RAD Conversions for Section 202 PRACs
Recently HUD emailed interested parties a notice of a proposed change to the existing RAD Notice. This draft notice is available here or a pdf copy can be downloaded here. The proposed change would allow Section 202 projects to convert to the RAD program. Although Section 4 is lengthy, AHACPA wishes to notify users about this proposed section and allow them to comment on appropriately.
The proposal is a result of The Consolidated Appropriations Act, 2018 (Pub. L. No. 115-141), which authorized the conversion of properties assisted by Section 202 Project Rental Assistance Contracts. The general idea of the proposal is as follows:
- Projects will be released from their current Capital Advance mortgage-related restrictions
- Projects may convert form the current 202 PRAC to either a RAD Section 8 contract or a project-based voucher (PBV) contract. PBV requires an arrangement with a local PHA.
- Eligibility to participate is based on the following criteria:
- Project in good standing with HUD and a history of compliance with contractual requirements
- Certify to Fair Housing Compliance
- Current PRAC in place (units may not be increased)
- Physical condition score above 60
- A Capital Needs Assessment will be required
- Supportive Services be provided (see details)
- For repairs required by the CAN that exceed $5,000/unit, the owner must show availability to finance repairs
- Reserve for replacements will be required
- Owner will be required to maintain an operating reserve of $250/unit for distributions to be available
- An Elderly Use Agreement will be in place for the remainder of the Capital Advance Use Agreement plus 20 years
- There are restrictions on the use of sale or refinance proceeds.
- See proposal for additional requirements
Section 4.6 contains provisions related to PBRA conversions. The length of the contract will an initial period of 20 years and renew through the Use Agreement period. Contract rents will be adjusted by an OCAF at each anniversary date. Distributions will be available to the project subject only to the minimum $250 operating reserve requirement. Surplus cash will be calculated similar to current requirements.
AHACPA believes that this change represents a significant opportunity for these project to change their current operating requirement for the better. We urge interest parties to comment on the proposal.
AHACPA has put together information on frequently asked questions:
20th Annual Public Housing Authority (PHA) Conference
June 17th & 18th, 2019
June 17th: 8:00 am - 5:00 pm
June 18th: 8:00 am - 3:10 pm
Course Fee: $650 ($600 for AHACPA Members)
Register before May 27th for a $50 early-registration discount
The Cosmopolitan of Las Vegas
3708 Las Vegas Blvd South Las Vegas, NV 89109
Click here to register online.
Click here for a printable registration form (use this when registering more than one person at the same time)
Save the Date - More information to be announced
21st Annual Multifamily Conference
December 10th & 11th, 2019
The Cosmopolitan Las Vegas
FHA Lender Update - Las Vegas
December 9th, 2019
The Cosmopolitan Las Vegas
One-day Update Courses and Webinars to be announced
Courses will be posted on AHACPA's Training Calendar
CPE Credit Information
Objective: To learn HUD accounting, auditing, and electronic submission requirements and how to efficiently implement those requirements.
Prerequisites / Advanced Preparation: General HUD accounting or audit experience. You do not need to print any course materials prior to your arrival. All materials will be provided for you.
Instructional Method: Group-Live with interactive discussion and Group Internet Based
Length / CPE Credits: One-day Update Courses provide up to 8 hours CPE credit (4 hours governmental accounting and 4 hours governmental auditing). Two-day Conferences provide up to 16 hours CPE credit (8 hours governmental accounting and 8 hours governmental auditing).
Cancellation Policy: All cancellation requests must be received in writing (email or fax is fine). Registration fees are fully refundable provided the request is received at least three weeks prior to the course. Requests received after this date, but one week before the course will receive a refund less an administration fee of $50 for Update Courses and $75 for Conferences. Due to financial obligations incurred by AHACPA, no refunds will be issued for cancellation requests received less than a week before the course.
Substitutions: If you are unable to attend a course you may substitute another individual or change locations without penalty. The location change must be within the same calendar year. For proper CPE credit and record keeping, you must notify us in advance of any substitution or change in location.
Contact Information: For more information regarding refund, complaint, and/or program cancellation policies, please contact our office at 801-547-0809.