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RENTAL ASSISTANCE DEMONSTRATION NOTICE PIH 2012-32 (HA) ISSUED: July 26, 2012 R ENTAL A SSISTANCE D EMONSTRATION (RAD) 1.

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Presentation on theme: "RENTAL ASSISTANCE DEMONSTRATION NOTICE PIH 2012-32 (HA) ISSUED: July 26, 2012 R ENTAL A SSISTANCE D EMONSTRATION (RAD) 1."— Presentation transcript:

1 RENTAL ASSISTANCE DEMONSTRATION NOTICE PIH (HA) ISSUED: July 26, 2012 R ENTAL A SSISTANCE D EMONSTRATION (RAD) 1

2 To be eligible a PHA must:  Have Public Housing Units under an ACC (Annual Contributions Contract).  PHA has to be classified as Standard or High Performance under Public Housing Assessment System (PHAS).  PHA has to be classified as Standard or High Performance under PHA Assessment System under Section 8 Management Assessment Plan (SEMAP).  PHA has to be compliant with all reporting and programmatic requirements. ELIGIBILITY 2

3  PHA can not be debarred, suspended or have limited participation in Federal Programs against the PHA, Executive Director, Board Members or Affiliates.  PHA has to submit completed RAD Application that complies with all RAD requirements.  PHA has to be compliant with all Fair Housing and Civil Right Requirements under 24 CFR 5.105(a). ELIGIBILITY ( CONT ’ D ) 3

4 TIMELINE OVERVIEW WhenWhat 0 DaysCHAP issuance by HUD 15 DaysApplicant timeframe to reject Chap expires 30 DaysLender engagement letter, development team information 60 DaysPBRA-PBV decision; Significant Amendment to PHA Plan 90 DaysRPCA; certification that all other due diligence has been received 150 DaysFirm Commitment applications for all financing 180 DaysFinancing Plan 320 DaysFirm Commitments for all financing 360 DaysClosing 4

5 1. It is not a HAP Contract, it is a commitment to enter into a HAP contract. The CHAP gets issued at the closing of the RAD transaction. 2. It is needed to show the Lender that HUD will enter into the HAP Contract at closing. 3. It is non-negotiable. The PHA must execute it without changes or reject it. 4. PHA has 15 days from date of issuance of the CHAP to accept or reject it. 5. Once PHA accepts the CHAP, the asset is assigned to a Transaction Manager who drives the RAD process. CHAP 5

6 The PHA should get its entire development team to join the Kickoff Call:  PHA Executive Director and key PHA Development Staff  Lender  PHA and Lender Counsel  Architect  General Contractor  RPCA Contractor The Transaction Manager will invite PIH Field Office contact, Multifamily HUD Director and if FHA-insured loan is involved the Multifamily Originating Office Director. KICKOFF CALL 6

7 7 1. Introductions and Roles 2. Questions from the Application review 3. The RAD Physical Condition Assessment (RPCA) Ordering the RPCA Assembling utility bills for owner-paid utilities Getting tenant releases for tenant-paid utilities Supporting the RPCA Contractor Provide existing components: installation, cost, usage Discuss recent major maintenance and capital improvements Discuss plans for upcoming capital improvements Discuss owner-initiated rehab plans

8 KICKOFF CALL 8 Review RAD Program rehab requirements (Notice pgs )  Minimum: Energy Star, Water Sense, Federal Energy Management Program designated products and appliances  Cost effective utility-saving components that are financially feasible 4. RAD Physical Condition Assessment (RPCA) Supporting the RPCA Contractor Identify Green Standard ( if applicable) i.e. LEED, Enterprise Green Communities, etc. Provide ample notice of property inspection to tenants.

9 (continued from prior slide) Join in the property inspection Share other recent property inspections and studies 5. Other necessary due diligence 6. RAD FHA Processing Mortgagee Letter (if FHA-insured loan) Mortgagee Letter KICKOFF CALL 9

10 PROCESSING MILESTONES 30 days from CHAP Issuance  Lender Engagement Letter (Notice, pg. 59) This letter will include proposed loan amount, terms of the loan, pro forma sources and uses and pro forma stabilized cash flow. The letter may be conditional upon lenders due diligence and underwriting and approval process.  Development Team Description (Notice, pg. 50) Identify development team members with applicable evidence of recent successful experience with financing, developing, rehabilitation, construction, ownership and operation of similar properties. Proven experience with at least three transactions with mixed or multiple sources of financing. 10

11 60 days from CHAP Issuance Significant Amendment to Annual/5 year Plan (Notice, pgs ) o RAD Notice requires RAD conversions be subject to a Significant Amendment. o Plan addresses the mission, goals and objective for achieving preservation of affordable housing stock in their portfolio. o PHA makes decision for conversion to Project Based Rental Assistance (PBRA) or Project Based Voucher (PBA).  90 days from CHAP Issuance o RPCA is submitted for review (Notice, pg. 60) o RAD Physical Condition Assessment Statement Work (radresource.net) o Davis Bacon applies to all rehab work even with FHA Financing. o Davis Bacon is required due to public housing requirements and not the FHA Financing. PROCESSING MILESTONES 11

12 o Transaction Manager will review the report for accuracy and compliance to the RAD PCA Scope of Work found on radresource.net o Additional due diligence may be submitted in conjunction with the RPCA include environmental reports, or related lender due diligence such as appraisal, survey, title commitment, etc.  150 days from CHAP Issuance o Certification that all Firm Commitments applied for (Notice, pg. 60) o For FHA insured financing this would be in the form of the Firm Commitment o Application to FHA. P ROCESSING MILESTONES 12

13  180 days from CHAP Issuance o Financing Plan is submitted (Notice, pg. 60) o HUD will have 60 calendar days from date of submission of the Financing Plan to approve, reject or request additional information. o 223(f) deals will be underwritten by OAHP (Office of Affordable Housing Preservation) Senior Underwriters. o 221(d) 4 deals will be processed by a select team of MAP underwriters in Multifamily HUBs.  320 days from CHAP Issuance o Firm Commitments for all Financing (Notice, pg. 62) o Firm Commitments must cover all sources of financing required to close the transaction.  360 days from CHAP Issuance o Closing (Notice, pgs )  PROCESSING MILESTONES 13

14 Contact Information Glenda M. Brown, Underwriter/Transaction Manager Office of Affordable Housing Preservation (312)


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