HUD Housing Notice § 2025-01
Rental Assistance Demonstration – Supplemental Notice 4C (HUD Housing Notices)
HUD guidance — not codified law
In Force
Verified 10/6/2026 · Next check 10/13/2026
effective 10/6/2026FederalAffordable Housing ProgramsOperative Text
HUD Housing Notice § 2025-01
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of Housing
Office of Public and Indian Housing
Special Attention of: Notice H 2025-01
Public Housing Agencies Notice PIH 2025-03 (HA)
Public Housing Hub Office Directors
Public Housing Program Center Directors Issued: January 16, 2025
Multifamily Regional Center Directors
Multifamily Regional Satellite Office Directors
Regional and Field Office Directors Expires: This Notice remains
Regional Administrators in effect until amended,
Performance Based Contract Administrators superseded, or rescinded.
Amends: H-2019-09/PIH-
2019-23 as amended by H-
2023-18/PIH-2023-19
Cross Reference: PIH-2021-07
(HA) and H-2016-17/PIH 2016-
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SUBJECT: Rental Assistance Demonstration – Supplemental Notice 4C
Purpose
This Supplemental Notice amends Notice H-2019-09 PIH-2019-23(HA) to implement certain
changes to the Rental Assistance Demonstration (RAD) authorized under the Fiscal Year (FY)
2024 Appropriations Act as well as other changes.
Background
RAD is authorized by the Consolidated and Further Continuing Appropriations Act of 2012
(Pub. L. No. 112-55, approved November 18, 2011), as amended by the Consolidated
Appropriations Act, 2014 (Pub. L. No. 113-76, approved January 17, 2014), the Consolidated
and Further Continuing Appropriations Act, 2015 (Pub. L. No. 113-235, approved December 16,
2014), the Consolidated Appropriations Act, 2016 (Pub. L. No. 114-113, approved December 18,
2015), the Consolidated Appropriations Act, 2017 (Pub. L. No 115-31, approved May 5, 2017),
the Consolidated Appropriations Act, 2018 (Pub. L. 115-141, approved March 23, 2018), the
Consolidated Appropriations Act, 2022 (Pub. L. 117-103, approved March 15, 2022), and the
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Consolidated Appropriations Act, 2024 (Pub. L. 118-42, approved March 9, 2024) (collectively,
the “RAD Statute”).
MAJOR REVISIONS IN SUPPLEMENTAL NOTICE 4C
Implementation guidance for RAD is currently described in Notice H- 2019-09/ PIH- 2019-23
(HA) “Rental Assistance Demonstration – Final Implementation, Revision 4,” as amended (RAD
Notice, Rev-4) and as amended by Supplemental 4B published July 27, 2024 (Housing 2023-08
and PIH 2023-19). This Supplemental Notice supplements and further amends RAD Notice,
Rev-4 in the following respects:
Extension of Application Date. The Consolidated Appropriations Act, 2024 extended the
date to September 30, 2029 by which a Public Housing Agency (PHA) may apply to
convert public housing under RAD. Section I of this Supplemental Notice implements
this statutory change, which impacts both stand-alone applications and applications for
Portfolio Awards which allow a PHA to reserve RAD conversion authority for a set of
projects (including for multiple phases of a large scale redevelopment effort and for
planned projects) and that lock in the applicable contract rent in the year of the
application.
RAD and Section 18 Blends. The RAD statute as amended by the Consolidated
Appropriations Act, 2024 allows HUD to convert tenant protection voucher assistance to
a RAD HAP Contract under either Project-Based Rental Assistance (PBRA) or Project
Based Voucher (PBV) when a Converting Property partially converts Section 9
assistance under RAD and an event under Section 18 of the United States Housing Act of
1937 (the Act) occurs that results in the eligibility for tenant protection vouchers under
Section 8(o) of the Act. Section II of this Supplemental Notice implements this statutory
change.
Resident Services. The RAD statute as amended by the Consolidated Appropriations Act,
2024 provides waiver authority to facilitate the ongoing availability of services to
residents for Jobs Plus, ROSS, and FSS programs. Section III of this Supplemental
Notice extends the availability of these programs at Covered Projects, removes waivers
with respect to the FSS program which are no longer needed due to the implementation
of 24 CFR part 984, and clarifies the continuing availability of grant assistance through
the Congregate Housing Services Program.
Waivers of Rent Adjustments by OCAF. Section IV of this Supplemental Notice
describes the process by which Covered Projects may apply for a waiver to receive an
exception to the requirement in RAD Notice, Rev-4 for annual adjustments to contract
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rents during the initial contract term while limited to the Operating Cost Adjustment
Factor.
Annual Financial Statements. Section V of this Supplemental Notice strengthens program
requirements for Project Owners to submit annual financial statements to HUD or the
Contract Administrator.
Extension from 14 to 30 Days’ Notice for Non-payment of Rent. Section VI of this
Supplemental Notice strengthens RAD resident protections by increasing termination
notification timelines by adding 16 more days in the case of tenant nonpayment of rent.
Renewal After Initial Term. Section VII of this Supplemental Notice clarifies that each
HAP Contract must be renewed/extended after its initial term of 15 or 20 years.
Leases. Section VIII of this Supplemental Notice provides guidance on security deposits,
pet occupancy, and the use of plain language in resident leases.
Restore-Rebuild (formerly Faircloth-to-RAD). Section IX of this Supplemental Notice
makes clarifying changes to resident notification requirements for Restore-Rebuild
developments where the proposed project is occupied.
Financing Plan Requirements and Feasibility Benchmarks for Public Housing
Conversions. Section X of this Supplemental Notice strengthens the Financing Plan
Requirements and Feasibility Benchmarks for public housing properties undergoing a
RAD conversion to ensure properties are sustainable and financially stable for the long
term.
HOTMA PBV Rule conforming changes. Section XI of this Supplemental Notice
modifies the RAD Notice, Rev-4 due to the publication of the Housing Opportunity
Through Modernization Act of 2016 – Housing Choice Voucher and Project Based
Voucher Implementation; Additional Streamlining Changes (HOTMA Voucher Final
Rule), published in the Federal Register May 7, 2024 at 89 FR 38304, as corrected in a
publication in the Federal Register on May 28, 2024 (89 FR 46020) and effective as of
June 6, 2024.
Effective Date
Except as noted herein, the changes in this Supplemental Notice shall be effective immediately
(the “Effective Date”). Further, these provisions are subject to a 30-day comment period. If
HUD receives comment that would lead to the reconsideration of any of the changes contained in
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this Supplemental Notice, HUD will notify the public in a new revision upon expiration of the
comment period. Please submit all comments to RAD@hud.gov. Finally, any waivers or
alternative requirements to statutory provisions shall take effect 10 days after such waivers are
published in the Federal Register.
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SECTION I: EXTENSION OF APPLICATION DEADLINE
1. Section 1.9.A is amended by adding at the end of the first paragraph the following sentence:
“Applications must be submitted no later than September 30, 2029.”
2. All references to the date September 30, 2024 shall be replaced with the date September 30,
2029.
SECTION II: RAD AND SECTION 18 BLENDS
1. The Definitions section is amended to add the following definitions:
Converting Public Housing Assistance. The funding for units associated with a
Converting Project whose public housing assistance is converting under RAD.
Converting TPV Assistance. The tenant protection voucher assistance resulting from an
approval under Section 18 of the Act that is converting under RAD.
Legacy Non-RAD PBV. PBV assistance in a Covered Project that prior to December 31,
2024 replaced public housing at the time of conversion and that are subject to a non-RAD
PBV HAP Contract.
Legacy Non-RAD PBRA. PBRA assistance in a Covered Project that prior to December
31, 2024 replaced public housing at the time of conversion and that are subject to a non-
RAD PBRA HAP Contract.
RAD/Section 18 Blend. A public housing conversion that is combining RAD and Section
18 activities and that includes both Converting Public Housing Assistance and
Converting TPV Assistance.
2. Section 1.5.B.2 is deleted and replaced with:
2. RAD/Section 18 Blends. A PHA can combine RAD and Section 18 activities towards
the preservation of a project.
a. In certain circumstances as determined by HUD (for additional details see Notice
PIH 2021-07, or any amended or successor Notice), HUD will offer the PHA a
streamlined process for securing HUD approval for a disposition under Section 18
and for a determination of eligibility for tenant protection vouchers (TPV) under
section 8(o) of the Act.
b. A PHA that has received a Section 18 approval under normal processing shall be
subject to the provisions governing RAD/Section 18 Blends provided they request
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and receive SAC approval to conditionally rescind the Section 18 approval for
some portion of RAD eligible units (see paragraph 1.5.B.3.b below) and provided
at least 10% of the total units in the Converting Project will be Converting Public
Housing Assistance.
c. If, at a Converting Project, a PHA is using 24 CFR § 970.17(b) or 970.17(c) to
dispose of other units at the project justified on the grounds that disposition
allows more efficient or effective on-site or off-site development (§ 970.17(b)) or
to dispose for reasons and goals of the PHA in its PHA Plan (970.17(c)) (see
Notice PIH 2021-07, as may be amended or succeeded, for more details), HUD
may disapprove the conversion if HUD determines that the PHA’s use of both
RAD and disposition under sections 970.17(b) or 970.17(c) in a single project
undermines the unit replacement requirements of the RAD program.
d. Both the Converting Public Housing Assistance and the Converting TPV
Assistance shall be converted to the selected form of Section 8 assistance (i.e.,
PBV or PBRA). All assistance converting under a RAD/Section 18 Blend will be
placed under a single RAD form of HAP contract upon conversion, be subject to a
single RAD Use Agreement, and be governed by the terms of this Notice for
RAD PBV or RAD PBRA as applicable.
e. All RAD relocation requirements (such as the resident notice and meeting
requirements, the right to return and relocation assistance and payments as
described in the Notice H 2016-17/PIH 2016-17 RAD Fair Housing, Civil Rights,
and Relocation Notice, or successor notice) shall apply to residents of the units
subject to a Section 18 action in lieu of the relocation requirements under 24 CFR
§ 970.21. The PHA must provide the same relocation rights and benefits to all
residents of the Converting Project.
f. Public housing properties that have been developed pursuant to the mixed-finance
development method are eligible for RAD/Section 18 Blends.
g. With HUD approval, for a Covered Project that previously entered into a RAD
PBRA HAP Contract with Converting Public Housing Assistance and that also
includes units assisted by a PBV HAP Contract, the Project Owner and PHA may
request to terminate the PBV HAP Contract and enter into one single RAD PBRA
HAP Contract for all of the assisted units for a term not less than the remaining
term of the original RAD PBRA HAP Contract. Section 8(o)(F)(iv) of the Act and
its implementing regulations in 24 CFR § 983.206(b) requiring provision of
tenant-based assistance upon termination of a PBV contract shall not apply. Any
residents of the PBV units shall not be re-screened for admission into the PBRA
program and shall retain all choice-mobility rights of Section 1.6.D.8. of this
Notice including counting the length of occupancy under the PBV HAP Contract
toward the family’s eligibility for choice-mobility.
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Additionally, Section 8(c)(8)(A) of the Act and 24 CFR § 983.206(a) requires an
owner to provide written notice of the impending Contract termination to
residents not less than one year before the termination of any contract and, in the
event the owner does not provide the notice required, prohibits the owner from
evicting the tenants or increasing the tenants’ rent payment until such time as the
owner has provided the notice and one year has elapsed. An owner requesting to
replace an eligible PBV contract with a PBRA contract under this Section of the
Notice must comply with this requirement. However, placing the units formerly
covered under a PBV contract under a PBRA contract will protect residents from
displacement and protect them from an increase in the resident portion of the rent.
Consequently, execution of the PBRA contract may be processed and completed
during the one-year notification period.
Project Owners seeking to use this provision shall apply to HUD for approval
pursuant to instructions to be separately provided by HUD at www.hud.gov/rad.
3. The second paragraph of Section 1.5.D is deleted and replaced with:
A PHA’s Faircloth Limit will be reduced by the number of units that generate the
Converting Public Housing Assistance. The units that generate Converting TPV
Assistance shall not reduce the PHA’s Faircloth Limit. For example, a PHA with a pre-
RAD Faircloth Limit of 1,000 public housing units would have its Faircloth Limit
reduced to 960 units if it entered into a 100-unit RAD HAP Contract utilizing Converting
Public Housing Assistance from 40 ACC units and Converting TPV Assistance from 60
ACC units.
4. Section 1.6.B.5.a is deleted and replaced with:
a. MTW Fungibility. MTW agencies may use their MTW funds to set the initial contract
rents higher than the normally applicable contract rent cap as described in this section.
However, the initial contract rent set by the PHA is still subject to all other applicable
program caps. The agency must use existing MTW funds to supplement the initial
contract rent; HUD will only provide new incremental funding based on the normally
applicable contract rent as described in this section. Any use of MTW funds in setting
higher initial contract rents shall be subject to subsidy layering review and MTW
continued service requirements, as calculated using the MTW Baseline Methodology
described in Notice PIH 2013-02, or successor notice.
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5. Section 1.6.B.5.c is deleted and replaced with:
c. Demolition Disposition Transition Funding (DDTF). PHAs that are scheduled to
receive ongoing DDTF subsidy for an approved Section 18 action that was not part of the
Converting Project may choose to forego any ongoing DDTF for the purpose of
offsetting an increase to the initial RAD rent. In the case of RAD/Section 18 Blends,
DDTF for which the PHA would become eligible for the units approved under Section 18
will immediately be cancelled and used to offset an increase to the initial RAD rents for
the Covered Project that results from the RAD/Section 18 Blend, unless the resulting
RAD rent would exceed the initial PBV contract rent cap (see Section 1.6.B.7.h) or HUD
determines the Section 18 units would not have been eligible for DDTF. See Attachment
1C for the calculation of how HUD will determine the increase to the RAD rent.
6. Subsection Section 1.6.B.5.g is relabeled Section 1.6.B.5.h and a new subsection is added as
Section 1.6.B.5.g, as follows:
g. Rents in RAD/Section 18 Blends. HUD will produce a single, blended rent schedule
for all units resulting from a RAD/Section 18 Blend. The rent schedule will be calculated
as the unit-weighted average contract rent by bedroom of:
• the Converting Public Housing Assistance using the RAD rents based on their
“RAD rent base year” described in Attachment 1C, and
• the Converting TPV Assistance using the lower of 110% of the applicable FMR
(or approved exception payment standard) minus any Utility Allowance or the
Reasonable Rent.
The initial contract rent in a RAD/Section 18 Blend can use any of the flexibilities
referenced in subsections a. through e. above.
7. With the exception to the references in Sections 1.5.L, 1.6.B.5.b, and the second paragraph in
Section 1.6.C.9 all other instances of the phrase “Non-RAD PBV” shall be replaced with
“Legacy Non-RAD PBV.”
8. The following sentence is added at the end of the 2nd paragraph in Section 1.7:
Conversions from a RAD/Section 18 Blend will result in a single form of RAD PBRA
HAP contract for the Converting Public Housing Assistance and Converting TPV
Assistance and will include all of the same requirements.
9. Section 1.7.A.5.c is deleted and replaced with:
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c. Demolition Disposition Transition Funding (DDTF). PHAs that are scheduled to
receive ongoing DDTF subsidy for an approved Section 18 action that was not part of the
Converting Project may choose to forego any ongoing DDTF for the purpose of
amending the initial RAD rent. In the case of RAD/Section 18 Blends, DDTF for which
the PHA would become eligible for the units approved under Section 18 will immediately
be cancelled and used to increase the initial RAD rents for the Covered Project that
results from the RAD/Section 18 Blend, unless the resulting RAD rent would exceed the
initial PBRA contract rent cap or HUD determines the Section 18 units would not have
been eligible for DDTF. See Attachment 1C for the calculation of how HUD will
determine the increase to the RAD rent.
10. A new subsection is added as Section 1.7.A.5.g, as follows:
g. Rents in RAD/Section 18 Blends. HUD will produce a single, blended rent schedule
for all units resulting from a RAD/Section 18 Blend. The rent schedule will be calculated
as the unit-weighted average contract rent by bedroom of:
• the Converting Public Housing Assistance using the RAD rents based on their
“RAD rent base year” described in Attachment 1C, and
• the Converting TPV Assistance using the lower of 110% of the applicable FMR
(or approved exception payment standard) minus any Utility Allowance or the
Reasonable Rent.
The initial contract rent in a RAD/Section 18 Blend can use any of the flexibilities
referenced in subsections a. through e. above.
11. The first paragraph of Section 1.13.B.6 is deleted and replaced, as follows, without any
changes to sub-paragraphs a and b:
6. Funding Upon Closing. For the remainder of the first Calendar Year in which a HAP
Contract is effective (the “year of conversion”), the contract will be funded as follows:
• Operating Funds and Capital Funds will be obligated to the PHA for the Covered
Project at the level of public housing subsidy which the Converting Public
Housing Assistance is eligible to receive regardless of the initial contract rent
amount or OCAF;65 and
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For example, a closing on December 10 will result in a HAP Contract that is effective on January 1 or February 1,
as selected by the Project Owner. For the remainder of the Calendar Year which includes the January 1 or February
1 date, subsidy is paid from public housing funds obligated to the PHA regardless of the RAD HAP Contract rent
amount or OCAF. Following conversion, the public housing units that are included in the RAD conversion will be
removed from the Public Housing Information Center (PIC). This action will not impact public housing subsidy for
the Covered Project for the balance of the Calendar Year.
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• For a RAD/Section 18 Blend, the amount of funding available for Covered
Projects will include the Converting TPV Assistance provided to the PHA (for
PBV conversions) or obligated to the contract (for PBRA conversions).
12. Note 4 in Attachment 1C is deleted and replaced with:
For scenarios in which a PHA will forego DDTF to increase the initial RAD rent
pursuant to Section 1.6.B.5.c and 1.7.A.5.c., HUD will provide a forecast of total
Anticipated DDTF based on the RAD Rent Base Year. The RAD rent may then be
increased by the following amount:
[Total Anticipated DDTF or Undisbursed DDTF] ÷ 20 ÷ Number of Units converting
under RAD ÷12 = PUM RAD Rent Increase
The PUM RAD Rent Increase would be reflected in the initial rents established in the
HAP Contract. The contract rents will still be subject to applicable rent caps. PHAs
electing to utilize this flexibility must acknowledge through a certification that HUD will
cancel all affected obligations of DDTF.
Section III: Resident Services Programs
1. Section 1.5.G is deleted and replaced with:
G. Resident Opportunity and Self-Sufficiency Service Coordinators (ROSS-SC).
With respect to ROSS, current ROSS-SC grantees will be able to finish out their current
ROSS-SC grants once their project is converted under RAD and the PHAs or the new
Project Owners may apply for their ROSS-SC grant to be renewed, subject to
requirements of the ROSS-SC NOFO. To implement this provision, HUD is using its
RAD authority to waive and establish alternative requirements to the language in the Self
Sufficiency Program account in the Appropriations Acts and to Section 34 of the Act that
would limit ROSS-SC to serving only public housing units or residents.
In addition, Covered Projects where the project previously received a ROSS-SC grant
prior to conversion but was ineligible to renew the grant after conversion are eligible to
apply for a ROSS-SC grant, subject to requirements of the ROSS-SC NOFO. Authority
for this provision is provided under recent Appropriation Acts (see, for example, the
FY2023 and FY2024 Appropriation Acts under the heading “Self-Sufficiency
Programs”) which allow a PHA or a new owner to continue to serve (or restart service to)
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residents of a project with assistance converted from public housing to RAD PBV or
RAD PBRA.
All information on specific eligibility and application requirements will be described in
forthcoming ROSS NOFOs. Upon completion of a ROSS-SC grant, PHAs should follow
the normal closeout procedures outlined in the grant agreement. To facilitate the uniform
treatment of residents and units at a Covered Project previously served by a ROSS-SC
grant, any Legacy Non-RAD PBV units in a Covered Project that replace former public
housing at the time of conversion shall be subject to the terms of this provision.
2. A new Section 1.5.N is added:
N. Congregate Housing Services Program (CHSP). A Converting Project that is
receiving congregate housing services assistance under the Congregate Housing Services
Act of 1978 (42 USC 8001-8010) or section 802 of the Cranston-Gonzalez National
Affordable Housing Act (42 USC 8011), will be able to finish out their current grant once
the project is converted under RAD. To facilitate the uniform treatment of residents and
units at a Covered Project, any Legacy Non-RAD PBV or Legacy Non-RAD PBRA units
in a Covered Project that replace former public housing at the time of conversion shall be
subject to the terms of this provision.
3. Subsection 1.6.C.4 is deleted and replaced with:
4. Family Self Sufficiency (FSS). PHAs and Project Owners must follow the FSS
regulations at 24 CFR part 984. Public Housing residents that are currently FSS
participants must be allowed to continue to participate in the PHA’s FSS program for the
duration of the grant’s period of performance. The PHA may continue to use any FSS
funds already awarded to serve those FSS participants who live in units converted
through RAD. At the completion of the FSS grant, PHAs should follow the normal
closeout procedures outlined in the grant agreement and any applicable 24 CFR part 200
requirements. If the PHA continues to run an FSS program that serves public housing,
HCV (including PBV), and/or PBRA participants, the PHA will continue to be eligible
(subject to FSS Funding Notice requirements) to apply for FSS funding. Due to the
program merger between public housing FSS and HCV FSS that took place pursuant to
the FY2014 Appropriations Act (and was continued in the subsequent Appropriation
Acts), no special provisions are required to continue serving FSS participants that live in
public housing units converting to PBV through RAD.
4. Subsection 1.7.B.4 is deleted and replaced with:
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4. Family Self Sufficiency (FSS). PHAs and Project Owners must follow the FSS
regulations at 24 CFR part 984. Public Housing residents that are currently FSS
participants must be allowed to continue to participate in the PHA’s FSS program once
their housing is converted through RAD for the duration of the grant’s period of
performance. The Project Owner must ensure that these participants continue to be served
by an FSS program: The PBRA owner may administer their own FSS program or enter
into a Cooperative Agreement with the PHA, another PHA or another owner, allowing
the partner entity to provide service coordination to PBRA participants in accordance
with the requirements of 24 CFR parts 984 and 877, and current and future guidance
published by HUD. In all program administration scenarios, the Project Owner must
submit an FSS Action Plan to HUD for approval upon RAD conversion where there are
converted participants. Under a Cooperative Agreement, the Project Owner must assume
responsibility for the administrative duties associated with FSS such as calculating and
crediting escrow and reporting. The Project Owner may choose to continue to enroll new
participants but is not required to continue enrollment if they plan to phase out the FSS
program.
If, upon conversion, the PHA ceases to be a PHA and no longer has public housing or
HCV participants, or if the PHA converts all units that were eligible for FSS and no
longer wishes to run an FSS program, the FSS grant may be transferred to the PBRA
Project Owner for the remainder of the FSS grant period of performance. Following such
a transfer, an otherwise eligible entity will be identified as a renewal or new applicant
under future FSS Funding Notices.
5. Subsection 1.6.C.8 is deleted and replaced with:
8. Jobs Plus. Jobs Plus grantees awarded FY2014 and/or subsequent fiscal year funds
that convert the Jobs Plus target projects(s) under RAD will be able to finish out their
Jobs Plus period of performance unless significant relocation and/or change in building
occupancy is planned. If either is planned at the Jobs Plus target project(s), HUD may
allow for a modification of the Jobs Plus grant agreement and/or work plan or may, at the
Secretary’s discretion, choose to end the Jobs Plus program at that project (see provisions
in the relevant Jobs Plus NOFO and/or Grant Agreement). If the Jobs Plus program is
continued, the grantee must agree to continue to implement the program according to
HUD’s program requirements. During the term of the Jobs Plus grant period after
conversion, residents previously enrolled in the Jobs Plus rent incentive may continue
their enrollment and any project resident may enroll in services or the rent incentive after
conversion. To facilitate the uniform treatment of residents and units , any Jobs Plus
program at a target project(s) may also enroll residents in any Legacy Non-RAD PBV
units in a Covered Project that replaced former public housing at the time of conversion
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in Jobs Plus services and in the Jobs Plus financial/rent incentive. To facilitate the
ongoing availability of services for resident participants of Jobs Plus, HUD is waiving
and establishing an alternative requirement to the “Self Sufficiency Programs” account in
the Consolidated Appropriations Act, 2024 (and subsequent Appropriations Acts, as
applicable) that restricts Jobs Plus grants to serving only public housing residents.
6. Subsection 1.7.B.8 is deleted and replaced with:
8. Jobs Plus. Jobs Plus grantees awarded FY2014 and/or subsequent fiscal year funds
that convert the Jobs Plus target projects(s) under RAD will be able to finish out their
Jobs Plus period of performance unless significant relocation and/or change in building
occupancy is planned. If either is planned at the Jobs Plus target project(s), HUD may
allow for a modification of the Jobs Plus grant agreement and/or work plan or may, at the
Secretary’s discretion, choose to end the Jobs Plus program at that project (see provisions
in the relevant Jobs Plus NOFO and/or Grant Agreement). If the Jobs Plus program is
continued, the grantee must agree to continue to implement the program according to
HUD’s program requirements. During the term of the Jobs Plus grant period after
conversion, residents previously enrolled in the Jobs Plus rent incentive may continue
their enrollment and any project resident may enroll in services or the rent incentive after
conversion. To facilitate the uniform treatment of residents and units in a Jobs Plus
program at a target project(s), any Jobs Plus program at a target project(s) may also enroll
residents in any Legacy Non-RAD PBRA units in a Covered Project that replaced former
public housing at the time of conversion in Jobs Plus services and in the Jobs Plus
financial/rent incentive. To facilitate the ongoing availability of services for resident
participants of Jobs Plus, HUD is waiving and establishing an alternative requirement to
the “Self Sufficiency Programs” account in the Consolidated Appropriations Act, 2024
(and subsequent Appropriations Acts, as applicable) that restrict Jobs Plus grants to
serving only public housing residents.
SECTION IV: WAIVERS OF RENTAL ADJUSTMENTS BY OCAF
The RAD Statute allows HUD to set annual rent adjustments by an operating cost factor. HUD
uses the annually published Operating Cost Adjustment Factor (OCAF) for this factor. HUD
acknowledges that this methodology may not fully capture increases in operating costs for all
Covered Projects. HUD may consider individual waivers of the annual rent adjustment in
extraordinary circumstances.
In extraordinary circumstances, a Project Owner may request a waiver of the rental adjustment
by OCAF and receive a rental adjustment by an alternative operating cost factor. Project Owners
requesting a waiver of the rental adjustment by OCAF must submit a request with documentation
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demonstrating the need for an alternative operating cost factor rental adjustment in order to
preserve the Covered Project. The submission to the Office of Recapitalization must be
consistent with instructions published on www.hud.gov/rad. The documentation will allow the
Office of Recapitalization to determine if there is good cause to grant the waiver. If the Owner
has demonstrated the need for the waiver, the Office of Recapitalization may grant the waiver
and will determine the appropriate alternative operating cost factor and resulting rents. For PBV,
the Contract Administrator must consent to the request and their consent must be evidenced in
the Project Owner’s documentation.
SECTION V: ANNUAL FINANCIAL STATEMENTS
1. Section 1.6.D.2 is deleted and replaced with the following:
2. Review of Financial Documents. The Project Owner must submit to the administering
PHA’s Board the operating budget for the Covered Project annually. When timely
requested by the Contract Administrator, the Project Owner must also submit property-
specific audited year-end financial statements within a reasonable time established by the
Contract Administrator. The Contract Administrator must confirm that the Project Owner
is making deposits into the Reserve for Replacement account in accordance with the RCC
as well as assess the financial health of the Covered Project.40
2. Section 1.7.C.7 is deleted and replaced with the following:
7. Submission of Year-End Financial Statements. Projects converting assistance to
PBRA must comply with 24 CFR part 5, Subpart H, as amended, revised, or modified by
HUD and must file annual financial statements to HUD in accordance with the following
provisions.5 HUD may require the Project Owner to amend the HAP Contract to
incorporate these requirements:
a. Within ninety (90) days, or such alternative period established in writing by HUD,
following the end of the Project Owner’s fiscal year, the Project Owner shall
prepare a financial report for the Project Owner’s fiscal year, or the portion
thereof that started with the Project Owner’s assumption of the HAP Contract,
based on an examination of the books and records of the Project Owner in
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For PBV conversions that are not FHA-insured, a future HUD notice will describe project financial data that may
be required to be submitted by a PBV owner for purposes of monitoring and evaluation, given that PBV projects do
not submit annual financial statements to HUD/REAC.
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This provision is included to clarify existing requirements for PHAs that own PBRA-assisted projects through
Single Asset Entities. Such owners are considered reporting entities under 24 CFR § 5.801 (a)(3) and (a)(4).
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accordance with generally accepted accounting principles and in such other form
and substance as specified by HUD in supplemental guidance, and provide such
report to HUD in such form, substance, and manner as may be specified by HUD
under the Uniform Financial Reporting Standards at 24 CFR § 5.801 (“UFRS”),
or any successor regulations.
b. Unless specifically waived or modified by HUD or to the extent otherwise
exempt, the Project Owner shall: (a) engage an independent, licensed Certified
Public Accountant (“CPA”) to audit the Project Owner’s annual financial report
and to produce an audit report in accordance with both Generally Accepted
Government Auditing Standards and Generally Accepted Auditing Standards; (b)
engage an independent, licensed CPA to perform an agreed-upon procedure, in
accordance with the American Institute of Certified Public Accountants Statement
on Standards for Attestation Engagements, to compare the financial data template
information submitted electronically by the Project Owner to HUD against the
annual financial report examined by, and the audit report prepared by, the
independent, licensed CPA, and report any variances to HUD; and (c) furnish to
the Contract Administrator and HUD (if a PHA is the Contract Administrator) the
audit report, and any other reports relating to the annual financial report or the
audit report as required by HUD, by such means and in such form, substance, and
manner as may be specified by HUD under UFRS, or any successor regulations.
c. To the extent certain non-profit Project Owners’ requirement to submit annual
financial reports may be waived or modified by HUD, or such Project Owners
may otherwise be exempt from compliance, such waiver, modification, or
exemption shall not be construed to relieve the Project Owner of any requirements
of this provision, except for those requirements specifically waived, modified, or
from which they are exempt.
d. If the Project Owner fails to perform as required pursuant to this provision, the
Contract Administrator or HUD (if a PHA is the Contract Administrator) may, at
its sole election, and in a manner determined by HUD, and without affecting any
other provisions herein, and after first providing to the Project Owner a notice of
default of the HAP Contract with a reasonable opportunity to cure, initiate or
cause to be initiated a forensic audit of the Project Owner’s books, records, and
accounts in such a manner as to provide to the Contract Administrator and HUD
(if a PHA is the Contract Administrator) with as much of the same information
that would have been provided had the Project Owner not failed to perform as
required. Any such audit initiated by the Contract Administrator or HUD does not
relieve Project Owner of the requirement to submit to the Contract Administrator
and HUD (if a PHA is the Contract Administrator) an annual audited financial
report as required pursuant to this provision.
15
SECTION VI: NOTICES FOR NONPAYMENT OF RENT
1. Section 1.6.C.6.a.ii is deleted and replaced with:
ii. Not less than 30 days in the case of nonpayment of rent and in conformance with
the terms of the Tenancy Addendum (HUD Form 52530c or replacement form); and
2. Section 1.7.B.6.a.i.2 is deleted and replaced with:
2. Not less than 30 days in the case of nonpayment of rent and in conformance with 24
CFR part 247; and
3. Attachment 1E, Paragraph a.i.2 is replaced with:
2. Not less than 30 days in the case of nonpayment of rent and in conformance with 24
CFR part 247; and
SECTION VII: RENEWAL AFTER INITIAL TERM
1. A new sentence is added at the end of Section 1.6.B.2:
After the expiration of a 20-year initial term of the HAP Contract, the HAP Contract shall
be renewed on a form approved by HUD, which shall include language that requires rents
to be re-determined in accordance with 24 CFR §§ 983.301 and 983.302. If the RAD
PBV HAP Contract was renewed or extended prior to the 20th year after conversion, then
starting with the 20th year after execution of the original RAD PBV HAP Contract,
contract rents shall be re-determined in accordance with 24 CFR § 983.302 or successor
regulation.
2. A new sentence is added at the end of Section 1.7.A.2:
The renewal contract shall have contract rents set in accordance with the renewal options
available under MAHRAA (see Section 8 Renewal Guide, as may be amended).
SECTION VIII: LEASES
1. Section 1.13.B.2 is replaced with the following:
16
2. Leases. PHAs must provide residents with notification of public housing lease
termination in accordance with 24 CFR § 966.4(l)(3) and in accordance with local law,
and shall enter into new Section 8 leases effective as of the effective date of the HAP
Contract. As part of the RAD Closing package, PHAs must provide a copy of the sample
Section 8 tenant lease including all riders and addenda (i.e., House Rules) for HUD
review. For PBRA conversions, PHAs must use the HUD Model Lease (Form HUD-
90105a), including an approved RAD lease addendum. For PBV conversions, there is no
model lease. However, the PHA/Project Owner of a PBV Covered Project must ensure
that the proposed tenant lease meets the requirements in 24 CFR § 983.256, that the
required Tenancy Addendum (HUD Form 52530c or replacement form) is included, and
that the lease incorporates the tenancy provisions provided under this Notice. For both
PBRA and PBV properties, the lease terms and provisions, including all addenda and
referenced documents such as House Rules, must:
a. Be reasonable, use plain language, and must not contain provisions that
conflict with resident rights described in this Notice or requirements of the
PBV or PBRA programs (as applicable). The lease, including all riders
and addenda, must also be available in multiple languages as needed and
written in a manner accessible to people with disabilities. Furthermore,
tenant leases and House Rules should not be onerous or difficult for
residents to understand, and should not impose overly restrictive rules
about what residents may or may not do in their homes. HUD reserves the
right to reject or require revisions to leases if they are deemed
unreasonable or otherwise do not conform to the aforementioned
requirements.
b. Not require a new security deposit for residents in-place at the time of
conversion,
c. Not prohibit residents’ pets in-place at the time of conversion. Owners are
encouraged to adopt reasonable policies permitting pets and are required
to permit residents with disabilities to have service or assistance animals.
d. For any residences that qualify as “target housing” under 42 U.S.C. 4851b,
each lease must comply with the Lead Disclosure Rule, as codified in 24
CFR part 35, subpart A.
SECTION IX: RESTORE-REBUILD, FORMERLY KNOWN AS FAIRCLOTH-TO-RAD
1. All references to “Faircloth-to-RAD” shall be replaced with “Restore-Rebuild.”
2. Section 1.8.I.1. is deleted and replaced as follows:
17
1. If the impacted property is occupied, Sections 1.8.A through 1.8.D shall apply with the
following modifications unless otherwise approved by HUD. The PHA must have
complied with resident notification and meeting requirements as described in Section
1.8.A. prior to submission of the public housing acquisition, mixed finance development,
or other development proposal. References to the Concept Call in Section 1.8.B shall be
deemed to be references to HUD approval of the public housing acquisition, mixed
finance development, or other development proposal pursuant to the applicable
provisions of 24 CFR part 905. References to Closing in Section 1.8.C shall be deemed to
be the Closing of the RAD conversion.
SECTION X: FINANCING PLAN REQUIREMENTS AND FEASIBILITY BENCHMARKS FOR PUBLIC
HOUSING CONVERSIONS
The provisions of this Section X shall be effective for any transaction that has not submitted a
complete Financing Plan on or before the 90th day following the Effective Date, unless
otherwise approved by HUD. All other transactions will be subject to the previous provisions of
the RAD Notice, Rev-4.
1. Section 1.4.A.3. is deleted and replaced with:
3. Environmental Review. Under Federal environmental review requirements, proposed
RAD projects are subject to environmental review under either 24 CFR part 50 or 24
CFR part 58, as applicable. HUD has made a determination under 24 CFR § 58.11(c) that
all conversions will be subject to an environmental review under part 50. Environmental
documents are required to be submitted no later than the applicant’s Financing Plan.9
HUD will not issue an RCC if the project plan does not meet the environmental review
requirements described in Attachment 1A. Once an awardee has submitted an application
for a specific project, they may not make any choice limiting actions before the
completion of the environmental review.1
Under Part 50, HUD staff complete the review in conjunction with the Financing Plan review and therefore the
PHA should submit full environmental review documentation no later than the Financing Plan submission. HUD
may require earlier submission in order to ascertain whether a conversion has sufficiently advanced (see Section
1.12 for discussion of the Concept Call).
A choice limiting action means an action that would have an adverse impact on the environment or limit the
choice of reasonable alternatives. A choice limiting action may include, but is not limited to, real property
acquisition, demolition, disposition, rehabilitation, repair, new construction, site preparation or clearance, and
ground disturbance. For more information see the Environmental Review Requirements for RAD Conversions
Quick Reference Guide: https://www.hudexchange.info/resource/4216/environmental-review-requirements-for-rad-
transactions/.
18
2. Footnote 21 following the first sentence of Section 1.4.B.6 is deleted and replaced with:
21
PHAs, Project Owners, and the source of the grant funds shall determine, based on
local conditions, whether funds are structured as grants or as loans pursuant to the terms
of Section 1.4.B.1. The same source, such as CDBG funds or public housing Capital
Funds, could be structured in either manner. Repayment may be required from cash flow
when the debt is in good standing and from any available source with respect to balloon
payments at maturity and accelerated payments following a declaration of default and
expiration of any applicable cure period.
3. Subparagraph C.1. in Attachment 1A is deleted and replaced with:
1. Identify and address all repairs identified in the CNA as critical, immediate or required
within the first two years following conversion (including all items identified in the CNA
as not functioning at the time of the CNA site visit). Briefly discuss any differences
between the proposed Work and the conclusions and recommendations of the CNA
provider; any additional scope items not identified in the CNA; and the Project Owner’s
choices for replacement components.
4. Subparagraph C.8 in Attachment 1A is deleted and replaced with:
8. For all existing buildings located in a FFRMS floodplain as determined by 24 CFR §
55.7, the PHA must submit an appraisal. The appraisal must determine the market value
of the building(s) either before the improvement or repair is started, or if this structure
has been damaged and is being restored, before the damage occurred. If the total cost of
work exceeds 50% of the market value, or if the conversion increases the total number of
project units by 20%, the work is considered to be a substantial improvement in
accordance with 24 CFR § 55.2(b)(12), and FFRMS requirements are triggered under 24
CFR § 55.20. Further, 24 CFR § 55.2(b)(12)(ii) states substantial improvement may not
be defined to include either: (a) Any project for improvement of a structure to comply
with existing state or local health, sanitary or safety code specifications that is solely
necessary to assure safe living conditions, or (b) Any alteration of a structure listed on the
National Register of Historical Places or on a State Inventory of Historic Places. If a
building(s) will be new construction, an appraisal is not required and compliance with 24
CFR § 55.20 is required.
For buildings outside of FFRMS floodplains and therefore not covered under the FFRMS
rule, PHAs are encouraged to consult other sources (e.g., historical flooding of
neighboring sites, NOAA Sea Level Rise Viewer, Flood Factor) to consider and design to
future flood risk.
5. Attachment 1A, Section D is deleted and replaced with:
19
D. Environmental Review. HUD cannot approve an applicant’s Financing Plan
submission unless and until the required environmental review has been completed for
the applicant’s proposed conversion project and found to meet environmental review
requirements. The following describes the submission and approval steps for securing a
completed environmental review.
All RAD transactions will be reviewed under 24 CFR part 50 (“Part 50 Reviews”) by
HUD.
For multi-phase developments, the environmental documents submitted with the
Financing Plan during the first phase must be submitted for the entire site (i.e. all of the
phases of the multi-phase development) and the environmental review conducted during
the first phase will cover the entire site.
For requests to transfer assistance from the Converting Project, the new site where the
Covered Project will be located is subject to a Part 50 Review. For the Converting
Project, as a condition of releasing the DOT on the Converting Project, the Converting
Project must undergo a Part 58 Environmental Review, completed by the Responsible
Entity. This Part 58 review is distinct from the required Part 50 requirements for the
Covered Project.
The following table shows which review protocol a transaction will follow, along with
who will conduct the review:
Transaction Type Review Performed Review Performed by
Under
PBRA Non-FHA Part 50 RAD Transaction Manager
PBRA FHA Risk-Share
PBV Non-FHA
PBV FHA Risk-Share
PBRA FHA Non-Risk Share Part 50 FHA Production Underwriter
PBV FHA Non-Risk Share
Release of DOT following a Part 58 Responsible Entity
Transfer of Assistance
For transactions receiving funding from other HUD programs (i.e. HOME, CDBG, non-
RAD PBV), HUD encourages all parties to complete one review for all programs, even if
these programs’ environmental reviews are conducted under a different review protocol
(Part 50, Part 58). In cases where two Part 58 programs are combined, HUD encourages
applicants to work with the Responsible Entity to see if environmental reviews can be
combined. However, this is solely the Responsible Entity’s determination. In cases where
20
a Part 50 program and a Part 58 program are combined, HUD may determine that it will
perform one Part 50 environmental review for both programs under 24 CFR § 58.11 if
performing an additional Part 58 environmental review is not feasible in the time allotted.
HUD must ensure that the Part 50 review considers the full scope of all activities and
funding associated with all programs. When one review is used for both programs, the
HUD Approving Officials for both programs must certify the review.
For all Part 50 reviews, the applicant must submit reports and documentation to
HUD in accordance with 24 CFR part 50, as discussed in Chapter 9 of the MAP
Guide, except as follows:77
1. For all RAD conversions without FHA insurance and without any rehabilitation,
construction, or demolition,78 HUD has conducted the first (program-wide) tier of
a tiered review of program-wide and site-specific compliance. HUD has made
program-wide compliance determinations for most of the applicable
environmental laws and authorities, and will complete a site-specific compliance
review of the following:
A. Coastal protection pursuant to the Coastal Barrier Resources Act, as
amended by the Coastal Barrier Improvement Act of 1990 (16 U.S.C.
3501);
B. Flood insurance and floodplain management pursuant to the Flood
Disaster Protection Act of 1973, the National Flood Insurance Reform Act
of 1994 (42 U.S.C. 4001-4128 and 42 U.S.C. 5154a), Executive Order
11988, particularly section 2(a), and 24 CFR part 55;
C. Contamination pursuant to 24 C.F.R. 50.3(i) (HUD Standard).
D. Radon pursuant to the protocols set by the American Association of Radon
Scientists and Technologists, Protocol for Conducting Radon and Radon
Decay Product Measurements in Multifamily Buildings (ANSI-AARST
MAMF-2017) that includes testing 100% of ground floor units and at least
10% of upper floor units in all buildings included in the Covered Project.
PHAs are to follow the radon requirements detailed in Section 9.6.3 of the
MAP Guide (or successor versions).
77
The MAP Guide is available at
http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/guidebooks/hsg-GB4430.
Additional guidance on environmental review requirements is available on the HUD Environmental Review
website, at https://www.hudexchange.info/environmental-review/.
78
This is further defined as those transactions that do not anticipate any reasonably foreseeable repairs or other
physical activities beyond maintenance, as defined in HUD Notice CPD 2016-02 (or future successor Notice).
21
Additionally, while Historic Preservation (National Historic Preservation Act of
1966, particularly sections 106 & 110; 36 CFR part 800) is not included in the
tiered review, for conversions that entail no physical activities or only activities
that are limited to maintenance as defined in HUD Notice CPD-16-02, HUD has
no further obligations under Section 106. HUD is not required to contact SHPO,
THPO, and/or other interested parties or the public.79
PHAs will be required to submit documentation to facilitate HUD’s site-specific
review. Refer to https://www.hudexchange.info/resource/5799/site-specific-
environmental-review-form-for-part-50-rad-conversions/ for additional
information.
2. For all RAD Conversions that do not meet the requirements under paragraph 1
above, the awardee will follow the guidelines in Chapter 9 of the MAP guide.
Awardees will upload all applicable documentation directly into HEROS at the
time of Financing Plan submission. The following exceptions to the MAP Guide
apply:
▪ In lieu of a Phase I Environmental Site Assessment (ESA) in accordance
with ASTM E 1527-21 (or the most recent edition), 80 except for
conversions involving substantial rehabilitation or new construction
activities, Awardees may submit a more limited report on potential
sources of contamination. Where a Phase I ESA is not required (i.e.,
projects without any associated substantial rehabilitation81 or new
construction), the Awardees can submit a “transaction screen” in
accordance with ASTM E 1528-22 (or the most recent edition). A
transaction screen will identify potential environmental concerns based on
questionnaires, owner/occupant inquiry, site visit, government records
inquiry and historical sources inquiry. The transaction screen must be
prepared by a qualified professional, in accordance with 24 CFR §
50.3(i)(4). As the definition of preparer in ASTM E 1528-22 does not
meet this requirement, the environmental professional, as defined by the
79
This Determination is detailed in the “Determination of ‘No Potential to Cause Effects’ under Section 106 of the
National Historic Preservation Act for Rental Assistance Demonstration (RAD) Projects Limited to Maintenance
Activities and Carried Out Under 24 CFR part 50.” See https://www.hudexchange.info/resource/3865/no-potential-
to-cause-effects-to-historic-properties-memos/.
80
The Transaction Screen does not meet the standard for “All Appropriate Inquiries” for CERCLA liability
protection, as noted in ASTM E 1528-22 Section 4.2.1.
81
Substantial rehabilitation is any rehabilitation that does not meet the conditions in 24 CFR § 50.20(a)(2) for
exclusion from review under the National Environmental Policy Act. Applications to RAD for conversion assistance
involving substantial rehabilitation or new construction will always require a Phase I ESA in accordance with
ASTM E 1527-21.
22
EPA’s AAI Final Rule, must have either (a) A state- or tribal-issued
certification or license and three years of relevant, full-time work
experience, (b) A bachelor’s degree or higher in science or engineering
and five years of relevant, full-time work experience, or (c) Ten years of
relevant, full-time work experience. If any potential environmental
concerns are identified, an ASTM Phase I ESA in accordance with ASTM
E 1527-21 (or the most recent edition) must be provided.
▪ Awardees may submit a Phase I ESA that is up to 5 years old upon
submission; however, it must be updated by a Transaction Screen that is
up to 1 year old upon submission.
PHAs (or their vendors) must submit environmental reports and documentation82 for
HUD review into the HUD Environmental Review Online System (HEROS), where
HUD will complete its review.
HUD staff will review the submissions and may require additional information in order to
complete their review. HUD’s review will result in a determination, which may stipulate
the rejection of the site for this demonstration or may require the completion of
mitigation measures. The RCC will include any conditions required to carry out any and
all mitigation measures as may result from the environmental review. Any conditions or
mitigation that cannot be satisfied before Closing will survive Closing and remain as a
Covered Project Owner obligation to complete.
6. A new subparagraph F.7 in Attachment 1A is added, as follows:
7. To ensure that a PHA has adequate funds should operating expenses such as utilities,
management fees, management staff salaries, maintenance, real estate taxes, and
insurance exceed the gross rent potential of the Covered Project, HUD will require
conversions without the use of Low Income Housing Tax Credits or commercial debt to
include an operating reserve equal to six months of stabilized operating expenses,
excluding monthly deposits to the replacement reserve.
The operating reserve may be held or escrowed at the Covered Project level and may
only be used for the benefit of the Covered Project.
7. Subparagraph I.5.i. in Attachment 1A is deleted and replaced with:
82 PHAs and providers should take care to respond to all applicable laws and authorities and MAP-specific
requirements when providing documentation for environmental review. For all maps, please clearly indicate where
the project site is located. Information about HEROS and how to register can be found at
https://www.hudexchange.info/programs/environmental-review/housing/#heros.
23
i. For non-leveraged transactions (i.e. transactions that will not be taking on any new hard
debt as part of the conversion), the Operating Expense Ratio, calculated as all operating
expenses and required deposits to the capital replacement reserve divided by gross
potential income, must be no greater than 80% within the first five years of stabilized
operations. For leveraged transactions (i.e. transactions that will be taking on new hard
debt as part of the conversion), the debt-coverage ratio should not be less than 1.11 over a
ten-year period using 2% growth in revenue and 3% growth in expenses.
SECTION XI: HOTMA CONFORMING CHANGES
This Notice makes the following changes to the RAD Notice due to the implementation of the
HOTMA Voucher Final Rule. HUD is making technical changes to the RAD Notice to update
regulatory references and language and certain non-technical changes to resolve conflicts
between the RAD Notice and the HOTMA Voucher Final Rule. In the event that these technical
changes to the RAD Notice do not resolve all apparent conflicts, HUD will continue to apply the
RAD Notice’s waivers and alternative requirements consistent with the PBV requirements in
effect prior to the HOTMA Voucher Final Rule and the comparable provisions as they appear
following the HOTMA Voucher Final Rule.
1. The following Definitions are modified:
• The definition for “HOTMA Implementation Notice” is deleted in its entirety.
• The definition for “Housing Quality Standards” is replaced with “The minimum quality
standards developed by HUD in accordance with 24 CFR § 5.703 for the PBV program,
including any variations approved by HUD for the PHA under 24 CFR § 5.705(a)(3).”
• The footnote in “Project” is revised to read, “The definition of “project” in 24 CFR §
983.3 is used to determine how many PBV HAP Contracts must be entered into.”
• The definition of “Tenant Protection Vouchers” is deleted.
2. The first paragraph of the introductory language appearing at Section 1.6 is deleted and
replaced with the following, and the final paragraph is deleted:
Under the Demonstration, HUD has the authority to waive statutory and regulatory
provisions governing the PBV program, or to establish alternative requirements for the
effective conversion of assistance. Additionally, the RAD Statute imposes certain unique
requirements and authorizes HUD to establish requirements for converted assistance
under the Demonstration. Conversions of public housing properties through RAD,
including conversions through a RAD/Section 18 Blend, will be subject to the
requirements below and in this Notice, and as reflected in the RAD PBV HAP Contract.
Consequently, there are fundamental differences in the process, structure and function in
24
RAD PBV conversions of public housing properties as compared to the traditional PBV
program.
3. Section 1.6.A.1 is deleted in its entirety and replaced with
Maximum Number of PBV Units (Percentage Limitation). RAD PBV units in
Covered Projects do not count against the percentage limitation (program cap) applicable
to the PBV program. Per 24 CFR § 983.6(e), units that meet the requirements of 24 CFR
§ 983.59 that were previously subject to federally required rent restrictions or received
one of the listed forms of HUD assistance do not count toward the program cap.
Furthermore, HUD is waiving section 8(o)(13)(B) of the Act as well as 24 CFR §
983.6(a)-(b) with respect to RAD PBV units and Legacy Non-RAD PBV units within a
Covered Project when such units replace public housing units at the time of the
conversion at a new location. Any additional PBV units subsequently placed at the
former public housing site would not be excluded from the percentage limitation
applicable to the PBV program. In other words, the number of PBV units excluded from
the PHA’s PBV program cap cannot exceed the number of former public housing units
that those PBV units are replacing through the course of the RAD conversion. All PBV
units in a Covered Project that replace former public housing units at the time of
conversion are excluded from both the numerator and the denominator when calculating
the percentage of vouchers that may be project-based by a PHA.
4. Section 1.6.A.2 is deleted in its entirety and replaced with:
Cap on Number of PBV Units in Each Project (Income-Mixing requirement). There
is no cap on the number of units that may receive RAD PBV assistance in each project.
Under 24 CFR § 983.54(c)(3), units excluded under 24 CFR § 983.59 that were
previously subject to federally required rent restrictions or received one of the listed
forms of HUD assistance do not count toward the project cap. For any RAD PBV and
Legacy Non-RAD PBV units in Covered Projects not already excluded under 24 CFR §
983.59, including transfers of assistance to a new location, HUD is waiving section
8(o)(13)(D) of the Act, as well as related provisions of 24 CFR § 983.54. Accordingly,
units under the contract may not be “excepted” for a specified purpose.
5. Section 1.6.A.3 is deleted in its entirety and replaced with:
Proposal and Project Selection Procedures. A PHA is not required to follow
competitive selection procedures for units that will be subject to a RAD PBV HAP
Contract. Accordingly, HUD is waiving 24 CFR § 983.51(b) (which also renders the
selection procedures at 24 CFR § 983.51(c), (d), (h), and (i) inapplicable) with regard to
units that will be subject to a RAD PBV HAP Contract. 24 CFR § 983.51(e)(2) does not
apply, since HUD has waived the definition of existing housing for RAD PBV projects
25
under the First Component of the Demonstration. HUD is also waiving 24 CFR §
983.51(f), such that no written notice of proposal or project selection is required for units
that will be subject to a RAD PBV HAP Contract. HUD is establishing an alternative
requirement at 24 CFR § 983.51(g) to specify that the proposal or project selection date
(as the term is used throughout 24 CFR part 983, where applicable) is the date of
execution of the RAD PBV HAP Contract. 24 CFR § 983.51(a) (General Procedures),
(e)(1) (inspection required prior to selection to determine site selection standards
compliance), (j) (inapplicability of previous participation clearance) and (k) (exclusions
from Federal procurement) continue to apply, except that the PHA is not required to
describe in the PHA Administrative Plan the procedures for owner submission of RAD
PBV proposals and PHA selection of PBV proposals for RAD PBV projects. To facilitate
the uniform treatment of residents and units at a Covered Project, any Legacy Non-RAD
PBV units in the same Covered Project, shall be subject to the terms of this provision.
Any additional PBV units placed at the Covered Project would be subject to all of the
requirements of 24 CFR § 983.51.
5. Section 1.6.B.9 is deleted in its entirety and replaced with:
Applicability of PBV Housing Types, Execution of RAD PBV HAP Contract, and
RAD Rehab Assistance Payments. For public housing conversions to PBV, the project
will not be classified as one of the housing types defined in the PBV regulations (i.e.,
“existing housing,” “rehabilitated housing,” or “newly constructed housing”).
Accordingly, regulations as well as other requirements that stem from a project’s
classification as “existing housing,” “rehabilitated housing,” or “newly constructed
housing,” shall not apply until HUD has accepted the certification of Work completion
under the RCC. Following the completion of Work, the contract shall be subject to all
PBV requirements that apply to “existing housing.”
The PHA and Project Owner will enter into a RAD PBV HAP Contract and will follow
the requirements in this Notice with regard to conditions for entering into the HAP
contract, executing the HAP contract, and conducting any Work. Except as provided
under Section 1.4.A.12 (Transfers of Assistance), the RAD PBV HAP Contract will take
effect before any Work begins.
During the period of Work identified in the RCC, standard HAP Contract funding
procedures will be used for occupied units. Units covered under the RAD PBV HAP
Contract that are not occupied at any point during the period of Work identified in the
RCC may be eligible, subject to the conditions below, for Rehab Assistance Payments
equal to the Public Housing Operating Fund and the Capital Fund amounts that formed
the basis for the calculation of initial contract rents (see Attachment 1C). During the
period of rehabilitation or construction as identified in the RCC, the maximum number of
26
units for which a Project Owner can receive RAD Rehab Assistance Payments is limited
to the number of units eligible for Operating Fund or Capital Fund subsidy prior to
conversion. As a result, some units in the Covered Project may not be eligible for Rehab
Assistance Payments.
The Project Owner will no longer be eligible to receive RAD Rehab Assistance Payments
upon the earlier of completion of the Work or expiration of the time period identified in
the RCC for completion of all Work, which date is specified in the RAD PBV HAP
Contract. After such date, all units under the HAP Contract will be eligible for payment
only for occupied units or for vacancy payments, as applicable. MTW agencies may not
alter this requirement.
To effectuate the above requirements, the definitions of “existing housing,” “rehabilitated
housing,” and “newly constructed housing” at 24 CFR § 983.3(b), the definitions of
“development activity” and “substantial improvement” at 24 CFR § 983.3(b) with respect
to Work completed under the RCC, and 42 USC 1437f(o)(13)(A) and 24 CFR §
983.5(a)(2) describing the housing types for which a PHA enters into a HAP Contract in
the PBV program, are waived. The requirements of this Notice shall apply with regard to
the procedures for attaching PBV assistance to a Covered Project or to Work completed
under the RCC in place of the PBV requirements stemming from the housing type
classifications, such as: 24 CFR § 983.5(a)(3) (procedure for developing housing), 24
CFR § 983.10(b)(6)(i)-(ii), (8), and (10) (Administrative Plan policies), 24 CFR § 983.11
(Subsidy Layering Review), 24 CFR § 983.51(e)(2) (requirements before entering into a
HAP Contract), 24 CFR § 983.52(d) (commencement of construction), 24 CFR §
983.56(a)(2) (environmental review), 24 CFR § 983.103(a)-(c) (pre-selection and initial
inspections; see Section 1.6.B.10 for alternative inspection requirements), 24 CFR
Subpart D (governing development activity), and 24 CFR § 983.204(a)-(c) (procedure for
executing the HAP Contract). With respect to site selection standards, HUD requires site
selection standards in compliance with this Notice and Notice PIH 2016-17/H 2016-17.
2. The second paragraph of Section 2.3.2.B is deleted and replaced with:
For PBV conversions, except as modified in this Notice, the converting project must
qualify as existing housing or rehabilitated housing (as defined in 24 CFR § 983.3(b)) to
be selected for conversion under the Second Component of RAD. The PHA must comply
with all applicable housing quality standards of 24 CFR part 983.
3. A new Section 2.5.K is added:
K. Execution of RAD PBV HAP Contract and Rehabilitation. Work on Mod Rehab
units that convert to PBV through RAD will generally be conducted under the PBV
27
program requirements applicable to rehabilitated housing, except as modified by this
Notice (e.g. Section 2.5.I Davis-Bacon Wages). However, until such time as 24 CFR §
983.157 is effective, allowing a Project Owner to undergo rehabilitation after the HAP
Contract is effective, this section provides alternative requirements for projects
completing Work. Mod Rehab projects converting to PBV through RAD shall be
considered existing housing under 24 CFR part 983 so long as they meet the criteria of
paragraph (i) of the definition of existing housing in 24 CFR § 983.3. Such projects shall
follow the requirements governing “substantial improvements” under 24 CFR § 983.212
when conducting Work, except as modified below. Accordingly, HUD is providing a
limited waiver to the requirement under paragraph (ii) of the definition of existing
housing in 24 CFR § 983.3(b), which requires a PHA determination and owner
certification regarding substantial improvement in order for a project to qualify as
existing housing, the provision of 24 CFR § 983.212(a) prohibiting the owner from
requesting PHA approval before the effective date of the HAP contract, and 24 CFR §
983.212(a)(1)(ii) which requires that PHAs do not approve substantial improvement to
commence until after the first two years of the effective date of the HAP Contract. These
waivers shall remain in effect for any projects where the Project Owner has submitted a
Conversion Plan (which includes the substantial improvement request and approval) prior
to 60 days after the implementation of 24 CFR § 983.157. During the period in which
these waivers are effective, references to “construction” or “rehabilitation” in paragraph
2.5.I shall include “substantial improvements.”
4. The following references are deleted or modified as follows:
• In Section 1.4.A.7., 1.6.A.4., 2.4.H., 2.5.D., 4.4.O., and 4.5.F., replace “24 CFR §
983.57” with “24 CFR § 983.55.”
• In Section 1.4.A.12.b, Footnote 18, the reference to “See the Housing Opportunity
Through Modernization Act of 2016 (HOTMA) and HUD’s implementation notices
including the January 18, 2017, HOTMA implementation notice, 82 Fed. Reg. 5458, and
the July 14, 2017, technical correction and clarification notice, 82 Fed. Reg. 32461. Also
see Notice PIH 2017-21.” is deleted.
• In Section 1.6.B.5.d, the reference to 24 CFR § 983.2(c)(6)(iii) is deleted and replaced
with 24 CFR § 983.2(c)(7)(iii) and 24 CFR § 983.301(f)(4).
• In Section 1.6.B.5.g, the reference to 24 CFR § 983.301 is removed and the reference to
24 CFR § 983.303 is replaced with 24 CFR § 982.4.
• In Section 1.6.B.7 the reference to “in accordance with section 8(o)(11) of the Act as
amended by HOTMA (see Attachment A in Notice PIH 2017-21 for guidance on PHA-
owned units)” is replaced with “as defined at 24 CFR § 983.3”.
• In Section 1.6.B.7 the reference to 24 CFR § 983.59(b) is replaced with 24 CFR §
983.57(b).
28
• In Section 1.6.B.10, the first two sentences are replaced with: “Section 8(o)(8)(A) of the
Act provides that HAP Contract units must be inspected to ensure compliance with HQS
prior to payment of any assistance on behalf of a family.”
• In Section 1.6.B.10, the words “24 CFR § 983.103(b) and” are removed from the last
sentence.
• In Section 1.6.C.1, the reference to “a household that was over-income at time of
conversion” is replaced with “a public housing program participant that was over-income
at time of conversion”.
• In Section 1.6.C.1, “, 24 CFR § 983.251(a)(2) and 24 CFR § 983.255(a)(1)” is added
after the reference to 24 CFR § 982.201.
• In Section 1.6.C.9, all references to 24 CFR § 983.53(c) are changed to 24 CFR §§
983.52(c) and 983.251(a)(2).
• In Section 1.6.C.9, in the second paragraph, “and 24 CFR § 983.353(b)(1)” is added after
the reference to 983.301.
• In Section 1.6.C.9, the reference to 24 CFR § 983.259 is changed to 983.258.
• In Section 1.6.D.4, the reference to 24 CFR § 983.251(c)(2) is deleted and replaced with
24 CFR § 983.251(c)(2)(iii).
• In Section 1.6.D.10 the reference to 24 CFR § 983.3(c)(6)(iii) is deleted and replaced
with 24 CFR § 983.2(c)(7)(iii).
• In Attachment 1B the reference to 24 CFR § 983.260 is deleted and replaced with 24
CFR § 983.261.
Further Information
Please check www.hud.gov/rad for the latest information on RAD or to join the RAD listserv.
Materials referenced in this Notice may be obtained from this RAD website. Email questions to
RAD@hud.gov. Additionally, HUD will develop informational materials to address various
program elements that HUD will post on the RAD website.
29
Paperwork Reduction Act
Approved
The information collection requirements contained in this document have been approved by the
Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520) and assigned OMB control numbers 2502-0612, 2529-0013, 2506-0087, and
2577-0169. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor,
and a person is not required to respond to, a collection of information unless the collection
displays a currently valid OMB control number.
Dominique G. Blom Julia R. Gordon
General Deputy Assistant Secretary Assistant Secretary for Housing –
Public and Indian Housing Federal Housing Commissioner
30
31
Source: Legislative text reproduced verbatim
Plain English
Housing Notice § 2025-01 (also issued as Notice PIH 2025-03) is a supplemental administrative notice from the U.S. Department of Housing and Urban Development that updates the rules governing the Rental Assistance Demonstration (RAD) program, which allows public housing agencies to convert public housing assistance to project-based Section 8 assistance. Among its most resident-facing changes, the notice extends the RAD application deadline to September 30, 2029, increases the minimum notice period for nonpayment of rent from 14 to 30 days before a termination can proceed, and requires that leases be written in plain language without overly restrictive provisions. It also clarifies how HAP Contracts must be renewed after their initial terms and strengthens financial reporting requirements for project owners.
Written by anthropic/claude-sonnet-4.6 · Reviewed on October 6, 2026
Plain English — not legal advice.
For Property Managers
Property owners and public housing agencies operating under the RAD program should be aware that Housing Notice § 2025-01 imposes several updated compliance obligations. Operators of covered projects are generally expected to provide residents with at least 30 days' written notice before initiating termination proceedings for nonpayment of rent, replacing the prior 14-day standard. Compliant operators also ensure that resident leases use plain language, do not impose new security deposits on residents already in place at conversion, and do not prohibit pets that were present at the time of conversion; they also submit annual audited financial statements to HUD or the Contract Administrator as required under the strengthened provisions of Section V of this notice.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For Tenants
Residents living in housing that has converted or is converting under the RAD program gain several strengthened protections under Housing Notice § 2025-01. Most notably, Section VI of this notice requires that landlords provide at least 30 days' notice before pursuing a lease termination for nonpayment of rent, up from the previous 14-day minimum, and Section VIII requires that leases be written in plain language and not contain overly restrictive rules about how residents may use their homes. Tenants who believe these protections are not being honored may wish to contact their local public housing agency, reach out to HUD directly at RAD@hud.gov, or consult a tenant-rights organization familiar with federally assisted housing programs for information about available options.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 6, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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