82_FR_6627 82 FR 6615 - Rental Assistance Demonstration: Revised Program Notice

82 FR 6615 - Rental Assistance Demonstration: Revised Program Notice

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 82, Issue 12 (January 19, 2017)

Page Range6615-6617
FR Document2017-01246

On July 26, 2012, HUD announced through notice in the Federal Register the implementation of the statutorily authorized Rental Assistance Demonstration (RAD), which provides the opportunity to test the conversion of public housing and other HUD-assisted properties to long-term, project-based Section 8 rental assistance. The July 26, 2012, Federal Register notice also announced the availability of the program notice (PIH 2012-32), providing program instruction on HUD's Web site. On July 2, 2013, HUD issued a revised program notice (PIH 2012-32, REV-1). On April 26, 2015, HUD issued a further revised program notice (PIH 2012-32, REV-2). This Federal Register notice announces further revisions to RAD and solicits public comment on changed eligibility and selection criteria. It also announces the posting of a further revised program notice (Revised Program Notice, PIH 2012-32/H 2017-03, REV-3). As provided by the RAD Statute, this notice addresses the requirement that the demonstration may proceed after publication of notice of its terms in the Federal Register. This notice summarizes the key changes made to PIH 2012-32/H 2017-03, REV-3. This notice also meets the RAD statutory requirement to publish at least 10 days before they may take effect, waivers and alternative requirements authorized by the statute, which does not prevent the demonstration, as modified, from proceeding immediately.

Federal Register, Volume 82 Issue 12 (Thursday, January 19, 2017)
[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Notices]
[Pages 6615-6617]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01246]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5630-N-09]


Rental Assistance Demonstration: Revised Program Notice

AGENCY: Office of the Assistant Secretary for Public and Indian Housing 
and Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: On July 26, 2012, HUD announced through notice in the Federal 
Register the implementation of the statutorily authorized Rental 
Assistance Demonstration (RAD), which provides the opportunity to test 
the conversion of public housing and other HUD-assisted properties to 
long-term, project-based Section 8 rental assistance. The July 26, 
2012, Federal Register notice also announced the availability of the 
program notice (PIH 2012-32), providing program instruction on HUD's 
Web site. On July 2, 2013, HUD issued a revised program notice (PIH 
2012-32, REV-1). On April 26, 2015, HUD issued a further revised 
program notice (PIH 2012-32, REV-2). This Federal Register notice 
announces further revisions to RAD and solicits public comment on 
changed eligibility and selection criteria. It also announces the 
posting of a further revised program notice (Revised Program Notice, 
PIH 2012-32/H 2017-03, REV-3). As provided by the RAD Statute, this 
notice addresses the requirement that the demonstration may proceed 
after publication of notice of its terms in the Federal Register. This 
notice summarizes the key changes made to PIH 2012-32/H 2017-03, REV-3. 
This notice also meets the RAD statutory requirement to publish at 
least 10 days before they may take effect, waivers and alternative 
requirements authorized by the statute, which does not prevent the 
demonstration, as modified, from proceeding immediately.

DATES: Comment Due Date: February 21, 2017.
    Effective Dates: The Revised Program Notice, PIH 2012-32/H 2017-03, 
REV-3, other than those items listed as subject to notice and comment 
or new statutory or regulatory waivers or alternative requirements 
specified in this notice, is effective January 19, 2017.
    The new statutory and regulatory waivers and alternative 
requirements are effective January 30, 2017.
    The items listed as subject to notice and comment will be effective 
upon February 21, 2017. If HUD receives adverse comment that leads to 
reconsideration, HUD will notify the public in a new notice immediately 
upon the expiration of the comment period.

ADDRESSES: Interested persons are invited to submit comments 
electronically to [email protected] no later than the comment due date.

FOR FURTHER INFORMATION CONTACT: To assure a timely response, please 
direct requests for further information electronically to the email 
address [email protected]. Written requests may also be directed to the 
following address: Office of Public and Indian Housing--RAD Program; 
Department of Housing and Urban Development; 451 7th Street SW., Room 
2000; Washington, DC 20410.

SUPPLEMENTARY INFORMATION: 

I. Background

    RAD, authorized by the Consolidated and Further Continuing 
Appropriations Act, 2012 (Pub. L. 122-55, signed November 18, 2011) 
(2012 Appropriations Act), allows for the conversion of assistance 
under the public housing, Rent Supplement (Rent Supp), Rental 
Assistance (RAP), Moderate Rehabilitation (Mod Rehab), and Mod Rehab 
Single Room Occupancy (SRO) programs (collectively, ``covered 
programs'') to long-term, renewable assistance under Section 8.\1\ The 
most recent version of the RAD program notice is PIH 2012-32, REV-2, 
located at https://portal.hud.gov/hudportal/documents/huddoc?id=PIHNotice_2012-32_062015.pdf.
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    \1\ The RAD statutory requirements were amended by the 
Consolidated Appropriations Act, 2014 (Pub. L. 113-76, signed 
January 17, 2014) (2014 Appropriations Act), the Consolidated and 
Further Continuing Appropriations Act, 2015 (Pub. L. 113-235, signed 
December 16, 2014) (2015 Appropriations Act), and the Consolidated 
Appropriations Act, 2016 (Pub. L. 114-113, signed December 18, 2015) 
(2016 Appropriations Act). The statutory provisions of the 2012 
Appropriations Act pertaining to RAD, as amended, are referred to as 
the RAD Statute in this notice.
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II. Key Changes Made to RAD

    The following highlights key changes to the RAD program that are 
included in the Revised Program Notice:

 First Component (Public Housing Conversions)

    1. Creating a new way in which public housing agencies (PHAs) can 
increase their RAD rents by relinquishing existing balances of 
replacement housing factor (RHF) funds or demolition and disposition 
transition funding (DDTF) (see section 1.5.A).
    2. Eliminating the cap on the number of project-based voucher (PBV) 
units at a project (see section 1.6.A.2).
    3. Improving the quality of information that must be provided to 
residents of properties undergoing conversion and requiring that PHAs 
submit responses to resident comments in connection with meetings held 
following the issuance of the Commitment to enter into a Housing 
Assistance Payments Contract (CHAP) (see section 1.8).
    4. Extending the prohibition on re-screening to current public 
housing households that will reside in non-RAD PBV or non-RAD project-
based rental assistance (PBRA) units placed in a project that contain 
RAD PBV or RAD PBRA units so as to facilitate the right to return to 
the assisted property (see sections 1.6.C.1 and 1.7.B.1).
    5. Correcting the phase-in of rents for residents who may 
experience a rent increase as a result of conversion, in order to 
ensure a more even distribution across years (see sections 1.6.B.3 and 
1.7.B.3).
    6. Clarifying that a PHA is permitted to receive cash acquisition 
proceeds in excess of any seller take-back financing and that such 
proceeds must be used for Affordable Housing Purposes, a newly defined 
term (see section 1.4.7).
    7. Establishing flexibility for requirements related to the Capital 
Needs Assessments, permitting certain

[[Page 6616]]

exemptions when the assisted units are a small percentage of the total 
project (see section 1.4.A.1).
    8. Requiring title reports to be submitted with the Financing Plan 
to avoid delays in closing (see section 1.15, Attachment 1A).
    9. Modifying the maximum allowable developer fee, by excluding from 
the formula for larger transactions any acquisition payments made to 
the PHA, developer fee, and reserves (see section 1.14).
    10. Establishing greater flexibility to underwrite to new loan 
products that have emerged in the market (see section 1.15, Attachment 
2A).
    11. Providing greater detail on the acceptable forms in which a 
public or non-profit entity can demonstrate ownership or control (see 
section 1.4.A.11).
    12. Providing guidance on owners' responsibilities to treat lead-
based paint hazards in the context of a RAD conversion (see section 
1.4.A.15).
    13. Encouraging PHAs and their partners to grant current workers 
whose employment positions may be eliminated during conversion the 
right of first refusal for new employment openings for which they are 
qualified (see section 1.4.A.16).

Second Component (Mod Rehab, Mod Rehab SRO, Rent Supp, RAP Conversions)

    1. Eliminating the cap on the number of PBV units at a project (see 
section 2.5.C).
    2. Permitting Mod Rehab conversions to PBRA to convert at 
comparable market rents, up to 110 percent of fair market rent (FMR) 
(see sections 2.6.C and D).
    3. For Mod Rehab SRO conversions, authorizing the use of the 
efficiency FMR for SRO units, rather than 75 percent of the efficiency 
FMR, which is the existing SRO standard (see section 2.7).
    4. Allowing all conversions to PBRA to achieve rents between 110 
percent and 120 percent of FMR (up to the statutory maximum), if 
justified by comparable market rents and only in certain circumstances 
where preservation criteria have been meet (see sections 3.6.C and D).
    5. For conversions to PBRA, permitting the use of Small Area FMR 
(SAFMR) in the calculation of contract rent cap, with HUD approval (see 
sections 2.5 and 2.6).

III. Changes Subject to Notice and Comment

    The Revised Program Notice makes changes to some of the selection 
and eligibility criteria for conversions of public housing under the 
First Component. Pursuant to the RAD Statute, these changes must be 
made available for public comment before they are effective. Please 
submit all comments to [email protected]. As indicated above, the following 
changes will be effective on February 21, 2017. If HUD receives adverse 
comment that leads to reconsideration, HUD will notify the public in a 
new notice immediately upon the expiration of the comment period.
    The changes subject to notice and comment are:
    1. Consolidating the selection priority categories for new 
applications into two buckets: (1) High investment applications and (2) 
all other applications (see section 1.11.C).
    2. Allowing PHAs to submit a simple letter of interest, rather than 
an application, when a waiting list has formed. A letter of interest 
would serve to reserve a project or portfolio's position on the waiting 
list subject to future submission of a RAD Application (see section 
1.9).
    3. Making eligible an entire contiguous HOPE VI project that was 
developed in phases as long as the earliest phase is greater than ten 
years old (see section 1.3.H).

IV. New Waivers and Alternative Requirements

    The RAD Statute provides that waivers and alternative requirements 
authorized under the First Component must be published by notice in the 
Federal Register no later than 10 days before the effective date of 
such notice. Under the Second Component of RAD, HUD is authorized to 
waive or alter the provisions of subparagraphs (C) and (D) of section 
8(o)(13) of the United States Housing Act of 1937 (42 U.S.C. 1437f) 
(the 1937 Act).
    HUD has previously published its waivers and alternative 
requirements for RAD, on July 26, 2012 (77 FR 43850), July 2, 2013 (78 
FR 39759), and June 26, 2015 (80 FR 36830). This notice only includes 
waivers and alternative requirements not previously published or that 
have changed from previous publications. Although waivers or 
alternative requirements under the Second Component are not subject to 
a Federal Register publication requirement, the new Second Component 
waivers and alternative requirements are included in this notice as a 
matter of convenience.
    The new waivers and alternative requirements are:
    1. Cap on PBV Units in a Project. Provisions affected: Section 
8(o)(13)(D) of the Act, and 24 CFR 983.56, 983.257(b), 983.262(a) and 
(d). Alternative requirements: None. The previously imposed alternative 
requirements are waived, effectively eliminating any cap on the number 
of PBV units in a project undergoing conversion.
    2. Eligibility and Targeting of Tenants for Initial Occupancy. 
Provisions affected: 24 CFR 982.201 and 880.603(b). Alternative 
requirements: Pursuant to the RAD Statute, at conversion, current 
households cannot be excluded from occupancy at the Covered Project 
based on any rescreening, income eligibility, or income targeting. 
Therefore, current households admitted into the PBV program following 
conversion of assistance at the property were not subject to the 
application of eligibility criteria for conditions that occurred prior 
to conversion of assistance but were subject to ongoing eligibility 
requirement for actions occurring after conversion. Once the 
grandfathered household moves out, the unit must be leased to an 
eligible family. MTW agencies may not alter this requirement. Further, 
so as to facilitate the right to return to the assisted property, this 
provision shall apply to current public housing residents of the 
Converting Project that will reside in non-RAD PBV units or non-RAD 
PBRA units placed in a project that contain RAD PBV units or RAD PBRA 
units. Such families and such contract units will otherwise be subject 
to all requirements of the applicable program, specifically 24 CFR 983 
for non-RAD PBV units and the PBRA requirements governing the 
applicable contract for non-RAD PBRA units. Accordingly, HUD is waiving 
24 CFR 982.201 and 880.603(b) for current public housing residents of 
the Converting Project that will reside in non-RAD PBV units or non-RAD 
PBRA units placed in a project that contain RAD PBV units or RAD PBRA 
units.
    3. Total Tenant Payment (TTP). Provisions affected: Section 3(a)(1) 
of the Act and 24 CFR 983.3 and 880.201. Alternative requirements: If a 
resident's monthly rent increases by more than the greater of 10 
percent or $25 purely as a result of conversion, the rent increase will 
be phased in over 3 years or 5 years. Eligibility for the phase-in is 
to be determined at the Initial Certification which occurs at the time 
the household is converted to PBRA. A phase-in must not be applied 
after the household's Initial Certification. To implement the phase-in, 
HUD is specifying alternative requirements for section 3(a)(1) of the 
Act, as well as 24 CFR 880.201 (definition of ``total tenant payment''

[[Page 6617]]

(TTP)) to the extent necessary to allow for the phase-in of tenant rent 
increases. A PHA must create a policy setting the length of the phase-
in period at three years, five years, or a combination depending on 
circumstances. For example, a PHA may create a policy that uses a 
three-year phase-in for smaller increases in rent and a five-year 
phase-in for larger increases in rent. This policy must be in place at 
conversion and may not be modified after conversion.
    The method described below explains the set percentage-based phase-
in a Project Owner must follow according to the phase-in period 
established. For purposes of this section ``Calculated Multifamily 
TTP'' refers to the TTP calculated in accordance with regulations at 24 
CFR 5.628 (not capped at Gross Rent) and the ``most recently paid TTP'' 
refers to the TTP recorded on the family's most recent HUD Form 50059. 
If a family in a project converting from Public Housing to PBRA was 
paying a flat rent immediately prior to conversion, the PHA should use 
the flat rent amount to calculate the phase-in amount for Year 1, as 
illustrated below.
    Three-Year Phase-in:
     Year 1: Any recertification (interim or annual) performed 
prior to the second annual recertification after conversion--33 percent 
of difference between most recently paid TTP or flat rent and the 
Calculated Multifamily TTP
     Year 2: Year 2 Annual Recertification (AR) and any Interim 
Recertification (IR) in prior to Year 3 AR--50 percent of difference 
between most recently paid TTP and Calculated Multifamily TTP
     Year 3: Year 3 AR and all subsequent recertifications--
Year 3 AR and any IR in Year 3: Full Calculated Multifamily TTP \2\
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    \2\ For example, where a resident's most recently paid TTP is 
$100, but the Calculated PBV TTP is $200 and remains $200 for the 
period of the resident's occupancy, (i.e. no changes in income) the 
resident would continue to pay the same rent and utilities for which 
it was responsible prior to conversion. At the first recertification 
following conversion, the resident's contribution would increase by 
33% of $100 to $133. At the second AR, the resident's contribution 
would increase by 50% of the $66 differential to the standard TPP, 
increasing to $166. At the third AR, the resident's contribution 
would increase to $200 and the resident would continue to pay the 
Calculated PBV TTP for the duration of their tenancy.
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    Five-Year Phase-in
     Year 1: Any recertification (interim or annual) performed 
prior to the second annual recertification after conversion--20 percent 
of difference between most recently paid TTP or flat rent and the 
Calculated Multifamily TTP
     Year 2: Year 2 AR and any IR prior to Year 3 AR--25 
percent of difference between most recently paid TTP and Calculated 
Multifamily TTP
     Year 3: Year 3 AR and any IR prior to Year 4 AR--33 
percent of difference between most recently paid TTP and Calculated 
Multifamily TTP
     Year 4: Year 4 AR and any IR prior to Year 5 AR--50 
percent of difference between most recently paid TTP and Calculated 
Multifamily TTP
     Year 5 AR and all subsequent recertifications--Full 
Calculated Multifamily TTP
    Please Note: In either the three-year phase-in or the five-year 
phase-in, once Calculated Multifamily TTP is equal to or less than the 
previous TTP, the phase-in ends and tenants will pay full Calculated 
Multifamily TTP from that point forward.
    4. Mod Rehab SRO FMRs. Provision affected: 24 CFR 888.113(f)(2). 
Alternative requirements: The applicable FMR used for SRO units for 
initial and re-determined rents will be the zero bedroom (efficiency) 
FMR. Accordingly, HUD is waiving 24 CFR 888.113(f)(2) for Mod Rehab SRO 
units.
    5. Small Area FMRs for PBRA. Provision affected: 24 CFR 888.113(h). 
Alternative requirements: Projects converting assistance to PBRA under 
the Second Component may use a Small Area FMR for initial contract rent 
setting and when adjusting contract rents. Accordingly, HUD is waiving 
24 CFR 888.113(h) for those projects.

V. Revised Program Notice Availability

    The Revised Program Notice (PIH 2012-32/H 2017-03, REV-3) can be 
found on RAD's Web site, www.hud.gov/RAD.

VI. Environmental Review

    A Finding of No Significant Impact with respect to the environment 
was made in connection with HUD notice PIH 2012-32 issued on March 8, 
2012, and in accordance with HUD regulations in 24 CFR part 50 that 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4332(2)(C)). The Finding remains applicable to the 
Revised Program Notice and is available for public inspection during 
regular business hours in the Regulations Division, Office of General 
Counsel; Department of Housing and Urban Development; 451 7th Street 
SW., Room 10276; Washington, DC 20410-0500. Due to security measures at 
the HUD Headquarters building, please schedule an appointment to review 
the finding by calling the Regulations Division at 202-402-3055 (this 
is not a toll-free number). Individuals with speech or hearing 
impairments may access this number via TTY by calling the Federal Relay 
Service at 800-877-8339.

    Dated: January 12, 2017.
Nani A. Coloretti,
Deputy Secretary.
[FR Doc. 2017-01246 Filed 1-18-17; 8:45 am]
 BILLING CODE 4210-67-P



                                                                               Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices                                                    6615

                                                  Section D. Redelegations Superseded                     the posting of a further revised program               Section 8.1 The most recent version of
                                                    This notice supersedes all prior                      notice (Revised Program Notice, PIH                    the RAD program notice is PIH 2012–32,
                                                  redelegations of authority to Deputy                    2012–32/H 2017–03, REV–3). As                          REV–2, located at https://
                                                  Assistant Secretaries of Community                      provided by the RAD Statute, this notice               portal.hud.gov/hudportal/documents/
                                                  Planning and Development, including                     addresses the requirement that the                     huddoc?id=PIHNotice_2012-32_
                                                  the redelegation of authority published                 demonstration may proceed after                        062015.pdf.
                                                  on June 29, 2012 at 77 FR 38853.                        publication of notice of its terms in the
                                                                                                                                                                 II. Key Changes Made to RAD
                                                                                                          Federal Register. This notice
                                                  Section E. Actions Ratified                             summarizes the key changes made to                        The following highlights key changes
                                                     The Assistant Secretary for                          PIH 2012–32/H 2017–03, REV–3. This                     to the RAD program that are included in
                                                  Community Planning and Development,                     notice also meets the RAD statutory                    the Revised Program Notice:
                                                  the Principal Deputy Assistant Secretary                requirement to publish at least 10 days                First Component (Public Housing
                                                  for Community Planning and                              before they may take effect, waivers and               Conversions)
                                                  Development, and the General Deputy                     alternative requirements authorized by
                                                  Assistant Secretary for Community                       the statute, which does not prevent the                  1. Creating a new way in which
                                                  Planning and Development hereby ratify                  demonstration, as modified, from                       public housing agencies (PHAs) can
                                                  all actions previously taken by the                     proceeding immediately.                                increase their RAD rents by
                                                  Deputy Assistant Secretaries for                                                                               relinquishing existing balances of
                                                                                                          DATES: Comment Due Date: February 21,
                                                  Community Planning and Development,                                                                            replacement housing factor (RHF) funds
                                                                                                          2017.
                                                  with respect to the programs and                                                                               or demolition and disposition transition
                                                                                                             Effective Dates: The Revised Program
                                                  matters listed in Section A.                                                                                   funding (DDTF) (see section 1.5.A).
                                                                                                          Notice, PIH 2012–32/H 2017–03, REV–                      2. Eliminating the cap on the number
                                                    Authority: Section 7(d), Department of                3, other than those items listed as                    of project-based voucher (PBV) units at
                                                  Housing and Urban Development Act, 42                   subject to notice and comment or new                   a project (see section 1.6.A.2).
                                                  U.S.C. 3535(d).                                         statutory or regulatory waivers or                       3. Improving the quality of
                                                    Dated: January 10, 2017.                              alternative requirements specified in                  information that must be provided to
                                                  Harriet Tregoning,
                                                                                                          this notice, is effective January 19, 2017.            residents of properties undergoing
                                                                                                             The new statutory and regulatory                    conversion and requiring that PHAs
                                                  Principal Deputy Assistant Secretary for
                                                  Community Planning and Development.                     waivers and alternative requirements                   submit responses to resident comments
                                                                                                          are effective January 30, 2017.                        in connection with meetings held
                                                  [FR Doc. 2017–01244 Filed 1–18–17; 8:45 am]
                                                                                                             The items listed as subject to notice               following the issuance of the
                                                  BILLING CODE 4210–67–P
                                                                                                          and comment will be effective upon                     Commitment to enter into a Housing
                                                                                                          February 21, 2017. If HUD receives                     Assistance Payments Contract (CHAP)
                                                  DEPARTMENT OF HOUSING AND                               adverse comment that leads to                          (see section 1.8).
                                                  URBAN DEVELOPMENT                                       reconsideration, HUD will notify the                     4. Extending the prohibition on re-
                                                                                                          public in a new notice immediately                     screening to current public housing
                                                  [Docket No. FR–5630–N–09]                               upon the expiration of the comment                     households that will reside in non-RAD
                                                                                                          period.                                                PBV or non-RAD project-based rental
                                                  Rental Assistance Demonstration:
                                                  Revised Program Notice                                  ADDRESSES:   Interested persons are                    assistance (PBRA) units placed in a
                                                                                                          invited to submit comments                             project that contain RAD PBV or RAD
                                                  AGENCY:  Office of the Assistant                        electronically to rad@hud.gov no later                 PBRA units so as to facilitate the right
                                                  Secretary for Public and Indian Housing                 than the comment due date.                             to return to the assisted property (see
                                                  and Office of the Assistant Secretary for                                                                      sections 1.6.C.1 and 1.7.B.1).
                                                                                                          FOR FURTHER INFORMATION CONTACT: To
                                                  Housing-Federal Housing                                                                                          5. Correcting the phase-in of rents for
                                                                                                          assure a timely response, please direct
                                                  Commissioner, HUD.                                                                                             residents who may experience a rent
                                                                                                          requests for further information
                                                  ACTION: Notice.                                         electronically to the email address rad@               increase as a result of conversion, in
                                                                                                          hud.gov. Written requests may also be                  order to ensure a more even distribution
                                                  SUMMARY:   On July 26, 2012, HUD                                                                               across years (see sections 1.6.B.3 and
                                                  announced through notice in the                         directed to the following address: Office
                                                                                                          of Public and Indian Housing—RAD                       1.7.B.3).
                                                  Federal Register the implementation of                                                                           6. Clarifying that a PHA is permitted
                                                  the statutorily authorized Rental                       Program; Department of Housing and
                                                                                                          Urban Development; 451 7th Street SW.,                 to receive cash acquisition proceeds in
                                                  Assistance Demonstration (RAD), which                                                                          excess of any seller take-back financing
                                                  provides the opportunity to test the                    Room 2000; Washington, DC 20410.
                                                                                                                                                                 and that such proceeds must be used for
                                                  conversion of public housing and other                  SUPPLEMENTARY INFORMATION:
                                                                                                                                                                 Affordable Housing Purposes, a newly
                                                  HUD-assisted properties to long-term,                   I. Background                                          defined term (see section 1.4.7).
                                                  project-based Section 8 rental                                                                                   7. Establishing flexibility for
                                                  assistance. The July 26, 2012, Federal                    RAD, authorized by the Consolidated                  requirements related to the Capital
                                                  Register notice also announced the                      and Further Continuing Appropriations                  Needs Assessments, permitting certain
                                                  availability of the program notice (PIH                 Act, 2012 (Pub. L. 122–55, signed
                                                  2012–32), providing program                             November 18, 2011) (2012                                 1 The RAD statutory requirements were amended

                                                  instruction on HUD’s Web site. On July                  Appropriations Act), allows for the                    by the Consolidated Appropriations Act, 2014 (Pub.
                                                  2, 2013, HUD issued a revised program                   conversion of assistance under the                     L. 113–76, signed January 17, 2014) (2014
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                          public housing, Rent Supplement (Rent                  Appropriations Act), the Consolidated and Further
                                                  notice (PIH 2012–32, REV–1). On April                                                                          Continuing Appropriations Act, 2015 (Pub. L. 113–
                                                  26, 2015, HUD issued a further revised                  Supp), Rental Assistance (RAP),                        235, signed December 16, 2014) (2015
                                                  program notice (PIH 2012–32, REV–2).                    Moderate Rehabilitation (Mod Rehab),                   Appropriations Act), and the Consolidated
                                                  This Federal Register notice announces                  and Mod Rehab Single Room                              Appropriations Act, 2016 (Pub. L. 114–113, signed
                                                                                                          Occupancy (SRO) programs                               December 18, 2015) (2016 Appropriations Act). The
                                                  further revisions to RAD and solicits                                                                          statutory provisions of the 2012 Appropriations Act
                                                  public comment on changed eligibility                   (collectively, ‘‘covered programs’’) to                pertaining to RAD, as amended, are referred to as
                                                  and selection criteria. It also announces               long-term, renewable assistance under                  the RAD Statute in this notice.



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                                                  6616                         Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices

                                                  exemptions when the assisted units are                  eligibility criteria for conversions of                of the Act, and 24 CFR 983.56,
                                                  a small percentage of the total project                 public housing under the First                         983.257(b), 983.262(a) and (d).
                                                  (see section 1.4.A.1).                                  Component. Pursuant to the RAD                         Alternative requirements: None. The
                                                     8. Requiring title reports to be                     Statute, these changes must be made                    previously imposed alternative
                                                  submitted with the Financing Plan to                    available for public comment before                    requirements are waived, effectively
                                                  avoid delays in closing (see section 1.15,              they are effective. Please submit all                  eliminating any cap on the number of
                                                  Attachment 1A).                                         comments to rad@hud.gov. As indicated                  PBV units in a project undergoing
                                                     9. Modifying the maximum allowable                   above, the following changes will be                   conversion.
                                                  developer fee, by excluding from the                    effective on February 21, 2017. If HUD                    2. Eligibility and Targeting of Tenants
                                                  formula for larger transactions any                     receives adverse comment that leads to                 for Initial Occupancy. Provisions
                                                  acquisition payments made to the PHA,                   reconsideration, HUD will notify the                   affected: 24 CFR 982.201 and
                                                  developer fee, and reserves (see section                public in a new notice immediately                     880.603(b). Alternative requirements:
                                                  1.14).                                                  upon the expiration of the comment                     Pursuant to the RAD Statute, at
                                                     10. Establishing greater flexibility to              period.                                                conversion, current households cannot
                                                  underwrite to new loan products that                       The changes subject to notice and                   be excluded from occupancy at the
                                                  have emerged in the market (see section                 comment are:                                           Covered Project based on any
                                                  1.15, Attachment 2A).                                      1. Consolidating the selection priority             rescreening, income eligibility, or
                                                     11. Providing greater detail on the                  categories for new applications into two               income targeting. Therefore, current
                                                  acceptable forms in which a public or                   buckets: (1) High investment                           households admitted into the PBV
                                                  non-profit entity can demonstrate                       applications and (2) all other                         program following conversion of
                                                  ownership or control (see section                       applications (see section 1.11.C).                     assistance at the property were not
                                                  1.4.A.11).                                                 2. Allowing PHAs to submit a simple                 subject to the application of eligibility
                                                     12. Providing guidance on owners’                    letter of interest, rather than an                     criteria for conditions that occurred
                                                  responsibilities to treat lead-based paint              application, when a waiting list has                   prior to conversion of assistance but
                                                  hazards in the context of a RAD                         formed. A letter of interest would serve               were subject to ongoing eligibility
                                                  conversion (see section 1.4.A.15).                      to reserve a project or portfolio’s                    requirement for actions occurring after
                                                     13. Encouraging PHAs and their                       position on the waiting list subject to                conversion. Once the grandfathered
                                                  partners to grant current workers whose                 future submission of a RAD Application                 household moves out, the unit must be
                                                  employment positions may be                             (see section 1.9).                                     leased to an eligible family. MTW
                                                  eliminated during conversion the right                     3. Making eligible an entire                        agencies may not alter this requirement.
                                                  of first refusal for new employment                     contiguous HOPE VI project that was                    Further, so as to facilitate the right to
                                                  openings for which they are qualified                   developed in phases as long as the                     return to the assisted property, this
                                                  (see section 1.4.A.16).                                 earliest phase is greater than ten years               provision shall apply to current public
                                                                                                          old (see section 1.3.H).                               housing residents of the Converting
                                                  Second Component (Mod Rehab, Mod                                                                               Project that will reside in non-RAD PBV
                                                  Rehab SRO, Rent Supp, RAP                               IV. New Waivers and Alternative
                                                                                                                                                                 units or non-RAD PBRA units placed in
                                                  Conversions)                                            Requirements                                           a project that contain RAD PBV units or
                                                    1. Eliminating the cap on the number                     The RAD Statute provides that                       RAD PBRA units. Such families and
                                                  of PBV units at a project (see section                  waivers and alternative requirements                   such contract units will otherwise be
                                                  2.5.C).                                                 authorized under the First Component                   subject to all requirements of the
                                                    2. Permitting Mod Rehab conversions                   must be published by notice in the                     applicable program, specifically 24 CFR
                                                  to PBRA to convert at comparable                        Federal Register no later than 10 days                 983 for non-RAD PBV units and the
                                                  market rents, up to 110 percent of fair                 before the effective date of such notice.              PBRA requirements governing the
                                                  market rent (FMR) (see sections 2.6.C                   Under the Second Component of RAD,                     applicable contract for non-RAD PBRA
                                                  and D).                                                 HUD is authorized to waive or alter the                units. Accordingly, HUD is waiving 24
                                                    3. For Mod Rehab SRO conversions,                     provisions of subparagraphs (C) and (D)                CFR 982.201 and 880.603(b) for current
                                                  authorizing the use of the efficiency                   of section 8(o)(13) of the United States               public housing residents of the
                                                  FMR for SRO units, rather than 75                       Housing Act of 1937 (42 U.S.C. 1437f)                  Converting Project that will reside in
                                                  percent of the efficiency FMR, which is                 (the 1937 Act).                                        non-RAD PBV units or non-RAD PBRA
                                                  the existing SRO standard (see section                     HUD has previously published its                    units placed in a project that contain
                                                  2.7).                                                   waivers and alternative requirements for               RAD PBV units or RAD PBRA units.
                                                    4. Allowing all conversions to PBRA                   RAD, on July 26, 2012 (77 FR 43850),                      3. Total Tenant Payment (TTP).
                                                  to achieve rents between 110 percent                    July 2, 2013 (78 FR 39759), and June 26,               Provisions affected: Section 3(a)(1) of
                                                  and 120 percent of FMR (up to the                       2015 (80 FR 36830). This notice only                   the Act and 24 CFR 983.3 and 880.201.
                                                  statutory maximum), if justified by                     includes waivers and alternative                       Alternative requirements: If a resident’s
                                                  comparable market rents and only in                     requirements not previously published                  monthly rent increases by more than the
                                                  certain circumstances where                             or that have changed from previous                     greater of 10 percent or $25 purely as a
                                                  preservation criteria have been meet                    publications. Although waivers or                      result of conversion, the rent increase
                                                  (see sections 3.6.C and D).                             alternative requirements under the                     will be phased in over 3 years or 5
                                                    5. For conversions to PBRA,                           Second Component are not subject to a                  years. Eligibility for the phase-in is to be
                                                  permitting the use of Small Area FMR                    Federal Register publication                           determined at the Initial Certification
                                                                                                                                                                 which occurs at the time the household
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                                                  (SAFMR) in the calculation of contract                  requirement, the new Second
                                                  rent cap, with HUD approval (see                        Component waivers and alternative                      is converted to PBRA. A phase-in must
                                                  sections 2.5 and 2.6).                                  requirements are included in this notice               not be applied after the household’s
                                                                                                          as a matter of convenience.                            Initial Certification. To implement the
                                                  III. Changes Subject to Notice and                         The new waivers and alternative                     phase-in, HUD is specifying alternative
                                                  Comment                                                 requirements are:                                      requirements for section 3(a)(1) of the
                                                     The Revised Program Notice makes                        1. Cap on PBV Units in a Project.                   Act, as well as 24 CFR 880.201
                                                  changes to some of the selection and                    Provisions affected: Section 8(o)(13)(D)               (definition of ‘‘total tenant payment’’


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                                                                               Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices                                                  6617

                                                  (TTP)) to the extent necessary to allow                   • Year 2: Year 2 AR and any IR prior                 number). Individuals with speech or
                                                  for the phase-in of tenant rent increases.              to Year 3 AR—25 percent of difference                  hearing impairments may access this
                                                  A PHA must create a policy setting the                  between most recently paid TTP and                     number via TTY by calling the Federal
                                                  length of the phase-in period at three                  Calculated Multifamily TTP                             Relay Service at 800–877–8339.
                                                  years, five years, or a combination                       • Year 3: Year 3 AR and any IR prior                   Dated: January 12, 2017.
                                                  depending on circumstances. For                         to Year 4 AR—33 percent of difference
                                                                                                                                                                 Nani A. Coloretti,
                                                  example, a PHA may create a policy that                 between most recently paid TTP and
                                                                                                                                                                 Deputy Secretary.
                                                  uses a three-year phase-in for smaller                  Calculated Multifamily TTP
                                                  increases in rent and a five-year phase-                  • Year 4: Year 4 AR and any IR prior                 [FR Doc. 2017–01246 Filed 1–18–17; 8:45 am]
                                                  in for larger increases in rent. This                   to Year 5 AR—50 percent of difference                  BILLING CODE 4210–67–P

                                                  policy must be in place at conversion                   between most recently paid TTP and
                                                  and may not be modified after                           Calculated Multifamily TTP
                                                  conversion.                                               • Year 5 AR and all subsequent                       DEPARTMENT OF HOUSING AND
                                                     The method described below explains                  recertifications—Full Calculated                       URBAN DEVELOPMENT
                                                  the set percentage-based phase-in a                     Multifamily TTP                                        [Docket No. FR–5995–N–3]
                                                  Project Owner must follow according to                    Please Note: In either the three-year
                                                  the phase-in period established. For                    phase-in or the five-year phase-in, once               Federal Property Suitable as Facilities
                                                  purposes of this section ‘‘Calculated                   Calculated Multifamily TTP is equal to                 To Assist the Homeless
                                                  Multifamily TTP’’ refers to the TTP                     or less than the previous TTP, the
                                                                                                          phase-in ends and tenants will pay full                AGENCY:  Office of the Assistant
                                                  calculated in accordance with
                                                                                                          Calculated Multifamily TTP from that                   Secretary for Community Planning and
                                                  regulations at 24 CFR 5.628 (not capped
                                                                                                          point forward.                                         Development, HUD.
                                                  at Gross Rent) and the ‘‘most recently
                                                  paid TTP’’ refers to the TTP recorded on                  4. Mod Rehab SRO FMRs. Provision                     ACTION: Notice.
                                                  the family’s most recent HUD Form                       affected: 24 CFR 888.113(f)(2).                        SUMMARY:    This Notice identifies
                                                  50059. If a family in a project converting              Alternative requirements: The                          unutilized, underutilized, excess, and
                                                  from Public Housing to PBRA was                         applicable FMR used for SRO units for                  surplus Federal property reviewed by
                                                  paying a flat rent immediately prior to                 initial and re-determined rents will be                HUD for suitability for use to assist the
                                                  conversion, the PHA should use the flat                 the zero bedroom (efficiency) FMR.                     homeless.
                                                  rent amount to calculate the phase-in                   Accordingly, HUD is waiving 24 CFR
                                                                                                                                                                 FOR FURTHER INFORMATION CONTACT:
                                                  amount for Year 1, as illustrated below.                888.113(f)(2) for Mod Rehab SRO units.
                                                     Three-Year Phase-in:                                   5. Small Area FMRs for PBRA.                         Juanita Perry, Department of Housing
                                                     • Year 1: Any recertification (interim               Provision affected: 24 CFR 888.113(h).                 and Urban Development, 451 Seventh
                                                  or annual) performed prior to the                       Alternative requirements: Projects                     Street SW., Room 7266, Washington, DC
                                                  second annual recertification after                     converting assistance to PBRA under the                20410; telephone (202) 402–3970; TTY
                                                  conversion—33 percent of difference                     Second Component may use a Small                       number for the hearing- and speech-
                                                  between most recently paid TTP or flat                  Area FMR for initial contract rent                     impaired (202) 708–2565 (these
                                                  rent and the Calculated Multifamily                     setting and when adjusting contract                    telephone numbers are not toll-free),
                                                  TTP                                                     rents. Accordingly, HUD is waiving 24                  call the toll-free Title V information line
                                                     • Year 2: Year 2 Annual                              CFR 888.113(h) for those projects.                     at 800–927–7588 or send an email to
                                                  Recertification (AR) and any Interim                                                                           title5@hud.gov.
                                                  Recertification (IR) in prior to Year 3                 V. Revised Program Notice Availability                 SUPPLEMENTARY INFORMATION: In
                                                  AR—50 percent of difference between                       The Revised Program Notice (PIH                      accordance with 24 CFR part 581 and
                                                  most recently paid TTP and Calculated                   2012–32/H 2017–03, REV–3) can be                       section 501 of the Stewart B. McKinney
                                                  Multifamily TTP                                         found on RAD’s Web site,                               Homeless Assistance Act (42 U.S.C.
                                                     • Year 3: Year 3 AR and all                          www.hud.gov/RAD.                                       11411), as amended, HUD is publishing
                                                  subsequent recertifications—Year 3 AR                                                                          this Notice to identify Federal buildings
                                                  and any IR in Year 3: Full Calculated                   VI. Environmental Review                               and other real property that HUD has
                                                  Multifamily TTP 2                                         A Finding of No Significant Impact                   reviewed for suitability for use to assist
                                                     Five-Year Phase-in                                   with respect to the environment was                    the homeless. The properties were
                                                     • Year 1: Any recertification (interim               made in connection with HUD notice                     reviewed using information provided to
                                                  or annual) performed prior to the                       PIH 2012–32 issued on March 8, 2012,                   HUD by Federal landholding agencies
                                                  second annual recertification after                     and in accordance with HUD                             regarding unutilized and underutilized
                                                  conversion—20 percent of difference                     regulations in 24 CFR part 50 that                     buildings and real property controlled
                                                  between most recently paid TTP or flat                  implement section 102(2)(C) of the                     by such agencies or by GSA regarding
                                                  rent and the Calculated Multifamily                     National Environmental Policy Act of                   its inventory of excess or surplus
                                                  TTP                                                     1969 (42 U.S.C. 4332(2)(C)). The                       Federal property. This Notice is also
                                                                                                          Finding remains applicable to the                      published in order to comply with the
                                                    2 For example, where a resident’s most recently
                                                                                                          Revised Program Notice and is available                December 12, 1988 Court Order in
                                                  paid TTP is $100, but the Calculated PBV TTP is
                                                  $200 and remains $200 for the period of the
                                                                                                          for public inspection during regular                   National Coalition for the Homeless v.
                                                  resident’s occupancy, (i.e. no changes in income)       business hours in the Regulations                      Veterans Administration, No. 88–2503–
                                                  the resident would continue to pay the same rent        Division, Office of General Counsel;                   OG (D.D.C.).
                                                  and utilities for which it was responsible prior to     Department of Housing and Urban                           Properties reviewed are listed in this
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                                                  conversion. At the first recertification following
                                                  conversion, the resident’s contribution would
                                                                                                          Development; 451 7th Street SW., Room                  Notice according to the following
                                                  increase by 33% of $100 to $133. At the second AR,      10276; Washington, DC 20410–0500.                      categories: Suitable/available, suitable/
                                                  the resident’s contribution would increase by 50%       Due to security measures at the HUD                    unavailable, and suitable/to be excess,
                                                  of the $66 differential to the standard TPP,            Headquarters building, please schedule                 and unsuitable. The properties listed in
                                                  increasing to $166. At the third AR, the resident’s
                                                  contribution would increase to $200 and the
                                                                                                          an appointment to review the finding by                the three suitable categories have been
                                                  resident would continue to pay the Calculated PBV       calling the Regulations Division at 202–               reviewed by the landholding agencies,
                                                  TTP for the duration of their tenancy.                  402–3055 (this is not a toll-free                      and each agency has transmitted to


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Document Created: 2018-02-01 15:16:31
Document Modified: 2018-02-01 15:16:31
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice.
DatesComment Due Date: February 21, 2017.
ContactTo assure a timely response, please direct requests for further information electronically to the email
FR Citation82 FR 6615 

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