Expanding, preserving, and improving the supply of affordable and accessible senior housing is LeadingAge’s top priority. Many LeadingAge members have utilized HUD’s Rental Assistance Demonstration (RAD) to convert and preserve affordable senior housing properties.

Through the annual appropriations process, Congress and HUD are working on a number of improvements to the program to make the preservation tool more feasible for Section 202 PRAC (and Section 811 PRAC) properties.

Fiscal Year 2022 Budget

On March 15th, the President signed into law the FY 2022 Appropriations Act, which included two provisions impacting the conversion of Section 202 Project Rental Assistance Contracts (202 PRACs). The Appropriation Act:

• Provided $6 million within the Housing for the Elderly Account to support higher contract rents for properties pursuing preservation transactions through RAD
• Gave HUD the authority to establish initial PBRA contract rents in excess of 120% of the Fair Market Rent (FMR) rent cap, if necessary to continue the provision and coordination of services for the elderly or to avoid a reduction in project subsidy  

LeadingAge strongly supported these provisions, and we expect HUD to implement these provisions in the summer of 2022.

The Appropriations Act also authorized the budget-neutral conversion of Section 811 PRAC properties under RAD. HUD has said that it will take some time to develop the policies governing these RAD conversions and to publish implementation guidance.

Fiscal Year 2023 Budget

On March 28th, the President released a proposed budget for FY 2023. The proposed budget includes a number of requests that, if adopted by Congress, would enhance RAD by providing new funding for properties to convert that are currently unable to. The budget request also includes several provisions that would further protect residents’ access to services, provide an affordable housing preservation strategy for an additional portfolio of at-risk properties, and provide technical capacity to support small owners.

Specifically, the FY 2023 President’s Budget requests:

• $10 million to support higher contract rents for the conversion of Section 202 PRACs
• Ensuring continued availability of services for residents following a RAD conversion to PBRA or PBV under the first component. This will guarantee that resident services funding under the Jobs Plus, Resident Opportunities for Self-Sufficiency (ROSS), and Congregate Housing Services Program (CHSP) programs awarded to public housing properties prior to conversion may continue to operate fully and, as appropriate, be eligible for renewal at the completion of the grant term. Additionally, this would also permit the full implementation of the Jobs Plus Initiative program design following conversion of properties benefiting from Jobs Plus program grants.
• Authorizing the use of Participating Administrative Entities (PAEs) to reduce the administrative burden on small properties converting under RAD.
• Authorizing the budget-neutral conversion of properties assisted under Senior Preservation Rental Assistance Contracts (SPRACs) under RAD.

The Budget also requests improvements impacting Public Housing conversions. For example, $100 million to support higher contract rents for public housing conversions that promote the energy efficiency or climate resilience of properties, as well as the elimination of the cap on public housing units that may convert under RAD and the sunset date by which applications must be received. In addition, the budget request strengthens properties that are blending RAD and Section 18 strategies.

LeadingAge strongly supports improvements to RAD for 202 and 811 PRACs, as well as RAD for Public Housing. For more details on the FY22 Budget, click here. For more information on the FY23 Budget Request, click here.