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Rental Assistance Demonstration (RAD)Resident Protections and Engagement in
Mod Rehab and Section 202 PRAC Conversions
September 12, 2019
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BACKGROUND
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Why RAD?
The Problem
Properties assisted with Section 8 Moderate Rehabilitation (Mod Rehab), McKinney Vento Single Room Occupancy (Mod Rehab SRO), and Section 202 Project Rental Assistance Contract (202 PRACs) are aging stocks of HUD‐assisted affordable housing that renew on year‐to‐year rental subsidy contracts that inhibit access to commonly used financing needed to make property improvements.
RAD was created in 2011 to preserve and bring new resources to these critical stocks of affordable housing by “converting” properties to subsidy under a long‐term Project‐Based Section 8 contract
Property Type Occupancy Units
202 PRACs Elderly 120,000
Mod Rehab General 17,000
SRO Formerly homeless 13,500
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RAD Notice: Housing 2019‐09/PIH 2019‐23
RADConversion
Sec. 8 Moderate Rehabilitation
202 PRACMod Rehab
Mod Rehab SRO Rent Supp
RAP
McKinney Vento SRO
Public Housing
Section 8 Project‐Based Rental
Assistance (PBRA)
Section 8 Project‐Based Voucher
(PBV)
“First Component” “Second” Component”
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How RAD Is UsedProperty owners use RAD to preserve affordable housing in their communities by: Stabilizing funding for properties Financing repairs and improvements Transferring the assistance to properties in lower poverty neighborhoods with access to schools, jobs, and transportation.
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Common RAD Financing Sources
Debt
Low Income Housing Tax Credits
Other grants or soft‐loans
Existing property reserves
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RAD Core Principles
#1 Long‐term preservation and affordability– Capital Needs Assessment performed upfront to ensure current and future repairs can be supported
– Long‐term (20 years) Section 8 HAP contract ensures residents pay an affordable rent
202 PRAC only– RAD Elderly Housing Use Agreement recorded on land, superior to all liens – extends affordability by 20 years
– HAP must be renewed during term of Use Agreement– One‐for‐one replacement of deeply affordable units (with certain minor exceptions)
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RAD Core Principles#2 Maintain ownership requirements
– 202 PRAC properties converted under RAD must be owned or controlled by a non‐profit owner
– No restrictions on ownership of Mod Rehab properties converted under RAD
#3 Maintain occupancy requirements– 202 PRAC conversions – elderly, 62yrs+– Mod Rehab SRO – formerly homeless– Mod Rehab – general occupancy
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RAD Core Principles#4 Ensure current residents benefit from the
conversion– Resident meetings and notices– Right to remain in or return to the property– No Rescreening as a result of RAD – Relocation assistance
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RAD PROCESS AND RESIDENT ENGAGEMENT
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RAD Process Illustrated
Submission of Interest
Resident Notification
and Consultation
Conversion Plan
HUD Approval
Closing
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Submission of Interest
Submission of Interest
Resident Notification
and Consultation
Conversion Plan
HUD Approval
Closing
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Owner provides basic property and contract information
HUD assigns a “Transaction Manager” to provide technical assistance
Owner begins to:‐ Identify necessary scope of work‐ Find partners (if needed)‐ Secure financing commitments
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Resident Notification and Consultation
Submission of Interest
Resident Notification
and Consultation
Conversion Plan
HUD Approval
Closing
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Owner provides written notification letters to all residents (samples available at www.radresource.net)
Owner conducts at least two resident meetings to describe conversion plans
Resident comments submitted with Conversion Plan
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Conversion Plan
Submission of Interest
Resident Notification
and Consultation
Conversion Plan
HUD Approval
Closing
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Owner submits to HUD Conversion Plan, which includes:
o Capital Needs Assessmento Environmental Reviewo Proposed financing (if applicable)o Description of relocation (if applicable)
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HUD Approval
Submission of Interest
Resident Notification
and Consultation
Conversion Plan
HUD Approval
Closing
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Approval letter will outline the key components of the planned RAD conversion and conditions that need to be satisfied to close the conversion
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Closing
Submission of Interest
Resident Notification
and Consultation
Conversion Plan
HUD Approval
Closing
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Owner completes all closing requirements New Section 8 HAP contract signed New RAD Elderly Housing Use Agreement
recorded on land Residents sign new Section 8 leases New tenant certification process not needed
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Construction/Rehab
Submission of Interest
Resident Notification
and Consultation
Conversion Plan
HUD Approval
Closing
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If required by Approval Letter, rehabilitation/ construction begins after “closing”
Residents may be living in temporary relocation housing during rehab/construction.
Residents return following completion of rehab/ construction
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RESIDENT RIGHTS
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Tenant Rents
Resident rents remain affordable after conversionUnder the Section 8 programs, residents continue to pay 30% of their adjusted gross income in rent.
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Right to Remain and Right of ReturnMost conversions do not involve relocation residents will remain in‐place and cannot be rescreened after the conversion
When relocation is necessary Residents have a right of return to a unit in the project
No resident may be permanently, involuntarily displaced
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No RescreeningA conversion under RAD cannot be the basis for an eviction or loss of rental assistance• Residents may not be rescreened as a result of the RAD conversion.
• Following conversion, residents will be protected by standard Section 8 requirements related to tenancy
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Where relocation is necessary, owners must provide residents with Resident notices Moving assistance Benefits and assistance per the “Uniform Relocation Assistance and Real
Property Acquisition Policies Act (URA)”
Relocation cannot begin until HUD approves the Financing Plan and issues the RAD Conversion Commitment (RCC).
Owners should maintain a resident log for all impacted residents to be provided to HUD upon request.
Relocation
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To maximize resident choice, owners may offer alternative housing options, such as vouchers, homeownership opportunities, etc.
Residents can voluntarily decline their right to return. Written consent by resident must be:
Informed – written notification w/ counseling Voluntary – cannot be pressured and must be provided at least 30 days to make a decision
Documented – retain evidence of notices, counseling and resident’s decision
Alternative Housing Options
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Right of Return & Low Income Housing Tax Credits (LIHTC)LIHTC cannot bar the right of return• LIHTC is a non‐HUD program run by state housing
agencies that is commonly used to fund property repairs• While residents cannot be rescreened for admission to
the Section 8 program, a participating owner will certify residents for LIHTC
• However, if a resident is “over‐income” for LIHTC eligibility,* the resident still retains the right of return– Unit can be excluded from LIHTC and remain affordable – Resident may choose, voluntarily, to move elsewhere
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*Generally,householdsareeligibleforLIHTCiftheirincomeisatorbelow60%ofthe“AreaMedianIncome.”Statescannowaverageincomesofpropertyresidentstobroadeneligibility.
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RESIDENT PROCEDURAL RIGHTSFor conversions to PBRA, residents gain or retain resident organizing rights (24 CFR Part 245) which safeguard:
– Formation of resident organizations– Organizing activities– Meeting space– Resident organizers– Canvassing
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Choice Mobility
For conversions to PBV, residents may request a tenant‐based voucher after living at the converted property for one year (“choice‐mobility”)
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Resident Reminders• Review Notices for information about the RAD process
• Attend Resident Meetings• Ask questions • Request clarification/more information before signing documents
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Questions/Issues?Typically, the best place to start when you have questions or issues related to the RAD conversion is to discuss with your property manager or OwnerIf you seek additional assistance
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Prior to Conversion
After Conversion
Property Manager HUD Multifamily Field Office
Project Based Voucher Lease
HUD Public Housing Field Office
Project Based Rental Assistance Lease HUD Multifamily Field Office
Public Housing Field Offices: www.hud.gov/program_offices/public_indian_housing/about/field_officeMultifamily Field Offices: www.hud.gov/program_offices/housing/mfh/hsgmfbus/abouthubspcs
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Thank You and QuestionsFor more information visit
www.hud.gov/rad“Resident Information” “How Does RAD Impact Me?” Bottom of page
Mod Rehab Resident Fact Sheet (PRAC forthcoming)
Contact: [email protected]
Join the RAD LISTSERV for periodic news and updates(link available at the bottom right of the
www.hud.gov/rad webpage)
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