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Notice Listing on Faircloth-to-RAD

Notice Section 1.9 Application Requirements

Under the Demonstration, applicants may apply to convert a single project⁷⁸, a phase of a multi-phase rehabilitation or redevelopment, and/or a PHA-defined portfolio of projects (which could include subsequent phases in a multi-phase effort and completely independent projects. The requirements for each type of application are listed below:

General Requirements. All applicants must complete the RAD Application, which HUD will make available on the RAD website (www.hud.gov/rad), along with all other required submittals. The RAD Application will include certain pre-populated project data and will require the applicant to input summary information regarding the PHA's tentative plans.
PHAs apply by Project which may consist of an entire Asset Management Project (AMP), a part of an AMP, or multiple AMPs. If a PHA desires to convert only a portion of a project (e.g., only the high-rise portion of a project that is currently combined with scattered sites) and maintain the remaining portion as public housing, the PHA should indicate as such in its application (i.e., the PHA will not need to request a change in configuration for the project in order to submit the application). Similarly, a PHA may indicate in its application if it is applying for multiple public housing AMPs as a single Project.
The RAD Application must include, where applicable:
1. A Certification of Board Approval, which must be signed by the authorized representative of the PHA. This certification will be required for all submitted applications.
2. A Response to comments received in connection with the required resident meetings on the proposed conversion.
3. A Mixed-Finance Affidavit is required where the PHA is requesting to convert the public housing assistance in a mixed-finance project. This affidavit must be signed by both the PHA administering the public housing ACC and the Owner Entity of the project. Since only PHAs can apply under the Demonstration (see Section 1.3 of this Notice), the purpose of this affidavit is to ensure that both parties (the Owner Entity and the PHA) agree in principle to the conversion. Please note, however, that the HAP Contract for a mixed-finance conversion will be executed between the Contract Administrator and the mixed-finance Owner Entity, not the PHA administering the public housing ACC. (The PHA may be part of the ownership structure, however.)
4. A Choice-Mobility Commitment Letter signed by: (a) the voucher agency that has committed to provide Choice-Mobility vouchers to the covered PBRA project of another PHA for the term of the initial HAP Contract; and (b) the agency that obtains a commitment from a voucher agency to support Choice-Mobility for a specified PBRA project. PHAs that are able to meet the Choice-Mobility requirement through turnover from their own voucher programs do not need to complete this letter.
If a PHA chooses to convert assistance to PBVs, the PHA must identify in the RAD Application the voucher agency that will administer the PBV HAP Contract. If another PHA is proposed as the contract administrator and the project is selected, the PHA will need to submit a signed letter from the voucher agency evidencing the agency’s willingness to administer the PBVs. The PHA may contact the local HUD Office of Public Housing to identify a list of voucher agencies that have appropriate legal jurisdiction to perform this role. If there is no voucher agency with overlapping legal jurisdiction that is willing to administer the PBV contract, the PHA may want to consider converting the project to PBRA. However, in so doing, the PHA would still be required to meet, or receive an exception to, the Choice-Mobility requirement as described above.
Applications for Multi-phase Development. Prior versions of the Notice distinguished Multi-Phase Awards from Portfolio Awards. With this notice, PHAs that wish to implement a multi-phase rehabilitation or redevelopment of a public housing site may reserve authority to do so under the Portfolio Award structure. As of the effective date of this Notice, existing Multi-Phase Awards are converted to Portfolio Awards, subject to the time frames specified for Portfolio Awards provided that HUD may, in its sole discretion, grant extensions to such deadlines up to september 30, 2024.

HUD recognizes that in certain situations multi-phase development warrants the demolition of a greater number of units than may be replaced in a single phase. HUD will consider individual requests for demolition prior to the construction closing of a phase based on a site plan, the timing and sources & uses for each proposed phase, the capacity of the development team, the impact on residents, and the overall likelihood that units will be successfully redeveloped.

Applicants should keep in mind that the environmental documents submitted with the Financing Plan during the first phase (see Attachment 1A) must be submitted for the entire site, i.e., all of the phases of the multi-phase development, and that the environmental review conducted during the first phase will cover the entire site.
Applications for Portfolio Awards. A PHA may apply for a Portfolio Award, which allows a PHA to reserve RAD conversion authority for a set of projects (including for multiple phases of a large scale redevelopment effort and for planned projects) and that locks in the applicable contract rent in the year of application. In order to apply for a Portfolio Award, a PHA must submit:
1. The total number of units to be converted; and
2. RAD Applications for the lessor of four projects or 25% of the units identified in the portfolio.
Upon approval of the application submission listed above, HUD will issue, in addition to the provision of CHAPs for the applications submitted, a Portfolio Award Letter covering the remaining units within the portfolio proposed by the applicant. The Portfolio Award Letter reserves RAD conversion authority for the remaining units in the portfolio and locks in the applicable contract rent for the year of the application submission for the units covered by the Portfolio Award. In order to retain its Portfolio Award, except with HUD approval, a PHA must close, on average starting one year after the issuance of the first CHAP, either two prjects per year or 25% of the units identified in the portfolio per year. For purposes of the annual average, conversions which occur in the first year shall be deemed to have occurred in the second year after issuance of the first CHAP. Units held in an existing portfolio award will be held to this standard effective on the date of publication of this Notice. PHAs may count existing CHAPs, in lieu of Applications, in presenting their Portfolio Award requests. The PHA has until September 30, 20204, submit an application for the final project covered by the Portfolio Award. Recipients of Portfolio Awards shall be required to fulfill all RAD Requirements for each CHAP issued by HUD. If at any time HUD determines that a PHA has failed to make sufficient progress towards the submitted conversion of the proposed portfolio, HUD may revoke RAD conversion authority provided under the Portfolio Award for all projects where a CHAP has yet to be issued. With HUD consent, PHAs may substitute projects in the portfolio award, and switch projects between the active and pending portions of the portfolio, provided that the newly substituted projects are subject to all of the requirements of this Notice.
Further, PHAs that have received CHAPs for multiple projects, but that did not request a Portfolio Award, may convert their awards into a Portfolio Award as long as they comply with the requirements for a Portfolio Award.
Application for projects awarded under a Choice Neighborhoods Initiative (CNI) Implementation Notice of Funding Availability (CNI NOFA). HUD will reserve authority under the statutory cap on public housing conversions for properties covered under CNI implementation grants that submit RAD Applications or Portfolio Award applications and that meet eligibility requirements.
Submission of Letter of Interest When a Waiting List Has Formed.During any period when HUD is maintaining a waiting list pursuant to Section 1.10, in lieu of a RAD Application, a PHA may submit a letter of interest signed by the PHA’s Executive Director to RADapplications@hud.gov that identifies all of the properties (PIC # and name) and associated ACC units that the PHA is proposing for conversion. Such a submission would reserve the PHA’s spot on the waiting list under the lowest priority category described in Section 1.11 in the order in which the letter was received. In anticipation of HUD’s ability to make additional awards, HUD will notify the PHA that it must submit a complete RAD Application orPortfolio Award application, and comply with all the application provisions of this Notice, within 60 days of such notification or forfeit its position on the waiting list. PHAs may consider submitting complete RAD Applications separately for properties in its conversion portfolio that would fall under a higher priority category so as to achieve a higher position on the waiting list.

Documents on Faircloth-to-RAD

Faircloth to RAD Guide

*Internal HUD Use Only

Webinars on Faircloth-to-RAD

Faircloth to RAD PHA Peer Learning Session (02/15/2024)

Faircloth-to-RAD Development (09/20/2023)

Faircloth to RAD: Developing Units available under a PHA’s Faircloth Limit and Converting the Assistance Through RAD (04/26/2021)

*Internal HUD Use Only

Questions on Faircloth-to-RAD

Faircloth to RAD and RAD/Section 18 Blends

Would HUD allow PHAs to utilize the RAD Section 18 Blend strategy of disposing of a portion of the units for a Faircloth-to-RAD as a part of the converrsion process to obtain higher rent levels?

Constructing Faircloth units and then immediately converting them under a RAD/S18 blend would not be feasible under current rules and regulations. Because the Faircloth units must be developed as Mixed-Finance, the construction costs are not part of the RAD transaction and the high cost factor of the the RAD/Section 18 blend would not apply. Faircloth is also incompatible with Section 18 because HUD would not approve construction of Faircloth units where the resulting units would meet the obsolescence test necessary for Section 18.

RAD Contract Rents for Mixed-Finance Projects

HUD will assign to a mixed-finance project, as with all RAD conversions, a RAD Contract Rent. Can the PHA negotiate with the owner of that project for such things as land lease payments, participation in cash flow, etc.?

Yes. HUD will underwrite each project to determine that all costs are reasonable and related to the project, and that the financing plan is feasible. Otherwise, the PHA and the mixed-finance owner are free to negotiate such matters.