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RAD 2nd Component Application Materials and Conversion Process
 

Rent Supplement and Rental Assistance Payment (RAP) Conversions

For projects with Rent Supplement and RAP contracts Owners may choose between two forms of long-term Section 8 Housing Assistance Payment (HAP) contracts: project-based vouchers (PBVs) or project-based rental assistance (PBRA). 

For owners applying for a PBV conversion the application and conversion process is outlined as follows:

For owners applying for a PBRA conversion the application and conversion process is outlined as follows:

For both PBV and PBRA conversions:

  • Initial Contact & Tenant Notification:  Owner expresses interest in RAD conversion and contacts HUD’s Office of Recapitalization (RECAP) via email at RAD2@HUD.gov.  A transaction manager (TM) will be assigned and will help develop a successful strategy with owner for conversion.  Before submitting a formal application for a RAD conversion, the owner must notify all tenant household and legitimate tenant organizations per the guidance in PIH Notice 12-32 REV-2.  Sample tenant notification letters can be found on this website under reference guide and other resources.

  • Application Submission & Review:  After the tenant notification process has been completed, the owner must submit an application with all supporting documentation via email at RAD2@HUD.gov.  A TM will review the submission for eligibility, accuracy, and completeness.

 For PBV Conversions:

  • PHA Selection:  Once the TM verifies that the application meets the program requirements and is acceptable for conversion, a memo is sent to the Public and Indian Housing (PIH) Field Office Director.  The field office will determine the appropriate PHA to administer the PBVs in accordance with established criteria for selection of PHA administration of Tenant Protection Vouchers (TPVs).

  • Transaction Timeline & Approval:  After a PHA is selected and formally accepts the invitation from PIH to administer a PBV HAP, the TM will establish a conversion timeline with the owner for an estimated date of when the PBV HAP will be effective.  Once the timeline is established formal RAD conversion approval will be issued from the TM to the owner.

  • Funding Request & Annual Contributions Contract (ACC) Amendment:  Subsequent to conversion approval, the TM will request funding via a Housing Conversion Action Worksheet.  The TM will work with the PIH to verify that the correct amount of vouchers are being requested before funding is approved.  Once funding has been reserved, HUD will then amend the PHA’s ACC to provide tenant-protection funding for the conversion.

  • PBV HAP & Rider Execution:  Prior to the execution of the HAP contract, the units proposed for conversion must meet Housing Quality Standards (HQS), all income certifications must have been made, and the triggering event must have occurred.  After these reviews, the PHA and owner will enter into a PBV HAP contract for projects that qualify as existing housing under the PBV program.

For PBRA conversions:

  • RAD Approval:  After reviewing the RAD application, RECAP will send a letter to the owner informing them of their initial approval to convert assistance under PBRA. Conversion of assistance under PBRA will be conditioned on expiration or termination of the Rent Supp or RAP contract at the property.

  • Funding Request and Reservation:  After approval of the RAD conversion is issued the TM will request funding for the units being converted to the PBRA contract. 

  • PBRA HAP and Rider Execution:  Once the funding has been reserved, HUD and owner will enter into a PBRA HAP contract for projects that qualify under the PBRA program.

  

Moderate Rehabilitation (Mod Rehab) and Single Room Occupancy (SRO) Conversions 

For projects with owners of Section 8 Mod Rehab, including SRO dwellings Owners may choose between two forms of long-term Section 8 Housing Assistance Payment (HAP) contracts: project-based vouchers (PBVs) or project-based rental assistance (PBRA). 

For owners applying for a PBV conversion the application and conversion process is outlined as follows:
              

 

 

 

 

For owners applying for a PBRA conversion the application and conversion process is outlined as follows:

      

For both PBV and PBRA conversions:

  • Initial Submission & Tenant Notification:  An owner must make an initial submission to HUD indicating the owner’s interest in conversion.  HUD has developed a sample Excel template owners can use to make this initial submission that must be submitted electronically to rad2@hud.gov including both an Excel and signed PDF copy.  The owner must notify all tenant household and legitimate tenant organizations per the guidance in PIH Notice 12-32 REV-2.  Sample tenant notification letters can be found on this website under reference guide and other resources.

  • Financing Plan:  The Owner must submit to HUD through the RAD Resource Desk a complete Financing Plan that satisfies all HUD underwriting standards and program requirements. HUD will have 60 calendar days from the date of submission of the Financing Plan to approve or reject the plan, or request additional information. The owner must submit a copy of all comments received with their Financing Plan, along with a description of how the residents’ comments will be addressed in the conversion.

  • RAD Approval:  An owner will be notified of HUD’s acceptance of the Financing Plan via issuance of an approval letter, conditioned upon a firm commitment of financing from the lender on substantially the same terms as those presented with the Financing Plan.  The approval letter will allow 90 calendar days (from the date the approval letter is issued to the owner) in which to close the RAD conversion transaction.

  • ClosingConversion does not occur until the financing is closed.

For PBV Conversions:

  • PHA Selection:  HUD will identify a PHA able and willing to administer the PBV contract, and the PHA will need to accept the responsibility. HUD will generally select the PHA that currently administers the Mod Rehab contract.

  • Funding Request & Annual Contributions Contract (ACC) Amendment:  Following resident consultation and submission and approval of a Financing Plan, at the Closing of the conversion of assistance, the Mod Rehab contract will be terminated. The PHA that has agreed to administer the PBV HAP contract will have the vouchers added to its ACC.

  • PBV HAP & Rider Execution:  Prior to the execution of the HAP contract, the units proposed for conversion must meet Housing Quality Standards (HQS) and all income certifications must have been made.  After these reviews, the PHA and owner will enter into a PBV HAP contract for projects that qualify as existing housing under the PBV program.

For PBRA Conversions:

  • Funding Request:  After approval of the RAD conversion is issued the TM will request funding for the units being converted to the PBRA contract.  The current funding for the Mod Rehab contract is converted to PBRA funding.
  • PBRA HAP and Rider Execution:  HUD and owner will enter into a PBRA HAP contract for projects that qualify as existing housing under the PBV program.

RAD 2 More Information