Rental Assistance Demonstration Resource Desk
Frequently Asked Questions
Category:Application
Posted:04/28/2017
Question:Currently, only Section 202 properties with a Rent Supplement contract (which are rare) can convert under RAD's Second Component provided all of the eligibility requirements have been met.
Answer:The Administration's FY 2017 proposal includes Section 202/PRAC properties under the RAD Second Component however, legislation providing this authority has not been enacted.

Posted:07/23/2015
Question:Do plans developed under Strong Cities, Strong Communities, or the HUD-funded Sustainable Communities Regional Planning grant or Community Challenge grant programs count as eligible plans for priority consideration in the RAD notice?
Answer:Yes, plans developed under the Strong Cities Strong Communities program, or the Sustainable Communities Regional Planning grant and Community Challenge grant programs can be submitted under subfactor c (“locally recognized neighborhood revitalization plan”). As with other local plans, in order to be considered under this factor, a letter of support from the City or County government must accompany the application and describe the manner in which the proposed RAD projects connects to, advances, and/or supports the plan or activities developed under either of these two planning grant programs.

Posted:04/02/2015
Question: Please tell me what Budget Line Items (BLIs) are used for RAD activities on Capital Funds HUD Form 50075.1 along with a description of planned activities that should be reflected under each applicable account.
Answer: Use BLI 1504 for Capital Funds that are contributed into a RAD project's development budget. Use BLI 1503 for Capital Funds that are or will be used to make rental assistance payments.

Posted:10/09/2014
Question:What will be the effective date of the RAD HAP contract?
Answer:The first day of the first month following. The Notice details the steps that must take place prior to closing.

Posted:06/02/2014
Question:Can a PHA apply the de-minimis standard for replacement across properties?
Answer:A PHA may apply the de-minimis standard for any group of properties that are undergoing conversion. For example, if the PHA has two CHAPs, each consisting of 100 units, and the PHA has six units at the first project that have rehab costs that would be exorbitant, the PHA could apply the de-minimis standard across both properties. Thus, because the PHA would, combined, be able to reduce 10 units (5%), the PHA would be permitted to reduce the 6 units at the first property (provided it does not reduce more than 4 units at the second property). However, the project utilizing the greatest reductions has to be the latest to convert (or converts simultaneously).

Posted:02/03/2014
Question:In the event that a housing authority chooses to do a deminimis reduction, is the current funding simply redistributed across the units remaining or is that funding lost with the reduction?
Answer:Funding is lost in a de minimis reduction. You will see that when you enter the reduction in the Excel Application.

Posted:01/30/2014
Question:If you submit a joint CNI/RAD application, will the RAD award date be based on the CNI award schedule?
Answer:When applying for RAD via a joint RAD/CNI application in which you indicate that the CNI application is also your RAD application, you will only receive a RAD CHAP award (Commitment to enter into a Housing Assistance Payment Contract or "CHAP") upon receipt of the CNI award. In other words, your RAD application will only be accepted if and when your CNI application is accepted so the date of your RAD award will be the date of your CNI award. If you not receive a CNI award, your RAD application is also considered rejected. If you believe the project is viable for RAD regardless of the CNI funding you should submit a separate RAD application independent of the CNI application (without any CNI grant money as a source of funds). In the latter scenario, you would receive a RAD Award (CHAP) regardless of the outcome of your CNI application.

Posted:10/01/2013
Question:My agency does not administer vouchers. I can't seem to find any guidance in calculating "Reasonable Rents" to include in the application under Section 2. How are these calculated?
Answer:If you plan to convert the public housing project to assistance under project-based vouchers (PBV) and you do not have a voucher program, you need to find a PHA with a voucher program that is willing to administer the PBVs. That PHA can provide you a Reasonable Rent estimate. For conversions to PBRA, the application asks for the Reasonable Rents as a proxy for market rents. In this case, please provide your best estimate of market rents. [Updated 7.29.13]

Posted:10/22/2012
Question:The AMP we are considering includes two properties with different utility allowances for each bedroom size. How should this be handled in the Application?
Answer:Calculate a weighted average utility allowance. For example, if there are 10 2BR units at $100 plus 15 2BR units at $115, you would calculate 10 x 100 = $1000 plus 15 x $115 = $1725 equals $2725, divided by 25 units = $109.

Posted:10/19/2012
Question:Does RAD allow for the complete demolition and reconstruction of a project?
Answer:Yes. If the reconstruction is on the current site, your conversion plan would need to cover temporary relocation costs for residents during the demolition and reconstruction. Alternatively, the reconstruction might be on a separate site (using the ‘transfer of assistance’ feature of RAD), in which case you might be able to complete the new construction prior to relocating residents from the existing project.

Posted:10/15/2012
Question: Is it acceptable to fund some or all of the required 20 year Replacement Reserve funding in the form of an initial Replacement Reserve deposit , with only a small annual Replacement Reserve deposit or with no annual Replcacement Reserve deposit?
Answer: Attachment 1A-1 specifies that the initial and annual reserve deposits must be sufficient to cover all capital needs arising during the first 20 years. HUD recognizes that this requirement can be met through a relatively high initial deposit and a relatively low annual deposit. Please note, however, that an approach that utilizes a high initial deposit and low or zero on-going deposit will result in the Replacement Reserve funding being inadequate after year 20, which may present underwriting concerns for your lender and other funding partners. In a financing involving LIHTCs, the investor will likely want all anticipated rehabilitation completed in the initial financing which should result in a relatively low need for ongoing replacement reserve funding. Contact your lender (and LIHTC investor, if applicable) to determine whether this approach will be acceptable (for FHA financing, your Replacement Reserve approach must meet all FHA requirements as well as RAD requirements). HUD is open to considering this approach as part of your Financing Plan if your funding partners are agreeable.

Posted:10/15/2012
Question:Can you make a RAD project from several scattered site units?
Answer:Yes, RAD allows scattered site projects. If the scattered site units are part of one AMP, all or some of the units may be included in a single application.

Posted:10/15/2012
Question:Since my PHA has a CFFP loan, I see that the PHA cannot reduce its PHA inventory by more than 5%, or in this PHA’s case, 60 units. At their priority development there are 12 buildings with a total of 97 units. The PHA would like to convert 51 units within only 6 of the buildings. The remaining 46 units would not be converted or otherwise improved at this time. Is this allowed?
Answer:You may be able to carry out a full conversion of the 97 units; please see existing Q&A WEB10082012_2_09100 regarding the 5% limitation. Assuming the CFFP lender agrees, no reasonable proposal to HUD to exempt the PHA from the 5% limitation (and the corresponding 33% of annual Capital Fund grant for debt service) will be denied. It is definitely permissible to convert a part of an AMP (provided there is a sound business reason and that it makes sense from financing/management perspective). Indicate in Section 2 of the Application the mix of units you intend to convert. Explain in Section 3 (Reduction in Unit Count) that you are proposing a partial conversion (see row 69). You may also need to make corrections to the three year historical information in Section 8 (Operating Expenses) because you are converting only part of the AMP.

Posted:10/15/2012
Question:There are four buldings with four HAP contracts. I assume they could be consolidated into one RAD contract.
Answer:Indeed, there are some Mod Rehab projects where there is one legal entity but multiple HAP contracts. It would be acceptable (and advisable) for the owner to consolidate these into one HAP following conversion.

Posted:10/12/2012
Question:Phase in of rent increases – during phase in period, is the difference between the phased in amount and contract rent covered by subsidy?
Answer: Yes.

Category:Benefits of RAD
Posted:06/18/2013
Question:I'm considering a RAD transaction, versus pursuing demolition-disposition through the SAC. It appears that, under RAD, approval of new financing is simpler. However, one advantage that the SAC provides (or used to provide) was the possibility of Tenant Protection Vouchers,that had the effect of increasing a PHAs voucher pool and providing the means for vouchers to be deployed via PBV using a true FMR-based payment standard. However, I understand that RAD brings with it no corresponding bonus of "extra" vouchers (please confirm).
Answer:You are correct that, under RAD, a PHA does not receive TPVs. See Notice PIH-2012-07 for procedures for authorizing TPVs under demolition / disposition. Note that the RAD-HAP contract does begin to fund at construction closing and funds throughout construction. Some PHAs intend to use that rental income to assist with temporary relocation costs for residents. Those PHAs must ensure that their relocation plan complies with all requirements of the Uniform Relocation Act.

Category:Capital Needs Assessment
Posted:04/28/2017
Question:We are pursuing a RAD conversion under the second component. Our current Section 8 SRO Mod Rehab contract covers only a portion of the housing units in our building. Do we need to complete a PCA for the entire building, or just for the units included in our contract?
Answer:The requirement for the assessment of the physical condition of the property proposed for RAD conversion is contacted in Notice, PIH-2012-32 (HA), REV-2, Section 2.4.A., on page 136. The RAD conversion is intended to place the SRO units on a sound financial, physical, and managerial footing for the long-term HAP contract that will replace the Mod Rehab contract. If the ownership of the SRO units also owns the remaining units in the building, then the CNA (HUD’s name for the PCA) must cover the entire building. If the ownership of the SRO units is different than the entity owning the remaining units in the building, then the CNA must only cover the SRO units.

Posted:08/27/2015
Question:If a component does not fall into a category for which the Fannie Mae Physical Needs Assessment Guidance to the Property Evaluator lists an EUL, can it be excluded from the RAD Report?
Answer:No, the component cannot be excluded. HUD relies on RPCA contractors to be aware of appropriate sources of information for EULs in this situation.

Posted:08/27/2015
Question:Is the RPCA required to include units that will not be converted to RAD because of the allowable de minimis reduction?
Answer:No. If the units are being reduced as part of the allowable de minimis reduction, they do not need to be included in the RPCA because they are not converting to RAD.

Posted:10/14/2014
Question:Is a RAD Property Condition Assessment (RPCA) required on a new construction or substantial renovation transaction?
Answer:A RPCA is required for all RAD transactions, except the following: 1) New Construction; 2) Gut Rehab (essentially, down to the stud); or 3) Recently modernized or constructed buildings (based on the recommendation of the HUD RAD Transaction Manager and approval by the RAD Team Lead). However, the RPCA Excel tool is still required to size the reserve for replacement deposit on all sub-rehab transactions, with the exception of “gut rehabs”. “Gut rehabilitation” is defined as “removal/replacement of all or substantially all interior finished surfaces”.

Posted:09/08/2014
Question:If a PHA has accessibility improvements identified in the PCA, can it perform that work post-closing as part of the scope of immediate repairs?
Answer:Critical repairs are repairs that must be done on an accelerated schedule, including health and safety issues (such as an improperly vented gas appliance). Note that identified accessibility modifications that pose imminent health and safety risks, may be considered critical repairs. All critical repairs must be completed prior to the RAD closing. If your property has a critical repair that you believe cannot be completed prior to RAD closing due to time constraints, please discuss this with your RAD Transaction Manager who may permit the repair to be moved into rehab as long as it can be demonstrated that doing so does not present an immediate health or safety hazard to residents. Rehab items also must be done, but the schedule is governed by the rehab provisions of the RAD Conversion Commitment. Year One items typically reflect systems or components that were functioning at the time of the inspection and are anticipated to require replacement in the first year. Whether and when these are done will be up to the property owner. A typical example would be a 20 year roof that is not leaking but that either has reached 20 years of age or will reach 20 years of age within the first year after the closing. The Reserve for Replacement would contain sufficient funds to pay for the roof replacement, and the timing of the roof replacement would be up to the owner.

Posted:06/03/2014
Question:My PHA previously met the standard for accessibility across the public housing portfolio. However, now that we are converting to RAD, there are individual projects that exceed the standard and some that do not meet the standard (but, again, overall we are in compliance). When we convert to RAD, will we be “grandfathered” in, or will we have to have all projects meet the accessibility standards on their own?
Answer:Each project covered under a HAP contract must meet the 5%/2% accessibility standards under Section 504 if the project is undergoing substantial alterations.

Posted:06/02/2014
Question:When is the RPCA required?
Answer:The RPCA is required in all instances, except the following: 1) New Construction; 2) Gut Rehab (essentially, down to the stud); 3) Recently modernized or constructed buildings (based on the recommendation of your RAD Transaction Manager and approval by the RAD Team Lead); or 4) Any FHA 221(d)(4) transaction.

Posted:05/14/2014
Question:Is SHPO or Section 106 review required on a RAD conversion project that is more than 40 years old? ?Does it matter whether it's minor rehab, gut rehab or demolition?
Answer:RAD requires Environmental Review approval (see Notice PIH-2012-32 REV-1 pages 84-85).? The required Environmental Review includes consultation with SHPO.

Posted:05/14/2014
Question:We are a PHA and have been unable to get the Responsible Entity to complete the Environmental Review to ensure the property meets requirements for 24 CFR Part 50 or Part 58, as applicable. Is the Environmental Review still required in this instance?
Answer:In cases where the Responsible Entity chooses not to complete the assessment, HUD will complete the assessment under Part 50. Please contact your Transaction Manager for further instruction.

Posted:05/14/2014
Question:What is the required format of a Phase I Site Assessment to meet RAD Environmental requirements?
Answer:If you are using FHA financing, the Phase I will be ordered by your FHA lender, and the format will be in accordance with Chapter 9 of the MAP Guide. Otherwise, check with the agency that will be issuing the Environmental Review approval; the Phase I will need to be acceptable to the approving agency. It is a good idea to procure the Phase I from a firm that has experience preparing reports that have been found acceptable by the specific agency that will be issuing the Environmental Review approval. If you are not using FHA insurance, you should check with the entity performing the assessment to determine if a full Phase I will be required.

Posted:02/14/2014
Question:Is there any restriction on how early the RPCA can be done? We have a project where we would like go ahead and order the RPCA before we submit the application. The project will be funded entirely with Housing Authority funds, so there is no issue with having the RPCA provider approved by a lender. Is this acceptable?
Answer:Obviously the more current the RPCA, the better it is for the Owner, HUD, and all funding partners to understand the property and what repair and replacement needs have to be addressed. Typically HUD uses an RPCA for 12 months after which time, it will have to be updated if the RAD transaction has not closed. It is also important to document significant replacements that are made and changes made to the property after the RPCA has been completed and while HUD is reviewing the RAD transaction. However, if the transaction is using FHA insurance, the RPCA can be no more than 6 months old at the time of Firm Commitment issuance, otherwise it will need to be updated. Please keep your HUD Transaction Manager apprised of these significant changes. [Updated 2.14.14]

Posted:06/18/2013
Question:Could you further explain the Occupancy adjustment factor and how it’s calculated?
Answer:The utility usage should be adjusted when there are vacancies that impacted utility usage so that the consumption represents 100% occupancy. For example, if your property was 90% occupied during the year, and vacant units consume half as much electricity as occupied units, then the actual consumption represents about 95% of the amount of electricity that the property would have consumed if all units had been occupied for the full year. HUD does not dictate how the occupancy adjustment is made but does ask that you explain how you made your calculation in the narrative portion of the utility baseline.

Posted:05/20/2013
Question:Are there any restrictions on what functions an RPCA contracting firm can perform in addition to completing the RPCA? Can they perform the work and serve as a GC?
Answer:The RAD Notice does not impose any requirements.

Posted:01/30/2013
Question:All public housing agencies are required to conduct a Green Physical Needs Assessment using the HUD GPNA Tool. The final rule is projected to be published in March. Agencies with a December 31 fiscal year must submit the GPNA to HUD on September 1, 2013. My question is if a project is converting all units to RAD, does the project need to complete the GPNA? And, if a project is only converting some of the units to RAD and the remaining will stay in public housing, will the RAD units need to be part of the GPNA?
Answer:The public housing GPNA requirement will not become effective until the publication of its final rule. PHAs that have entered RAD and whose converted units are no longer recorded as ACC units in PIC as of their GPNA submission due date (and are reflected in the PIC data set provided by HUD for import into the GPNA tool) are not required to make the PNA submission from the GPNA tool for that portion of their inventory that has left public housing for RAD. PHAs that have been awarded a Commitment to Enter into a HAP (CHAP) under RAD as of the due date of their public housing GPNA will be required to make the PNA submission from the GPNA tool accounting for the entire inventory of units remaining in public housing (and remaining reflected in the PIC data set provided by HUD for import into the GPNA tool) but recording “0” needs for that portion under the CHAP. If the entire inventory of any AMP is under a CHAP as of the GPNA due date, no submission will be required as it will be considered likely that the entire AMP will be leaving public housing. Should public housing inventory under a CHAP not ultimately convert to RAD and remain in public housing, a GPNA submission will become required. Any subsequently required submission must be made from the automated reporting feature of the GPNA tool. Information from a RAD PCA may be used for the submission but it must be migrated to the GPNA tool.

Category:CHAPs
Posted:04/28/2017
Question:For a RAD PBV Transaction that has had a CHAP and RCC issued and is in the Closing process, what are the steps to request a utility allowance change?
Answer:The utility allowances shown in the RAD CHAP award reflect the utility allowances input by the PHA at the time of the original RAD application submission. The RAD conversion must close with the Public Housing utility allowances currently in place at the site. The existing utility allowances should be reviewed and confirmed at the Financing Plan stage. If there is a change to the utility allowances since the original CHAP was issued, the Executive Director of the PHA must submit a signed certification to their Transaction Manager stating the requested utility allowances per bedroom type and certifying that those are the utility allowances currently in effect at the site. The Transaction Manager will then request an amended RAD CHAP Exhibit A which will reflect the updated utility allowances. If an RCC has already been issued, the RCC will also need to be amended to reflect the revision. Please see the RAD CHAP Amendment Overview available in the RAD Resource Desk Document Library for additional information on utility allowances.

Posted:03/16/2016
Question:Prior to closing, how are my CHAP rents increased by OCAF?
Answer:HUD will increase the RAD contract rents included in the CHAP each year by the published OCAF. For properties awarded under the original 60,000 unit cap with initial contract rents based on FY 2012 funding levels (“FY 12 RAD rent base year”), the first OCAF adjustment occurred in 2014 and will occur each year thereafter until closing. Thus, for a project in this category that closes with a HAP effective date of January 1, 2017, the initial contract rents are based on 2012 funding, increased by the 2014, 2015, 2016, and 2017 OCAFs. For properties awarded above HUD’s original 60,000 unit cap but subject to the increased 185,000 cap with initial contract rents based on FY 2014 funding levels (“FY 14 RAD rent base year”), the first OCAF adjustment occurred in 2015 and will occur each year thereafter until closing. Thus, for a project in this category that closes with a HAP effective date of January 1, 2017, the initial contract rents will be based on 2014 funding, increased by the 2015, 2016, and 2017 OCAF. Note: Because the OCAF adjustments are generally published in October for the following calendar year, beginning in CY 2017 HUD plans to update all CHAP rents by the applicable OCAF adjustments before the start of the calendar year.

Posted:05/12/2015
Question:We have a large project that we are converting in phases. For the initial phase, in terms of PIC removal, do I include acreage for the entire site or just the portion being converted?
Answer:For the PIC removal application, just include the portion being converted at this time.

Posted:02/03/2014
Question:My RAD project received a CHAP in December 2012 and had a REAC inspection in April 2013. Because the project was exempt for PHAS purposes at the time of the REAC inspection, can the record of the inspection be removed from the REAC system?
Answer:No. REAC inspections will continue after issuance of a CHAP, and scores will continue to be issued. The exemption is an exemption from the PHAS scoring system. The April 2013 inspection score for your project stands, but it will not affect your PHA's score under the PHAS system.

Posted:10/01/2013
Question:PIH Notice 2012-32 REV-1 page 76 indicates that a PHA must notify HUD within 15 days of the CHAP award (or issuance) if it decides to refuse the CHAP. Is the PHA required to confirm its intent to accept the CHAP under that same deadline?
Answer:The PHA is not required to notify HUD that it will accept the CHAP. Unless HUD hears otherwise, it is assumed that the CHAP has been accepted by the PHA.[Updated 7.29.13]

Category:Choice Mobility
Posted:01/15/2016
Question:Is choice mobility only available to residents who were in place at conversion, or can new residents eventually qualify for it too?
Answer:For covered projects, the Choice-Mobility option is available to all existing and future residents. Note, however, that there may be limits on the number of residents in a covered project who might receive a Choice-Mobility option in any given year. See Notice PIH-2032 REV-2 for additional information on the Choice-Mobility requirement (see in particular section 1.6.D.9 for PBV conversions and section 1.7.C.5 for PBRA conversions). Some RAD PBRA conversions received an exemption from the Choice-Mobility requirement at the time of the initial RAD application and approval, as discussed on Section 2.3.6.C.3 of the Notice.

Posted:10/09/2015
Question:Do residents of a PBV RAD conversion have to wait 12 months or 24 months after the execution of the HAP to exercise their right to move into tenant-based assistance?
Answer:See the RAD Notice REV-2, page 61, item 9 Choice Mobility, which makes it clear that, with PBVs, a resident's ability to access the choice-mobility option is available "at any time after the first year of occupancy." Note that the choice-mobility requirements for PBV conversions differ in some respects from the choice-mobility requirements for PBRA conversions.

Posted:08/27/2015
Question:Could you point to a Notice or other official document that provides a clear, succinct definition of “Choice Mobility Voucher” and its requirements in the context of RAD?
Answer:For RAD, the Choice-Mobility was modeled after the requirements in the PBV program. The statutory reference is Section 8(o)(13)(E)(i) of the Housing Act of 1937. The regulatory reference is 24 CFR 983.260. Under RAD, HUD made no changes in Choice-Mobility for PBV conversions. For PBRA conversions, see section 1.7(C)(5).

Posted:08/27/2015
Question:How do I know if my request for a good cause exemption from Choice Mobility was approved?
Answer:If the PHA requested a good cause exemption in their RAD application, after CHAP issuance the Executive Director will receive an email notifying them of whether or not the exemption was approved. The Transaction Manager will be copied on this email as well. The exemption approval is also logged on the RAD Resource Desk on the Property Details page for future reference.

Posted:07/30/2015
Question:What is the time period for a resident to request a voucher after the one year obligation has been met?
Answer:The resident may request a Choice Mobility voucher at any time after one year.

Category:Closing
Posted:02/17/2017
Question:If a conversion occurs early in the calendar year before HUD has made its Capital Fund grants, how can a PHA that is converting its last public housing project make sure to apply the entire Capital Fund grant to the converting project?
Answer:Capital Funds are used for funding HAP payments in the initial year of closing and can also be used for development costs (in the Sources & Uses). First, the PHA will want to ensure that enough of the Capital Fund grant is set aside for HAP payments. In such a case, a portion, based on the number of months remaining in the calendar year of the PHA’s Capital Fund grant, can be used for rental assistance to support the Covered Project for the remainder of the calendar year of the conversion. Within 2 weeks of the Capital Fund grant award, the PHA should complete the updated Initial Year Funding Tool to calculate the amount of Capital Funds needed and then complete HUD form 50075.1 with that amount shown in BLI 1503. The executed 50075.1 and the Initial Year Funding Tool should be emailed to resourcedesk@radresoucre.net, with a copy to Ivan Pour. Upon receipt, HUD will review and move the funds to BLI 1503 in LOCCS. The remaining balance of the Capital Fund grant can be contributed to the Covered Project as part of the development budget if in the Financing Plan and memorialized in the RCC (Sources & Uses Exhibit), the PHA identifies that this source will come into the project after conversion by, for example, including in the Sources “TBD- 2017 Capital Fund balance.” This would authorize the use of those funds for the Covered Project when the funds become available, even though that would occur after conversion. Given that the precise amount that will be available will be unknown at the time of Financing Plan submission and at closing, in its review of the Financing Plan, HUD will make sure that the transaction does not rely on those funds in order to meet RAD’s minimum underwriting standards. In other words, the transaction must be able to stand on its own without the funds. The funds could then be used to enhance replacement reserves or operating reserves. Within 2 weeks of the Capital Fund grant award, the PHA should complete the 50075.1 with BLI 1504 populated with the corresponding Capital Fund amount and then email the 50075.1 to resourcedesk@radresource.net, with a copy to Ivan Pour. Upon receipt, HUD will review and move the funds to BLI 1504 in LOCCS.

Posted:06/09/2016
Question:For a PBV conversion, where the property is undergoing initial repairs, the RAD Notice requires that all units meet HQS no later than the date of completion of initial repairs as indicated in the RAD Conversion Commitment, rather than prior to entering into the HAP contract. If an HQS inspection does not occur until the initial repairs are completed, what dates should be entered into the Form-50058 for the date of last inspection for residents that are residing in the units while the repairs occur?
Answer:In such cases, the PHA should carry over the date that the unit was last inspected as a public housing unit.

Posted:10/08/2015
Question:Is there a requirement for who holds the Replacement Reserves?
Answer:Yes. If there is FHA-insured financing, the insured lender will hold the Replacement Reserve. Otherwise, typically a non-FHA-insured lender or a LIHTC investor holds the Replacement Reserve. In RAD transactions without debt and without LIHTCs, HUD can agree to allow the PHA to hold the Replacement Reserve as a separate account with a banking institution with the account covered by a General Depository Agreement (form HUD-51999). Please note that a GDA may also be required in other circumstances, such as when public housing funds are being used to fund the reserve. Please contact your RAD Closing Coordinator for additional information.

Posted:08/27/2015
Question:A PHA is planning to use HUD Risk Share in their loan and bond closing. Do they need to modify their documents to include any RAD specific language, or is the Use Agreement sufficient? Has there been experience with other HUD Risk Share participants?
Answer:HUD Field Counsel will determine what, if any, documents need to be modified as part of the closing process for a RAD conversion utilizing the HFA-FHA Risk Share program. HUD Field Counsel is typically assigned when the RCC is issued, so the PHA or their counsel should inquire at that time.

Posted:11/03/2014
Question:When a PHA is not taking on any debt, is it required to obtain title insurance and/or surveys?
Answer:If there are no existing surveys for the property, the decision will be made by the field counsel as to what is required. Please note that there is no such thing as an "HQ Waiver" for these requirements and it is up to HUD field counsel to make the determination. Often in these circumstances, in lieu of title insurance or surveys, the PHA will be required to obtain a Title Report. Although each case will be determined by field office counsel, generally, new surveys and title insurance will not be required when there is a clean Title Report.

Posted:07/17/2014
Question:How is RAD responding to concerns of commercial lenders and Low-Income Housing Tax Credit (LIHTC) investors with regard to foreclosure matters and continued rental assistance?
Answer:HUD has posted a standard rider to the public housing conversion RAD HAP contracts to address the concerns LIHTC investors have raised while also protecting the long term affordability of properties converting under RAD, and adhering to the statutory provisions for ownership and control. These riders document and set forth conditions for: providing notice to LIHTC investors; accepting the investor’s offer to cure on behalf of a defaulted owner; providing HUD consent to the transfer of the investor’s interest in the ownership; and pre-approving replacement of the general partner or managing member with the special limited partner or similar entity for a limited period of time in order to facilitate an acceptable permanent replacement. To access these riders, go to www.radresource.net > Contracts & Closing Documents. HUD is also in the process of drafting standard riders to the Use Agreement and the public housing conversion RAD HAP contracts to clarify that HUD will not assert an interest to prohibit a lender from foreclosing when there is cause, but that the Use Agreement -- which establishes affordability requirements -- survives foreclosure by its terms and that continuation of HAP assistance requires HUD consent. It is also HUD’s goal through these riders to provide for a limited continuation of HAP assistance if the lender or its designee comes into ownership of the project in accordance with its rights under the loan documents. When final, these riders will be published on the RAD website. Until these riders are finalized, HUD has developed several provisions that can be provided by the RAD Closing Coordinator to assist with transactions currently moving into the closing phase. These provisions address lender concerns while also protecting the long term affordability of properties converting under RAD, and adhering to the statutory provisions for ownership and control. Importantly, neither rider changes RAD statutory and RAD notice requirements around ownership and control. The RAD Use agreement and RAD HAP contract – two means through which long-term affordability for residents are secured – survive foreclosure, leaving current and future residents protected.

Posted:06/03/2014
Question:Must a PHA give tenants 30-day notice of the effective date of the new lease?
Answer: PHAs must give tenants at least 30-day notice of their public housing lease termination (recognizing that the exact date of closing, and thus the exact effective date of the HAP, is not known). HUD recommends that PHAs provide this notification to residents along with a notification of the effective date of the new lease. However, PHAs should consult with legal counsel, especially with respect to the requirements of state and local tenant laws.

Posted:06/02/2014
Question:For conversions where the PHA is transferring ownership to a non-profit or public entity, must the PHA also evidence “ownership or control” of the units?
Answer:No. The RAD statute requires that, unless to facilitate tax credits, converting properties either be owned by public or non-profit entities or controlled by the PHA. As such, transfer of ownership to these entities is permitted as-of-right. The PHA must still submit to the HUD closing attorney the organizational documents, but the review of these documents is only to ascertain that the entity has the legal authority to own the units

Posted:06/02/2014
Question:If a public housing-only PHA converts its entire inventory to RAD, does it need to submit one last FASS-PH report (for that last partial or full year)?
Answer:Yes. Because it received Federal funds for a portion of that fiscal year, the PHA will need to submit a close-out FDS.

Posted:05/30/2014
Question:What is the process for clearing critical repairs that have been completed?
Answer:The RAD Conversion Commitment contains an exhibit (Ex. G) for all critical repairs associated with the RAD conversion and states that they must be completed prior to closng. The Owner must provide a written certification that all critical repairs listed in Exhibit G of the RCC have been completed prior to closing. This certification can be made via the Consolidated Owner Certification template which is available on www.radresourc.net > Contracts & Closing Documents. [Updated 5.30.14]

Posted:04/29/2014
Question:I am a PHA with a CHAP and would like to complete some repairs prior to the closing of the RAD conversion. Is this allowed?
Answer:All repairs identified as "critical" in the RAD PCA must be completed prior to closing. If the PHA wishes to complete additional repairs to the property prior to closing, it is permitted to do so but must follow all applicable Public Housing rules. It is important to remember that until the RAD conversion has closed, the property is still considered Public Housing and is subject to Public Housing rules. The PHA must also make sure the Financing Plan and RAD PCA are updated to reflect the changes to the repair schedule and scope of work. Please note that RAD conversions pursuing FHA financing should discuss the completion of additional repairs with their Transaction Manager as additional approvals may be necessary.

Posted:03/28/2014
Question:Is a RAD Use Agreement required for a Mod Rehab RAD conversion?
Answer:No. The RAD Use Agreement is not required when a Mod Rehab converts to RAD under either the 1st or 2nd Component. The RAD Use Agreement is only required for 1st Component public housing conversions.

Posted:12/09/2013
Question:When, under RAD, are Capital Funds considered obligated and/or expended?
Answer:If a PHA is contributing Capital Funds to the development budget (Sources & Uses), those Capital Funds are considered both obligated and expended as of the effective date of the RAD closing. If a PHA needs to extend the obligation end date for capital funds in order to use capital funds in the development budget, the PHA should send a request to the Office of Capital Improvements, to the attention of Jeff Riddell, with copies to the RAD Transaction Manager and the local PIH field office.

Posted:12/04/2013
Question:If a PHA owns excess personal property (i.e., vehicles) not currently considered part of any one AMP, may it include the property in its RAD conversion?
Answer:Yes, provided that either: (A) the PHA is converting its entire public housing portfolio; or (B) there is a sufficient nexus between the property and the proposed conversion (i.e., the vehicle will serve the project).

Posted:04/24/2013
Question:What is the exact process for releasing the DOT? Is there a document or form that we have to create or fill out or does HUD just do that automatically when the Financing Plan is approved? Is there an amendment to the ACC?
Answer:The release of the DOT will be done by HUD at closing and in conjunction with the signing and recordation of the Use Agreement. HUD will provide the PHA's with closing instructions outlining the necessary forms and systems changes that the PHA must complete prior to closing. Following closing, the ACC is amended when the PHA removes the unit from the PIH Information Center (PIC). HUD will provide instructions to PHAs for properly documenting the removal of units from PIC.

Posted:03/05/2013
Question:On what date does a RAD project cease being a public housing project?
Answer:The project ceases to be a public housing project at the effective date of the HAP contract, which is the first of the month following closing.

Category:Demoliton/Disposition
Posted:07/30/2018
Question: If I am using both the de minimus reduction and the 75%/25% RAD/Section 18 blend provisions on a RAD transaction, do I need to submit the FHEO Change in Unit Configuration review? All reduced units will be replaced by other PBV units and Tenant Protection Vouchers (TPV), so the number of low-income dwelling units is the same.
Answer:If all of the reduced units are being replaced with project-based assistance, an FHEO Change in Unit Configuration review is not needed.

Posted:06/02/2014
Question:Can a PHA apply the de-minimis standard for replacement across properties?
Answer:A PHA may apply the de-minimis standard for any group of properties that are undergoing conversion. For example, if the PHA has two CHAPs, each consisting of 100 units, and the PHA has six units at the first project that have rehab costs that would be exorbitant, the PHA could apply the de-minimis standard across both properties. Thus, because the PHA would, combined, be able to reduce 10 units (5%), the PHA would be permitted to reduce the 6 units at the first property (provided it does not reduce more than 4 units at the second property). However, the project utilizing the greatest reductions has to be the latest to convert (or converts simultaneously).

Posted:12/04/2013
Question:A PHA is considering applying for RAD for a project that has already been demolished. Is this project still eligible for RAD?
Answer:No. Only projects with units under ACC and in PIC are eligible for RAD.

Posted:10/01/2013
Question:If a HA is proposing to do a RAD conversion of Public Housing that involves demolishing an existing project and rebuilding an equal or greater number of units on the same site, is this treated in essentially the same way as for a RAD conversion with rehab? Is it unnecessary to do a transfer of assistance as long as the units are being rebuilt on the same site? Where and how does the RAD PCA fit into this scenario?
Answer:In the situation you describe, a transfer of assistance would not be needed, because the RAD project would be located on the same site as the current public housing. In demolition-and-reconstruction projects, a RAD PCA is not required. See Notice PIH-2012-32, page 26, footnote 6; and Attachment 1A.1 paragraph B. [Updated 7.29.13]

Posted:03/22/2013
Question:Can a housing authority that has demolished units counted in their ACC rebuild and covert to RAD for the new building with the same unit count?
Answer:RAD is a "current funding" program. Therefore if you have units that have been demolished but are still in PIC and being funded by operating and capital funds, you can convert those units to RAD. The RAD rents will be set by the amounts currently funded in the operating and capital funds. Thus, if there has been a phase down of funding, the RAD rents will be set at the lower (current) levels. If the demolished units are not still in PIC, they are not eligible for RAD conversion. For the most part, units that are being built back under "Faircloth" must first be brought into the public housing program under either the traditional development method or the mixed-finance method, and then they would be eligible for RAD. Some PHAs have inquired as to whether there could be a "joint" or "simultaneous" closing. The Department is looking into that possibility.

Category:Determining Rents
Posted:05/10/2016
Question:My agency is scheduled to receive Replacement Housing Factor (RHF) or Demolition/Disposition Transition Funds (DDTF) as a result of other public housing properties that were removed from our inventory through demolition or disposition. We would like to augment our RAD contract rent instead. How do we request the rent increase and how do we determine the amount that the RAD rents can be increased?
Answer:To request a RAD contract rent augmentation, PHAs should email their RAD Transaction Manager who will obtain the amount of future RHF/DDTF funds for which PHAs are eligible. Once PHAs have received confirmation of the available amount, the PHAs complete the RHF/DDTF Rent Boost/Cancellation Certification form found in the Document Library on the RAD Resource Desk and email it to the RAD Transaction Manager. The PHAs should note in their email whether they wish to apply the amount to a specific CHAP or across multiple CHAPs. The Office of Recap will then issue an amended RAD CHAP award reflecting the revised contract rents. Note that the augmented contract rents are still subject to existing PBV and PBRA rent caps.

Posted:03/16/2016
Question:Prior to closing, how are my CHAP rents increased by OCAF?
Answer:HUD will increase the RAD contract rents included in the CHAP each year by the published OCAF. For properties awarded under the original 60,000 unit cap with initial contract rents based on FY 2012 funding levels (“FY 12 RAD rent base year”), the first OCAF adjustment occurred in 2014 and will occur each year thereafter until closing. Thus, for a project in this category that closes with a HAP effective date of January 1, 2017, the initial contract rents are based on 2012 funding, increased by the 2014, 2015, 2016, and 2017 OCAFs. For properties awarded above HUD’s original 60,000 unit cap but subject to the increased 185,000 cap with initial contract rents based on FY 2014 funding levels (“FY 14 RAD rent base year”), the first OCAF adjustment occurred in 2015 and will occur each year thereafter until closing. Thus, for a project in this category that closes with a HAP effective date of January 1, 2017, the initial contract rents will be based on 2014 funding, increased by the 2015, 2016, and 2017 OCAF. Note: Because the OCAF adjustments are generally published in October for the following calendar year, beginning in CY 2017 HUD plans to update all CHAP rents by the applicable OCAF adjustments before the start of the calendar year.

Posted:03/04/2016
Question:Can a PHA ask for a waiver of certain regulations in order to establish a site-specific utility allowance schedule for a property converted to a Project-Based Voucher contract under RAD?
Answer:Yes. A PHA can ask for a waiver of 24 CFR 983.301(f)(2)(ii) and 982.517 in order to establish a site-specific utility allowance schedule for a property converted to a Project-based Voucher contract under RAD. In considering such waiver requests, HUD will take into consideration whether the project had a site-specific utility allowance prior to conversion, the extent to which the voucher-wide utility allowance schedule can be appropriately applied to the site without causing undue burden to the residents or over-subsidizing the residents, and other factors HUD may request in order to assess good cause. Such waiver requests must be submitted through the Office of Public and Indian Housing (PIH) in accordance with PIH Notice 2013-20

Posted:08/27/2015
Question:The PHA is concerned that tenants currently paying a flat rent may not be able to handle the rent increase that could result from the TTP. Although the tenant may stay in place, their rent could rise considerably. Will the phasing of rent increases apply in this case?
Answer:The flat rents no longer apply after the RAD conversion. Post-conversion, rents will be in accordance with the PBV or PBRA HAP contract. If the resulting rent increase is more than 10%, the RAD phase-in rules would apply

Posted:07/30/2015
Question:The energy savings provision of the new HUD RAD notice (Attachment 1C, pages 116-118 of the Notice REV-2) allows PHAs to apply 75% of the energy savings back to the contract rent. (1) When can a PHA apply the energy savings?; 2) How does it get documented?; 3) Can the PHA take the energy savings in the first year of the new HAP?
Answer:(1) The Notice provides that, for rehab projects, the energy savings will result in an increase to the post-rehab rents (at the RAD closing the PBRA HAP contract will specify both pre-rehab and post-rehab rents). Thus, you must complete the rehab before the energy savings can be applied. For new construction, the energy savings can be applied once construction is completed. (2) The Notice discusses documentation requirements at the bottom of page 116 and top of page 117. "PHAs can submit UA projections performed by a professional engineer, based on the project’s plans and specifications that, at a minimum, take into account specific factors including, but not limited to, unit size, building orientation, design. and materials, mechanical systems, appliances, and characteristics of the building location. The projections must be submitted in the RAD UA Projections Template." Note that approval is at HUD's discretion. (3) See item (1) regarding timing of the increase in RAD Contract Rent.

Posted:07/24/2015
Question:The RAD Notice refers to the “calculated” TTP. Is this capped at the RAD gross rent?
Answer:No. The calculated TTP is determined only by the household’s adjusted income.

Posted:04/02/2015
Question: If a PHA has received a CHAP award, are they required to comply with the new Public Housing Flat Rent requirements?
Answer: Yes, the PHA must comply with the flat rent requirements, until the RAD conversion date.

Posted:09/18/2014
Question:The property I wish to convert to RAD currently contains efficiencies which are hard to market. I'd like to convert them into 1 bedrooms. How will this impact my RAD contract rents?
Answer:Where a PHA wants to eliminate efficiencies (or otherwise reconfigure units) because the units are hard-to-market, and does so by combining two units into one, HUD will fund the reconfigured units according to the appropriate bedroom size. In addition, for the “lost” units, HUD will treat these as “special purpose”, meaning that the subsidy for the lost units will be distributed across the remaining units, subject to the RAD rent caps and in no event more than what the PHA would have received in subsidy prior to conversion. For example, a project has 100 efficiencies with RAD contract of $400 PUM, which was calculated based on combined Operating and Capital Fund subsidy of $200 and tenant rents of $200. The PHA wants to convert the 100 efficiencies into 50 one-bedroom units. As such, all 50 1-BR units could convert at a $600 PUM contract rent (subject to applicable 1-BR rent caps). [Updated 9/18/14]

Posted:07/08/2014
Question:Can an owner administer the PBV waitlist?
Answer:The obligation that the waiting list be maintained by the administering PHA is statutory. A PHA may choose to use a broad HCV waiting list, a PBV waiting list, or a project-specific PBV waiting list, but it is still the responsibility of the PHA to maintain that waiting list.

Posted:07/08/2014
Question:My project currently has a mix of project-paid and tenant paid utilities. We are attempting to determine whether to switch to all tenant-paid or all project-paid utilities. How will those changes affect my RAD rents?
Answer:If you are prepared to make the change in utility combination at the time of conversion, we will adjust the RAD rents at that time, based on the following: 1) If you are converting from tenant-paid utilities to project-paid utilities, we will add to your contract rent the amount of the associated utility allowance. For example, if your contract rent is $400, and your utility allowance is $100, then your new contract rent will be $500 if you convert all tenant-paid utilities to project-paid. 2) If you are converting from project-paid to tenant paid utilities, we will reduce your contract rent by the utility allowance that will now be assigned to those units. For example, if your current contract rent is $500, but there is no utility allowance, and if you plan to convert to tenant-paid utilities and the utility allowance will be $100, we will then reduce your contract rent from $500 to $400. If conversion of utilities occurs after the RAD conversion date say, after completion of repairs), the utility conversion must be effective at the property’s contract anniversary date. Chapter 12, Section 5 of HUD Handbook 4350.1 describes the procedural requirements for these conversion requests.

Posted:07/08/2014
Question:My project has a family that is currently paying a “flat rent.” Per PIH Notice 2014-12, PHAs are now required to update these flat rents, where applicable, and offer residents a phase-in of 35% a year. How will this phase-in of flat rents impact the resident when we convert to RAD?
Answer:Let’s assume the tenant is now paying $200 in rent but the new amount, under public housing flat rent, is $400. The family’s recertification is July 1. So, the PHA raises the rent in July to $270. Let’s further assume that the project converts in August. The flat rent phase-in "schedule" that a tenant was going to undergo in public housing is now irrelevant. If, at the time of conversion this tenant was paying $270, but the tenant's TTP under section 8 is $500, then the rent will phase in from $270 to $500 over 3 or 5 years (note: the public housing flat rent target of $400 doesn't matter anymore). Since the next recertification would be the following July, the 3-5 year phase in for RAD wouldn't start until July 2015. As a result, the PHA will not run into the problem of a tenant's rent increasing twice in one year.

Posted:06/02/2014
Question:At conversion, what utility allowance shall I use – the utility allowance that was in my application (2012) or the utility allowance in effect at the time of conversion?
Answer:The PHA should use the most recent utility allowance at the time of conversion.

Posted:06/02/2014
Question:How does a change in classification of bedroom size impact my RAD rents?
Answer:If a PHA can demonstrate that the current units are not competitive because of size or other factors, and therefore the PHA requests to re-classify the units to a smaller bedroom size, HUD will retain the current funding, subject to the applicable RAD rent caps. For example, assume that a PHA currently has 10 5-brm units with a RAD contract rent of $500. However, these units are extremely small by market standards and, as a result, the PHA has difficulty leasing these units to families otherwise eligible for a 5-brm unit. With supporting documentation, the PHA shows that these units would more appropriately be treated as 4-brm units. HUD will convert the units to 4-brm, but retain the funding at $500, subject only to the 4-brm rent cap.

Posted:06/02/2014
Question:HUD will assign to a mixed-finance project, as with all RAD conversions, a RAD Contract Rent. Can the PHA negotiate with the owner of that project for such things as land lease payments, participation in cash flow, etc.?
Answer:Yes. HUD will underwrite each project to determine that all costs are reasonable and related to the project, and that the financing plan is feasible. Otherwise, the PHA and the mixed-finance owner are free to negotiate such matters.

Posted:06/02/2014
Question:If my RAD conversion involves a change in bedroom distributions (due to a transfer of assistance, demolition/new construction, or rehab), how will this affect the RAD contract rents?
Answer:Whether or not the actual number of units changes, the RAD team will assign to the project the contract rents associated with the bedroom sizes prior to the change in bedroom distribution. Thus, if the property had 40 2-brms with a RAD rent of $500 and 60 3-brms with a RAD rent of $600, but the PHA plans to change the distribution to 100 3-brm units, all those units will be funded at $600. Similarly, if the new project included all 2-brms, the rents for the 2-brms would be $500.

Posted:06/02/2014
Question:In either PBV or PBRA, can an owner charge for excess utilities?
Answer:No. Although the public housing program has a provision for “check-metering” and surcharges for excess resident utility usage (24 CFR 965.506), there is no such provision in PBV or PBRA. If a converting project currently has surcharges for excess consumption of PHA-supplied utilities, the PHA may ask HUD to adjust the rent by the amount in Row 19 of the HUD-52722 (Calculation of Utility Expense Level) used in the Fiscal Year in which the RAD contract rents were calculated.

Posted:05/21/2014
Question:We are a PHA converting to PBRA which currently has Flat Rent tenants. Is there some provision in the 50059 to allow us to phase in their rent according to our policy that it not increase by more than $25 per month as a result of conversion? We will need to phase these individuals in for five years.
Answer:The 50059 form does not currently have such a provision, but TRACS will allow the phase-in. The RAD team has been advised that "TRACS accepts the 50059 and sends an error message to the owner indicating the rent paid by the tenant does NOT meet 30% of adjusted income. However, it’s not a fatal message error. TRACS 202d will implement a rent override indicator for audit purposes."

Posted:05/12/2014
Question:If an over-housed household remains in their unit and continues to receive PBV assistance under the RAD program, will the assistance received be based on the unit size, and not on the household size?
Answer:The contract rent, and HAP assistance, will be based on the unit size, for both PBVs and for PBRA. If there is no appropriately sized unit available to move the family into and the over-housed household is therefore permitted to remain in the unit, it will not impact the rent due from the tenant or the subsidy provided under the contract.

Posted:10/17/2013
Question:Am I correct in thinking rent reasonableness does not factor into calculating PBRA Contract Rents?
Answer:Yes. However, because the PBRA-PBV decision can be changed after the Application is submitted, HUD is requiring a reasonable rent estimate for each RAD application, even if PBRA is preliminarily selected. If your agency administers a Housing Choice Voucher program, you will make the reasonable rent determination yourself, in accordance with voucher program requirements. If you do not have a voucher program, you may enter your best estimate of comparable market rents (the rents that the property would command in the local market, without subsidy), but please note somewhere in the Application that you do not have a voucher program and that your reasonable rent estimate did not follow voucher program requirements.

Posted:10/01/2013
Question:Are there funds to provide residents/legitimate tenant organizations with technical assistance? If yes, what is the application process?
Answer:There is no RAD-specific funding for technical assistance to residents / tenant organizations. There are extensive resources available on www.hud.gov/rad and www.radresource.net websites. HUD staff is providing RAD webinars regularly (check hud.gov/rad) and residents are encouraged to attend and ask questions. PHAs are reminded that RAD includes various requirements for tenant consultation. In addition, HUD is developing materials to assist tenants in understanding RAD and participate in their local process. [Updated 7.29.13]

Posted:10/01/2013
Question:How are the rents included in Exhibit A of the CHAP determined?
Answer:The contract rents are noted in Exhibit A of the CHAP. The PHA’s lender should proceed with those rents. For all Applications received by or before December 31, 2013, the CHAP rents are based on 2012 appropriations. Note: The general methodology for calculating rents can be found on page 98 of PIH Notice 2012-32. [Updated 7.29.13]

Posted:10/01/2013
Question:If the RAD contract rents are below what could be achieved in the local market, is there a way under RAD that the PHA could achieve the higher market rents?
Answer:Unfortunately, although HUD requested additional funding for RAD (to supplement the “current funding”), the Congress did not provide this additional funding. Therefore, a project converts at its current funding. A PHA may utilize rent flexibilities in 1.6(B)(5) or 1.7(A)(5) of the RAD Notice to alter the initial contract rents. [Updated 7.29.13]

Posted:03/05/2013
Question:For a RAD project, is the utility consumption frozen at the RAD conversion?
Answer:Utility consumption, as a factor in determining utility subsidy, is only important in the public housing program. When the PHA converts, the RAD contract rents will be based on “current funding.” So, if a PHA has a high Utility Expense Level (UEL) under the public housing program, and the PHA can reduce that consumption following conversion (say, by making energy improvements),the PHA will benefit from those energy savings, i.e., HUD is locking in the funding to the PHA based on these higher consumption levels.

Posted:03/05/2013
Question:If, post-RAD, a RAD project made utility-saving investments, what would happen to Section 8 contract rents and tenant utility allowances?
Answer:Any savings in owner-paid utilities would flow to the project owner, and there would be no adjustment to the Section 8 contract rents. Any savings in tenant-paid utilities would flow to the tenants.

Posted:01/22/2013
Question:The RAD rent for our project is less than the FMR. If we convert a project to RAD will the RAD rents be included in the calculation of average rent for Section 8 and thus drop our agency's allocation and fee income?
Answer:RAD rents do not affect the baseline Section 8 rent calculation for the Agency and thus will not impact allocation or fees. The new voucher subsidy that will be issued to fund conversions to PBV will get renewed in the same manner as other Section 8 HAP. Further, a PHA will receive an admin fee for each new RAD unit.

Category:Eligibility
Posted:04/28/2017
Question:Currently, only Section 202 properties with a Rent Supplement contract (which are rare) can convert under RAD's Second Component provided all of the eligibility requirements have been met.
Answer:The Administration's FY 2017 proposal includes Section 202/PRAC properties under the RAD Second Component however, legislation providing this authority has not been enacted.

Posted:04/28/2017
Question:Under public housing, some of our ACC units are offline for Resident Council/Social Service activities however we still receive subsidy for them. After the RAD conversion, will we still receive subsidy for these units and, if so, at what amount?
Answer:For conversions where the PHA is proposing a de minimis reduction in dwelling units, but certain units will be designated for special purpose uses or units are being reconfigured through rehab to improve marketability (e.g. combining efficiencies), these units will not be included in the HAP contract and will not receive subsidy. However, HUD will increase the contract rents for the dwelling units by a share of the foregone subsidy (i.e., the Operating Fund and Capital Fund portion of the weighted Contract Rent) attributable to the deminimis units that meet this criteria.

Posted:08/27/2015
Question:Does a unit have to actually receive operating subsidy before it can be converted to RAD?
Answer:The unit must be receiving ACC subsidy at the time of the RAD conversion. However, the PHA may apply for RAD as soon as the unit is under the ACC (even if the unit is not yet receiving subsidy).

Posted:08/27/2015
Question:Is the RPCA required to include units that will not be converted to RAD because of the allowable de minimis reduction?
Answer:No. If the units are being reduced as part of the allowable de minimis reduction, they do not need to be included in the RPCA because they are not converting to RAD.

Posted:07/10/2015
Question:Can you convert units located in a flood zone to RAD?
Answer:RAD is subject to the floodplain management regulations at 24 CFR Part 55. Those regulations do not prohibit assisance in floodplains, but do require a process to consider and mitigate impacts. Please keep in mind that in most cases, activities in a floodway will be prohibited.

Posted:07/01/2014
Question:We see from the regulations that the Moderate Rehabilitation SRO program is excluded from participation in the RAD program. Is there a possibility for a waiver of this exclusion and how do we go about requesting it?
Answer:It is excluded by statute, so HUD does not have discretion to make it eligible. However, HUD has asked Congress to make Mod Rehab SRO eligible in the 2015 appropriation bill.

Posted:02/03/2014
Question:In the event that a housing authority chooses to do a deminimis reduction, is the current funding simply redistributed across the units remaining or is that funding lost with the reduction?
Answer:Funding is lost in a de minimis reduction. You will see that when you enter the reduction in the Excel Application.

Posted:12/04/2013
Question:A PHA is considering applying for RAD for a project that has already been demolished. Is this project still eligible for RAD?
Answer:No. Only projects with units under ACC and in PIC are eligible for RAD.

Posted:01/22/2013
Question:What income limits are used to determine whether a family is income-eligible for PBV assistance under the second component of RAD, at Rent Supp and RAP properties?
Answer:The applicable answer depends on whether there is a prepayment of the mortgage that would trigger provision of enhanced vouchers. Where there is no prepayment of the mortgage: To be eligible for the PBV program under the second component of RAD, residents at these Rent Supp or RAP properties must be low-income (annual income of not more than 80% of the median income for the area). The PHA’s administrative plan must allow for the provision of PBV assistance to these low-income families. If the PHA’s administrative plan does not currently provide for these low-income families to be eligible, the PHA must amend its administrative plan in order to administer the RAD conversion. This administrative plan requirement is consistent with 24 CFR 982.201(b)(1)(iii). HUD will consider waivers of 24 CFR 982.201(b)(1)(iii) to allow a PHA to provide assistance to these low-income families without an amendment to the PHA’s administrative plan, when needed due to the timing of the conversion (for example, when the PHA is unable to amend its administrative plan before the PBV HAP contract is signed). Where there is a prepayment that would trigger provision of enhanced vouchers: To be eligible for the PBV program under the second component of RAD, residents at these RAP properties must be low-income, and there is no need to amend the PHA administrative plan to accommodate these families. Please note that a moderate-income family (annual income above 80% of but not more than 95% of the median income for the area) who is elderly or disabled or is residing in a low-vacancy area (3 percent or less vacancy rate, as determined by the HUD local office economist) is income-eligible for an enhanced voucher, but is over-income for PBV assistance. Such families will receive enhanced vouchers through the conversion, and the units occupied by such families shall not be included in the PBV contract.

Category:Energy Performance Contract (EPC)
Posted:03/09/2016
Question:Are the existing EPC incentives maintained under the new RAD Section 8 rent?
Answer:Yes. The RAD rents for each public housing project incorporate any existing Frozen Rolling Base (FRB), Add-On Subisdy (AOS), and Rate Reduction Incentive associated with an existing EPC that were in place at the time of each project’s “RAD rent base year” – FY 2012 for properties awarded under the original 60,000 unit cap or FY 2014 for properties awarded as a result of the increase of the cap to 185,000 units. The methodology for calculating RAD rents includes the Operating Subsidy Utility Expense Level (UEL) and Energy Add-on so that projects retain the value of existing EPC incentives when they convert through RAD. The PHA should consider the impact of essentially switching from the AOS to the Frozen Rolling Base incentive as part of its RAD conversion. However, due to incomplete administrative data, HUD did not incorporate the Resident Paid Utility Incentive (RPU) into the rent levels posted in the RAD Application and Tool. As a result, for projects proposed for RAD conversion with an existing EPC using the RPU, HUD will allow an amendment to the posted RAD rent to add the Per Unit Month (PUM) EPC Resident Paid Utility Incentive. If the PHA has the RPU incentive, they should notify their Transaction Manager who will work with PIH to determine an accurate incentive amount. For additional details on the specific line items utilized in calculating the posted RAD rents, see Attachment 1C in PIH Notice 2012-32 REV 2.

Posted:03/09/2016
Question:How is the ESCo guarantee impacted when an EPC is amended as a result of a conversion of a portion of units covered under an EPC?
Answer:Any changes to an ESCo guarantee are to be determined between the PHA and their ESCo. ESCO guarantees are not required for an EPC so if changes to it do occur they do not affect the conversion process. HUD is committed to providing PHAs with ongoing assistance in understanding RAD’s intersection with green and energy efficiency objectives. As additional best practices, success stories, and helpful decision frameworks are identified, HUD will maintain those resources on the RAD web site for interested parties. HUD also strongly encourages PHAs and partners to discuss creative ideas around maximizing energy and water efficient improvements through RAD. We look forward to continued dialogue with partners around this and other related issues. For questions or additional feedback, please contact us at the RAD mailbox at RAD@hud.gov, or at the EPC Policy mailbox at PHI_EPC_Policy@hud.gov.

Posted:03/09/2016
Question:If I have a RAD award and my project is covered under an existing EPC, what are the options available in terms of satisfying that EPC obligation?
Answer:Essentially, there are two basic options: Option A: Pay off the EPC debt, either with proceeds from the RAD conversion (say, mortgage proceeds or tax credit equity) or through other eligible uses, e.g., existing Operating or Capital Fund accounts. Some EPC contracts require EPC lender approval to pay off (or pay down) any debt. Or Option B: Assume the debt and continue to make the EPC debt payments post-conversion with projects or other proceeds. If the converting project will assume the debt, the lender will have to agree to subordinate all interests to the RAD Use Agreement. Further, if, in addition to assuming the EPC debt, you plan on taking on new debt as part of the RAD conversion, the EPC lender and the non-EPC lender will need to negotiate over which position each will take, which often pushes the PHA towards paying off the EPC debt. Sometimes, a PHA will assume the obligation of the existing EPC debt but with non-program and non-project funds, depending on the existing EPC contractual provisions, Either of these options must be reflected in a PHA’s Financing Plan submission. Where the debt will be paid down or paid off, the debt would be included in the development budget. Where the debt will be assumed, HUD will underwrite the transaction to ensure there is adequate cash flow to continue debt service payments. HUD recommends a PHA consult with legal and financial advisors, the EPC lender and the new first mortgage lender (if applicable), to determine which approach will work best for the PHA and the project. HUD also encourages PHAs to work with ESCos ealy in the process to develop options and reach out to the OFO Energy Center at OFOEnergyCenter@hud.gov for comment.

Posted:03/09/2016
Question:What do I need to submit to HUD if I am converting a property covered under an EPC?
Answer:Where the PHA will pay-off or assume all of the EPC debt as part of the conversion, the PHA will need to notify of its intent. The PHA will draft a letter from the Executive Director to the Field Office (copying the Transaction Manager and Energy Center) formally requesting HUD to end the EPC incentives at the time of conversion and describing the PHA plan to address EPC debt (i.e. Pay off or assume). After conversion, the Field Office will finanlize the cessation of EPC incentives through a letter to the PHA Executive Director. However, where a portion of the EPC will remain following the conversion, HUD will need to amend the EPC approval letter. To do this, the PHA must propose the amount to be paid off or assumed so as to ensure that the project’s conversion does not increase the risk of default on the remaining EPC loan and, for partial AMP conversions, determine the appropriate updates to the project’s Operating Subsidy forms (HUD 52722, 52723). This information will be submitted to the Energy Center, in the format requested, along with the supporting documents delineated in Appendix A, the PHA is highly encouraged to engage their ESCo in developing this submission. The Energy Center will review the submission and if it determines the PHA proposal to be accurate, the Energy Center will create a draft approval letter, which PHAs must submit with their Financing Plan. After closing, HUD will finalize the amendment to the EPC approval letter.

Posted:03/09/2016
Question:Where I am converting a project that is part of a larger EPC, and I am proposing to pay down the project’s EPC debt, how will I determine the proportionate amount that must be addressed as part of the conversion?
Answer:HUD’s primary interest is to ensure that a converting property addresses, at a minimum, the debt proportionate with the amount of savings the project had been projected to achieve in the original EPC approval so that once the property is converted and removed from the public housing inventory, the PHA’s remaining EPC remains financially viable. Accordingly, the information that PHAs must submit must clearly show the savings that were projected for the converting project, especially when it is not adequately presented in the EPC approval letter. HUD reserves the right to require additional debt treatment in the event that the remaining EPC would fail to meet the EPC statutory and regulatory standards. Note that the EPC lender is likely to also evaluate the debt that should be addressed as part of the conversion and may require a different amount than HUD calculates. Notwithstanding the requirements of an EPC lender, PHAs must comply with HUD’s requirements.

Category:Environmental Review
Posted:04/04/2018
Question:How should RAD conversions mitigate the presence of asbestos containing material (ACM)?
Answer:RAD conversions must follow the ACM guidance found in Chapter 9 of the MAP Guide. However, as of 3/27/18, HUD is in the process of updating this section of the MAP guide and has issued a MAP Guide Waiver with the below interim guidance which is applicable to all RAD conversions: If Asbestos Containing Material (ACM) or suspect ACM is identified at a facility, HUD requires a response action to address the risk. Response actions may include complete removal, limited removal/repair, encapsulation, enclosure or management of the ACM under an Operation and Maintenance (O&M) Program, or a combination of these, as recommended by an accredited professional. If ACM or suspect ACM remains after the initial identification and, if applicable, response action, an asbestos O&M program shall be implemented. The following are examples for when certain response actions may be appropriate. A. Removal 1. Damaged friable materials 2. Friable materials in good condition with high potential for disturbance (e.g., accessible pipe or tank insulation, ceiling tiles where air exchanges occur in plenum above, ceiling tiles that are required to be moved to access mechanical equipment or piping on a routine basis, etc.) B. Limited removal/repair, encapsulation or enclosure. 1. Damaged non-friable materials (limited removal/repair) 2. Limited damage to ceiling texture (limited removal/repair) 3. More extensive wall and/or ceiling texture damage or highly friable texture 4. Pipe insulation with limited damage but with limited potential for disturbance/impact (enclosure or removal) C. Operation & Maintenance (“O&M”) Plan 1. Non-friable materials in good condition 2. Joint compound or wall and ceiling textures in good condition 3. Adhesive ceiling tiles with no real potential for disturbance 4. Friable pipe insulation materials in mechanical areas in good condition with limited potential for disturbance/impact by routine maintenance activities

Posted:12/31/2015
Question:Do RAD conversions trigger an Environmental Justice review?
Answer:An Environmental Justice (EJ) review may be triggered if the conversion involves new construction, either on a new site or an existing site. The goal of EJ is to avoid, minimize, or mitigate any disproportionately high and adverse impacts to minority or low-income populations. The process is to first determine if there are any adverse impacts. If there are, the PHA should work to change the project so that they are avoided or at least minimized. If adverse impacts remain, a determination of whether there is a minority of low-income population disproportionately affected must be made. Any mitigation decisions must be based on meaningful public outreach to the affected community. Additional information regarding completing an EJ and how to document the findings as part of the environmental review can be found here: https://www.hudexchange.info/programs/environmental-review/environmental-justice/

Posted:07/10/2015
Question:Can you convert units located in a flood zone to RAD?
Answer:RAD is subject to the floodplain management regulations at 24 CFR Part 55. Those regulations do not prohibit assisance in floodplains, but do require a process to consider and mitigate impacts. Please keep in mind that in most cases, activities in a floodway will be prohibited.

Posted:07/10/2015
Question:Does an environmental review need to be done on dispositions in transfer of assistance?
Answer:Yes. If HUD is taking a federal action, an environmental review is required unless there is a categorical exclusion in the applicable regulation (Part 50 or Part 58) that specifically excludes that action from all or part of environmental review requirements. For example, some dispositions may be partially excluded from environmental review (categorically excluded subject to the Federal laws and authorities cited in 24 CFR 50.4 or 24 CFR 58.5) if the structure or land disposed of will be retained for the same use. The review will be conducted based on the reasonably forseeable use of the land or structure that will be disposed of.

Posted:07/10/2015
Question:If we are doing PBRA, very minimal rehab (mostly cosmetic) with no FHA, I'm understanding that we need to do either a Transaction screen or a Phase I. How do we know if a transaction screen would suffice?
Answer:The Notice and the RAD Environmental Review Guidance both discuss the transaction screen option. To qualify, you must be converting to PBRA (non-FHA), and cannot be engaging in sub rehab or new construction. The transaction screen must be in accordance with ASTM E1528-14. The only deviation from that standard is the required preparer qualifications that are set forth in the Notice and the Guidance. If any potential environmental concerns are identified, a Phase I ESA in accordance with ASTM E1527-13 would be required. If the site owner has an idea that there could be concerns with the site, they may want to simply order a Phase I ESA.

Posted:07/10/2015
Question:Under what circumstances would an environmental review for a PBV conversion be conducted under Part 50?
Answer:HUD can determine to perform a Part 50 review instead of having an RE perform a Part 58 review under 24 CFR 58.11. When a RAD application includes FHA insurance (or other Part 50 program), and funding sources that are authorized for Part 58, such as HOME, are also being contemplated for that site, HUD can use 24 CFR 58.11 to prepare one environmental review under Part 50. It is important that the applicant notify HUD of this situation early on in the process.

Category:Existing PHA Indebtedness
Posted:03/03/2015
Question:My PHA is considering RAD but we have an existing Capital Fund Financing Program (CFFP) obligation. Can my PHA still apply for RAD?
Answer:Yes, any PHA with a CFFP obligation may apply for RAD. Some CFFP debt will not require any change in the structure or form of the CFFP obligation. In other instances, HUD will work with the PHA, following CHAP issuance, to attempt to develop a payment strategy to discharge either all or a portion of CFPP debt with eligible sources of pre-payment funds, which could include Capital Funds, Operating Funds, or funds proceeds from the RAD transaction, if structured appropriately. (Upated: 10/19/2012)

Posted:10/15/2012
Question:Since my PHA has a CFFP loan, I see that the PHA cannot reduce its PHA inventory by more than 5%, or in this PHA’s case, 60 units. At their priority development there are 12 buildings with a total of 97 units. The PHA would like to convert 51 units within only 6 of the buildings. The remaining 46 units would not be converted or otherwise improved at this time. Is this allowed?
Answer:You may be able to carry out a full conversion of the 97 units; please see existing Q&A WEB10082012_2_09100 regarding the 5% limitation. Assuming the CFFP lender agrees, no reasonable proposal to HUD to exempt the PHA from the 5% limitation (and the corresponding 33% of annual Capital Fund grant for debt service) will be denied. It is definitely permissible to convert a part of an AMP (provided there is a sound business reason and that it makes sense from financing/management perspective). Indicate in Section 2 of the Application the mix of units you intend to convert. Explain in Section 3 (Reduction in Unit Count) that you are proposing a partial conversion (see row 69). You may also need to make corrections to the three year historical information in Section 8 (Operating Expenses) because you are converting only part of the AMP.

Posted:09/25/2012
Question:If my PHA has a CFFP* and/or EPC loan, what do I need to do before submitting my application and what are the implications for applying for RAD if I have a CFFP loan? *Under the Capital Fund Financing Program (CFFP), a PHA may borrow private capital to make improvements and pledge, subject to the availability of appropriations, a portion of its future yaer annual Capital Funds to make debt service payments for either a bond or conventional bank loan transaction. An EPC loan is generally undertaken under 24 CFR 990.185, wherein energy conservation measures are financed by a third-party based on projected energy savings.
Answer:At the time of application, you will need to indicate how you plan to address the current obligation, e.g., by repaying the loan. Once you receive an award, you will then have six months to provide a Financing Plan that explains precisely how these obligations will be handled. As a result, you should have early conversations with your CFFP or EPC lender. Generally, debt service payments under the CFFP program cannot exceed 33% of a PHA’s annual Capital Fund award. For this reason, the CFFP program restricts PHAs from reducing their public housing inventory by more than 5% (any reduction in inventory affects a PHA’s Capital Fund formula grant). Under RAD, a PHA will be removing units from inventory and, therefore, eliminating the Capital Funds generated by that project’s formula characteristics. There are a number of possible solutions: • If the PHA has added public housing units to its stock since the CFFP loan closing, the PHA may be able to remove the RAD conversion units without exceeding the 5% rule. • It may be possible for the PHA to pay off the CFFP loan with proceeds from the RAD financing. • For larger PHAs, a change of 5% in the number of ACC units (and related capital funds) may be sufficient to cover the RAD project being considered for conversion. For example, if a PHA has 3,000 ACC units, it could convert a 150-unit project without tripping the 5% restriction. • Finally, PHAs may request an exemption from HUD to exceed either the 5% restriction or the limitation that not more than 33% of Capital Funds be used for debt service. PHAs will need to work directly with their lenders and investors to seek approval and make any needed changes in their respective documents. [See Final RAD Notice Reference: Paragraph 1.4, B-3]

Category:FHA Financing
Posted:01/18/2017
Question:When and how does an FHA representative get assigned to a RAD deal with an FHA component?
Answer:The designated FHA underwriter is typically not assigned until the FHA Firm Application has been submitted (which is at about the same time that the RAD Financing Plan is submitted). Prior to submitting the FHA Firm Application, the lender should request a concept call with the local MF Field Office to discuss the project 30-60 days prior to submission of the FHA Firm Application. The MF Field Office will schedule the call with the lender and typically invites the RAD TM as well. The MAP lender that the PHA is working with should be familiar with this process and should contact the local MF Field Office nearest to the project.

Posted:10/08/2015
Question:We are working with the owner of a Mod Rehab property and we have been advised by others that the property could undergo a refinance now with the Section 223(f) mortgage insurance program and afterwards apply for RAD. Is that accurate? Can the property refinance now and then apply for RAD? Would this exempt the owner from additional engineering studies, financing plans, etc? Would there be anything special with the pending RAD application that we could address with the current refinance (such as additional testing, energy studies, etc)?
Answer:Yes, it is possible to refinance first and pursue RAD later. Your lender would have to be OK with the existing Mod Rehab contract, and you would want to be sure that your lender would also be OK with the future RAD conversion. Please also be aware that Mod Rehab eligibility is limited under RAD, and accordingly that there is a risk in waiting to apply for RAD. Refinancing prior to pursuing RAD would not change any of the otherwise applicable RAD requirements such as a PCA and a Financing Plan, so there probably will be savings available in transaction costs if the refinancing and RAD are pursued at the same time. If you do pursue refinancing now and RAD later, you might see if your lender would accept a RAD-compliant PCA. If so, your PCA provider might be able to update the PCA at a modest cost at the time you pursue RAD.

Posted:08/28/2015
Question:Is the cash out provision in the RAD Notice applicable for RAD conversions utilizing FHA insured financing?
Answer:The cash out provision in the RAD Notice at 1.4B(2)applies to RAD conversions using FHA-insured financing; but it does not supersede the FHA program limitations on cash-out for a 221(d)(4).

Posted:03/05/2013
Question:We are interested in the RAD program for public housing. If we refinance a property using Section 223f as part of the RAD transaction, what HUD office would process the Section 223f Firm Commitment application?
Answer:The RAD program has designated and trained a team of Transaction Managers who will process the RAD transactions, including 223(f) Firm Applications and FHA LIHTC pilot transactions. Once a CHAP is issued, the PHA will be assigned a HUD Transaction Manager who will also serve as the 223f FHA underwriter for the transaction. Transaction Managers are physically stationed at several different HUD offices.

Category:FHEO/Site and Neighborhood Standards
Posted:07/30/2018
Question: If I am using both the de minimus reduction and the 75%/25% RAD/Section 18 blend provisions on a RAD transaction, do I need to submit the FHEO Change in Unit Configuration review? All reduced units will be replaced by other PBV units and Tenant Protection Vouchers (TPV), so the number of low-income dwelling units is the same.
Answer:If all of the reduced units are being replaced with project-based assistance, an FHEO Change in Unit Configuration review is not needed.

Posted:01/18/2017
Question:What level of work is considered "new construction" for a RAD project when rehab is being done? For example, would a PHA be required to perform an FHEO review for "new construction" if it is gut-rehabbing all of the units?
Answer:For the purposes of RAD, new construction refers to the construction of entirely new structures and/or significant extensions of existing structures. Substantial rehabilitation of an existing structure that may include the demolition of units and walls but that will re-use the existing foundation is not considered new construction.

Posted:08/27/2015
Question:Can a PHA do a RAD Transfer of Assistance to sites outside the jurisdiction of the PHA provided that the receiving jurisdiction and the state agency overseeing vouchers approves?
Answer:See the discussion of Transfer of Assistance in the Notice (including in particular, pages 31-32 of the Notice REV-2). HUD approvals for Transfer of Assistance are made case by case and in HUD's sole discretion. The site will also be subject to site and neighborhood standards. If you would like to discuss a specific proposal for Transfer of Assistance, please contact the RAD Team at RAD@hud.gov.

Posted:08/27/2015
Question:How long does the FHEO neighborhood and site review take to complete and what is the formal process for requesting the up-front review?
Answer:HUD expects the upfront civil rights reviews to take approximately 60 days. The upfront civil rights review templates can be found in the Document Library on the RAD Resource Desk and the submission instructions can be found within the templates.

Category:Funding Sources
Posted:07/30/2018
Question:I am about to apply for RAD but am also in the process of applying for a Resident Opportunities and Self-Sufficiency (ROSS) grant. The ROSS grant regulations state that HA’s cannot apply for a ROSS grant if they have received a CHAP at the time of the application due date. Would I have any issues applying for a ROSS grant while waiting for my CHAP award?
Answer:As long as you don't have a CHAP by the application due date, you are eligible to apply for the ROSS grant. You can continue to use the grant until it has expired, even if the AMP converts under RAD.

Posted:02/17/2017
Question:If a conversion occurs early in the calendar year before HUD has made its Capital Fund grants, how can a PHA that is converting its last public housing project make sure to apply the entire Capital Fund grant to the converting project?
Answer:Capital Funds are used for funding HAP payments in the initial year of closing and can also be used for development costs (in the Sources & Uses). First, the PHA will want to ensure that enough of the Capital Fund grant is set aside for HAP payments. In such a case, a portion, based on the number of months remaining in the calendar year of the PHA’s Capital Fund grant, can be used for rental assistance to support the Covered Project for the remainder of the calendar year of the conversion. Within 2 weeks of the Capital Fund grant award, the PHA should complete the updated Initial Year Funding Tool to calculate the amount of Capital Funds needed and then complete HUD form 50075.1 with that amount shown in BLI 1503. The executed 50075.1 and the Initial Year Funding Tool should be emailed to resourcedesk@radresoucre.net, with a copy to Ivan Pour. Upon receipt, HUD will review and move the funds to BLI 1503 in LOCCS. The remaining balance of the Capital Fund grant can be contributed to the Covered Project as part of the development budget if in the Financing Plan and memorialized in the RCC (Sources & Uses Exhibit), the PHA identifies that this source will come into the project after conversion by, for example, including in the Sources “TBD- 2017 Capital Fund balance.” This would authorize the use of those funds for the Covered Project when the funds become available, even though that would occur after conversion. Given that the precise amount that will be available will be unknown at the time of Financing Plan submission and at closing, in its review of the Financing Plan, HUD will make sure that the transaction does not rely on those funds in order to meet RAD’s minimum underwriting standards. In other words, the transaction must be able to stand on its own without the funds. The funds could then be used to enhance replacement reserves or operating reserves. Within 2 weeks of the Capital Fund grant award, the PHA should complete the 50075.1 with BLI 1504 populated with the corresponding Capital Fund amount and then email the 50075.1 to resourcedesk@radresource.net, with a copy to Ivan Pour. Upon receipt, HUD will review and move the funds to BLI 1504 in LOCCS.

Posted:10/08/2015
Question:I am the E.D. of a very small, rural PHA. If we convert our entire PIH inventory to RAD, what would happen to our existing financial public housing reserves? Would these funds be completely de-regulated (allowing us to leverage them for additional affordable units) or would they be somehow recaptured by HUD?
Answer:If you convert your entire Public Housing inventory to RAD then you are permitted to bring all of your current public housing funding with your RAD conversion. It would not be recaptured by HUD.

Posted:09/24/2015
Question:Does RAD have any Appraisal requirements?
Answer:RAD does not have any appraisal requirements. For non-FHA financing, your lender will decide on any appraisal requirements.

Posted:09/18/2015
Question:Our authority has section 8 admin fee reserves as well as section 8 project based new construction reserves. Can these be used toward a RAD transaction? Does it make a difference whether the RAD transaction is PBV or PBRA?
Answer:Yes. Admin fee reserves from the Section 8 program can be used to support a RAD transaction.

Posted:08/27/2015
Question:A PHA is planning to use HUD Risk Share in their loan and bond closing. Do they need to modify their documents to include any RAD specific language, or is the Use Agreement sufficient? Has there been experience with other HUD Risk Share participants?
Answer:HUD Field Counsel will determine what, if any, documents need to be modified as part of the closing process for a RAD conversion utilizing the HFA-FHA Risk Share program. HUD Field Counsel is typically assigned when the RCC is issued, so the PHA or their counsel should inquire at that time.

Posted:08/27/2015
Question:Can a PHA doing a straight RAD conversion without any rehab work take all the remaining Capital Funds or Operating Reserves at conversion? So, it would be listed as a source with $0 uses.
Answer:If a PHA converts all of its units under RAD, it may bring all of its capital funds and operating reserves without restriction. The PHA should still have a balanced Sources and Uses - many PHAs create a "PHA Reserve" as a use of funds.

Posted:07/24/2015
Question:Are HOME funds eligible for pre-development costs during RAD conversion? For example, can HOME funds be used to pay for the CNA and repairs identified in the CNA? If so, can the funds be drawn down before closing?
Answer:What you propose would not be a problem from a RAD standpoint. You should check with the HOME Participating Jurisdiction to see if what you propose would be acceptable from a HOME program standpoint. For example, the HOME PJ would need to satisfy itself that the particular costs to be funded are HOME-eligible. Similarly, the HOME PJ would decide when HOME funds could be advanced.

Posted:05/13/2015
Question:A PHA will be using their 2012 funds for RAD and want to make sure they meet the obligation deadline. What is the process for doing this?
Answer:The PHA should send an extension request (to extend the obligation deadline) to the Capital Fund Office, attention: Alan Kaufmann and Ivan Pour. [Updated 5.13.15]

Posted:04/14/2015
Question:Does RAD have a standard for the reasonableness of Architectural and Engineering (A/E) fees?
Answer:For projects subject to Subsidy Layering Reviews, the RAD SLR has a threshold of 5% of hard construction costs for architectural fees. Engineering fees, however, should be reported separately, as should construction management, permitting, and commissioning services. For any amount above 5%, the PHA would need to provide documentation that such amounts are consistent with local practices, including allowable amounts under the applicable State Qualified Allocation Plan (QAP).

Posted:06/02/2014
Question:When a PHA contributes Capital Fund grants to a RAD development budget, are those funds treated as both obligated and expended at closing?
Answer:Yes. A PHA should withdraw those funds from LOCCS and deposit into the escrow account at closing, which will then also serve to obligate and expend the funds under the Capital Fund program.

Posted:02/03/2014
Question:Can housing authorities use sale proceeds from public housing units as a source for financing in a RAD development?
Answer:Yes; indeed, such proceeds are a common source of funding in RAD applications.

Posted:12/09/2013
Question:When, under RAD, are Capital Funds considered obligated and/or expended?
Answer:If a PHA is contributing Capital Funds to the development budget (Sources & Uses), those Capital Funds are considered both obligated and expended as of the effective date of the RAD closing. If a PHA needs to extend the obligation end date for capital funds in order to use capital funds in the development budget, the PHA should send a request to the Office of Capital Improvements, to the attention of Jeff Riddell, with copies to the RAD Transaction Manager and the local PIH field office.

Posted:12/04/2013
Question:How do Capital Funds become part of a RAD conversion?
Answer:A PHA wishing to use Capital Funds in its conversion should include the Capital Funds in the Sources & Uses section of their RAD Financing Plan. Upon closing, a PHA including Capital Funds into a conversion will transfer the Capital Funds into a rehab escrow.

Posted:10/17/2013
Question:Is there any limit on how much of the developer fee can be deferred to finance a RAD conversion, assuming all project financing will be from Housing Authority sources?
Answer:While in tax credit deals only a certain amount of deferred developer fee can be counted towards basis, there’s no such rule outside of that context. As a general principle, the RAD team generally wants a material amount of non-deferred developer fee because it acts as an additional contingency (if there are cost overruns, the developer can defer more fee without having to invest more cash in the deal). Additionally, funding requirements may change based on the findings from the completed RAD Physical Condition Assessment (RPCA).

Posted:10/01/2013
Question:For purposes of Replacement Housing Funding (funds are permitted to be used 'for development'), are construction costs considered 'development'?
Answer:Yes. Under RAD, RHF funds may be used for renovation (of the converting site) or new construction. [Updated 7.29.13]

Posted:10/01/2013
Question:Our PHA is considering applying to convert all of its public housing to RAD. What can future RHF funds be used for? Can future RHF units be converted to RAD?
Answer:PHAs can contribute any existing/accumulated RHF to the converted projects. The converted units are not eligible to generate RHF, so you would not receive any RHF for the converted units. If you have a future stream of RHF funds due to your agency in future years, they may be used for convention RHF purposes (i.e. constructing new public housing units) or, under RAD you may choose to forgo any ongoing RHF grants and re-purpose the foregone subsidy to augment the initial RAD rent for a converting project. The RAD rent may be augmented by the following amount: 2012 RHF grant × Years of RHF funding the PHA is eligible to receive, but has not yet received = Total Anticipated RHF grants Total Anticipated RHF Grants ÷ 20 ÷ Number of Units converting under RAD ÷12 = PUM RAD Rent Augmentation The PUM RAD Rent Augmentation would be reflected in the initial rents established in the HAP contracts. The contract rents will still be subject to applicable rent caps. [Updated 7.29.13]

Posted:10/01/2013
Question:Under what circumstances can I use other public housing funds, such as operating reserves, unobligated Capital Funds, Replacement Housing Factor (RHF) funds, etc., to facilitate conversion under RAD?
Answer:PHAs can use available public housing funding, including Operating Reserves, Capital Funds, and RHF funds, as an additional source of capital to support conversion. Eligible conversion-related uses for these funds include pre-development, development or rehabilitation costs and establishment of a capital replacement reserve or operating reserve. As stated in the Notice, these funds must be identified in the Financing Plan submitted to HUD for review.[See RAD Final Notice Reference: Paragraph 1.5, A.] [Update 7.29.13]

Posted:08/13/2013
Question:How do I submit a request to extend the obligation and expenditure dates of my capital funds?
Answer:Section 1.5A of the revised Notice (page 27) contains the following new language: "If the PHA requests, in accordance with section 9(j)(2)(A)((ii) of the United States Housing Act of 1937 and the relevant HUD Appropriation Acts, HUD will extend the obligation end date for Capital Funds used in the conversion for up to five years from the point when Capital Funds became available to the PHA for obligation. By extending the obligation end dates, the expenditure end dates will correspondingly be also extended. Such extensions will prevent PHAs from otherwise losing its unobligated Capital Funds prior to conversion." The PHA should send a request to the Office of Capital Improvements, to the attention of Jeff Riddell, with copies to the RAD Transaction Manager and the local PIH field office.

Posted:05/22/2013
Question:Do the TDC/HCC cost limits established by HUD apply to the RAD program?
Answer:No. During conversion the TDC/HCC cost limits do not apply. Post-conversion, a RAD project is not public housing, so public housing rules do not apply.

Posted:03/05/2013
Question:Who will be conducting the subsidy layering reviews when required?
Answer:The RAD Subsidy Layering process is currently being finalized. Subsidy Layering Reviews will be done either by the RAD Transaction Manager or (for transactions involving certain non-RAD sources of funds) by another funder. For example, some state HFAs do the subsidy layering review for tax credit project.

Posted:01/22/2013
Question:We will be converting a large portion of our public housing units through RAD. Will we be able to retain the current reserves and use them for affordable housing development?
Answer:If a PHA converts all of its units under RAD, it may bring all of its capital funds and operating reserves without restriction. However, if the PHA will have have projects remaining in the public housing program, aside from a safe harbor of Operating Reserves (the average the project has maintained over the past three years), the PHA may only contribute to the project what is needed for the projects rehabilitation and ongoing viability. HUD will perform a subsidy layering review in such cases to ensure that the project is not being excessively subsidized. As a result, a PHA will not be able to contribute public housing funds that will not be used on the project.

Posted:10/18/2012
Question: When you convert a project under RAD, are the converted units eligible for RHF funds?
Answer: No, but if you have existing RHF funds, you can use those to help pay for the conversion.

Category:Income-Mixing
Posted:10/15/2012
Question: We have a High Rise Building of 180 units all of 3 Bedrooms. The property is under the Mod Rehab Program and has 168 units under the HAP Contract only. The contract expired on June 14, 2009, since that time we have renewed year to year. We would like to apply under the RAD program (Section 2 of the Notice) for the option of PBV. But we need the conversion for all HAP units. Is this possible (Section 2.2.5 A 2 of the Notice mentions that the assistance is for only 50% of the units)?
Answer: The Section of the Notice that you mention in your question generally limits the number of units at any given site that can be assisted by project-based vouchers to 50% unless there are "exception" units at the site. Exception units include scattered site units, units occupied by the elderly or disabled, or units occupied by families receiving supportive services. In effect, no more than 50% of the units at a site can be assisted by project-based vouchers and occupied by families not receiving supportive services. Assuming your project is primarily occupied by families, to maintain all 168 units of assistance at the current site, you would need to provide or arrange for supportive services for at least 78 families. You may also want to consider a conversion to PBRA, in which all 168 HAP units would be eligible for conversion without a supportive service requirement.

Category:Milestone - 60 Day
Posted:02/03/2014
Question:If a Housing Authority converts all their amps to RAD and submitted an Amendment to their 5 year plan, do they need to submit a 5 year plan again? We believe the HA would not have to because they would no longer be considered public housing.
Answer:You are correct that the Housing Authority would not have to submit a 5 Year Plan if all AMPs are being converted to RAD. However, the AMPs will not "officially" leave public housing until the RAD closing so if a 5 Year Plan is due prior to the RAD closings of all of the Housing Authorities AMPs, the Housing Authority would still need to comply with the current public housing rules in place regarding a 5 Year Plan submission.

Posted:05/22/2013
Question:Should the HCV Administrative Plan also be amended to include the RAD program/language?
Answer:If the PHA is going to do a RAD conversion to PBV, the PBV Administrative Plan should be amended to reflect the Agency's plans as part of the 60 Day Milestone. There are no additional RAD requirements.

Posted:03/22/2013
Question:We have a Mod Rehab property, under the first component of RAD. We are working on the 60 days Milestone. Do we need to submit a Significant Amendment?
Answer:No. The Significant Amendment to the Annual/Five Year Plan is only applicable to PHAs. For your Mod Rehab property, to complete the 60 day milestone you will only need to upload a document indicating your decision to convert via PBV or PBRA as well as the milestone complete certification.

Category:Milestone - 90 Days
Posted:06/02/2014
Question:When is the RPCA required?
Answer:The RPCA is required in all instances, except the following: 1) New Construction; 2) Gut Rehab (essentially, down to the stud); 3) Recently modernized or constructed buildings (based on the recommendation of your RAD Transaction Manager and approval by the RAD Team Lead); or 4) Any FHA 221(d)(4) transaction.

Posted:05/20/2013
Question:Are there any restrictions on what functions an RPCA contracting firm can perform in addition to completing the RPCA? Can they perform the work and serve as a GC?
Answer:The RAD Notice does not impose any requirements.

Category:Milestones
Posted:01/10/2013
Question:The Financing Plan requires updated engagement letters from equity partners and the lender/HUD containing this approval. Does this apply to 1) Public Housing Capital and Operating funds pledged to the project? and 2) Deferred Developer fees?
Answer:Yes, the requirement applies to all of the above, except for the deferred developer’s fee. The PHA’s financing plan is due by 180 day milestone; however, in the case of RAD transactions with FHA financing, it’s due by the 150th day when the FHA Firm Commitment is to be submitted. As part of the underwriting, the FHA lender will need to confirm the owner equity to be contributed and any other funding commitments including secondary financing. The lender can’t do this without getting confirmation of the pledged funds, and confirmation of tax credit funding commitments. The deferred developers’ fee will be a secondary financing, in the form of a surplus cash note.

Posted:01/09/2013
Question:The Financing Plan requires certification of previous participation. Are paper 2530s still acceptable or does information have to be in APPS?
Answer:Yes, submission of paper 2530s is still permitted. The lender has the option of submitting either paper (Form HUD 2530) or electronic “previous participation clearance” via APPS.

Posted:01/09/2013
Question:Typically, a title policy is obtained immediately before closing, but this is identified as a 90-day CHAP milestone. Are we talking about the same thing? Does the title company need to provide a preliminary version for inclusion with the financing plan in addition to an updated version for closing?
Answer:Yes, a preliminary/pro forma title insurance policy must be obtained in the financing plan. It should be submitted with the financing plan at the 180 day milestone or, if has FHA financing, at the 150 day milestone. It is a required exhibit for FHA firm commitment application. Note: At the 90 day milestone, the PHA owner is required to submit to HUD: 1) a certification to HUD that all the due diligence lending has been completed, and 2) a copy of the PCA. The PHA owner isn’t required to provide all the 3rd party reports which the lender has received by then, only the PCA. The lender will submit the other reports with its FHA application.

Category:Mod Rehab
Posted:04/28/2017
Question:I'm working with an MOD/SRO owner converting to RAD PBV. Once the application is received, are the current processing times still 180 days per the notice, pending all owner/PHA required information is received?
Answer:The RAD Program Notice PIH-2012-32-(HA), addresses this in paragraphs 2.8.4.A and B on page 153. HUD will review and either approve/reject/request more information in 60 days. HUD’s approval letter requires closing within 90 days. In the case of a PBV conversion, the HAP contract is issued by the Public Housing Authority, and the Owner would need to coordinate timing with the PHA also.

Posted:04/28/2017
Question:We are pursuing a RAD conversion under the second component. Our current Section 8 SRO Mod Rehab contract covers only a portion of the housing units in our building. Do we need to complete a PCA for the entire building, or just for the units included in our contract?
Answer:The requirement for the assessment of the physical condition of the property proposed for RAD conversion is contacted in Notice, PIH-2012-32 (HA), REV-2, Section 2.4.A., on page 136. The RAD conversion is intended to place the SRO units on a sound financial, physical, and managerial footing for the long-term HAP contract that will replace the Mod Rehab contract. If the ownership of the SRO units also owns the remaining units in the building, then the CNA (HUD’s name for the PCA) must cover the entire building. If the ownership of the SRO units is different than the entity owning the remaining units in the building, then the CNA must only cover the SRO units.

Posted:02/28/2017
Question:Through SRO Mod rad conversion is an increase to the total units subsidized approvable?
Answer:No, an increase to the total units subsidized is not allowed. Only units on the contract are eligible for conversion.

Posted:01/18/2017
Question:We have a 47 unit mod rehab project that may be interested in redeveloping under RAD at another site. Is this permissible under RAD?
Answer:Yes, transfers of assistance are permitted for Mod Rehab RAD conversions. See Section 2.4(I) in the RAD Notice for scenarios under which assistance may be transferred to another site.

Posted:10/08/2015
Question:We are working with the owner of a Mod Rehab property and we have been advised by others that the property could undergo a refinance now with the Section 223(f) mortgage insurance program and afterwards apply for RAD. Is that accurate? Can the property refinance now and then apply for RAD? Would this exempt the owner from additional engineering studies, financing plans, etc? Would there be anything special with the pending RAD application that we could address with the current refinance (such as additional testing, energy studies, etc)?
Answer:Yes, it is possible to refinance first and pursue RAD later. Your lender would have to be OK with the existing Mod Rehab contract, and you would want to be sure that your lender would also be OK with the future RAD conversion. Please also be aware that Mod Rehab eligibility is limited under RAD, and accordingly that there is a risk in waiting to apply for RAD. Refinancing prior to pursuing RAD would not change any of the otherwise applicable RAD requirements such as a PCA and a Financing Plan, so there probably will be savings available in transaction costs if the refinancing and RAD are pursued at the same time. If you do pursue refinancing now and RAD later, you might see if your lender would accept a RAD-compliant PCA. If so, your PCA provider might be able to update the PCA at a modest cost at the time you pursue RAD.

Posted:08/21/2014
Question:Do Mod Rehab conversions under the First Component of RAD need to complete the RAD Relocation and Accessibility checklist as part of the Financing Plan?
Answer:No.

Posted:10/01/2013
Question:I am preparing a Conversion application for a project that involves consolidating two mod rehab contracts (and properties) under one new ownership and LIHTC financing structure. Is there a way that we can submit a single RAD application rather than having to submit individual applications for each Mod Rehab contract? All of the financing is interwoven.
Answer:Yes, you can. When completing the Mod Rehab RAD Application, which is only used for the first component, fill out a single application, including the total units at the project and make sure you attach both Mod Rehab contracts. For data for which the two contracts may have different numbers (e.g. rents and utility allowances) use the weighted average.[Updated 7.29.13]

Posted:10/01/2013
Question:Is there still a 1,250 unit cap for Mod Rehab conversions under the 1st component?
Answer:No. That cap was removed with the publication of PIH Notice 2012-32 REV-1. [Updated 7.29.13]

Posted:10/01/2013
Question:There are two different rents for the same size unit. Would these rents be kept different in the RAD HAP or averaged?
Answer:If there is a sound business reason to maintain a different rent for the different 2-bedroom units, we would consider it (i.e., one with 1 1/2 baths and the other with just 1 bath). Otherwise, we would consolidate into one contract rent for all two bedrooms. [Updated 7.29.13]

Posted:05/22/2013
Question:For Mod Rehab applications under the first component, if you choose PBRA the limited dividend is eliminated (2.2.6.a.5). Why is the LD not eliminated if choosing PBV?
Answer:The Notice provision you mention simply clarifies that no new limited distribution requirement is imposed if your Mod Rehab (first component) project selects PBRA. Similarly, there would be no new limited distribution requirement if you selected PBVs (the PBV program does not limit distributions). However, neither PBV nor PBRA would eliminate an existing limited distribution requirement (if, for example, your project had an existing mortgage loan that imposed a limited distribution requirement).

Posted:10/23/2012
Question:What should we do if the Mod Rehab contract is expected to expire before the RAD conversion is completed?
Answer:If the Mod Rehab contract is expected to expire before the RAD conversion is completed, the Owner may request a short term renewal contract for the period necessary to complete the conversion.

Posted:10/15/2012
Question:There are four buldings with four HAP contracts. I assume they could be consolidated into one RAD contract.
Answer:Indeed, there are some Mod Rehab projects where there is one legal entity but multiple HAP contracts. It would be acceptable (and advisable) for the owner to consolidate these into one HAP following conversion.

Category:Moving to Work (MTW)
Posted:06/23/2017
Question:If an MTW Agency sets a rent for the HAP contract at the time of conversion, can the Agency go back at a future date (say, year 5) and increase the rent for the HAP contract beyond the standard OCAF adjustments?
Answer:No. The RAD Notice (Section 1.6.B.6) and the HAP contracts require that contract rents may only be adjusted by the OCAF. The RAD notice further specifies that MTW agencies may not alter this requirement.

Posted:09/18/2015
Question:I am an MTW PHA. What process should I follow for submitting and receiving approval of the amendment to my MTW Plan as required by the RAD Notice?
Answer:A RAD conversion, as noted in Section 1.5(E) of PIH Notice 2012-32, REV 2, requires an amendment to the MTW Plan for MTW agencies. The PHA's MTW representative should send the RAD MTW Plan revisions to the MTW Office and copy the Field Office. The PHA must also upload a memo noting their submission and date to the RAD Resource Desk. For MTW PHAs submitting a regularly scheduled MTW Plan, the Public Housing Field and MTW Offices should follow their regular Plan review and approval process. The MTW Office will send an approval letter, or comments that need to be addressed in the Plan, to the MTW PHA, with a copy to the appropriate Public housing Field Office director and RAD TM, within 75 days of submission. The MTW PHA will upload the approval letter to the RAD Resource Desk. Note that the RADPHAPlan@hud.gov inbox is no longer in service and should not be utilized.

Posted:07/30/2015
Question:The Notice (REV-2, pages 48-49) specifies that "MTW Fungibility" (the ability of the MTW agency to use its block grant funds to set initial contract rents) is available only if the PHA has submitted RAD applications for two or more projects. Is OK if one project is the first phase and the second project is the second phase, of the same overall project?
Answer:Yes, that is OK so long as the two projects (phase one and phase two) are separate AMPs within PIC.

Category:Multiphase Award
Posted:10/08/2015
Question:What happens on RAD multi-phase projects if all units are not ultimately delivered as originally promised. Does HUD take back the RAD assistance for the entire project from the early phases that were completed?
Answer:The RAD assistance for any closed transactions that are part of a multiphase award will not be impacted. If the PHA fails to submit applications for the remaining phases of the project as outlined in the Multiphase Award letter, HUD will release the units previously reserved for the later phases to other PHAs on the waitlist.

Category:New Construction
Posted:01/18/2017
Question:What level of work is considered "new construction" for a RAD project when rehab is being done? For example, would a PHA be required to perform an FHEO review for "new construction" if it is gut-rehabbing all of the units?
Answer:For the purposes of RAD, new construction refers to the construction of entirely new structures and/or significant extensions of existing structures. Substantial rehabilitation of an existing structure that may include the demolition of units and walls but that will re-use the existing foundation is not considered new construction.

Posted:10/14/2014
Question:Is a RAD Property Condition Assessment (RPCA) required on a new construction or substantial renovation transaction?
Answer:A RPCA is required for all RAD transactions, except the following: 1) New Construction; 2) Gut Rehab (essentially, down to the stud); or 3) Recently modernized or constructed buildings (based on the recommendation of the HUD RAD Transaction Manager and approval by the RAD Team Lead). However, the RPCA Excel tool is still required to size the reserve for replacement deposit on all sub-rehab transactions, with the exception of “gut rehabs”. “Gut rehabilitation” is defined as “removal/replacement of all or substantially all interior finished surfaces”.

Posted:12/09/2013
Question:What is the trigger for Davis-Bacon and Section 3 under a RAD conversion?
Answer:Davis-Bacon and Section 3 are triggered by any any rehabilitation or new construction performed as part of the “Year One” repair schedule defined by the RPCA, Financing Plan and Rad Conversion Commitment. In addition, and substantial repairs undertaken prior to conversion (i.e., pre-conversion rehabilitation with Capital Funds).

Posted:10/01/2013
Question:If a HA is proposing to do a RAD conversion of Public Housing that involves demolishing an existing project and rebuilding an equal or greater number of units on the same site, is this treated in essentially the same way as for a RAD conversion with rehab? Is it unnecessary to do a transfer of assistance as long as the units are being rebuilt on the same site? Where and how does the RAD PCA fit into this scenario?
Answer:In the situation you describe, a transfer of assistance would not be needed, because the RAD project would be located on the same site as the current public housing. In demolition-and-reconstruction projects, a RAD PCA is not required. See Notice PIH-2012-32, page 26, footnote 6; and Attachment 1A.1 paragraph B. [Updated 7.29.13]

Posted:09/24/2012
Question: As part of a RAD conversion, can my PHA demolish the existing structure and undertake new construction?
Answer: The RAD program was designed to help address the large backlog of capital needs in public housing. A PHA may use RAD to rehabilitate an existing project or, where circumstances warrant, demolish a project and build new replacement housing, including atoff-site locations. However, this type of redevelopment will very likely require more than debt financing to be feasible. Additional funding possibilities include LIHTC equity, soft financing sources such as green funding products, CDBG, HOME, the Affordable Housing Program of the Federal Home Loan Banks, local housing trust funds or foundation funding and PHA sources such as Operating Funds, Capital Fund and, Replacement Housing Factor Funds. Other public housing development funds targeted to distressed housing may be available under the HUD’s Choice Neighborhoods Initiative. A separate Section 18 Demo/Dspo approval is not required under RAD. However, PHAs should keep in mind that they must follow the Uniform Relocation Act with respect to resident relocation and that current residents of the project being converted under RAD have the right to return to the site without re-screening. [See Final RAD Notice References: Paragraphs 1.5, B and 1A.1,C.]

Category:Notice
Posted:10/22/2012
Question:Is a nonprofit agency (not a housing authority), who owns/operates a nursing home or assisted living facility (currently with an FHA-insured loan), eligible to apply under RAD to convert units to PBV?
Answer:No. In the first component of RAD, eligibility is limited to units that are already assisted under the public housing units or Section 8 Mod Rehab programs. In the second component of RAD, eligibility is limited to units that are already assisted under the Mod Rehab, RAP or Rent Supplement programs.

Category:Notifying Residents
Posted:10/27/2017
Question:In a PBRA conversion, can the owner/PHA of a Public Housing project designated for the elderly continue to serve only elderly households?
Answer:The owner/PHA cannot designate buildings as is done in Public Housing. While owners may not restrict occupancy to certain household types, however, Owners may adopt certain waiting list preferences on their waiting list, some of which require prior HUD approval while others do not. HUD regulation (see 24 CFR 5.655) permits Owners of PBRA projects to adopt waiting list preferences for single persons who are elderly without prior HUD approval. To adopt a waiting list preference for elderly families (i.e. non single-persons), the Owner must obtain prior HUD approval. See Paragraph 4-6 of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs and HUD Housing Notice 2013-21 for the applicable requirements for implementing a preference for elderly families. Note that all owner adopted preferences must be included in the Tenant Selection Plan (TSP) and the Affirmative Fair Housing Marketing Plan for the property.

Posted:10/11/2017
Question:When does a resident first get the Right to Return? With the issuance of the RIN? The CHAP? Some other milestone?
Answer:Under Section 6 of the RAD Relocation Notice (H 2016-17), eligibility for protections under said Notice apply to any person residing at the Converting Project and who is legally on the public housing lease, has submitted an application to be added to an existing lease, or is otherwise in lawful occupancy at the time of CHAP issuance. Consequently the Right to Return would apply to anyone meeting these conditions at the time of CHAP issuance.

Posted:07/21/2017
Question:In a RAD conversion to PBVs, can a PHA “designate” a building as elderly
Answer:No. Prior to the enactment of HOTMA, the PBV program had an income mixing component, wherein not more than 25% of the units in the project could be assisted, with exceptions for units made available for certain types of households, including elderly households. Under those requirements, a PHA could designate specific units for elderly occupancy. Since HOTMA has eliminated this income-mixing requirement, PHAs can no longer designate units in such a manner. A PHA may, however, adopt a project-specific waiting list and an admission preference for elderly households.

Posted:01/18/2017
Question:Are new tenants who come under lease post-RAD conversion eligible for the Family Self Sufficiency (FSS) program?
Answer:For PBV conversions, new residents would be eligible for FSS as long as the PHA administers an FSS program. For PBRA conversions, FSS funds awarded in FY14 and prior FSS funds may be used only to continue to serve FSS participants living in units converted under RAD to PBRA. Pursuant to FY 2015 Appropriations Act, any FSS funds awarded in FY 2015 (and forward if the provision is extended), may be used to also serve any other PBRA resident, affected by RAD or not.

Posted:11/13/2015
Question:The RAD Notice indicates that a Tenant Selection Plan is only required to be submitted for HUD approval if the owner plans to adopt any local or residency preferences. My building currently serves the elderly/disabled and will continue to do so after closing but we do not wish to establish a preference and have indicated that in our AFHMP. Do we still need to submit a Tenant Selection Plan to HUD?
Answer:While a TSP must be created and maintained on file for all Multifamily PBRA projects, HUD does not review or approve tenant selection plans unless the Owner adopts a local or residency preference. There are various types of owner-adopted preferences allowable under PBRA as defined in HUD Handbook 4350.3, REV-1, Chapter 4, Paragraph 4-6.C. 1) A Residency Preference, provides applicants who live in a specific geographic area at the time of an application a priority over nonresidents on the waiting list. 2) A Working Families preference would give applicants in which the head of household or spouse is employed priority over other applicants on the waiting list. 3) A Disability Preference would give applicants that include a disabled family member preference over other applicants on the waiting list. 4) A Victims of Domestic Violence preference would give priority to families who have been victim of domestic violence, dating violence, or stalking priority over other applicants on the waiting list. 5) Owners may also adopt a preference for single persons who are elderly, displaced, homeless, or persons with disabilities over other single persons. In order for a RAD converted projects to continue to serve an elderly/disabled population, the Owner must adopt a preference as described in number 5 above, however, the adoption of a Single Elderly or Disabled Preference would not trigger the TSP submission requirement. Refer to HUD Handbook 43503., REV-1, Chapter 4, Paragraph 4-6.C. for further information on owner-adopted preferences.

Posted:11/06/2015
Question:The residents of a project converting to RAD want to form a resident council after conversion. What are the requirements to form a council after RAD conversion?
Answer:There is no requirement to form a resident council under RAD, but residents may form a resident organization and receive tenant participation funds. There are different resident participation and funding requirements under PBRA and PBV. For PBRA conversions, residents have the right to establish and operate a resident organization in accordance with 24 CFR Part 245 (Tenant Participation in Multifamily Housing Projects). In addition, in accordance with Attachment 1B (more specifically, Attachment 1B.2 at page 110 of REV-2), residents will be eligible for resident participation funding. For PBV conversions, residents of Covered Projects with converted PBV assistance will have the right to establish and operate a resident organization for the purpose of addressing issues related to their living environment and be eligible for resident participation funding In accordance with Attachment 1B.2.

Posted:11/06/2015
Question:What is the policy with respect to tenants who were not properly screened upon initial occupancy and do not qualify for a particular public housing unit?
Answer:RAD does not allow re-screening of tenants, meaning residents cannot be rescreened because of a RAD conversion. PHAs should be following their occupancy policies up until the RAD closing. These policies should outline when re-certifications and interim re-examinations may take place.

Posted:10/08/2015
Question:Are work requirements for new residents (not returning residents) permitted under PBRA?
Answer:Owners may not require a specific minimum income, however, owners may adopt a Working Families preference in selecting families from the waiting list for those families in which the head of household or spouse is employed. Even if the owner adopts such a preference, however, discrimination against persons unable to work is prohibited. Owners must not deny the preference to households in which the head or spouse is 62 or older, or to a person with disabilities. Refer to HUD Handbook 4350.3, REV-1, Chapter 4, Paragraphs 4-6.C.2 and 4-8.A.

Posted:09/24/2015
Question:We have converted 164 units of PH to RAD under PBRA. Are we now required to pay interest on Security Deposits and to keep these funds in a separate bank account?
Answer:RAD PBRA conversions are subject to HUD Handbook 4350.3 Occupancy Requirements for Subsidized Programs. Paragraph 6-17.B of the Handbook states, "The owner must place the security deposits into a segregated, interest-bearing account. The balance of the account must equal the total amount collected from all tenants then in occupancy, plus any accrued interest." Also refer to paragraph 6-18 regarding 'Refunding and Use of the Security Deposit' which states that any interest earned on the security deposit is to be paid at move-out, provided the tenant is due a refund of the security deposit. For existing tenants, this requirement applies to any security deposits carried over from their public housing tenancy. No new or additional security deposit can be required for existing tenants. For new tenants, collection of security deposits must be done in accordance with the HAP Contract and with the requirements of the Handbook.

Posted:08/27/2015
Question:Under RAD, if an applicant or resident needs a reasonable accommodation, who is to pay for the accommodation?
Answer:Section 504 (of the Rehabilitation Act of 1973) requires property owners to provide and pay for physical and procedural accommodations, as needed by applicants and residents with disabilities, for properties with "federal financial assistance". Public housing is "federal financial assistance", and so are PBRA and PBVs. Accordingly, under RAD you have the same responsibilities regarding reasonable accommodations as you did under the public housing program. The HUD website contains a one-stop Section 504 resource at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/disabilities/sect504.

Posted:08/27/2015
Question:What happens if tenants who are relocated off-site choose not to come back? What is the PHA's responsibility for relocation costs for such tenants? Is there any impact on the RAD PBRA or PBV Contract?
Answer:Your question describes a tenant who accepts temporary relocation assistance but later decides not to return to the completed project. In this situation, the PHA's responsibility for relocation assistance is limited to the assistance that the PHA offered (and the tenant accepted) in the RAD Notice of Relocation. See Notice H-2014-09 / PIH-2014-17 "Relocation Requirements under the REntal Assistance Demonstration (RAD) Program, Public Housing in the First Component". In the situation you describe, the RAD project itself, and the RAD HAP Contract, are unaffected, except that the RAD project no longer needs to hold a unit for the tenant who decided not to return.

Posted:07/30/2015
Question:If a family is currently over-crowded in their unit according to HQS standards and there is no way to accommodate them in the building because there are no vacancies, is the new owner obligated to honor the family’s right to return to the property or to find the family housing elsewhere because the owner would be violating the over-crowding standard? If it’s the latter, what options are the new owner entitled to give to this family?
Answer:In the situation you describe, the owner must offer the family a unit in the converted project. The owner may also choose to offer another unit elsewhere that is of the proper size, but the family may not be required or pressured to accept the alternative unit.

Posted:06/09/2015
Question:I am converting a public housing project to RAD using PBRA. There is an existing public housing project-specific waiting list, and I’m planning to implement a project-specific PBRA waiting list. What happens to folks currently on the public housing project-specific waiting list? Post-RAD, how would we select an applicant to fill a vacated unit?
Answer:See Section 1.7.C.3 of the RAD Notice, which discusses establishment of the new waiting list. Because your project has an existing project-specific public housing waiting list, all applicants on that waiting list would transfer to the new post-RAD PBRA waiting list, where their priority will be “in accordance with the date and time of their application to the original project's waiting list” as required by the RAD Notice. After transferring all applicants from the existing public housing waiting list, you would then manage the new PBRA waiting list, and select applicants from that waiting list to fill vacated units, in accordance with the requirements of HUD Handbook 4350.3 (Chapter 4 Waiting List and Tenant Selection).

Posted:04/21/2015
Question:We plan to offer Housing Choice Vouchers to residents who choose permanent relocation and waive their right to return. If a resident accepts the voucher, does that satisfy RAD and URA relocation requirements and relieve the PHA of its relocation obligations?
Answer:No. Vouchers are a useful tool in the relocation process and can be part of the relocation assistance package offered to a public housing resident. However, the offer and use of a voucher alone does not satisfy all applicable RAD and URA relocation requirements. For example, the URA requires that displaced residents be provided relocation advisory services and moving options and payments. Additionally, the URA generally provides that a resident cannot be required to move permanently before receiving at least 90 days advance written notice of the earliest date on which they will be required to move. If the 90-day notice is issued before a comparable replacement dwelling is made available to the resident, the notice must inform that the resident that they will not have to move earlier than 90 days after a comparable replacement dwelling is made available. Residents that will be displaced may not be required to move unless at least one, and when possible, three or more comparable replacement dwellings are made available to them in accordance with 49 CFR 24.204(a). When Housing Choice Vouchers are reflected in a PHA’s offers of comparable replacement dwellings, the PHA must ensure that comparable replacement dwellings are made available to residents before displacement. This includes ensuring that the identified dwellings are eligible to participate in the HCV program. PHAs also need to determine whether any resident will be eligible to receive a replacement housing payment (gap payment) determined in accordance with 49 CFR 24.402. For further guidance on the Housing Choice Voucher (HCV) program and its applicability to the URA and RAD, please refer to the following online resources: • HUD RAP Newsletter- Vol. 5 No. 1, dated May 15, 2014, is available at: http://portal.hud.gov/hudportal/documents/huddoc?id=HUD_RAP_Vol5_No1.pdf • HUD Handbook 1378 – Chapter 2-6 “gap payments” when using a voucher is available at: http://portal.hud.gov/hudportal/documents/huddoc?id=1378c2CPDH.pdf • The RAD Relocation Notice is available at: http://portal.hud.gov/hudportal/documents/huddoc?id=RAD_Notice2.pdf

Posted:11/24/2014
Question:Does the Uniform Relocation Act require an owner to be financially responsible for the cost of packing a resident’s belongings if the resident is being moved on site, one time (as opposed to off site, then returning to the property). I know the owner is responsible for the cost of the move itself. I’m just not sure about the requirement to have movers pack the belongings.
Answer:As provided in Footnote 15 of the RAD Relocation Notice (H 2014-09/PIH 2014-17), the PHA must provide reimbursement for all reasonable out-of-pocket expenses incurred by a resident in connection with the resident’s permanent move to another unit within the same building/complex. The PHA has the option of undertaking the move itself. If the PHA chooses to do so, the Notice provides that it is the PHA’s responsibility to pack and move the resident’s belongings and household goods, if the resident so desires. If the resident prefers to pack their own belongings, the PHA may nonetheless still be responsible for reasonable out-of-pocket expenses that the resident incurs in connection with the move, including costs associated with packing and unpacking of personal property. The PHA is responsible for making a reasonableness determination with respect to a resident’s claim for reimbursement. If the PHA does not undertake the move itself, the PHA should be aware that the cost of packing and unpacking personal property is considered to be an eligible actual moving expense under URA regulations at 49 CFR 24.301(g)(2).

Posted:10/14/2014
Question:Can relocation take place before closing/RAD Conversion?
Answer:Relocation may not begin until the date of closing. However, in rare cases, some project plans may necessitate relocation prior to closing. With prior HUD approval, for projects involving acquisition, PHAs may relocate residents prior to the closing date. PHAs must contact their assigned RAD transaction manager (TM) to discuss plans as early as possible in the process to ensure compliance with all URA and RAD requirements. PHAs should refer to Section 9: Initiation of Relocation of Notice H 2014-09/PIH 2014-17 for further information and requirements related to relocation prior to closing.

Posted:10/14/2014
Question:Can the PHA charge residents fees for missing move dates?
Answer:According to federal public housing rules, PHAs have limited abilities to charge additional fees unless permitted by state and local law. PHAs should consult with local counsel and review their lease terms to determine whether or not such fees would be allowed.

Posted:10/14/2014
Question:My deal is closed. I’ve converted my units to PBRA. Can my relocation plan involve relocating families temporarily to other public housing units?
Answer:Yes, a PHA can move families temporarily into available public housing units as long as the PHA’s public admissions and occupancy procedures allow for this. Families temporarily relocated to public housing units would be treated as public housing residents during that period (e.g. the family would use a public housing lease and the PHA could consider the unit occupied for purposes of the Operating Fund subsidy, etc.). PHAs should note that the temporary relocation unit must be decent, safe, and sanitary.

Posted:10/14/2014
Question:What are the ramifications for residents who absolutely will not move – due to illnesses and severely disabled HHM’s? The PHA’s legal counsel is addressing this from the legal standpoint, however do you have any advice from the relocation perspective?
Answer:This issue involves a temporary move and the residents are expected to return to the units. Generally, assuming that the relocation process is done in accordance with the RAD Relocation Notice, H 2014-09/PIH 2014-17, the temporary relocation of residents should proceed smoothly. Keep in mind that the Notice gives more specific requirements for relocating residents with disabilities. See Notice at §10, pages 10-12. Specifically, PHAs should consult the disabled residents’ information to provide them with replacement housing appropriate to their accessibility needs. To the extent the PHA has complied with these Notice requirements and the residents still refuse to move, the PHA should consult State and local law for any legal remedies.

Posted:10/14/2014
Question:What is the best way to determine a resident’s moving benefits?
Answer:The URA rules for moving expenses for a displaced person are located at 49 CFR 24.301-24.306. Additional guidance on expenses relating to residential moves is found at Paragraph 3-2 of HUD Handbook 1378, “Tenant Assistance, Relocation and Real Property Acquisition,” http://portal.hud.gov/hudportal/documents/huddoc?id=1378c3CPDH.pdf. PHAs participating in RAD should also follow the guidance regarding moves in Appendix 1 of the RAD Relocation Notice, H2014-09/PIH2014-17. If not all members of the family being relocated are persons lawfully present in the United States, proration of moving expenses may be necessary. See other FAQs on proration for more information.

Posted:10/14/2014
Question:When do resident relocation requirements begin, at CHAP Award or at Closing? Our PHA wants to make sure they are providing required notices and assistance on time.
Answer:PHAs should begin to engage residents on relocation matters as soon as they begin to develop any RAD development or rehabilitation plans that may involve relocation. PHAs should refer to Section 4: Relocation Planning of Notice H 2014-09/PIH 2014-17. The chart provided in this section presents a general sequencing of relocation planning activities within the RAD milestones.

Posted:08/22/2014
Question:What are the reporting procedures should there be a change in family composition changes while the family is in a temporary unit? Would we just update the information using our current management software and submit to PIC or is there a different action needed.
Answer:A change in family composition during a temporary relocation period should be reported into either TRACS or PIC. Under PBRA conversions, once the property has converted, families will not be reported in PIC. Instead, owners will submit tenant data through 50059s in TRACS. Families should continue to be reported in TRACS even while temporarily relocated from the property under HAP contract. For conversion to the PBV program, families temporarily relocated into units subsidized through the public housing, HCV, PBV, or other program that normally reports into PIC should report these changes in PIC.

Posted:08/21/2014
Question:Are housing authorities expected to walk residents through the process of moving utilities and forwarding mail, or just to pay the out-of-pocket expenses of those kinds of activities?
Answer:Part of URA requirements are to provide relocation advisory services for any permanent relocations. Under RAD, advisory services are required for relocations lasting longer than a year and strongly recommended for relocations that are for shorter periods.

Posted:08/21/2014
Question:If a resident decides to accept a Housing Choice Voucher, how is the right of return affected?
Answer:When a resident chooses to accept permanent relocation payments and assistance in accordance with URA or at URA levels for a RAD conversion (for example accepting a HCV as their permanent relocation housing), the resident is also choosing to decline their right to return to the completed RAD property. If a resident accepts an HCV as a temporary relocation housing option, this acceptance does not mean that the resident is declining their right to return. A resident can choose to accept temporary relocation assistance and payments without declining their RAD right to return. PHAs are reminded that residents must give informed consent to decline their right to return, meaning they are making a decision based on an informed understanding of their housing options, and that PHAs must keep auditable records of this decision.

Posted:08/21/2014
Question:When converting to PBRA or PBV under RAD, does the URA apply to persons temporarily relocating – for less than twelve months – or only for those residents who relocate either permanently or for more than one year?
Answer:URA applies to RAD projects that involve acquisition, demolition, or rehabilitation. So if your deal involves acquisition, demolition, or rehabilitation, then URA applies. Both URA and RAD have requirements for relocations that last less than a year. For example, URA requires that a resident who will be temporarily relocated receive reimbursement for reasonable out of pocket expenses connected to the move, such as moving expenses and increased housing costs. Additionally, RAD would require residents that move temporarily receive a RAD Notice of Relocation, which is a specific RAD requirement, and not one that comes from the URA.

Posted:07/17/2014
Question:My PHA is the recipient of a ROSS Service Coordinator Grant and plans to submit a RAD Application. Will we be permitted to continue assisting families (who, because of the RAD conversion) will be residing in non-public housing units) after the conversion?
Answer:Yes. Section 1.5H of the Notice provides that residents who are currently participating in ROSS may continue to participate after the RAD conversion for the term of ROSS grant. Also, with the PBRA HAP, the converted properties will be eligible to apply for the Multifamily Housing Service Coordinator Grants which are available to subsidized properties. These competitive grants are offered through a Notification of Funding Availability to serve properties designated as elderly and/or disabled. [Revised 7.17.14]

Posted:06/03/2014
Question:Must a PHA give tenants 30-day notice of the effective date of the new lease?
Answer: PHAs must give tenants at least 30-day notice of their public housing lease termination (recognizing that the exact date of closing, and thus the exact effective date of the HAP, is not known). HUD recommends that PHAs provide this notification to residents along with a notification of the effective date of the new lease. However, PHAs should consult with legal counsel, especially with respect to the requirements of state and local tenant laws.

Posted:06/02/2014
Question:Some of the families are currently over-housed. How will these units be treated for subsidy purposes at conversion?
Answer:If there is not an appropriately-sized bedroom for the family to transfer into, the family can remain in the unit and unit will continue to be funded based on the actual bedroom size and the contract rent. But if an appropriately-sized unit becomes available, the family will be required to move at that time.

Posted:05/12/2014
Question:If an over-housed household remains in their unit and continues to receive PBV assistance under the RAD program, will the assistance received be based on the unit size, and not on the household size?
Answer:The contract rent, and HAP assistance, will be based on the unit size, for both PBVs and for PBRA. If there is no appropriately sized unit available to move the family into and the over-housed household is therefore permitted to remain in the unit, it will not impact the rent due from the tenant or the subsidy provided under the contract.

Posted:05/12/2014
Question:If we elected to covert our ACC assistance to PBV or PBRA, will we be certifying tenants and receiving funding through the PIH office or Multi-Family? Will we use 50058 or 50059? Will we be using the TRACS system?
Answer:RAD conversions to PBVs will use the 50058 which will be submitted into PIC, just like certifications for any other family assisted under the Housing Choice Voucher program. Subsidy will be administered by the housing authority with whom the PBV HAP contract is signed, rather than through PIH. RAD conversions to PBRA will use the 50059 which will be submitted into TRACS. Subsidy will be administered by the Office of Multifamly Housing at HUD.

Posted:04/10/2014
Question:Do residents of properties need to be receritified at conversion?
Answer:No. All residents will maintain the same annual recertification date they would have had as public housing residents. Current residents are not subject to the rescreening, income eligibility, or income targeting provisions of either the PBV or PBRA programs. Following conversion: 1)For PBRA conversions, for the purposes of recording the resident in TRACS, owners should complete an initial HUD-50059 certification for each household that includes the same information previously found on the 50058, including the next annual reexamination date found on Line 2i; 2) For PBV conversions, the PHA would continue to use HUD Form 50058 for each household, but would consider the family a new admission and complete Section 11 (instead of Section 10). The Form should include the same information previously found on the 50058, including the next annual reexamination date found on Line 2i.

Posted:04/10/2014
Question:We expect to have vacancies at the property that we are converting between now and closing. When a Public Housing tenant signs a lease, they are required by HUD to sign for a year for the initial lease term. We don’t want to have vacancies because that negatively impacts the budget, but we wouldn’t be able to keep a PH tenant on a PH lease once we convert. How should this be handled? Can we modify the PH lease to make it shorter?
Answer:PHAs should enter into normal lease terms with any resident moving in prior to conversion. All public housing residents, regardless of when they moved in, will need to be given at least 30-day prior notification that their public housing lease will be terminated at the effective date of the new HAP contract.

Posted:02/28/2014
Question:To help deter crime, we have police officers who live in the public housing units even though they do not qualify for assistance. Are police officers allowed to continue to live at the property following conversion?
Answer:If converting to PBRA 245 CFR 5.661 provides for police and other security personnel to reside in an assisted project. MFH Handbook 4350.3, Section 3-8.D provides guidance on the admission of over-income tenants, and further in the Handbook, how to calculate rents. These will need to be approved by the contract administrator (HUD field office) to ensure the needs are there and the rents are appropriate. Under PBV, there is no provision for police officers to live in assisted units. However, if the police officer family was living in public housing at the time of the conversion, they can remain in the unit even though they may be over-income because RAD prohibits the re-screening of current public housing residents. However, once that family moves out, only income eligible applicants can be admitted into the PBV program and the participant must be receiving some amount of HAP to move into the unit. A PHA that wishes to continue to have police officers reside in units in the project may consider not including those units on the HAP contract.

Posted:02/03/2014
Question:How will Family Self-Sufficiency participates be handled in a RAD project?
Answer:Family Self-Sufficiency is specifically discussed in Notice PIH-2012-32 REV-1. See pages 40-41 for PBV conversions and page 54 for PBRA conversions.

Posted:12/04/2013
Question:Can a family voluntarily waive its right to return?
Answer:Yes. A family may voluntarily waive its right to return. If a PHA is going to obtain a voluntary waiver of the right to return, HUD recommends the PHA first offer the family a public housing unit or Housing Choice Voucher in lieu of a right to return. If this is not possible, the PHA is still required to provide permanent relocation assistance as defined in the URA, and must ensure that all fair housing and civil rights conditions are met.

Posted:10/17/2013
Question:Tenants in place at the time of conversion will be housed in accordance to existing PH occupancy standards; is it permissible to have subsequent tenants housed in accordance with our S8 occupancy standards of number of bedrooms?
Answer:After conversion, occupancy requirements will be in accordance with the new HAP contract (either PBVs or PBRA). If your project converts to PBRA, the occupancy standards in HUD Handbook 4350.3 would be applicable. If your project converts to PBV, the occupancy standard are determine by your HCV occupancy standard.

Posted:10/01/2013
Question:Are there funds to provide residents/legitimate tenant organizations with technical assistance? If yes, what is the application process?
Answer:There is no RAD-specific funding for technical assistance to residents / tenant organizations. There are extensive resources available on www.hud.gov/rad and www.radresource.net websites. HUD staff is providing RAD webinars regularly (check hud.gov/rad) and residents are encouraged to attend and ask questions. PHAs are reminded that RAD includes various requirements for tenant consultation. In addition, HUD is developing materials to assist tenants in understanding RAD and participate in their local process. [Updated 7.29.13]

Posted:10/01/2013
Question:What is the obligation of a project owner in the unlikely event that, due to an approved de minimis reduction in the number of units in a project, there are insufficient units available to accommodate all tenants who want to return to the converted project?
Answer:At the time of closing, all residents currently in converting units have a right to return to the project following rehabilitation. If a de minimis number of units are being removed from the site such that some families may be unable to move back in, the PHA must obtain consent from a household waive their right to return if the PHA is providing them with alternative accommodations. [Updated 7.29.13]

Posted:05/22/2013
Question:Are PBV units under RAD required to have a Request for Tenancy Approval (RFTA) filled out by the owner and tenant?
Answer:Yes. RAD includes a few adjustments to the basic PBV program (see Section 1.6 of Notice PIH-2012-32), but none of those adjustments affects the requirement for an RFTA.

Posted:05/22/2013
Question:Do housing complexes receiving RAD funds need to provide smoke free apartment blocks?
Answer:RAD does not include any smoke free building requirement. You would, however, want to check whether your project has any non-RAD funding sources that include such a requirement.

Posted:04/04/2013
Question:Can you explain the consequences of switching to RAD on the tenant protection and Tenant Council funds that are currently built into our Operating Budget? I know RAD intends that those funds continue to be provided to the Tenant Councils etc, but what is the source of those funds (i.e. do they reduce the RAD contract rent payments) or are the PHA expected to provide those funds from other sources (ACC grant) etc?
Answer:The $25 per unit per year, of which at least $15 must be conveyed to resident organizations, is built into the RAD rent. It would be a project expense.

Posted:03/05/2013
Question:What is the tenant certification reporting process for RAD PBV conversions? Will they be reported to HUD through the 50058 or 50059 process? Or, does it depend of the type of Project Based Voucher the development is converted to?
Answer:If the PHA converts a project to Section 8 PBVs, the PHA will continue to use HUD-50058s for the tenant certifications. (The PHA will actually terminate the 50058 for the family under the public housing program and create a new 50058 for the voucher program.) If, however, the PHA converts to PBRA, the PHA will then complete a 50059 for each family.

Posted:02/28/2013
Question:Is there an example of the proper type of tenant notice that owners can post to inform tenants for the different cases of either accepting or rejecting RAD?
Answer:Sample tenant notification letters can be found in the appendix of Section III (assuming this is a question for a Rent Supp or RAP owner) of the notice (PIH Notice 2012-32). The Notice is on the RAD website (www.hud.gov/rad).

Posted:02/19/2013
Question:If a Mod Rehab property converts to PBRA under RAD, will the future Tenant Certifications be under HUD Handbook 4350.3 guidelines?
Answer:Yes if the property is converting to PBRA; no if the property is converting to PBV

Posted:10/22/2012
Question: Our RAD transaction will have a Choice-Mobility requirement. This question concerns residents who do not meet current screening requirements for Housing Choice Vouchers but who (because of the waiver of rescreening) will occupy PBV or PBRA units post-RAD. If one of these residents later requested a Choice-Mobility voucher, would the resident have to satisfy all current screnning requirements for the Housing Choice Voucher program, or would the waiver of re-screening continue to apply?
Answer: The waiver of re-screening applies (a) to issues that pre-date the RAD conversion (for example, a prior conviction record that would be unacceptable under one-strike) and (b) to continued occupancy at the RAD project. The waiver of re-screening would not apply to the possible future application for a Housing Choice Voucher that you describe (the resident would have to meet all HCV screening requirements in effect at the time). The waiver also does not apply to any issue that arises post-conversion (for example, a conviction that occurs after the RAD conversion).

Posted:10/22/2012
Question: Will the security deposit amount following the rehab be at a higher level than public housing?
Answer: The tenant’s existing security deposit will transfer at the RAD closing. Future tenants will pay security deposits according to PBRA / PBV rules.

Posted:10/19/2012
Question: Under RAD, will the relocation costs be subject to URA for former tenants returning to the property?
Answer: Yes.

Posted:10/19/2012
Question:We made a decision to relocate tenants prior to RAD and have used funds designated for public housing to move the tenants out. If we convert the units through RAD, we will not have access to these funds to move the tenants back into the project after the renovation. How will we cover the relocation costs to move the tenants back to the project?
Answer:You are correct that, once the RAD closing has occurred, public housing funds can no longer be used to pay for continued relocation costs. However, RAD permits you to transfer public housing funds to the RAD project at the RAD closing, so you might consider that approach. Of course, you may also include relocation costs in your RAD development budget.

Posted:10/18/2012
Question: At the RAD conversion, when do we re-certify the families?
Answer: You should re-certify families on their next annual re-certification date.

Posted:10/18/2012
Question:Does no re-screening of tenants include sex offenders, is that also waived?
Answer:Yes, there is no rescreening of sex offenders based solely on the RAD conversion. However, if through the routine annual/interim recertification it is discovered the individual was erroneously admitted into public housing in violation of QHWRA, then that individual must be terminated.

Posted:10/18/2012
Question:Is the income limit waived for former public housing residents coming back to the property?
Answer:Yes, there is no re-screening of tenants.

Posted:10/15/2012
Question: If a housing authority is planning to submit an application for conversion of their entire portfolio (less than 1,000 units), will the resident notification / meeting be required prior to the submission of an application? There is no plan for significant rehabilitation and no plans for displacement of tenants. If meetings are required, can the meetings be portfolio-wide resident meetings in lieu of a separate resident meetings for each site?
Answer: Yes, regardless of the level of rehab or whether relocation is needed, two resident meetings must take place prior to application submission and you must include resulting comments and your responses as an attachment to the application. It is fine to hold one portfolio wide meeting as long as all tenants are notified.

Posted:10/15/2012
Question: If we are using RAD to redevelop our final public housing site, can the residents of the public housing site being demolished get priority on the HCV voucher wait list so that they can receive a voucher for relocation since we can not get temporary relocation vouchers?
Answer: If you want to use your current vouchers to help with the required relocation at the site being demolished, your PHA should amend its Section 8 Administrative Plan, if applicable, to provide a preference for the families who are affected by the demolition. (You should also be aware that you can use the HAP payments that would otherwise flow to the project during the construction period as a source of relocation funds.)

Posted:10/12/2012
Question: Must all families resident at the property pre-conversion live there after conversion? May pre-conversion residents be permanently relocated?
Answer: No permanent involuntary displacement may occur as a result of a RAD transaction. If a resident is temporarily relocated to accommodate construction and makes a voluntary decision not to return, that does not violate RAD rules.

Posted:10/08/2012
Question:Is it correct that there is nothing in the "no-rescreening" provisions that would prevent collection and analysis of tenant income data for purposes of determining LIHTC eligibility and for determining tenant rent payments under PBRA or PBV? Is the answer the same for both PBRA and PBV?
Answer:The prohibition against "re-screening" protects tenants against displacement. PHAs may not, for example, re-evaluate any existing tenant under the one-strike rules. The prohibition against "re-screening" does not, however, prohibit any re-determination of income that is otherwise required. If LIHTCs will be utilized in the RAD transaction, the PHA may encourage an existing tenant who is over LIHTC income limits to move from the project by offering an HCV from the PHA's own allocation. However, the PHA may not require the existing tenant to move. If the tenant wishes to remain, he or she has that right. In that case, the over-income tenant's unit would not be eligible for the LIHTC program. The preceding applies to both PBVs and PBRA.

Category:Physical Condition Assessment (PCA)
Posted:04/02/2015
Question: If you have a multi-unit community with buildings that have a mix of public housing and non-public housing apartments, should the Capital Needs Section on page 3 of the RAD application include the capital needs for ALL of the units (both public housing and non-public housing) OR just the public housing units and their pro rata share of capital improvement costs for common areas?
Answer: The RAD PCA must cover all units in the project, not just the units being converted under RAD.

Posted:04/02/2015
Question: My firm was engaged by a property owner to complete a RPCA for a mixed income property. Some of the units within the development are market rate and are public housing.
Answer: The 25% sample requirement refers to all units not just the units being converted under RAD.

Posted:01/30/2013
Question:All public housing agencies are required to conduct a Green Physical Needs Assessment using the HUD GPNA Tool. The final rule is projected to be published in March. Agencies with a December 31 fiscal year must submit the GPNA to HUD on September 1, 2013. My question is if a project is converting all units to RAD, does the project need to complete the GPNA? And, if a project is only converting some of the units to RAD and the remaining will stay in public housing, will the RAD units need to be part of the GPNA?
Answer:The public housing GPNA requirement will not become effective until the publication of its final rule. PHAs that have entered RAD and whose converted units are no longer recorded as ACC units in PIC as of their GPNA submission due date (and are reflected in the PIC data set provided by HUD for import into the GPNA tool) are not required to make the PNA submission from the GPNA tool for that portion of their inventory that has left public housing for RAD. PHAs that have been awarded a Commitment to Enter into a HAP (CHAP) under RAD as of the due date of their public housing GPNA will be required to make the PNA submission from the GPNA tool accounting for the entire inventory of units remaining in public housing (and remaining reflected in the PIC data set provided by HUD for import into the GPNA tool) but recording “0” needs for that portion under the CHAP. If the entire inventory of any AMP is under a CHAP as of the GPNA due date, no submission will be required as it will be considered likely that the entire AMP will be leaving public housing. Should public housing inventory under a CHAP not ultimately convert to RAD and remain in public housing, a GPNA submission will become required. Any subsequently required submission must be made from the automated reporting feature of the GPNA tool. Information from a RAD PCA may be used for the submission but it must be migrated to the GPNA tool.

Posted:10/19/2012
Question: We are working with a housing authority that is: 1) planning to convert their entire conventional public housing portfolio (under 1,000 units) to PBRA, and 2) contemplating NO additional improvements / financing associated with this RAD conversion. Will HUD still require a detailed Physical Conditions Assessment for that portfolio?
Answer: Yes, even if you’re not contemplating any improvements or financing, you will be required to complete a PCA following CHAP issuance and prior to conversion. We want to make sure that the project is viable over the long-term. It is fine that the PHA is not contemplating any improvements at the time of conversion, if that’s what the PCA shows, but then we want to make sure that the reserve deposits are sufficient for work in the out-years,

Category:PIC Removal
Posted:05/12/2015
Question:How should the PHA treat non-dwelling buildings that should be removed under the PIC removal application, but are not currently listed in PIC?
Answer:On the PIC removal application there is a place to list non-dwelling buildings “not in PIC”, as the application should include all units and buildings, regardless of their dwelling status.

Posted:05/12/2015
Question:My converting RAD project also includes some non-dwelling units. Do I request removal for the non-dwelling units as well?
Answer:Yes.

Posted:05/12/2015
Question:Once I submit the draft PIC Removal application, what happens? Am I out of public housing?
Answer:This initial application is a draft, and will not be finalized until your transaction closes and converts through RAD. Your application remains “Under Review.” Although the project will then be exempt from scoring under the Public Housing Assessment System (PHAS), it will otherwise remain in public housing and be subject to all public housing rules and regulations until after closing.

Posted:05/12/2015
Question:We have a large project that we are converting in phases. For the initial phase, in terms of PIC removal, do I include acreage for the entire site or just the portion being converted?
Answer:For the PIC removal application, just include the portion being converted at this time.

Category:Post-Closing
Posted:03/05/2018
Question:What are the Catalog of Federal Domestic Assistance (CFDA) numbers for properties that have converted to RAD?
Answer:PBV RAD conversions are reported under CFDA 14.871. PBRA RAD conversions are reported under CFDA 14.195, Section 8 Housing Assistance Payments Program.

Posted:11/28/2017
Question:If a tenant is in the RAD PBV phase-in period and transfers to a different size unit in the same PBV project, does the phase-in still apply or will rent be based on TTP at that point?
Answer:If the rent increase is occurring because of new income, the rent phase-in does not apply. If the tenant's monthly rent increases because the tenant moved to a new unit as a result of the RAD conversion, then the phase-in does apply.

Posted:11/06/2017
Question:We are a Property Management company that was previously processing the annual recertifications for the Public Housing units. The units have now converted to PBV under RAD. Do we continue to do the annual/interim recertifications until Jan. 1 of the following year, and do we issue the utility reimbursement checks? Or, does the Housing Authority take over the recertifications/interims and issue the utility reimbursement checks as the of RAD closing date?
Answer:It is up to the PHA how they wish to handle processing of recertifications and utility allowances for its voucher program. HUD does not prevent PHAs from contracting with a management company to perform these tasks.

Posted:10/27/2017
Question:In a PBRA conversion, can the owner/PHA of a Public Housing project designated for the elderly continue to serve only elderly households?
Answer:The owner/PHA cannot designate buildings as is done in Public Housing. While owners may not restrict occupancy to certain household types, however, Owners may adopt certain waiting list preferences on their waiting list, some of which require prior HUD approval while others do not. HUD regulation (see 24 CFR 5.655) permits Owners of PBRA projects to adopt waiting list preferences for single persons who are elderly without prior HUD approval. To adopt a waiting list preference for elderly families (i.e. non single-persons), the Owner must obtain prior HUD approval. See Paragraph 4-6 of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs and HUD Housing Notice 2013-21 for the applicable requirements for implementing a preference for elderly families. Note that all owner adopted preferences must be included in the Tenant Selection Plan (TSP) and the Affirmative Fair Housing Marketing Plan for the property.

Posted:09/12/2017
Question:How are over-income tenants treated following conversion to a RAD PBV HAP contract?
Answer:Any existing tenants at the time of RAD conversion may remain in the project, and the unit may remain under HAP, even if the tenant's Total Tenant Payment (TTP) exceeds the RAD Gross Rent. In these instances, the tenant will pay the TTP amount and the unit will become a "zero HAP" unit. Until the tenant's TTP falls below the gross rent, the rent to the owner for the unit will equal the lesser of (a) the family's TTP, less the utility allowances, or (b) any applicable maximum rent under LIHTC regulations. For the RAD PBV units, this protection applies only to tenants living at the Converting Project prior to conversion. New admissions with zero-HAP are not permitted. New admissions are subject to the regular PBV program rules (per 983.211), meaning the unit must be removed from the HAP contract when no HAP assistance has been paid for 180 days.

Posted:07/24/2017
Question:HUD requires us to have one Resident Commissioner. Our Resident Commissioner lives in a property that has been converted and renovated under the RAD program. Is he still eligible to serve on the Board of Commissioners as a Resident Commissioner?
Answer:The Resident Commission must be a public housing resident, so they are not eligible to serve. However, per 24 CFR 964.415 the resident board member could be allowed to finish out his/her current term. In addition, the PHA and residents should be aware of the Resident Participation component of RAD. Here is a Fact Sheet that may help: https://portal.hud.gov/hudportal/documents/huddoc?id=RFS6_Participation_Funding.pdf”

Posted:06/23/2017
Question:If an MTW Agency sets a rent for the HAP contract at the time of conversion, can the Agency go back at a future date (say, year 5) and increase the rent for the HAP contract beyond the standard OCAF adjustments?
Answer:No. The RAD Notice (Section 1.6.B.6) and the HAP contracts require that contract rents may only be adjusted by the OCAF. The RAD notice further specifies that MTW agencies may not alter this requirement.

Posted:05/01/2017
Question:How should materials and equipment inventory should be handled when the PHA is transferring project ownership as part of RAD conversion? Should the PHA should retain ownership of them or transfer to the LLC and lease them?
Answer:HUD expects that when a public housing project will be transferred as part of a RAD transaction, the transfer will include all assets and records associated with the project, so that the post-RAD ownership entity is in a position to operate the property going forward. Unless a compelling transaction-specific case can be made that some different approach is in the interest of the project and tenants, HUD expects that the PHA would not retain ownership of materials, equipment or any other assets associated with the project being transferred under RAD.

Posted:04/28/2017
Question:When a site-based waiting list is transferred following conversion, am I required to serve all of the existing applicants on the waiting list in their current order before serving any new applicants and without respect to adopted preferences?
Answer:No. Once the waiting list is transferred, applications and preferences continue to operate in accordance with applicable regulations and locally adopted policies. As a result, new applicants following conversion may get housed ahead of applicants who were on the public housing site based waiting list at the time of conversion if they qualify for a higher preference even though they are entering the waiting list at a later date. There is no requirement to house all of the people who were on the PH site-based waiting list at the time of conversion before housing anyone else.

Posted:03/15/2017
Question:We converted to PBV and units were vacated due to rehab and thus we are eligible to receive Rehab Assistance Payments (RAP). How do we report the use of the RAP funds in VMS?
Answer:The VMS Users Manual instructs PHAs to report Rehab Assistance Payments in the RAD 1 HAP Expense field in VMS. PHAs should not report the units as leased.

Posted:01/18/2017
Question:Are new tenants who come under lease post-RAD conversion eligible for the Family Self Sufficiency (FSS) program?
Answer:For PBV conversions, new residents would be eligible for FSS as long as the PHA administers an FSS program. For PBRA conversions, FSS funds awarded in FY14 and prior FSS funds may be used only to continue to serve FSS participants living in units converted under RAD to PBRA. Pursuant to FY 2015 Appropriations Act, any FSS funds awarded in FY 2015 (and forward if the provision is extended), may be used to also serve any other PBRA resident, affected by RAD or not.

Posted:01/18/2017
Question:Suppose that the PHA's operating expenses increase following conversion and the project doesn't have the cash to make the deposit into the R4R as required under RAD- what would be the likely consequences of a failure to make required replacement reserve deposits? Does it make a difference whether it's PBV or PBRA?
Answer:Failure to make required deposits to the replacement reserve is a violation of both the RAD Conversion Commitment (which survives the closing) and the PBRA or PBV HAP Contract and HUD may take enforcement action in such an event. If a property experiences an unexpected and substantial increase in operating expenses, the owner should contact HUD to determine options that will not result in HUD initiating an enforcement action.

Posted:06/10/2016
Question:Does RAD impose any requirements regarding the type of Management Agent utilized after RAD conversion? Can the PHA serve in this role or does RAD require that the properties be managed by a company in the private sector?
Answer:The RAD program does not have any requirement to hire a private management company; it is up to the Owner to select an appropriate organization to serve in that role. Many RAD projects have utilized the PHA as the management agent. If the RAD One transaction utilizes PBVs, the proposed management agent must meet all applicable requirements of the PBV HAP. If the RAD One transaction utilizes PBRA, the proposed management agent must be approved by HUD-Multifamily under applicable requirements of HUD Handbook 4381.5. If your RAD One transaction includes non-RAD funding, the proposed management agent must be acceptable to all non-RAD funders. For example, if your RAD One transaction includes Low Income Housing Tax Credits, it is likely that the tax credit syndicator / investor will have approval requirements for the proposed management agent.

Posted:06/10/2016
Question:What are the insurance requirements for a RAD project? Is an AM Best rating required for the insurance company?
Answer:The RAD requirements for insurance can be found in the RAD Notice (1.6.D.5 for PBVs, 1.7.C.4 for PBRA): "Mandatory Insurance Coverage. The Covered Project shall maintain at all times commercially available property and liability insurance to protect the project from financial loss and, to the extent insurance proceeds permit, promptly restore, reconstruct, and/or repair any damaged or destroyed project property." If your RAD project has a first mortgage loan or other non-RAD funding, your other funding provider(s) probably have their own insurance requirements, so be sure to check with your non-RAD funders as well.

Posted:03/04/2016
Question:Can a PHA ask for a waiver of certain regulations in order to establish a site-specific utility allowance schedule for a property converted to a Project-Based Voucher contract under RAD?
Answer:Yes. A PHA can ask for a waiver of 24 CFR 983.301(f)(2)(ii) and 982.517 in order to establish a site-specific utility allowance schedule for a property converted to a Project-based Voucher contract under RAD. In considering such waiver requests, HUD will take into consideration whether the project had a site-specific utility allowance prior to conversion, the extent to which the voucher-wide utility allowance schedule can be appropriately applied to the site without causing undue burden to the residents or over-subsidizing the residents, and other factors HUD may request in order to assess good cause. Such waiver requests must be submitted through the Office of Public and Indian Housing (PIH) in accordance with PIH Notice 2013-20

Posted:02/22/2016
Question:How can a PHA determine how many units under HAP contract are eligible for Rehab Assistance Payments?
Answer:During the period of rehabilitation or construction as identified in the HAP Contract, the maximum number of units for which a Project Owner can receive RAD Rehab Assistance Payments is limited to the number of units eligible for Operating Fund subsidy prior to conversion. The number of units eligible for Operating Fund subsidy prior to conversion is equal to the number of Total Eligible Unit Months (EUMs) on the project’s Form-52723 submission (Section 2, Column B, Row 15.) divided by twelve and rounded down to the nearest whole number. For conversions where only a portion of a PIC Development has converted, the number of EUMs associated with the converted portion can be derived from the Initial Year Funding Tool (See “2a. Operating Fund” worksheet, cell R28).

Posted:01/15/2016
Question:Is choice mobility only available to residents who were in place at conversion, or can new residents eventually qualify for it too?
Answer:For covered projects, the Choice-Mobility option is available to all existing and future residents. Note, however, that there may be limits on the number of residents in a covered project who might receive a Choice-Mobility option in any given year. See Notice PIH-2032 REV-2 for additional information on the Choice-Mobility requirement (see in particular section 1.6.D.9 for PBV conversions and section 1.7.C.5 for PBRA conversions). Some RAD PBRA conversions received an exemption from the Choice-Mobility requirement at the time of the initial RAD application and approval, as discussed on Section 2.3.6.C.3 of the Notice.

Posted:11/13/2015
Question:When should a property receive voucher payments through the TRACS system relative to the effective contract date?
Answer:Payments through TRACS would start with the first January following the RAD closing.

Posted:11/06/2015
Question:How do FSS escrow accounts get transferred to deals that are converting to PBRA? We understand that they are transferred in PBV and that HUD continues to fund the rents at the initial HAP level, so that the FSS escrow accounts can funded by resident payments as their incomes rise. Will this also happen with PBRA?
Answer:Public Housing residents that are current FSS participants will continue to be eligible for FSS once their housing is converted under RAD, and PHAs will be allowed to use any remaining PH FSSfunds, to serve those FSS participants who live in units converted by RAD. Due to the program merger between PH FSS and HCV FSS that took place pursuant to the FY14 Appropriations Act (and was continued in the FY15 Appropriations Act), no special provisions are required to continue serving FSS participants that live in public housing units converting to PBV under RAD. However, PHAs should note that there are certain FSS requirements (e.g. escrow calculation and escrow forfeitures) that apply differently depending on whether the FSS participant is a participant under the HCV program or a public housing resident, and PHAs must follow such requirements accordingly. All PHAs will be required to administer the FSS program in accordance with FSS regulations at 24 CFR Part 984, the participants’ contracts of participation, and the alternative requirements established in the “Waivers and Alternative Requirements for the FSS Program” Federal Register notice, published on December 29, 2014, at 79 FR 78100. 25 Further, upon conversion to PBV, already escrowed funds for FSS participants shall be transferred into the HCV escrow account and be considered TBRA funds, thus reverting to the HAP account if forfeited by the FSS participant. An owner is permitted to obtain the escrow amount by creating monthly Owner/Agent Request (OARQ) adjustments on the property’s HAP voucher and then must deposit the money in the corresponding escrow account. In order for HUD to identify information relating to FSS, and until future updates can be made to TRACS, all FSS OARQ adjustments must indicate the Unit Number, Head of Household’s Last Name, and the words “FSS Participant” in the comments section. The owner shall deposit the FSS account funds of all participating families into a single depository account.

Posted:11/06/2015
Question:The residents of a project converting to RAD want to form a resident council after conversion. What are the requirements to form a council after RAD conversion?
Answer:There is no requirement to form a resident council under RAD, but residents may form a resident organization and receive tenant participation funds. There are different resident participation and funding requirements under PBRA and PBV. For PBRA conversions, residents have the right to establish and operate a resident organization in accordance with 24 CFR Part 245 (Tenant Participation in Multifamily Housing Projects). In addition, in accordance with Attachment 1B (more specifically, Attachment 1B.2 at page 110 of REV-2), residents will be eligible for resident participation funding. For PBV conversions, residents of Covered Projects with converted PBV assistance will have the right to establish and operate a resident organization for the purpose of addressing issues related to their living environment and be eligible for resident participation funding In accordance with Attachment 1B.2.

Posted:10/20/2015
Question:For RAD transactions subject to Davis Bacon, where should the PHA/owner submit certified payrolls?
Answer:Certified payrolls should be submitted to the HUD Labor Relations Specialist with jurisdiction for the applicable region. Please see HUD Handbook 1344.1 Rev 2 Chapter 4, which establishes the requirement for submission of the certified payrolls (Link: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/sech/13441)

Posted:10/09/2015
Question:Do residents of a PBV RAD conversion have to wait 12 months or 24 months after the execution of the HAP to exercise their right to move into tenant-based assistance?
Answer:See the RAD Notice REV-2, page 61, item 9 Choice Mobility, which makes it clear that, with PBVs, a resident's ability to access the choice-mobility option is available "at any time after the first year of occupancy." Note that the choice-mobility requirements for PBV conversions differ in some respects from the choice-mobility requirements for PBRA conversions.

Posted:10/08/2015
Question:Are work requirements for new residents (not returning residents) permitted under PBRA?
Answer:Owners may not require a specific minimum income, however, owners may adopt a Working Families preference in selecting families from the waiting list for those families in which the head of household or spouse is employed. Even if the owner adopts such a preference, however, discrimination against persons unable to work is prohibited. Owners must not deny the preference to households in which the head or spouse is 62 or older, or to a person with disabilities. Refer to HUD Handbook 4350.3, REV-1, Chapter 4, Paragraphs 4-6.C.2 and 4-8.A.

Posted:10/08/2015
Question:I am the E.D. of a very small, rural PHA. If we convert our entire PIH inventory to RAD, what would happen to our existing financial public housing reserves? Would these funds be completely de-regulated (allowing us to leverage them for additional affordable units) or would they be somehow recaptured by HUD?
Answer:If you convert your entire Public Housing inventory to RAD then you are permitted to bring all of your current public housing funding with your RAD conversion. It would not be recaptured by HUD.

Posted:10/08/2015
Question:Is there a requirement for who holds the Replacement Reserves?
Answer:Yes. If there is FHA-insured financing, the insured lender will hold the Replacement Reserve. Otherwise, typically a non-FHA-insured lender or a LIHTC investor holds the Replacement Reserve. In RAD transactions without debt and without LIHTCs, HUD can agree to allow the PHA to hold the Replacement Reserve as a separate account with a banking institution with the account covered by a General Depository Agreement (form HUD-51999). Please note that a GDA may also be required in other circumstances, such as when public housing funds are being used to fund the reserve. Please contact your RAD Closing Coordinator for additional information.

Posted:09/24/2015
Question:We have converted 164 units of PH to RAD under PBRA. Are we now required to pay interest on Security Deposits and to keep these funds in a separate bank account?
Answer:RAD PBRA conversions are subject to HUD Handbook 4350.3 Occupancy Requirements for Subsidized Programs. Paragraph 6-17.B of the Handbook states, "The owner must place the security deposits into a segregated, interest-bearing account. The balance of the account must equal the total amount collected from all tenants then in occupancy, plus any accrued interest." Also refer to paragraph 6-18 regarding 'Refunding and Use of the Security Deposit' which states that any interest earned on the security deposit is to be paid at move-out, provided the tenant is due a refund of the security deposit. For existing tenants, this requirement applies to any security deposits carried over from their public housing tenancy. No new or additional security deposit can be required for existing tenants. For new tenants, collection of security deposits must be done in accordance with the HAP Contract and with the requirements of the Handbook.

Posted:09/18/2015
Question:A PHA is proposing a straight conversion, but would like to potentially transfer the assistance post-conversion (perhaps in 2 to 3 years). The Notice has a 10-Year lockout on transfer of assistance post-conversion. Would a waiver to the 10-Year prohibition be possible?
Answer:The provisions of the Notice concerning transfer of assistance (see in particular pages 32-34 of the Notice REV-2) presume that a transfer of assistance will be appropriate for consideration by HUD only when it is not feasible to make the existing property viable long-term. However, your question indicates that it is possible to preserve the property long-term via RAD, so it is not apparent why a transfer of assistance might be appropriate for HUD to consider. Moreover, the Notice is clear that any transfer of assistance is subject to HUD's case by case decision, in HUD's sole discretion. Accordingly, HUD will not consider requests for transfer of assistance except on a case by case basis, and except when the PHA is ready to provide full details of the proposed transaction. Note that post-conversion, the PHA would need to submit a waiver request, with "good cause", to allow for transfer of assistance prior to 10 years.

Posted:09/18/2015
Question:We have a RAD conversion entering into the final phases (post-construction) of closing out to the permanent loan from our lender. Is there is any RAD requirement to send excess cash to a residual receipts account?
Answer:No. Per page 66 of the RAD Notice REV-2, Distributions: "Regardless of type of financing, Converted Projects will not be subject to any limitation on distributions of surplus cash, contingent on the availability of surplus cash as determined by year-end audited or certified financial statements. To implement this provision, HUD will not apply 24 CFR § 880.205, which, among other provisions, establishes certain limitations on distributions for profit-motivated owners and authorizes HUD to require the owner to establish a residual receipts account. Distributions are not considered program or project funds." However, this refers only to limitations by HUD. The PHA may choose to accept limitations on distributions that may be imposed by non-FHA lenders or other funders.

Posted:08/27/2015
Question:This is for a public housing conversion to PBVs. During the conversion year under PBV, the voucher-administering agency earns no admin fee (Notice, REV-2, page 60). However, can the converting agency choose to reimburse the voucher-administering agency for its admin costs?
Answer:Yes, the PHA may do so long as (1) the amount paid is not more than the allowable HUD schedule of admin fees and (2) the PHA identifies these amounts in the Development Budget (Sources and Uses). This action is allowable even if the converting agency is also the voucher-administering agency.

Posted:08/27/2015
Question:Under RAD, if an applicant or resident needs a reasonable accommodation, who is to pay for the accommodation?
Answer:Section 504 (of the Rehabilitation Act of 1973) requires property owners to provide and pay for physical and procedural accommodations, as needed by applicants and residents with disabilities, for properties with "federal financial assistance". Public housing is "federal financial assistance", and so are PBRA and PBVs. Accordingly, under RAD you have the same responsibilities regarding reasonable accommodations as you did under the public housing program. The HUD website contains a one-stop Section 504 resource at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/disabilities/sect504.

Posted:07/24/2015
Question:The RAD Notice refers to the “calculated” TTP. Is this capped at the RAD gross rent?
Answer:No. The calculated TTP is determined only by the household’s adjusted income.

Posted:07/21/2015
Question:After my RAD conversion, I am considering assigning property management responsibilities to the new third-party ownership entity. Are there any considerations for addressing the potential impact on PHA staff?
Answer:In the Conference Report on the 2015 Appropriations Act, Congress noted, “[This] agreement encourages housing authorities that participate in the rental assistance demonstration program to grant current workers whose employment positions are eliminated during conversion the right of first refusal for new employment openings for which they are qualified.”

Posted:06/09/2015
Question:I am converting a public housing project to RAD using PBRA. There is an existing public housing project-specific waiting list, and I’m planning to implement a project-specific PBRA waiting list. What happens to folks currently on the public housing project-specific waiting list? Post-RAD, how would we select an applicant to fill a vacated unit?
Answer:See Section 1.7.C.3 of the RAD Notice, which discusses establishment of the new waiting list. Because your project has an existing project-specific public housing waiting list, all applicants on that waiting list would transfer to the new post-RAD PBRA waiting list, where their priority will be “in accordance with the date and time of their application to the original project's waiting list” as required by the RAD Notice. After transferring all applicants from the existing public housing waiting list, you would then manage the new PBRA waiting list, and select applicants from that waiting list to fill vacated units, in accordance with the requirements of HUD Handbook 4350.3 (Chapter 4 Waiting List and Tenant Selection).

Posted:04/02/2015
Question:Does a PHA receive the admin fee for administering PBV as part of a RAD conversion? In other words, the money paid to PBRA is limited to RAD contract rents. Is the money paid to a PHA for PBV include the RAD Contract rents PLUS an admin fee?
Answer: Yes, the PHA that administers the PBV contract will receive monthly administrative fees under the Voucher program, beginning in the first full calendar year following conversion. This amount is not funded through the RAD contract rents but is funded from the larger Tenant Based Rental Assistance (TBRA) account.

Posted:11/03/2014
Question:Eligibility is grandfathered for public housing residents that occupy units converted to PBV via RAD. Would this grandfathering also apply to residents that were working through their Earned Income Disregard periods? In public housing, the EID eligibility is not limited to persons with disabilities as it is in Section 8. I am assuming that their EID eligibility would continue through to completion and during their tenancy in the PBV unit. However, wanted to confirm that here.
Answer:See pages 42 and 43 of Notice PIH-2012-32 REV-1 that discuss the continuation of Earned Income Disregard. Also see pages 39 and 40 that discuss the process for phasing in the rent increase that would occur at the end of the EID period.

Posted:10/06/2014
Question:We are preparing to occupy our RAD site, however we do not know the process for 50058 submission. Is there a RAD program code for the 50058? Further should we submit a code "10" when the voucher is issued and a code "1" 50058 when the resident moves in? Also, will be 50058 be submitted as a public housing or housing choice voucher, both have different and distinct reporting information? Without a RAD program code HUD will not be able to actively track the success of the RAD program through the 50058 submission process.
Answer:The 50058 should be filled out as it normally is for the Project-Based Voucher program, including completing Section 11 of the Form. In addition, the PHA should enter in line 2N “RADPH.” Action Code 10, Issuance of a Voucher, does not apply under the PBV program

Posted:08/21/2014
Question:When is the first REAC inspection from the time a redeveloped unit is occupied? We understand that the resident has a move in inspection done by the HA and that they are not re-screened for one year after moving in to the permanent unit.
Answer:Under PBRA conversions, a physical inspection will take place as soon as possible after closing. If rehabilitation is occurring at the project and the project has FHA insurance, the first inspection will not occur until the rehabilitation is complete. If rehabilitation is being done and the project does not have FHA financing, the owner can submit a formal written request to the local multifamily field office to postpone the initial inspection until rehabilitation is complete. After the initial inspection, the schedule of subsequent physical inspections will be determined by 24 CFR Part 200 Subpart P.

Posted:07/17/2014
Question:How is RAD responding to concerns of commercial lenders and Low-Income Housing Tax Credit (LIHTC) investors with regard to foreclosure matters and continued rental assistance?
Answer:HUD has posted a standard rider to the public housing conversion RAD HAP contracts to address the concerns LIHTC investors have raised while also protecting the long term affordability of properties converting under RAD, and adhering to the statutory provisions for ownership and control. These riders document and set forth conditions for: providing notice to LIHTC investors; accepting the investor’s offer to cure on behalf of a defaulted owner; providing HUD consent to the transfer of the investor’s interest in the ownership; and pre-approving replacement of the general partner or managing member with the special limited partner or similar entity for a limited period of time in order to facilitate an acceptable permanent replacement. To access these riders, go to www.radresource.net > Contracts & Closing Documents. HUD is also in the process of drafting standard riders to the Use Agreement and the public housing conversion RAD HAP contracts to clarify that HUD will not assert an interest to prohibit a lender from foreclosing when there is cause, but that the Use Agreement -- which establishes affordability requirements -- survives foreclosure by its terms and that continuation of HAP assistance requires HUD consent. It is also HUD’s goal through these riders to provide for a limited continuation of HAP assistance if the lender or its designee comes into ownership of the project in accordance with its rights under the loan documents. When final, these riders will be published on the RAD website. Until these riders are finalized, HUD has developed several provisions that can be provided by the RAD Closing Coordinator to assist with transactions currently moving into the closing phase. These provisions address lender concerns while also protecting the long term affordability of properties converting under RAD, and adhering to the statutory provisions for ownership and control. Importantly, neither rider changes RAD statutory and RAD notice requirements around ownership and control. The RAD Use agreement and RAD HAP contract – two means through which long-term affordability for residents are secured – survive foreclosure, leaving current and future residents protected.

Posted:07/17/2014
Question:My PHA is the recipient of a ROSS Service Coordinator Grant and plans to submit a RAD Application. Will we be permitted to continue assisting families (who, because of the RAD conversion) will be residing in non-public housing units) after the conversion?
Answer:Yes. Section 1.5H of the Notice provides that residents who are currently participating in ROSS may continue to participate after the RAD conversion for the term of ROSS grant. Also, with the PBRA HAP, the converted properties will be eligible to apply for the Multifamily Housing Service Coordinator Grants which are available to subsidized properties. These competitive grants are offered through a Notification of Funding Availability to serve properties designated as elderly and/or disabled. [Revised 7.17.14]

Posted:07/15/2014
Question:Who is responsible for monitoring the provision of supportive services, the PHA or the owner? Any guidance that you can provide would be greatly appreciated
Answer:The responsibility for monitoring, per 24 cfr 983.56(b)(2)(ii)(C), is on the PHA. “The PHA must monitor the excepted family’s continued receipt of supportive services and take appropriate action regarding those families that fail without good cause to complet either supportive services requirement. The PHA administrative plan must sate the form and frequency of such monitoring.”

Posted:07/08/2014
Question:Can an owner administer the PBV waitlist?
Answer:The obligation that the waiting list be maintained by the administering PHA is statutory. A PHA may choose to use a broad HCV waiting list, a PBV waiting list, or a project-specific PBV waiting list, but it is still the responsibility of the PHA to maintain that waiting list.

Posted:06/02/2014
Question:If a public housing-only PHA converts its entire inventory to RAD, does it need to submit one last FASS-PH report (for that last partial or full year)?
Answer:Yes. Because it received Federal funds for a portion of that fiscal year, the PHA will need to submit a close-out FDS.

Posted:05/14/2014
Question:Our PHA is pursuing a RAD conversion, and we will be transferring the property to a new single asset entity. Does the new entity have to have a separate board of directors?
Answer:There is no RAD requirement that a new single asset entity have a separate board of directors. Check with your financing partners (and your local legal counsel) to see if they have any requirements. Outside the public housing community, it is common for nonprofit housing owner-developers to have a single board of directors governing the nonprofit itself and all of its 100% owned single asset entities.

Posted:05/14/2014
Question:Our PHA is pursuing a RAD conversion. We are converting to PBRA, we are not using tax credits, and we do not plan on taking out a first mortgage loan. Accordingly, there is no requirement that we transfer the property to a single asset entity. However, the RAD Notice strongly encourages a single asset entity. Why is that?
Answer:The short answer is that single asset entities are the industry standard form of ownership for apartment properties, single asset entities facilitate accurate accounting and management reporting, and single asset entities make it easier for management and the board to understand trends in the portfolio.

Posted:02/03/2014
Question:If a PHA converts a complex or AMP to RAD, is the property still maintained by the PHA’s maintenance staff and office staff?
Answer:Under RAD, the project owner (in this case, the PHA) would be free to implement any property management approach that is acceptable under the HAP and that is acceptable to lenders and other funders. If you convert to PBRA, and you self-manage, you will be required to complete a Management Agent Certification, HUD Form 9839.

Posted:10/17/2013
Question:In considering a RAD conversion from public housing to PBRA, would the Form HUD-90105a Model Lease for Subsidized Programs be required under PBRA?
Answer:Yes. The current form of model lease, and instructions for implementing the model lease, are contained in Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs (see Appendices 4-A and 4-E). Additionally, PIH Notice 2012-32 REV 1 requires additional resident rights be included in the lease.

Posted:10/17/2013
Question:Once conversion is completed, are there restrictions regarding the form of lease used or can a PHA use a lease of their choosing?
Answer:For RAD PBV conversions, the normal voucher program lease requirements are applicable. For RAD PBRA conversions, the normal PBRA lease requirements are applicable. See HUD Handbook 4350.3 Chapter 6. In both cases, the lease must include the tenant rights as required in PIH Notice 2012-32 REV 1

Posted:10/17/2013
Question:What accounting/book-keeping measures must be instituted if only a portion of our properties participate in RAD (some remain traditional PHA properties receiving funds from HUD while others convert)? As a part of that financial question, can staff be allocated to each program or will separate staff need to be used?
Answer:Be sure to talk to each of your funders. First mortgage lenders, in particular, are likely to have accounting / bookkeeping requirements. RAD itself has very few such requirements: a) All RAD conversions are subject to a requirement to provide access to records (including project financial statements and operating data), if HUD so requests. b) RAD PBRA conversions must submit annual financial statements electronically to HUD; see the REAC-FASS website at http://www.hud.gov/offices/reac/products/prodmf.cfm. c) RAD projects that utilize FHA-insured first mortgage financing will be subject to FHA's accounting and bookkeeping requirements; contact your FHA multifamily lender. Your question concerning whether it is acceptable to allocate staff costs to the RAD project should be posed to your first mortgage lender. If you will be using FHA-insured financing, HUD recommends that before adopting any allocations, you consult with accountants, property managers, or other experts who are very familiar with applicable FHA requirements.

Posted:10/01/2013
Question:When an authority has a CHAP Agreement, but has not yet closed, are those units still to be inspected by REAC if that is scheduled prior to the closing?
Answer:Upon CHAP award, affected units will be exempt from PHAS scoring. However, normal public housing inspections continue until the RAD closing. [Updated 7.29.13]

Posted:08/13/2013
Question:We are converting almost all of our public housing through RAD. What happens to the community centers during this conversion, maintenance buildings, central office, etc.? All are non-Residential units but are there to support the residential units.
Answer:These are decisions that you will need to make. First, any non-dwelling structures that are on the same footprint of a converting project will become defederalized with the RAD conversion (assuming they do not receive any special federal funding). HUD expects that, in your situation, you will be operating a central office cost center after the RAD conversions. If you will be providing property management, the central office cost center would receive property management fees. The central office cost center would also receive cash flow distributions. From those revenues, the central office cost center would bear the expenses of providing property management services and of being the owner. If you follow this approach, most likely your central office would be retained by the PHA (not transferred to any RAD project) and used to house the central office cost center. Most likely, community centers and maintenance buildings that fall within the 'footprint' of a RAD project would be transferred to the RAD project along with the residential buildings. You would want to talk with your legal and financial advisors regarding a central community center (serving multiple properties) and regarding a central maintenance facility (serving multiple properties); the best option for these types of central facilities will vary depending on your specific circumstances.

Posted:05/21/2013
Question:Relative to future audits, I'm guessing a PH development converted to PBRA via RAD would be treated like any other 4350.1 property (Section 8 New Construction, 236, etc.) in that a separate audit would be required, but that the former PH property would no longer be included in the Housing Authority's Financial Data Schedule - is that right?
Answer:The RAD PBRA contract will require the electronic submission of annual financial statement data to HUD. However, the PHA will also record financials for the property under "Other Business" in FASS-PH.

Posted:03/05/2013
Question:Can a RAD project take on an Energy Performance Contract (EPC) after RAD closing?
Answer:After the RAD closing, the project will no longer be public housing, and the public housing EPC program would not be applicable. However, many PHAs are finding that RAD allows them, essentially, to create their own EPC. By locking in the current funding under RAD, the PHA will benefit from utility savings.

Posted:03/05/2013
Question:For a RAD project, is the utility consumption frozen at the RAD conversion?
Answer:Utility consumption, as a factor in determining utility subsidy, is only important in the public housing program. When the PHA converts, the RAD contract rents will be based on “current funding.” So, if a PHA has a high Utility Expense Level (UEL) under the public housing program, and the PHA can reduce that consumption following conversion (say, by making energy improvements),the PHA will benefit from those energy savings, i.e., HUD is locking in the funding to the PHA based on these higher consumption levels.

Posted:02/19/2013
Question:If a Mod Rehab property converts to PBRA under RAD, who administers the Tenant Certifications (the Housing Authority that now administers the Mod Rehab contract or a Performance Based Contract Administrator)?
Answer:Assuming that the owner converts to PBRA under the first component, the owner will administer the contract. If the owner converts to PBV, it will be the PHA.

Posted:02/19/2013
Question:If a Mod Rehab property converts to PBRA under the first component of RAD, would the property have HUD REAC inspections, or continue with local Housing Authority inspections?
Answer:Following the RAD closing, physical inspections would be through REAC for PBRA conversions.

Posted:02/19/2013
Question:In the sample RAD PBRA HAP contract for former Mod Rehab properties, it appears an AFS Audit will be required. Is this correct?
Answer:Yes, after the RAD closing the converted PBRA project would be subject to the REAC-FASS annual financial statement requirements. This is not applicable to PBV conversions.

Posted:02/19/2013
Question:The template PBRA HAP Contract for former Mod Rehab properties that is on the RAD website includes a provision that surplus cash can only be distributed once a year. Can this requirement be waived or modified for projects that do not have FHA financing?
Answer:No. The RAD template legal documents must be used without alteration. The restriction on cash flow only after closing of financial statements is true regardless of financing source.

Posted:01/22/2013
Question:How does the switch to a RAD HAP Contract affect the PHA's Admissions and Continued Occupancy Policy?
Answer:A project that converts under RAD will no longer be under the public housing program. Therefore, the ACOP will not apply. The owner must establish admissions and occupancy policy consistent with the program to which the project is applying. For conversions to PBV, these policies can be found in CFR 24 Part 983. For conversions to PBRA, these policies can be found in Handbook 4350.3

Posted:01/22/2013
Question:The RAD rent for our project is less than the FMR. If we convert a project to RAD will the RAD rents be included in the calculation of average rent for Section 8 and thus drop our agency's allocation and fee income?
Answer:RAD rents do not affect the baseline Section 8 rent calculation for the Agency and thus will not impact allocation or fees. The new voucher subsidy that will be issued to fund conversions to PBV will get renewed in the same manner as other Section 8 HAP. Further, a PHA will receive an admin fee for each new RAD unit.

Posted:10/22/2012
Question: Why wouldn’t the PHA be tax exempt from the real estate taxes?
Answer: Real estate tax exemption is governed by state and local law. In most cases, HUD believes PHAs will be able to retain their PILOT agreement. You should consult local counsel to make such a determination. Additionally, In some jurisdictions, nonprofits that provide affordable rental housing are exempt from real estate taxes, and such an exemption might be available to your PHA.

Posted:10/22/2012
Question: Since RAD is a demonstration program, do we have the option to use the HQS or UPCS?
Answer: It depends on whether you convert to PBV or PBRA. If you convert to project based vouchers, you are governed by the project based voucher rules, which is HQS. If you convert to multi-family section 8, or PBRA, that program, like public housing, is covered by uniform physical condition standards (UPCS) and there will be a UPCS inspection every year or once every 3 years depending on the score you receive.

Posted:10/18/2012
Question:Is RAD PBV eligible for vacancy loss and damages claim?
Answer:For the PBV program, vacancy loss is governed by 24 CFR 983.352; we did not change the rules for vacancy payments.

Category:Procurement
Posted:10/01/2013
Question:Are there any federal bidding or procurement requirements for the selection of developer or development partners (investors, lenders, contractors, architects/engineers, legal, consultants, etc.) associated with a public housing conversion and the completion of initial repairs?
Answer:PHAs must comply with conflict of interest requirements in the respective Project-Based Rental Assistance (PBRA) and Project-Based Voucher (PBV) programs. Additionally, PHAs must comply with any state and local requirements as well as any requirements established by the lenders or funders. Otherwise, the RAD program does not impose any federal bidding or procurement requirements in the selection of developer or development partners. Aside from the issue of selection of developer or development partners, public housing conversions may be subject to subsidy layering review (see Section 1.5.A of the Notice) as well as Davis-Bacon and Section 3 (see Sections 1.6.D.3 and 1.7.C.2). Additionally, with respect to pre-development costs, Section 1.5.A of the Notice reads: Prior to the approval of a project’s Financing Plan, a PHA may expend up to $100,000 in public housing program funds in related pre-development conversion costs per project. Predevelopment funds may be used to pay for materials and services related to proposed development and may also be used for preliminary development work. Public housing program funds spent prior to the effective date of the HAP are subject to public housing procurement rules. These rules continue to apply. [Updated 7.29.13]

Posted:10/01/2013
Question:The Notice provides that a PHA may use up to $100,000 in pre-development funds without prior HUD approval. We anticipate spending about $300,000 in architectural work, due diligence, legal, etc. prior to financial closing. Can the PHA put in these additional funds? Would they need to seek approval from their Transaction Manager?
Answer:If the PHA needs to spend more than $100,000 in pre-development costs, it can do one of the following: (1) request approval from HUD to exceed this amount, which would need to follow the normal public housing (24 CFR part 85) procurement rules, unless the PHA submitted a good-cause waiver, or (2) use non-public housing funds for these purposes, which would then be reimbursed at closing, if necessary. [Updated 7.29.13]

Posted:10/01/2013
Question:What are the PHAs' procurement rules following award of the CHAP? Are the PHA's RAD post-award development activities exempted from HUD PHA procurement rules (e.g. Part 85) ? The RAD FAQs provides guidance on pre-award procurement requirements but not after the CHAP issuance.
Answer:Public housing procurement rules apply until the RAD closing has occurred. [Updated 7.29.13]

Category:RAD with Public Housing Programs
Posted:07/24/2017
Question:HUD requires us to have one Resident Commissioner. Our Resident Commissioner lives in a property that has been converted and renovated under the RAD program. Is he still eligible to serve on the Board of Commissioners as a Resident Commissioner?
Answer:The Resident Commission must be a public housing resident, so they are not eligible to serve. However, per 24 CFR 964.415 the resident board member could be allowed to finish out his/her current term. In addition, the PHA and residents should be aware of the Resident Participation component of RAD. Here is a Fact Sheet that may help: https://portal.hud.gov/hudportal/documents/huddoc?id=RFS6_Participation_Funding.pdf”

Posted:07/30/2015
Question:As it relates to the 2015 ROSS NOFA, are you eligible if you sign the final RAD contract before the awards for ROSS are made, or are you ineligible once the CHAP is received?
Answer:The RAD units are ineligible once the CHAP is received. See the ROSS NOFA Section IIIlA: "RAD Provision. Units that have been approved for RAD conversion or units that have already converted are not eligible to be served under the ROSS-SC NOFA. PHAs that are submitting RAD applications for some or all of their units, but that have not received approval during the ROSS application period, must withdraw their request for a ROSS grant as soon as they receive a RAD Commitment to enter into a Housing Assistance Payment (CHAP)."

Posted:07/24/2015
Question:Under what circumstances can units covered by a CHAP Award be considered "Units Undergoing Modernization"?
Answer:Units in a project with CHAP approval, which the PHA plans to modernize, that are vacant because a PHA has not reoccupied them in preparation for modernization pursuant to a for RAD conversion, can be considered as “Units Undergoing Modernization,” provided they comply with 24 CFR 990.145 (excerpted below). To be eligible, such vacant units must need to be vacated for the modernization work to occur. Such vacant units may be categorized as undergoing modernization for a maximum of two years (24 months) prior to the RAD conversion (HAP Effective Date). The units must be approved by the Field Office, and the unit status correctly reflected in PIC. The RAD conversion and planned modernization must be in: 1) A HUD approved PHA Annual Plan for non-qualified PHAs (24 CFR 903); 2) A HUD approved 5-Year Plan for qualified PHAs (24 CFR Part 903) (if no Capital Funds are being used as part of the modernization, a narrative description of the work, including the projected start and completion date, should be included in the Capital Improvements section of the Plan); or 3) a HUD approved Capital Fund Plan (24 CFR 905.300) if Capital Funds are also being used for modernization Units converting to RAD that will not be modernized are not eligible to be categorized as Units Undergoing Modernization. § 990.145 Dwelling units with ap¬proved vacancies. (a) A PHA is eligible to receive oper¬ating subsidy for vacant public housing units for each unit month the units are under an ACC and meet one of the fol¬lowing HUD-approved vacancies: (1) Units undergoing modernization. Vacancies resulting from project mod-ernization or unit modernization (such as work necessary to reoccupy vacant units) provided that one of the fol¬lowing conditions is met: (i) The unit is undergoing moderniza¬tion (i.e., the modernization contract has been awarded or force account work has started) and must be vacant to perform the work, and the construc¬tion is on schedule according to a HUD-approved PHA Annual Plan; or (ii) The unit must be vacant to per¬form the work and the treatment of the vacant unit is included in a HUD-approved PHA Annual Plan, but the time period for placing the vacant unit under construction has not yet expired. The PHA shall place the vacant unit under construction within two federal fiscal years (FFYs) after the FFY in which the capital funds are approved.

Category:REAC/HQS Inspections
Posted:04/02/2015
Question: Our PHA received a RAD Portfolio award for all of our public housing units. We have been contacted by a REAC inspector that wants to schedule the annual inspections for those RAD units. We understood that these units would not be inspected. Are we to arrange for these inspections, or are we exempt?
Answer: You should arrange for the inspections. REAC will continue to inspect RAD units after CHAP issuance; the exemption discussed in the RAD Notice is that no score will be entered for PHAS purposes.

Category:Rehabilitation
Posted:03/15/2017
Question:We converted to PBV and units were vacated due to rehab and thus we are eligible to receive Rehab Assistance Payments (RAP). How do we report the use of the RAP funds in VMS?
Answer:The VMS Users Manual instructs PHAs to report Rehab Assistance Payments in the RAD 1 HAP Expense field in VMS. PHAs should not report the units as leased.

Posted:02/22/2016
Question:How can a PHA determine how many units under HAP contract are eligible for Rehab Assistance Payments?
Answer:During the period of rehabilitation or construction as identified in the HAP Contract, the maximum number of units for which a Project Owner can receive RAD Rehab Assistance Payments is limited to the number of units eligible for Operating Fund subsidy prior to conversion. The number of units eligible for Operating Fund subsidy prior to conversion is equal to the number of Total Eligible Unit Months (EUMs) on the project’s Form-52723 submission (Section 2, Column B, Row 15.) divided by twelve and rounded down to the nearest whole number. For conversions where only a portion of a PIC Development has converted, the number of EUMs associated with the converted portion can be derived from the Initial Year Funding Tool (See “2a. Operating Fund” worksheet, cell R28).

Posted:10/20/2015
Question:For RAD transactions subject to Davis Bacon, where should the PHA/owner submit certified payrolls?
Answer:Certified payrolls should be submitted to the HUD Labor Relations Specialist with jurisdiction for the applicable region. Please see HUD Handbook 1344.1 Rev 2 Chapter 4, which establishes the requirement for submission of the certified payrolls (Link: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/sech/13441)

Posted:07/24/2015
Question:Under what circumstances can units covered by a CHAP Award be considered "Units Undergoing Modernization"?
Answer:Units in a project with CHAP approval, which the PHA plans to modernize, that are vacant because a PHA has not reoccupied them in preparation for modernization pursuant to a for RAD conversion, can be considered as “Units Undergoing Modernization,” provided they comply with 24 CFR 990.145 (excerpted below). To be eligible, such vacant units must need to be vacated for the modernization work to occur. Such vacant units may be categorized as undergoing modernization for a maximum of two years (24 months) prior to the RAD conversion (HAP Effective Date). The units must be approved by the Field Office, and the unit status correctly reflected in PIC. The RAD conversion and planned modernization must be in: 1) A HUD approved PHA Annual Plan for non-qualified PHAs (24 CFR 903); 2) A HUD approved 5-Year Plan for qualified PHAs (24 CFR Part 903) (if no Capital Funds are being used as part of the modernization, a narrative description of the work, including the projected start and completion date, should be included in the Capital Improvements section of the Plan); or 3) a HUD approved Capital Fund Plan (24 CFR 905.300) if Capital Funds are also being used for modernization Units converting to RAD that will not be modernized are not eligible to be categorized as Units Undergoing Modernization. § 990.145 Dwelling units with ap¬proved vacancies. (a) A PHA is eligible to receive oper¬ating subsidy for vacant public housing units for each unit month the units are under an ACC and meet one of the fol¬lowing HUD-approved vacancies: (1) Units undergoing modernization. Vacancies resulting from project mod-ernization or unit modernization (such as work necessary to reoccupy vacant units) provided that one of the fol¬lowing conditions is met: (i) The unit is undergoing moderniza¬tion (i.e., the modernization contract has been awarded or force account work has started) and must be vacant to perform the work, and the construc¬tion is on schedule according to a HUD-approved PHA Annual Plan; or (ii) The unit must be vacant to per¬form the work and the treatment of the vacant unit is included in a HUD-approved PHA Annual Plan, but the time period for placing the vacant unit under construction has not yet expired. The PHA shall place the vacant unit under construction within two federal fiscal years (FFYs) after the FFY in which the capital funds are approved.

Posted:09/08/2014
Question:If a PHA has accessibility improvements identified in the PCA, can it perform that work post-closing as part of the scope of immediate repairs?
Answer:Critical repairs are repairs that must be done on an accelerated schedule, including health and safety issues (such as an improperly vented gas appliance). Note that identified accessibility modifications that pose imminent health and safety risks, may be considered critical repairs. All critical repairs must be completed prior to the RAD closing. If your property has a critical repair that you believe cannot be completed prior to RAD closing due to time constraints, please discuss this with your RAD Transaction Manager who may permit the repair to be moved into rehab as long as it can be demonstrated that doing so does not present an immediate health or safety hazard to residents. Rehab items also must be done, but the schedule is governed by the rehab provisions of the RAD Conversion Commitment. Year One items typically reflect systems or components that were functioning at the time of the inspection and are anticipated to require replacement in the first year. Whether and when these are done will be up to the property owner. A typical example would be a 20 year roof that is not leaking but that either has reached 20 years of age or will reach 20 years of age within the first year after the closing. The Reserve for Replacement would contain sufficient funds to pay for the roof replacement, and the timing of the roof replacement would be up to the owner.

Posted:07/29/2014
Question:I am pursing a 2nd component conversion. Under the wording of the new PBV Final Rule, I am unclear if the transaction will be subject to Davis Bacon wage rates. Can you please confirm?
Answer:In the June 25, 2014 final rule, HUD clarified the reference to statutory labor standards provisions that are applicable to assistance under the PBV program. The Final Rule states that when the nature of the work planned to be performed prior to execution of a Housing Assistance Payments (HAP) contract, or after HAP contract execution within such post-execution period as may be specified by HUD, constitutes development of the project, statutory Davis-Bacon requirements may apply to existing housing (which is not subject to an agreement to enter into a housing assistance payments contract, or AHAP). The Department is preparing additional guidance to clarify when Davis Bacon requirements apply to existing PBV housing, including 2nd Component RAD transactions. In the meantime, we offer the following general rule of thumb: if the project will undergo rehabilitation in connection with the RAD conversion (either pre or post HAP contract execution), the development team should budget assuming Davis Bacon wage rates will apply.

Posted:06/03/2014
Question:My PHA previously met the standard for accessibility across the public housing portfolio. However, now that we are converting to RAD, there are individual projects that exceed the standard and some that do not meet the standard (but, again, overall we are in compliance). When we convert to RAD, will we be “grandfathered” in, or will we have to have all projects meet the accessibility standards on their own?
Answer:Each project covered under a HAP contract must meet the 5%/2% accessibility standards under Section 504 if the project is undergoing substantial alterations.

Posted:06/02/2014
Question:A PHA receives a CHAP award and, because of the scope of repairs, chooses not to re-fill vacancies, waiting instead until conversion to make repairs. How would these units be treated under the Operating Fund Program for the period prior to conversion?
Answer:Units vacant for RAD can be considered as “Under Vacant for Modernization” per the 990 regulation. For 2014, the RAD conversion would have to be in the PHA Plan. The months in 2013 during the reporting period when the unit was vacant for RAD purposes must be reflected in PIC as a unit status change. Additionally, if it is intended that the unit receive funding in 2014 as “Unit Vacant undergoing Modernization” but the current eligibility in the HUD-52723 indicates the unit as simply vacant then a revision will need to be submitted. The revision deadline for 2014 is June 27th. The PHA can also reference the Notice PIH 2011-7 Guidance IMS/PIC Development

Posted:06/02/2014
Question:How can I forecast the income my project is eligible to receive in Rehab Assistance Payments?
Answer:Rehab Assistance Payments are provided under the HAP contract to provide subsidy payments to the property during the period of rehab. Units are only eligible for Rehab Assistance Payments if they were eligible for Operating Subsidy prior to conversion (i.e., included in “Eligible Unit Months” in the Form 52723 for the Calendar Year of conversion) and are uninhabitable during the period of rehab or construction. Rehab Assistance Payments are sized by HUD based on the Operating Fund and Capital Fund subsidy that formed the basis of a property’s RAD rent. For example, a property has a RAD rent of $500 PUM, which was based on Operating and Capital subsidy of $300 and tenant rents of $200. The HAP contract would include a Rehab Assistance Payment of $300 (adjusted by the OCAF, if the rents were due an OCAF adjustment). The PHA can find these amounts in the validation tab of the original RAD application.

Posted:05/30/2014
Question:What is the process for clearing critical repairs that have been completed?
Answer:The RAD Conversion Commitment contains an exhibit (Ex. G) for all critical repairs associated with the RAD conversion and states that they must be completed prior to closng. The Owner must provide a written certification that all critical repairs listed in Exhibit G of the RCC have been completed prior to closing. This certification can be made via the Consolidated Owner Certification template which is available on www.radresourc.net > Contracts & Closing Documents. [Updated 5.30.14]

Posted:04/29/2014
Question:I am a PHA with a CHAP and would like to complete some repairs prior to the closing of the RAD conversion. Is this allowed?
Answer:All repairs identified as "critical" in the RAD PCA must be completed prior to closing. If the PHA wishes to complete additional repairs to the property prior to closing, it is permitted to do so but must follow all applicable Public Housing rules. It is important to remember that until the RAD conversion has closed, the property is still considered Public Housing and is subject to Public Housing rules. The PHA must also make sure the Financing Plan and RAD PCA are updated to reflect the changes to the repair schedule and scope of work. Please note that RAD conversions pursuing FHA financing should discuss the completion of additional repairs with their Transaction Manager as additional approvals may be necessary.

Posted:02/03/2014
Question:Once awarded, what is the time frame to complete capital improvements?
Answer:The Financing Plan and RCC must include a reasonable timeline for completion of all rehabilitation items acceptable to HUD, generally 12 to 18 months from the date of closing the conversion and any financing, depending on the scope of rehabilitation funded. (Notice PIH-2012-32 REV-1 page 79).

Posted:12/09/2013
Question:What is the trigger for Davis-Bacon and Section 3 under a RAD conversion?
Answer:Davis-Bacon and Section 3 are triggered by any any rehabilitation or new construction performed as part of the “Year One” repair schedule defined by the RPCA, Financing Plan and Rad Conversion Commitment. In addition, and substantial repairs undertaken prior to conversion (i.e., pre-conversion rehabilitation with Capital Funds).

Category:Relocation
Posted:04/20/2018
Question:What is RAD's definition of "personally served" regarding the delivery of GIN notices?
Answer:The GIN should be hand delivered to the head of household and the PHA should get written acknowledgement of receipt for their records. Leaving the GIN in a mailbox or under the door is not sufficient. HUD needs to know that the head of the household actually received the GIN and that requires a signature by the head of household.

Posted:10/11/2017
Question:When does a resident first get the Right to Return? With the issuance of the RIN? The CHAP? Some other milestone?
Answer:Under Section 6 of the RAD Relocation Notice (H 2016-17), eligibility for protections under said Notice apply to any person residing at the Converting Project and who is legally on the public housing lease, has submitted an application to be added to an existing lease, or is otherwise in lawful occupancy at the time of CHAP issuance. Consequently the Right to Return would apply to anyone meeting these conditions at the time of CHAP issuance.

Posted:06/01/2017
Question:When there is a transfer of assistance (ToA) to an occupied, non-public housing site, are occupants of the receiving site entitled to RAD or other protections?
Answer:When the project-based assistance is transferred from one site (transferring site) to another (receiving site) in connection with a RAD conversion, generally, residents of the transferring site have protections and rights under RAD. Occupants of the receiving site are not generally entitled to RAD protections and rights due to the incoming assistance. However, if acquisition, rehabilitation or demolition is planned and will cause occupants of the receiving site to move, the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) may apply. In that event, the project owner is required to provide a General Information Notice (GIN) to occupants of the receiving site “as soon as feasible”. Under these circumstances, HUD anticipates that “as soon as feasible” will generally mean no later than when the site is identified to receive the proposed transfer of assistance in connection with the RAD conversion. Where a receiving site was not identified in the initial RAD application or CHAP, a GIN should be provided at the time the site is identified, or more specifically, when the PHA submits a revised CHAP application identifying the site, but no later than 30 days after submitting the revised CHAP application identifying the receiving site. Project owners and PHAs should be mindful that although occupants of the receiving site may not be eligible for RAD related protections and assistance, occupants that are required to move may be protected and eligible for relocation assistance and payments under the URA. In some cases, where CDBG or HOME funds are involved, those occupants may also be protected and eligible for relocation assistance and payments under section 104(d) of the Housing and Community Development Act (section 104(d)). Additional information and resources on the URA and section 104(d) are available on HUD’s Acquisition and Relocation website at www.hud.gov/relocation

Posted:05/26/2017
Question:The Housing Authority will be doing a transfer of assistance. However, some residents may decide that they would rather not relocate to the Transfer of Assistance site. If a resident does not wish to move to the Transfer of Assistance site, may the PHA allow these residents to initiate a move to other nearby project-based Section 8 RAD housing owned by the PHA? If so, can such moves be treated by the PHA similarly to a “Resident Initiated Public Housing Transfer Related to the RAD Transaction” as described in Section 7.4 of the RAD Notice Regarding Fair Housing and Civil rights Requirements and Relocation Requirements (PIH 2016-17)?
Answer:We believe this is addressed on pages 45-46 of the RAD Relocation Notice- see excerpt below. If this scenario applies to your project, please contact your RAD Transaction Manager so that HUD approval can be obtained. - "If HUD determines that the distance from the Converting Project to the site of the Covered Project is significant and the resident could not reasonably be required to move to the new site, then HUD will require the PHA to adjust project plans to accommodate the resident in an assisted unit (e.g., a public housing unit, some other project-based Section 8 unit or a market unit 46 with a housing choice voucher) within a reasonable distance of the site of the Converting Project. HUD will evaluate whether this requirement applies on a case by case basis, considering whether the distance would impose a significant burden on residents’ access to existing employment, transportation options, schooling or other critical services. Accommodating the resident may also be satisfied by the resident’s consent to an alternative housing option pursuant to Section 6.10. The requirement set forth in this paragraph is in addition to all protections, including, for example, the offer of comparable replacement dwellings, which are required in all instances where a transfer of assistance is subject to the URA and/or Section 104(d)."

Posted:11/06/2015
Question:What is the policy with respect to tenants who were not properly screened upon initial occupancy and do not qualify for a particular public housing unit?
Answer:RAD does not allow re-screening of tenants, meaning residents cannot be rescreened because of a RAD conversion. PHAs should be following their occupancy policies up until the RAD closing. These policies should outline when re-certifications and interim re-examinations may take place.

Posted:08/27/2015
Question:We are moving tenants under Transfer of Assistance. If we offer the dislocated tenants a new unit at the receiving site and they refuse the new site is our obligation terminated? What if we offer a voucher after the refusal, are there any other obligations long term. (We would still offer relocation payment.)
Answer:In the situation you mention, your obligation is limited to the relocation assistance that you provided in the RAD Notice of Relocation. You may choose to, but are not required to, offer relocation assistance in addition to what you provided in the RAD Notice of Relocation .You should consult with local counsel regarding any local legal actions regarding legal actions/termination of assistance.

Posted:08/27/2015
Question:What happens if tenants who are relocated off-site choose not to come back? What is the PHA's responsibility for relocation costs for such tenants? Is there any impact on the RAD PBRA or PBV Contract?
Answer:Your question describes a tenant who accepts temporary relocation assistance but later decides not to return to the completed project. In this situation, the PHA's responsibility for relocation assistance is limited to the assistance that the PHA offered (and the tenant accepted) in the RAD Notice of Relocation. See Notice H-2014-09 / PIH-2014-17 "Relocation Requirements under the REntal Assistance Demonstration (RAD) Program, Public Housing in the First Component". In the situation you describe, the RAD project itself, and the RAD HAP Contract, are unaffected, except that the RAD project no longer needs to hold a unit for the tenant who decided not to return.

Posted:07/30/2015
Question:If a family is currently over-crowded in their unit according to HQS standards and there is no way to accommodate them in the building because there are no vacancies, is the new owner obligated to honor the family’s right to return to the property or to find the family housing elsewhere because the owner would be violating the over-crowding standard? If it’s the latter, what options are the new owner entitled to give to this family?
Answer:In the situation you describe, the owner must offer the family a unit in the converted project. The owner may also choose to offer another unit elsewhere that is of the proper size, but the family may not be required or pressured to accept the alternative unit.

Posted:04/21/2015
Question:We plan to offer Housing Choice Vouchers to residents who choose permanent relocation and waive their right to return. If a resident accepts the voucher, does that satisfy RAD and URA relocation requirements and relieve the PHA of its relocation obligations?
Answer:No. Vouchers are a useful tool in the relocation process and can be part of the relocation assistance package offered to a public housing resident. However, the offer and use of a voucher alone does not satisfy all applicable RAD and URA relocation requirements. For example, the URA requires that displaced residents be provided relocation advisory services and moving options and payments. Additionally, the URA generally provides that a resident cannot be required to move permanently before receiving at least 90 days advance written notice of the earliest date on which they will be required to move. If the 90-day notice is issued before a comparable replacement dwelling is made available to the resident, the notice must inform that the resident that they will not have to move earlier than 90 days after a comparable replacement dwelling is made available. Residents that will be displaced may not be required to move unless at least one, and when possible, three or more comparable replacement dwellings are made available to them in accordance with 49 CFR 24.204(a). When Housing Choice Vouchers are reflected in a PHA’s offers of comparable replacement dwellings, the PHA must ensure that comparable replacement dwellings are made available to residents before displacement. This includes ensuring that the identified dwellings are eligible to participate in the HCV program. PHAs also need to determine whether any resident will be eligible to receive a replacement housing payment (gap payment) determined in accordance with 49 CFR 24.402. For further guidance on the Housing Choice Voucher (HCV) program and its applicability to the URA and RAD, please refer to the following online resources: • HUD RAP Newsletter- Vol. 5 No. 1, dated May 15, 2014, is available at: http://portal.hud.gov/hudportal/documents/huddoc?id=HUD_RAP_Vol5_No1.pdf • HUD Handbook 1378 – Chapter 2-6 “gap payments” when using a voucher is available at: http://portal.hud.gov/hudportal/documents/huddoc?id=1378c2CPDH.pdf • The RAD Relocation Notice is available at: http://portal.hud.gov/hudportal/documents/huddoc?id=RAD_Notice2.pdf

Posted:11/24/2014
Question:Does the Uniform Relocation Act require an owner to be financially responsible for the cost of packing a resident’s belongings if the resident is being moved on site, one time (as opposed to off site, then returning to the property). I know the owner is responsible for the cost of the move itself. I’m just not sure about the requirement to have movers pack the belongings.
Answer:As provided in Footnote 15 of the RAD Relocation Notice (H 2014-09/PIH 2014-17), the PHA must provide reimbursement for all reasonable out-of-pocket expenses incurred by a resident in connection with the resident’s permanent move to another unit within the same building/complex. The PHA has the option of undertaking the move itself. If the PHA chooses to do so, the Notice provides that it is the PHA’s responsibility to pack and move the resident’s belongings and household goods, if the resident so desires. If the resident prefers to pack their own belongings, the PHA may nonetheless still be responsible for reasonable out-of-pocket expenses that the resident incurs in connection with the move, including costs associated with packing and unpacking of personal property. The PHA is responsible for making a reasonableness determination with respect to a resident’s claim for reimbursement. If the PHA does not undertake the move itself, the PHA should be aware that the cost of packing and unpacking personal property is considered to be an eligible actual moving expense under URA regulations at 49 CFR 24.301(g)(2).

Posted:10/14/2014
Question:Are security or utility deposits for replacement housing units considered a reasonable relocation expense?
Answer:URA regulations consider refundable security and utility deposits to be an ineligible expense in connection with a permanent move. However, in the context of temporary relocation, HUD policy allows for a PHA to advance funds for such deposits under a repayment agreement or pay such deposits on behalf of a temporarily relocated resident (provided any refund will be made to the PHA). For more information, see paragraph 2-7(A)(3) of HUD’s Relocation Handbook, HUD Handbook 1378.

Posted:10/14/2014
Question:Can relocation take place before closing/RAD Conversion?
Answer:Relocation may not begin until the date of closing. However, in rare cases, some project plans may necessitate relocation prior to closing. With prior HUD approval, for projects involving acquisition, PHAs may relocate residents prior to the closing date. PHAs must contact their assigned RAD transaction manager (TM) to discuss plans as early as possible in the process to ensure compliance with all URA and RAD requirements. PHAs should refer to Section 9: Initiation of Relocation of Notice H 2014-09/PIH 2014-17 for further information and requirements related to relocation prior to closing.

Posted:10/14/2014
Question:Can the PHA charge residents fees for missing move dates?
Answer:According to federal public housing rules, PHAs have limited abilities to charge additional fees unless permitted by state and local law. PHAs should consult with local counsel and review their lease terms to determine whether or not such fees would be allowed.

Posted:10/14/2014
Question:How is the proration calculated? i.e., if the PHA pays for the move, for example $1200 – and the family has ineligible members, would the family have to pay back the prorated portion to the PHA?
Answer:Moving expenses provided for an eligible family that includes displaced persons that are lawfully present and persons that are not lawfully present in the United States are to be calculated based on the proportion of lawful occupants to the total number of occupants, except where the move is undertaken by the PHA from one public housing unit to another public housing unit and is set at a flat rate (that is, not based on the number of eligible individuals in the family). As an example, if 3 out of 5 total occupants are found to be eligible to receive relocation assistance, then the family is eligible to receive assistance to cover 3/5 (or 60%) of the moving expenses that the family would otherwise have been eligible to receive. For additional information, please see Frequently Asked Questions attached to an August 9, 1999 Federal Highway Administration memorandum relating to Section 104 of the URA (available at: http://www.fhwa.dot.gov/real_estate/uniform_act/relocation/illegaqa.cfm). Please note that when a PHA undertakes the move at no cost to the resident, the PHA is responsible for doing so in accordance with all applicable Public Housing requirements, including any requirements that govern the provision of assistance to persons that are not U.S. citizens or lawfully present resident noncitizens. If a PHA undertakes the family’s move at no cost to the family, a subsequent discovery that the family contains an ineligible family member does not justify seeking repayment from the family. However, the PHA should address the issue to ensure that the overpayment is not charged to public housing funds or characterized as an eligible moving expense under the URA.

Posted:10/14/2014
Question:My deal is closed. I’ve converted my units to PBRA. Can my relocation plan involve relocating families temporarily to other public housing units?
Answer:Yes, a PHA can move families temporarily into available public housing units as long as the PHA’s public admissions and occupancy procedures allow for this. Families temporarily relocated to public housing units would be treated as public housing residents during that period (e.g. the family would use a public housing lease and the PHA could consider the unit occupied for purposes of the Operating Fund subsidy, etc.). PHAs should note that the temporary relocation unit must be decent, safe, and sanitary.

Posted:10/14/2014
Question:What are the ramifications for residents who absolutely will not move – due to illnesses and severely disabled HHM’s? The PHA’s legal counsel is addressing this from the legal standpoint, however do you have any advice from the relocation perspective?
Answer:This issue involves a temporary move and the residents are expected to return to the units. Generally, assuming that the relocation process is done in accordance with the RAD Relocation Notice, H 2014-09/PIH 2014-17, the temporary relocation of residents should proceed smoothly. Keep in mind that the Notice gives more specific requirements for relocating residents with disabilities. See Notice at §10, pages 10-12. Specifically, PHAs should consult the disabled residents’ information to provide them with replacement housing appropriate to their accessibility needs. To the extent the PHA has complied with these Notice requirements and the residents still refuse to move, the PHA should consult State and local law for any legal remedies.

Posted:10/14/2014
Question:What is the best way to determine a resident’s moving benefits?
Answer:The URA rules for moving expenses for a displaced person are located at 49 CFR 24.301-24.306. Additional guidance on expenses relating to residential moves is found at Paragraph 3-2 of HUD Handbook 1378, “Tenant Assistance, Relocation and Real Property Acquisition,” http://portal.hud.gov/hudportal/documents/huddoc?id=1378c3CPDH.pdf. PHAs participating in RAD should also follow the guidance regarding moves in Appendix 1 of the RAD Relocation Notice, H2014-09/PIH2014-17. If not all members of the family being relocated are persons lawfully present in the United States, proration of moving expenses may be necessary. See other FAQs on proration for more information.

Posted:10/14/2014
Question:When do resident relocation requirements begin, at CHAP Award or at Closing? Our PHA wants to make sure they are providing required notices and assistance on time.
Answer:PHAs should begin to engage residents on relocation matters as soon as they begin to develop any RAD development or rehabilitation plans that may involve relocation. PHAs should refer to Section 4: Relocation Planning of Notice H 2014-09/PIH 2014-17. The chart provided in this section presents a general sequencing of relocation planning activities within the RAD milestones.

Posted:10/14/2014
Question:When is proration of moving expenses necessary, and why?
Answer:Section 104(a) of the URA, and implementing regulations at 49 CFR 24.208, provide that a displaced person is not eligible to receive relocation payments or other assistance under the URA if the person is an alien not lawfully present in the United States. This general rule is subject to the hardship exception discussed in another FAQ. To comply with section 104 and the regulations, moving expenses must be prorated, that is, computed based on the eligible members of the family. Similar requirements apply to the use of public housing funds. See 24 CFR 5.520(“Proration of Assistance”).

Posted:08/22/2014
Question:Can the form 40030 “Claim for Temporary Expenses” be used for the temporary moves or do we need to use form 40054 “Residential Claim for Moving and Related Expenses” for all moves? This would ease the reporting burden significantly.
Answer:HUD-40030 is specifically designed to be used for temporary (residential) moves under the URA. HUD-40054 is specifically designed to be used for permanent (residential) moves under the URA. The forms are not interchangeable. Each form serves a different purpose. Persons who temporarily relocate are not eligible for the same relocation payments and moving options as persons who permanently relocate and vice versa.

Posted:08/22/2014
Question:What are the reporting procedures should there be a change in family composition changes while the family is in a temporary unit? Would we just update the information using our current management software and submit to PIC or is there a different action needed.
Answer:A change in family composition during a temporary relocation period should be reported into either TRACS or PIC. Under PBRA conversions, once the property has converted, families will not be reported in PIC. Instead, owners will submit tenant data through 50059s in TRACS. Families should continue to be reported in TRACS even while temporarily relocated from the property under HAP contract. For conversion to the PBV program, families temporarily relocated into units subsidized through the public housing, HCV, PBV, or other program that normally reports into PIC should report these changes in PIC.

Posted:08/21/2014
Question:Are housing authorities expected to walk residents through the process of moving utilities and forwarding mail, or just to pay the out-of-pocket expenses of those kinds of activities?
Answer:Part of URA requirements are to provide relocation advisory services for any permanent relocations. Under RAD, advisory services are required for relocations lasting longer than a year and strongly recommended for relocations that are for shorter periods.

Posted:08/21/2014
Question:Do Mod Rehab conversions under the First Component of RAD need to complete the RAD Relocation and Accessibility checklist as part of the Financing Plan?
Answer:No.

Posted:08/21/2014
Question:If a resident decides to accept a Housing Choice Voucher, how is the right of return affected?
Answer:When a resident chooses to accept permanent relocation payments and assistance in accordance with URA or at URA levels for a RAD conversion (for example accepting a HCV as their permanent relocation housing), the resident is also choosing to decline their right to return to the completed RAD property. If a resident accepts an HCV as a temporary relocation housing option, this acceptance does not mean that the resident is declining their right to return. A resident can choose to accept temporary relocation assistance and payments without declining their RAD right to return. PHAs are reminded that residents must give informed consent to decline their right to return, meaning they are making a decision based on an informed understanding of their housing options, and that PHAs must keep auditable records of this decision.

Posted:08/21/2014
Question:When converting to PBRA or PBV under RAD, does the URA apply to persons temporarily relocating – for less than twelve months – or only for those residents who relocate either permanently or for more than one year?
Answer:URA applies to RAD projects that involve acquisition, demolition, or rehabilitation. So if your deal involves acquisition, demolition, or rehabilitation, then URA applies. Both URA and RAD have requirements for relocations that last less than a year. For example, URA requires that a resident who will be temporarily relocated receive reimbursement for reasonable out of pocket expenses connected to the move, such as moving expenses and increased housing costs. Additionally, RAD would require residents that move temporarily receive a RAD Notice of Relocation, which is a specific RAD requirement, and not one that comes from the URA.

Posted:08/21/2014
Question:When is the first REAC inspection from the time a redeveloped unit is occupied? We understand that the resident has a move in inspection done by the HA and that they are not re-screened for one year after moving in to the permanent unit.
Answer:Under PBRA conversions, a physical inspection will take place as soon as possible after closing. If rehabilitation is occurring at the project and the project has FHA insurance, the first inspection will not occur until the rehabilitation is complete. If rehabilitation is being done and the project does not have FHA financing, the owner can submit a formal written request to the local multifamily field office to postpone the initial inspection until rehabilitation is complete. After the initial inspection, the schedule of subsequent physical inspections will be determined by 24 CFR Part 200 Subpart P.

Category:Rent Supplements and Rental Assistance Payment
Posted:07/29/2014
Question:I am pursing a 2nd component conversion. Under the wording of the new PBV Final Rule, I am unclear if the transaction will be subject to Davis Bacon wage rates. Can you please confirm?
Answer:In the June 25, 2014 final rule, HUD clarified the reference to statutory labor standards provisions that are applicable to assistance under the PBV program. The Final Rule states that when the nature of the work planned to be performed prior to execution of a Housing Assistance Payments (HAP) contract, or after HAP contract execution within such post-execution period as may be specified by HUD, constitutes development of the project, statutory Davis-Bacon requirements may apply to existing housing (which is not subject to an agreement to enter into a housing assistance payments contract, or AHAP). The Department is preparing additional guidance to clarify when Davis Bacon requirements apply to existing PBV housing, including 2nd Component RAD transactions. In the meantime, we offer the following general rule of thumb: if the project will undergo rehabilitation in connection with the RAD conversion (either pre or post HAP contract execution), the development team should budget assuming Davis Bacon wage rates will apply.

Posted:05/20/2013
Question:Can a PHA that does not currently administer Housing Choice Vouchers administer the RAD HAP contract with HUD’s approval? And, if so, is approval easily obtained?
Answer: A PHA that does not have a HCV program cannot administer a PBV HAP contract. There are no exceptions made specifically for the Rental Assistance Demonstration. Unfortunately, there is no ability at this time to obtain HCV status for those PHAs that do not currently have an HCV program.

Posted:05/20/2013
Question:Does Davis Bacon Wages rates apply to a Section 236 De-coupling project (State HFA insured) and converting from 20% RAP/80% 236 Basic Rent to a 100% Project Based Voucher Contract? As part of the de-coupling, the project will go through unit and common area renovation work.
Answer:The project you describe would be eligible for RAD if it is a prospective Rent Supp or RAP conversion that involves the decoupling and prepayment of the Section 236 mortgage. The prepayment would trigger Enhanced Vouchers for all units that could be included in the PBV contract. The 2nd component of RAD (non-competitive conversion of RAP, Rent Supp and Mod Rehab units to PBVs under Section 3 of the Notice) does not add a unique requirement for Davis-Bacon prevailing wage compliance. However, per the PBV regulations, if the project does not meet the HQS requirements, the Owner will need to enter into an AHAP (Agreement to Enter into a HAP) for the construction period and this will require Davis Bacon wage rates. You may wish to work closely with your PHA to understand HQS standards, and to asses whether the project meets these standards prior to the prepayment and decoupling.

Posted:05/20/2013
Question:We are considering applying for a Prospective Conversion under the 2nd component of RAD, for a Rent Supplement project. Who would administer the PBV contract? Also, how are the initial rents for the PBVs determined?
Answer:The PBV contracts are administered by Public Housing Authorities (PHAs). While HUD ultimately determines the PHA that will administer a given PBV contract, you (the project owner) are encourage to reach out to a PHA in your jurisdiction to gauge their interest and begin the conversation about a potential RAD conversion and related project rents (see section 3.6 of Notice PIH-2012-32 for additional information on the application process). Since PBV HAP contracts are contracts between an owner and PHA, the PHA determines the PBV rents. The regulations for PBVs (24 CFR Part 983), however, require that PHAs set their PBV rents at the lessor of: a. Reasonable Rent (ie Comparable Market), b. 110% of FMR, or c. rent requested by the owner.

Posted:03/04/2013
Question:Are there any start-up fees or other special fees for PHAs who are administering project-based vouchers for a conversion under the second component of RAD (conversions of Rent Supplement, RAP or Mod Rehab contracts)?
Answer:For prospective Rent Supp and RAP conversion under the 2nd component of RAD, a PHA will be eligible for the “special housing fee” that accompanies certain “conversion actions” as established in PIH Notice 2001-41. While Special Fees were established in PIH Notice 2001-41, PIH Notice 2012-09 reestablished the amount at $200.00/unit. The purpose of this special fee is twofold: (1) to compensate PHAs for any extraordinary administrative costs associated with these special purpose allocations; and (2) to ensure PHAs will receive reimbursement for their efforts in the rare instances where the pending conversion action does not ultimately happen because of a decision by the owner or HUD. Please refer to PIH Notices 2001-41 and 2012-09 for more information regarding these Special Fees. The PHA will not earn a special housing fee for Mod Rehab conversions (since the PHA already administers those contracts).

Posted:02/28/2013
Question:Is there an example of the proper type of tenant notice that owners can post to inform tenants for the different cases of either accepting or rejecting RAD?
Answer:Sample tenant notification letters can be found in the appendix of Section III (assuming this is a question for a Rent Supp or RAP owner) of the notice (PIH Notice 2012-32). The Notice is on the RAD website (www.hud.gov/rad).

Posted:12/04/2012
Question: We plan on submitting a RAD application under Component Two. Our Rent Supp contract will expire on 1/1/13 so this is fewer than 60 days as referenced on Page 131. Since we are less than 60 days it is our understanding that we first must submit the RAD application, then request a one year extension. to the Rent Supp contract. If we ask for this extension, the contract will expire on 1/1/14. Since this would be later than the date of 9/30/13, then should the Owner submit the submission request per Section 3.6.1 of PIH-2012-32 or 3.6.3(B)?
Answer:Many owners have contracts with fast approaching expiration dates. If you contract will expire within 120 days, we strongly encourage you to pursue what is called a Retroactive conversion, as described in Section III of Notice 2012-32. Under a Retroactive conversion, you will work with the Multifamily field office to request tenant protection vouchers for the project residents (TPVs are provided fto income eligible residents for all units on the original contract that have been occupied at some point in the prior 24 months). After the TPVs are provided, you may work with the PHA to request conversion of the assistance to Project Based Vouchers. HUD has extremely limited funds to support short term extensions of Rent Supp and RAP contracts. Since your contract will expire within 60 days, we recommend pursuing the retroactive conversion described above. If an Owner has a contract expiring further out, HUD will consider contract extensions on a case by case basis for the purpose of facilitating a RAD conversion. To discuss this option, please contact your Multifamily field office who will set up a meeting with you and include the RAD team.

Posted:12/04/2012
Question:We have a HUD 236 project totaling 80 units of which 31 units are under a Rent Supp contract. When requesting a RAD Prospective Conversion, do we notify only the 31 tenants who will be impacted (conversation of TBV to PBV) or all 80 units?
Answer:. The resident briefing and required tenant notification and comment period are applicable to all residents, not just the 31 Rent Supp units; this is particularly important in partially-assisted properties because residents will need to understand if the assistance in their unit will be converted.

Posted:11/13/2012
Question:If a project with Flexible Subsidy loan has a Rent Supplement or RAP contract expiring in FY13, may an owner include in the RAD conversion the Enhanced Vouchers that would be provided because of the Flexible Subsidy loan?
Answer:Yes. Pursuant to Section 201 of the Housing and Community Development Amendments of 1978, residents of a project which received Flexible Subsidy are entitled to enhanced vouchers if it is part of a preservation transaction as determined by the Secretary. If the Owner prepays the mortgage, this would terminate the Rent Supp or RAP contract, constituting a triggering event for RAD. If HUD opts to make EVs available under this discretionary authority, these may be included in the RAD conversion to Project Based Vouchers.

Posted:10/15/2012
Question: Assume that 100% of the units in a multifamily family project are covered by the original Rent Supp contract. In an application for a prospective conversion under the 2nd component of RAD, how many of the Rent Supp units can be converted to PBVs?
Answer: See Section 3.5A of the Notice (pages 128 and 129). The Notice provides that 100% of the Rent Supp units can be converted to PBVs so long as at least 50% of the units at the project quality for one or more of the exceptions described in the Notice. Note that one of these exceptions is for 'families receiving supportive services. If less than 50% of the units at the project qualify for an exception, then only 50% of the Rent Supp units can be converted to PBVs; the remaining Rent Supp households would receive tenant-based vouchers.

Category:Significant Amendment
Posted:09/18/2015
Question:I am a non-MTW PHA. What process do I follow for submitting and receiving approval of our Significant Amendment to the Five Year Plan or Annual Plan as required by the RAD Notice?
Answer:A RAD conversion, as noted in Section 1.5(E) of PIH Notice 2012-32, REV 2, requires a Significant Amendment to the PHA’s Five-Year Plan for qualified and non-qualified PHAs or a Significant Amendment to the Annual Plan for non-qualified PHAs. The Notice at Attachment 1 D also outlines elements that the PHA Plan Significant Amendment must address. PHAs will no longer submit Significant Amendments and PHA Plans to the RADPHAPlans@hud.gov mailbox. Non-MTW PHAs must submit Significant Amendments or PHA Plans via email to Field Office Public Housing Director or designated field office contact. The PHA must also upload a memo noting their submission and date to the RAD Resource Desk as part of their Financing Pla uploads. For non-MTW PHAs submitting a regularly scheduled PHA Plan, the Public Housing Field Office should follow their regular PHA Plan review and approval process. The Public Housing Field Office should send a letter confirming approval to the PHA, with a copy to the appropriate RAD Transaction Manager (TM), within 75 days of submission. The PHA will then upload the approval letter to the RAD Resource Desk.

Category:Submitting the Financing Plan
Posted:02/17/2017
Question:I'm working on a LIHTC transaction. The HFA has agreed to do the subsidy layering review. Is there a form that HUD would prefer the HFA use?
Answer:No. HUD does not have a subsidy layering form for external parties to use. The HFA should perform the subsidy layering review in accordance with their existing internal process.

Posted:06/10/2016
Question:What are the insurance requirements for a RAD project? Is an AM Best rating required for the insurance company?
Answer:The RAD requirements for insurance can be found in the RAD Notice (1.6.D.5 for PBVs, 1.7.C.4 for PBRA): "Mandatory Insurance Coverage. The Covered Project shall maintain at all times commercially available property and liability insurance to protect the project from financial loss and, to the extent insurance proceeds permit, promptly restore, reconstruct, and/or repair any damaged or destroyed project property." If your RAD project has a first mortgage loan or other non-RAD funding, your other funding provider(s) probably have their own insurance requirements, so be sure to check with your non-RAD funders as well.

Posted:03/09/2016
Question:Are the existing EPC incentives maintained under the new RAD Section 8 rent?
Answer:Yes. The RAD rents for each public housing project incorporate any existing Frozen Rolling Base (FRB), Add-On Subisdy (AOS), and Rate Reduction Incentive associated with an existing EPC that were in place at the time of each project’s “RAD rent base year” – FY 2012 for properties awarded under the original 60,000 unit cap or FY 2014 for properties awarded as a result of the increase of the cap to 185,000 units. The methodology for calculating RAD rents includes the Operating Subsidy Utility Expense Level (UEL) and Energy Add-on so that projects retain the value of existing EPC incentives when they convert through RAD. The PHA should consider the impact of essentially switching from the AOS to the Frozen Rolling Base incentive as part of its RAD conversion. However, due to incomplete administrative data, HUD did not incorporate the Resident Paid Utility Incentive (RPU) into the rent levels posted in the RAD Application and Tool. As a result, for projects proposed for RAD conversion with an existing EPC using the RPU, HUD will allow an amendment to the posted RAD rent to add the Per Unit Month (PUM) EPC Resident Paid Utility Incentive. If the PHA has the RPU incentive, they should notify their Transaction Manager who will work with PIH to determine an accurate incentive amount. For additional details on the specific line items utilized in calculating the posted RAD rents, see Attachment 1C in PIH Notice 2012-32 REV 2.

Posted:03/09/2016
Question:How is the ESCo guarantee impacted when an EPC is amended as a result of a conversion of a portion of units covered under an EPC?
Answer:Any changes to an ESCo guarantee are to be determined between the PHA and their ESCo. ESCO guarantees are not required for an EPC so if changes to it do occur they do not affect the conversion process. HUD is committed to providing PHAs with ongoing assistance in understanding RAD’s intersection with green and energy efficiency objectives. As additional best practices, success stories, and helpful decision frameworks are identified, HUD will maintain those resources on the RAD web site for interested parties. HUD also strongly encourages PHAs and partners to discuss creative ideas around maximizing energy and water efficient improvements through RAD. We look forward to continued dialogue with partners around this and other related issues. For questions or additional feedback, please contact us at the RAD mailbox at RAD@hud.gov, or at the EPC Policy mailbox at PHI_EPC_Policy@hud.gov.

Posted:03/09/2016
Question:If I have a RAD award and my project is covered under an existing EPC, what are the options available in terms of satisfying that EPC obligation?
Answer:Essentially, there are two basic options: Option A: Pay off the EPC debt, either with proceeds from the RAD conversion (say, mortgage proceeds or tax credit equity) or through other eligible uses, e.g., existing Operating or Capital Fund accounts. Some EPC contracts require EPC lender approval to pay off (or pay down) any debt. Or Option B: Assume the debt and continue to make the EPC debt payments post-conversion with projects or other proceeds. If the converting project will assume the debt, the lender will have to agree to subordinate all interests to the RAD Use Agreement. Further, if, in addition to assuming the EPC debt, you plan on taking on new debt as part of the RAD conversion, the EPC lender and the non-EPC lender will need to negotiate over which position each will take, which often pushes the PHA towards paying off the EPC debt. Sometimes, a PHA will assume the obligation of the existing EPC debt but with non-program and non-project funds, depending on the existing EPC contractual provisions, Either of these options must be reflected in a PHA’s Financing Plan submission. Where the debt will be paid down or paid off, the debt would be included in the development budget. Where the debt will be assumed, HUD will underwrite the transaction to ensure there is adequate cash flow to continue debt service payments. HUD recommends a PHA consult with legal and financial advisors, the EPC lender and the new first mortgage lender (if applicable), to determine which approach will work best for the PHA and the project. HUD also encourages PHAs to work with ESCos ealy in the process to develop options and reach out to the OFO Energy Center at OFOEnergyCenter@hud.gov for comment.

Posted:03/09/2016
Question:What do I need to submit to HUD if I am converting a property covered under an EPC?
Answer:Where the PHA will pay-off or assume all of the EPC debt as part of the conversion, the PHA will need to notify of its intent. The PHA will draft a letter from the Executive Director to the Field Office (copying the Transaction Manager and Energy Center) formally requesting HUD to end the EPC incentives at the time of conversion and describing the PHA plan to address EPC debt (i.e. Pay off or assume). After conversion, the Field Office will finanlize the cessation of EPC incentives through a letter to the PHA Executive Director. However, where a portion of the EPC will remain following the conversion, HUD will need to amend the EPC approval letter. To do this, the PHA must propose the amount to be paid off or assumed so as to ensure that the project’s conversion does not increase the risk of default on the remaining EPC loan and, for partial AMP conversions, determine the appropriate updates to the project’s Operating Subsidy forms (HUD 52722, 52723). This information will be submitted to the Energy Center, in the format requested, along with the supporting documents delineated in Appendix A, the PHA is highly encouraged to engage their ESCo in developing this submission. The Energy Center will review the submission and if it determines the PHA proposal to be accurate, the Energy Center will create a draft approval letter, which PHAs must submit with their Financing Plan. After closing, HUD will finalize the amendment to the EPC approval letter.

Posted:03/09/2016
Question:Where I am converting a project that is part of a larger EPC, and I am proposing to pay down the project’s EPC debt, how will I determine the proportionate amount that must be addressed as part of the conversion?
Answer:HUD’s primary interest is to ensure that a converting property addresses, at a minimum, the debt proportionate with the amount of savings the project had been projected to achieve in the original EPC approval so that once the property is converted and removed from the public housing inventory, the PHA’s remaining EPC remains financially viable. Accordingly, the information that PHAs must submit must clearly show the savings that were projected for the converting project, especially when it is not adequately presented in the EPC approval letter. HUD reserves the right to require additional debt treatment in the event that the remaining EPC would fail to meet the EPC statutory and regulatory standards. Note that the EPC lender is likely to also evaluate the debt that should be addressed as part of the conversion and may require a different amount than HUD calculates. Notwithstanding the requirements of an EPC lender, PHAs must comply with HUD’s requirements.

Posted:11/13/2015
Question:The RAD Notice indicates that a Tenant Selection Plan is only required to be submitted for HUD approval if the owner plans to adopt any local or residency preferences. My building currently serves the elderly/disabled and will continue to do so after closing but we do not wish to establish a preference and have indicated that in our AFHMP. Do we still need to submit a Tenant Selection Plan to HUD?
Answer:While a TSP must be created and maintained on file for all Multifamily PBRA projects, HUD does not review or approve tenant selection plans unless the Owner adopts a local or residency preference. There are various types of owner-adopted preferences allowable under PBRA as defined in HUD Handbook 4350.3, REV-1, Chapter 4, Paragraph 4-6.C. 1) A Residency Preference, provides applicants who live in a specific geographic area at the time of an application a priority over nonresidents on the waiting list. 2) A Working Families preference would give applicants in which the head of household or spouse is employed priority over other applicants on the waiting list. 3) A Disability Preference would give applicants that include a disabled family member preference over other applicants on the waiting list. 4) A Victims of Domestic Violence preference would give priority to families who have been victim of domestic violence, dating violence, or stalking priority over other applicants on the waiting list. 5) Owners may also adopt a preference for single persons who are elderly, displaced, homeless, or persons with disabilities over other single persons. In order for a RAD converted projects to continue to serve an elderly/disabled population, the Owner must adopt a preference as described in number 5 above, however, the adoption of a Single Elderly or Disabled Preference would not trigger the TSP submission requirement. Refer to HUD Handbook 43503., REV-1, Chapter 4, Paragraph 4-6.C. for further information on owner-adopted preferences.

Posted:09/24/2015
Question:Does RAD have any Appraisal requirements?
Answer:RAD does not have any appraisal requirements. For non-FHA financing, your lender will decide on any appraisal requirements.

Posted:09/18/2015
Question:Attachment 1A of the RAD Notice Rev-2 states, "For leveraged transactions, the debt-coverage ratio should not be less than 1.11 over a ten year period using 2% growth in revenue and 3% growth in expenses." Will HUD be only reviewing the DCR for the first 10 years of a property? In effect, do we only need to submit a proforma with cash flow projections for 10 years? If so, is that also true for non-leveraged transactions?
Answer:HUD requires an operating pro forma that projects out for the length of the initial HAP contract (either 15 or 20 years) for both leveraged and non-leveraged projects. Although we require that you submit a pro-forma for the 15 or 20 year period of the HAP, for purposes of analyzing the project’s feasibility, if it’s a self-financed deal (no debt), then we only test the first 10 years for DSCR and net cash flow. Please note that in the revised Notice, HUD has instructions that say that the Financing Plan will be reviewed and evaluated as a whole.

Posted:08/27/2015
Question:How would cell tower income be underwritten?
Answer:As with all other sources of income, HUD would review past history and supporting documentation (e.g., long-term cell tower lease), with reasonable allowance for loss/bad debt.

Posted:07/30/2015
Question:Is construction period interest an eligible cost in the Subsidy Layering Review?
Answer:Construction period interest is an eligible cost only if is paid in cash. If it is not to be paid in cash (for example, if it is to be paid from future cash flow of the property) then it is not eligible because no cash is needed during the development period.

Posted:07/30/2015
Question:What are the specifics of HUD’s decision to issue a new Financing Plan due date if the project is not awarded credits in current round and needs more than 30 days to established a financing strategy that does not include 9% credits? Notice states that the decision is based on score and rank. What does "score and rank" refer to?
Answer:If the PHA’s applications for 9% tax credits is unsuccessful in the first tax credit round that begins 90 days after CHAP issuance, the CHAP will be terminated unless, within 30 days of notification, the PHA demonstrates that it diligently pursued 9% tax credits, as evidenced by the score and ranking in the unsuccessful 9% application OR proposes a financing strategy that does not rely on 9% tax credits and that is feasible. “Score and ranking” refers to the QAP score and rank within the LIHTC application round. Typically projects are rated and ranked based upon how well the project met the priorities and criteria set forth in the state’s QAP and the top scoring applicants are awarded LIHTCs. The PHA would need to submit evidence showing that their project received a high QAP score and ranking but still did not receive the credits due to the competiveness of the round.

Posted:07/24/2015
Question:When, under RAD, a property is transferred for FMV, can the PHA use the tax assessors' value (as opposed to appraised value)?
Answer:The PHA should use an appraisal to establish FMV.

Posted:04/14/2015
Question:Does RAD have a standard for the reasonableness of Architectural and Engineering (A/E) fees?
Answer:For projects subject to Subsidy Layering Reviews, the RAD SLR has a threshold of 5% of hard construction costs for architectural fees. Engineering fees, however, should be reported separately, as should construction management, permitting, and commissioning services. For any amount above 5%, the PHA would need to provide documentation that such amounts are consistent with local practices, including allowable amounts under the applicable State Qualified Allocation Plan (QAP).

Posted:06/02/2014
Question:My PHA is converting a project using no debt. What standard should be used in reviewing the financing plan with respect to cash flow coverage?
Answer:Generally, the same standards as used in FHA, e.g., 1.11 if New Construction/Sub Rehab and 1.15 if there are modest or no repairs. Similarly, like FHA, there is no need to make assumptions about income and expense trending when examining long-term cash flow coverage.

Posted:02/03/2014
Question:Is there a HUD 2530 submission required as part of RAD?
Answer:If a PHA converts to PBVs, the 2530 process does not apply. If a PHA converts to PBRA, the PHA itself is exempt from the 2530 process, but any development partner with greater than a 25% stake in the project, or any management agent (other than the PHA) will be subject to the 2530 process. Please note that transactions utilizing FHA financing are subject to the existing 2530 procedures for FHA. Please discuss with your respective Transaction Manager.

Posted:02/03/2014
Question:Once awarded, what is the time frame to complete capital improvements?
Answer:The Financing Plan and RCC must include a reasonable timeline for completion of all rehabilitation items acceptable to HUD, generally 12 to 18 months from the date of closing the conversion and any financing, depending on the scope of rehabilitation funded. (Notice PIH-2012-32 REV-1 page 79).

Posted:12/09/2013
Question:If a PHA is performing a conversion without any rehabilitation or construction, is it necessary to provide an accessibility and relocation plan checklist?
Answer:Yes. All PHAs participating in RAD must fill out an accessibility and relocation plan checklist. There are only 2 questions that need to be completed on the checklist if the transaction does not involve any rehab or construction. A PHA will be required to fill out the checklist consistent with the provisions in Section 1.12 and Attachment 1A.1.E of PIH Notice 2012-32, REV-1.

Posted:12/09/2013
Question:Is it appropriate for a PHA to provide the accessibility and relocation plan checklist prior to submission of an application for firm commitment for FHA financing or submission of a financing plan?
Answer:Yes. PHAs must provide the accessibility and relocation checklist prior to submission of an application for firm commitment for FHA financing or submission of a financing plan. However, since approval of the checklist is required prior to closing, in order to avoid delays HUD strongly recommends that PHAs submit the checklist as soon as details of the transaction are known (i.e. before all of the other components of the Financing Plan or application for firm commitment is ready). Submission of the checklist in an earlier stage will help speed up transaction processing and allow HUD more time to work with a PHA to resolve any issues that may arise during review.

Posted:12/04/2013
Question:If a PHA owns excess personal property (i.e., vehicles) not currently considered part of any one AMP, may it include the property in its RAD conversion?
Answer:Yes, provided that either: (A) the PHA is converting its entire public housing portfolio; or (B) there is a sufficient nexus between the property and the proposed conversion (i.e., the vehicle will serve the project).

Posted:05/20/2013
Question:In RAD deals with high expense ratios, at 2% & 3% rent/expense trending, NOI trends downward. This makes the debt sizing difficult if you need to keep the DSCR positive for 15 years. You have a very high DSCR in year 1 to get to a 1.05 or 1.10 in year 15. Has HUD considered any measures to mitigate this risk?
Answer:The RAD program does not have any requirements regarding how a lender or investor underwrites the transaction or what level of debt service coverage be maintained over time. You may use any trending assumptions that you think are reasonable. Please note though that because rents will increase each year by the OCAF, which incorporates market expense factors, that rents and expenses may trend at the same rate.

Posted:01/09/2013
Question:The Financing Plan requires certification of previous participation. Are paper 2530s still acceptable or does information have to be in APPS?
Answer:Yes, submission of paper 2530s is still permitted. The lender has the option of submitting either paper (Form HUD 2530) or electronic “previous participation clearance” via APPS.

Posted:10/22/2012
Question:Am I correct that the financing projections submitted in the RAD application may change without penalty before the Financing Plan is submitted? For example, the PHA might originally anticipate investing $250,000 of its own capital funds in the RAD transaction but may later find that a lower or higher amount is appropriate.
Answer: You are correct. Note, however, that for applications submitted during the Initial Application Period, the amount of rehab in the Financing Plan cannot change in such a way that would have affected the project’s selection in the competition. Thus, if the proposed amount of rehab exceeds the amount required to score all 50 points, and the actual amount of rehab still exceeds that amount, there will be no penalty. (Updated: Oct 22, 2012)

Posted:10/09/2012
Question:My RAD transaction is expected to generate $500,000 of excess proceeds, which the PHA understands must be used to further its mission. Will any additional HUD requirements apply to these funds (e.g., would these funds have to be considered PHA Reserve funds)?
Answer:No additional HUD requirements would apply. As indicated, those funds must be used for purposes consistent with the PHA's mission, state-enabling legislation, and any local laws, if applicable.

Category:Subsidy
Posted:02/17/2017
Question:I'm working on a LIHTC transaction. The HFA has agreed to do the subsidy layering review. Is there a form that HUD would prefer the HFA use?
Answer:No. HUD does not have a subsidy layering form for external parties to use. The HFA should perform the subsidy layering review in accordance with their existing internal process.

Posted:06/18/2013
Question:Are Housing Authorities eligible to receive subsidy phase-down payments for units converted under RAD?
Answer:No. Housing Authorities are not eligible to receive subsidy phase-down payments for units converted under RAD, or what, under the public housing program, is referred to as "Asset Repositioning Fee." Nor will PHAs, under RAD, be eligible for Replacement Housing Factor (RHF) funds for units that convert. Essentially, the act of conversion makes the PHA "whole" in terms of assisted units.

Posted:05/20/2013
Question:Will ACC and capital fund subsidy continue during the RAD conversion? If so, can those funds be used for temporary relocation costs and/or other development costs?
Answer:ACC subsidy will continue until the RAD closing. Following the RAD closing, the property will be under a Section 8 HAP contract. Under RAD, properties are eligible under their HAP contract for Rehab Assistance Payments, which provides subsidy payments during the period of rehab, approximately equal to the Operating and Capital subsidy amounts the project had received under public housing. Many PHAs plan to use this subsidy to support relocation costs.

Posted:03/05/2013
Question:Who will be conducting the subsidy layering reviews when required?
Answer:The RAD Subsidy Layering process is currently being finalized. Subsidy Layering Reviews will be done either by the RAD Transaction Manager or (for transactions involving certain non-RAD sources of funds) by another funder. For example, some state HFAs do the subsidy layering review for tax credit project.

Posted:10/18/2012
Question:Is RAD PBV eligible for vacancy loss and damages claim?
Answer:For the PBV program, vacancy loss is governed by 24 CFR 983.352; we did not change the rules for vacancy payments.

Posted:10/15/2012
Question: How is a PHA's budget authority for the PBV program affected by the RAD program?
Answer: The funding for the RAD PBVs will increase the PHA's existing funding for its voucher program. There will be an offsetting decrease in funding under the PHA's public housing ACC. Please also note that the RAD conversion to PBVs is in addition to the PHA's existing ability to project-base up to 20% of its vouchers; that is, the PHA can still project-base up to 20% of its pre-RAD vouchers in addition to the new RAD PBVs.

Category:Tax Credits
Posted:07/30/2015
Question:Can a Housing Authority provide the guarantees in a LIHTC deal.
Answer:The RAD program neither requires nor prohibits a PHA from providing these guarantees.

Posted:07/30/2015
Question:What are the specifics of HUD’s decision to issue a new Financing Plan due date if the project is not awarded credits in current round and needs more than 30 days to established a financing strategy that does not include 9% credits? Notice states that the decision is based on score and rank. What does "score and rank" refer to?
Answer:If the PHA’s applications for 9% tax credits is unsuccessful in the first tax credit round that begins 90 days after CHAP issuance, the CHAP will be terminated unless, within 30 days of notification, the PHA demonstrates that it diligently pursued 9% tax credits, as evidenced by the score and ranking in the unsuccessful 9% application OR proposes a financing strategy that does not rely on 9% tax credits and that is feasible. “Score and ranking” refers to the QAP score and rank within the LIHTC application round. Typically projects are rated and ranked based upon how well the project met the priorities and criteria set forth in the state’s QAP and the top scoring applicants are awarded LIHTCs. The PHA would need to submit evidence showing that their project received a high QAP score and ranking but still did not receive the credits due to the competiveness of the round.

Posted:06/21/2013
Question:Can you clarify who needs to provide HUD 2530s in regards to a low income housing tax credit investor?
Answer:The RAD applicant is responsible for providing all 2530/APPS submissions. Note that LIHTC investors may qualify for 'passive investor' status in APPS. See http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/apps/appsmfhm. Passive investors can make a limited submission in APPS.

Category:The PBV Program
Posted:11/28/2017
Question:If a tenant is in the RAD PBV phase-in period and transfers to a different size unit in the same PBV project, does the phase-in still apply or will rent be based on TTP at that point?
Answer:If the rent increase is occurring because of new income, the rent phase-in does not apply. If the tenant's monthly rent increases because the tenant moved to a new unit as a result of the RAD conversion, then the phase-in does apply.

Posted:11/06/2017
Question:We are a Property Management company that was previously processing the annual recertifications for the Public Housing units. The units have now converted to PBV under RAD. Do we continue to do the annual/interim recertifications until Jan. 1 of the following year, and do we issue the utility reimbursement checks? Or, does the Housing Authority take over the recertifications/interims and issue the utility reimbursement checks as the of RAD closing date?
Answer:It is up to the PHA how they wish to handle processing of recertifications and utility allowances for its voucher program. HUD does not prevent PHAs from contracting with a management company to perform these tasks.

Posted:10/06/2017
Question:How can a PHA own a property covered under a PBV contract that it will administer?
Answer:Under the PBV program, the Contract Administrator and the Owner listed on the contract cannot be the same legal entity (i.e., the PHA cannot execute a contract with itself). To avoid this situation, the PHA may either: 1) Transfer the ownership of the project to a non-profit affiliate or instrumentality of the PHA (including to a “single-purpose entity” that owns nothing other than the property, which will typically be a requirement of a lender or investor) or 2) The PHA can form a related entity that is responsible for management and leasing and can serve as the owner for purposes of the Section 8 HAP contract; in this scenario, the HAP is then executed between the PHA (as the Contract Administrator) and the PHA’s related entity (as the Owner for HAP contract purposes). Note that in the second scenario, both the PHA and the entity serving as the Owner for HAP contract purposes will be required to sign the RAD Use Agreement. Additionally, where the PHA owns a property covered under the PBV contract, the PHA must utilize an independent entity, approved by HUD, to perform the HQS inspections and rent reasonableness (24 CFR 983.59). The independent entity that performs these tasks can be the unit of general local government for the PHA jurisdiction (unless the PHA it itself the unit of general local government or an agency of such government), or any other HUD-approved public or private independent entity.

Posted:09/12/2017
Question:How are over-income tenants treated following conversion to a RAD PBV HAP contract?
Answer:Any existing tenants at the time of RAD conversion may remain in the project, and the unit may remain under HAP, even if the tenant's Total Tenant Payment (TTP) exceeds the RAD Gross Rent. In these instances, the tenant will pay the TTP amount and the unit will become a "zero HAP" unit. Until the tenant's TTP falls below the gross rent, the rent to the owner for the unit will equal the lesser of (a) the family's TTP, less the utility allowances, or (b) any applicable maximum rent under LIHTC regulations. For the RAD PBV units, this protection applies only to tenants living at the Converting Project prior to conversion. New admissions with zero-HAP are not permitted. New admissions are subject to the regular PBV program rules (per 983.211), meaning the unit must be removed from the HAP contract when no HAP assistance has been paid for 180 days.

Posted:07/21/2017
Question:In a RAD conversion to PBVs, can a PHA “designate” a building as elderly
Answer:No. Prior to the enactment of HOTMA, the PBV program had an income mixing component, wherein not more than 25% of the units in the project could be assisted, with exceptions for units made available for certain types of households, including elderly households. Under those requirements, a PHA could designate specific units for elderly occupancy. Since HOTMA has eliminated this income-mixing requirement, PHAs can no longer designate units in such a manner. A PHA may, however, adopt a project-specific waiting list and an admission preference for elderly households.

Posted:04/28/2017
Question:When a site-based waiting list is transferred following conversion, am I required to serve all of the existing applicants on the waiting list in their current order before serving any new applicants and without respect to adopted preferences?
Answer:No. Once the waiting list is transferred, applications and preferences continue to operate in accordance with applicable regulations and locally adopted policies. As a result, new applicants following conversion may get housed ahead of applicants who were on the public housing site based waiting list at the time of conversion if they qualify for a higher preference even though they are entering the waiting list at a later date. There is no requirement to house all of the people who were on the PH site-based waiting list at the time of conversion before housing anyone else.

Posted:06/09/2016
Question:For a PBV conversion, where the property is undergoing initial repairs, the RAD Notice requires that all units meet HQS no later than the date of completion of initial repairs as indicated in the RAD Conversion Commitment, rather than prior to entering into the HAP contract. If an HQS inspection does not occur until the initial repairs are completed, what dates should be entered into the Form-50058 for the date of last inspection for residents that are residing in the units while the repairs occur?
Answer:In such cases, the PHA should carry over the date that the unit was last inspected as a public housing unit.

Posted:08/27/2015
Question:This is for a public housing conversion to PBVs. During the conversion year under PBV, the voucher-administering agency earns no admin fee (Notice, REV-2, page 60). However, can the converting agency choose to reimburse the voucher-administering agency for its admin costs?
Answer:Yes, the PHA may do so long as (1) the amount paid is not more than the allowable HUD schedule of admin fees and (2) the PHA identifies these amounts in the Development Budget (Sources and Uses). This action is allowable even if the converting agency is also the voucher-administering agency.

Posted:04/02/2015
Question:Does a PHA receive the admin fee for administering PBV as part of a RAD conversion? In other words, the money paid to PBRA is limited to RAD contract rents. Is the money paid to a PHA for PBV include the RAD Contract rents PLUS an admin fee?
Answer: Yes, the PHA that administers the PBV contract will receive monthly administrative fees under the Voucher program, beginning in the first full calendar year following conversion. This amount is not funded through the RAD contract rents but is funded from the larger Tenant Based Rental Assistance (TBRA) account.

Posted:10/06/2014
Question:We are preparing to occupy our RAD site, however we do not know the process for 50058 submission. Is there a RAD program code for the 50058? Further should we submit a code "10" when the voucher is issued and a code "1" 50058 when the resident moves in? Also, will be 50058 be submitted as a public housing or housing choice voucher, both have different and distinct reporting information? Without a RAD program code HUD will not be able to actively track the success of the RAD program through the 50058 submission process.
Answer:The 50058 should be filled out as it normally is for the Project-Based Voucher program, including completing Section 11 of the Form. In addition, the PHA should enter in line 2N “RADPH.” Action Code 10, Issuance of a Voucher, does not apply under the PBV program

Posted:07/29/2014
Question:Are PBV units separately identified under the HAP Contract (e.g., unit 101 and 102) and, if so, can they be changed?
Answer:Yes, all PBV units are separately identified in the HAP Contract. After the signing of the HAP, the PHA may substitute units, but only in accordance with 24 CFR §983.206.

Posted:07/29/2014
Question:My current public housing project consists of scattered sites on multiple parcels and I am considering a conversion to PBV under RAD. Under what conditions will I be allowed to combine these units under one CHAP (and one HAP)?
Answer:In the PBV program, multiple single-family buildings may be on the same HAP Contract (i.e. scattered-site single family buildings). However, if the scattered sites are not single-family buildings, each project must have its own HAP contract. A project can be defined as a single building, multiple contiguous buildings, or multiple buildings on contiguous parcels of land. HUD interprets project to apply to all these structures (i.e., single building, multiple contiguous buildings, etc.), and a PHA must consider the entire definition and apply this definition to proposed PBV units. For purposes of RAD application, the PHA will need to submit an application for each AMP (or each portion of an AMP). If the scattered-sites are eligible to be under one HAP, as described above, and are already under one AMP, one CHAP will be issued. If the scattered-sites are eligible to be under one HAP as described above, but are not currently under one AMP, separate applications should still be submitted using the “Many-to-One” application instructions found here: http://portal.hud.gov/huddoc/manyto1_appinstr.docx.

Category:Transfers of Assistance
Posted:04/20/2018
Question:For the purposes of the FHEO New Construction review requirements, is the transfer of assistance to an existing commercial building (that will be converted to residential use)considered new construction?
Answer:Yes. For purposes of RAD, this scenario would be treated as new construction since the use of the existing building is changed from commercial to residential and thus it would be subject to an FHEO Site Selection & Neighborhood Standards review for New Construction.

Posted:04/20/2018
Question:If a Transfer of Assistance is to an existing apartment complex (instead of new construction), what Site and Neighborhood standards apply to determine whether that existing apartment complex meets FHEO requirements?
Answer:For all transactions that are converting the assistance of an existing structure (whether on-site or through a transfer of assistance), the PHA must provide a certification that the site complies with the Site and Neighborhood Standards for existing or rehabilitated housing. This certification must be included within the PHA’s Annual or Five Year Plan.

Posted:06/01/2017
Question:When there is a transfer of assistance (ToA) to an occupied, non-public housing site, are occupants of the receiving site entitled to RAD or other protections?
Answer:When the project-based assistance is transferred from one site (transferring site) to another (receiving site) in connection with a RAD conversion, generally, residents of the transferring site have protections and rights under RAD. Occupants of the receiving site are not generally entitled to RAD protections and rights due to the incoming assistance. However, if acquisition, rehabilitation or demolition is planned and will cause occupants of the receiving site to move, the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) may apply. In that event, the project owner is required to provide a General Information Notice (GIN) to occupants of the receiving site “as soon as feasible”. Under these circumstances, HUD anticipates that “as soon as feasible” will generally mean no later than when the site is identified to receive the proposed transfer of assistance in connection with the RAD conversion. Where a receiving site was not identified in the initial RAD application or CHAP, a GIN should be provided at the time the site is identified, or more specifically, when the PHA submits a revised CHAP application identifying the site, but no later than 30 days after submitting the revised CHAP application identifying the receiving site. Project owners and PHAs should be mindful that although occupants of the receiving site may not be eligible for RAD related protections and assistance, occupants that are required to move may be protected and eligible for relocation assistance and payments under the URA. In some cases, where CDBG or HOME funds are involved, those occupants may also be protected and eligible for relocation assistance and payments under section 104(d) of the Housing and Community Development Act (section 104(d)). Additional information and resources on the URA and section 104(d) are available on HUD’s Acquisition and Relocation website at www.hud.gov/relocation

Posted:05/26/2017
Question:The Housing Authority will be doing a transfer of assistance. However, some residents may decide that they would rather not relocate to the Transfer of Assistance site. If a resident does not wish to move to the Transfer of Assistance site, may the PHA allow these residents to initiate a move to other nearby project-based Section 8 RAD housing owned by the PHA? If so, can such moves be treated by the PHA similarly to a “Resident Initiated Public Housing Transfer Related to the RAD Transaction” as described in Section 7.4 of the RAD Notice Regarding Fair Housing and Civil rights Requirements and Relocation Requirements (PIH 2016-17)?
Answer:We believe this is addressed on pages 45-46 of the RAD Relocation Notice- see excerpt below. If this scenario applies to your project, please contact your RAD Transaction Manager so that HUD approval can be obtained. - "If HUD determines that the distance from the Converting Project to the site of the Covered Project is significant and the resident could not reasonably be required to move to the new site, then HUD will require the PHA to adjust project plans to accommodate the resident in an assisted unit (e.g., a public housing unit, some other project-based Section 8 unit or a market unit 46 with a housing choice voucher) within a reasonable distance of the site of the Converting Project. HUD will evaluate whether this requirement applies on a case by case basis, considering whether the distance would impose a significant burden on residents’ access to existing employment, transportation options, schooling or other critical services. Accommodating the resident may also be satisfied by the resident’s consent to an alternative housing option pursuant to Section 6.10. The requirement set forth in this paragraph is in addition to all protections, including, for example, the offer of comparable replacement dwellings, which are required in all instances where a transfer of assistance is subject to the URA and/or Section 104(d)."

Posted:01/18/2017
Question:We have a 47 unit mod rehab project that may be interested in redeveloping under RAD at another site. Is this permissible under RAD?
Answer:Yes, transfers of assistance are permitted for Mod Rehab RAD conversions. See Section 2.4(I) in the RAD Notice for scenarios under which assistance may be transferred to another site.

Posted:08/27/2015
Question:Can a PHA do a RAD Transfer of Assistance to sites outside the jurisdiction of the PHA provided that the receiving jurisdiction and the state agency overseeing vouchers approves?
Answer:See the discussion of Transfer of Assistance in the Notice (including in particular, pages 31-32 of the Notice REV-2). HUD approvals for Transfer of Assistance are made case by case and in HUD's sole discretion. The site will also be subject to site and neighborhood standards. If you would like to discuss a specific proposal for Transfer of Assistance, please contact the RAD Team at RAD@hud.gov.

Category:Transitioning Funding After Closing
Posted:10/06/2017
Question:How can a PHA own a property covered under a PBV contract that it will administer?
Answer:Under the PBV program, the Contract Administrator and the Owner listed on the contract cannot be the same legal entity (i.e., the PHA cannot execute a contract with itself). To avoid this situation, the PHA may either: 1) Transfer the ownership of the project to a non-profit affiliate or instrumentality of the PHA (including to a “single-purpose entity” that owns nothing other than the property, which will typically be a requirement of a lender or investor) or 2) The PHA can form a related entity that is responsible for management and leasing and can serve as the owner for purposes of the Section 8 HAP contract; in this scenario, the HAP is then executed between the PHA (as the Contract Administrator) and the PHA’s related entity (as the Owner for HAP contract purposes). Note that in the second scenario, both the PHA and the entity serving as the Owner for HAP contract purposes will be required to sign the RAD Use Agreement. Additionally, where the PHA owns a property covered under the PBV contract, the PHA must utilize an independent entity, approved by HUD, to perform the HQS inspections and rent reasonableness (24 CFR 983.59). The independent entity that performs these tasks can be the unit of general local government for the PHA jurisdiction (unless the PHA it itself the unit of general local government or an agency of such government), or any other HUD-approved public or private independent entity.

Posted:04/28/2017
Question:Under public housing, some of our ACC units are offline for Resident Council/Social Service activities however we still receive subsidy for them. After the RAD conversion, will we still receive subsidy for these units and, if so, at what amount?
Answer:For conversions where the PHA is proposing a de minimis reduction in dwelling units, but certain units will be designated for special purpose uses or units are being reconfigured through rehab to improve marketability (e.g. combining efficiencies), these units will not be included in the HAP contract and will not receive subsidy. However, HUD will increase the contract rents for the dwelling units by a share of the foregone subsidy (i.e., the Operating Fund and Capital Fund portion of the weighted Contract Rent) attributable to the deminimis units that meet this criteria.

Posted:10/09/2014
Question:What will be the effective date of the RAD HAP contract?
Answer:The first day of the first month following. The Notice details the steps that must take place prior to closing.

Posted:07/29/2014
Question:Are PBV units separately identified under the HAP Contract (e.g., unit 101 and 102) and, if so, can they be changed?
Answer:Yes, all PBV units are separately identified in the HAP Contract. After the signing of the HAP, the PHA may substitute units, but only in accordance with 24 CFR §983.206.

Posted:07/29/2014
Question:My current public housing project consists of scattered sites on multiple parcels and I am considering a conversion to PBV under RAD. Under what conditions will I be allowed to combine these units under one CHAP (and one HAP)?
Answer:In the PBV program, multiple single-family buildings may be on the same HAP Contract (i.e. scattered-site single family buildings). However, if the scattered sites are not single-family buildings, each project must have its own HAP contract. A project can be defined as a single building, multiple contiguous buildings, or multiple buildings on contiguous parcels of land. HUD interprets project to apply to all these structures (i.e., single building, multiple contiguous buildings, etc.), and a PHA must consider the entire definition and apply this definition to proposed PBV units. For purposes of RAD application, the PHA will need to submit an application for each AMP (or each portion of an AMP). If the scattered-sites are eligible to be under one HAP, as described above, and are already under one AMP, one CHAP will be issued. If the scattered-sites are eligible to be under one HAP as described above, but are not currently under one AMP, separate applications should still be submitted using the “Many-to-One” application instructions found here: http://portal.hud.gov/huddoc/manyto1_appinstr.docx.

Posted:03/05/2013
Question:On what date does a RAD project cease being a public housing project?
Answer:The project ceases to be a public housing project at the effective date of the HAP contract, which is the first of the month following closing.

Posted:03/04/2013
Question:If a PHA agreed to administer a PBV Contract, would the PHA be required to amend its Annual Plan and go through the 45 day comment period before it could take any of the required actions for the conversion?
Answer:Yes, if the PHA administrative plan does not already include project-basing of vouchers and the required PBV policies. If the PHA administrative plan already includes those provisions, no further amendment is required.

Posted:03/04/2013
Question:This is for the 2nd component of RAD. If a PHA agreed to administer a PBV Contract, would the PHA be required to amend its Section 8 Administrative Plan even if the Section 8 Admin Plan includes verbiage on project-basing vouchers that complies with 24 CFR 983?
Answer:So long as the PHA's administrative plan already provides for project-basing vouchers and already includes the appropriate policies regarding project-based vouchers (e.g., appropriate policies for tenant selection), no further amendment to the administrative plan is required in order to administer PBVs under the 2nd component of RAD.

Posted:03/04/2013
Question:Will PHA's converting to Project Based Vouchers receive an extra one time "special housing fee" of $200 per unit when they convert to PBVs? Does the answer depend on the type of RAD PBV conversion?
Answer:The answer depends on the type of PBV conversion. Generally, the special housing fee is allowable only if the PHA is not already administering rental assistance for the project: 1. The special housing fee is not applicable to conversions of public housing to PBVs. 2. The special housing fee is not applicable to conversions of Mod Rehab to PBV, whether the conversion occurs under the 1st or 2nd component of RAD. 3. The special housing fee is applicable to prospective conversions of RAP and Rent Supplement under the 2nd component of RAD. 4. The special housing fee is not applicable to retroactive conversions under the 2nd component of RAD.

Posted:03/04/2013
Question:Will the units converting to RAD be considered PBV units at the time of closing or after the rehabilitation is done?
Answer:The PBV HAP contract goes into effect at the RAD closing, so the units would become Section 8 PBVs at the beginning of the following month. For example, if the closing is on March 15, the effective date of the HAP contract would be April 1. Please note that, for most conversions, the HAP is executed prior to construction taking place.

Posted:02/19/2013
Question:In the sample RAD PBRA HAP contract for former Mod Rehab properties, it appears an AFS Audit will be required. Is this correct?
Answer:Yes, after the RAD closing the converted PBRA project would be subject to the REAC-FASS annual financial statement requirements. This is not applicable to PBV conversions.

Posted:02/19/2013
Question:The template PBRA HAP Contract for former Mod Rehab properties that is on the RAD website includes a provision that surplus cash can only be distributed once a year. Can this requirement be waived or modified for projects that do not have FHA financing?
Answer:No. The RAD template legal documents must be used without alteration. The restriction on cash flow only after closing of financial statements is true regardless of financing source.

Posted:01/22/2013
Question:How does the switch to a RAD HAP Contract affect the PHA's Admissions and Continued Occupancy Policy?
Answer:A project that converts under RAD will no longer be under the public housing program. Therefore, the ACOP will not apply. The owner must establish admissions and occupancy policy consistent with the program to which the project is applying. For conversions to PBV, these policies can be found in CFR 24 Part 983. For conversions to PBRA, these policies can be found in Handbook 4350.3

Category:Utility Allowances and Configuration
Posted:04/28/2017
Question:For a RAD PBV Transaction that has had a CHAP and RCC issued and is in the Closing process, what are the steps to request a utility allowance change?
Answer:The utility allowances shown in the RAD CHAP award reflect the utility allowances input by the PHA at the time of the original RAD application submission. The RAD conversion must close with the Public Housing utility allowances currently in place at the site. The existing utility allowances should be reviewed and confirmed at the Financing Plan stage. If there is a change to the utility allowances since the original CHAP was issued, the Executive Director of the PHA must submit a signed certification to their Transaction Manager stating the requested utility allowances per bedroom type and certifying that those are the utility allowances currently in effect at the site. The Transaction Manager will then request an amended RAD CHAP Exhibit A which will reflect the updated utility allowances. If an RCC has already been issued, the RCC will also need to be amended to reflect the revision. Please see the RAD CHAP Amendment Overview available in the RAD Resource Desk Document Library for additional information on utility allowances.