[Federal Register Volume 87, Number 122 (Monday, June 27, 2022)]
[Notices]
[Pages 38171-38172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-13425]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5654-N-04]


Section 8 Housing Assistance Programs Management and Occupancy 
Review Schedule

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner.

ACTION: Notice.

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SUMMARY: Through this Notice, the Federal Housing Administration (FHA) 
establishes the Management and Occupancy Review (MOR) schedule for 
projects assisted under each of seven project-based Section 8 programs 
administered by the Office of Multifamily Housing Programs. The MOR 
schedule establishes a frequency for the completion of MORs based upon 
a project's previous MOR score and the project's rating under HUD's 
risk-based asset management model. This Notice follows the January 14, 
2015, publication of a proposed MOR schedule, on which HUD sought 
public comments. It adopts a final schedule that reflects changes made 
in response to such comments.

DATES: The MOR schedule is effective September 26, 2022.

FOR FURTHER INFORMATION CONTACT: Jennifer Lavorel, Director, Program 
Administration Office, Office of Multifamily Asset Management, Office 
of Housing, Department of Housing and Urban Development, 451 7th Street 
SW, Washington, DC 20410-7000; telephone number 202-402-2515 (this is 
not a toll-free number). Hearing- and speech-impaired persons may 
access this numbers through TTY by calling the Federal Relay Service at 
800-877-8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

    On January 14, 2015, HUD published the ``Section 8 Housing 
Assistance Programs Proposed Management and Occupancy Review Schedule'' 
(MOR Notice) (80 FR 1930) to solicit public comments on HUD's proposed 
MOR schedule. The proposed MOR schedule was published concurrently with 
a Proposed Rule (80 FR 1860) that sought to amend HUD's regulations 
governing seven project-based Section 8 Housing Assistance Payment 
(HAP) programs administered by the Office of Multifamily Housing 
Programs to provide for consistency across the programs with respect to 
the frequency of MORs and to authorize HUD to establish by Federal 
Register Notice, subject to public comment, an MOR schedule based on a 
project's annual MOR score and its rating under HUD's risk-based 
management model.
    The seven programs addressed in the Proposed Rule and subject to 
the MOR schedule are the HAP program for New Construction (24 CFR part 
880) and the HAP program for Substantial Rehabilitation (24 CFR part 
881), which provide rental assistance in connection with the 
development of newly constructed or substantially rehabilitated 
privately owned rental housing; the HAP Program for State Housing 
Agencies (24 CFR part 883), which applies to newly constructed or 
substantially rehabilitated housing financed by state agencies; the HAP 
program for New Construction financed under Section 515 of the Housing 
Act of 1949 (24 CFR part 884), which applies to U.S. Department of 
Agriculture rural rental housing projects; the Loan Management Set 
Aside Program (24 CFR part 886, subpart A), which provides rental 
subsidies to HUD-insured or HUD-held multifamily properties 
experiencing immediate or potential financial difficulties; the HAP for 
the Disposition of HUD-Owned Projects (24 CFR part 886, subpart C), 
which provides Section 8 assistance in connection with the sale of HUD-
owned multifamily rental housing projects and the foreclosure of HUD-
held mortgages on rental housing projects; and the Section 202/8 
Program (24 CFR part 891, subpart E), which provides assistance for 
housing projects serving the elderly or households headed by persons 
with disabilities.
    HUD's risk-based asset management model incorporates both 
qualitative and quantitative elements into a comprehensive property-
level rating. This rating translates to a classification (hereafter 
referred to as a ``risk-based classification'') of ``Troubled,'' 
``Potentially Troubled,'' or ``Not Troubled.''
    Elsewhere in this issue of the Federal Register, HUD publishes a 
Final Rule that adopts with no substantive changes the portions of the 
Proposed Rule that provide for consistency across the seven above-
described programs with respect to the frequency of MORs. As required 
pursuant to this Final Rule, HUD sets forth by publication of this 
Federal Register Notice an MOR schedule for

[[Page 38172]]

projects assisted under such programs, taking into account public 
comments received on the proposed MOR schedule.

II. Proposed MOR Schedule

    The proposed schedule was as follows:
    (1) A project with a ``Below Average'' or ``Unsatisfactory'' score 
on the previous MOR and a risk classification of ``Troubled,'' 
``Potentially Troubled,'' or ``Not Troubled'' would have an MOR within 
12 months of the previous MOR conducted at the project;
    (2) A project with a ``Satisfactory'' score on the previous MOR and 
a risk classification of ``Troubled'' or ``Potentially Troubled'' would 
have an MOR within 24 months of the previous MOR conducted at the 
project. Additionally, a project with an ``Above Average'' or 
``Superior'' score on the previous MOR and a risk classification of 
``Troubled'' would have an MOR within 24 months of the previous MOR 
conducted at the project; and
    (3) A project with a ``Satisfactory'' score on the previous MOR and 
a risk classification of ``Not Troubled'' would have an MOR within 36 
months of the previous MOR conducted at the project. Additionally, a 
project with an ``Above Average'' or ``Superior'' score on the previous 
MOR and a risk classification of ``Potentially Troubled'' or ``Not 
Troubled'' would have an MOR within 36 months of the previous MOR 
conducted at the project.
    HUD received 23 public comments on the Proposed Rule and 16 public 
comments on the proposed MOR schedule from management associations, 
public housing authorities, homebuilders' associations, residents of 
public housing, and other interested parties. Given the overlap between 
the public comments received on the Proposed Rule and the proposed MOR 
schedule, HUD provides a detailed discussion of all significant 
comments in the preamble to the Final Rule.

III. Final Notice

    HUD has made changes to the final MOR schedule based on comments on 
the proposed MOR schedule. As of the effective date of this Notice, the 
MOR schedule for projects assisted under the seven project-based 
Section 8 programs administered by the Office of Multifamily Housing 
Programs is as follows:
    (1) A project must have an MOR within 12 months of its previous MOR 
if--
    (a) it has a risk classification of ``Troubled'' or ``Potentially 
Troubled'' without regard to its MOR score, or;
    (b) it has a risk classification of ``Not Troubled'' and an MOR 
score of ``Unsatisfactory'' or ``Below Average.''
    (2) A project must have an MOR within 24 months of its previous MOR 
if it has a risk classification of ``Not Troubled'' and an MOR score of 
``Satisfactory.''
    (3) A project must have an MOR within 36 months of its previous MOR 
if it has a risk classification of ``Not Troubled'' and a previous MOR 
score of ``Above Average'' or ``Superior.''
    The schedule is summarized in the table below.

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            Previous MOR                 Unsatisfactory           Below average           Satisfactory          Above average             Superior
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                                                         Next MOR must be conducted within . . .
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Risk Classification: Troubled......  12 months of previous   12 months of previous   12 months of previous  12 months of previous  12 months of previous
                                      MOR.                    MOR.                    MOR.                   MOR.                   MOR.
Risk Classification: Potentially     12 months of previous   12 months of previous   12 months of previous  12 months of previous  12 months of previous
 Troubled.                            MOR.                    MOR.                    MOR.                   MOR.                   MOR.
Risk Classification: Not Troubled..  12 months of previous   12 months of previous   24 months of previous  36 months of previous  36 months of previous
                                      MOR.                    MOR.                    MOR.                   MOR.                   MOR.
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    Either HUD or the respective contract administrator (CA) may 
conduct an MOR outside of this schedule as warranted based on project-
level circumstances (for example, if a project's risk profile has 
worsened; note HUD requires an MOR within 6 months of a change in 
ownership or management irrespective of a project's performance-based 
MOR schedule). All scheduling of MORs is subject to the availability of 
appropriations for CA services, constraints on HUD staffing, the status 
of government operations, and whether a disaster declaration is in 
effect for the area in which a property is located. For any property 
with a previous MOR score of ``Satisfactory'' or better, HUD may opt to 
defer scheduling for up to 90 days from the date established pursuant 
to this schedule in order to balance workload. Deferred scheduling may 
be approved by CAs or vendors under HAP support services contracts only 
with prior approval from HUD.
    HUD suggests that owners provide copies of completed MORs to tenant 
organizations upon request, after redacting any personally identifiable 
information.

IV. Findings and Certifications

Paperwork Reduction Act

    The information collection requirements for this Notice have been 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB 
control number 2502-0178. The Department is amending the collection 
requirement to reflect this Notice's reduced burden. In accordance with 
the Paperwork Reduction Act, an agency may not conduct or sponsor, and 
a person is not required to respond to, a collection of information, 
unless the collection displays a currently valid OMB control number.

Environmental Review

    This Notice provides operating instructions and procedures in 
connection with activities under provisions of Section 8 project-based 
assistance program regulations that have been the subject of a required 
environmental review. Accordingly, under 24 CFR 50.19(c)(4), this 
Notice is categorically excluded from environmental review under the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Julia R. Gordon,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2022-13425 Filed 6-24-22; 8:45 am]
BILLING CODE 4210-67-P