CHAP Terminations and Replacement Awards

If a CHAP that is awarded to an owner is terminated, withdrawn, or fails to comply with milestones, HUD will utilize the waiting list to select a replacement award. HUD will first

identify the highest ranked application that is within the same Census Region as the application it is replacing. If no qualified application exists that meets this criteria, HUD will select the highest ranked application from the consolidated waiting list.

E. Choice-Mobility in the Competition

All applicants will be required to meet the choice-mobility component; however, HUD may grant a limited number of good-cause exemptions for eligible projects up to 10 percent of awards under the Demonstration. Applicants will need to indicate in the RAD Applications for each project whether they are applying for the good-cause exemption, which will be limited to one project per owner. All of the assisted units of a project that is selected for a good-cause exemption will count against these allowances.

An owner that requests a good-cause exemption, but is not awarded one will be placed on the waiting list and may be selected if a CHAP is terminated for a project that originally received a good-cause exemption.

2.3.11 Notification of Award, Execution of CHAP, and Related Milestones Please see Section 1.13 of this Notice for information regarding notification of award, execution of CHAP, and related milestones. (Where the term “PHA” is used to refer to the PHA as owner, the term “owner” applies to the Mod Rehab applicants.)

2.3.12 Compliance with all Applicable Notices Regarding Contract Expiration or Termination

Section 8(c)(8)(A) of the Act requires that not less than one year before the termination or expiration of the Section 8 Mod Rehab HAP contract, the owner must provide written notice to tenants assisted under the Mod Rehab HAP contract. This notice is required to inform residents

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of the impending HAP contract expiration. An owner requesting conversion under this section of the Notice must comply with this requirement. The law also requires that the owner submit the notice to HUD; however, since local PHAs administer the Mod Rehab program, the owner shall submit the notice to the appropriate PHA instead of HUD. A PHA may not issue a letter of support/consent for a Mod Rehab conversion of EVs to PBVs for an owner who has failed to comply with these notice requirements.

2.3.13 Preliminary Implementation Timetable

To assist Mod Rehab owners in their planning efforts, the table below provides a preliminary implementation timetable. Please understand that these timeframes may change.

Event Date

Proposed Program Notice Published March 8, 2012

30-day Public Comment Period Ends April 9, 2012

Final Program Notice Published June 1, 2012

Applications Window Opens August 1, 2012

Initial CHAP Awards October 1, 2012

2.4 Conversions Under the Second Component of RAD: Project-Basing Enhanced Voucher Assistance

This Section 2.4 of the Notice applies to Mod Rehab owners wishing to project-base enhanced vouchers (EVs), i.e., the second component of the Demonstration.

2.4.1 General Program Description

At contract expiration and subject to the availability of tenant protection voucher (TPV) funding, an owner may request to convert Section 8 EVs⁴³assistance to Section 8 project-based voucher (PBV) assistance for which assisted families residing in units under the Mod Rehab HAP contract would otherwise be eligible (or that may have already have been issued), in accordance with Section 2.4 of this Notice. Under the Demonstration, an owner may request to enter into a PBV HAP contract with the administering PHA for a term of 15 years at the Mod Rehab

43Enhanced vouchers are a form of tenant protection voucher, pursuant to Section 8(t) of the United States Housing Act.

property in lieu of the issuance of EVs to eligible families. In such cases, EVs converted to PBVs will have rents determined by the administering PHA’s PBV program. HUD will consider two types of conversions:

 Prospective Conversions. For prospective conversions, the contract expiration must occur no earlier than 120 days following the date of issuance of this Notice, and no later than September 30, 2013, and owners and PHAs must comply with the resident

consultation procedures described in this Notice. Where the contract expiration has not occurred as of the effective date of this Notice, but will occur prior to 120 days following the issuance of this Notice, and EVs have not been issued to residents pursuant to an owner’s decision not to renew the Mod Rehab HAP contract, the PHA and the owner may enter into a short term Mod Rehab renewal contract for the period necessary to pursue the conversion to PBV assistance under this Section.

 Retroactive Conversions. For retroactive conversions, where contract expiration occurred after October 2, 2006, and EVs have been issued to project residents, an owner may request that the EV assistance be converted to PBV assistance, subject to PHA and resident consent.

The request for conversion must first be made to the PHA that serves as the Mod Rehab Contract Administrator, which must consent to the conversion. HUD Headquarters will verify the PHA consent as part of the review of the Mod Rehab owner’s request. In all cases, the PHA that will administer the PBV contract will be the same PHA that administered the Mod Rehab HAP contract prior to expiration.

The owner is advised that early planning is critical to reduce any delays in the execution of the PBV HAP contract and gaps in rental assistance payments.

2.4.2 Eligibility

Owners of Mod Rehab projects may submit a request to convert EVs to PBVs under this Section of the Notice if all eligibility requirements described below are met.

A. Eligible Owners. Owners must be in good standing with HUD and the PHA. The owner must have a history of compliance with program and contractual requirements, including maintaining units in a decent, safe, and sanitary manner. If the request for attachment of PBVs is in the context of an acquisition, the administering PHA must consent to the assignment of the contract in accordance with the provisions of the Mod Rehab HAP contract. The purchaser must provide evidence of successful experience owning and operating HUD or other affordable multifamily housing properties.

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B. Eligible Properties. Eligible properties are (1) multifamily housing projects assisted