RAD PIH Notice 2012-32 (.pdf, 1 MB) - National Low Income ...

Section I: Public Housing Projectscategories: Contract Terms, Resident Rights and Participation, and Other MiscellaneousProvisions. Where applicable, reference is made to the affected statute and/or regulation. Foradditional background purposes, HUD has provided Appendix I, which is a copy of the existing24 CFR Part 880 regulation with the provisions stricken that will not apply to covered projects.Additionally, Appendix II includes the specific provisions of the Act that are inapplicable toPBRA conversions.A. PBRA Contract Terms1. Length of Contract. Covered projects shall have an initial HAP term of 20 years. Toimplement this provision, HUD is waiving section 8(d)(2)(A) of the Act, whichestablishes a maximum term of 15 years for ―an existing structure.‖ Additionally, 24CFR § 880.502, which imposes maximum contract terms for New Construction projectsconsistent with statutory authority that was repealed in 1983 does not apply.2. Mandatory Contract Renewal. Section 524 of MAHRAA and 24 CFR Part 402currently govern renewals of expiring or terminating project-based section 8 HAPcontracts and, in general, require HUD to renew such contracts ―at the request of theowner.‖ Pursuant to the RAD statute, upon contract expiration, the Secretary shall offer,and the PHA shall accept, renewal of the contract subject to the terms and conditionsapplicable at the time of renewal and the availability of appropriations each year of suchrenewal. Consequently, to the extent that section 524 of MAHRAA and 24 CFR Part 402are in effect upon contract expiration, the various provisions stating or requiring that anyrenewal of an expiring contract for project-based assistance under Section 8 shall be ―atthe request of the owner‖ will not apply.3. Ownership or Control. Pursuant to the RAD statute, during the initial term and allrenewal terms of the HAP contract, HUD will require ownership or control of assistedunits by a public or non-profit entity. However, as HUD, in its sole discretion, determinesnecessary pursuant to foreclosure, bankruptcy, or termination and transfer of assistancefor material violations of, or default under, the HAP contract, HUD will requireownership or control of assisted units in the following priority: (1) a capable publicentity; and (2) a capable non-public entity (e.g., a private entity), as determined by theSecretary. HUD may allow ownership of the project to be transferred to a for-profit entityto facilitate such entity’s use of tax credits, but only if the PHA preserves its interest inchanges to part 880 would apply to RAD as long as the future changes are not provisions that have been stricken inthe final Notice.PIH-2012-32 (HA) Rental Assistance Demonstration – Final Implementation 37