Updates to a Multifamily Q&A Document Provide Clarification during COVID-19 Outbreak

March 26 update:

HUD provided an updated COVID-19 Q&A on March 24, 2020, which provided additional information regarding the following topics:
  • Addressed the steps that should be taken by a HUD-assisted property when there is a confirmed COVID-19 case at the property.
  • Provided additional guidance regarding the completion of Interim and Annual Recertifications. 
  • HUD is permitting electronic signature on recertification or interim recertification documents IF the owner obtains an original “wet“ signatures on the recertification/interim recertification documents at a later date. 
  • HUD further states that tenants can also provide income documentation for the recertification process, (i.e. paystubs, SS/SSI/SSP awards, bank statements, public assistance documents, etc.) by email to the Owner/Agent at their discretion. This approach will allow owners/agents to conduct a temporary-recertification using electronic versions of these documents and the owner/agent can collect the original documents from the tenant(s) at a later date.
  • Addressed the handling of work orders and entering units.
“The deferral of non-essential or non-health and safety repairs should be made on a unit-by-unit basis. If the repair is necessary for the health and safety of residents and the staff person is not comfortable entering the unit as a result of potential COVID-19 exposure, owner/management should consult local health guidance regarding the appropriate precautions to take.”

  • HUD clarified that Personal Protective Equipment and other safety equipment for HUD is an allowable project expense.
  • Addressed the closing of, or reduced hours, of the rental office
  • Clarified that HUD RCSs are suspended in areas that are under a state or nationally declared emergency or where public health officials have imposed limited travel.
  • Addressed whether FHA-insured borrowers, as well as Section 202 and 811 PRAC property owners, can access their reserve for replacement accounts to cover items not consistent with Handbook 4350.1, such as mortgage payments for delinquent mortgages.
  • HUD has extended the audited financial reporting deadlines until April 30.

“All entities required to submit financial information on or before April 30, 2020, are now required to submit their financial information no later than 120 days after the end of the fiscal year of the reporting period, and as otherwise provided by law. This waiver does not apply to the submission requirements for financial information that was delinquent as of March 23, 2020.”

HUD also addressed several questions related to Loan closings.

 Updates to HUD Guidance on Recertifications Related to Collection of Signatures for TRACS Submissions

On March 24, 2020, HUD published guidance on the impact of COVID-19 on the Annual Recertifications and Interim Recertification related to the collection of signatures and TRACS submissions. 
HUD provides that if a tenant is unable or unwilling to come into the office to sign an annual re-certification the owner/agent may submit the AR to the TRACS using one of the following three (3) extenuating circumstances codes:
1 = Medical (medical staff have quarantined the tenant)
2 = Late annual certification due to accommodation or extenuating circumstances
10 = Other
The owner/agent must obtain a signature from the tenant and submit a corrected certification to TRACS once the pandemic has passed.