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

Section II: Moderate Rehabilitation Projectsproject-based rental assistance (PBRA). No incremental funds are authorized for this component.Owners will convert their assistance at current contract rent levels. Applications must besubmitted for specific projects. Up to 1,250 Mod Rehab units will be selected competitively toconvert assistance under this component. Following review and selection of application, HUDwill provide the owner with a Commitment to enter into a Housing Assistance Payment (CHAP),following which the owner will have to present a Financing Plan for HUD to approve. AfterHUD approval of the long-term viability of the Financing Plan and successful closing of theconversion, the project will receive a long-term Section 8 HAP contract. 68PBV Conversions. Where the owner converts assistance to Section 8 PBVs, the project will beadministered by a consenting PHA on whose Annual Contributions Contract (ACC) the vouchersare assigned. PBV contract rents will be determined based on the project’s current contract rentlevels and will be adjusted annually by an operating cost factor at each anniversary of the HAPcontract, subject to the availability of appropriations for each year of the contract term. Theinitial contract will be for a period of at least 15 years (up to 20 years upon approval of theadministering voucher agency) and will be subject to annual appropriations. At expiration of theinitial contract, the PHA may renew the contract at the owner’s request. Further, PHAs thatadminister the vouchers will provide a Choice-Mobility option to residents of covered projects,in accordance with PBV program rules. With the exception of provisions identified in this Noticeregulatory and statutory requirements of the PBV program in 24 CFR Part 983 shall apply.PBRA Conversions. Where the owner converts assistance to Section 8 PBRA, the project willbe administered by HUD’s Office of Housing. PBRA contract rents will be determined based onthe project’s current contract rent levels and will be adjusted annually by an operating cost factorat each anniversary of the HAP contract, subject to the availability of appropriations for eachyear of the contract term. The initial contract will be for a period of 20 years and will be subjectto annual appropriations. At expiration of the initial contract, the owner is eligible to renew thecontract under the Multifamily Assisted Housing Reform and Affordability Act of 1997(MAHRAA). Further, the provision of a Choice-Mobility option to residents of covered projectswill be a condition of conversion, as specified in Section 2.2.6(C)(3) of this Notice, unlessexempted from this requirement. With the exception of provisions identified in this Notice,regulatory and statutory requirements of the PBRA program in 24 CFR Part 880 and applicablestanding and subsequent Office of Housing guidance, including handbooks, shall apply.As a major goal of the first component of RAD is to test, in large part, the conversion of the ModRehab assistance to long-term, project-based Section 8 assistance in order to generate additionalsources of private financing, HUD believes that it is important to offer the Section 8 PBV andPBRA forms of assistance largely in the manner that they have been established and proven68 In the case where all units in a project do not substantially meet HQS, the owner will enter into an AHAP prior toexecuting the HAP.PIH-2012-32 (HA) Rental Assistance Demonstration – Final Implementation 83