2023-20130. Economic Growth Regulatory Relief and Consumer Protection Act: Implementation of National Standards for the Physical Inspection of Real Estate (NSPIRE); Extension of Compliance Date

AGENCY:

Office of the Assistant Secretary for Community Planning and Development, U.S. Department of Housing and Urban Development (HUD).

ACTION:

Notice.

SUMMARY:

This notice extends the compliance date for HUD's National Standards for the Physical Inspection of Real Estate (NSPIRE) final rule for Community Planning and Development (CPD) programs. Specifically, HUD is extending the compliance date for the HOME Investment Partnerships Program (HOME) and Housing Trust Fund (HTF), Housing Opportunities for Persons With AIDS (HOPWA), Emergency Solution Grants (ESG) and Continuum of Care (COC) programs (“CPD programs”) until October 1, 2024. HUD is taking this action to allow jurisdictions, participants, and grantees additional time to incorporate HUD's NSPIRE standards specific to their own programs and the flexibility to transition to NSPIRE under their own timelines.

DATES:

Compliance Date: Jurisdictions, participants, and grantees subject to 24 CFR parts 92, 93, 574, 576, and 578, are not required to comply with the changes to these parts in the NSPIRE final rule until October 1, 2024.

FOR FURTHER INFORMATION CONTACT:

Caitlin Renner, Supervisory Affordable Housing Specialist, Room 7160, Department of Housing and Urban Development, 451 Seventh Street SW, Washington, DC 20410–7000; telephone [phone]. (This is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit: https://www.fcc.gov/​consumers/​guides/​telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

The Economic Growth Regulatory Relief and Consumer Protection Act: Implementation of National Standards for Physical Inspection of Real Estate (NSPIRE) final rule (“NSPIRE final rule”) was published on May 11, 2023 (88 FR 30442). The NSPIRE final rule strengthens HUD's physical condition standards and re-envisions how HUD-assisted housing is inspected by aligning and consolidating the inspection regulations. The NSPIRE final rule included amendments to 24 CFR parts 92, 93, 574, 576, and 578 to conform their various inspection requirements to NSPIRE and established an effective date for these amendments of October 1, 2023.

The amendments for HOME and HTF require participating jurisdictions to develop property standards that apply the requirements in 24 CFR 5.703 to rental or homeownership projects involving rehabilitation, ongoing inspections of HOME- and HTF-assisted rental housing during the period of affordability, and acquisition of standard housing for homeownership. For HOME, these requirements also apply to units occupied by tenants receiving HOME tenant-based rental assistance. The changes in the NSPIRE final rule further provide that HUD will publish lists of specific deficiencies in a Federal Register notice that must be corrected before HOME or HTF project completion or during the period of affordability for occupied units. HUD has not yet published this notice for HOME or HTF deficiencies, but these deficiencies for HOME and HTF will be a subset of the deficiencies in the NSPIRE Inspection Standards published on June 22, 2023 (the “NSPIRE Standards”) for public housing, multifamily housing, and housing choice vouchers/project based vouchers (88 FR 40832). To fully implement the NSPIRE final rule, HOME participating jurisdictions and HTF grantees must develop rehabilitation and ongoing property standards, as well as policies and procedures that incorporate the specific deficiencies that will be published in the notice, applicable requirements in the NSPIRE final rule, and other applicable requirements in the HOME and HTF regulations.

II. Basis for Delay of Compliance Date

Under the NSPIRE final rule, CPD programs are subject to only the portions of 24 CFR part 5, subpart G that apply to their particular programs. Additionally, different participants may have different implementation needs. For example, some PHAs may be implementing NSPIRE in their voucher program right away, and would therefore benefit from immediate implementation of NSPIRE in their CPD programs, while other participants may have no external need to transition to NSPIRE and would benefit from additional time to implement NSPIRE into their own program.

In particular, HOME participating jurisdictions and HTF grantees are not able to update their rehabilitation and ongoing property standards and policies and procedures in accordance with the NSPIRE final rule until HUD publishes the lists of specific deficiencies for HOME and HTF in the Federal Register . This notice will not be published by the effective date of October 1, 2023. HUD recognizes that participating jurisdictions and HTF grantees will not have all the tools to fully implement NSPIRE for HOME and HTF by the effective date. HUD also recognizes that, after HUD publishes the list of specific deficiencies, participating jurisdictions and HTF grantees will need additional time to incorporate the list of specific deficiencies into their rehabilitation and ongoing property standards and policies and procedures.

Therefore, for all the reasons stated above, HUD has determined that it is in the public interest to extend the compliance date for all CPD programs to October 1, 2024, to allow participants additional time to transition to NSPIRE.

III. Instructions

HUD provides the below instructions and guidance specific to particular CPD programs.

Instructions for HOME Participating Jurisdictions and HTF Grantees

While the NSPIRE final rule applies to projects with HOME or HTF funds committed on or after the effective date of October 1, 2023, HOME participating jurisdictions and HTF grantees do not have to complete implementation of the changes in the NSPIRE rule until the compliance date of October 1, 2024. Participating jurisdictions and grantees should prepare for the compliance date by updating property standard regulatory citations and requirements in written agreement templates with State recipients, subrecipients, and project owners, as required by 24 CFR 92.504(c) and 24 CFR 93.404(c).

In addition, participating jurisdictions or HTF grantees that intend to comply with the changes in the NSPIRE final rule as of the effective date should review the deficiencies established in the NSPIRE Standards notice at 88 FR 40832 and compare these requirements to their existing rehabilitation and property standards and their inspection procedures and checklists. While HUD intends to publish a subset of the deficiencies in the NSPIRE Standards that are applicable to HOME and HTF projects, participating jurisdictions and HTF grantees that implement the changes in the NSPIRE final rule before publication of the subset of deficiencies for HOME and HTF must implement the full set of deficiencies in the NSPIRE Standards in their rehabilitation and ongoing property standards and policies and procedures. Further, participating jurisdictions and HTF grantees may not implement the changes in the NSPIRE final rule until such rehabilitation and ongoing property standards and policies and procedures are updated consistent with NSPIRE.

Participating jurisdictions and HTF grantees are required to manage the day-to-day operations of their programs in accordance with all program requirements and written agreements as required at 24 CFR 92.504(a) and 24 CFR 93.404(a) respectively. However, participating jurisdictions and HTF grantees cannot impose new requirements resulting from updated regulations on project owners unless the written agreements with owners for the funds permit the participating jurisdiction or HTF grantee to do so. Consequently, participating jurisdictions or HTF grantees must determine whether the requirements applied in the written agreements that are fully executed before the effective date of the NSPIRE final rule are automatically updated when regulatory changes take effect or if such agreements must be amended to apply the new or updated requirements. This is an important consideration when participating jurisdictions or HTF grantees would like to apply the NSPIRE final rule rehabilitation and ongoing HOME or HTF property standard requirements to projects with commitments made prior to the effective date of the NSPIRE final rule and for HOME or HTF projects that are jointly funded by another HUD program with an earlier NSPIRE final rule effective date.

Instructions for CoC, ESG, and HOPWA

Many CoC, ESG, and HOPWA recipients administer housing choice vouchers or project based vouchers and may adopt NSPIRE standards for those programs beginning October 1, 2023. Nothing in this extension of the compliance date prevents CoC, ESG, and HOPWA recipients or subrecipients from using NSPIRE standards beginning October 1, 2023. HUD also intends to publish, through a Federal Register notice, guidance on which NSPIRE standards apply to CoC, ESG, and HOPWA programs.

IV. Conclusion

Accordingly, HUD revises the October 1, 2023, compliance date for the changes made to 24 CFR parts 92, 93, 574, 576, and 578 to October 1, 2024, at which time jurisdictions subject to these parts must comply with the NSPIRE final rule. Until October 1, 2024, participants subject to these parts may instead choose to comply with these parts as they existed prior to October 1, 2023.

Marion McFadden,

Principal Deputy Assistant Secretary for Community Planning and Development.