New HUD REAC Notice Effective January 1, 2013

This is a reminder that the U.S. Department of Housing and Urban Development (HUD) has
issued a final notice on Physical Condition Scoring Notice and Revised Dictionary of Deficiency
Definitions for Real Estate Assessment Center (REAC) inspections that will be effective Jan. 1,
2013. The major revision was the addition of a point loss cap, which limits the amount by which
a single deficiency in an inspectable area could reduce the overall property score. This change
was incorporated after HUD reviewed complaints about situations where the reduction from a
single deficiency was so severe as to be unfair.

Further, the Dictionary of Deficiencies was changed to introduce technical modifications and
clarifications to a number of deficiencies, including building exterior, building systems, common
areas, units, site and health and safety. For more information on this notice, click here.