[Federal Register Volume 83, Number 128 (Tuesday, July 3, 2018)]
[Notices]
[Pages 31168-31169]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14248]



[[Page 31168]]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6105-N-01]


Rental Assistance Demonstration: Implementation of Certain Fiscal 
Year (FY) 2018 Appropriations Act Provisions

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner and Office of the Assistant Secretary for Public and 
Indian Housing, HUD.

ACTION: Notice.

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SUMMARY: This notice implements several changes to HUD's Rental 
Assistance Demonstration (RAD) program that were enacted in the 
Consolidated Appropriations Act, 2018 (2018 Appropriations Act). For 
participants under the First Component of RAD relating to Public 
Housing conversions, this notice increases the number of public housing 
units that may be awarded competitively and extends the application 
deadline. In order to implement the unit increase, the notice describes 
how HUD will set initial contract rents for awards made pursuant to the 
expansion of RAD, simplifies the process by which public housing 
agencies (PHAs) can withdraw and replace their existing awards, serves 
as notification to PHAs that have submitted Letters of Interest (LOI) 
that to reserve their position on the RAD waiting list they must take 
additional steps to secure their award, and modifies the latest 
possible date for PHAs to submit an application for the final phase of 
a project covered by a Multi-phase Award. For the Second Component of 
RAD, this notice implements two provisions of the 2018 Appropriations 
Act relating to initial rent setting for the conversion of Rent 
Supplement (Rent Supp) and Rental Assistance Payment (RAP) properties 
and to the prohibition against rescreening residents.

DATES: This notice is applicable on July 3, 2018.

ADDRESSES: Interested persons are invited to submit questions or 
comments electronically to [email protected].

FOR FURTHER INFORMATION CONTACT: William A. Lavy, Director, Program 
Administration Division, Office of Recapitalization, Office of 
Multifamily Programs, Department of Housing and Urban Development, 451 
Seventh Street SW, Room 6230, Washington, DC 20410; telephone 202-708-
0614. (This is not a toll-free number.) Individuals with speech or 
hearing impairments may access this number through TTY by calling the 
toll-free Federal Relay Service at 1-800-877-8339. To assure a timely 
response, HUD recommends that requests for further information be 
submitted electronically to the email address [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On March 23, 2018, section 237 of Title II, Division L--
Transportation, Housing and Urban Development, and Related Agencies, of 
the Consolidated Appropriations Act, 2018 (Pub. L. 115-141) (2018 
Appropriations Act), amended the RAD statute, as authorized in Title 
II, Division C, of the Consolidated and Further Continuing 
Appropriations Act, 2012, (Pub. L. 112-55) by, among other changes, (1) 
increasing the unit cap from 225,000 units to 455,000 units and 
extending the period for project applications until September 30, 2024, 
under the RAD First Component, which allows for the conversion of 
assistance under the public housing program to long-term, renewable 
assistance under Section 8; \1\ (2) establishing that contracts 
provided through the conversion of properties currently assisted 
through the Rent Supp and RAP programs that are located in high-cost 
areas shall have initial contract rents set at comparable market rents 
for the market area; and (3) establishing that conversions of 
assistance under the Second Component may not be the basis for re-
screening or termination of assistance or eviction of any tenant family 
in a property participating in the demonstration and such a family 
shall not be considered a new admission for any purpose, including 
compliance with income targeting.
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    \1\ The RAD statutory requirements were amended by the 
Consolidated Appropriations Act, 2014 (Pub. L. 113-76, signed 
January 17, 2014), the Consolidated and Further Continuing 
Appropriations Act, 2015 (Pub. L. 113-235, signed December 16, 
2014), the Consolidated Appropriations Act, 2016 (Pub. L. 114-113, 
signed December 18, 2015), the Consolidated Appropriations Act, 2017 
(Pub. L. 115-31, signed May 4, 2017), and the Consolidated 
Appropriations Act, 2018 (Pub. L. 115-141, signed March 23, 2018). 
The statutory provisions of the 2012 Appropriations Act pertaining 
to RAD, as amended, are referred to as the RAD statute in this 
notice.
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    The most recent version of the RAD program notice, Rental 
Assistance Demonstration--Final Implementation, Revision 3 notice (PIH 
2012-32 (HA) H 2017-03, REV-3), was published on January 12, 2017 and 
can be found on RAD's website, www.hud.gov/RAD. Its publication was 
announced on January 19, 2017 at 82 FR 6615.

II. First Component: RAD Unit Cap Increase and Rent Setting

    This notice announces the following:
    1. For Commitments to enter into a HAP contract (CHAPs), portfolio 
awards, and multi-phase awards issued on or after January 1, 2019, for 
which HUD has authority to make awards under the 455,000 unit statutory 
cap, HUD will use rent levels based on the FY 18 RAD rent base year, 
which will be published once the final public housing operating subsidy 
obligation is made for FY 18.
    2. To permit the PHAs on the waiting list to commence their RAD 
conversions without delay, for CHAPs, portfolio awards, and multi-phase 
awards issued between the effective date of this notice and January 1, 
2019, for which HUD has authority to make awards under the 455,000 unit 
statutory cap, HUD is modifying the FY 16 RAD rent base year 
methodology by replacing the PHA's FY 16 Capital Fund Formula Grant 
attributable to the project with the PHA's FY 18 Capital Fund Formula 
Grant attributable to the project once available for the Capital Fund 
component of the contract rent. All other components of the contract 
rent (i.e., Operating Fund and tenant rents) will continue to be based 
on FY 16 levels. Rent levels continue to be subject to the rent setting 
limitations detailed in PIH 2012-32 (HA) H 2017-03, REV-3. Further, 
these rents will be adjusted each year by HUD's published Operating 
Cost Adjustment Factors (OCAF) starting in Calendar Year (CY) 19, 
rather than CY 17, and the adjusted rents will be established in the 
Housing Assistance Payment (HAP) contracts at the time of conversion.
    3. HUD is now able to award RAD authority to certain projects where 
PHAs have submitted LOIs to reserve their position on the RAD waiting 
list if they submit a complete RAD Application, portfolio award 
request, or multi-phase award request for the number of units 
identified in their LOIs by September 4, 2018. By an email sent on or 
before the publication date of this notice, HUD will identify and 
notify each PHA that may submit an application or request for an award 
as a result of the expansion. Failure to make a complete submission for 
the reserved units (that is, submit a complete application or request) 
by September 4, 2018 will result in a forfeiture of the PHA's position 
on the waiting list.
    4. For all multi-phase awards issued after March 22, 2018, PHAs 
will have until September 30, 2024, to submit an application for the 
final phase of the project covered by the multi-phase

[[Page 31169]]

award. For any multi-phase awards issued prior to March 22, 2018, HUD 
may approve extensions up to September 30, 2024 on a case-by-case 
basis.
    5. When a PHA returns RAD authority to HUD by submitting a 
voluntary withdrawal of a project and subsequently requests new RAD 
authority for the same project within one month thereafter, provided 
that HUD has authority to make awards under the 455,000 unit statutory 
cap, HUD may approve issuance of a replacement CHAP without the 
requirement that the PHA submit the application materials that would 
otherwise be required. The replacement CHAP will include the original 
CHAP issuance date, but will have rents based on the applicable RAD 
rent base year as described above. For example, a withdrawal of a CHAP 
and subsequent request for new RAD authority that occurs in September 
of 2018 would have rents based on FY 16 rent levels as modified in 
Paragraph 2.

III. Second Component: Initial Contract Rents for Rent Supplement and 
RAP Conversions

    For Project Based Rental Assistance (PBRA) conversions, properties 
currently assisted through the Rent Supp and RAP programs that are 
located in High Cost Areas as identified in Housing Notice 2017-06 
shall have initial rents set at comparable market rents, without regard 
to any Fair Market Rent (FMR) cap, but as otherwise described in PIH 
2012-32 (HA) H 2017-03, REV-3. Over the 20-year term of the HAP 
contract, contract rents will be adjusted using the processes described 
in the HUD Section 8 Renewal Policy Guidebook under Option 1A: Mark-Up-
To-Market.
    For Project-Based Voucher (PBV) conversions, HUD is not prepared to 
implement this modification to initial contract rent setting at this 
time.

IV. No Rescreening of Tenants Upon Conversion Under the Second 
Component

    At conversion under the RAD Second Component, current households 
cannot be excluded from occupancy at the Covered Project (as defined in 
the RAD program notice) based on any rescreening, income eligibility, 
or income targeting. With respect to occupancy in the Covered Project, 
current households in the Converting Project will be grandfathered for 
application of any eligibility criteria to conditions that occurred 
prior to conversion but will be subject to any ongoing eligibility 
requirements for actions that occur after conversion. These protections 
also apply when a household is relocated to facilitate construction or 
rehabilitation work following conversion and subsequently returns to 
the Covered Project. Post-conversion, the tenure of all residents of 
the Covered Project is protected pursuant to PBV or PBRA requirements 
regarding continued occupancy. For example, a unit with a household 
that was over-income at time of conversion would continue to be treated 
as an assisted unit. Thus, 24 CFR 982.201, concerning eligibility and 
targeting of tenants for initial occupancy, and the first clause of 
section 8(c)(4) of the United States Housing Act of 1937 and 24 CFR 
880.603(b), concerning determination of eligibility and selection of 
tenants for initial occupancy, will not apply for current households. 
Once the grandfathered household moves out, the unit must be leased to 
an eligible family.

V. Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations in 24 CFR 
part 50, which implemented section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is 
available for public inspection during regular business hours in the 
Regulations Division, Office of General Counsel, Department of Housing 
and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 
20410-0500. Due to security measures at HUD Headquarters building, 
please schedule an appointment to review the FONSI by calling the 
Regulations Division at 202-708-3055 (this is not a toll-free number). 
Individuals with speech or hearing impairments may access this number 
via TTY by calling the Federal Relay Service at 800-877-8339.

    Dated: June 22, 2018.
Dominique Blom,
General Deputy Assistant Secretary for Public and Indian Housing.
Brian Montgomery,
Assistant Secretary for Housing, Federal Housing Commissioner.
[FR Doc. 2018-14248 Filed 7-2-18; 8:45 am]
BILLING CODE 4210-67-P