Is this your national policy? I know that my org allows re-instatement, and I guess I just assumed that was the norm. Maybe I should start a new thread to poll.

This is the key difference right here. Your org went on, and possibly got membership back up to the old level, and is still a strong chapter. In an NPC group, losing the house would be a death blow, if every other chapter had housing.

What if the university says initiation must happen within 8 weeks?

This is what has me worried - as I mentioned, the chapter I advise will not be having housing next year. All of the other NPC groups will. Kappa Delta went for a year without housing on that campus for a year recently, but it was because of a recolonization. As far as fraternities go, Pikes recently dropped their housing and doubled in size within a year (so I've been told anyhow) - apparently it was appealing on that campus for fraternity pledges to know that they wouldn't be "forced" to live in b/c there was no house. Whether or not that same type of benefit for NPC rush remains to be seen.

I'm pretty sure we do check grades, like a progress report, before initiation. I know we sign a grade release form during the first round of information we get at our first new member meeting. I remember that much. I could be wrong, though. I know we've had grades situations before...it is, indeed, possible to make below a 1.0. I did not know that until my second semester here. I still don't see how it's done but...

Anyway, it's extremely unpleasant, because unless there is another situation they are still on our Panhellenic Council's roll and count towards our chapter's GPA that semester. We don't have many not make it because of grades, because there are alternatives to just dropping, and usually we have enough sisters who are good tutors to help bring grades up.