Nixon Peabody LLP

  • People
  • Capabilities
  • Insights
  • About

Trending Topics

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni

    Practices

    View All

    • Affordable Housing
    • Community Development Finance
    • Corporate & Finance
    • Cybersecurity & Privacy
    • Environmental
    • Franchising & Distribution
    • Government Investigations & White Collar Defense
    • Healthcare
    • Intellectual Property
    • International Services
    • Labor & Employment
    • Litigation
    • Private Wealth & Advisory
    • Project Finance
    • Public Finance
    • Real Estate
    • Regulatory & Government Relations

    Industries

    View All

    • Cannabis
    • Consumer
    • Energy
    • Entertainment
    • Financial Services
    • Healthcare
    • Higher Education
    • Infrastructure
    • Manufacturing
    • Non Profit
    • Real Estate
    • Technology

    Value-Added Services

    View All

    • Alternative Fee Arrangements

      Developing innovative pricing structures and alternative fee agreement models that deliver additional value for our clients.

    • Continuing Education

      Advancing professional knowledge and offering credits for attorneys, staff and other professionals.

    • Crisis Advisory

      Helping clients respond correctly when a crisis occurs.

    • DEI Strategic Services

      Providing our clients with legal, strategic, and practical advice to make transformational changes in their organizations.

    • eDiscovery

      Leveraging law and technology to deliver sound solutions.

    • Global Services

      Delivering seamless service through partnerships across the globe.

    • Innovation

      Leveraging leading-edge technology to guide change and create seamless, collaborative experiences for clients and attorneys.

    • IPED

      Industry-leading conferences focused on affordable housing, tax credits, and more.

    • Legal Project Management

      Providing actionable information to support strategic decision-making.

    • Legally Green

      Teaming with clients to advance sustainable projects, mitigate the effects of climate change, and protect our planet.

    • Nixon Peabody Trust Company

      Offering a range of investment management and fiduciary services.

    • NP Capital Connector

      Bringing together companies and investors for tomorrow’s new deals.

    • NP Second Opinion

      Offering fresh insights on cases that are delayed, over budget, or off-target from the desired resolution.

    • NP Trial

      Courtroom-ready lawyers who can resolve disputes early on clients’ terms or prevail at trial before a judge or jury.

    • Social Impact

      Creating positive impact in our communities through increasing equity, access, and opportunity.

    1. Home
    2. Insights
    3. Alerts
    4. New tools to boost RAD rents — HUD makes more funding available for PHA repositioningAlerts

    Alert / Affordable Housing Alert

    New tools to boost RAD rents — HUD makes more funding available for PHA repositioning

    Jan 20, 2021

    Share

    By Kathie Soroka and Deborah VanAmerongen

    Up to 80% of a RAD project’s units may be eligible for Tenant Protection Vouchers (TPVs) and higher rents, according to updated Section 18 guidance.

    DOWNLOADS

    An updated HUD Notice, PIH 2021-17, revises guidance on the public housing demolition and disposition authority pursuant to Section 18 of the U.S. Housing Act of 1937, known as “Section 18.” Up to 80% of units in a Rental Assistance Demonstration (RAD) project may now be eligible for Section 18 authority. Section 18 units generate Tenant Protection Vouchers (TPVs), which typically can be project-based with rents at up to 110% of the area’s Fair Market Rent (FMR), instead of more-limited RAD rents, subject to certain limitations.

    The updated notice has two new key components: (1) More units in projects meeting hard construction cost thresholds are eligible for Section 18 and (2) a new option for public housing authorities (PHAs) with fewer than 250 units makes up to 80% of that PHA’s units eligible for Section 18.

    RAD/Section 18 Construction Blend

    Since 2018, RAD projects planning substantial rehabilitation have been eligible to receive Section 18 authority, and therefore TPVs, which can be project-based at rents up to 110% FMR. This has been known as the 75-25 blend, because projects have gotten RAD rents for 75% of their units and Section 18 authority for 25% of their units if their rehab costs were at least 60% of the HUD-determined Housing Construction Cost (HCC) amount for a given jurisdiction. The updated guidance increases eligibility from 25% to 40% of units at this rehab threshold.

    Projects involving more rehabilitation could get more Section 18 units. Rehab equal to 90% of the HCC would allow 60% of units to receive Section 18 in most areas. In “high-cost areas,” 80% of units could be eligible for Section 18. High-cost areas are defined as those where the local HCC exceeds 120% of the national average.

    In addition, projects doing less rehabilitation are now also eligible for Section 18. Projects with hard construction costs of at least 30% of the HCC can receive Section 18 for 20% of their units.

    RAD/Section 18 blends would continue to be processed primarily through HUD’s Office of Recapitalization (as the 75/25 blends had been).

    RAD/Section 18 blend for PHAs with fewer than 250 units

    A new authority allows PHAs with 250 public housing units or fewer to receive Section 18 authority, and therefore TPVs, for up to 80% of units in a RAD project. This conversion must be part of a plan to close out the PHA’s public housing portfolio. This creates a new option for PHAs currently exploring HUD’s Streamlined Voluntary Conversion program (also known as “Section 22” or “SVC”). While SVC converts public housing assistance to tenant-based vouchers and requires a PHA to take particular steps to secure tenant consent to project-basing, this new RAD-Section 18 option may allow PHAs to convert directly to project-based assistance.

    The boost from these new tools also comes shortly after HUD announced the 2020 RAD rents, which generally increased RAD levels from the previous 2018 levels.

    Affordable Housing

    Practices

    Affordable HousingReal Estate

    Industries

    Real Estate

    Insights And Happenings

    • Alert

      New York Governor Hochul’s State of the State message delivers promising news for the affordable housing industry

      Jan 7, 2022
    • Press Release

      Nixon Peabody continues to expand its Cooperatives & Condominiums team in New York City with the arrival of Laura Sugarman

      Sep 14, 2021
    • Alert

      RAD provisions in President Biden’s FY 22 Budget Proposal

      June 25, 2021

    Subscribe to stay informed of the latest legal news, alerts, and business trends.Subscribe

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    • © 2023 Nixon Peabody. All rights reserved
    • Privacy Policy
    • Terms of Use
    • Statement of Client Rights
    • Supplier Diversity Program
    • Nixon Peabody International LLC
    • PAL