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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 ConversionOn 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.
Pro Forma Title Insurance PolicyTypically, 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?
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.
Timing of RAD Unit ConversionWill 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.
Release of the Declaration of Trust (DOT)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?
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.
Completion of Critical RepairsWhat is the process for clearing critical repairs that have been completed?
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]
Title Insurance and Survey for No Debt RAD ConversionsWhen a PHA is not taking on any debt, is it required to obtain title insurance and/or surveys?
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.