Tap to get financing
HUD Loans
HUD Loans
Loan Programs
FHA & HUD LoansHUD 221(d)(4)HUD 223(f)HUD 223(a)(7)HUD 241(a)HUD 232/223(f)
Calculators
Break-Even Ratio CalculatorCap Rate CalculatorCash-on-Cash Return CalculatorCommercial Mortgage CalculatorDebt Yield CalculatorDSCR CalculatorLoan Repayment CalculatorLTV CalculatorNOI Calculator
Resources
BlogLoan DocsHUD REAC InspectionsHUD Section 202 Supportive HousingHAP Contracts2021-2022 HUD Multifamily Basic Statutory LimitsFrequently Asked Questions
About
CompanyLeadershipTeamWe're Hiring
Contact Us
Get financing
Was This Article Helpful?
Newly Published
Oct 5 at HUD Loans
HUD’s New Surplus Cash Distribution Changes
Oct 3 at HUD Loans
What Are Replacement Reserves?
Sep 12 at HUD Loans
Is HUD Financing Available for Assisted Living Facilities?
Explore the Janover Network
Feb 2 at Multifamily Loans
Top 10 Fannie Mae Multifamily Lenders of 2023
Jan 31 at Commercial Real Estate Loans
Top 10 Commercial Property Management Companies of 2023
Jan 30 at Commercial Real Estate Loans
Top 5 Markets for Medical Office Investing in 2023
HUD Multifamily Loans Blog
Last updated on Dec 8, 2022
5 min read
by Jeff Hamann

Top 10 REAC Inspection Deficiencies

HUD’s published list of most common issues for inspections offers insights in how best to prepare your affordable housing asset for its next check-up.

Get Quotes ← Apply for a loan in minutes and get multiple quotes today

In this article:
  1. 10. Kitchen Functionality
  2. 9. Security Doors
  3. 8. Damaged Door Hardware
  4. 7. Damaged Door Seals
  5. 6. Open Breaker/Fuse Ports
  6. 5. Missing Electrical Covers
  7. 4. Accessibility of Electrical Panels
  8. 3. Missing HVAC Covers
  9. 2. Misaligned Chimneys
  10. 1. Water Heater  
  11. Get Financing

Affordable housing communities insured by the Department of Housing and Urban Development are, as we’ve previously covered, subject to periodic inspections by HUD’s Real Estate Assessment Center. The organization conducts about 20,000 inspections every single year, and knowing what inspectors are assessing is a critical component to ensure that you, as an affordable housing owner or operator, are providing safe and secure housing.

Between early 2020 and mid 2021, REAC inspections largely ground to a halt, owing to the novel coronavirus pandemic. Although the group jumpstarted inspections late last year, a huge backlog of deferred inspections awaits. To address this backlog and some evidence of conditions deteriorating across the nation’s affordable housing inventory, REAC plans to inspect nearly all HUD-insured properties by the end of this year.

So, if you’re preparing your asset for a REAC inspection, what areas should you focus on? Generally, health and safety concerns are given significant weighting in an inspection, but what are the most common slip ups reported by REAC inspectors? Check out our list below of the 10 most common deficiencies reported, based on data from HUD.

10. Kitchen Functionality

The kitchens in your property’s units are among the most frequent places inside an apartment where a REAC inspector may notice an issue. It’s hardly surprising — given the intricacies of plumbing, electrical systems and often gas lines, there’s a lot of room for something to go wrong. And if something does go wrong, it could be potentially life threatening. With this in mind, inspectors pay very close attention to the safety and functionality of a kitchen’s built-in appliances. The stove, in particular, is cited as one of the most common reasons to lose points during an inspection. Ensure all knobs are connected and that burners operate properly.

9. Security Doors

Your community’s security doors may see a lot of use, particularly in large properties with multiple units, and they are a critical safety component of a building. HUD notes that security doors must not be fitted with dual-side key locks — after all, in the event of an emergency, requiring a key to exit a property could be extremely dangerous.

8. Damaged Door Hardware

Door issues account for three items on our list. Basic functionality of a door’s hardware — meaning handles, hinges, latches, and locks — is imperative for a good inspection. Prior to inspection day, ensure that all mechanisms in your exterior and fire doors work without a hitch to ensure top marks.

7. Damaged Door Seals

For our last door-related problem on this list, door seals can be a significant issue that a community owner should address. Damaged or broken door seals not only cause significant discomfort to a resident — particularly in regions with cold winters — but they also can lead to higher energy costs both for residents and a community’s common areas.

6. Open Breaker/Fuse Ports

This issue is pretty straightforward: Within your circuit breaker or fuse box, all open ports must be covered. Leaving ports open could present an electrical safety hazard.

5. Missing Electrical Covers

Another potential electrical hazard, your property’s electrical panels must have covers in place to avoid anything coming into contact with wiring and connections. This includes not only a circuit breaker box but any electrical junctions, both within units and in a community’s common areas.

4. Accessibility of Electrical Panels

While those panels must be covered, they must also be accessible. If furniture is blocking access to a wiring junction or other electrical panel, this is very likely to lead to a reduced score. This is not to say that nothing may be around a panel, however — the main criterion is that objects near a panel must be easily removed. A large desk or a fridge should not block access to a panel, for example, but something smaller and lighter — say, an office chair or a nightstand — is likely perfectly fine.

3. Missing HVAC Covers

The main concern with HVAC systems concerns covers for baseboard heating. If baseboard heating systems are utilized in your property, make sure they are in good working order. This means that the system covers should be securely in place. Without covers in place, an inspector may identify burn hazards — or even issues relating to sharp edges — which could significantly impact your overall score.

2. Misaligned Chimneys

Building systems are a potential area for significant losses in terms of inspection scoring. One of the most common building system issues is the presence of chimneys or other ventilation systems that are not aligned with what they’re meant to vent.

Consider: Do your systems like furnaces or water heaters have ventilation ducts or chimneys in place to capture exhaust? If there is even a slight disconnect or misalignment between these devices and their exhaust systems, it could raise safety concerns your inspector may flag.

1. Water Heater 

While there are several concerns relating to water heaters — particularly with ventilation for those using gas — the most common deficiency in a REAC inspection is specific to the placement of water heaters’ pressure relief discharge tube. The end of this tube must be within 18 inches of the floor. Any higher up, and you could lose serious points on your inspection. However, make sure the pipe doesn’t terminate too close to the floor, either. Any discharge from the pipe should be readily observable to identify any issues in your water heater operations.

In this article:
  1. 10. Kitchen Functionality
  2. 9. Security Doors
  3. 8. Damaged Door Hardware
  4. 7. Damaged Door Seals
  5. 6. Open Breaker/Fuse Ports
  6. 5. Missing Electrical Covers
  7. 4. Accessibility of Electrical Panels
  8. 3. Missing HVAC Covers
  9. 2. Misaligned Chimneys
  10. 1. Water Heater  
  11. Get Financing
Tags
  • REAC
  • HUD
  • HUD REAC
  • REAC Inspections
  • HUD Inspections
  • Real Estate Assessment Center

Getting commercial property financing should be easy.⁠ Now it is.

Click below for a free, no obligation quote and to learn more about your loan options.

Get financing →
Janover logo

HUD Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Multifamily Today, Commercial Real Estate Loans, SBA7a Loans, CMBS Loans, Apartment Loans, HUD Loans, HUD 221d4 Loan, HUD 232 Loan, HUD 223f Loan, HUD 223a7 Loan, SBA Express Loans, SBA 504 Loans, and OpportunityZones Help.

Janover Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487

hello@hud.loans

Site Information

Privacy Policy
Terms of Use

This website is owned by a private company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. We have no affiliation with any government agency and are not a lender. We are a technology company that uses software and experience to bring lenders and borrowers together. By using this website, you agree to our use of cookies, our Terms of Use and our Privacy Policy. We use cookies to provide you with a great experience and to help our website run effectively.

Freddie Mac® and Optigo® are registered trademarks of Freddie Mac. Fannie Mae® is a registered trademark of Fannie Mae. We are not affiliated with the Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), Freddie Mac or Fannie Mae.

Copyright © 2022 Janover Inc. All rights reserved.