HUD Did Not Sufficiently Flag Unacceptable Physical Condition Scores To Assess Its Controlling Participants

We found 13 properties with consecutive REAC scores below 60 that were missing the required flags in HUD’s Active Partners Performance System (APPS) for unacceptable physical condition. This condition occurred because HUD did not have a quality control program to ensure that the account executives manually entered the flags into APPS and there was no automated process for flagging a property once it received the second consecutive below-60 REAC score. As a result, HUD relied on incomplete previous participation information to make decisions about future participation. Not having sufficient information to assess its controlling participants could potentially impact the health and safety of residents at multifamily properties.