- Special Applications Center (SAC) Applications and RAD.
- General.HUD encourages PHAs to consider RAD as well as other tools that may be available ot them to reposition and preserve their public housing inventories. Other available tools include application to the Special Applications Center (SAC) for Demolition or Disposition under Section 18 of the Act, Voluntary Conversion under Section 22 of the Act, including Streamlined Voluntary Conversion as described in Notice PIH 2019-05, Required Conversion under Section 33 of the Act, and Homeownership under Section 32 of the Act.
- Joint RAD and Section 18 applications.In some instances, a PHA may be able to combine RAD and Section 18 towards the preservation of a project. Where permitted, a PHA submits a RAD application for all units in a project. Once HUD confirms that the PHA is eligible to combine RAD with Section 18, HUD will offer the PHA a streamlined process for getting HUD approval for the units eligible for Section 18.
- If a PHA is combining the use of RAD and Section 18 at a project, including through the use of 24 CFR 970.17(c) to dispose of 25% of the units at the project on the grounds that it allows for comprehensive rehabilitation or replacement through RAD so that all units can be operated under project-based assistance (i.e., RAD/Section 18 Blend, see Notice PIH 2018-04 for more details), the RAD relocation requirements described in the RAD Fair Housing, Civil Rights, and Relocation Notice shall apply to residents of the Section 18 units, in lieu of the relocation requirements under 24 CFR part 970. All of the RAD relocation requirements shall apply to residents of the Section 18 units, including, but not limited to, the resident notice and meeting requirements, the right to return, and relocation assistance and payments. The PHA may not provide different relocation rights and benefits to residents of the project on the basis of whether they reside in a RAD unit or a Section 18 unit.
- In conjunction and simultaneously with RAD, a PHA may pursue Section 18 approval under 24 CFR 970.17(c) to dispose of its last 50 or fewer public housing units. For the RAD and Section 18 approval to be jointly processed, the PHA must be converting sufficient units under RAD that would result in the PHA having 50 or fewer units and the units being converted through RAD must be in the same project (e.g., a high-rise or group or properties that are managed as one project) as units being removed through Section 18. The Section 18 approval will be conditioned on the successful conversion of the RAD units.
- If at a converting project a PHA is using 24 CFR 970.17(b) or 970.17(c) to dispose of other units at the project justified on the grounds that disposition allows more efficient or effective on-site or off-site development (see Notice PIH 2018-04 for more details), HUD may disapprove the conversion if HUD determines that the PHA's use of both RAD and disposition under sections 970.17(b) or 970.17(c) in a single project undermines the unit replacement requirements of the RAD program.
- Switching applications. In come cases, after initiating a RAD or SAC application, a PHA may determine to pursue an alternative tool.
- After submiting a RAD Application or receiving a CHAP, a PHA must request to suspend its CHAP before submitting a SAC Application for the same units. HUD may subsequently reinstate the CHAP without the resubmission of a complete application described in Section 1.10.
- If a PHA that has submitted a SAC applicaton decides to pursue RAD for eligible units, the PHA must first withdraw its SAC application, in writing with a Board Resolution to support the withdrawal.
- If a PHA that has been approved for a SAC application decides to pursue RAD for eligible units, the PHA must request that SAC rescind or conditionally rescind its approval of the application. If applicable, the SAC will conditionally rescind its SAC application approval contingent on the successful copletionof the RAD transaction and will modify IMS/PIC accordingly. Units for which a PHA has received a SAC approval are ineligible for RAD if the PHA has taken any of the following actions to implement the Section 18 approval:
- executed a demolition contract;
- completed a disposition (i.e., transferring title and/or executing a ground lease);
- received TPVs from HUD as a result of an approval;37 or
- Taken any steps to implement relocation under the approval (i.e., issuing the 90-day notice to residents).
- Demolition. Conversion plans may include the partial or complete demolition of the Covered Project and replacement of assistance on-site or off-site. Unless approved in writing by HUD, a PHA may not demolish and/or dispose of units until after the closing of construction financing for the Covered Project.13 Both the demolition action and new construction or rehabilitation (either on-site or off-site) are considered as part of a single Environmental Review. PHAs should be aware that the CDBG and HOME programs have additional requirements regarding demolition if those sources of funds are used.20
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.
Demolition and ReconstructionDoes RAD allow for the complete demolition and reconstruction of a project?
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.
RAD Conversion of Demolished ACC UnitsCan 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?
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.
Demo/Dispo, Transfer of Assistance and RPCA RequirementIf 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?
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]
Benefits of RAD v. SACI'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).
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.
FHEO Review for Unit ReductionIf 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.
If all of the reduced units are being replaced with project-based assistance, an FHEO Change in Unit Configuration review is not needed.