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HUD Notice Rental Assistance Demonstration (RAD) –

HUD Notice Rental Assistance Demonstration (RAD) – Partial Implementation and Request for Comments April 2012. Current Challenges. Public Housing Capital repair needs in excess of $25.6B across portfolio, or $23,365/unit

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HUD Notice Rental Assistance Demonstration (RAD) –

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  1. HUD Notice Rental Assistance Demonstration (RAD) – Partial Implementation and Request for Comments April 2012

  2. Current Challenges 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) • Losing 10,000-15,000 hard units/year Section 8 Moderate Rehabilitation (Mod Rehab) • Cannot renew on terms needed to secure financing Rent Supplement (RS) & Rental Assistance Payment (RAP) • No option to renew when contracts expire

  3. History • February 2010: FY11 Budget requests $350M for Transforming Rental Assistance (TRA) initiative • May 2010: “Preservation, Enhancement, and Transformation of Rental Assistance Act of 2010” (PETRA) - Administration’s bill • December 2010: “Rental Housing Revitalization Act” (RHRA) introduced by Rep. Ellison and co-sponsors • February 2011: FY12 Budget requests $200M for a “Rental Assistance Demonstration” (RAD) • August 2011: RAD language submitted as “Technical Drafting Service” (TDS) to Rep. Ellison, Rep. Bachus, and Senator Shelby • November 2011: FY12 Appropriations minibus authorized RAD

  4. Goals FY12 Rental Assistance Demonstration (RAD) Allow selected Public Housing & some at-risk assisted Multifamily programs to convert to long-term Section 8 Housing Assistance Payment (HAP) contracts • Goals • Build on proven Section 8 multifamily platform • Leverage private capital to preserve public housing • Offer residents greater choice & mobility

  5. Authority Authorized as part of the Consolidated Further Continuing Appropriations Act of 2012 (Public Law 112-55) • Program Rules outlined in PIH Notice 2012-18 2 Components • 1st Component: Competitive – Public Housing & Mod Rehab • 2nd Component: Non-competitive – Mod Rehab, Rent Supp, & RAP

  6. RAD Conversion Eligibility Effective Immediately Public Housing Mod Rehab RS & RAP Cap of 60,000 Units No Cap , but subject to availability of TPVs PBRA PBV PBV

  7. 1st Component: Competitive • Public Housing & Mod Rehab • Proposed: Public Comments due April 9, 2012 • Can compete to convert assistance to: • Project-Based Rental Assistance (PBRA) or • Project-Based Vouchers (PBV) • Cap of 60,000 units • Convert at current funding only • Choice-mobility, with limited exemptions • Extensive waiver authority to facilitate conversion • Applications through September 30, 2015

  8. Key Program Provisions: Public Housing

  9. Key Program Provisions: Public Housing Continued

  10. Current Funding – Conversion Rent Levels ACC Section 8

  11. Impacts on Public Housing RAD Authority Could Impact • ≈220,000 – 270,000 units could potentially convert at current funding* • 60,000 unit cap ≈5% of public housing inventory • 300 – 400 projects could potentially convert • ≈$380M in current PH funding and ACC units to transfer to PBRA or TBRA account • PBRA HAP conversions shift to Office of Multifamily Housing Programs * Defined as able to leverage sufficient debt at current funding levels to meet the average regional capital need in the Capital Needs Assessment 2010 (Abt Associates). Estimate assumes debt-only and does not account for the use of other forms of capital.

  12. RAD Conversion Eligibility Effective Immediately Public Housing Mod Rehab RS & RAP Cap of 60,000 Units No Cap , but subject to availability of TPVs PBRA PBV PBV

  13. Key Program Provisions: Mod Rehab 1st Component

  14. Resident Choice-Mobility • PBV • Adhere to current program rules: • Minimum residency: 1 year • Waitlist priority if comparable TBRA is not immediately available • PBRA • Minimum residency: 2 years • PHA may limit: • Choice-mobility vouchers to one-third of its turnover vouchers • Choice-mobility moves to 20 percent of the assisted units in the project • HUD may exempt up to 10% of converted units for: • PHAs/owners without voucher program • PHAs with one-third of voucher turnover already committed to veterans or to the homeless • Ranking factor (in competition) for applicants who obtain/commit choice-mobility vouchers

  15. RAD Conversion Eligibility Effective Immediately Public Housing Mod Rehab RS & RAP Cap of 60,000 Units No Cap , but subject to availability of TPVs PBRA PBV PBV

  16. Key Program Provisions: Mod Rehab 2nd Component

  17. 2nd Component: Non-Competitive • Mod Rehab, Rent Supp & RAP – All Public Comments due April 9, 2012 • Proposed: Mod Rehab • Interim Authority: Rent Supp & RAP • Upon contract termination/expiration, convert Tenant Protection Vouchers (TPVs) to PBVs • No cap, but subject to availability of TPVs • Choice-mobility requirement as found in PBV program • Limited waiver authority to facilitate conversion • 2-year prospective conversion authority (ends 9/30/2013) • 5-year retroactive conversion authority (10/1/2006)

  18. RAD Conversion Eligibility Effective Immediately Public Housing Mod Rehab RS & RAP Cap of 60,000 Units No Cap , but subject to availability of TPVs PBRA PBV PBV

  19. Rent Supp & RAP Background • Rent Supp program authorized under Section 101 of the Housing and Urban Development Act of 1965 • RAP programauthorized under Section 236(f)(2) of the National Housing Act • Contracts authorized for 30 to 40 year terms.Budget authority provided for contract term. No option for renewal. • All contracts expire by 2019, most prior to 2016 • Today: Approximately 25,000 Rent Supp/RAP units remain, in 345 properties (236 and some 202s). In most cases the Rent Supp or RAP provides assistance to some, but not all units.

  20. Geography of Rent Supp & RAP

  21. Key Program Provisions: Rent Supp & RAP

  22. Submission of Public Comments • Due April 23, 2012 • 2 methods for submitting public comments • Electronic – Federal eRulemaking Portal at www.regulations.gov. HUD strongly encourages electronic submissions of comments. • Mail – Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW, Room 10276, Washington, DC 20410-0500 • Submissions must refer to HUD Notice (PIH 2012-18) • All comments submitted will be posted for public viewing on www.regulations.gov

  23. Projected Timeline Initial Notice Published 3/8/2012 45-Day Public Comment Period Ends 4/23/2012 Final Notice Published 6/15/2012 First Component (Public Housing & Mod Rehab) Initial Application Window Opens 8/1/2012 Public Housing Ongoing Application Window Opens 9/1/2012 Initial CHAP Awards 10/1/2012 Second Component (Mod Rehab, Rent Supp, & RAP) Rent Supp/RAP Requests for Conversions Under Interim Authority 3/8/2012 Rent Supp/RAP/Mod Rehab Requests for Conversions Under Final Notice 8/1/2012

  24. RAD Web Page All Notice and application materials, as well as additional resources, can be found at www.hud.gov/rad

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