- Substantial Conversion of Assistance. Conversions may not result in a reduction of the number of assisted units, except by a de minimis amount, defined as no more than the greater of five percent of the number of project or portfolio units under ACC immediately prior to conversion or five units. However, a unit is excluded from this de minimis threshold if any of the following apply:
- The unit has been vacant for more than 24 months at the time of RAD Application; or
- Reducing the total unit number will allow the PHA to more effectively or efficiently serve assisted households through: 1) reconfiguring apartments (e.g., converting efficiency units to one-bedroom units); or 2) facilitating social service delivery (e.g., converting a basement unit into community space).
Otherwise, a PHA may not reduce the number of ACC units at a project without Section 18 Demolition or Disposition approval from the Special Applications Center (SAC).
In all cases, the PHA shall submit within their PIC removal application (See Section 1.12) a narrative explanation of the proposed reduction, including a description of the units to be removed, an explanation of why the project meets the exclusion criteria, and any supporting evidence. The assigned Transaction Manager will approve any reduction of units by project or portfolio.
De Minimis exceptions are allowed across multi-phase or portfolio conversions, but the number of de minimis units must be authorized by the RAD conversions closed prior to or simultaneous with the execution of the de minimis reduction. For example, a PHA that is converting 200 units across three properties is permitted to replace 190 RAD-assisted units (i.e. 95% of 200) across its portfolio and apply the unit reductions to a single property. However, the property that would have 10 fewer units assisted under a RAD HAP Contract must convert simultaneous with or after the first two properties, not before.
A PHA must demonstrate that any reduction in units better serves residents, the Covered Project, or the operating viability of the PHA’s RAD or public housing portfolio, will not result in the involuntary permanent displacement of any tenant family, and will not result in discrimination based on race, color, religion, national origin, sex, disability, or familial status.
Any property or the proceeds received from the sale of any property that is released from the DOT under the de minimis exception must be used for Affordable Housing purposes.
- Change in Unit Configuration. Where a PHA is proposing to change the unit configuration as part of the conversion, the PHA must demonstrate that the change in bedroom distribution will not result in the involuntary permanent displacement of any resident and will not result in discrimination based on race, color, national origin, religion, sex, disability, or familial status. For example, if three and four-bedroom units are replaced with one and two-bedroom units, the conversion may, but in not all cases, result in discrimination against families with children.
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