As with any new program, there is bound to be a feeling-out stage, and growing pains and hiccups were to be expected. Now, in response to the overwhelming and growing demand for contracts under the RAD program, HUD is taking steps to streamline the process by implementing the new RAD Fast Track program. The implemented changes are clear evidence that HUD is serious about making this program attractive and owner/operator friendly, before the cap is lifted, and the influx of applications becomes too much to handle.

Here is a review of some of the revisions to the process:

• Condenses the 30, 60, 90 & 150 day milestone process into a streamlined 60 day process (commences after receipt of the CHAP/Award Letter)
• Codifies the existing documentation checklists, and eliminates some of the unnecessary/repetitive paperwork
• The first phase is for “Non-FHA Insured” Submittals only (both 4% & 9% LIHTC programs); however, there will be a Fast Track Program for FHA Insured projects coming soon

Due Diligence and RAD Fast Track

The RAD program requires a number of third party reports to be included with the submittal package prepared by the lender and borrower. With the implementation of the RAD Fast Track, execution of the due diligence scopes of work becomes even more vital to the process, and a quality provider can identify a lot of unforeseen conditions early in the process that come along with assessing aging properties. The related due diligence scopes of work include:

• A Part 50 review by HUD (which in essence would require supplying them with a Phase I) is required for all borrowers wishing to convert to a Section 8 Project Based Rental Assistance Program (PBRA)
• Borrowers wishing to convert to a Section 8 Project Based Voucher (PBV) requires a part 58 review by a local agency; however, if the local agency will not or cannot do the review, then a Phase I is recommended so that HUD can do the Part 50 review
• A RAD Physical Condition Assessment (PCA) is required for all RAD conversion submittals. The RAD PCA includes an Intrusive level HUD compliant Property Condition Assessment with a Reserve for Replacement Analysis/RAD Excel Tool, as well as an Energy Audit and Utility Analysis.
• Projects submitted under the RAD program are also encouraged to bolster their accessible dwelling unit inventory as part of the proposed substantial improvements. The relocation of tenants, and modification and adaptation of existing buildings/units to meet current accessibility standards requires design and consultation by a qualified third party

The above due diligence not only allows owners/operators to take advantage of much needed funding through the RAD program, should they decide to pursue HUD backed financing via long term Section 8 rental assistance, but they also provide valuable information about the condition of their property and viability of proposed improvements.

I discussed the RAD program in more detail in a previous Globe St blog. More information and links to RAD and Fast track related documents, including program information, planning tools, checklists and applications/closing materials, can be accessed via HUD's Resource center website.