1. WHY RAD? Mississippi Home Conference Biloxi, MS February 20, 2013 Gregory A. Byrne Senior Program Manager HUD Gregory.A.Byrne@hud.gov

2. Authorized as part of the Consolidated Further Continuing Appropriations Act of 2012 (Public Law 112-55)Public Law 112-55 Allows public housing and certain at-risk Multifamily legacy programs to convert to long-term Section 8 rental assistance Two components – Competitive – cap of 60,000 units (public housing and Mod Rehab) – Non-competitive – no cap but subject to availability of tenant protection vouchers (Mod Rehab, Rent Supplement and Rental Assistance (RAP) programs) RAD A UTHORITY 2

3. RAD C ONVERSION A UTHORITY 3 Public HousingMod RehabRS & RAP Cap of 60,000 Units PBRAPBV No Cap, but subject to availability of TPVs PBV

4. T HIS IS RAD 4 ACCSection 8 At closing, funding is converted to a Section 8 contract rent

5. Milwood I Mixed-Finance Project (McComb, MS) First phase of a redevelopment of an existing public housing project, involving demolition and new construction 10 project-based vouchers (with tax credits) 16 public housing units (with tax credits) 26 total units 13 duplexes PBV contract rents average $621 Public housing contract rents average $325 E XAMPLE 2/2/20125

6. Sources Capital Fund Financing Program (CFFP) Loan $595,000 Tax Credit Equity $3,925,486 FHLB AHP Funds $182,000 Deferred Developer Fee $90,658 Total $4,793,144 Uses Construction Costs $3,045,000 Soft Costs $1,653,144 Soft/CFFP Loan $95,000 Total $4,793,144 D EVELOPMENT B UDGET – O RIGINAL 2/2/20126

7. P RO - FORMA – O RIGINAL 2/2/20127 AnnualPUM Revenues Section 8 Rents$74,496$239 Public Housing Rents$62,367$200 Other$1,800$6 Vacancy loss $(6,843)($22) Effective Gross Income$131,820$423 Expenses Operating Expense$101,191$324 Replacement Reserves$7800$25 Total$108,991$349 NOI$22,829$73 Debt Service($0) Cash Flow$22,829 $73

8. The public housing units were assigned the RAD rents of approximately $500 PUM First mortgage terms were as follows: Amortization period = 30 years Rate = 3.5% Mortgage Insurance Premium = 0.45% Debt coverage ratio = 1.20 W HAT IF ? 2/2/20128

9. P RO - FORMA – R EVISED 2/2/20129 AnnualPUM Revenues Section 8 Rents$74,496$239 Public Housing Rents$96,000$308 Other$1,800$6 Vacancy loss ($8,525)($27) Effective Gross Income$163,771$526 Expenses Operating Expense$101,191$324 Replacement Reserves$7800$25 Total$108,991$349 NOI$54,780$176 Debt Service($45,650)($146) Cash Flow$9,130 $29

10. With the RAD rents, the project is able to generate in excess of $800,000 in first mortgage proceeds, which would have eliminated the need for the PHA to contribute CFFP funds. M AGIC 2/2/201210

11. RAD Notice, application materials, and additional resources can be found at www.hud.gov/rad Email questions to radresource.net RAD W EB P AGE 11