The RAD 2nd Component allows Rent Supplement (Rent Supp), Rental Assistance Payment (RAP), and Mod Rehab properties to convert tenant-based vouchers issued upon contract expiration or termination to project-based vouchers (PBVs) or Project Based Rental Assistance (PRBA). These subsidies enable properties to refinance in order to address needed repairs.
In order to be eligible under the RAD 2nd component, eligible properties must have an active Rent Supp or RAP assistance contract at the property, or must have previously received Rent Supp or RAP assistance that terminated on or after October 1, 2006.
The property must have experienced (on or after October 1, 2006) an event that has triggered the provision of Tenant Protection Vouchers (TPVs). Under RAD, a triggering event is defined as:
- The termination (or expiration) of a Rent Supp or RAP rental assistance contract
- Prepayment of the underlying mortgage on a Rent Supp or RAP project
In addition, the owner must demonstrate a MOR of Satisfactory or higher OR offer a certification that the management agent is being replaced and the most recent Real Estate Assessment Center (REAC) score at the property must be 60 or above.
HUD will consider two types of RAD conversions: prospective conversions and retroactive conversions.
- To be considered a prospective conversion, the expiration/termination date of the Rent Supp or RAP contract must be at least 60 days after the owner’s RAD request. In a prospective conversion, the project will receive PBV assistance in lieu of the TPV assistance that would have been otherwise provided to project residents.
- Retroactive conversions are conversions of TPVs that have already been issued to project residents as a result of a Rent Supp or RAP contract expiration or the termination of a Rent Supp or RAP contract due to prepayment of a mortgage. The contract expiration or termination and issuance of TPVs must have occurred on or after October 1, 2006. Only the units occupied by eligible low-income residents that received TPV assistance and consent to the conversion may be assisted under the PBV HAP contract.