RAD Program Overview WHY RAD Public Capital Housing

RAD Program Overview

WHY RAD? § Public Ø Capital Housing Status Quo repair needs $25. 6 billion ü $23, 365 per unit Ø Unreliable funding platform (pro-ration, cuts) Ø Unable to access private debt and equity due to public housing declaration of trust (DOT) Ø Losing 10, 000 – 15, 000 physical units annually § Response: Ø Section RAD 8 funding platform Ø Release from DOT 2

RAD GOALS § Build on the proven Section 8 platform § Leverage private capital to preserve assets § Offer residents greater choice and mobility 3

RAD AUTHORITY § Authorized in Consolidated Further Continuing Appropriations Act of 2012 Ø Draft Notice PIH-2012 -18 (3/8/12) Ø Final Notice PIH-2012 -32 (7/26/12) Ø Updated Notice issued 7/2/13 Ø Revised Updated Notice Issued 6/5/15 4

MULTIPLE ASPECTS OF RAD Component 1 § RAD for Public Housing (Orignally Competitive) Ø Ø RAD for Mod Rehab (Originally Competitive) RAD for Mod Rehab – Now Under Component 2 § Other aspects of RAD are: Ø RAD for Mod Rehab (Non Competitive) Ø RAD for RAP and Rent Supplement (Non Competitive) Ø Subject Only to Availability of Appropriations 5

KEY PROVISIONS: PUBLIC HOUSING § Voluntary § PHA can choose: Ø Project-Based Rental Assistance (PBRA) or Ø Project-Based Vouchers (PBV) § Projects Ø or convert at current funding PBRA-PBV limit, if lower § Choice-Mobility Ø With is required limited exemptions § Resident Protections 6

CONVERSION AT CURRENT FUNDING Sample Public Housing Conversion Per Unit Monthly (PUM) $ 900 $ 800 $ 700 $ 600 Operating Fund $330 Housing Assistance Payment $474 $ 500 $ 400 Capital Fund $144 $792 $ 300 $ 200 $ 100 Tenant Payment $318 Pre-Conversion Post-Conversion At conversion, PHAs will convert funding to a Section 8 contract rent $ACC Section 8 7

Current Funding, PBRA & PBV Rent Caps PBRA Cap—lower of • Current funding, or • 120% of FMR (less utility allowance) • EXCEPT where current funding is below market (note 1) PBV Cap—lower of • Current funding, or • 110% of FMR (less utility allowance), or • Reasonable rent (note 2) Note 1: Where the PBRA exception applies, the PHA submits an RCS for HUD review. Rent is lower of comparable market rent or 150% of FMR (minus U/A). Note 2: Reasonable rent is a market rent determination made by the PHA that administers the vouchers. Typically a staff determination; often based on a desk review. 8

CHOICE-MOBILITY § General Ø Residents concept: have the opportunity to exchange their projectbased Section 8 slot for a tenant-based voucher Ø Opportunity is available only after an initial minimum occupancy period § Rules differ for PBRA and PBV § Generally required for all RAD public housing conversions Ø Some PBRA projects can receive good cause exemptions 9

OTHER § Davis-Bacon and Section 3 apply to the initial rehab § Ability to transfer assistance to another property after 10 years § Resident protections/resident participation § Use Agreement § Physical Condition Assessment (PCA) 10

CONVERSION AWARDS - COMPONENT 1 RAD Statistics As Of 5/31/15 Units Projects Statutory Cap 185, 000 n/a Active CHAPS 104, 489 879 Closed Conversions 17, 214 164 Applications Under Review 19, 346 183 177, 084 1, 472 36, 035 246 7, 916 43 Total Awarded Multiphase/Portfolio Reservations Authority Remaining RAD Component 2 Units Projects Active Conversions 3, 221 25 Closed Conversions 15, 295 114 5/16/2013 11

PUBLIC HOUSING INITIAL AWARDS – KEY CHARACTERISTICS $Total Construction Activity Leverages • $971, 367, 463 5/16/2013 12

RAD FINANCING Debt ØConventional ØSoft secondary ØCredit enhancement FHA Insurance üFHA Mortgagee Letter for RAD transactions üLIHTC Pilot LIHTCs Ø 4% availability & considerations Ø 9% availability & considerations 13

RAD FINANCING RAD Sweet Spot— 4% LIHTCs ØRehab needs above $24 k/unit to ~$40 k/unit ØEase of meeting 50% test with RAD rents ØAvailable Volume Cap ØNon-competitive ØQAPs favoring preservation, green ØEvolving, accessible short-bond structure ØHistorically low borrowing rates 14

RAD FINANCING RAD Sweet Spot— 9% LIHTCs ØAbove $40 K: Targeted prospects for substantial rehab & replacement housing ØNo Section 18 review ØIncome mixing ØSplit project (AMP) – 9% LIHTC used to help cover relo/demo/first phase – 4% LIHTC for balance of site ØRAD HAP contract(s) for off-site replacement – Acquisition/rehab – New construction 15

Developer Opportunities

DEVELOPER OPPS Partner with PHAs to ØModernize aging family & elderly properties ØSubstantial rehab of deteriorated properties ØDemolish/replace severely distressed/obsolete properties ØThin densities/mix incomes via RAD HAPs and transfer authority Place RAD HAP contracts in off-site units in high amenity locations ØIncrease QAP scoring by serving more VLI families ØNew 20 year HAP contract funding 2/2/2012 17

DEVELOPER OPPS, CONT’D Restructure existing Mixed Finance Transactions to avoid Transformation Remedies ØRAD available to all mixed finance transactions not using HOPE VI ØPHA needs to initiate process New Mixed Finance Transactions ØCan do conversions from RAD site to off-site ØCan’t do direct conversion from Faircloth “shelf” 2/2/2012 18

RAD RESOURCE DESK PHA libraries, Milestone tracking, Document library, and FAQs can be found at www. radresource. net 19

RAD WEB PAGE RAD Notice, application materials, and additional resources can be found at www. hud. gov/rad Email questions to rad@hud. gov 20