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Notice Listings on Transitioning Funding After Closing
Notice Section 1.6.B.8 Agreement waiver and RAD Rehab Assistance Payemnts Notice Section 1.7.B.9 When Total Tenant Payment Exceeds Gross Rent
Documents on Transitioning Funding After Closing
Questions on Transitioning Funding After Closing

What will be the effective date of the post-RAD HAPs?

What will be the effective date of the RAD HAP contract?

The first day of the first month following. The Notice details the steps that must take place prior to closing.

Effective Date of RAD Conversion

On what date does a RAD project cease being a public housing project?

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.

RAD PRAC

How does the switch to a RAD HAP Contract affect the PHA's Admissions and Continued Occupancy Policy?

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

Surplus Cash under the HAP Contract

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?

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.

AFS Audit Requirement in HAP Contract for PBRA Conversions

In the sample RAD PBRA HAP contract for former Mod Rehab properties, it appears an AFS Audit will be required. Is this correct?

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.

Administrative Fees for PBV Conversions

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?

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.

PHA Administering PBV Contract and Section 8 Administrative Plan

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?

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.

PBV Contract Administration

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?

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.

Timing of RAD Unit Conversion

Will the units converting to RAD be considered PBV units at the time of closing or after the rehabilitation is done?

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.

Combining Scattered Sites into a Single CHAP & HAP Contract

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)?

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.

Identifying PBV Units in the HAP Contract

Are PBV units separately identified under the HAP Contract (e.g., unit 101 and 102) and, if so, can they be changed?

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.

Eligible Units for PBV HAP Subsidy

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?

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.

PBV HAP Contract Administration

How can a PHA own a property covered under a PBV contract that it will administer?

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.