CARH’S BROADCAST E-MAIL – Regulatory Update

September 5, 2019

Today, the Department of Housing and Urban Development (HUD) published Notice H-2019-09 / PIH-2019-23 (HA), Rental Assistance Demonstration – Final Implementation, Revision 4. The Notice provides program instructions for the Rental Assistance Demonstration (RAD) program, including eligibility and selection criteria. The Notice is effective immediately, except for changes to project eligibility criteria, which are subject to a 30-day comment period, which begins today.

The Notice provides several major revisions to both the First Component (Public Housing Conversions) and the Second Component (Section 202 PRAC, Mod Rehab, Mod Rehab SRO, Rent Supp, RAP Conversions) including:

First Component:

• Extends all resident rights to households that will reside in non-RAD Project Based Voucher (PBV) units placed in a converted public housing project so as to facilitate the standard protection of residents;
• Increases resident notice requirements to improve communication with residents throughout the conversion process;
• Establishes a mechanism for public housing agencies (PHAs) to enter into partnerships in order to pool resources or capacity with each other so as to effectively convert properties through RAD;
• Allows limited rent increases for public housing conversions to Project Based Rental Assistance (PBRA) contracts in certain scenarios, including in designated Opportunity Zones;
• Modifies the requirements for portfolio awards so as to provide PHAs greater flexibility in staging the conversion of their properties;
• Streamlines Capital Needs Assessment (CNA) requirements to eliminate the submission of the CNA Tool when certain conditions have been met;
• Introduces a “Concept Call” so that PHAs can receive confirmation that project plans are sufficiently advanced to submit a Financing Plan;
• Prohibits PHAs from entering debt into the Earned Income Verification “Debts Owed” module purely as a result of the 50058 End of Participations that is required to be submitted into Public and Indian Housing Information Center (PIC) as part of the conversion;
• Broadens the use of “tiered” environmental reviews so that streamlined submissions are needed for certain 24 CFR Part 50 reviews; requires the use of the HUD Environmental Review Online System (HEROS) for Part 50 reviews; and requires radon testing for PBRA and PBV conversions;
• Establishes policy that RAD rents will be updated every two years and the updated rents will be applied to new awards issued after those established dates;
• Establishes a priority for “Section 3” employment and other economic opportunities for residents of public housing or Section 8 assisted housing.

The following additional changes are subject to Notice and Comment because they impact eligibility and selection criteria:

• Removing restrictions on certain HOPE VI properties that are under 10 years old; and
• Eliminating the selection of applications based on previously established “Priority Categories” so that HUD reviews applications on a first-come, first serve basis. In the event that a waiting list forms, establishes the priority selection of applications for properties located in designated Opportunity Zones.

Second Component

• Implements the provision of the 2018 Appropriations Act authorizing the conversion of Section 202 PRAC projects to Section 8 PBRA or PBV contracts;
• Streamlines Capital Needs Assessment (CNA) requirements for Mod Rehab conversion to eliminate the submission of the CNA Tool when certain conditions have been met;
• Broadens the use of “tiered” environmental reviews so that streamlined submissions are needed for certain Part 50 reviews; requires the use of the HUD Environmental Review Online System (HEROS) for Part 50 reviews; and requires radon testing for PBRA and PBV conversions;
• Streamlines the Conversion Plan (Financing Plan) requirements for Mod Rehab Conversion when certain criteria has been met;
• Creates an ability for Mod Rehab and SRO properties converting to PBRA to utilize contract rents based on the condition of the property following rehabilitation;
• Provides an ability for owners of converting SRO properties serving the homeless to establish a leasing or occupancy preference that facilitates permanent supportive housing;
• Fully establishes resident right of return and the prohibition against re-screening for existing residents; and
• Establishes a final date that any remaining RAP properties may make a submission of conversion under RAD.

CARH has been waiting for this revision and will review it fully in the coming weeks. After that review, we expect to be able to provide further information to our members via additional broadcast emails, CARH News articles and updates at CARH’s national meetings. In the meantime, if you have any concerns, please forward them to CARH at carh@carh.org.