Ohio Participates in Physical Inspections Pilot Program
February 13, 2012 – A Physical Inspection Pilot Program which tests the feasibility of conducting one coordinated inspection on mixed-financed properties by which would satisfy LIHTC, HUD and/or RD requirements is currently underway in six states – Michigan, Minnesota, Ohio, Oregon, Washington, and Wisconsin. HFAs in these six states may satisfy their property inspection responsibilities by using either their current property inspection protocol or the inspection protocol of HUD's Real Estate Assessment Center (REAC). A conflict between the IRS inspection requirements for LIHTC units and the REAC protocol has been discovered. Specifically, IRS rules require that at least 20 percent of the low-income units in a project be physically inspected and that the records for those same units be reviewed. However, in some cases, the number of low-income units physically inspected under the REAC inspection protocol may not satisfy the 20 percent requirement.