Verification of Value and Determination of Income from Real Estate Investments

Executive Order Establishes English as Official U.S. Language: Impact on HUD Programs

President Donald Trump signed an Executive Order on March 1, 2025, establishing English as the official language of the United States. This move has significant implications for federal agencies and their communication policies, especially for the Department of Housing and Urban Development (HUD) and Rural Development properties. Key Changes The Executive Order revokes Executive Order 13166, issued on August 11, 2000. That previous order mandated federal agencies, including HUD, to implement Limited English Proficiency (LEP) policies for their programs. Under the previous order, agencies were required to ensure that individuals with limited English proficiency could access their services. With the revocation, HUD will no longer mandate LEP policies for owners and Public Housing Authorities (PHAs) in HUD-assisted properties. Current Status and Recommendations It's important to note that the new Executive Order does not prohibit federal agencies from producing documents in languages besides English. However, they will no longer be legally obligated to do so. No immediate action is necessary for HUD and Rural Development property owners and managers who currently have LEP policies in place. I recommend maintaining current policies until formal guidance is issued. Both HUD and Rural Development are expected to provide official guidance on this change in the coming weeks or months. Project operators are advised to await this guidance before implementing any changes to their existing language access policies. Looking Ahead This policy shift signifies a substantial change in federal language requirements. Housing providers should remain informed about upcoming agency guidance that will clarify expectations and requirements going forward. Once formal guidance is released, property managers and owners should consult with their industry associations and legal advisors to ensure compliance. This article offers informational content based on current developments and should not be interpreted as legal advice. Property owners and managers should seek guidance from qualified legal professionals regarding specific compliance issues.

HUD Extends NSPIRE Affirmative Standards Compliance Deadline to October 2025

The U.S. Department of Housing and Urban Development s (HUD) Real Estate Assessment Center (REAC) has announced an extension of the compliance deadline for the National Standards for the Physical Inspection of Real Estate (NSPIRE) affirmative requirements. Initially planned for earlier implementation, the new deadline of October 1, 2025, gives property owners and managers in the Public Housing and Multifamily Housing programs extra time to align their properties with the updated standards. Background and Rationale for Extension The decision to extend the compliance period was influenced by the challenges property owners and managers encountered in meeting the new requirements. HUD recognizes the complexity of these updates and the operational adjustments needed, so it has opted to provide a grace period, allowing property stakeholders to address any deficiencies without immediate penalty. While property inspections conducted during this period will still identify deficiencies, they will not adversely affect inspection scores until the new deadline. Instead, flagged issues will be marked with a caret (^) symbol, indicating non-compliance that must be addressed before the final implementation date. It s important to note that the extension does not change HUD s existing policies regarding traditionally non-scored deficiencies. This means that requirements related to smoke detectors, carbon monoxide (CO) detectors, handrails, and call-for-aid devices remain unchanged and must continue to be addressed according to HUD s existing standards. Key Affirmative Requirements Under NSPIRE The NSPIRE affirmative requirements encompass a wide array of safety and habitability standards aimed at improving the quality of housing for tenants. These requirements pertain to various aspects of property maintenance, including site conditions, individual unit standards, building interiors, and exterior features. Below is a summary of the essential requirements: Site-Specific Requirements Installation of fire-labeled doors Electrical safety improvements, such as the installation of Ground Fault Circuit Interrupters (GFCI) and Arc Fault Circuit Interrupters (AFCI) are essential. Guardrails for elevated surfaces HVAC system compliance with specified standards Adequate interior lighting levels Minimum electrical and lighting standards to ensure habitability Detailed Unit Requirements Provision of hot and cold running water in bathrooms and kitchens Private bathroom facilities with required fixtures Properly installed smoke detectors in designated locations Special accommodations for hearing-impaired residents, including visual alert devices CO alarms installed per safety regulations Designated living room and kitchen area standards Electrical outlet and lighting provisions for Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) program units GFCI protection in areas near water sources Adequate heating sources to maintain comfortable indoor temperatures Guardrails for elevated surfaces within units Fixed lighting in kitchens and bathrooms for enhanced visibility Building Interior Requirements Smoke detectors installed on each level of the property CO alarms strategically placed to maximize safety GFCI protection in locations with potential water exposure Guardrails for all elevated walking areas Permanently mounted lighting fixtures to improve illumination Restrictions on the use of unvented space heaters to mitigate fire hazards Exterior Requirements GFCI protection for outdoor outlets near water sources Guardrails for elevated exterior walking paths to prevent accidents Preparing for Full Implementation While the extended deadline postpones the enforcement of compliance-related penalties, property owners and managers should take advantage of this time to proactively address deficiencies and make necessary upgrades. By acting now, property stakeholders can ensure a smoother transition when the standards fully take effect in October 2025. The primary goal of these affirmative requirements is to enhance property resilience and increase tenant safety. By following these updated standards, property owners help create a healthier and more secure living environment for residents. HUD strongly encourages proactive compliance measures to prevent last-minute challenges and potential non-compliance issues when the deadline arrives. With this extension, HUD acknowledges the challenges housing providers face while reinforcing its commitment to uphold high standards of housing quality and tenant protection. Property owners and managers should use the extra time to assess, plan, and implement necessary improvements to ensure full compliance by the October 2025 deadline.

HUD Delays Implementation of Final Rule Updating HOME Investment Partnerships Program

The U.S. Department of Housing and Urban Development (HUD) has announced a significant update to the HOME Investment Partnerships (HOME) program regulations. This final rule, which was originally set to take effect on February 5, 2025, has now been delayed until April 20, 2025. The delay follows President Trump's directive to freeze all pending regulations, affecting the timeline for implementation. The final rule was published in the Federal Register on January 6, 2025, and aims to modernize and streamline program requirements while ensuring better alignment with other federal housing initiatives. Here is a detailed overview of the changes and their implications for stakeholders. Key Highlights of the Final Rule Simplification and Streamlining: The updated regulations are designed to reduce administrative burden and complexity, making it easier for participants to navigate the program requirements. Changes include clarified guidelines and updated processes to improve efficiency and accessibility. Alignment with Other Federal Housing Programs: The revisions harmonize HOME program regulations with other federal housing initiatives, such as the Community Development Block Grant (CDBG) and Section 8 Housing Choice Voucher programs. This alignment facilitates cohesive and complementary use of federal housing resources. Implementation of Recent Statutory Amendments: The final rule incorporates recent amendments to the HOME statute, ensuring compliance with current legislative mandates. Applicability: The revised regulations apply to developments for which HOME funds are committed on or after 30 days following the new implementation date effectively starting April 20, 2025. Background on the Final Rule The final rule follows the publication of a proposed rule on May 29, 2024. HUD received and reviewed extensive feedback from stakeholders during the comment period, resulting in adjustments to ensure the regulations address both practical challenges and statutory requirements. Minor revisions were also made to CDBG and Section 8 program regulations to align with the updated HOME program rules. Implications for Affordable Housing Stakeholders For Developers: Developers planning to utilize HOME funds for projects must familiarize themselves with the updated requirements to ensure compliance. Streamlined processes may expedite project approvals and reduce administrative delays. For Public Housing Agencies (PHAs) and Local Governments: Agencies administering HOME funds will benefit from more precise regulations and enhanced alignment with other federal housing programs. Training and resources may be required to adapt to the new requirements. For Tenants and Communities: The updates aim to enhance the efficiency and effectiveness of HOME-funded projects, resulting in improved housing opportunities for low-income families. Next Steps HUD encourages all stakeholders to review the final rule in detail and assess its impact on their operations and strategies. Additional guidance and training materials are expected to be released to assist in the transition to the updated regulations. Given the implementation delay, stakeholders have extra time to prepare for the changes and ensure compliance with the new requirements. Conclusion The final rule represents a significant step forward in modernizing the HOME program and optimizing its role in addressing the nation s affordable housing needs. Although implementation has been postponed until April 20, 2025, stakeholders should continue preparing to align with the updated requirements and capitalize on the improved processes.

Understanding Medicare Advantage Flex Card Benefits in HUD Housing Income Determinations

In January 2025, the U.S. Department of Housing and Urban Development (HUD) clarified how Medicare Advantage (MA) supplemental benefits, particularly those administered through Flex Cards, should be treated when calculating income for HUD-assisted housing residents. This guidance helps housing providers accurately determine which benefits should be included or excluded from income calculations. Key Points for Income Calculations Rent and Utility Support When MA supplemental benefits are explicitly used for rent and utilities, these amounts must be included in income determinations. Only the amount spent on rent and utilities should be counted, not the total available benefit. Rent and utility expenditures may be documented through third-party verification or resident self-certification if third-party documentation is unavailable. Other Flex Card Benefits Benefits used for purposes other than rent and utilities (such as groceries, medical expenses, or over-the-counter medications) should be excluded from income calculations. Unused benefits that expire at month-end or year-end are not counted as income. Housing providers should assume Flex Card benefits are not being used for rent and utilities unless they have specific information indicating otherwise. Verification Requirements Housing providers should note that: Most MA supplemental benefits are excluded from income and do not require verification. Providers should not require beneficiaries to track or document routine Flex Card purchases for excluded benefits. Only benefits used explicitly for rent and utilities need verification. As part of the application and intake procedures, owners and managers should inquire whether applicants or residents use MA benefits for rent or utilities. When residents report using MA benefits for rent and utilities, providers should first attempt to obtain third-party documentation. Self-certification is acceptable when third-party documentation cannot be obtained. Example Scenario If a resident receives a $100 monthly Flex Card benefit: If they spend $50 on medical expenses and $0 on rent/utilities, the entire $100 is excluded from income. If they spend $30 on rent/utilities and $70 on other eligible expenses, only the $30 used for rent/utilities is counted as income. Any unused portion that expires is not counted as income. Practical Implementation Housing providers should: Update their policies and procedures to reflect these requirements. Train staff on the proper treatment of MA supplemental benefits. Develop appropriate verification procedures for benefits used for rent and utilities. Maintain clear documentation of included benefits. This guidance helps ensure consistent and appropriate treatment of Medicare Advantage supplemental benefits while minimizing the administrative burden on housing providers and residents.