Rehab Needs

Assess the rehab needs of public housing projects by creating a chart of estimated rehab needs—

Divide all public housing properties into groups based on the amount of estimated rehab that will be needed over the next 20 years: Minimal, Mid-Level, Most Rehab, Replace—and current Mixed-Finance properties, which involve a different strategy. As RAD provides a 20-year Section 8 contract, HUD will review the extent of needs over the initial HAP contract period.

“Most Rehab” needed ($40K+, including new construction, replacement housing)
- If a project(s) scores well for 9% LIHTC awards. Schedule out 9% LIHTC applications according to criteria in a state’s LIHTC Qualified Allocation Plan. Do not count on more than one 9% LIHTC award per year.
- If a project(s) doesn’t score well for 9% LIHTCs
  - Consider Transfer of Assistance: Can the RAD income stream be transferred to another site owned by a PHA or a nonprofit partner that can potentially meet Site and Neighborhood Standards?
  - Consider Section 18 Demo/Dispo
  - Consider Choice Neighborhoods
“Mid-Level Rehab” needed ($20-40K/unit)
- Determine if the project can qualify for a bank loan using RAD Inventory Assessment Tool
  - Assess if FHA 221(d)3 or 221(f) insurance products offering lower interest rates might be a good fit
- Consider 4% LIHTC/Tax-Exempt Bond financing, including a “short bond” structure that is taken out by other sources of debt and/or investor equity after construction. Possibly combine 4%/Tax-Exempt bond projects into a single bond offering to save transaction costs.
- Identify other sources of “soft financing” that might be available (CDBD, HOME, National Housing Trust Fund, Local Trust Funds, other).
“Minimal Rehab” needed (less than $20K/unit)
- Assess of the PHA have sufficient resources to self- finance needed repairs?
- Identify other sources of “soft financing” that might be available (CDBD, HOME, National Housing Trust Fund, Local Trust Funds, other).

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