Office of Recapitalization
The Office of Recapitalization (“Recap”) supports the preservation and recapitalization of federally-assisted housing and rental assistance for current and future generations. Recap structures, reviews, and implements transactions to ensure long-term physical and financial viability, often through public-private partnerships and the use of tax-incentivized financing. Recap also implements other affordable housing initiatives which leverage this transactional expertise. Programs currently or recently implemented by Recap include the Rental Assistance Demonstration (RAD), Mark-to-Market (M2M), Section 236 Preservation, Pre-1974 Section 202 Direct Loan Preservation (including SPRAC), Section 202 Capital Advance NOFAs, Tenant and Community Engagement Initiatives, and the Green Retrofit Program.
The History of Recap. Preservation efforts originally began in the "Office of Multifamily Housing Assistance Restructuring" (OMHAR), established in 1997, to administer the Mark-to-Market program under the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA). As a result of the M2M program's success and due to the growing need for preservation and affordability across other housing programs, OMHAR expanded its portfolio, taking on a new purpose and a new program name, the "Office of Affordable Housing Preservation" (OAHP), until its transition as the Office of Recapitalization under the Office of Multifamily Housing. Here are the descriptions of the primary programs implemented by the Office of Recap:
- Mark-to-Market (M2M) - This program preserves affordability and availability of low income rental multifamily properties with federally insured program. The purpose of M2M is to reduce rents to market levels by restructuring existing debt to levels supportable by these rents. The Green Initiative is also available through this program to assist owners in rehabilitating their properties in the most sustainable way feasible. For more information visit the Mark-to-Market web page.
- Rental Assistance Demonstration (RAD) - This program allows proven financing tools to be applied to at-risk public and assisted housing. RAD is a central part of the Department's rental housing preservation strategy, which works to preserve the nation's stock of deeply affordable rental housing, promote efficiency within and among HUD programs, and build strong, stable communities. RAD provides service for Public Housing, Rent Supp, RAP, Mod Rehab, Mod Rehab SRO, and PRAC properties. For more information visit the RAD web page.
- Section 236 Preservation - This program serves as a centralized processing model for the majority of Section 236 preservation activity through Recap where owners and purchasers will no longer submit applications to the Multifamily Program Centers. This procedure modification is designed to streamline how Section 236 prepayment applications and related requests are processed, and to assign dedicated staff to oversee the complex work involved in these transactions. For more information visit the 236 Preservation web page.
- Pre-1974 Section 202 Direct Loan Preservation - This program provides two comprehensive options for owners of properties with pre-1974 Section 202 Direct Loans to preserve the affordability of these properties by entering into long-term rental assistance contracts. For more information visit the Pre-1974 Section 202 Direct Loan Preservation web page.
