RENTAL ASSISTANCE DEMONSTRATION (RAD) PROJECTS
Increasingly, the revitalization of public housing developments includes project-based vouchers, often through HUD’s Rental Assistance Demonstration (RAD) program. RAD was introduced in 2012 to give housing authorities a tool to preserve and improve public housing properties and to address a $26 billion nationwide backlog of deferred maintenance.
Since RAD’s inception, D+B has become very familiar with the complexities inherent in RAD conversions. D+B works with PHAs to evaluate RAD’s impact on their financial operations; factors include the scope of RAD conversions relative to an overall portfolio as well as existing and potential sources of revenues. For PHAs that are new to redevelopment, are beginning to undertake master planning or asset repositionings, or are unfamiliar with the RAD program, D+B has provided board and staff trainings in RAD.
Among D+B’s RAD-related projects are the following:
- D+B is currently working with the Municipal Housing Authority of the City of Yonkers as co-developer (with L+M Development) rehabilitating and converting to RAD three MHACY projects with a total of 853 units. The redevelopment, which closed in March 2018, is being financed by HFA tax-exempt bond financing and 4% LIHTC, and Public Housing Preservation funds.
- D+B is currently working with the New Rochelle Municipal Housing Authority as co-developer (with Property Resources Corporation) rehabilitating and converting to RAD two buildings of senior housing with a total of 203 units. The redevelopment, which is scheduled to close in June 2018, is being financed by HFA tax-exempt bond financing and 4% LIHTC, and Public Housing Preservation funds.
- D+B serves as financial consultant to the Lexington Housing Authority (LHA). In 2014, D+B advised on the closing of one of the first, RAD public housing conversions at Centre Meadows (formerly Pimlico Apartments). The RAD conversion includes substantial rehabilitation of 206 multifamily units. The financing included tax-exempt bonds that were collateralized by an FHA 221(d) (4) mortgage as well as LHA funds. D+B assisted with all aspects of the financing including RAD application, KHC tax-exempt bond and a 4% credit application, KHC HOME fund application, FHA 221(d) (4) application. D+B issued RFP for financial partners – including first mortgage lender, bond underwriter and equity investor. The transaction closed in March 2014. Construction completion and permanent conversion occurred in March 2016.
- D+B serves as RAD consultant to the Housing Authority of Columbus, Georgia (HACG) related to the RAD conversion of its entire public housing portfolio. D+B assisted with the RAD conversion of four scattered sites comprised of 582 units. The financing included non-competitive tax-exempt bond financing, 4% credits and HACG subordinate financing. Construction is complete and qualified occupancy has been achieved. D+B is assisting in all aspects of the development including, running financial projections, relocation budgets, negotiation of key business terms with lenders and tax credit investors, HUD RAD submissions and approvals. Work on HACG’s portfolio conversion continues. HACG has three conventional public housing sites to convert to RAD.
- D+B is currently advising the Phenix (AL) Housing Authority on the RAD conversion and new construction redevelopment of its 306 unit Riverview Courts development, and the RAD conversions and rehabilitation of its 76 unit Whispering Pines and 262 unit Frederick Douglass Homes developments.
- D+B has advised the Philadelphia Housing Authority on closing several RAD transactions in the past three years, including Blumberg Apartments Phase I in 2015, a 57 unit development that contains 51 RAD and six traditional PBV units, Strawberry Mansion Apartments, with 55 RAD units, in February 2017, and D+B is currently working with PHA to close on North Central CNI Phase II Apartments, with 74 RAD and 15 traditional PBV units, in July 2018.
- D+B advised the Durham Housing Authority on the RAD conversion and Rehabilitation of Damar court (102 units) and Morreene Road (224 units.) Financing for each project included FHA loans, tax-exempt bonds, tax credits and DHA soft loans, and both transactions closed in December 2017.
- D+B is assisting the Port Arthur Housing Authority in Texas in converting its portfolio to RAD. D+B assisted the agency in preparing RAD applications at the inception of the program and continues to provide technical assistance for the conversion process. PAHA’s 86 unit Lakeview Palms development was converted to RAD IN 2017. The Park Central development was completed as a mixed-finance project in 2016 and is expected to complete conversion to RAD in 2018.
- D+B worked with the Greensboro (North Carolina) Housing Authority to convert the majority of its conventional public housing stock to RAD. D+B assisted the GHA in the submission of ten RAD applications in 2014 and in the closing of eight transactions (debt only and no debt) in 2015.