For Small Rental Property Owners

What Can I Do If My Property Failed Final Inspection?

If you are unable to fulfill specific construction related scoring items that you selected on your Small Rental Property Program (Rental program) application in order to receive priority scoring points, you now have the following options:

Complete your property as originally planned.

The first option is to make the necessary changes to the structure to meet the original scoring items that you selected and committed to provide on your original Rental program application and then proceed to closing where you will receive your full award under the original terms. If at all possible, this is the preferred option.
- First, it will ensure that your unit has the amenities you committed to provide, which should increase your property’s value and make it more attractive to tenants.
- Second, it will ensure that you receive the full amount of funds that you were conditionally awarded and it will enable you to keep the affordability terms that you signed up for – generally 10 years for owners in the general pool.
To help you in this process, please review the document Getting Ready for Final Inspection so that you will know what needs to be done to make sure that it passes. In addition, you may call your Rental program Advisor or the Rental program at 1.888.ROAD.2.LA (1.888.762.3252) and select the Rental program prompt (#1) to receive specific advice about what is needed in your situation. The ultimate goal is to get your unit approved so that you may proceed with your award.
Proceed with a full award but a longer affordability term.

The second option was recently added to give you the flexibility of receiving your full award although you are not able to provide some of the building features you agreed to deliver on your Rental program application. As a result of not being able to fulfill your commitment, you will be required to extend the affordability term of the same rent for a three or five year period.
- Owners NOT able to meet three or fewer scoring items are required to maintain an additional three years of affordability.
- Owners NOT able to meet more than three scoring items are required to maintain an additional five years of affordability.
NOTE: The additional years of affordability will NOT affect the three year term to receive the first scheduled amount of debt “forgiveness.” Instead, the additional years of affordability will be added on the end of the term. For instance, owners who choose this option can still “buy” out of the Rental program at any time after the initial three year period.

In addition, for owners that agree to stay in the Rental program in a standard project with a 10 year term that previously divided the remaining debt balance in equal parts over the last five years, will now divide the remaining balance in equal parts of the last eight years or ten years, as applicable.
Proceed with the same affordability terms but a lower award level.

Under this option, you will be allowed to proceed with your original loan terms (e.g. 10 years of affordable rents); although you did not provide some of the building features you agreed to deliver on your Rental program application. As a result of not being able to fulfill your commitment you will be required to take a reduction in your awarded funding amount.
- Owners who are unable to meet three or fewer scoring items will receive the total award amount, reduced by 30%.
- Owners who are unable to meet more than three scoring items will receive the total award amount, reduced by 50%.
Owners choosing the extended term of affordability or the reduced award will still need to provide a unit that meets the applicable local, State and Federal building codes and is decent and safe for tenants to occupy. For a full description of these basic standards, please review the document Getting Ready for Final Inspection along with the detailed Final Inspection Checklist.
- Special note for Round 1 Owners who chose to provide green, universal, and/or visit-ability design standards:
  Because a complete description of these particular requirements was not widely available during the Round 1 process, the Rental program has provided Round 1 owners with some additional flexibility with regard to these items. Specifically, Round 1 owners may choose to “opt out” of these particular items under the following circumstances:
  - First, your score must remain above the minimum score for your parish after the points for the “opted out” item(s) have been deducted. Your Rental program Advisor will be able to assist you in determining whether you can opt out of an item or items and remain in the Rental program.
  - Second, the special cost allowances for these item(s) will also be deducted from your Road Home Cost Evaluation total since you will no longer be providing these items. In most cases, this will not affect your overall award amount. However, in some instances a reduction in the total estimated cost to repair will push it below the amount of the Rental program’s incentive award, in which case you will receive the lesser amount. Again, your Rental program Advisor will be able to tell you whether opting out of these requirements will impact the amount of your award.

Post Construction scoring questions are:

Ceiling fans in all sleeping and living rooms
Garbage disposal
Energy Star refrigerator
Conventional water heater
Tankless water heater
Conventional dishwasher
Energy Star dishwasher
Washer/Dryer hook-up
Conventional clothes dryer
Energy Star clothes washer
Conventional central heating and air conditioning systems
Central heating or air conditioning in excess of 14 SEER or 95% AFUE
Hazard Mitigation: Rental property/affordable units have at least three of the following hazard mitigation measures: stronger exterior doors, bracing on garage doors, tying down or anchoring of propane and heating fuel tanks, elevated washers and dryers, elevated furnaces and water heaters, elevated electrical panels and air conditioning units, window protection, backflow valves, hurricane straps/clips for the roof, walls bolted to the foundation
Green Design Standards: National Association of Home Builders Silver or Gold standards, LEED standards, or The Road Home’s Green Communities standards (information of all three standards is available at http://www.road2la.org/rental under "Resources and Downloads")
Kitchen Dimensions/cabinetry (PDF/34k): The kitchen in each one-bedroom affordable unit must be at least 100 SF and have at least 6 LF of cabinetry. The kitchen in each two-bedroom affordable unit must be at least 120 SF and have at least 10 LF of cabinetry. The kitchen in each three-bedroom affordable unit must be at least 160 SF and have at least 14 LF of cabinetry. The kitchen in each four-bedroom (or more) affordable unit must be at least 180 SF and have at least 22 LF of cabinetry
Unit Dimension: Affordable studios must be 500 SF, affordable one-bedroom units must be 660 SF, affordable two-bedroom units must be 880 SF, affordable three-bedroom units must be 990 SF, affordable four-bedroom (or more) units must be 1320 SF
Unit Dimension: Affordable studios must be 600 SF, affordable one-bedroom units must be 720 SF, affordable two-bedroom units must be 960 SF, affordable three-bedroom units must be 1080 SF, affordable four-bedroom (or more) units must be 1440 SF
Visit-ability Standard (PDF/74k): Make sure your repairs are consistent with The Road Home's visit-ability standard (available at http://www.road2la.org/rental under "Resources and Downloads")
Universal Design Standard (PDF/108k): Repairs are consistent with The Road Home's universal design standard (available at http://www.road2la.org/rental under "Resources and Downloads”)

If you have any additional questions regarding options available for a failed final inspection for the Small Rental Property Program, please call 1.888.ROAD.2.LA (1.888.762.3252) and select the Rental program prompt (#1). TTY callers use 711 relay or 1.800.846.5277.