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Eligibility for 2019 NOFA Properties
Is it possible for a successful applicant under the 2019 Section 202 NOFA to undergo a RAD for PRAC conversion simultaneous with or shortly after the commencement of the awarded PRAC contract?Yes, PRAC units developed under the 2019 (or a subsequent year) NOFA may be eligible to convert to the Section 8 platform using the authorities under RAD once the units are constructed and placed under the executed PRAC, provided the conversion is in compliance with all requirements of the RAD Notice. However, special timing considerations may be needed if a property is in its initial PRAC contract term, because the age of the funds HUD has obligated to the PRAC contract may affect when funding can be transferred to support a conversion to a Section 8 contract. Owners of PRACs that are still in the original contract term should confirm with HUD the necessary timing of its conversion.
Repayment of Original 202 Grant
Is the original 202 grant from HUD forgiven or repaid with the new financing?At Closing, the project is released from outstanding obligations under the Capital Advance Agreement, the Capital Advance Mortgage Note, the Capital Advance Program Regulatory Agreement, the Capital Advance Program Use Agreement, and related or collateral documents associated with the PRAC. Simultaneous with the release of Capital Advance obligations, the Owner will be required to execute and record a new Elderly Housing Use Agreement.
Service Coordinator Hiring
We don’t currently have a service coordinator at our 202 PRAC project. Do we need to hire one before we can convert?Hiring a service coordinator is not a requirement. However, the owner must demonstrate the physical and mental health and wellness needs of residents have been identified and/or can be adequately met in ways other than through a Service Coordinator on staff and that those supportive services are available to all residents. The owner must also identify that the available services will meet emerging needs of the residents to facilitate aging in place.
Capital Advance Amount on PRAC TOA
What happens to the capital advance amount if we were looking to move the entire PRAC to a new location? Does it stay the same or is it adjusted based on the property we move the PRAC to?The Capital Advance Note amount does not change and is forgiven at the time of conversion. This is also true when the conversion involves a transfer of assistance. At Closing, HUD will release the Capital Advance Use Agreement on the original site.
Eligibility for Occupancy at RAD for PRAC
When a 202 PRAC converts under RAD, are disabled individuals over the age of 18 but under the age of 62 eligible for occupancy?After conversion, the project must continue to serve Elderly Families as defined by 24 CFR 5.403. Elderly Family means the head of household or spouse or sole member is a person who is at least 62 years of age. It may include two or more persons who are at least 62 years of age living together, or one or more persons who are at least 62 years of age living with one or more live-in aides.
Adjacent 811 and 202 PRAC Properties
We have a 15-unit Section 811 PRAC project located adjacent to our 50-unit Section 202 PRAC project. Under RAD, could the 811 project be combined with the 202 project to form a new 65 unit Section 8 project?No, the projects must be maintained as two separate projects. Only the 50 units at the Section 202 PRAC project can be converted to Section 8.
RAD for PRAC Eligibility
Can Section 811 PRACs convert under RAD?No, the RAD statute as currently written does not permit Section 811 PRACs to convert under RAD.