HUD Clarifies HAP Contract Bifurcation Options for Affordable Housing Preservation

On Jan. 31^st, the U.S. Department of Housing and Urban Development (HUD) Office of Multifamily Housing Programs published a Housing Notice entitled “Approval and Processing of Requests to Bifurcate Contracts.”

“Bifurcation” relates to dividing a project-based Section 8 Housing Assistance Payment (HAP) contract into two or more contracts while retaining the same level of affordability, allowing a property’s contracted units to be geographically or financially dispersed.

Bifurcation is a useful asset management tool that can help affordable housing providers preserve their stock, including owners of properties that converted from a Section 202 Project Rental Assistance Contract (PRAC) platform to a Project-Based Rental Assistance (PBRA) contract through the Rental Assistance Demonstration (RAD).