This guide provides guidance for occupancy related policy to owners (including Public Housing Agencies) converting their projects to Section 8 Project-Based Rental Assistance (PBRA) authorized under the Rental Assistance Demonstration (RAD). The purpose of this guide is not to be all-inclusive or overly descriptive of HUD Multifamily Housing program requirements but rather to highlight certain requirements owners converting under RAD should be aware of. The guide is a starting point for owners converting under RAD to become familiar with HUD Multifamily Housing program requirements. This guide applies only to conversions of public housing, Section 8 Moderate Rehabilitation (Mod Rehab), Rent Supplement, Rental Assistance Payment (RAP), and Section 202 PRAC assistance to PBRA.

Click here to access the RAD to Multifamily Housing Quick Reference Guide.

TRACS compliant software selection is an important element of the transition process. You need to understand how far in advance you need to make crucial software decisions to ensure timely subsidy payments after closing. On average, from the date of vendor selection to the end of the transition from PIC, a 90-day timeframe should be anticipated before you will be fully operational in MFH TRACS. Please note, an established PIH vendor that is knowledgeable about PIC is not guaranteed to be knowledgeable about TRACS. It is important that the vendor you choose receives and complies with HUD’s TRACS revisions and updates.

The federal government requires that each entity that does business with the Federal government obtain a Unique Entity Identifier (UEI) and register in the System for Award Management (SAM). These requirements apply to all entities that own HUD insured and/or assisted properties, including those that have undergone Rental Assistance Demonstration (RAD) conversion and are receiving project based rental assistance (PBRA).

All entities that own HUD insured and/or assisted properties, including those that have undergone Rental Assistance Demonstration (RAD) conversion and are receiving project based rental assistance (PBRA), must have access to HUD Secure Systems. This is required for accessing TRACS, EIV and performing mandatory monthly compliance tasks to receive HUD Housing Assistance Payments (HAP). This guide is designed to teach new owner/management entities of properties that have undergone RAD conversion to PBRA about registering their entities, assigning an organizational coordinator, and obtaining access to HUD Secure Systems and relevant subsystems so that they can enter certifications into and use TRACS for transmitting their monthly Housing Assistance Payment (HAP) vouchers. Access the guide here.

Owners whose properties have recently converted through the Rental Assistance Demonstration (RAD) Program from public housing to PBRA must adhere to unique policies and procedures for getting their properties set up and operational in TRACS within 90 days of conversion. This guide provides the Owner instructions on how to populate tenant data, such as dates and types of certifications in their software to transmit to TRACS. Once vouchers have been released from the manual review process noted in the Guide, owners will need to voucher by the 10^th of every month preceding the voucher month for timely payments.Example, the March voucher will need to be transmitted to the CA by February 10^th. View the guide.

• Vouchering for Rehab Assistance Payments

RAD properties scheduled to undergo rehabilitation upon conversion may be eligible for Rehab Assistance Payments. Please follow the section 3.3 of TRACS Voucher & Tenant File Preparations and Submissions Guide above to complete a request for payment using the Rehab Assistance Schedule found here. Properties vouchering for Rehab Assistance Payments will need to ensure the number of units claimed on the Rehab Assistance Invoice plus the number of units receiving regular subsidy must not exceed the total contracts in the HAP contract.

• Vouchering for Pre-rehab Rents and Post-Rehab Rents

Should a property undergo rehabilitation upon conversion as set forth in the RCC and HAP contract they may have both pre-rehab rents and post-rehab rents noted in Part I of the HAP contract. The pre-rehab rents will be shown in Exhibit 1A.The post-rehab rents in Exhibit 1B.

Initially the owner will voucher monthly using pre-rehab rents, and utility allowances if applicable. Once rehab has been completed in full the owner must submit a Completion Certification Form found here. through the RAD Resource Desk for approval. Once the Completion Certification has been approved, the owner will be notified and the post-rehab rents, and utility allowances if applicable, become effective the first day of the following month from approval date. It is important to note that any decrease in utility allowances require a 30-day notice to tenants.

• Vouchering for Special Claims

Owners may be eligible for special claims for vacancy and/or damages on contract units. The Special Claims Guide provides eligibility and submissions requirements for requesting special claims.

Rent Adjustments

RAD HAP contracts receive an Operating Cost Adjustment Factor (OCAF) rent adjustment annually on the contract anniversary date. In addition to the OCAF adjustment, many RAD HAP contracts are subject to the Maximum Rent application that was introduced in 2015 but made retroactive to the first RAD conversions.

All RAD Component I contracts are subject to a Maximum Rent using 140% of the Fair Market Rent (FMR) in their calculation. Language describing this application is below:

2.8 RENT ADJUSTMENTS.

1. Operating Cost Adjustment Factor. Contract Rents will be adjusted annually by HUD's Operating Cost Adjustment Factor (OCAF) at each Anniversary of the HAP Contract, subject to the availability of appropriations for each year of the HAP Contract term and provided that the OCAF-adjusted rent potential shall not exceed the Maximum Rent. The Maximum Rent is equal to the greater of (i) 140% of the Fair Market Rent (FMR) potential based on the FMRs in effect at such time for the FMR area in which the project is located, less Utility Allowances: or (ii) the comparable market rent potential for the market area, as demonstrated by a Rent Comparability Study (RCS) prepared in accordance with HUD requirements and procured and paid for by the Owner. If the Maximum Rent exceeds the OCAF-adjusted rent potential, the Contract Rents shall be adjusted by the OCAF. If the OCAF-adjusted rent potential exceeds the Maximum Rent, the adjusted rents shall be limited by the Maximum Rent.
2. Exception to Application of Maximum Rent. When an RCS has been used to establish the initial Contract Rents or to justify an OCAF-adjusted rent potential in excess of 140% of the Fair Market Rent potential any time during the term of the HAP Contract, for the next four annual rent adjustments, the Maximum Rent shall not apply and the Contract Rents shall be adjusted by the OCAF.

Similarly, RAD Component II contracts may be subject to Maximum Rent calculations which may vary depending upon the formula used to set the initial rents at conversion. Owners/Agents will need to refer to their HAP contracts in Part II under Rent Adjustments for the Maximum Rent percentages to apply in their calculation and be aware of any RAD Supplemental Notices that may be issued that may supersede the previous Maximum Rent provisions in your contract.

Submitting Rent Adjustment Requests:

Owners/Agents must submit their completed OCAF Rent Adjustment Worksheets to their CA 120-days to 150 days prior to the contract anniversary date. This allows the CA time to process and approve the rent adjustments, and utility analysis’ if applicable, and return to the Owner/Agents by the contract anniversary date.

• The OCAF Rent Adjustment Worksheet HUD Form 9625 MAX Rent Tool and Instructions for completing the Worksheet can be located here.

Note: RCSs are prepared by state certified Appraisers in the state the property is located and typically take one or more months to complete.

Utility Analysis Requirements

Owners of multifamily housing properties that receive subsidy assistance, and for which HUD provides a utility allowance to tenants, are required to adjust their properties’ utility allowances every year at the time of the annual adjustments of contract rents. Utility adjustments must be supported by a utility analysis using the methodology described in Housing Notice 2015-04. The methodology and requirements used my MFH differs from that of PIH’s requirements and cannot be waived. As required by 24 CFR 245.405(a) and 245.410, a minimum of 30-day’s notice must be provided to tenants for any utility allowance decrease.

Guidance for completing an utility analysis is located in here under 15-04. FAQs are provided to answer questions.

The use of the EIV system by O/As is mandatory. Effective January 31, 2010, MFH O/As must use HUD’s EIV system in its entirety:

• As a third-party source to verify tenant employment and income information during mandatory recertifications of family composition and income, in accordance with §5.236, and administrative guidance issued by HUD; and
• To reduce administrative and subsidy payment errors in accordance with HUD administrative guidance. (24 CFR §5.233)

The MFH EIV system differs from the PIH EIV system and O/As of RAD converted properties are required to obtain access to the system by following instructions in the above link. Additional guidance on the use of the MFH EIV system can be found in Housing Notice 2010-10.

Multifamily Enterprise Income Verification (EIV) System

HUD conducts project monitoring for each of its assisted projects annually or less frequently based on a risk assessment.One of HUD’s monitoring actions is a Management and Occupancy Review (MOR).Details relating to MORs can be found in Chapter 6 of HUD Handbook 4350.1.

This guide discusses components of a comprehensive Choice-Mobility policy, guidance for communications with residents, turnover voucher management, and many more topic areas. Additionally, the guide is supplemented with sample materials PHAs and owners can use such as an info sheets for residents, a sample Choice-Mobility request form, and sample language that can be included in a PHA Plan or Housing Choice Voucher Administrative Plan.

For Supplemental Materials:

• 11.1 Sample Choice-Mobility Information Sheet
• 11.2 Sample Choice-Mobility Request Form
• 11.3 Sample Acknowledgment of CM Request
• 11.4 Sample Choice-Mobility Meeting Agenda
• 11.5 Sample Checklist for PHA Staff
• 11.6 Sample Choice-Mobility Letter of Agreement
• 11.8 PBRA Choice-Mobility Plan Template

• RAD Notice Revision 4
• RAD Resource Desk (RRD)
• TRACS Web Page
• Multifamily Housing Web Site
• Occupancy Requirements of Subsidized Multifamily Housing Programs Handbook 4350.3
• Violence Against Women Act (VAWA)
• Residents Rights and Responsibilities Brochure
• EIV & You
• HUDCLIPS