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HUD Publishes Notices Modifying RAD Program

3 Jul 2018 1:24 PM | Steve Wallace (Administrator)
On July 2nd and 3rd, HUD published two notices which implement a series of previously announced modifications to the RAD Program, one notice in the Federal Register, and the other a Supplemental Guidance notice. Highlights of the two notices include:

Federal Register
  • RAD 1 unit cap is increased to 455K and the application deadline is extended to September 30th, 2024. Additionally, PHAs that previously submitted an LOI to hold their place on the waitlist now have 60 days to submit an application.
  • Commitments to enter into a HAP Contract (CHAPs), portfolio awards, and multi-phased awards awarded on or after January 1, 2019 (under RAD 1) will see rents increased to levels based on the FY 2018 RAD rent base year (as determined by modifications found in the FY 2018 Omnibus to the Capital Fund Formula).
  • PBRA conversions of Rent Supp and RAP properties under RAD 2 that are located in High Cost Areas (as identified in Housing Notice 2017-06) will have initial rents set at comparable market rents, without regard to any FMR caps. Additionally, over the 20-year term of the HAP Contract, rents will be adjusted according to Mark-Up-To-Market processes. The notice states that HUD is not prepared to issue the previously-described modification to initial contract rent setting for PBV conversions at this time.
Supplemental Guidance
  • PHAs are now permitted to rent-bundle any non-RAD PBV to the PBV assistance provided by the RAD program, provided the PHA uses its own voucher funding to supplement rents, as no additional voucher funding for PBV rent-bundling will be provided through the RAD program. HUD will review the rents proposed for the non-RAD PBV contract to ensure the PHA does not exceed the aggregate subsidy available for all rent-bundled projects.
  • If the Contract Administrator agrees to set aside 25% of units in a property for households exiting homelessness or permanent supportive housing, HUD will permit a 25% increase in the allowable development fee, subject to the LIHTC allocating agency's limitations, if applicable.
  • Additionally, the Supplemental Guidance notice details a new, streamlined RAD conversion process for small PHAs on pages 5-9 of the document.

Supplemental Guidance notice (streamlined RAD conversion for small PHAs on pages 5-9)

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