C
C
Public Housing
• Capital repair needs in excess of $25.6B across portfolio, or
$23,365/unit
• Section 9 funding platform unreliable (pro-rations, cuts), inhibits access to private debt and equity capital (deed of trust)
2013 Op Sub Funding is an 81% proration
2013 Capital Fund may see about a 5% reduction
• Public Housing Compliance requirements continue to be a challenge.
There are more PH requirements than in Section 8
Examples: Community Service, Pet Policy…
2

RAD A
• Authorized as part of the Consolidated Further
Continuing Appropriations Act of 2012
( Public Law 112-55 )
• Final program rules outlined in PIH Notice 2012-32
• Allows public housing and certain at-risk multifamily legacy programs to convert to long-term Section 8 rental assistance contracts
3

RAD A
,
CONT
D
• 2 components
– 1 st Component, Competitive : Public Housing &
Moderate Rehabilitation (Mod Rehab)
– 2 nd Component, Non-competitive : Mod Rehab, Rent
Supplement (Rent Supp) & Rental Assistance Payment
(RAP)
4

P
H
C
R
L
Sample Public Housing Conversion
Per Unit Monthly (PUM)
$900
$800
$700
$600
$500
$400
$300
$200
$100
$-
Operating
Fund $330
C apital Fund
$144
T enant
Payment $318
$792
Housing
Assistance
Payment
$474
T enant
Payment $318
Pre-Conversion
ACC
Post-Conversion
Section 8 5

• After award, must complete a Physical Condition Assessment (PCA) to identify conditions at the property
• Can use other PH Funding Sources in the transactions
•
Reserves
• Cap Fund
• RHF
• Ownership – Public or non-profit, except to facilitate tax credits
•
Initial Contract Terms
–
• PBRA – 20 years, with mandatory renewals
• PBV – 15-20, also with mandatory renewals, but PHA also can extend initial contract for additional 15 years
• Annual Adjustments to rents – based on Operating Cost Adjustment Factor (OCAF), i.e., lock in funding long term with an increase of inflation factor each year (OCAF)
•
Choice Mobility
• PBV – resident gets opportunity for voucher after one year
• PBRA – resident gets opportunity for voucher after two years; however, PHA may impose a cap of not more than 15% at any project annually and not more than 1/3 voucher turnover cap. Also, HUD provides a good-cause exemption for up to 10% of conversions for PHAs without a voucher program.
6

•
Exemption from 20% PBV caps for HCV agencies
•
PBV Income Targeting
– raised from 25% to 50% the number of families that can be assisted who are not also receiving supportive services exemption
• Eligibility, Waitlist and Annual Reexaminations
• PBRA – administered by project
• PBV – administered by voucher agency
•
Resident Participation funds
– must maintain “level of service”, i.e., current funding includes $25 per occupied unit annually
• Public Housing Requirements go away (PHA plan, Federal Contracting,
Section3/Minority reporting after initial conversion)
7

A
S
8

RAD I
T
S
9

C
S
– P
H
HUD Publishes
Final Notice
PHAs submits
Excel-based
Application to HQ
HQ reviews application and requests Field Office input on Eligibility
HQ issues awards/Commitments to Enter Housing
Assistance Payments
Contract (CHAPs)
PHAs have 6 months to submit Financing
Plan to HQ for review
PHA
•
Asset Management
• Subsidy
Administration
PIH
• Voucher Oversight
Multifamily Housing
• Asset Management
• Subsidy
Administration
PBV
PBRA
Project converts

Remove from ACC
 Release DOT
 Execute HAP

Execute RAD Use
Agreement

Close Financing
HUD issues RAD
Conversion
Commitment
10

RENTAL ASSISTANCE DEMONSTRATION (RAD)
Various Considerations in Choosing PBRA vs. PBV
Item
1. Baseline Funding Levels
2. Initial Contract Term
3. Contract Renewals
4. Rent Caps
5. Annual Inflation Adjustment
6. Choice Mobility
7. Voucher Admin Fee
PBRA
Based on 2012 levels, with Operating Fund Offset restored
20 years
Same
PBV
15 years (up to 20 at option of voucher agency); voucher agency may also automatically extend for another 15 years
At end of contract term, Secretary must offer, and PHA must, accept renewal
Same
Current funding cannot exceed 120% of the FMR, unless the current funding is less than market, in which case the current funding cannot exceed
150% of FMR.
Current funding cannot exceed the lower of (1) reasonable rent or (2) 110% of FMR.
Based on Operating Cost Adjustment Factor
(OCAF), i.e., the method used to adjust rents for
Multifamily projects renewed under the
Multifamily Assisted Housing Reform and
Affordability Act (MAHRAA).
Same
Resident may request next available voucher after two years; however, voucher agency may limit to not more than 15% of project in any year and not more than 33% of voucher turnover due to RAD.
Resident may request next available voucher after one year, with no limitations.
N/A PHA earns Section 8 voucher admin fee for all units converted to PBV
Note: for agencies that do not administer a voucher program, and that convert to PBVs, the voucher agency will be responsible for administration of the waiting list, eligibility, reexaminations, leading to substantial deregulation for the converting agency.
11

RENTAL ASSISTANCE DEMONSTRATION (RAD)
Various Considerations in Choosing PBRA vs. PBV
8. REAC/UPCS Inspections
9. REAC/FASS-MF Annual Financial
Statements
10. Management and Occupancy
Reviews (MORs)
11. Cash Flow
12. Appropriations
13. Rehab Requirements
Yes
Yes
No (unless project receives FHA insurance)
No (unless project receives FHA insurance)
No (unless project receives FHA insurance) Yes
Unrestricted
Annual funding subject to appropriations; however, the Congress has never failed to renew a PBRA contract
Same
Annual funding subject to appropriations.
Because of the RAD Use Agreement, if
Congress provides less than full funding for the Voucher program (i.e., proration), the
PHA administering the voucher program may will likely need to absorb the cuts from its non-RAD voucher units.
There is no required level of rehab under
RAD (or requirement to leverage debt). The
PHA must simply ensure that whatever needs are identified are addressed.
Same
14. FHEO Site/Neighborhood
Standards
15. Income Mixing
Standard FHEO requirements not waived under RAD.
N/A
Same
Under normal PBV rules, not more than 25% of units in a project can be assisted, unless the units are elderly or disable, scattered site, or receiving supportive services. RAD increased the threshold to 50%, with the same exceptions.
12

RAD W
P
13