RAD Threshold Issues

Housing authorities should assess any potential RAD threshold issues- 

In most cases, these  issues can be accommodated and do not need to be resolved before the RAD application. Below are three common threshold issues:

• Capital Fund Financing Program: previous CFFP financing structures limit the amount of public housing units that can be removed from the public housing inventory via RAD conversions and Section 18 Demo/Dispo actions; review loan terms and pre-payment “lock-out” provisions

• Energy Performance Contracting: EPC financing structures require a lien to be placed on newly-installed energy-savings equipment that typically cannot be subordinated to other mortgage liens in financing real property; review loan terms and pre-payment “lock-out” provisions

• HUD/DOJ/Local Consent Agreements: CAs of any type can sometimes limit actions to convert or replace public housing stock in defined areas; review any agreements carefully