Technical Assistance Available to Assist in RAD Conversions
HUD continues to work with owners and Housing Authorities across the nation to convert existing contracts to long-term Section 8 contracts through its Rental Assistance Demonstration (RAD). If you are considering a RAD conversion, consultation services and Technical Assistance (TA) are available free of charge.
Several owners of Section 8 Moderate Rehabilitation (Mod Rehab) and Moderate Rehabilitation Single Room Occupancy (Mod Rehab SRO) properties have used TA for guidance during several different phases of the RAD conversion lifecycle to enable them to move forward with their transactions.
One property owner requested TA during its conversion of 24 units to a Project Based Voucher (PBV) contract. The owner had some knowledge of real estate finance but needed additional assistance to determine the next steps in the property’s RAD conversion process. Through TA, the owner was able to:
- Understand the basic steps of building an operating proforma (i.e., rents, expenses, reserves, net operating income, cash flow, etc.)
- Determine the amount of debt the property could support
- Ascertain the remaining financing gaps that would need to be filled so the transaction would work
The owner of another, larger property received TA over the course of a year to help convert 422 units to a PBV contract. Through the TA, the owner gained an understanding of the following:
- What a Capital Needs Assessment (CNA) entails
- How to convert multiple Housing Assistance Payment (HAP) contracts
- How to build a financing plan to demonstrate how the property would pay off existing debt, finance rehabilitation, take on new debt, and remain financially viable over the long term
If you know of an owner who would like information on TA or general assistance with a RAD conversion, please contact HUD via email at RAD2@hud.gov.
Office of Recapitalization Staff
U.S. Department of Housing and Urban Development