HUD MOR Audit Preparation: What to Expect and How to Prepare
A HUD Management and Occupancy Review (MOR) evaluates whether your property's management practices comply with HUD requirements. If the review identifies deficiencies, your team must address them within the required timeframes.
Under HUD Handbook 4350.1, a property's Management and Occupancy Review Summary Report includes a Targeted Completion Date for each identified deficiency. That date generally cannot exceed 30 calendar days from the report date.
Preparing for an MOR before the review begins can help your team understand what HUD evaluates, determine which scheduling rules apply to your property, and respond promptly to any findings.
This guide explains what an MOR covers, who conducts it, how review schedules are determined, and what property managers should do to prepare.
What Does a HUD Management and Occupancy Review Evaluate?
An MOR evaluates whether a property's management complies with its governing agreements and applicable HUD requirements.
According to HUD's Federal Register notice (91 FR 49440 August 4, 2026), the review helps HUD staff, Mortgagees, and Contract Administrators (CAs):
Evaluate how a property is managed.
Identify the causes of project-related problems.
Develop corrective actions to stabilize properties and prevent defaults.
Detect and prevent fraud, waste, and mismanagement.
What a review measures a property against depends on who conducts the review. A Contract Administrator (CA) reviews compliance with the HAP Contract only. The footnote on Form HUD-9834 indicates the same restriction “If this review is conducted by a CA or PBCA as indicated above, the overall rating reflects a review as it relates to compliance with the HAP Contract only”.
For New Construction properties, 24 CFR § 880.201 defines the HAP Contract as the contract between the owner and the contract administrator that “sets forth the rights and duties of the parties with respect to the project and the payments under the Contract”. HUD staff are responsible for the areas a Contract Administrator does not monitor. For an insured project that a CA reviews, HUD staff conduct a limited review of the remaining sections to assess compliance with the Regulatory Agreement and other agreements. Form HUD-9834 also asks HUD staff and Mortgagees whether the owner and management agent executed a management agreement in accordance with the management and whether that agreement reflects HUD’s regulations and guidelines.
Which Properties Apply
Not every HUD Multifamily property follows the same MOR scheduling requirements. The applicable rules depend on the specific program and regulatory part governing the property.
HUD's 2022 final rule (87 FR 37990 June 27, 2022) identifies the following covered program categories:
| Program Category | Regulatory Reference |
|---|---|
| New Construction | 24 CFR Part 880 |
| Substantial Rehabilitation | 24 CFR Part 881 |
| State Housing Agency-Financed Projects | 24 CFR Part 883 |
| Section 515 Rural Rental Housing | 24 CFR Part 884 |
| Loan Management Set-Aside Program and Disposition of HUD-Owned Projects | 24 CFR Part 886 |
| Section 202/8 | 24 CFR Part 891 |
What property managers should do: Review your property's HAP Contract and confirm the applicable regulatory part with HUD or your Contract Administrator. Do not rely solely on the general program name to determine which scheduling requirements apply.
Who Conducts an MOR?
A Management and Occupancy Review is conducted by either HUD staff or a Contract Administrator, depending on the property's contract and program requirements.
What this means for property managers: Compliance preparation should be an ongoing process, not something that begins only when an MOR is scheduled.
Keep required documentation organized, monitor property operations regularly, and make sure staff understand their responsibilities under the property's governing agreements.
How Often Will HUD Review Your Property?
HUD uses a risk-based schedule to determine when a property receives its next MOR. Two factors influence that schedule:
The property's risk classification.
The property's score from its previous MOR.
Understanding your property's risk classification
HUD uses three risk classifications:
Not Troubled
Potentially Troubled
Troubled
HUD does not publish these classifications, but owners and authorized agents may request their property's current risk rating directly from HUD or the Contract Administrator.
How risk ratings affect review frequency
A property's risk classification and previous MOR score work together to determine its review schedule.
An improved risk classification between scheduled reviews does not automatically shorten the interval until the next MOR. HUD's rule specifically states that it will not consider requests to reduce MOR frequency based on an improvement in a property's condition or risk rating between scheduled reviews.
However, a worsened risk classification may result in an earlier review, regardless of the existing schedule.
Changes in ownership or management
A change in ownership or management triggers a separate review requirement for properties covered by this rule. The review must occur within six months of the change, independently of the property's regular MOR schedule.
A scheduled MOR is not the only time HUD may examine a property. HUD or the Contract Administrator may also inspect project operations and individual units outside the scheduled review process. Equal Opportunity reviews may occur separately and at any time.
What property managers should do: Request your property's current risk classification, review its most recent MOR score, and confirm whether an ownership or management change has triggered an additional review requirement.
What Happens During and After an MOR?
The MOR process generally includes a desk review, an on-site visit, and a written report. Understanding each stage helps property managers prepare documentation and respond appropriately to findings.
Step 1: Desk review
The reviewer examines relevant records and documentation to assess whether the property's management practices comply with applicable requirements.
Maintaining organized, accessible records can help your team respond efficiently to requests for information.
Step 2: On-site review
The reviewer visits the property to examine its operations and, where applicable, inspect units and supporting records.
Property staff should be prepared to answer questions, provide requested documentation, and explain how management procedures are implemented.
Step 3: Written report
Following the on-site review, HUD staff or the Contract Administrator prepares a written report documenting the findings.
HUD Handbook 4350.1, Chapter 6, Change 2, Section 6-9 (August 2010), states that reports for on-site reviews conducted by HUD staff and Contract Administrators must be completed within 30 calendar days of completing the on-site review.
Once the owner receives the report, the next priority is to review each finding, identify the required corrective action, and track all applicable deadlines.
Key MOR deadlines at a glance
| Requirement | Deadline |
|---|---|
| Completion of the written report | Within 30 calendar days after the on-site review is completed |
| Targeted Completion Date for a deficiency | Generally no more than 30 calendar days from the report date |
| Corrective action plan, when additional time is needed | Due within the same 30-day window |
| Written appeal of a finding | Within 30 calendar days of the report date |
| Initial appeal decision | Within 45 calendar days of receiving the appeal |
| Final appeal | Must be postmarked within 15 calendar days of the initial decision |
These deadlines serve different purposes, so property managers should track them separately rather than treating them as one overall response period.
What if a deficiency requires more time to correct?
Section 6-13 of HUD Handbook 4350.1 sets the requirements for Targeted Completion Dates.
Every written finding states five things (Handbook 4350.1, Chapter 6, Section 6-10):
Condition; describes the problem.
Criteria; cites the statutory, regulatory, or HUD Handbook requirements that were not met.
Cause; explains why the condition occurred.
Effect; describes what happened or may happen as a result.
Corrective action; required for every finding. It should address the cause to prevent reoccurrence and includes a timeframe for the owner to respond.
If a deficiency cannot be corrected by its Targeted Completion Date, the owner’s corrective action plan is due within 30 calendar days and must include targeted timeframes for resolving each deficiency. The reviewer monitors the plan until every deficiency is addressed. Form HUD-9834 also instructs reviewers to require the owner to correct the errors and omissions found and to describe to the reviewer which systems, controls, policies, and procedures were adjusted or changed so the same errors do not recur.
What if you disagree with a finding?
Owners may appeal findings in accordance with the applicable procedures and deadlines.
Owners may appeal findings under Handbook 4350.1, Chapter 6, Section 6-14:
Submit a written appeal within 30 calendar days of the report date.
HUD or the Contract Administrator has 45 calendar days from receiving the appeal to issue an initial decision.
A final appeal must be postmarked within 15 calendar days of that decision.
Because appeal deadlines can affect a property's ability to challenge findings, document the report date, the submission date, and all correspondence.
Final Takeaway: Prepare Before the Review is Scheduled
Successful HUD MOR preparation begins well before the reviewer arrives.
Property managers should understand which regulations apply to their properties, know their current risk classification and previous review score, maintain organized documentation, and establish a reliable process for responding to deficiencies.
By reviewing these areas regularly, your team can identify potential gaps earlier, respond to findings more efficiently, and approach the next Management and Occupancy Review with a clearer plan.
The goal is not simply to get through the review. It is to maintain consistent compliance and effective property management throughout the year.
HUD MOR Preparation Checklist
Prepare your property for its next Management and Occupancy Review.
Use this checklist as a preparation aid. Confirm applicable requirements and deadlines with HUD or your Contract Administrator.
