is responsible for inspecting the HUD housing unless the PHA is managing units on which it is also administering the HAP Contract in accordance with 882.412, in which case HUD is responsible for the inspections in accordance with 882.516d of this title.
c Timing of inspections1
Generally. A property must be inspected before the property is approved for participation in any of the HUD housing programs under this part unless the property is already a participant in another of the HUD programs under this part. An entity responsible for conducting an inspection of HUD
housing to determine compliance with this subpart must inspect such housing annually unless specified otherwise below. An inspection shall be conducted no earlier than 3 months before and no later than 3 months after
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the date marking the anniversary of the previous inspection in the year that the inspection is due; however, an inspection must be completed before the end of the calendar year that the inspection is due.
2 Extended Inspection cycle. HUD
housing other than HCV, PBV, and Moderate Rehabilitation housing shall be subject to annual inspection as described in paragraph c1 of this section, except that the Secretary, based on appropriate evaluation of risk, may extend the inspection cycles of certain qualifying properties for a period between two and five years, through publication in the Federal Register, following notice and the opportunity to comment.
3 Triennial cycle for small rural PHAs. Small rural PHAs as defined in 902.101 of this title shall be assessed in accordance with part 902, subpart H
of this title.
4 Housing Choice Vouchers. PHAs must inspect units subject to part 982 of this title in accordance with the frequency described in 982.405 of this title.
5 Project Based Vouchers. PHAs must inspect units subject to part 983 of this title in accordance with the frequency described in 983.103 of this title.
6 FHA insured mortgages section 232 facilities. HUD may exempt assisted-living facilities, board and care facilities, and intermediate care facilities from physical inspections under this part if HUD determines that the State or local government has a reliable and adequate inspection system in place, with the results of the inspection being readily and timely available to HUD. For any other Section 232 facilities, the inspection will be conducted only when and if HUD
determines, on the basis of information received, such as through a complaint, site inspection, or referral by a State agency, on a case-by-case basis, that inspection of a particular facility is needed to assure protection of the residents or the adequate preservation of the project.
d Inspection Costs. The cost of an inspection shall be the responsibility of the entity responsible for the inspection as identified in paragraph a of this section, except that a reasonable fee may be required of the owner of a property for a reinspection if an owner notifies the entity responsible for the inspection that a repair has been made or the allotted time for repairs has elapsed and a reinspection reveals that any deficiency cited in the previous inspection that the owner is responsible for repairing was not corrected. No fee
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may be passed along to the household residing in the unit or units.
e Access to property for inspection 1 HUD Inspections. Nothing in this subpart shall restrict the right of HUD, or an entity contracted by HUD, to inspect HUD housing.
2 Public housing projects. All PHAs are required to provide HUD or its representative with full and free access to all facilities in its projects. All PHAs are required to provide HUD or its representative with access to its projects and to all units and appurtenances in order to permit physical inspections, monitoring reviews, and quality assurance reviews under this part.
Access to the units shall be provided whether or not the resident is home or has installed additional locks for which the PHA did not obtain keys. In the event that the PHA fails to provide access as required by HUD or its representative, the PHA shall be given a physical condition score of zero for the project or projects involved. This score of zero shall be used to calculate the physical condition indicator score and the overall assessment score for that PHA.
5.707 Uniform self-inspection requirement and report.

All owners of HUD housing, other than owners participating in the HCV, PBV, and Moderate Rehabilitation Programs, are required to annually inspect their properties, including all units, to ensure the units are maintained in accordance with the standards in 5.703 and electronically report results to HUD, in accordance with the procedures set out by the Secretary and published in the Federal Register, following notice and the opportunity to comment. This self-inspection is independent of other HUD inspections discussed in 5.705.
5.709 Administrative Process for Defining and Revising Inspection Criteria.

a Inspection standards and scoring methodology. The Secretary will publish in the Federal Register, following notice and the opportunity to comment, a list of deficiencies and methodologies to use for scoring and ranking HUD housing. The Federal Register notice will include the factors for determining if an HCV unit passes or fails the inspection in addition to the scoring and ranking of other HUD
housing. After considering the public comments received on the Federal Register notice, HUD will publish a notice announcing the new inspections procedures, and the date on which the new procedures becomes effective.

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