Standard Error Calculation for HUD Property Physical Inspection Scores

Any opinions expressed in this paper are those of the author and do not constitute policy of the Department of Housing and Urban Development. 1. Introduction The Department of Housing and Urban Development is responsible for assessing the physical condition of the public and assisted housing portfolios. This includes: • Approximately 14,000 properties owned by public housing authorities (public housing), and • Approximately 28,000 properties that are FHA-insured and/or HUD-assisted (multifamily housing). To meet this responsibility, HUD conducts physical inspections, observing the condition of the properties by recording deficiencies. Due to cost constraints, only a sample of dwelling units is inspected in most properties (those with at least 6 dwelling units). In addition, an inspection is limited to a sample of buildings in some properties. Thus, inspection scores are subject to sampling error. After an overview of the sample design and the scoring methodology, this paper discusses the procedure used to estimate physical inspection score sampling errors. Some possible uses of these error estimates are also discussed. The sections of this paper are as follows: 2.