Receivership Recovery Process

The Office of Receivership Oversight (ORO) has developed a five-phase process to restore public housing authorities in receivership to successful and sustainable operation. Prior to a PHA entering receivership status, HUD, through its public housing field offices, provides technical assistance to the troubled PHA to address critical issues and determine the causes of its current problems. If this effort does not produce the necessary improvement, and the PHA is found to be in substantial default of its Annual Contributions Contract with HUD, the Secretary may put the PHA into administrative receivership.

Phase 1, Situation Assessment, entails additional fact-finding and diagnosis by HUD staff or contractors to determine the extent of the PHA's problems. HUD often discovers many additional problems once the receivership team has had an opportunity to examine the PHA's files and interview employees. Situation Assessment is continuously performed throughout the duration of the receivership to monitor recovery progress.

During Phase 2, Stabilization, the focus is on addressing critical issues that may impede a complete recovery, while simultaneously maintaining current operations and program delivery. Adjustments may occur in any of the following areas:

  • Governance
  • Organization and Staffing
  • Finance
  • Procurement and Contract Management
  • Property Management
  • Resident Relations
  • Capital Funds and Development
  • Security
  • Information Technology

Phase 3, Recovery Plan Development, involves developing a detailed plan to cure the deficiencies that led to the receivership, and repositioning the PHA for rapid recovery and sustainable improvement. The Recovery Plan addresses deep seated problems investigated during the Situation Assessment phase.

Phase 4, Recovery Plan Implementation, is the implementation and further revision of the Recovery Plan developed in Phase 3. This phase emphasizes improving the operational structure and financial condition of the PHA while introducing processes and procedures that will standardize efficient and professional PHA operations. Human, physical, systems, financial and managerial resources are allocated in an integrated and strategic manner to expedite recovery. Experienced managers are recruited to fill key vacancies. HUD often relies on contractors to provide specialized assistance or training to the PHA and its staff.

The final phase, Transition to Local Control/Sustainability, focuses on positioning the PHA for transition out of HUD administrative receivership and back to local control while sustaining the improvements made to PHA operations. Usually, at this point, a non-voting Advisory Board is appointed and trained by HUD. The Advisory Board will convert to a fully-governing Board of Commissioners for the PHA upon termination of the receivership. Before local control is granted, the PHA management and its Advisory Board must exhibit evidence of normal and professional operations.

Once HUD determines that the PHA has sufficiently recovered, the PHA is transitioned to local control. The duration of a HUD receivership varies depending on individual circumstances, such as the size of the PHA, the nature and complexity of the PHA's problems, PHA staff capability, and the pace of recovery. The ORO works with HUD's Office of Field Operations to implement post-receivership monitoring provisions to ensure that the PHA continues on the path of improvement started during the receivership.