On January 16, 2025, HUD published Notice H 2025-01/PIH 2025-03, Rental Assistance Demonstration – Supplemental Notice 4C, amending Notice H-2019-09. There are a number of revisions to current RAD regulations, and we encourage you to read the Notice in its entirety.
Our team has reviewed it and identified the following topics of interest for Compliance and Property Management staff:
Waivers of Rent Adjustments by OCAF
Section IV of the Supplemental Notice describes the process by which RAD Owners may apply for a waiver to receive an exception to the standard process of receiving annual adjustments to contract rents during the initial contract term via application of the Operating Cost Adjustment Factor (OCAF). In extraordinary circumstances, owners would submit a request with documentation demonstrating the need for an alternative operating cost factor rental adjustment to the Office of Recap for review. If approved, the Owner would be granted an alternative operating cost factor.
This is very exciting news for early adopters of RAD who have seen OCAFs that do not keep pace with the increased costs of running their properties. Right now, there’s limited information as to what is considered an “extraordinary circumstances” or the documentation that would be required to support such a request. These qualifiers will be outlined by the Office of Recap in the near future and shared with the industry.
Resident Services
The RAD statute, as amended by the Consolidated Appropriations Act 2024, provides waiver authority to facilitate the ongoing availability of services to residents for Jobs Plus, ROSS, and FSS programs originated in the Public Housing Program. Section III of this Supplemental Notice extends the availability of these programs after conversion and removes the need for waivers with respect to the FSS program. Lastly, it clarifies that there is continuing availability of grant assistance through the Congregate Housing Services Program.
Current ROSS-SC grantees will be able to finish out their current ROSS-SC grants once their project is converted under RAD. And, these properties may apply for the ROSS-SC grant to be renewed.
FSS: The language in the notice was revised to reflect current regulations that allow for Multi-family FSS programs.
Non-Payment of Rent, Notice of Proposed Termination due to Non-payment of Rent
This Notice aligns the RAD program’s notification requirements with all other multifamily programs pursuant to HUD’s recent Final Rule (30-Day Notification Requirement Prior To Termination of Lease for Nonpayment of Rent) published on December 13, 2024.
The language in the RAD Notice was revised to match preexisting requirements in 24 CFR part 247 regarding leases
Specifically, Section VIII states that a new Security Deposit cannot be required for residents in-place at the time of conversion. It requires that House Rules and other approved addenda be in plain language, compliant with program requirements, and not overly restrictive. Lastly, it affords HUD the right to reject or require revisions to any section they deem unreasonable.
Owners cannot prohibit residents’ pets in-place
Via this Supplemental Notice, owners cannot prohibit residents’ pets in-place at the time of conversion from remaining on property following conversion. These owners are encouraged to adopt pet friendly policies.
Lead Paint Disclosure
Finally, the Notice clarifies that Lead Paint Disclosure must also be provided, when applicable, at conversion.
Are you associated with a property that is planning or has completed a recent PBRA RAD conversion? Are you looking for training, policy development, or compliance consulting to include crucial nuances unique to RAD properties? If so, you are in luck! DeSilva Housing Group’s Vice President of Compliance and Consulting Services, Brian Gamble, has nearly a decade of experiences overseeing various aspects of this emerging HUD program.
Mr. Gamble was deeply involved in HUD’s PBRA RAD program, managing compliance for 16 sites formerly participating in HUD’s Public Housing Program. Let his experience and insight work to your benefit! Reach out today!