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Judy Vandyke , CEO/Managing Partner, BGC (334) 321-0529 Judy @thebennettgrp

Holly Knight, Vice President of Development, BGC 202-699-1998 holly@thebennettgrp.net. Judy Vandyke , CEO/Managing Partner, BGC (334) 321-0529 Judy @thebennettgrp.net. Goal of RAD.

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Judy Vandyke , CEO/Managing Partner, BGC (334) 321-0529 Judy @thebennettgrp

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  1. Holly Knight, Vice President of Development, BGC 202-699-1998 holly@thebennettgrp.net Judy Vandyke, CEO/Managing Partner, BGC (334) 321-0529 Judy@thebennettgrp.net

  2. Goal of RAD • In order to preserve the public housing stock convert its assistance to the project-based Section 8 platform, which will: • Stabilize funding • Create access to private capital • Streamline HUD programs • Enhance housing options for residents • In order to convert the entire public housing stock, HUD continues to ask Congress for authority and for funds.

  3. Percentage of Current PH Units by HUD Region that have Applied for RAD 15% 6% 7% 3% 7% 18% 16% 21% 22% 21% Note: This data reflects the percentage of PH units in each HUD region that have applied for RAD; note that units are considered public housing until the RAD closing is complete.

  4. Whole Portfolio Conversions • 76% of the PHAs with CHAP awards have proposed to convert their entire stock, including • 52 small PHA (<250 units) • 29 medium PHA (250-1,250 units) • 26 large PHAs (>1,250 units)

  5. RAD Helping PHAs Address Challenges • Indicated PHA Objectives • Complete repairs – range of moderate repairs, substantial rehab and New Construction • ~ 20% of projects planning Demolition and New Construction (on site or off site) • Average repair hard costs of ~ $45,000 per unit ($25,000 per unit excluding new construction) • Place mixed-finance properties on solid financial footing for long term (~ 15% of projects) • Thin densities/mix-incomes via transfer of assistance • Streamline programs

  6. Reviewing Applications on the Waitlist • Secretary Donovan letter 2/20 confirms HUD will review the ~ 685 applications above the 60,000 unit cap • Instruction from Secretary: • Review applications and prepare conditional approvals. • When cap is lifted, HUD will issue CHAPs to all approved applications and process in order of the waiting list. • HUD will use the RAD Notice for these projects but will use FY14 funding levels to calculate the rents.

  7. RAD Update • HUD has asked for RAD cap to be lifted in 2015 budget RAD Application by

  8. RAD Application update

  9. Application Overall Sources of Funding

  10. RAD Application tax credits

  11. Operating Subsidy Funding • 103% • 89.20% • 82% • 94.968% • 100% • 88.42%

  12. Capital Fund Capital Funding Trends

  13. Why RAD • Builds on a more stable funding platform • Lock in funding • Better than Capital Fund Finance, Leveraged Op Sub, or EPC • Leverage private capital to address physical needs and preserve your units • Leverage 4% LIHTC get 30% project equity • Leverage 9% LIHTC get 60+% project equity • Leverage developer fees, seller take back finance, ground lease • Apply for grants HOME, Federal Home Loan Bank • Provides a great deal of regulatory and reporting relief • Saves in reporting to HUD, policies, and oversight more with board and PHA

  14. Why RAD • Gives real estate opportunities • Can move HAP contract as needed • Can move out of flood zones/hazard zones/undesirable areas • Can use non federal funds to purchase properties or land • Benefits of partnering for expiring LIHTC, Home projects, HUD Multifamily developments • Best and highest use of assets • Feasibility, Marketability, and Sustainability

  15. Show the Money • • The RAD options: • • Modest rehab with no debt • • Modest rehab with debt only • • Moderate rehab with debt and 4% LIHTCs • • Major rehab or replacement with debt and 9% LIHTCs • • These are funding sources that are not conveniently • available to small PHAs • • A conversion of all LIPH units eliminates the HUD • requirements for: • • Procurement • • Annual and Five‐ Year Plans • • PHAS • • REAC (if…PBV) • • You Get to Keep the Money – no offsets, developer fees, seller take back financing, cash flow options

  16. PH Development Resources Note: Not listed PHA PBV at FMR, PHA Cost Center Funds, Admin Fees

  17. What can RAD do now? • 15-20 year, renewable contracts with use agreement • Predictable initial contract rent setting; annual operating cost adjustments for inflation (OCAF) • Established replacement and operating reserves; standard industry underwriting requirements • RAD HAP funding begins at construction closing • No limitations on use of project cash flow • PHA ownership/control similar to LIHTC practices • Long-term affordability ensured

  18. Change • Take the first step in faith. You don’t have to see the whole staircase, just take the first step. -Martin Luther King, Jr.

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