HUD Issues Final Program Instructions for the Rental Assistance Demonstration

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HUD has released the final program instructions for the Rental Assistance Demonstration (RAD), a demonstration program designed to test the conversion of public housing and other HUD-assisted housing to long-term, project-based Section 8 rental assistance. The purpose of the program is to enable property owners to access debt and equity markets and to test how property is affected by increased housing choices for residents after conversion.

The initial RAD application period runs from September 24, 2012, to October 24, 2012, for the competitive allocation of conversion authority for public housing units and units under the Moderate Rehabilitation program (Mod Rehab). The HUD PIH Notice, PIH 2012-32, and draft application forms are available at HUD’s RAD website. The Federal Register notice provides highlights of key changes made to the preliminary program notice issued in March 2012.

Under RAD, public housing properties or Mod Rehab properties can convert either to project-based Section 8 vouchers (PBV) or project-based rental assistance (PBRA) Section 8 housing assistance payment contracts. Access to RAD conversion authority for up to 60,000 units is competitive. After the initial application period closes, a rolling application period will open and run until all conversion authority has been allocated, or until September 30, 2015. HUD intends to allocate conversion authority across geographic regions and housing authority size.

An additional component of the RAD program would enable properties subsidized with Rental Supplement, Rental Assistance Payment, or Mod Rehab to convert existing tenant protection vouchers to PBVs upon contract expiration or termination occurring after October 1, 2006, and no later than September 30, 2013. These conversions are not competitive, but are subject to the availability of tenant protection vouchers. The final program notice clarifies that there is no limit on the number of units eligible to be converted under this component of RAD.

Ballard Spahr will continue to monitor and report on RAD developments. If you wish to discuss the RAD program or have any questions, please contact Sharon Wilson Géno at 202.661.2218 or genos@ballardspahr.com, Mary Grace Folwell at 202.661.7605 or folwellm@ballardspahr.com, or Nydia M. Pouyes at 202.661.2216 or pouyesn@ballardspahr.com.

Published In: Administrative Agency Updates, Consumer Protection Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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