SUPERVISORY VISITS and COMPLIANCE REVIEWS

1. SUPERVISORY VISITSand COMPLIANCE REVIEWS 7 CFR PART 3560

2. Purpose Of the Review • Ensure the project is managed in accordance with goals and objectives of the Rural Development Multi-Family Housing Program. • Preserve the $$$ value of the property.

3. Purpose (Con’t.) • Ensure the property is maintained in accordance with RD requirements for providing housing that is decent, safe, sanitary and affordable.

4. Purpose (Con’t.) • Ensure the project is operated at actual, necessary and reasonable costs • Detect waste, fraud and abuse. • Verify compliance with occupancy requirements

5. Purpose (Con’t.) To review compliance with the Affirmative Fair Housing Marketing Plan (AFHMP) and/or the Equal Opportunity requirements of Title VI of the Civil Rights Act of 1964, the Civil Rights Act of 1968 as amended by the Fair Housing Amendment Act of 1988, Section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975.

6. Timing of the Review Supervisory Visits and Compliance Reviews are required every 3 years. Can be conducted more frequently for projects with management that is unfamiliar with Agency requirements, or for projects experiencing occupancy or operational difficulties.

7. Notifications Area Specialist will coordinate site visit with Management. Confirmation letter will be sent requesting Statistical Application/Tenant Data and Management Information. At least two weeks prior to visit Management is responsible for notifying tenants of pending visit. (The Agency retains authority to visit the project without prior notice to observe conditions and operations and to conduct on-site reviews without the presence of the borrower or the borrower’s agent)

8. Notifications (Con’t.) • Confirmation of date and time will be provided with documents that should be available during our visit: • Completed “Request for Statistical Information • Marketing/Outreach File • Last Advertisement • Last Community Contact letters • Current financial balances for reserve, operating, tax/insurance and security deposit accounts • Tenant Files • Applications and the Waiting List

9. On-Site Review-Maintenance Systems

10. On-Site Review-Maintenance Systems 1. Routine Maintenance- a system to reflect that routine tasks are being performed to maintain compliance with RD standards. • The routine maintenance of equipment consistent with service information provided by the manufacturer—biweekly or monthly routine oiling, adjusting, replacement of filters, safety checks of alarms, and outside lighting, etc.

11. On-Site Review of Maintenance Systems 2. Responsive Maintenance-Tenant work order requests are being completed in a timely manner. Managers must know what has happened from the time a complaint has been received or a problem has been noted, to an inspection confirming the condition has been corrected.

12. On-Site Review-Maintenance Systems(Con’t.) 3. Preventive Maintenance – A system of regular review of existing structural, mechanical components for proper working order. The Agency requires managers to spell out procedures for scheduling routine tasks, such as garbage and trash removal, snow and ice removal, grounds upkeep, routine painting, and minor repairs. 4. Capital planning and Cash Flow- reviews of the reserve account and the Capital Needs Assessment (if one has been completed)- spot check to see if reserve account items were completed.

13. Financial Review

14. Financial Review • Cash Controls- How are rents, security deposits and application fees being collected and safeguarded? Review receipts to see if they are correct. • Insurance Claims\ Reserve account – Has RD been notified of insurance claims and are budgeted items in the reserve account being used? If not what is managements plan?

15. Financial Review (Con’t.) • Reserve account – sufficient to address major capital needs of the complex? If not how will these needs be addressed? • Security Deposit Account – Do funds agree with the tenant population? • Operating Account – is the current rent structure sufficient to address normal operating expenses? If not what adjustments need to be made.

16. Occupancy Review

17. Unit Assignment Assigning Available Units • Eligible Tenants residing in the property who are either under or over housed receive priority over new applicants if relocating them into a newly vacant unit would bring the household into compliance with the Occupancy Policy of the Property.

18. Unit Assignment Priorities for Units • If the unit is a designated accessible unit, then an eligible household that needs the features of that unit will receive priority over all other applicants, regardless of income. • Letter of Priority Entitlement- Persons displaced by agency action, for federally declared disaster have priority over all other applicants of the individual applicant’s income group.

19. Maintaining the Waiting List • Place ALL applications on waiting list (Complete, Incomplete, Eligible, Ineligible) • Record date and time application is RECEIVED. • Record date and time application is COMPLETE. • If application is incomplete, you must notify in writing within 10 days of what is still needed.

20. Maintaining the Waiting List (cont.) • Within 10 days of complete application, management must notify in writing that he/she have been selected for immediate occupancy, placed on waiting list or rejected. • Notices of rejection must give specific reasons and advise the applicant of the right to respond to the notice within 10 calendar days after receipt and of the right to a hearing. • Document final action taken on each applicant on the waiting list.

21. APPLICATIONS RECEIVED • Make sure that management has completed the race data for the applications that have been received on the RD form • Make sure that management has filled out the waiting list based on the information on the applications. In addition make sure that the applicants or the site manager has checked the appropriate boxes on the application

22. Sample Waiting List

23. Maintaining the Waiting List (cont.) • A recommended color coding system: Blue for Move-In Yellow for Withdrawn Pink for Rejected

24. Waiting List & Application Review Findings • Applicant notification letters missing • Letters not sent within timeframes. • Keep letters together and on top of the application. • All blanks on the application are not completed. • Required fields on waiting list not completed. • Lack of contacts with applicants missing. Need to document all contacts with applicant on a sheet of notebook paper and staple to the front of the application.

25. Waiting List Selecting Applications • Selection from the Waiting List will be made according to date and time and in the following order: Very low-income applicants Low-income applicants; and Moderate-income applicants

26. Waiting List Rejecting Applications • Borrowers are required to notify all applicants in writing of their ineligibility. • The rejection letter must advise the applicants of their right to appeal in accordance with 7 CFR 3560.154 and 7 CFR 3560.160. It must also be sent certified mail or signed by the applicant that they have received a copy of the letter. • The rejection letter must advise the applicants of the right to appeal the decision within 10 days.

27. Waiting List • If rejected for credit the letter must also state the source of the credit information. • Applications that are withdrawn must also be notified of the withdrawal from the waiting list

28. Assignment of Rental Assistance Five Priorities • First Priority is always to eligible very low-income tenants paying the highest percentage of their adjusted annual income in shelter costs. • Second Priority is to very low-income applicants on the waiting list

29. Assignment of Rental Assistance Five Priorities • Third priority is to eligible low income tenants paying the highest percentage of their adjusted annual income in shelter costs. • Fourth priority is to eligible low-income applicants on the waiting list.

30. Assignment of Rental Assistance Five Priorities • Final priority is to households that are residing in a rental unit for which they do not qualify on the basis of an occupancy waiver or other special approval situations.

31. Communication • Occupancy Standards of the Property. • Appropriate Lease Clauses. • What to do when repairs are needed. • Who will pay if tenants must relocate to another unit. • How security deposits are handled on unit transfers. • What happens when an eligible applicant needs unit occupied by an ineligible tenant (move into appropriate sized unit ). • Remind ineligible tenants on an annual basis the possibility of having to move to another unit. • Zero Income tenants

32. Occupancy Review • A sample of rejected and withdrawn applications will be reviewed for proper documentation and notification. • Occupancy requirements- are more or less, people living in a unit than the tenant occupancy plan calls for? Is the handicapped unit occupied by someone who needs that unit? Management will be required to inform RD of the tenants’ status living in these units.

33. Occupancy Review(Con’t.) • Achieving full occupancy – review marketing materials, applications and waiting lists to be sure management is working to achieve full occupancy in accordance with the AFHMP. • Tenant terminations and evictions- are lease terminations and evictions being handled properly? Are State laws being followed?

34. Occupancy Review (Con’t.) • Tenant Management Relations- Review bulletin boards and tenant files that tenants are notified of their rights through the Tenant Grievance Procedure (HB 3560.160) JUSTICE FOR ALL FAIR HOUSING AFHMP Tenant Grievance and Appeal Rights

35. Posters and Required Documentation • Tenant Grievance & Appeals Procedure(non-English) • And Justice For All (green) • Equal Housing Opportunity • Occupancy Rules( non-English) Includes Lease • Current Rent/Utility Allowance Approval Letter • Affirmative Fair Housing Marketing Plan (full copy) • Office Hours- Emergency Contact Information • LEP Requirements

36. AFFIRMATIVE FAIR HOUSING AND MARKETING All recipients who provide housing that is intended to be occupied for more than a brief period of time must have an approved Affirmative Fair Housing Marketing Plan (AFHMP). The approved plan must be made available and posted (in a conspicuous location) by the participant for public inspection at the participant’s place of business, sales and/or rental office. Specific instructions for the development of the AFHMP are attached to the blank form.

37. AFFIRMATIVE FAIR HOUSING AND MARKETING Management must establish a system for maintaining records of the number of applications received from participants on an annual basis and the records must reflect the number of applicants approved, rejected or withdrawn by sex, race/national origin, ethnicity.

38. AFFIRMATIVE FAIR HOUSING Outreach and community contacts.Management will make contacts, at a minimum annually, in the community with local organizations, minority leaders and others identified in the AFHMP to advise them of the availability of services at the recipient’s project or facility.

39. AFFIRMATIVE FAIR HOUSING Posters. The nondiscrimination poster, “...and Justice for All” will be conspicuously displayed at the recipient’s facility, especially in the recipient’s business office. Additional posters may be posted in common use areas such as laundry rooms or meeting rooms, the HUD Fair Housing Poster will also be displayed.

40. AFFIRMATIVE FAIR HOUSING Discuss with Management: Newspaper articles and advertisements: Newspaper articles or any advertisements describing the availability of services must contain the nondiscrimination clause, “This institution is an Equal Opportunity Provider and Employer.” Also must include the Equal Housing Opportunity Logo or statement, TDD phone number, if the project has a number and accessible logo or statement. If project is designated elderly/disabled the information given should read “62 years of age or older handicapped/disabled” In addition add the wording “Rental Assistance is available” if it applies. Obtain a copy of all planned advertisements and flyers.

41. INDICATORS OF NON-COMPLIANCE • Statistical data-Percentage of participants by race/ethnicity are out of proportion to the percentage of racial population in the area identified on AFHMP • No outreach in community • No advertising- or advertising that does not reach the targeted populations • No records on participants or applicants by race or ethnic group • Community contacts- no contacts made by the borrower with community contacts identified in AFHMP or contacts revealed that the targeted populations were not aware of the property.

42. Marketing and Outreach File • Is a marketing/outreach file maintained on site? • Is management marketing units in accordance with the AFHMP? • Are community contacts contacted at least once annually? • Are advertisements run at least once annually? • Are outreach efforts attracting eligible applicants?

43. Tenant File Reviews

44. Tenant File Reviews RD 3560-8 Tenant Certification Form • Income/assets/deductions calculated from verifications in the file correctly. • Does third party verification match these numbers? If not, RD will notify management of the differences. • Compare rents on Certification form to project worksheet.

45. Tenant File Reviews(Con’t.) • Review the application for completion – is it signed and dated by tenant and management for date and time received? Is there a receipt for application fee, if required? • Make sure that the applicants or the site manager has checked the appropriate race data on the application.

46. Tenant File Reviews (Con’t.) • Check the executed lease (or addendum if applicable) in the file for completion. Is the most recent Agency approved lease in the file? • Security Deposit – is it in accordance with the Management Plan? Is there a receipt in file or tracking system if paid in installments? Have all installments been collected. • Check for move-in inspection report – is it signed and dated by tenant and management? • Does a sample reflect equal treatment for all move-ins?

47. Tenant File Reviews (Con’t.) • Review for unit repairs and maintenance records for completion. • The most recent re-certification notification letter(s) have been sent. • Any tenant notices other than recertification notice • Social Security numbers for all family members or certification of no SSN? • Zero Income tenants have been reviewed quarterly.

48. Tenant File Reviews (Con’t) • Are annual inspections documented? • If findings or deficiencies were noted on inspection were they corrected? • All of these items should be maintained as long as tenant is a resident – if tenant transfers to new unit original documentation should follow them and remain in their file. • Has Property Manager/Management reviewed files.

49. Physical Inspection

50. Physical Inspection Adequate maintenance is a crucial element in providing decent, safe, and sanitary housing and ensuring that environmental and accessibility requirements are met. RD regularly conducts full physical inspections of its properties to ensure that they meet established program standards.