The Rental Assistance Demonstration (“RAD”) is well known for the option to convert public housing subsidy to a long-term Section 8 Housing Assistance Payments contract (“HAP Contract”) — but RAD also allows owners to convert their Moderate Rehabilitation (“Mod Rehab”) and Moderate Rehabilitation Single Room Occupancy (“SRO”) contracts to a Section 8 HAP Contract.  HUD estimates that there are over twenty thousand units of Mod Rehab and SRO units across the country with no cap on the number of units that can convert through RAD (see database of units here).

Converting Mod Rehab and SRO contracts to long-term Section 8 HAPs through RAD can present advantages to both the owners of the project and the public housing authorities (“PHA”) that administer the existing contracts.  Below are just a few of the possible benefits for owners and PHAs:

Benefits to Owner:
Long-term RAD HAP Contract:

  • Likely higher rents
  • Provides stability
  • Can be used to secure/leverage financing for rehabilitation
  • Preserve affordable housing
Benefits to PHAs:
For Project Based Voucher (PBV) conversions:

  • New vouchers added to PHA’s Annual Contributions Contract (ACC)
  • PHA receives ongoing administrative fee
  • Contract administration responsibilities align with standard PBV program

For Project Based Rental Assistance (PBRA) conversions:

  • HUD administers HAP contract
  • PHA relieved of contract administration

Ballard Spahr recently hosted a webinar with HUD on the RAD conversion process for Mod Rehab and SRO projects.  You can find a recording of the webinar and the associated slides on the Ballard Spahr website.  We are happy to answer and questions you might have on the conversion process.


Housing Plus bloggers Michael Skojec and Amy Glassman will be featured speakers on Novogradac’s webinar: “Consequences of Disparate Impact for Multifamily Housing” on July 22. The webinar will discuss the implications of the Supreme Court’s decision in the Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. case and explore how the Court’s opinion will shape future cases, HUD’s fair housing efforts, and the larger housing landscape.

The discussion points will include the following topics:

  • Fair Housing Act and defining disparate impact
  • Making a disparate impact claim (including examples)
  • How HUD’s three-step burden-shifting rule works
  • Recent lower-court decisions in Washington, D.C., and Illinois
  • Two prior cases (Magner and Mount Holly)
  • ICP v. TDHCA facts and history
  • Key issues argued in the Supreme Court case
  • Majority opinion, causation, and other safeguards
  • How this plays out—future litigation
  • Possible HUD modifications to the rule
  • One housing authority’s concerns
  • The upcoming affirmatively furthering rule

Registration is still open, but will close at 2 p.m. on July 21. We will be sure to follow up with the webinar’s key takeaways.

The IRS has released guidance in three areas of interest to entities that benefit from tax-exempt bond financings, particularly hospitals and educational institutions. This guidance creates new rules related to management contracts and participation by a nonprofit entity in an accountable care organization (ACO), final rules addressing requirements for charitable hospital organizations added by the Patient Protection and Affordable Care Act (ACA), and the creation of a standardized voluntary closing agreement program (VCAP) for issuers of 501(c)(3) bonds for the benefit of a 501(c)(3) organization that had its tax-exempt status reinstated after having it revoked for failure to file returns for three consecutive years.

Ballard Spahr will host a webinar on Friday, February 27, from 12:00 p.m. to 1:00 p.m. ET, on these recent IRS developments affecting tax-exempt bond financed educational institutions. The webinar will include a detailed discussion of the new management contract safe harbor. Please join us for that event by registering here.