NMA Blog

Last week via email, the Department of Housing and Urban Development (HUD) announced to the public the online publication of revised program instructions for the Rental Assistance Demonstration (RAD) in Notice PIH 2012-32/Notice H 2017-03, REV-3. The revised notice, which fills 242 pages, includes the following key revisions for the first component (from the email):

• Allowing PHAs to increase RAD rents by relinquishing existing balances of replacement housing factor (RHF) funds or demolition and disposition transition funding (DDTF)
• Eliminating the cap on the number of project-based voucher units at a project
• Revising the requirements regarding information provided to residents and PHA responses to resident comments at properties undergoing conversion
• Extending the prohibition on re-screening to current public housing households that will reside in non-RAD PBV or non-RAD PBRA units in projects that contain RAD PBV or RAD PBRA units to facilitate the right to return to the assisted property
• Consolidating the selection priority categories for new applications into “high investment applications” and “all other applications” (subject to public comment)
• Allowing PHAs to submit a simple letter of interest rather than an application when a waiting list has formed, where the letter of interest would serve to reserve a project or portfolio’s position on the waiting list subject to future submission of a RAD application (subject to public comment)
• Making an entire contiguous HOPE VI project that was developed in phases eligible, as long as the earliest phase is greater than ten years old (subject to public comment)
• Correcting rent phase-ins for residents who may experience a rent increase as a result of conversion
• Clarifying that a PHA is permitted to receive cash acquisition proceeds in excess of any seller take-back financing and that such proceeds must be used for affordable housing purposes, which is a newly defined term
• Allowing flexibility for requirements related to capital needs assessments, i.e., permitting certain exemptions when the assisted units are a small percentage of the total project
• Requiring title reports to be submitted with the Financing Plan
• Modifying the maximum allowable developer fee by excluding from the formula for larger transactions any acquisition payments made to the PHA, developer fee, and reserves
• Establishing greater flexibility to underwrite to new loan products
• Providing greater detail on the acceptable forms in which a public or non-profit can demonstrate ownership or control
• Providing guidance on owners’ responsibilities to treat lead-based paint hazards in the context of a RAD conversion
• Encouraging PHAs and their partners to grant current workers whose employment positions may be eliminated during conversion the right of first refusal for new employment openings for which they are qualified

Changes for the second component include:

• Likewise eliminating the cap on the number of PBV units at a project
• Permitting Mod Rehab conversions to PBRA to convert at comparable market rents, up to 110 percent of fair market rent (FMR)
• For Mod Rehab SRO conversions, authorizing the use of the efficiency FMR for SRO units, rather than 75 percent of the efficiency FMR, which is the existing SRO standard
• Allowing all conversions to PBRA to achieve rents between 110 percent and 120 percent of FMR, if justified by comparable market rents and only in certain circumstances where preservation criteria have been met
• For conversions to PBRA, permitting the use of small area FMRs (SAFMRs) in the calculation of the contract rent cap, with HUD approval

To help navigate through these numerous changes, HUD has kindly provided two versions of the notice: one showing all of the changes in a redlined format, and a clean version of the document. Both are available here, on the RAD webpage. According to the email, HUD intends to hold live webinars on the notice and will provide more information in the following weeks. Click here to join the RADBlast! email list.

Got questions about RAD? Nan McKay & Associates currently offers three RAD certifications: RAD Project-Based Rental Assistance (PBRA) Overview, RAD Project-Based Voucher (PBV) Specialist, and our newly redesigned Multifamily Housing Specialist (MHS), which is the only training in the affordable housing industry that includes specific requirements for PHAs participating in the RAD program. If your PHA has elected to transform its public housing to project-based rental assistance (PBRA), this training is a must.  If you aren't sure which training is the right one for your agency, give us a call at (800) 783-3100 or email sales@nanmckay.com and our experienced staff will point you in the right direction.

Last week the Department of Housing and Urban Development (HUD) posted new guidance for the Rental Assistance Demonstration (RAD) in Notice PIH 2016-17. The new notice, which fills 80 pages, combines guidance on fair housing and civil rights requirements with resident relocation requirements and procedures. It supersedes Notice PIH 2014-17, HUD’s previous guidance on RAD relocations. Notice PIH 2012-32 (HA) REV-2, which contains RAD implementation instructions, remains in effect.

The new notice is applicable only to public housing conversions under the first component of RAD. It provides PHAs, project owners, and their RAD development partners with guidance regarding key fair housing and civil rights requirements, explains the situations in which HUD is requiring front-end fair housing and civil rights reviews, and provides information regarding the types of information that must be submitted to facilitate HUD’s reviews.

The notice announces a requirement for submission of a fair housing, civil rights, and relocation checklist by PHAs and project owners. The checklist is currently being revised and will be posted to the RAD website when available.

HUD also announced that it will host a webinar on the new notice.

The presentation is scheduled for this Thursday, November 17,

at 2 p.m. eastern time (11 a.m. Pacific). Click here to register.

According to an accompanying press release, the new notice streamlines and accelerates the RAD approval process by:

• Clearly outlining the requirements for fair housing and relocation reviews 
• Providing guidance on what documents to submit and when to submit them, and
• Offering tools such as a comprehensive checklist to help stakeholders prepare submissions

Today in the Federal Register, HUD  published a request for comments on the new notice. While the requirements of the notice are available and became effective upon posting, HUD has published today’s notice to solicit comments with respect to the clarity and comprehensibility of the requirements.  Comments are due by December 14. 

Got questions about RAD? During our year-end sale, you'll save 20% when you register for upcoming sessions of our RAD trainings, RAD Project-Based Rental Assistance (PBRA) Overview and RAD Project-Based Voucher (PBV) Specialist. If you aren't sure which training is the right one for your agency, give us a call at (800) 783-3100 or email sales@nanmckay.com and our experienced staff will point you in the right direction.

NMA trainers Samantha Sowards and Sheryl Putnam will be presenting a session on RAD conversion to PBRA at The Housing Conference

As director of professional development, Sheryl Putnam has spearheaded the development of several NMA seminars, including Blended Occupancy Management, Fundamentals of LIHTC Management, and our newest class, Multifamily Housing Specialist (MHS). Prior to joining Nan McKay and Associates in 2011, she managed the compliance department for a state housing finance agency, providing compliance oversight activities for the LIHTC, PBRA, and HOME programs.

Senior trainer Samantha Sowards has been a part of the NMA team since 2008. As NMA’s manager of curriculum development, Samantha oversees publications from concept and creation through the ongoing revision process, including NMA Master Books, model policies, and handbooks. Sheryl and Samantha will be presenting the following session at the The Housing Conference in San Antonio this September.

Regulatory Knowledge for Smart Management

RAD: Post-Closing Operational Transition for PBRA
Presenters, Sheryl Putnam and Samantha Sowards

Congratulations, you’ve been approved for a RAD conversion to project-based rental assistance (PBRA). Now that you’ve been approved — or are waiting for approval — what’s next? This session will cover the key differences between public housing, PBRA, and RAD PBRA that you and your team need to know about. We will cover in-place resident considerations, eligibility and occupancy differences, rent phase-in requirements, what to do when TTP is greater than the contract/market rent, and more. We will also touch on some blended occupancy issues if you are adding low-income housing tax credits.

If you're interested in learning more about PBRA, don't miss our upcoming session of Multifamily Housing Specialist! Conference attendees save 10% on the seminar, which will be held immediately following the first two days of the The Housing Conference. Extend your stay and expand your learning! Register online or email sales@nanmckay.com for more information. Don't delay, room blocks are filling up fast.

This week via “RADBlast!” HUD released new guidance on the closing process for units converted to the rental assistance demonstration (RAD) program. The guidance is a result of feedback HUD received earlier this year.

The first change involves effective dates for HAP contracts following completion of the closing process. Effective immediately, project owners may now select the effective date of the HAP contract as the first day of either of the two months following the completed closing. For example, if the project closes on October 20, 2017, the HAP contract can be effective on either November 1, 2017 or December 1, 2017. HUD expects that the change will allow PHAs and project owners to better prepare for funding in the initial year and also allow for more time and flexibility to complete administrative functions such as executing new tenant leases.

HUD also announced that it will host a live Q&A session to walk

through the revised tools and respond to PHA questions.

The presentation is scheduled for today, July 13, from

3 p.m. until 4 p.m. eastern time (noon until 1 p.m. Pacific).

In a second change, HUD announced that it is releasing two tools intended to provide guidance on how funding of the new contracts works in the initial year. Initial year funding instructions describe the calculation of funding during the period between the HAP contract effective date and the remainder of the calendar year, as well as instruction on how to access these funds. An initial year funding tool will allow PHAs and project owners to calculate the amount of revenue that will be available to the project in the initial year and ensures that all parties have an accurate understanding of these amounts. Neither of the new tools has been posted to the RAD website.

Got questions about RAD? Don’t miss our sessions on post-closing operational transition at the The Housing Conference this September. You can read the description for the RAD PBV session online here.

This week on the Office of Capital Improvements (OCI) website, HUD posted a revised version of the Capital Fund Guidebook. The new, undated version replaces the original guidebook, which was dated August 2015. While the 2015 version was numbered “Handbook 7600.1,” the new version does not have a handbook number.

The following brief announcement was posted to the OCI home page:

The capital fund guidebook details the requirements contained under the public housing capital fund program final rule, including but not limited to eligible and ineligible activities and cost limits; decoupling of the capital fund from the PHA plan submission; replacement housing factor grants (RHF) and demolition and disposition transitional funding (DDTF); changes in obligation and expenditure end dates and close-out requirements; emergency, non-presidentially declared natural disaster, and safety and security grant program requirements; streamlined mixed-finance and other public housing modernization and development requirements; changes to demonstration programs such as RAD and MTW; and capital fund rule impact on security interests and financing activities.

Got questions about RAD, MTW, and the capital fund? Don’t miss the The Housing Conference this September in San Antonio, Texas, where NMA's Carrol Vaughan and other industry experts will address hot topics around those issues. Register online or email sales@nanmckay.com for more information.