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

Section I: Public Housing Projectsthe property in a manner approved by the Secretary. 33 All current and future ownershipentities are subject to the eligibility requirements of Section 1.3 of this final Notice,including the civil rights threshold requirements.4. RAD Use Agreement. Pursuant to the RAD statute, covered projects shall have an initialRAD Use Agreement that:a. Will be recorded superior to other liens on the property;b. Will run for the same term as the initial HAP contract, automatically renew uponextension or renewal of the HAP contract for a term that runs with the renewalterm of the HAP contract, and remain in effect even in the case of abatement ortermination of the HAP contract (for the term the HAP contract would have run,absent the abatement or termination), unless the Secretary provides approval forthe RAD Use Agreement to be terminated when an owner requests a transfer ofassistance;c. Requires that in the event that the HAP contract is removed due to breach, noncomplianceor insufficiency of Appropriations, for all units previously coveredunder the HAP contract new tenants must have incomes at or below 80 percent ofthe area median income (AMI) at the time of admission and rents may not exceed30% of 80% of median income for an appropriate size unit for the remainder ofthe term of the RAD Use Agreement; andd. Requires compliance with all applicable fair housing and civil rightsrequirements, including the obligation to affirmatively further fair housing and thesite selection and neighborhood standards requirements set forth in 24 CFR §1.4(b)(3).5. Initial Contract Rent Setting. No additional or incremental funding is associated withthis Demonstration. Consequently, section 8(c)(1) of the Act, which governs rent settingfor project-based Section 8 units, shall not apply. Nor shall section 8(c)(5) of the Act or24 CFR § 880.503(b), which govern the ―project account,‖ apply. At the time thatassistance will be converted, initial contract rents will be established based on the fundingfor which a project is currently eligible, including pro-rated Operating Subsidy eligibility,the portion of the PHA’s Capital Fund Formula Grant attributable to the project, andtenant rents (see Attachment 1C of this Notice for more detail). Initial contract rents will33 Sufficient interest in the project could include, but not be limited to, the following: long-term ground lease on theland, seller take-back financing subordinate to the first mortgage financing and serviced by available cash flow fromproperty operations; other seller funds lent to the property that is subordinate to the first mortgage financing andserviced by available cash flow from property operations; and right of first refusal for sale of property.PIH-2012-32 (HA) Rental Assistance Demonstration – Final Implementation 38