Only PHAs may apply under this section of the Notice. However, PHAs may consider enlisting partners to facilitate recapitalization and development of its projects. Additionally, while public housing mixed-finance projects are eligible for conversion under the Demonstration (see Section 1.11.B of this Notice), the application for conversion of assistance must be submitted by the PHA on whose ACC the units are included. This requirement also applies to directly-funded Resident Management Corporations (RMCs).
A RAD Application may be rejected, or a CHAP or RCC revoked, if HUD determines an applicant or PHA to be ineligible.
- Have public housing units under an ACC;
- Be classified as a Standard or High Performer under the Public Housing Assessment System (PHAS), or, if classified as “troubled” (Troubled), the PHA must be making substantial progress under its Recovery Agreement, Action Plan, Corrective Action Plan (CAP) or Memorandum of Agreement (MOA) and HUD must have determined that the factors resulting in the PHA’s Troubled status will not affect its capacity to carry out a successful conversion under this Demonstration;
- Be classified as a Standard or High Performer under the Section Eight Management Assessment Program (SEMAP) if the PHA will be administering the PBV contract under RAD. If classified as Troubled, the PHA must be making substantial progress under the CAP and HUD must have determined that the factors resulting in the PHA’s Troubled status will not affect its capacity to carry out a successful conversion under this Demonstration;
- Be otherwise in substantial compliance with HUD reporting and programmatic requirements and/or satisfactorily in compliance with any CAP or MOA related to any 1) program finding or 2) failure to carry out, to the satisfaction of the Department, management decisions relating to an audit by the Office of Inspector General;
- Not have a debarment, suspension, or Limited Denial of Participation in Federal programs lodged against the applicant, PHA Executive Director, Board members, or affiliates;
- Submit a completed application that complies with all RAD Application instructions.
- Not have a charge, cause determination, lawsuit, or letter of findings referenced in sub- paragraphs (1)-(5) below against a PHA, its transferees, proposed development partners, or sub-recipients that has not been resolved to HUD’s satisfaction:
- A charge from HUD concerning a systemic violation of the Fair Housing Act or a cause determination from a substantially equivalent state or local fair housing agency concerning a systemic violation of a substantially equivalent state or local fair housing law proscribing discrimination because of race, color, religion, sex, national origin, disability or familial status;
- A Fair Housing Act lawsuit filed by the Department of Justice (DOJ) alleging a pattern or practice of discrimination or denial of rights to a group of persons raising an issue of general public interest pursuant to 42 U.S.C. § 3614(a);
- A letter of findings or lawsuit filed by DOJ identifying systemic noncompliance under Title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, or section 109 of the Housing and Community Development Act of 1974;
- A cause determination from a substantially equivalent state or local fair housing agency concerning a systemic violation of provisions of a state or local law proscribing discrimination in housing based on sexual orientation or gender identity; or
- A cause determination from a substantially equivalent state or local fair housing agency concerning a systemic violation of a state or local law proscribing discrimination in housing based on lawful source of income.
Applicants may still be eligible for the Demonstration if the charge, cause determination, lawsuit, or letter of findings referenced in subparagraphs 1, 2, 3, 4, or 5 above has been resolved to HUD’s satisfaction. However, if the matter has not been resolved to HUD’s satisfaction, then the applicant is ineligible to participate in the Demonstration.
HUD will determine if actions to resolve the items listed above are sufficient to resolve the matter. Examples of actions that could resolve the matter include, but are not limited to, current compliance with a:
- Voluntary compliance agreement (VCA) signed by all the parties;
- HUD-approved conciliation agreement signed by all the parties;
- Conciliation agreement signed by all the parties and approved by the state governmental or local administrative agency with jurisdiction over the matter;
- Consent order or consent decree; or
- Final judicial ruling or administrative ruling or decision.
Additionally, a PHA may be required to demonstrate that its proposed activities under RAD are consistent with and will not hinder or delay satisfaction of any applicable fair housing or civil rights VCA, conciliation agreement, consent order or consent decree, final judicial ruling, or administrative ruling or decision. HUD may terminate a CHAP or RCC if it determines that the terms of the conversion would be inconsistent with fair housing or civil rights laws or is inconsistent with, would hinder, or would delay satisfaction of a fair housing or civil rights court order, settlement agreement, or VCA (see section 1.12 of this Notice).
- HOPE VI Projects. PHAs may submit applications for the following HOPE VI projects:
- Projects with a Date of Funding Availability (DOFA) of greater than 10 years prior to the date of RAD application. Where a HOPE VI project was developed in phases on a contiguous site, each of the phases may have distinct DOFA dates. For purposes of this subsection, the earliest DOFA shall apply to all contiguous phases submitted for conversion under RAD.
- Projects with a DOFA of less than 10 years, if the Converting Project evidences a recent multi-year pattern of financial distress, indicated by:
- At least two of the three most recent audited financial statements for the development partnership showing that the PHA’s assignment of funding for the public housing-restricted units has been below 90% of the operating cost of such units; and
- Evidence that withdrawals have been made from the project’s operating deficit reserve, transformation reserve or similar reserve account(s) set up to address public housing funding shortfalls to such an extent that only 75% of such a reserve(s) remain available, or evidence that, in at least two of the past three years, the PHA or owner has made an annual contribution to meet the operating deficit created by the public housing-restricted units.
To be eligible for this exception from the DOFA requirement, RAD applications for HOPE VI projects must include with the application the required audited financial statements and financial information documenting the pattern of distress.
Project(s) that, unless converted under RAD, would be the only remaining project(s) with public housing units in the PHA’s inventory.
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Demolished Project Eligibility under RADA PHA is considering applying for RAD for a project that has already been demolished. Is this project still eligible for RAD?
No. Only projects with units under ACC and in PIC are eligible for RAD.
Income Limits for PBV AssistanceWhat 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?
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.
De Minimis Reduction Impact on FundingIn 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?
Funding is lost in a de minimis reduction. You will see that when you enter the reduction in the Excel Application.
Eligibility of Mod Rehab SRO units for RADWe 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?
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.
Eligible Units for PBV HAP SubsidyUnder 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.
Section 202 Conversion to RADCurrently, 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.
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.
RPCA Requirement for Units Being Removed Under De Minimis ReductionIs the RPCA required to include units that will not be converted to RAD because of the allowable de minimis reduction?
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.
Eligibility for RAD ConversionDoes a unit have to actually receive operating subsidy before it can be converted to RAD?
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).
Eligibility of Units Located in a Flood Zone for RAD ConversionCan you convert units located in a flood zone to RAD?
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.