Yesterday afternoon, HUD distributed it’s latest with supplemental guidance related to the implementation of statutory changes to the Rental Assistance Demonstration (RAD) program and the processing of RAD applications in light of the increase of the unit cap for the first component from 60,000 units to 185,000 units. Key elements in the supplemental guidance include:
- explanation of the determination of initial contract rents, confirming that rents will be set at FY 2012 levels with the Operating Cost Adjustment Factor (OCAF) applied beginning as of CY 2014 for all awards made under the 60,000 unit cap, while rents will be set at FY 2014 levels for all awards made as a result of the increase of the cap to 185,000 units with the FY 2015 OCAF applied in those instances.
- confirmation that the existing deadlines for Portfolio and Multi-phase awards continue to apply to the original awards for the first 60,000 units (i.e., the second Portfolio application is due within one year of the first award and the last application for a Multi-phase award must be filed by July 30, 2015). For awards made above the 60,000 unit cap, the second Portfolio application must still be made within one year of the initial Portfolio application, while the deadline for filing the last application within a Multi-phase award is July 30, 2018.
- an announcement that HUD will issue an updated RAD Notice in early Spring incorporating the recent statutory changes associated with the increase in the cap, addressing the Mod Rehab SRO conversion options and possibly applying a new RAD Physical Condition Assessment tool. When this updated Notice is issued I will also author a second edition to the Beginner’s Guide to Public Housing Conversion under RAD, incorporating elements of the Notice and other supplemental guidance issued by HUD.
- a summary of the 2015 budget request made earlier this week, including a request to eliminate the 185,000 unit cap and the submission deadline, providing $50 million to support RAD conversion projects in targeted areas that are not otherwise financially feasible and clarifying the elimination of the sunset dates under the second component of RAD.