1. Compliance Challenges in the RAD Portfolio
October 2015
Compliance Challenges in the RAD Portfolio
Samantha Sowards
Experience – Leadership - Collaboration

2. Public Housing
October 2015
What is RAD?
$26 billion deferred maintenance backlog in public housing
Budget fell over 6% between
In 2012, HUD launched the rental assistance demonstration program (RAD)
Assess effectiveness of converting public housing (1st component) and Mod Rehab, Rent Sup, and RAP (2nd component) to long-term project-based Section 8
Chapter 1: Basic Program Information

3. Public Housing
October 2015
What is RAD?
As of May 2017, PHAs and their partners have converted over 60,000 units (571 projects) and raised a total of $4 billion in private and public funds
Chapter 1: Basic Program Information

4. What is RAD? PHA may select: Project-based rental assistance (PBRA)
HUD’s Office of Multifamily Housing Programs
Project-based vouchers (PBV)
Office of Public and Indian Housing (PIH)

5. What is RAD? Participation is voluntary
PHA submits an application to HUD
Many PHAs often apply for LIHTCs around to same time in order to rehab the property
Rules for RAD PBRA/PBV differ from standard programs in some places

6. RAD References REV-2: Closed prior to 1/19/17
Old Notices
PIH , REV 2
PIH ; H
New Notices
PIH , REV 3; H REV 3
PIH ; H
RAD References
REV-2: Closed prior to 1/19/17
REV-3: Closed on or after 1/19/17
effective 11/10/16 and replaced 2014 notice

7. Project-Based Voucher (PBV) Overview
HUD’s Office of Public & Indian Housing (PIH)
Discretionary component of HCV program
No additional funding
PHA attaches rental assistance to multiple units through a PBV HAP contract with an owner
Follows HCV regulations at 24 CFR 982 with special PBV-specific regulations at 24 CFR 983

8. PBV Overview
*Additional 10% for homeless, veterans, supportive housing, low poverty census tracts
RAD PBV units don’t count

9. PBRA Overview HUD’s Office of Multifamily Housing
Governed by the HUD Handbook , Rev-1, CHG-4
Rental assistance provided to owners and PHAs through HAP contracts with HUD
HAP contract specifics how many units receive Section 8 assistance

10. PBRA Overview PBRA authorized by Congress in 1974
Repealed in 1983 so no new projects
Existing projects continue to be funded
Owner has the option to renew contract
Exception under RAD which allows public housing units to convert to PBRA

11. RAD: Things to Consider
New relationships – state agency, syndicator, HUD
New policies needed – No more ACOP
PBV: Admin plan, lease (PHA-owned units)
PBRA: TSP, House Rules, EIV Use & Security Policy
Staff training is key!
Being an expert in PH or LIHTC compliance doesn’t mean you know how to run PBV/PBRA
New software, file systems, forms, etc.

12. Existing Residents are Special
Households in place at the time of the conversion not subject to rescreening
Subject to any ongoing eligibility requirements for actions that occur after conversion
A key component of RAD is the right to return

13. Income Limits Program LIHTC Income Limit Income Targeting RAD PBRA
Do income limits apply to in place residents?
Income Targeting
RAD PBRA
80% Section 8 No
40% of new admissions to the project at ELI
RAD PBV
Same as HCV
Typically 50% Section 8
75% of combined PBV/HCV admissions at ELI
LIHTC
Either 50% or 60% MTSP
Yes
Typically reach lower set asides like 30 or 35% MTSP

14. The Problem
Under RAD, over-income household at the time of conversion continue to be assisted
LIHTC does not recognize the RAD right to return
RAD says once the over-income, in-place family moves out, unit must be leased to income eligible family
But it’s probably too late to qualify the unit for LIHTC

15. TTP Exceeds Gross Rent
In both PBRA and PBV, when a resident’s TTP exceeds gross rent, no HAP is paid on their behalf
Regular rules don’t apply in RAD
Except for new admissions in RAD PBV
Everyone in RAD PBRA and all in-place families in RAD PBV have different rules

16. What are the RAD Rules?
Rent setting in this case depends on when the HAP contract was signed
REV-2 (before 1/19/17): Tenant rent is 30% of monthly adjusted income minus UA
Doesn’t consider LIHTCs
REV-3 (on or after 1/19/17): Tenant rent is the lesser of TTP minus UA or applicable LIHTC max rent
Everything is ok for LIHTC

17. Why is this a problem?
In LIHTC, gross rent can’t exceed LIHTC maximum gross limit rent when no HAP is paid on behalf of the household
But in REV-2 projects, HUD requires family pay 30% of monthly adjusted income minus UA
This rent could exceed LIHTC maximum

18. Student Status Public housing: No restriction on occupancy by students
PBV and PBRA: Follow Sec 8 Student Rule
PT or FT students at institutions of higher education must be income eligible and come from income eligible parents (with exceptions)
LIHTC has its own rule
Households consisting entirely of FT students don’t qualify (with exceptions)

19. Why is this a problem?
Nobody was looking at student status when these were public housing units
RAD says that you can’t rescreen in-place residents for eligibility
But for LIHTC, student rule still applies and is a crucial component of eligibility