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WHY RAD? Mississippi Home Conference Biloxi, MS February 20, 2013 Gregory A. Byrne

WHY RAD? Mississippi Home Conference Biloxi, MS February 20, 2013 Gregory A. Byrne Senior Program Manager HUD Gregory.A.Byrne@hud.gov. RAD Authority. Authorized as part of the Consolidated Further Continuing Appropriations Act of 2012 ( Public Law 112-55 )

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WHY RAD? Mississippi Home Conference Biloxi, MS February 20, 2013 Gregory A. Byrne

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  1. WHY RAD? • Mississippi Home Conference • Biloxi, MS • February 20, 2013 • Gregory A. Byrne • Senior Program Manager • HUD • Gregory.A.Byrne@hud.gov

  2. RAD Authority • Authorized as part of the Consolidated Further Continuing Appropriations Act of 2012 (Public Law 112-55) • Allows public housing and certain at-risk Multifamily legacy programs to convert to long-term Section 8 rental assistance • Two components • Competitive – cap of 60,000 units (public housing and Mod Rehab) • Non-competitive – no cap but subject to availability of tenant protection vouchers (Mod Rehab, Rent Supplement and Rental Assistance (RAP) programs)

  3. RAD Conversion Authority Public Housing Mod Rehab RS & RAP Cap of 60,000 Units No Cap , but subject to availability of TPVs PBRA PBV PBV

  4. This is rad At closing, funding is converted to a Section 8 contract rent ACC Section 8

  5. Example Milwood I Mixed-Finance Project (McComb, MS) First phase of a redevelopment of an existing public housing project, involving demolition and new construction 10 project-based vouchers (with tax credits) 16 public housing units (with tax credits) 26 total units 13 duplexes PBV contract rents average $621 Public housing contract rents average $325

  6. Development Budget – Original Sources Capital Fund Financing Program (CFFP) Loan                  $595,000 Tax Credit Equity                                                                  $3,925,486 FHLB AHP Funds                                                                   $182,000 Deferred Developer Fee                                                    $90,658   Total                                                                                     $4,793,144 Uses Construction Costs                                                               $3,045,000 Soft Costs                                                                               $1,653,144 Soft/CFFP Loan                                                                    $95,000   Total                                                                                    $4,793,144

  7. Pro-forma – Original

  8. What if? • The public housing units were assigned the RAD rents of approximately $500 PUM • First mortgage terms were as follows: • Amortization period = 30 years • Rate = 3.5% • Mortgage Insurance Premium = 0.45% • Debt coverage ratio = 1.20

  9. Pro-forma – Revised

  10. Magic With the RAD rents, the project is able to generate in excess of $800,000 in first mortgage proceeds, which would have eliminated the need for the PHA to contribute CFFP funds.

  11. RAD Web Page RAD Notice, application materials, and additional resources can be found at www.hud.gov/rad Email questions to radresource.net

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