June 30, 2020

HUD proposes new RAD for PRAC forms, provides RAD updates

BY Juliana Bilowich

Recently, HUD issued several new forms for PRAC properties undergoing a conversion through HUD’s Rental Assistance Demonstration (RAD) program. LeadingAge is working with members to provide feedback to the agency.

LeadingAge RAD for PRAC Update Call with HUD Staff

On June 30th, LeadingAge hosted a call on RAD for PRAC that included updates from HUD staff about RAD flexibilities during COVID-19, new RAD for PRAC forms, and other updates. Nearly 50 people from throughout the country were on the call. Tom Davis, director of HUD’s Office of Recapitalization, gave an update on the preservation demonstration, which was newly-authorizedfor PRAC properties. Also on the call was the recapitalization office’s new deputy director, Bennett Hilley, who has been in the position for a little over a week. Davis thanked providers on the call for their work, especially during the public health emergency.

HUD updates included:

  • HUD has been fully up and running throughout the emergency. Many staff, except the management team, had done telework previously, which made for a smooth transition. All RAD submissions done through the RAD Resource Desk were already being done electronically, so there was no change in that process. The biggest challenge continues to be signing documents that need to be notarized and recorded for public records. All other signatures at this time can be electronic.
  • Since the RAD for PRAC notice came out in the fall, 151 transactions started the process, representing over 8,000 units. Davis said there has been a phenomenal response and HUD is moving forward towards conversions and they are excited about the prospects. HUD expects the first transaction to close this August, with a handful on the heels of that.
  • On May 13, HUD published a Paperwork Reduction Act filing. All of the HUD standard forms go out for public comment for a 60-day review period, during which time HUD reviews and edits the forms based on the received comments. Then there is another 30-day period to review and edit the forms based on the comments. The first notice period for comments closes July 17. The RAD forms are entirely new and HUD reports they are anxious to hear what you think will work and what concerns you have.
  • HUD is accepting comments on the forms below.
  • You can submit an initial expression of interest through the RAD Resource Desk. A transaction manager will be assigned to be your point-of-contact throughout the process.
  • For smaller properties in a transaction, HUD is thinking a fair amount about and working on trying to be more clear and precise in written materials to make them more predictable.
  • There is a fair amount of variety and diversity in 202 projects in the pipeline. The pipeline has been quiet in the last few months, but indications are that the pipeline will continue to get stronger and busier about six months from now. HUD expects continued interest in 202 PRAC conversions.
  • HUD COVID-19 FAQs. A variety of frequently asked questions with thoughts on issues and the flexibilities offered by HUD. HUD anticipates flexibilities staying in place while there is a risk of exposure and level of concern about COVID-19. A timeline has not been set to ending flexibilities.
  • HUD is working on another Notice of Funding Availability (NOFA) for 202 funding for capital advance. About $50 million in funds went out earlier this year and this will be another batch and include $150 million in PRAC funding and capital advance. There will be another NOFA issued after this also.

New RAD for PRAC Forms Available for Public Comment

On May 18th, HUD published a Federal Register notice announcing form documents which can be used in RAD conversions, include new and revised documents, and forms for the conversion of Section 202 PRACs. Comments are due to the agency by July 17, 2020.

LeadingAge is compiling member feedback on the forms; please send any comments on the following to Juliana by the end of June, or join the LeadingAge RAD for PRAC update call on June 30th for a group discussion on the forms.

HUD is accepting comments on the following forms:

  • Submission of Interest (Mod Rehab and PRAC): This information is necessary in order to direct the owner to appropriate technical assistance to initiate the conversion process.
  • RAD Second Component Project Rental Assistance Contract (PRAC) Project-Based Section 8 (PBRA) Housing Assistance Payments (HAP) Contract Part I and Part II: HUD will use these contracts at the completion of a RAD conversion of PRAC to Project-Based Section 8 (PBRA). The contract dictates the terms under which housing assistance payments will be made.
  • RAD Section 8 Project-based Voucher (PBV) Housing Assistance Payments (HAP) Contract for Existing Housing (PRAC; Second Component) Part I and Part II: HUD will use these contracts at the completion of a RAD conversion of PRAC to PBV, the contract dictates the terms under which housing assistance payments will be made.
  • RAD PRAC Approval Letter Template: This document serves as a conditional approval of the request to convert a Section 202 Project Rental Assistance Contract. Note: This document is not a part of current public comment collection; however, it serves as a context for other documents, particularly, the PRAC Conversion Agreement listed below.
  • PRAC Conversion Agreement: This document acts as official HUD approval of an Owner’s Conversion Plan and details the terms and conditions of the conversion agreement between HUD and the Owner.
  • Elderly Housing Use Agreement: This document sets out affordability and use restrictions for converted projects. HUD will use this document in support of the RAD conversion and the official documentation therein.
  • Counsel Opinion (PRAC): These documents provide evidence to HUD that claims made are reliable.