[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR902.25]

[Page 261-264]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 902--PUBLIC HOUSING ASSESSMENT SYSTEM--Table of Contents
 
            Subpart B--PHAS Indicator #1: Physical Condition
 
Sec. 902.25  Physical condition scoring and thresholds.

    (a) Scoring. Under PHAS Indicator 1, REAC will calculate a 
score for the overall condition of a PHA's public housing portfolio 
following the procedures described in the PHAS Notice on the Physical 
Condition Scoring Process (PHAS PASS Notice 3), which will be published 
in the Federal Register. HUD may revise this notice in the future, but 
HUD will publish for comment any significant proposed amendments to this 
notice. After comments have been considered, HUD will publish a notice 
adopting a final notice or amendment. The PHAS Notice on the Physical 
Condition Scoring Process that is currently in effect can be found at 
the REAC Internet site at http://www.hud.gov/reac or obtained from 
REAC's Technical Assistance Center at 888-245-4860 (this is a toll free 
number).
    (b) Adjustment for physical condition (property age) and 
neighborhood environment. In accordance with section 6(j)(1)(I)(2) of 
the Act (42 U.S.C. 1437d(j)(1)(I)(2)), the overall physical score for a 
property will be adjusted upward to the extent that negative conditions 
are caused by situations outside the control of the PHA. These 
situations are related to the poor physical condition of the property or 
the overall depressed condition of the immediately surrounding 
neighborhood. The intent of this adjustment is to avoid penalizing the 
PHA through appropriate application of the adjustment. (See paragraph 
(c) of this section which provides for further adjustments of physical 
condition score under certain circumstances.)
    (1) Adjustments in three areas. Adjustments to the PHA physical 
condition score will be made in three factually observed and assessed 
areas (inspectable areas):
    (i) Physical condition of the site;
    (ii) Physical condition of the common areas on the property; and
    (iii) Physical condition of the building exteriors.
    (2) Definitions. Definitions and application of physical condition 
and neighborhood environment factors are:

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    (i) Physical condition applies to properties over 10 years old and 
that have not received substantial rehabilitation in the last 10 years.
    (ii) Neighborhood environment applies to properties located where 
the immediate surrounding neighborhood (that is a majority of the 
population that resides in the census tracts or census block groups on 
all sides of the development) has at least 51 percent of families with 
incomes below the poverty rate as documented by the most recent census 
data.
    (3) Adjustment for physical condition (property age) and 
neighborhood environment. HUD will adjust the physical score of a PHA's 
property subject to both the physical condition (property age) and 
neighborhood environment conditions. The adjustments will be made to the 
scores assigned to the applicable inspectable areas so as to reflect the 
difficulty in managing. In each instance where the actual physical 
condition of the inspectable area (site, common areas, building 
exterior) is rated below the maximum score for that area, 1 point will 
be added, but not to exceed the maximum number of points available to 
that inspectable area.
    (i) These extra points will be added to the score of the specific 
inspectable area, by property, to which these conditions may apply. A 
PHA is required to certify in the manner prescribed by HUD, the extent 
to which the conditions apply, and to which inspectable area the extra 
scoring point should be added.
    (ii) A PHA that receives the maximum potential weighted points on 
the inspectable areas may not claim any additional adjustments for 
physical condition and/or neighborhood environments for the respective 
inspectable area(s). In no circumstance shall a property's score for the 
inspectable area, after any adjustment(s) for physical condition and/or 
neighborhood environments, exceed the maximum potential weighted points 
assigned to the respective property's inspectable area(s).
    (4) Scattered site properties. The Date of Full Availability (DOFA) 
shall apply to scattered site properties, where the age of units and 
buildings vary, to determine whether the properties have received 
substantial rehabilitation within the past 10 years and are eligible for 
an adjusted score for the Physical Condition Indicator.
    (5) Maintenance of supporting documentation. PHAs shall maintain 
supporting documentation to show how they arrived at the determination 
that the property's score is subject to adjustment under this section.
    (i) If the basis was neighborhood environments, the PHA shall have 
on file the appropriate maps showing the census block groups surrounding 
the development(s) in question with supporting census data showing the 
level of poverty. Properties that fall into this category but which have 
already been removed from consideration for other reasons (permitted 
exemptions and modifications and/or exclusions) shall not be counted in 
this calculation.
    (ii) For the Physical Condition Indicator, a PHA would have to 
maintain documentation showing the age and condition of the properties 
and the record of capital improvements, evidencing that these particular 
properties have not received capital funds.
    (iii) PHAs shall also document that in all cases, properties that 
were exempted for other reasons were not included in the calculation.
    (c) Database adjustment. (1) Adjustments for factors not reflected 
or inappropriately reflected in physical condition score. Under certain 
circumstances, HUD may determine it is appropriate to review the results 
of a PHA's physical inspection which are unusual or incorrect due to 
facts and circumstances affecting the PHA's property which are not 
reflected in the inspection or which are reflected inappropriately in 
the inspection.
    (i) These circumstances are not those that may addressed by the 
technical review process described in Sec. 902.68. The circumstances 
addressed by this paragraph (c)(1) may include inconsistencies between 
local code requirements and the HUD physical inspection protocol; 
conditions which are permitted by local variance or license or which are 
preexisting physical features that do not conform to, or are 
inconsistent

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with, HUD's physical condition protocol; or the PHA has been scored for 
elements (e.g., roads, sidewalks, mail boxes, resident-owned appliances, 
etc.) that it does not own and is not responsible for maintaining, and 
the PHA has notified the proper authorities regarding the deficient 
structure.
    (ii) An adjustment due to these circumstances may be initiated by a 
PHA's notification to the applicable HUD HUB/Program Center and such 
notification shall include appropriate proof of the reasons for the 
unusual or incorrect result. A PHA may submit the request for this 
adjustment either prior to or after the physical inspection has been 
concluded. If the request is made after the conclusion of the physical 
inspection, the request must be made within 15 days of issuance of the 
physical condition score. Based on the recommendation of the applicable 
HUD HUB/Program Center following its review of the PHA's evidence or 
documentation, HUD may determine that a reinspection and/or re-scoring 
of the PHA's property is necessary. HUD shall define, by notice, the 
procedures to be followed to address circumstances described in 
paragraph (c) of this section. The notice will be applicable to both 
public housing and multifamily housing properties covered by 24 CFR part 
5, subpart G.
    (2) Adjustments for adverse conditions beyond the PHA's control. 
Under certain circumstances, HUD may determine that certain deficiencies 
that adversely and significantly affect the physical condition score of 
the PHA were caused by circumstances beyond the control of the PHA. The 
correction of these conditions, however, remains the responsibility of 
the PHA.
    (i) The circumstances addressed by this paragraph (c)(2) may 
include, but are not limited to, damage caused by third parties (such as 
a private entity or public entity undertaking work near a public housing 
development that results in damage to the development) or natural 
disasters. (The circumstances addressed in paragraph (c)(2) of this 
section are not those addressed by the technical review process in 
Sec. 902.68.)
    (ii) To adjust a physical condition score based on circumstances 
addressed in paragraph (c)(2) of this section, the PHA must submit a 
request to the applicable HUD HUB/Program Center requesting a 
reinspection of the PHA's properties. The request must be submitted 
within 15 days of the issuance of the physical condition score to the 
PHA and must be accompanied by a certification that all deficiencies 
identified in the original report have been corrected. Based on the 
recommendation of the applicable HUD HUB/Program Center following its 
review of the PHA's evidence or documentation, HUD may determine that a 
reinspection and/or re-scoring of the PHA's property is necessary.
    (3) Adjustments for modernization work in progress. HUD may 
determine that an occupied dwelling unit or other areas of a PHA 
development, subject to physical inspection under this subpart, which 
are undergoing modernization work in progress require an adjustment to 
the physical condition score.
    (i) An occupied dwelling unit or other areas of a PHA development 
undergoing modernization are subject to physical inspection; the unit 
and other areas of the PHA development are not exempt from physical 
inspection. All elements of the unit or of the other areas of the PHA 
development that are subject to inspection and are not undergoing 
modernization at the time of the inspection (even if modernization is 
planned) will be subject to HUD's physical inspection protocol without 
adjustment. For those elements of the unit or of the development that 
are undergoing modernization, deficiencies will be noted in accordance 
with HUD's physical inspection protocol, but the PHA may request 
adjustment of the physical condition score as a result of modernization 
work in progress.
    (ii) An adjustment due to modernization work in progress may be 
initiated by a PHA's notification to the applicable HUD HUB/Program 
Center and the notification shall include supporting documentation of 
the modernization work underway at the time of the physical inspection. 
A PHA may submit the request for this adjustment either prior to or 
after the physical inspection has been concluded. If the request is made 
after the conclusion of the physical inspection, the request must be 
made within 15 days of

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issuance of the physical condition score. Based on the recommendation of 
the applicable HUD HUB/Program Center, HUD may determine that a 
reinspection and/or re-scoring of the PHA's property is necessary.
    (d) Overall PHA Physical Condition Indicator score. The overall 
Physical Condition Indicator score for a PHA is the weighted average of 
the PHA's individual property physical inspection scores, where the 
weights are the number of units in each property divided by the total 
number of units in all properties of the PHA.
    (e) Thresholds. (1) The physical condition score is reduced to a 30 
point basis for the PHAS Physical Condition Indicator.
    (2) In order to receive a passing score under the Physical Condition 
Indicator, the PHA must achieve a score of at least 18 points, or 60 
percent of the available points under this indicator. If the PHA fails 
to receive a passing score on the Physical Condition Indicator, the PHA 
shall be categorized as a substandard physical agency.

[65 FR 1738, Jan. 11, 2000, as amended at 65 FR 36044, June 6, 2000]