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Rental Assistance Demonstration (RAD) & The San Francisco Housing Authority

In light of the recent RAD re authorization (125,000 more units YIPPIE!), I wanted to blog about this great article regarding San Francisco Housing Authority and RAD.  D3G has worked on the San Fran RAD projects for greater than a year with the Mayor’s Office, and it is nice to see good press about the benefits of healthy homes. 

Also the article notes “Early estimates indicate that the RAD financing structure will result in over $500 million in rehabilitation. To put that number into perspective, the Housing Authority only receives $10 million per year for rehabilitation under the current system.”

Here’s wishing a healthy and happy holiday season to San Francisco Housing and their residents!

Full Article Here

UPDATE: HUD issues another clarification on RAD. RPCA studies necessary for 221(d)(4) projects

Is a RAD Property Condition Assessment (RPCA) required on the Section 221(d)(4) transaction?

 

No, an RPCA narrative report is not required on any 221(d)(4) transaction.

However, the RPCA Excel tool is required on all 221(d)(4) sub-rehab projects where the scope of rehab does not include "the removal and replacement of substantially all interior finish surfaces exposing the underlying building frame (i.e. gut rehab).  

For those non-gut rehab transactions, the RPCA tool will be required  1) to size the project's reserve for replacement account's deposit, and 2) to capture it's utility consumption baseline data.

The required portions of the RPCA tool which must be completed include:

a) Utility Baseline - Summary

b) Utility Baseline - Monthly

c) Cap Needs Input

 

For FHA 221(d)(4) new construction and gut rehab transactions, Lenders should use the FHA Section 221(d)(4) formulas to size the reserve for replacement account deposit.

HUD Update: Emergency Call Systems in Elderly Properties

 

Recently HUD’s Office of Multifamily Housing Programs issued clear guidance on the requirements for an Emergency Call System in Elderly Properties.  

The memorandum (dated October 31, 2014) was written to clarify Section 100.2 of HUD’s Minimum Property Standards (MPS), Handbook 4910.1.  

Since the memorandum is moot on the definition of Elderly Housing (e.g. 55 or 62?) we will assume this requirement applies only to the Federally defined 62+ age demographic.

 

Read the full update below:

HUD-Update-Call-Systems-in-Elderly-Properties.pdf

UPDATE: FAQ was issued on RAD, clarifying which RPCA studies are necessary for HUD Section 221(d)(4) projects

 

My last blog was about a new RAD FAQ regarding 221(d4) mortgage insurance and RAD, specifically the following new FAQ on 10-14-2014: 

 

Posted: 10/14/2014

Question: Is a RAD Property Condition Assessment (RPCA) required on the Section 221(d)(4) transaction?

Answer: No. A RPCA narrative report is not required on any 221d4 transaction. However, the RPCA Excel tool IS required on all 221d4 sub-rehab projects where the scope of rehab does not include “the removal and replacement of substantially all interior finish surfaces exposing the underlying building frame (i.e. gut rehab). For these non-gut rehab transactions, the RPCA tool will be required: 1) to size the project’s reserve for replacement account’s deposit, and 2) to capture utility consumption baseline data. The required portions of the RPCA tool which must be completed include: a. Utility Baseline - Summary b. Utility Baseline - Monthly c. Cap Needs Input For FHA 221d4 new construction and gut rehab transactions, Lenders should use the FHA Section 221(d)(4) formula to size the reserve for replacement account deposit.

 

But, I want to thank a very astute client who culled the RAD FAQ’s this week, only to find that that the original FAQ response was modified (yet the date of issue remained the same)The new language is:

 

Posted: 10/14/2014

Question: Is a RAD Property Condition Assessment (RPCA) required on a new construction or substantial renovation transaction?

Answer: A RPCA is required for all RAD transactions, except the following: 1) New Construction; 2) Gut Rehab (essentially, down to the stud); or 3) Recently modernized or constructed buildings (based on the recommendation of the HUD RAD Transaction Manager and approval by the RAD Team Lead). However, the RPCA Excel tool is still required to size the reserve for replacement deposit on all sub-rehab transactions, with the exception of “gut rehabs”. “Gut rehabilitation” is defined as “removal/replacement of all or substantially all interior finished surfaces”.

 

I see the major change being that they removed the Utility Consumption Baseline (UCB) requirement, which makes sense and reduces the time and cost of the study.  Kudos to HQ for making this smart change, and Kudos to AGM Andy for finding the change!

 Full issued FAQ here: radfaq-1.pdf

First Freddie Tax-Exempt Loan Closes

We completed much of the 3rd party due diligence work for this rehab deal. We assisted the first Freddie tax-exempt loan deal by providing an Environmental 4.4 form, Green Physical Conditions Assessment, Integrated Pest Management, Utility Consumption Baseline and Energy Audit for The Lakewoods, a 417 unit apartment complex in Ohio.

 Read more in this excerpt from the latest edition of AHF.

AHF-10-14---Lakewoods--First-Freddie-Tax-exempt-loan.pdf

D3G's Accessibility Toolkit mentioned at HUD's FHA Housing Tax Credit Pilot Program Training

For those that attended HUD’s FHA Housing Tax Credit Pilot Program Training at HUD Headquarters on September 22nd and 23rd, you may have heard about our Fair Housing Act Accessibility Guideline Toolkit. 

This resource well illustrates common Fair Housing Act accessibility issues in housing, and can assist in making sure industry participants are educated on the important subject.

View our Accessibility Toolkit with the link below:

Accessibility-Toolkit-FHA-Design-Manual-Re-Issued.pdf

HUD posts RAD Case Studies

On Wednesday of last week, HUD posted RAD case studies on their website. As of today 10% of the original 60,000 units has closed.  Good progress going forward.

(One of the case studies featured was the project we worked for the Lexington Housing Authority in Lexington, North Carolina)

Read the case study here.

Lexington-NC-RAD.pdf

USDA Rural Development issues NOFA for $20 million

This week USDA Rural Development issued a NOFA for $20million aimed towards a “demonstration program to preserve and revitalize existing Rural Rental Housing (RRH) projects under Section 515, Section 514, and Section 516.” Pre-Applications are due November 24, 2014. 

And if you need assistance with a competitive application, D3G can provide a Green Physical Needs Assessment with energy audit which will be in important tool in the process. 

Read more about the NOFA here:   https://www.federalregister.gov/articles/2014/09/23/2014-22476/notice-of-funding-availability-multi-family-housing-preservation-and-revitalization-demonstration

Know that we are here to assist you with your preservation project.

 

 

D3G helps complete the first Mod-Rehab Rental Assistance Demonstration (RAD) Deal

Tags:Rental Assistance Demonstration, RAD, HUD, 221d4, CHAP, Broadway, Townhomes, PCA, RPCA, Property Conditions Assessment

Read press coverage of the deal here

Read the D3G Case Study of Broadway Townhomes here

D3G is very excited to be the third party consultant firm chosen to help complete the First Mod-Rehab Rental Assistance Demonstration (RAD) Deal - Broadway Townhomes in Camden, NJ.

D3G was tasked with both completion of a RAD Property Condition Assessment by a BPI-Multifamily Analyst, as well as processing the energy retrofits and construction budget under a HUD Section 221(d4) loan, post CHAP conversion. Under our scope of professional services we have provided BPI physical inspection, ASHRAE/HUD energy audit, TREAT modeling of varying configuration of scattered sites, domestic hot water and heating load calculation, a utility consumption baseline analysis, and technical review of construction documents for New Jersey Housing and Mortgage Finance Agency (NJHMFA) Modified Tier II Energy Star Homes Equivalency Compliance.

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FAQ Guidance on the Utility Consumption Baseline (UCB)

This week HUD issued some welcomed Frequently Asked Question (FAQ) guidance on the Utility Consumption Baseline (UCB). Read it here: http://www.radresource.net/faq_gen.cfm. HUD relaxed both the milestone timing of the UCB study as well as the unit sampling size.

 

In more detail, excerpts of the FAQ:

Question: In a RAD FAQ (WEB11102012_22_04070), the Department offered the following response regarding capturing tenant utility data to complete the UCB: “There is no specified minimum sampling requirement, due to the different configurations of buildings. The RPCA contractor must have enough data to ensure that they can produce such a baseline in which HUD can rely.” Can the Department further clarify the sampling size for the UCB?

Answer: The PCA provider should seek to obtain data on resident-paid utilities from 25% of the units, which is a threshold percentage for the PCA provider to provide reasonable estimates of whole-building energy consumption. Please note that in the near future HUD anticipates the publication of tools that will help PHAs and other industry partners manage the UCB data, so the flexibility and the 25% threshold provided in this FAQ is subject to change pending new HUD guidance and tools. Any UCB data submitted to HUD prior to publication of these standards will be grandfathered in to this sampling standard.

 

Question: The RAD Notice requires that the RAD Physical Condition Assessment (RPCA) be completed within 90 days of award. We expect to complete the RPCA within this timeframe, except for the Utility Consumption Baseline (UCB), which, because of the need to obtain individual utility data from tenants, will take longer. Since the UCB isn’t actually used for underwriting purposes, can we submit the UCB along with the Financing Plan, which is due within 180 days of award?

Answer: The UCB is an important feature of the RPCA and is part of HUD’s broader initiative to establish baseline utility data for our entire rental housing stock. However, since the data is not used as part of Underwriting, HUD will consider waiver requests from PHAs to submit the UCB at the time of the Financing Plan, or after the closing/RAD conversion. If you seek a waiver, please alert your Transaction Manager in writing. Please note: this flexibility extends to non-FHA transactions. For FHA transactions, until further notice, the UCB must be part of the RPCA document submitted with the FHA Firm Commitment application. Furthermore, in the near future HUD anticipates the publication of tools that will help PHAs and other industry partners manage the UCB data, so the flexibility provided in this FAQ is subject to change pending new HUD guidance and tools.

HUD Releases Intrusive FAQs

HUD's FAQs for Intrusive Studies. Read the document here more

NLHA Annual Conference in DC

I'm attending the NLHA Annual Conference in Washington, DC. Ben Metcalf just showed a PowerPoint slide demonstrating the effective timely processing of loans using the single underwriter model in the Atlanta HUB. Of the four examples, D3G performed third party services on three of the success stories!

 

Kudos to CHP for the NAHMA Award

D3G would like to give a shout out to CHP for The Warwick recognition (NAHMA award here). D3G did a lot of consulting work on this, including: Capital Needs Assessment, Environmental Site Assessment, Hazardous Materials Testing (Asbestos, Lead, Mold), Indoor Air Quality analyses, Phase 2 Environmental Sampling, Technical Abatement Specifications and Scope of Work Development, as well as Construction Inspections during rehabilitation.

This work started in the fall of 2008 and concluded in 2012. Determination and patience with this converted 1928 luxury hotel has resulted in 88 single room-occupancy (SRO) housing, supporting previously homeless individuals. Kudos to CHP!

IPM No Longer Required for RAD!

Excellent News! Apparently our constant request for IPM Waivers as well as pointed conversations about IPM, and where/when it is most appropriate, has been heard and a policy change made. Today HUD officially removed IPM from the RAD Scope of Work, and a new scope of work was issued with only three (3) parts for compliance entitled RPCA SOWv2. For those with RAD RPCA’s in progress, pick up the phone and tell your consultants this wonderful news, and save some fees!

Sec. Donovan Speaks at AHF Live

Tags:RAD

I was pleased by what Jennifer Berger and I heard about RAD from our Housing Secretary at the AHF Live conference we attended in Chicago. According to Secretary Donovan, the agency has received applications for more than 90,000 units to convert public housing under RAD and expects to hit the program’s 60,000-unit limit in the early months of 2014.

“That is why we need to increase the cap to 150,000 in our 2014 budget,” Donovan said at AHF Live in Chicago. Read all about it here. With approximately 40% of the early RAD conversions utilizing the LIHTC markets, we would love to see the RAD program authority increased with the upcoming budget / continuing resolution. Fingers crossed until January 16th...

HUD's Contingency Plan for Government Shutdown

Tags:HUD

I was hoping I would not need to send this out.  But just in case the government shutdown doesn't end today, and you work with HUD, you can read the contingency plan here.

D3G Is Founding Member of NEEDA

The National Engineering and Environmental Due Diligence Association (NEEDDA) publicly announced its formation today with seven founding members. These founders, some of the nation’s largest due diligence consulting firms, include Partner Engineering and Science, Inc., EMG, Nova Consulting, IVI International, Inc., AEI Consultants, Dominion Due Diligence Group, and PM Environmental.

Clients of the member firms include national lenders, investors, brokers, attorneys, and other real estate transaction parties.

The founders met throughout 2013 to create bylaws for the non-profit organization whose mission is to “promote the common interests of engineering and environmental consulting stakeholders who provide due diligence for real estate transactions.” Members must provide both engineering and environmental due diligence services and meet the membership criteria.

Read the full press release here.

RAD On The Road

Tags:RAD

D3G has teamed up with The Bennett Group (TBG) for a few lunch-n- learn meetings about the RAD process. I will be in Independence, MO on September 25th, Alexandria, LA on October 9th and Memphis, TN on October 10th. TBG is facilitating these meetings, so for more information or to request more information about future educational seminars regarding RAD, check out TBG's website here.

Updated FEMA Flood Elevation Certificate

Tags: FEMA, ESA

The National Flood Insurance Program (NFIP) Elevation Certificate (EC) is an administrative tool of the NFIP which is to used to provide elevation information necessary to ensure compliance with community floodplain management ordinances, to determine the proper insurance premium rate, or support a request for a Letter of Map Amendment (LOMA).

The FEMA Flood Elevation Certificate, OMB No. 1660-0008, was recently updated from the older version which expired on March 31, 2012. FEMA allowed a “phase-in” of the revised EC on a voluntary basis. During the 12-month transition period beginning August 1, 2012, either the new form or the old form could be accepted.  Now, the new form is the only acceptable submission, and you can find that updated form here.  

If you have any questions, email me!  This email address is being protected from spambots. You need JavaScript enabled to view it. 

Ohio Clarifies Radon Policy

Though not “news” to D3G, HUD ML2013-07, Multifamily Housing Radon Policy received some much needed clarification today from the Ohio Multifamily Hub by sending a link to this document issued by the Ohio Department of Health. Similar clarification should be provided by Illinois, which like Ohio, has radon testing requirements more onerous than the recently issued HUD standard. Also, New Jersey has similar regulations in the process of being enacted. In a nutshell, 3rd party consultants need to know the State regulations and are required to comply above and beyond the new HUD Radon Policy, as applicable. When in doubt use D3G, as we make sure our staff are up to date on Federal and State regulations that govern affordable housing due diligence. After all, we are here to reduce your risk – not create greater risk by skirting the regulations.

 
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