RAD News

The Rental Assistance Demonstration (RAD) is a. voluntary program of the Department of Housing and Urban Development (HUD). Check here for the latest news!

The RAD Guide to CHAP Amendments

The Office of Recap has created the attached “Overview of RAD CHAP Amendments” guide to assist PHAs who wish to make changes to their initial RAD CHAP award. The purpose of the guide is to provide an overview of the CHAP amendment process, a comprehensive listing of reasons CHAPs might be amended, including permitted changes to contract rents, updating utility allowances, and modifying the units that will be converted. It also provides additional clarity regarding the information the PHA must include in their amendment request in order for the amendment to be processed. HUD’s intent in producing this document is to ensure that PHAs are fully aware of the options available to them and to reduce the overall number of instances in which a CHAP may need to be amended.

All CHAP amendment requests must be submitted via email to your assigned RAD Transaction Manager 60 days prior to your Financing Plan submission. Waiting to submit a CHAP amendment request after this time may result in significant processing delays.

We encourage you to continue to work closely with your assigned RAD Transaction Manager on any changes to the proposed conversion.

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RAD Update

RAD NOTICE REVISIONS

On January 12, HUD issued a third revision to the RAD notice (PIH 2012-32 / H 2017-03 Rev 3—or RAD Rev3) to simplify certain 1st Component program requirements, create new flexibilities to make more conversions feasible, and strengthen tenant rights. Under the 2nd Component, the revisions improve the rent-setting options available to owners. A summary of key changes can be found by clicking here.

HUD has published both a blackline version showing the changes made in Revision 3 as compared to Revision 2 along with a clean Revision 3 of the RAD Notice. The Notice went into effect upon its publication in the Federal Register on 1-19-17. Changes related to selection and eligibility criteria (noted in the summary) will be subject to public comment and will be effective 30 days after publication in the Federal Register unless modified by HUD as a result of public comment. Comments are due 2-21-17.

According to Tom Davis of the Recap Office, RAD Rev3 mostly seeks to streamline and clarify a number of matters set out in practice over the last year. Nonetheless, there are a few policy changes worth reviewing closely, including a revised formula for determining developer fees and changes in how PHAs may use acquisition proceeds. Additionally, HUD has simplified the process for PHAs interested in converting properties through RAD to be added to the waiting list of likely interest to prospective applicants.

The Collaborative will offer comments on RAD Rev 3 for review and discussion shortly and then provide finalized comments to HUD. We will also conduct a Q&A webinar session open to all who are interested with leading RAD practitioners, counsel and advisors to discuss how to best apply in practice recent Notice revisions—along with the Site & Neighborhood Standards and relocation guidance issued last November. Standby for details on this to come shortly.

NEW RESIDENTS & RAD INFO

HUD recently added to a set of helpful fact sheets to aid and inform both residents and PHAs about different aspects of the RAD conversion process. The facts sheets are available on the Collaborative’s Residents & RAD web page tab by clicking here. HUD is seeking feedback on the fact sheets to help finalize them. Send comments directly to rad@hud.gov.

EXPANDING RAD AHEAD

As HUD’s new secretary-designee and his team begin to chart their policy objectives and the Hill considers a range of housing issues for possible legislative action, the Collaborative continues to believe that there will be opportunities to expand RAD in the months ahead:

  • The FY 2017 budget must be resolved by the end of April, and potentially offers a means to modestly extend RAD’s authority—even in the event of a full-year continuing resolution or CR.
  • Additionally, the new HUD team is expected to put forward soon its policy priorities in some form of an FY 2018 budget request. Dr. Carson advised the Senate Banking Committee in follow-up materials to his confirmation hearing that he was encouraged by RAD’s results to date, and that he “looked forward to working with Congress to expand this worthy program.”
  • The House Financial Services Committee in particular is likely to continue to be interested in advancing affordable housing policies that make the best use of limited public resources, which RAD has demonstrated that it does.
  • And the Hill more generally is likely to consider infrastructure legislation offered by the new administration, which Dr. Carson also advised the Banking Committee that he would work to see affordable housing addressed in the bill.

CLPHA and others are actively advancing investment in public housing and RAD as proven, high-leverage approaches to preserving much demanded affordable housing infrastructure—which demonstrably creates jobs and rebuilds neighborhoods (click here for more information on the CLPHA proposal)—elements of which are included in a just-released Democratic infrastructure plan: A Blueprint to Rebuild America’s Infrastructure. Improving public housing is included in a $100 billion component to “Revitalize America’s Main Streets” Another $10 billion is proposed for seed money for low-cost loans or loan guarantees available to affordable housing.

The Collaborative will continue to monitor, advocate and support opportunities to expand and streamline RAD—keeping you apprised and engaged—as they unfold. More immediately, please continue to press for the Senate’s RAD proposals in the FY 2017 budget, whatever the final resolution. More broadly, urge all of your Congressional representatives to support RAD as a cost-effective approach in preserving affordable housing for the elderly, disabled, under-employed and others who need it most.

IRS & TREASURY REINFORCE COMMUNITY REVITALIZATION PLAN REQUIREMENT

RAD projects tapping the basis boost provision in federally Qualified Census Tracts (QCTs) when utilizing LIHTCs should closely review two new notices issued by the IRS and Treasury Department on 1-20-17.

In a move to reduce the “risks of exacerbating concentrations of poverty” by “placing LIHTC projects in qualified census tracts,” IRS and Treasury recently reinforced restrictions on QCTs preferences in Revenue Notice 2016-77. The Notice advises LIHTC issuing agencies that a project may qualify for a QCT basis boost only if it “contributes to a concerted community revitalization plan.” It also clarifies that a LIHTC housing project in itself does not constitute a recognizable revitalization plan.

In a companion notice Revenue Ruling 2016-29, IRS and Treasury reinforced the Congressional requirement that local residents be given a “reasonable opportunity to comment” on the placement of LIHTC projects in their community while clarifying that this provision does not afford local residents effective veto power over projects, which has exacerbated racial segregation practices. The Notice asserts that a local opportunity to comment is not the same as a local veto.

This post originally appeared as part of the RAD Collaborative monthly update.