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HUD Notice Rental Assistance Demonstration (RAD) – Partial Implementation and Request for Comments April 2012. Current Challenges. Public Housing Capital repair needs in excess of $25.6B across portfolio, or $23,365/unit

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Hud notice rental assistance demonstration rad

HUD Notice

Rental Assistance Demonstration (RAD) –

Partial Implementation and Request for Comments

April 2012


Current challenges

Current Challenges

Public Housing

  • Capital repair needs in excess of $25.6B across portfolio, or $23,365/unit

  • Section 9 funding platform unreliable (pro-rations, cuts), inhibits access to private debt and equity capital (deed of trust)

  • Losing 10,000-15,000 hard units/year

    Section 8 Moderate Rehabilitation (Mod Rehab)

  • Cannot renew on terms needed to secure financing

    Rent Supplement (RS) & Rental Assistance Payment (RAP)

  • No option to renew when contracts expire


History

History

  • February 2010: FY11 Budget requests $350M for Transforming Rental Assistance (TRA) initiative

  • May 2010: “Preservation, Enhancement, and Transformation of Rental Assistance Act of 2010” (PETRA) - Administration’s bill

  • December 2010: “Rental Housing Revitalization Act” (RHRA) introduced by Rep. Ellison and co-sponsors

  • February 2011: FY12 Budget requests $200M for a “Rental Assistance Demonstration” (RAD)

  • August 2011: RAD language submitted as “Technical Drafting Service” (TDS) to Rep. Ellison, Rep. Bachus, and Senator Shelby

  • November 2011: FY12 Appropriations minibus authorized RAD


Goals

Goals

FY12 Rental Assistance Demonstration (RAD)

Allow selected Public Housing & some at-risk assisted Multifamily programs to convert to long-term Section 8 Housing Assistance Payment (HAP) contracts

  • Goals

    • Build on proven Section 8 multifamily platform

    • Leverage private capital to preserve public housing

    • Offer residents greater choice & mobility


Authority

Authority

Authorized as part of the Consolidated Further Continuing Appropriations Act of 2012 (Public Law 112-55)

  • Program Rules outlined in PIH Notice 2012-18

    2 Components

  • 1st Component: Competitive – Public Housing & Mod Rehab

  • 2nd Component: Non-competitive – Mod Rehab, Rent Supp, & RAP


Rad conversion eligibility

RAD Conversion Eligibility

Effective Immediately

Public Housing

Mod Rehab

RS & RAP

Cap of 60,000 Units

No Cap , but subject to availability of TPVs

PBRA

PBV

PBV


1 st component competitive

1st Component: Competitive

  • Public Housing & Mod Rehab

    • Proposed: Public Comments due April 9, 2012

  • Can compete to convert assistance to:

    • Project-Based Rental Assistance (PBRA) or

    • Project-Based Vouchers (PBV)

  • Cap of 60,000 units

  • Convert at current funding only

  • Choice-mobility, with limited exemptions

  • Extensive waiver authority to facilitate conversion

  • Applications through September 30, 2015


Key program provisions public housing

Key Program Provisions: Public Housing


Key program provisions public housing1

Key Program Provisions: Public Housing

Continued


Current funding conversion rent levels

Current Funding – Conversion Rent Levels

ACC

Section 8


Impacts on public housing

Impacts on Public Housing

RAD Authority Could Impact

  • ≈220,000 – 270,000 units could potentially convert at current funding*

  • 60,000 unit cap ≈5% of public housing inventory

  • 300 – 400 projects could potentially convert

  • ≈$380M in current PH funding and ACC units to transfer to PBRA or TBRA account

  • PBRA HAP conversions shift to Office of Multifamily Housing Programs

    * Defined as able to leverage sufficient debt at current funding levels to meet the average regional capital need in the Capital Needs Assessment 2010 (Abt Associates). Estimate assumes debt-only and does not account for the use of other forms of capital.


Rad conversion eligibility1

RAD Conversion Eligibility

Effective Immediately

Public Housing

Mod Rehab

RS & RAP

Cap of 60,000 Units

No Cap , but subject to availability of TPVs

PBRA

PBV

PBV


Key program provisions mod rehab

Key Program Provisions: Mod Rehab

1st Component


Resident choice mobility

Resident Choice-Mobility

  • PBV

  • Adhere to current program rules:

    • Minimum residency: 1 year

    • Waitlist priority if comparable TBRA is not immediately available

  • PBRA

  • Minimum residency: 2 years

  • PHA may limit:

    • Choice-mobility vouchers to one-third of its turnover vouchers

    • Choice-mobility moves to 20 percent of the assisted units in the project

  • HUD may exempt up to 10% of converted units for:

    • PHAs/owners without voucher program

    • PHAs with one-third of voucher turnover already committed to veterans or to the homeless

  • Ranking factor (in competition) for applicants who obtain/commit choice-mobility vouchers


Rad conversion eligibility2

RAD Conversion Eligibility

Effective Immediately

Public Housing

Mod Rehab

RS & RAP

Cap of 60,000 Units

No Cap , but subject to availability of TPVs

PBRA

PBV

PBV


Hud notice rental assistance demonstration rad

Key Program Provisions: Mod Rehab

2nd Component


2 nd component non competitive

2nd Component: Non-Competitive

  • Mod Rehab, Rent Supp & RAP – All Public Comments due April 9, 2012

    • Proposed: Mod Rehab

    • Interim Authority: Rent Supp & RAP

  • Upon contract termination/expiration, convert Tenant Protection Vouchers (TPVs) to PBVs

  • No cap, but subject to availability of TPVs

  • Choice-mobility requirement as found in PBV program

  • Limited waiver authority to facilitate conversion

  • 2-year prospective conversion authority (ends 9/30/2013)

  • 5-year retroactive conversion authority (10/1/2006)


Rad conversion eligibility3

RAD Conversion Eligibility

Effective Immediately

Public Housing

Mod Rehab

RS & RAP

Cap of 60,000 Units

No Cap , but subject to availability of TPVs

PBRA

PBV

PBV


Rent supp rap background

Rent Supp & RAP Background

  • Rent Supp program authorized under Section 101 of the Housing and Urban Development Act of 1965

  • RAP programauthorized under Section 236(f)(2) of the National Housing Act

  • Contracts authorized for 30 to 40 year terms.Budget authority provided for contract term. No option for renewal.

  • All contracts expire by 2019, most prior to 2016

  • Today: Approximately 25,000 Rent Supp/RAP units remain, in 345 properties (236 and some 202s). In most cases the Rent Supp or RAP provides assistance to some, but not all units.


Geography of rent supp rap

Geography of Rent Supp & RAP


Hud notice rental assistance demonstration rad

Key Program Provisions: Rent Supp & RAP


Hud notice rental assistance demonstration rad

Submission of Public Comments

  • Due April 23, 2012

  • 2 methods for submitting public comments

  • Electronic – Federal eRulemaking Portal at www.regulations.gov. HUD strongly encourages electronic submissions of comments.

  • Mail – Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW, Room 10276, Washington, DC 20410-0500

  • Submissions must refer to HUD Notice (PIH 2012-18)

  • All comments submitted will be posted for public viewing on www.regulations.gov


Projected timeline

Projected Timeline

Initial Notice Published3/8/2012

45-Day Public Comment Period Ends4/23/2012

Final Notice Published6/15/2012

First Component (Public Housing & Mod Rehab)

Initial Application Window Opens 8/1/2012

Public Housing Ongoing Application Window Opens 9/1/2012

Initial CHAP Awards 10/1/2012

Second Component (Mod Rehab, Rent Supp, & RAP)

Rent Supp/RAP Requests for Conversions Under

Interim Authority3/8/2012

Rent Supp/RAP/Mod Rehab Requests for Conversions Under

Final Notice8/1/2012


Rad web page

RAD Web Page

All Notice and application materials, as well as additional resources, can be found at

www.hud.gov/rad


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