Rental Assistance

Demonstration (RAD)PIH Notice 2012-32

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• Build on the proven Section 8 platform

• Leverage private capital to rehabilitate or develop housing assets

• Fulfill long term preservation needs

KEY RAD GOALS

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• 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

– Update of 2012-32 Coming Soon!

• Allows public housing and certain at-risk multifamily legacy programs to convert to long-term Section 8 rental assistance contracts

• 2 components – 1st Component, Competitive: Public Housing & Moderate

Rehabilitation (Mod Rehab)

– 2nd Component, Non-competitive: Mod Rehab, Rent Supplement (Rent Supp) & Rental Assistance Payment (RAP)

RAD AUTHORITY

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RAD CONVERSION AUTHORITY

Public Housing Mod Rehab RS & RAP

Cap of 60,000 Units, at current funding

PBRA PBV

No Cap , but subject to availability of TPVs

PBV

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PUBLIC HOUSING CONVERSION RENT LEVELS

Pre-Conversion Post-Conversion $-

$100

$200

$300

$400

$500

$600

$700

$800

$900

Tenant Payment $318

Tenant Payment $318

Capital Fund $144

Operating Fund $330 Housing Assistance

Payment$474

Sample Public Housing Conversion Per Unit Monthly (PUM)

$792

ACC Section 8

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RAD PROVISIONS

• 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)

30-DAY COMPETITIVE INITIAL AWARDS–PUBLIC HOUSING & MOD REHAB AWARDS

Initial Public Housing AwardsTotal Public Housing Applications 113Total Awarded Public Housing Projects 110

Total Awarded PHAs 68Total Awarded Public Housing Units 11,910

Initial Mod-Rehab AwardsTotal Mod Rehab Applications 3Total Awarded Mod Rehab Projects 2

Total Awarded Mod Rehab Owners 2Total Awarded Mod Rehab Units 343

Type of Section 8 Subsidy• 54% Project Based Vouchers (PBV)• 46% Project Based Rental Assistance (PBRA)

PUBLIC HOUSING INITIAL AWARDS – KEY CHARACTERISTICS

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PHA Size• 20% Small (<250 Units)• 58% Medium (251-1,249 Units)• 22% Large (1,250+ Units)

PUBLIC HOUSING INITIAL AWARDS – KEY CHARACTERISTICS

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$ 977 Million in Total Financing Sources• $74 million PHA Supplied (just 7.5% of all financing sources)

• $257 million 1st Mortgage• $409 million in 4% & 9% LIHTC• $237 million in Secondary Financing

PUBLIC HOUSING INITIAL AWARDS – KEY CHARACTERISTICS

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INITIAL CONVERSION AWARDS– 2ND COMPONENT

Rent Supp/RAP & MR Requests to DateTotal Rent Supp & RAP Conversion Requests

Mod Rehab Conversion Requests

Additional Requests in Pipeline**

40(~4,997 units)

2(~302 units)

24(~2,000 units)

Total Awards ApprovedTotal Awards Closed

Total Awards Under Review

1712

(~3,200 units)

11(~2,099 units)

Total Letters of Interest Received by 4/01/13 121(10,600 contract units & 9,700 potentially eligible

units)

**Additional requests in the pipeline are those that have received short-term extension to prepare and submit applications by September 30, 2013.

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RAD CAPITAL MARKETPLACE

www.radcapitalmarketplace.com

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RAD Notice, application materials, and additional resources can be found at

www.hud.gov/rad

Email questions to rad@hud.gov

RAD WEB PAGE