HUD: How New Funding Can Increase RAD for PRAC Rent Subsidies
Following the July 27th issuance of supplemental guidance for the Rental Assistance Demonstration (RAD) to support senior housing communities undergoing preservation transactions, the U.S. Department of Housing and Urban Development (HUD) has provided further detail as to how $12 million in new congressional funding will increase rents in Section 202 communities with Project Rental Assistance Contracts (PRACs) on RAD conversion.
As a result of the new funding, for which LeadingAge National advocated, owners of converting Section 202 PRACs may be eligible to increase the post-conversion Section 8 contract rent of their units by up to either $250 per unit, per month (PUPM) or $100 PUPM, depending on the level of rehabilitation or construction, if the work performed as part of the property’s RAD Conversion Plan will enhance climate resilience, energy and water efficiency, or appropriate design for elderly residents to age-in-place.
Beginning Aug. 22, 2023, converting Section 202 PRAC project owners can formally submit a request for an increase to contract rents by completing the “Preservation Rent Increase” request in the project conversion application on the RAD Resource Desk. For PRAC owners who are contemplating a RAD conversion, HUD has created a “RAD for PRAC: Preservation Rent Increase Eligibility Tool” to determine whether the project will reach the thresholds to qualify for an increase of $250 PUPM or of $100 PUPM based on anticipated rehabilitation or construction costs. Owners interested in receiving a rent increase “comfort letter” may also use the “Preservation Rent Increase” section of the conversion application on the RAD Resource Desk to make an initial request for the rent increase up to six months prior to the submission of the full property Conversion Plan; HUD has indicated that it will make a preliminary determination of eligibility and of the projected PUPM rent increase amount.
Access these tools, the “RAD for PRAC: Preservation Rent Increase Frequently Asked Questions (FAQs),” the slides and a recording of HUD’s Aug. 9th “Overview of the RAD Supplemental Notice” webinar, and more on HUD’s RAD website and in the RAD Multifamily Document Library.
Contact: Annalyse Komoroske Denio, akomoroskedenio@leadingageny.org, 518-867-8866