For the next blog installment summarizing a key element discussed during Ballard Spahr’s recent RAD webinar, following is an overview of the special conditions that apply to the transfer of assistance from an existing public housing site to a new property. Generally, the HUD Notice PIH 2012-32, REV-2 (RAD Notice) applies the following to any transfer of assistance:
- the request to transfer assistance must be made within three months of the CHAP issuance; and
- the transfer of assistance must be described in the housing authority’s significant amendment to its Annual Plan or MTW Plan and such transfer must be consistent with the locality’s Consolidated Plan.
The RAD Notice also describes the following circumstances under which HUD will release the public housing Declaration of Trust from a property from which assistance is transferred at the time of closing on the RAD conversion:
- The converting project from which the assistance is transferred is sold at fair market value to a third party and the resulting proceeds are used for a RAD deal;
- A housing authority plans to sell the converting project site within one year of the RAD closing to permit the site to be used for other affordable housing purposes, in which instance the property will need to be subject to an affordable housing restrictive covenant;
- A housing authority plans to sell the converting project site within one year at fair market value with the proceeds used for affordable housing purposes.
Any other disposition of property from which the assistance has been transferred that does not fall within the circumstances described above would require a disposition approval from the HUD Special Applications Center under Section 18 of the U.S. Housing Act of 1937.