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Notice Listings on Eligibility for RAD

Only PHAs may apply under this section of the Notice. However, PHAs may consider enlisting partners to facilitate recapitalization and development of its projects. Additionally, while public housing mixed-finance projects are eligible for conversion under the Demonstration (see Section 1.9 of this Notice), the application for conversion of assistance must be submitted by the PHA on whose ACC the units are included. This requirement also applies to directly-funded Resident Management Corporations (RMCs).

A RAD Application may be rejected, or a CHAP or RCC revoked, if HUD determines an applicant or PHA to be ineligible.

To be eligible for the Demonstration, a PHA must:

Have public housing units under an Acc;
Be classified as a Standard or High Performance under the Public Housing Assessment System (PHAS). If classified as “troubled” (Troubled), the PHA may still be eligible if the PHA is making substantial progress under its Recovery Agreement, Action Plan, Corrective Action Plan (CAP) or Memorandum of Agreement (MOA) or proposes a revision to such agreement or plan that incorporates conversion under RAD and that is acceptable to HUD, HUD must have determined that the factors resulting in the PHA’s Troubled status will not affect its capacity to carry out a successful conversion under this Demonstration;
Be classified as a Standard or High Performer under the Section Eight Management Assessment Program (SEMAP) if the PHA will be administering the PBV contract under RAD. If classified as Troubled, the PHA must be making substantial progress under the CAP and HUD must have determined that the factors resulting in the PHA’s Troubled status will not affect its capacity to carry out a successful conversion under this Demonstration;
Be in substantial compliance with HUD reporting and programmatic requirements and/or satisfactorily in compliance with any CAP or MOA related to any 1) program finding or 2) failure to carry out, to the satisfaction of the Department, management decisions, relating to an audit by the Office of Inspector General;
Not have a debarment, suspension, or Limited Denial of Participation (LDP) in Federal programs lodged against the applicant, PHA Executive Director, Board members, or affiliates, unless HUD has determined that the RAD conversion is likely to place the property under the control of a more capable entity;
Submit a completed application that complies with all RAD Application instructions. Resolve to HUD's satisfaction any outstanding civil rights matters prior to conversion. All pending legal processes must have been satisfied to meet this standard. If eligibility would be denied on this basis, HUD will notify the applicant of its determination and any actions to permit a finding of eligibility.

Additionally, a PHA may be required to demonstrate that its proposed activities under RAD are consistent with and will not hinder or delay satisfaction of any applicable fair housing or civil rights VCA, conciliation agreement, consent order or consent decree, final judicial ruling, or administrative ruling or decision. HUD may terminate a CHAP or RCC if it determines that the terms of the conversion would be inconsistent with fair housing or civil rights laws or is inconsistent with, would hinder, or would delay satisfaction of a fair housing or civil rights court order, settlement agreement, or VCA (see Section 1.12 of this Notice).

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Questions on Eligibility for RAD

Eligibility of Units Located in a Flood Zone for RAD Conversion

Can you convert units located in a flood zone to RAD?

RAD is subject to the floodplain management regulations at 24 CFR Part 55. Those regulations do not prohibit assisance in floodplains, but do require a process to consider and mitigate impacts. Please keep in mind that in most cases, activities in a floodway will be prohibited.

Eligibility for RAD Conversion

Does a unit have to actually receive operating subsidy before it can be converted to RAD?

The unit must be receiving ACC subsidy at the time of the RAD conversion. However, the PHA may apply for RAD as soon as the unit is under the ACC (even if the unit is not yet receiving subsidy).

Section 202 Conversion to RAD

Currently, only Section 202 properties with a Rent Supplement contract (which are rare) can convert under RAD's Second Component provided all of the eligibility requirements have been met.

The Administration's FY 2017 proposal includes Section 202/PRAC properties under the RAD Second Component however, legislation providing this authority has not been enacted.

Eligibility of Mod Rehab SRO units for RAD

We see from the regulations that the Moderate Rehabilitation SRO program is excluded from participation in the RAD program. Is there a possibility for a waiver of this exclusion and how do we go about requesting it?

It is excluded by statute, so HUD does not have discretion to make it eligible. However, HUD has asked Congress to make Mod Rehab SRO eligible in the 2015 appropriation bill.

Income Limits for PBV Assistance

What income limits are used to determine whether a family is income-eligible for PBV assistance under the second component of RAD, at Rent Supp and RAP properties?

The applicable answer depends on whether there is a prepayment of the mortgage that would trigger provision of enhanced vouchers. Where there is no prepayment of the mortgage: To be eligible for the PBV program under the second component of RAD, residents at these Rent Supp or RAP properties must be low-income (annual income of not more than 80% of the median income for the area). The PHA’s administrative plan must allow for the provision of PBV assistance to these low-income families. If the PHA’s administrative plan does not currently provide for these low-income families to be eligible, the PHA must amend its administrative plan in order to administer the RAD conversion. This administrative plan requirement is consistent with 24 CFR 982.201(b)(1)(iii). HUD will consider waivers of 24 CFR 982.201(b)(1)(iii) to allow a PHA to provide assistance to these low-income families without an amendment to the PHA’s administrative plan, when needed due to the timing of the conversion (for example, when the PHA is unable to amend its administrative plan before the PBV HAP contract is signed). Where there is a prepayment that would trigger provision of enhanced vouchers: To be eligible for the PBV program under the second component of RAD, residents at these RAP properties must be low-income, and there is no need to amend the PHA administrative plan to accommodate these families. Please note that a moderate-income family (annual income above 80% of but not more than 95% of the median income for the area) who is elderly or disabled or is residing in a low-vacancy area (3 percent or less vacancy rate, as determined by the HUD local office economist) is income-eligible for an enhanced voucher, but is over-income for PBV assistance. Such families will receive enhanced vouchers through the conversion, and the units occupied by such families shall not be included in the PBV contract.

Demolished Project Eligibility under RAD

A PHA is considering applying for RAD for a project that has already been demolished. Is this project still eligible for RAD?

No. Only projects with units under ACC and in PIC are eligible for RAD.

RAD Eligibility for FHA-Insured Healthcare Facility

Is a nonprofit agency (not a housing authority), who owns/operates a nursing home or assisted living facility (currently with an FHA-insured loan), eligible to apply under RAD to convert units to PBV?

No. In the first component of RAD, eligibility is limited to units that are already assisted under the public housing units or Section 8 Mod Rehab programs. In the second component of RAD, eligibility is limited to units that are already assisted under the Mod Rehab, RAP or Rent Supplement programs.

Capital Fund Financing Program

My PHA is considering RAD but we have an existing Capital Fund Financing Program (CFFP) obligation. Can my PHA still apply for RAD?

Yes, any PHA with a CFFP obligation may apply for RAD. Some CFFP debt will not require any change in the structure or form of the CFFP obligation. In other instances, HUD will work with the PHA, following CHAP issuance, to attempt to develop a payment strategy to discharge either all or a portion of CFPP debt with eligible sources of pre-payment funds, which could include Capital Funds, Operating Funds, or funds proceeds from the RAD transaction, if structured appropriately. (Upated: 10/19/2012)