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2.3Program EligibilityProgram eligibility determines whether applicants are eligible for assistance. Whileproject eligibility establishes whether applicants are eligible to reside in the specificproject to which they have applied. See HUD Handbook 4350.3 REV-1, paragraph 3-15.Pursuant to the RAD Statute, at conversion, current households are not subject torescreening, income eligibility, or income targeting provisions. Consequently, currenthouseholds will be grandfathered for conditions that occurred prior to conversion but willbe subject to any ongoing eligibility requirements for actions that occur after conversion.In-place tenants at the time of conversion are eligible to remain in the unit and receiveassistance according to the rent formula described in Chapter 5, Section 4 of HUDHandbook 4350.3, REV-1 and/or the rent phase-in formula specific to RAD.Owners have the ability to request and review documentation to ensure HUD programcompliance as well as compliance with the tenant’s obligations under the leaseagreement. This review can be performed at the time of a tenant’s annual or interimrecertification and in accordance with the screening/eviction procedures found in theowner’s policies. See HUD Handbook 4350.3 REV-1, Chapter 8.If, at conversion, households are over/under-housed, these households must betransferred to appropriately sized units when an appropriate sized unit becomes available.Refer to HUD Handbook 4350.3 REV-1, paragraph 3-23 (H)(1)(a), if there are noappropriately sized units available at the project at conversion.2.4Social Security NumbersAll household members must disclose and provide verification of the complete andaccurate SSN assigned to them except for those individuals who do not contend eligibleimmigration status or tenants who were age 62 or older as of January 31, 2010, andwhose initial determination of eligibility was begun before January 31, 2010. See HUDHandbook 4350.3, REV-1, paragraph 3-9. Tenants that do not have a valid SSN and donot meet one of the exception criteria will receive an error message when transmitted toTRACS and are not eligible to receive assistance.2.5CitizenshipAssistance in subsidized housing is restricted to U.S. citizens or nationals and noncitizensthat have eligible immigration status. At the first annual or interim recertification, ownersmust determine the citizenship/immigration status of tenants from whom the owner hasnot previously collected the proper documentation or whose documentation suggestedthat their status was likely to change. All family members, regardless of age, must declaretheir citizenship or immigration status. Noncitizens (except those age 62 or older) mustsign a verification consent form and submit documentation of their status or sign adeclaration that they do not claim to have eligible status. Noncitizens age 62 and older4

must sign a declaration of eligible immigration status and provide a proof of agedocument. U.S. citizens must sign a declaration of citizenship. Additional information oncitizenship can be found at HUD Handbook 4350.3, REV-1, paragraph 3-12 and a samplecitizenship declaration form can be found at Exhibit 3-5 of HUD Handbook 4350.3,Rev-1.Note: This paragraph is applicable to all RAD Conversions including (for emphasis)former Section 202 PRAC properties converted under RAD.2.6Mixed FamiliesWhen a family has members that include both citizenship or eligible immigration statusand those without citizenship or eligible immigration status, the family is considered amixed family and housing assistance must be prorated. Instructions for calculatingprorated assistance can be found at HUD Handbook 4350.3, REV-1, paragraph 3-12.P.2.7Elderly DesignationPursuant to the RAD Statute, Section 202 PRAC Properties converting under RADremain designated as elderly properties and are required to operate as such afterconversion. Owners of all other properties converting under RAD must not establish anelderly designation (i.e., a set-aside of units for the elderly). This is because the Section 8statute, unlike the statute governing public housing, does not authorize designations.2.8PreferencesPreferences are established criteria used to determine the order applicants are selectedfrom the waiting list for housing assistance or an assisted housing unit. Preferences maybe established by federal law, HUD regulations, State or local law, or written ownerpolicy. Preferences differ from designations which are used to set-aside a distinct numberof units for a specific purpose.As described below, RAD properties are: Permitted to establish owner adopted preferences (see Section 2.8.1, Section2.8.2, and Section 2.8.3) Not eligible for the statutory elderly preference established by Title VI, Subtitle Dof the Housing and Community Development Act of 1992 (see Section 2.8.6)2.8.1 Owner Adopted Preferences for Populations not identified in 24 CFR 5.655(c)(5) (e.g.Elderly family, Near-elderly single persons, Near-elderly families, etc.), for which localHUD office approval is required under Housing Notice 2013-21, Section V.b.Properties converting under RAD, except for Section 202 PRAC properties, areconsidered family properties and are required to operate as such.5

All owners, including former Section 202 PRAC owners who converted the propertyunder RAD can, however, establish owner-adopted occupancy preferences for theproperty which may impact how applicants are selected from the wait list. As identifiedin 2.8.2 below, some owner-adopted preferences can be implemented without HUDapproval, but many will require HUD approval prior to being implemented. Preferencesrequiring HUD approval are discussed in 2.8.3 below.Where an owner intends to implement a preference for new admissions immediatelyfollowing conversion, the approval must be secured prior to conversion. This includesany preference that may have been in use prior to conversion. Further, all applicants thatare on the waiting list must be notified of the preference(s) and give all applicants anopportunity to show that they qualify for available preferences.Note: Many owner-adopted occupancy preferences requested by owners will be reviewedfor fair housing compliance by HUD’s Office of Fair Housing and Equal Opportunity.2.8.2 Owner-Adopted Preferences That Do Not Require HUD ApprovalProject owners may adopt a preference for any or all the populations identified in 24 CFR§ 5.655(c)(5) without prior HUD approval. These four preferences are for: Single persons who are 62 or older over other single persons Single persons who are displaced over other single persons Single persons who are homeless over other single persons Single persons with disabilities over other single persons2.8.3 Preferences That Require HUD ApprovalAs stated in Section V.b. of Housing Notice 2013-21 Implementation and approval ofowner-adopted admissions preferences for individuals or families experiencinghomelessness (issued July 25, 2013), Section 8 project owners may establish an owneradopted preference for populations other than those identified in 24 CFR § 5.655(c)(5)but must first obtain local HUD office approval. Examples include but are not limited to: Elderly families Near-elderly single persons Near-elderly families Displaced familiesOwners are cautioned not to assume a preference will be approved based on requestalone. This is especially important if pursuing tax credits that may require the owner toserve a specific population. HUD approval for the population preference should beobtained prior to securing the tax credits to ensure the owner can comply with any taxcredit requirements.2.8.4 Fair Housing Requirements for Preferences6

An owner may not adopt a preference that would have the purpose or effect ofsubstantially delaying or denying the participation of other eligible families in theprogram on the basis of race, color, national origin, religion, sex, disability, or familialstatus, or would create or perpetuate segregation.2.8.5 Submission for HUD Approval of Owner-Adopted PreferencesOwners are required by paragraph 1.7.C.9 of the RAD Notice to submit their request foran owner-adopted preference to the Account Executive (field office) prior to execution ofthe HAP contract. Doing so will reduce the applicant notification burden put on theowner when a new preference is applied to the property. Further, having the preferenceapproved prior to execution of the HAP contract will permit the property to continuouslyoperate in the closest manner to how it operated pre-conversion.In addition to submitting a request for an owner-adopted preference to the AccountExecutive for approval, it is recommended that the owner submit the preference(s) intentin the RAD Financing Plan/Conversion Plan. It is important to note preference inclusionin the RAD Financing Plan/Conversion Plan are for notification purposes only. Anyowner-adopted preference(s) will still need approval from the Account Executive.2.8.6 RAD Properties Are Ineligible for Statutory Elderly PreferenceRAD properties are not eligible for the statutory elderly preference established by TitleVI, Subtitle D of the Housing and Community Development Act of 1992, implementedthrough 24 CFR § 880.612a, and discussed in HUD Handbook 4350.3, REV-1, paragraph3-18. For this reason, 24 CFR § 880.612a was struck in Appendix I of the RAD Noticebeginning with Revision-2 (issued June 15, 2015).12.9Waiting ListThe Project owner can utilize a project-specific waiting list or an owner/managementagent community waiting list. An owner/management agent community waiting list isdifferent from the public housing community-wide waiting list. Prior to RAD conversion,the PHA should refer to the RAD Notice for guidance to consider the best means totransition applicants from the current public housing waiting list.After conversion, the project waiting list must conform to the requirements outlined inHUD Handbook 4350.3 REV-1, Chapter 4, Section 3.Applicants may apply to any number of multifamily housing properties with no limit.1RAD conversions prior to Revision-2 to the RAD Notice may have established the statutory elderly preferencefollowing 24 CFR § 880.612a. Further, properties may have incorrectly identified and implemented an elderlypreference as an elderly designation. This is because 24 CFR § 880.612a was not struck in Appendix I of the RADNotice prior to June 15, 2015. Owners who have done either are required to analyze their policies and, if necessary,modify them to comply with the RAD Notice (Revision 3 and newer), 24 CFR § 5.655(c), and Housing Notice2013-21.7

2.10Lease Agreement and other Required Documents2.10.1 Lease Requirements for Existing TenantsAll properties converting under RAD must use form HUD 90105-A Model Lease forSubsidized Programs which is available on HUDCLIPS. Leases for existing tenants musthave a lease effective date equal to the HAP Contract effective date. The lease must besigned by both the owner and all adult household members on or before the HAPContract effective date. Tenants must also be provided with all attachments listed inparagraph 27 of the lease, including form HUD-50059 and 50059-A and the property’shouse rules, at the time the lease is signed. The RAD provisions must be incorporated asan addendum to the house rules and provided as Attachment 5 to this notice.2.10.2 Required Documents to Provide to Existing Tenants1.2.3.4.5.6.7.8.9.10.11.12.13.Initial Certification form HUD-50059Executed form HUD-90105A Model LeaseMove-in/Unit Inspection ReportForm HUD-91067 VAWA AddendumHouse Rules, including an addendum to incorporate the RAD provisionsPet Rules (if applicable)Lead-based Paint Disclosure (if applicable)HUD-approved Live-in Aide Addendum (if applicable)HUD-approved Police/Security Personnel Addendum (if applicable)Any other HUD approved Addendum (if applicable)Initial Notice of RecertificationForm HUD-9887/9887A signed by all adult family membersAcknowledgement of Tenant Receipt for:a. HUD 9887 Fact Sheetb. Form HUD-5380 VAWA Noticec. HUD Fact Sheet for Section 8d. EIV & You Brochuree. Resident Rights and Responsibilities Brochuref. Lead-based Paint Brochure (if applicable)2.10.3 House RulesOwners of properties converting under RAD must adhere to the resident rights andparticipation requirements identified in the RAD Notice and Attachment 5 of this guide.If owners develop additional house rules for a property beyond these resident rights, therules must be consistent with HUD requirements for operating HUD subsidized projects,must be reasonable, and must not infringe on tenants' civil rights.Developing a set of house rules is a prudent practice. By identifying both allowable andprohibited activities in housing units and common areas, owners provide a structure for8

treating tenants equitably and for making sure that tenants treat each other withconsideration. House rules are also beneficial in keeping the properties safe and clean andmaking them more appealing and livable for the tenants.House rules are an attachment to the lease, but do not replace the lease. House rules mustnot create a disparate impact on tenants based on race, color, national origin, religion,sex, disability, or familial status. Further information on house rules is found at HUDHandbook 4350.3 REV-1, paragraph 6-9.2.11PetsAll Properties Converting Under RADExisting pets must be grandfathered into the property at RAD conversion. Owners mustdevelop Pet Rules using the requirements found in 24 CFR Part 5, Subpart C, HUDHandbook 4350.1, and HUD Handbook 4350.3 REV-1, Chapter 6. When a propertypermits pets, the Pet Rules must be provided to each household regardless of whether thehousehold has a pet.Pet rule requirements for tenant admissions after conversion are covered by State andLocal requirements.Section 202 PRAC Properties Converting Under RAD – Additional RequirementBecause Section 202 PRAC properties that converted under RAD are available foroccupancy only to the elderly, the language addressing pets that is found in the ModelLease for Section 202 PRACS must be incorporated using a HUD-approved leaseaddendum. A HUD-approved addendum is provided as Attachment 4 to this guide.2.12Utility AllowancesIn general, the utility allowances in the HAP contract at closing must be the utilityallowances that are in effect for each public housing unit type prior to conversion. Referto Attachment 1C of the RAD Notice which includes information on how an alternativeutility allowance may be established at conversion when the owner can demonstrate thatenergy saving improvements will result in measurable tenant-paid utility cost savings.In accordance with Housing Notice H 2015-04 Methodology for Completing aMultifamily Housing Utility Analysis, properties undergoing new construction orsubstantial rehab may establish initial utility allowances for new or rehabilitated unitsbased on an analysis completed at underwriting through an energy consumption model,but only in the first year of occupancy post-construction. When the property is occupiedand the owner can obtain 12 months of consumption data, the owner must then follow themethodology in Notice H 2015-04 and establish a baseline analysis.For properties not undergoing new construction or substantial rehab, the owner mustfollow the methodology in Notice H 2015-04 and establish a baseline analysis beginningwith the first contract anniversary after the RAD conversion.9

If an owner fails to submit a utility analysis with a rent adjustment submission, theowner's rent adjustment will be withheld until a utility analysis is provided to HUD. Oncethe required documents are received, HUD will retroactively implement the rentadjustment.2.13Resident Rights and ParticipationOwners must be aware of the resident rights and participation requirements identified inthe RAD Notice and Attachment 5 of this guide. These rights must be included in thehouse rules portion of the lease for properties converting under RAD.2.14Tracking Households Housed Prior to RAD ConversionPer Section 6.9 of Housing/PIH Notice 2016-17,2 PHAs and owners are required tomaintain a resident log of every household that resides at the Converting Project at thetime of the first required resident meeting on the proposed conversion pursuant to Section1.8 of the RAD Notice (the “First Resident Meeting”) and of every household that movesinto the Converting Project after the First Resident Meeting and before the conversion ofassistance under RAD. If any relocation is required, the log shall track resident statusthrough completion of rehabilitation and construction, including re-occupancy afterrelocation. This document will be especially helpful for future audits/compliance reviewsthe property may undergo and will easily identify those households subject to slightlydifferent requirements than future households coming into the property. In addition to theowner developed tracking, HUD’s TRACS system will be updated to include anidentifier for all RAD households.2.15PIH Provisions Continuing After Conversion2.15.1 Family Self-Sufficiency (FSS)Current Public Housing and Housing Choice Voucher (HCV) Family Self-Sufficiency(FSS) participants will continue to be eligible for FSS at the time their housing isconverted under RAD. All owners will be required to administer the FSS program forcurrent participants until either those households graduate or leave the program. ThePHA and new owner may collaborate, allowing the PHA to continue to operate the FSSprogram for cur

owner’s policies. See HUD Handbook 4350.3 REV-1, Chapter 8. If, at conversion, households are over/under-housed, these households must be transferred to appropriately sized units when an appropriate sized unit becomes available. Refer to HUD Handbook