A.5.2.4.2 Section 504 Requirements for Assisted Housing

A. Federally assisted multifamily housing projects must comply with the requirements in 24 CFR Part 8. Such properties include properties that were originally built with Assistance or became Assisted regardless of the time of original construction or receipt of Assistance. HUD’s Section 504 regulations require that periodic repair and replacement actions and alterations completed at such projects contribute to a gradual process of change until such time that compliance is achieved. Given that a significant number of years have passed since the enactment of the law, the assisted properties have had

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much time to undergo a gradual process of change to be in full compliance, regardless the date of original construction.

1. All Federally assisted properties must be either in full compliance with 24 CFR 8.22 requirements for accessibility or brought to full compliance by remedying the deficiencies identified through the loan transaction. Such properties must provide:

   • A minimum of 5% of the units or at least one unit, whichever is greater, for residents with mobility disabilities;

• An additional minimum of 2% of the units or at least one unit, whichever is greater, for residents with sensory disabilities; and

• Accessible common areas and facilities readily usable by persons with disabilities. See 24 CFR 8.21(b); 8.23(b)(1).

2. HUD may prescribe a higher percentage or number upon demonstration of greater need (see 24 CFR 8.22(c)). Compliance with the Uniform Federal Accessibility Standards (UFAS) is deemed to comply with the accessibility requirements of Section 504 and 24 CFR §§ 8.21, 8.22, 8.23 and 8.25 (24 CFR 8.32). Departures from particular technical and scoping requirements of the UFAS by the use of other methods are permitted where substantially equivalent or greater access to and usability of the building is provided (24 CFR 8.32). Additionally, the Deeming Notice (79 Fed. Reg. 29,671 (May 23, 2014)) permits HUD recipients to use an alternative standard for purposes of complying with Section 504 by using the 2010 ADA Standards (with certain exceptions) as an alternative to UFAS for new construction or alterations commencing on or after May 23, 2014.

3. An exception to the requirements stated above is that for existing properties, an owner is “never required to undertake a degree of accessibility which would impose undue financial and administrative burdens” but when alterations were (are) undertaken, accessibility was (is) required “up to the point of infeasibility or undue financial and administrative burdens.” (53 Fed. Reg. 20216, 20224 (June 2, 1988)). In addition, measures to achieve compliance with UFAS which had “little likelihood of being accomplished without removing or altering a load-bearing structural member,” are not required. See 24 CFR 8.32(c).

   • When considering the term “undue financial and administrative burden,” Borrowers and Lenders should understand that the scope of the exemption is narrowly construed. Burden is measured against the resources not only of the mortgagor entity but also of its Sponsors and members.

   • The term is also intended to exclude possible remedies that would require an owner to engage in activities beyond those normal for an owner of multifamily property, e.g. hiring personal aides to assist tenants in climbing stairs or overcoming similar obstacles to accessibility.

4. Accordingly, the Needs Assessor or inspector should identify deficient accessibility features as measured against the requirements for new construction described at 24 CFR 8.22. The Lender must review and evaluate the identified accessibility deficiencies and propose remedies unless the Lender demonstrates that:

   • The remedy cannot be accomplished without “removing or altering a load-bearing structural member”72 or;

72 The Lender must consult with licensed structural engineer or an Architect for the determination.

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The remedy would impose an “undue financial and administrative burden,”