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Rental Assistance Demonstration to preserve tens of thousands of public, HUD-assisted housing units

WASHINGTON, DC – July 26, 2012 – (RealEstateRama) — With the publication of the Rental Assistance Demonstration (RAD) final rules in today’s Federal Register, the U.S. Department of Housing and Urban Development (HUD) officially implemented the Obama Administration’s groundbreaking strategy to preserve tens of thousands of units of public and assisted housing.

RAD allows public housing agencies and owners of certain at-risk, federally-assisted properties to convert their current assistance to long-term contracts. Such contracts will better allow owners to leverage millions of dollars in debt and equity to address immediate capital needs and preserve these affordable housing units.  Today’s publication updates initial rules published for public comment in March.

“After extensive consultation over the past few years with key stakeholders, including public housing agencies, multifamily property owners, residents and the lending community, this innovative approach greatly enhances our ability to confront the decline of our public housing and older assisted housing stock,” said HUD Secretary Shaun Donovan.  “RAD allows HUD to test the conversion of assistance as a means of preserving this scarce inventory of affordable housing and keep it on firm financial footing well into the future.”

Last year, HUD released Capital Needs in the Public Housing Program, a Congressionally-funded study of capital needs in public housing.  The study found that the nation’s 1.2 million public housing units need nearly $26 billion to keep these homes in safe and decent condition for families, a figure well in excess of the roughly $2 billion annually that the Congress appropriates for capital repairs. Beyond the public housing stock, the Moderate Rehabilitation (Mod Rehab), Rent Supplement (Rent Supp), and Rental Assistance Payment (RAP) programs either offer no option to renew and risk being lost from the affordable housing stock or cannot renew on terms that attract sufficient capital to preserve long-term affordability.

RAD is part of the Obama Administration’s comprehensive strategy to preserve public and HUD-assisted housing.  In November 2011, Congress authorized HUD to implement RAD as a budget-neutral demonstration program with two components, allowing for the conversion of assistance for public housing, Mod Rehab, Rent Supp, and RAP properties to long-term contracts with stable funding.

HUD estimates that the authority under RAD will enable owners to leverage financing to help reduce the severe backlog of capital repair needs. In the process, RAD will help create and support local construction jobs in communities across the country.

The initial RAD program rules issued in March gave the general public an opportunity to comment on the overall framework for RAD, including eligibility criteria, ranking factors, application instructions, review and approval processes, and anticipated timelines. The final program rules reflect HUD’s consideration of the more than 100 different individuals and organizations that submitted comments. Along with the publication of the final rules, HUD has published a document detailing its response to public comments.

The initial application window for the competitive component of RAD (for public housing and owners of Mod Rehab projects) is scheduled to be open from September 24, 2012 to October 24, 2012.  The non-competitive component of RAD (for owners of Mod Rehab, Rent Supp and RAP projects) is effective immediately.


HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
HUD is working to
strengthen the housing market to bolster the economy and protect consumers; meet the
need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build
inclusive and sustainable communities free from discrimination; and transform the way HUD does business.
More information about HUD and its programs is available on the Internet at and
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Donna White
(202) 708-0685