News | A. J. Johnson Consulting Services

On June 27, 2022, the Department of Housing & Urban Development (HUD) published the Management and Occupancy Review (MOR) Rule and Notice in the Federal Register. The rule becomes effective on September 26, 2022. This final rule follows the 2015 publication of a proposed rule on MOR scheduling.

The Rule and Notice apply to properties covered under project-based Section 8 Housing Assistance Payments (HAP) Contracts for the following programs:

New Construction
Substantial Rehabilitation
New Construction or Substantial Rehabilitation financed by State Housing Agencies
New Construction financed under Section 515 of the Housing Act of 1949 (Section 8/515 projects)
Loan Management Set Aside Program
Disposition of HUD-Owned Projects
Section 202/8

HUD conducts MORs to ensure that owners and agents (O/As) comply with HUD requirements. The MOR rule establishes a frequency for the completion of MORs based upon a project’s prior MOR score and the project’s rating under HUD’s risk-based asset management model. HUD believes that moving to a risk-based MOR schedule will enhance HUD oversight of the Section 8 HAP program and improve overall program effectiveness.

Beginning on September 26, 2022, Contract Administrators (CAs) will establish MOR schedules as follows:

Properties with a previous MOR rating of Unsatisfactory or Below Average will be reviewed within 12 months of the prior MOR;
Properties with a previous MOR rating of Satisfactory will be reviewed within 12 months of the prior MOR if the Risk Classification of the property was Troubled or Potentially Troubled. If the Risk Classification was Not Troubled, these properties will be reviewed within 24 months of the prior MOR;
Properties with a previous MOR rating of Above Average or Superior will be reviewed within 12 months of the prior MOR if the Risk Classification of the property was Troubled or Potentially Troubled. If the Risk Classification was Not Troubled, these properties will be reviewed within 36 months of the prior MOR.

Owners and Agents should remember that MORs are different than the physical inspections conducted by HUD’s Real Estate Assessment Center (REAC). The MOR Rule and Notice do not affect REAC’s inspections of Section 8 HAP properties.

O/As operating any of the property types noted above should obtain a copy of the MOR Rule and Notice at https://www.federalregister.gov/documents/2022/06/27/2022-13426/streamlining-management-and-occupancy-reviews-for-section-8-housing-assistance-programs?utm_medium=email&utm_source=govdelivery.

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07/02/2022

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