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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) –

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





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



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



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.




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 Published 3/8/2012

45-Day Public Comment Period Ends 4/23/2012

Final Notice Published 6/15/2012

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 Authority 3/8/2012

Rent Supp/RAP/Mod Rehab Requests for Conversions Under

Final Notice 8/1/2012


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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