Seven years after releasing the Proposed Rule and receiving comments, HUD has published the Final Rule on the new risk-based Management and Occupancy Review (MOR) schedule, effective September 26, 2022.
Under the new rule, MORs will occur on a one, two, or three-year schedule based on the previous MOR score and the Risk Classification according to the following table:
|Previous MOR:||Unsatisfactory||Below Average||Satisfactory||Above Average||Superior|
|Next MOR must be conducted within…|
|Risk Classification: Troubled||12 months of previous MOR||12 months of previous MOR||12 months of previous MOR||12 months of previous MOR||12 months of previous MOR|
|Risk Classification: Potentially Troubled||12 months of previous MOR||12 months of previous MOR||12 months of previous MOR||12 months of previous MOR||12 months of previous MOR|
|12 months of previous MOR||12 months of previous MOR||24 months of previous MOR||36 months of previous MOR||36 months of previous MOR|
Note: Any MORs scheduled before September 26th, 2022, will occur as scheduled. Contract Administrators (CAs) will use this chart to schedule all MORS after the effective date.
While conducting the MOR, HUD or CA staff must review all documentation in the tenant file going back to the date of the last MOR. In other words, if a project is on a three-year cycle, the reviewer will look at the previous three years of documentation in each file selected for review.
The Final Rule also clarifies that even though HUD is publishing this schedule, HUD or a CA retains the right to schedule a MOR at any time if:
- HUD publishes a new MOR schedule after public comment;
- Documented concerns at the project warrant an assessment; or
- The project’s condition or risk rating worsens.
Notably, if the risk rating improves, HUD does not permit the date of the next MOR to change.
In addition to the above schedule change, the Final Rule states that a MOR must be conducted within six months of a management or ownership change regardless of the previous MOR score or risk classification.
For more information, click here to download the Final Rule: https://www.govinfo.gov/content/pkg/FR-2022-06-27/pdf/2022-13426.pdf
If you are seeking more information about the Management and Occupancy Review process, NCHM offers a certification course called Management and Occupancy Review Specialist (MORS) that takes you through the steps of a MOR and shows you how to prepare in advance. More information on MORS can be found at: https://www.nchm.org/hud-compliance/mors/