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The Consolidated Appropriations Act of 2016 directed HUD to implement a single inspection protocol for public housing and voucher units. In addition, section 209 of the Economic Growth Regulatory Relief and Consumer Protection Act requires that program inspections apply existing physical inspection standards for projects assisted under section 8 of the 1937 Act to small and predominantly rural Public Housing Agencies. Accordingly, this rule revises HUD's physical inspection standards for assisted and insured housing programs. Under the rule, a single inspection standard would be adopted in place of the current differing standards that exist across some programs. HUD believes this new standard would provide residents with an assurance that their homes are safe and habitable. Other sections of the rule would streamline, align, and consolidate existing administrative and procedural inspection regulations to ease the burden of properties attempting to comply with numerous, yet similar inspection requirements. The rule also supports the Department's commitment to transparency by establishing the requirement for HUD to publish the inspection procedures through Federal Register notices with the opportunity for public input prior to implementation and at least once every three years.

This rule also reduces burdens on small, rural public housing agencies by implementing section 38(a)(2)(b) of the 1937 Act, which establishes regulatory definitions for a "Troubled Small Public Housing Agency" that predominantly operates in a rural area. Specifically, the rule establishes the criteria by which HUD may designate a small and rural PHA as troubled with respect to its administration of its public housing program or HCV program, the criteria used to determine if a small and rural PHA is a high performer, the frequency that HUD inspects a small and rural PHA’s public housing, and how frequently a small and rural PHA is required to conduct inspections for units assisted under the HCV and Project Based Voucher (PBV) programs. The rule also adjusts necessary oversight protocols and assessments for small rural PHAs and make conforming changes for all PHAs.