HUD REAC Requirements: A Guide for Multifamily and Public Housing Entities  

Summary: Timely HUD REAC filings are essential for maintaining compliance and funding eligibility for multifamily and public housing entities. In this article, we explore how to navigate HUD’s electronic submission process, best practices, and how Aprio’s Affordable Housing team can help fulfill your HUD digital reporting requirements. 

What Are HUD Electronic Filing Requirements? 

HUD electronic filings refer to the digital submission of financial and compliance data to HUD’s Real Estate Assessment Center (REAC). REAC’s online system varies if the entity is a public housing or multifamily housing user. Public housing entities use the Financial Management Assessment System – Public Housing Agency (FASS-PHA)  and multifamily housing entities use the Financial Assessment Subsystem (FASSUB). 

REAC filings are a vital part of HUD’s oversight process. They assure transparency, accountability, and the proper use of public funds. HUD electronic filings include the following: audited financial statements, supplemental schedules, surplus cash computations, footnotes and certifications, and internal control and compliance reports. The submission must align with HUD’s Uniform Financial Reporting Standards (UFRS) and be validated against hard copy documents. 

To stay compliant, entities must submit their annual financial data within nine months of the fiscal year-end for public housing and 90 days after the calendar year-end for multifamily housing. Failure to comply can result in penalties, including referral to HUD’s Departmental Enforcement Center (DEC). 

Financial reports that comply with all relevant regulations serve as a credible resource for providing accurate and unbiased reviews of how public funds are being used. The reports also provide transparency for potential stakeholders, taxpayers, and community members, presenting an opportunity to identify any misuse of funds and areas for improvement. 

Validation and Review Process 

Once information is entered, each financial statement submission undergoes a validation process within the REAC system. HUD has implemented a strict review process to assure that organizations receiving federal funding comply with program requirements. This validation process involves cross-checking financial data templates, reviewing surplus cash, assessing compliance metrics for accuracy and completeness, and addressing any discrepancies that may arise.  

Agencies use HUD-approved systems to collect and report data, which are reviewed for consistency with program requirements. HUD also conducts regular audits to verify records, including client data and financial statements, to assure compliance is maintained. The validation and review process makes sure that the data submitted by HUD-assisted entities is accurate, final, and compliant with federal standards. 

Best Practices for REAC Compliance 

It’s important for entities with REAC filing requirements to prepare early for smooth HUD filings. Establish a centralized compliance calendar to track all HUD deadlines. Make sure staff involved have knowledge of internal milestones, due dates, and any grace periods to refrain from late filing penalties. 

Engage with an auditor at least 60 days before the end of the fiscal year. Their early involvement enables them to review financial statements carefully and identify potential last-minute issues that could delay submissions.  

Register coordinators and users in REAC in advance and train staff. Anyone involved in the process of submitting and managing REAC filings should have the necessary access and credentials to refrain from delays and should be aware of submission instructions. 

If there are feedback or correction requests from HUD, it’s encouraged to respond promptly to maintain timely funding and refrain from costly penalties. Keep records of any correspondence with HUD along with confirmations of all submissions. 

Remember that the REAC system can slow down closer to due dates and plan system access and inputs accordingly. 

What is the Auditor’s Role in Navigating REAC Compliance? 

Auditors play an important role in helping clients comply with HUD REAC requirements. An auditor will first perform a financial and compliance audit on the entity. While the owner or public housing agency is responsible for submitting financials electronically through REAC, the auditor provides the audited financials in HUD’s required format, assists with data validation and formatting for FASSUB, and assures the CPA certification is properly included in the submission. 

Aprio’s experienced team can also help interpret HUD guidance, assist clients in responding to HUD findings and correspondence, and serve as a credible source for interpreting complex compliance standards. 

Auditors serve as indispensable partners in navigating HUD compliance. They provide strategic oversight and technical knowledge, and their proficiency extends beyond verifying financial accuracy. Auditors can help organizations interpret HUD’s complex regulatory framework, assure timely submissions, and proactively address potential compliance issues. Engaging with an auditor early in the reporting cycle helps entities navigate the requirements and stay compliant. 

Final Thoughts: Why HUD’s REAC Requirements Are Important 

HUD’s REAC requirements are essential for maintaining transparency, consistency, and efficiency across federally funded housing programs. Digital reporting enables more accurate comparison and analysis of data across various programs and jurisdictions, resulting in better-informed decisions. It also provides stakeholders, community organizations, and the public with access to important information about housing initiatives and outcomes, which fosters greater community engagement. For organizations, these requirements streamline internal processes, encourage the use of modern financial systems and processes, and reduce the administrative burden of manual labor.  

As the housing landscape becomes increasingly complex, digital requirements support a data-driven framework that can adapt to changing needs. HUD’s digital reporting requirements are not just a compliance measure; they serve as a blueprint for financial transparency and operational accountability. By mastering the submission process and applying best practices, Aprio’s assurance professionals can help clients navigate HUD’s digital landscape with confidence and precision.