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

Section II: Moderate Rehabilitation Projects5. Distributions. Regardless of type of financing, converted projects will not be subject toany limitation on distributions, contingent on the availability of surplus cash asdetermined by year-end audited or certified financial statements. To implement thisprovision, HUD will not apply 24 CFR § 880.205, which, among other provisions,establishes certain limitations on distributions for profit-motivated owners and authorizesHUD to require the owner to establish a residual receipts account.6. Transfer of Assistance. Pursuant to the RAD statute, in order to facilitate the financing,development, and preservation of decent, safe, and affordable housing, with HUD andlender and/or investor approval, and after consultation with residents, an owner maytransfer part or all of a rental assistance contract and a RAD Use Agreement to unassistedunits. 79 HUD may only approve a transfer if the project is economically non-viable,physically obsolete, severely distressed, or uninhabitable due to unforeseencircumstances such as natural disasters, or the transfer is in the best interest of theproject’s residents. An owner may only request a transfer of assistance at conversion orafter 10 years from the effective date of the initial contract (unless a transfer is neededsooner as a result of a natural disaster). A project to which assistance is transferred issubject to all of the contract terms as described in the HAP, RCC, and Use Agreement, aswell as site and neighborhood standards specified in Appendix III and all applicable fairhousing and civil rights requirements (including, but not limited to, site selectionrequirements of the Fair Housing Act and Title VI of the Civil Rights Act of 1964,including implementing regulations at 24 CFR § 1.4(b)(3)).B. PBRA Resident Rights and Participation1. No Rescreening of Tenants upon Conversion. Pursuant to the RAD statute, atconversion, current households are not subject to rescreening. Consequently, currenthouseholds will be grandfathered for conditions that occurred prior to conversion but willbe subject to any ongoing eligibility requirements. For example, a unit with a householdthat was over-income at time of conversion would continue to be treated as an assistedunit. Thus, the first clause of section 8(c)(4) of the Act and 24 CFR § 880.603(b),concerning determination of eligibility and selection of tenants, will not apply for currenthouseholds. Once that remaining household moves out, the unit must be leased to aneligible family. .79 HUD’s fair housing and civil rights review of each request to transfer assistance will include, but not be limitedto, a review of: the site and neighborhood of the property receiving assistance; any change in the number and/orbedroom distribution of assisted units; and any change in the policies that govern eligibility, admission, selection,and occupancy of assisted units after the transfer of assistance, including any waiting list preferences that will beadopted after the transfer of assistance. If only part of the assistance will be transferred, HUD will also review thePHA’s or owner’s plan for transferring the waiting list and selecting households that will be transferred to the newsite.PIH-2012-32 (HA) Rental Assistance Demonstration – Final Implementation 92