RAD for PRAC
St. Joachim House, Baltimore, MD
On September 6, 2019, HUD published Revision 4 of the Rental Assistance Demonstration (RAD) Notice, which was amended through the RAD Supplemental Notice, issued July 2023. The Notice establishes new provisions for HUD 202 PRAC properties, allowing them to convert the PRAC subsidy to the more stable Section 8 platform. We can help PRAC owners understand their options. To see a quick video from HUD on an overview of the program, go here.
How it Works
HUD will allow owners to convert their PRAC subsidy to a 20-year Section 8 contract. Even though there is no dramatic rent increase potential embedded in the RAD conversion process, there are steps that owners can take before they convert to increase rents. After conversion rents will be increased annually by OCAF.
Why do this?
Without a guaranteed increase in rents, why would an owner convert their PRAC? Key benefits include:
Forgiveness of the Capital Advance Grant. This allows you to take on new financing.
No residual receipts. You will be able to distribute surplus cash, or use it to leverage new debt.
Potential pre-conversion rent increases not available unless you are working towards a conversion. This will be related to an increase to the R4R deposit.
Access the $100 PUPM or $250 PUPM Rent Supplement made available in the July 2023 Notice.
How We can Help You
We can help you work towards a rent increase in the pre-conversion phase of assistance. If it is determined a RAD for PRAC conversion would be best for the Property, we will assemble the R4P Conversion Plan and take the project through the conversion process to a closing.
Go HERE to see HUD’s webinar on the RAD for PRAC provisions.
Click HERE to return to Subsidy Maximization page