HUD has issued a revised Chapter 6 of the 4350.1 Asset Management handbook. The new Chapter is effective August 1. It is posted to HUDCLIPS at http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4350.1/index.cfm.

HUD's summary of the revisions follow:

· Provides consistency with the HUD-9834, Management Review for Multifamily Housing Projects, which was revised in 2005;

· Clarifies the applicability section for the various programs covered under the chapter;

· Adds a new section to identify the reviewing officials (HUD staff, Contract Administrators, and Mortgagees);

· Removes outdated requirements (i.e., conducting a physical inspection as part of the on-site management review process.)  The revised version requires the reviewer to only perform follow-up activities for REAC inspection reports;

· Acknowledging that the REAC physical inspection process and Annual Financial Submission processes have been automated since the last publication and includes procedures based on the automated processes;

· Incorporates lead-based paint follow-up activities;

· Outlines the frequency of reviews based on set timeframes and/or project actions;

· Adds a section that discusses the Contract Administrator's role and interrelationship with HUD staff;

· Clarifies the processes prior to the on-site review for notifying owners/agents;

· Incorporates a discussion on the Desk Review process currently used in the revised HUD-9834, which occurs prior to the on-site review, prepares the reviewer for the on-site review, and reduces the burden on the owner/agent to provide information already available in HUD systems and file;.

· Provides guidance for communicating the on-site management review results to the owner/agent for consistency with the HUD Desk Monitoring Guide issued by former Deputy Secretary Bernardi.  The HUD Desk Monitoring Guide requires all findings to include the condition, criteria, cause, effect, and corrective action and the form HUD-9834 was revised in 2005 to conform to this requirement;

· Provides a more detailed set of standards/rating descriptions to apply when assigning the performance indicators (Superior, Above Average, Satisfactory, Below Average, and Unsatisfactory) for each of the seven rated categories;

· Provides a consistent overall rating calculation intended to eliminate major inconsistencies and variances in HUD field office ratings, which were previously discovered during national portfolio reviews;

· Places emphasis on limited reviews that should be performed by HUD staff for the insured/subsidized portfolio for projects that are also assisted by HAP contracts and monitored by HUD's Contract Administrator;

· Adds a section outlining the considerations when selecting properties for review;

· Incorporating actions that should be taken for owner/agent noncompliance issues; and,

· Removes the requirement that the lowest categorical rating assigned to high-impact review areas serve as the overall rating.

· This revised chapter may not be used under any circumstances until August 1, 2010.

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