NAHMA HUD Update: NSPIRE Administrative Procedures

July 5, 2023

Dear NAHMA Members -

Please find the attached notice on NSPIRE Administrative Procedures. The notice’s Purpose and Background sections have been included below for reference. The notice is also available on the NAHMA website HERE.

  1. Purpose

This notice implements 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)” or the “NSPIRE final rule.” The NSPIRE final rule establishes a new approach to defining and assessing housing quality called the National Standards for the Physical Inspection of Real Estate (NSPIRE). The purpose of NSPIRE is to strengthen HUD’s physical condition standards and improve HUD oversight through the alignment and consolidation of the inspection regulations used to evaluate “HUD housing,” as defined in 24 CFR 5.701(c), across multiple programs. Implementation of the NSPIRE final rule ensures 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. This 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. This 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 final NSPIRE 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.

  1. Background

On January 13, 2021, HUD published the “Economic Growth Regulatory Relief and Consumer Protection Act: Implementation of National Standards for the Physical Inspection of Real Estate (NSPIRE)” proposed rule (proposed rule) in the Federal Register. The NSPIRE final rule, published on May 11, 2023, (88 FR 30442) aligns and consolidates HUD’s inspection standards and procedures and incorporates provisions of the Economic Growth and Recovery, Regulatory Relief and Consumer Protection Act (P.L. 115-174) for HUD’s rental assistance programs. In the final rule, 24 CFR part 5, subpart G is the focal point of the consolidated requirements for HUDassisted housing that is decent, safe, sanitary, and in good repair, and will be referenced by other rental assistance regulations. In 24 CFR 5.703, the NSPIRE final rule revises that term to mean “functionally adequate, operable, and free of health and safety hazards.” Once published, this Administrative Procedures Notice supplements guidance provided in the NSPIRE Standards notice published on June 22, 2023 (88 FR 40832), and the NSPIRE Scoring notice. Both the NSPIRE Standards and Scoring notices included an opportunity for public comment, and any subsequent changes will be announced in the Federal Register after public comment. While this Departmental notice is issued as a final Departmental notice, HUD will accept comments sent to [email protected], and consider these comments for future revisions and operational guidance.