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>>> good afternoon, everyone. my name is patrick. i work in the secretary's office here at hud. i'm joined today by my colleagues, greg burn to my far right, who works in the office of public housing, dia thompson, also in pih, and

margaret salazar in the office of multifamily programs. today we want to share with you the proposed implementation details of the rental assistance demonstration or rad. hopefully most of you are fa congress in last november hud

2012 appropriations bill and based on our proposals last year. most of up know the purpose of rad is to generate additional sources of financing to address a substantial needs in public housing and with the so-called multifamily

organs, the rad and mod rehab programs. the public housing backlog today stands at nearly $26 billion as documented by the recent study. without additional financing resources, we stand to lose about 10 to 15,000 hard units of just public housing each year.

rad will test on a limited basis the convergence assistance for both public housing and orphans for long-term project based section 8 rental assistance to better access private debt and equity investments to help address that backlog and to stem the loss of this very much

needed housing. in publishing the initial notice last week, and maybe you had a chance to look through it, we considerable detail how hud proposes to implement the authority congress granted us in the 2012 appropriations bill. i say proposes, because the

initial notice is designed to solicit your comments. over the last year -- hopefully opportunity to discuss your thoughts, your inputs with us and how to implement the demonstration. the challenge now is to translate the statutory

authority into a workable we fully realize that what we propose now nor complete despite being fairly lengthy and may not be sufficiently addressing the questions and the inputs that you offered you. a lot of this is by design.

we now are seeking your further detail the comments that we're seeking. once we have all of your comments, we will thoroughly review them and then issue a final notice implementation later this spring.

before going into the details of the initial notice, let me underscore a few givens in the rad authority. that is, what congress said we have to do, and no volume or eloquence of your comments will be able to change that. first a

environment, congress judged that rad could only be piloted on a no-cost basis. basically this means that when rental assistance is converted from one type of assistance, for example, section 9 operating and capital funding for public there can be no increase in the

amount of that assistance when it's converted. obviously this affects initial rent levels and how rents can be adjusted, and we'll address that more today. second, congress also decided, partly a that there should be a 60,000

unit cap on the number of public housing and mod rehab units that could be converted under the competitive or the first component of the bill. but congress also allowed in a second component of t mod rehab rent sup and rad properties to project based

assistance in certain circumstances on a noncompetitive noncap basis. the variations allowed under the first and the second components of the bill make rad a bit we'll walk through today some of those complexities, and in subsequently webcasts this he

can would, we'll go into considerably more detail for each of the sections of the initial notice. be able to submit your questions to us via e-mail. the e-mail address to submit those questions to us is up on our white board today.

please send them to rad at hud.gov. another said by way of background. let's get into the notice. so let me hand this off to greg burn, who will give us an overview of what we're proposing in the initial notice.

greg. >> what i want to do is go to the white board here and see i can demystify a little bit this sort of 130-odd page notice. so the notice is rad notice phi 2018, the official rad number, although it's jointly issued by

the office of the office of housing. and this conversion authority, which the 2012 appropriation bill gave us, there are three sets of property types, public housing, which we call section 1 of the notice, mod rehab, which is in section 2, and rent

rap on section 3. what we try to do is make each section sort of stand on its own so you don't have to keep referring back to different sections if you're in mod rehab and whatnot. so i'm going to start here with section 1, which is public

housing, and down here these boxes, pbra, pbv and tpv's to pbv's. so pbra, what we really mean there is the ability to convert to traditional multifamily housing, the office of housing, whereas pbv is the project based voucher

program, which is the component of a housing authority's voucher program where today they can convert 20% of their vouchers or take 20% of their vouchers and attach them to buildings. so for public housing authorities, what they have is

the ability to choose between pbra and pbv, but there are a few conditions here, and those conditions are first and foremost that the congress only gave us the authority to 60,000 units under this first component of the demonstration. congress also said it has to be

done through a competition, and we'll talk more about the nature of that competition as we go along. another sort of real defining element of this first component of the demonstration is that it has to be done at current funding.

okay. 60,000 units competition currently funding, sort of three things that characterize really demonstration for public housing. mod rehab also has the ability to convert under this first component of the demonstration,

which they convert to pbra or pbv, in which they also are cap, also subject to competition and based on current funding. i want to move now over to rent supp/rap for a moment. rather than being able to choose assistance or project based vouchers, it's a much more

limited demonstration, and it really just gives the authority for these owners for rent supp and rap projects at contract certainly nation or that a rent sup rap owner, rather than using the tenant protect vouchers or tbv's, which would normally be given to

tenants of the property, that the owner has the right to convert those tenant project vouchers to project based section 8 voucher program. under this, compared to the first component of the demonstration, there is no competition.

so there is no competition. there is no units that can convert either, and the congress gave us the authority really through 2013 in which to sort of do this second and there is both a authority, which is the properties they're converting

between now and the end of 2013, but they also gave us retroactive authority back through october of 2006, and when margaret speaks about the rent su p go into more details about that. that's the demonstration, three sort of classes of property,

public housing properties being able to convert to project based rental assistance or project based vouchers but subject to the 60,000 cap competition, no more than current funding. rent sup rap, just purely being able to take the tenant protection vouchers and convert

them to project based vouchers, no cap, no competition, mod sides. it can either sort of be subject to the competition and go the same way as public housing, or it also has the develop to convert to tpv's and project based vouchers.

one last thing, pat, before i sort in terms of -- we mentioned that the notice is organized section 1, section 2, and section 3, that for public housing and mod rehab, the notice is proposed. expires april 9th, 2012, and that these are all proposed,

everything for public housing and mod rehab, whether mod rehab is moving in this direction or this direction, but rent sup rap, it's effective immediately. we call it sort of inter authority. that one we really wanted to do because these properties have no

sort of really new renewal option, for those expiring now, we wanted the ability to be able to convert, if that's what they want to do, their tpv's to comments, and after we review the comments, we may make changes. >> graying overview, greg.

thanks a lot. now i'd like to ask margaret salazar to help walk us through in a bit more detail rent supp and rap program will actually work. one of the main goals of rad, margaret, as we all know, is to generate financing for rent sup

and rap projects. why doesn't that work now? what's the problem and w rad to differently to help us raise additional capital? >> thanks. happy to talk about that. as we mentioned recently, rent sup and rap properties are

unique. the contracts are expiring, and unlike section 8 contracts, hud does not have the authorit renew them. so when the contract expires, that's it. there is no ability to renew it. so hud originally sought

authored under rad to convert those rent sup and rap contracts to section 8. rad doesn't quite allow us to do another tool. under rad, owners can convert the properties to project based voucher contracts with 15-year terms.

the assistance will be tied to the project, which means the owner will be able to leverage that project based voucher cont equity financing into the property to make repairs and maintain the project of the affordable housing.

>> great. margaret, another goal of rad is to give residents more choice in where they live. how will that work as we convert rent sup under rad. >> the project will be covered by a project based voucher

project as we said. the project based vouch every rules will be in place. what that means is that a resident in a project based voucher unit will have the ability to move after one year and will be next available tenant voucher

from the pha. >> greg. >> so let's talk a minute about how the rent sup or the rap owner can pursue a conversion to pdv's project based voucher under there is both as prospective and retroactive eligibility for

doing this; is that correct? >> that's right. i'll talk a little by about prospective first. if the contract has not yet expired or terminated, rad considered that to be a prospective conversion. contract is essentially provided

in lieu of the tenant protection vouchers that would otherwise be provided to the residents of the rent supp and rap units of the property, when the contract expires or terminates. how this works is that submits the request directly to the multifamily field office.

the request must be submitted at least 60 days prior to the expiration or termination date of the rent supp or rap contract to provide time to review it. section 3 of the rad notice provides detail on what the owner actually submits with that request.

i won't go into that today, but what i do want to talk about is the process. so the owner develops the application following -- excuse me, the request following the guidance in the rad notice. as part of that, the provide tenant notification and

a 30 day tenant comment period. tenants are provided a briefing by the owner with the multifamily and the public housing field office staff owner present. when that is complete, the owner submits the application to the office 60 days prior to contract

expiration or termination. the multifamily hub satisfy reviews the owner's request. if it meets the requirement of the notice, office informs the public housing field office director that it, in fact, meets the terms of the notice.

then the public housing field office selects a pha to administer the contract. now, per the rad statute, the pha has the opportunity to consent to actually e into that pbv contract with the owner. and if the pha does not consent,

office will actually seek an alternative pha to administer the contract. so at that point, then the pha actually e and enters into the contract with the owner. >> so that's the prospective component.

>> right. >> as you also mentioned, there is a retroactive component. can you explain how that works, how it's different? >> sure. there are a couple of main differences here. rad does provide the authority

sup or rap projects where the contracts have already expired or terminated, ask that's only for fiscal year 2 006 and later. here again, the tenant protection vouchers have already been issued to residents in those properties. we're calling this a

conversion. the vouchers that have already been issued and are being utilized by families in the property will convert. two main differences i wanted to might today for folks. the first main difference here is that the owner applies

directly to the administering the vouchers of the property. they actually don't make an application to hud at that point. the second main difference between retroactive and prospective is that for

retroactive tenant consent is required. so i mentioned for prospective conversions there is a tenant notification, period and a tenant briefing, but retroactive conversions, in those cases only the households that con isn't in writing to

convert their tenant vouchers to project based vouchers will have that assistance converted to the >> okay. thanks for that margaret. let's shift gears now for a minute and ask diane thompson to talk with us a bit about mod rehab, which has multiple

options under the bill. so diane, could you help us understand those options? >> sure, sure. well, pat, fir just a few differences between mod rehab and rent supp and rap that margaret just described under the second component of

the bill. there are really just three. first off, the section dealing with the mod rehab under the second component is proposed, so the public will have an opportunity to comment, unlike rent sup and rap which is effective immediately.

owners of mod rep has been projects, they had the opportunity to renew their contracts annually for one year. the second major difference is that mod rehab owners will be required to submit a financing plan. mod rehab projects underwent a

moderate level of rehabilitation some 15 to 30 years ago, so we recognize that these projects may be so we are requiring that the owner submit the financing plan to demonstrate that the project will be sustained both physically and financially for

the term of the contract. and basically just to insure that it's viable for long-term and the third important difference is that the mod rehab owner is going to submit the request to the currently administering pha, and they'll submit that request 120 days

prior to the expiration of the contract for both retroactive and prospective the pha has to consent, and once the pha does, the owner would submit that ab indication to hud headquarters. can you talk a little bit more how the mod rehab program, the

conversions will work under the first particular, how is it different from the way that public housing will be converted? we're going to talk about that in a minute. actually the process is going to be very similar as greg described.

there will be a competition. owners are are going to be able to choose or pbv's and rents, they will be based on the current funding left, as greg described, and also there are certain provisions for public housing that are unique just to the

public housing category. for example, use agreements, grievance procedures. those things would not apply to mod rehab owners. great. still under the first component demonstration where mod rehab converts at current funding.

what will be the contract term? >> great question. for project based rental assistance contracts, the current -- i'm sorry, the contract term will be for 20 years initially. for project based voucher contracts, the initial term will

be for 15 years with the option five-year initial term, so the total term could possibly be for project based voucher conversions, 20 years upon the consent of the pha. >> so you've talked a little bit about rent setting. how do rent increases or

adjustment contract terms? >> well, under the first component, as i indicated, it's going to be at current funding, the rent setting. however, the increases will be performed through an operating cost adjustment factor for both

project based rental assistance contracts as well as fo based voucher contracts, and the demonstration, the requirement for rent increases will be consistent with the project based voucher program and rules. so basically the owner would

request a rent increase from the pha on its anniversary dat the rent may be increased by the pha up to 110% of the fmr limited by resources, of course. >> overview, let's leave mod rehab for now, and greg, i'd like to turn it back o you.

if you could walk us back through how the first section of the bill on public housing, how those public housing conversions would actually work. >> sure, pat. so under the first component of the demonstration, again, subject to 60,000 cap, actually

the 60,000 units we're reserve about 58,750 for public housing conversions and about 1250 for mod rehappen conversions, and those are sort of representative of those sizes of those two portfolios. a pha will apply. we

go into probably at the next webinar, not this one, and pha's will submit an application and the application will require them to sort of walk through the basics of pro forma, what are they g current rents and what are their operating costs and how might

they -- if they need to raise debt, can they raise adequate debt. after we review applications, those that get awarded based on the selection factors will issue to chap, commitment to enter into a housing assistant payment

project. and from there, they will have about 6 months to come back to us with a firm financing plan. once wes review the financing plan for feasibility and hap, and it will be converted. >> where would a public housing authority go to get innocencing,

be -- financing, be it debt or equity. >> we'll go to all the sources that anybody with af housing production these days goes. if they're seeking financing, very likely they will look to fha insurance.

if it's a lightly rehab'd job, it's probably the fha 223 f program. if it's more heavy construction, they might do 221 d but some pha's may not see a need to do fha financing. they may found -- find something local or have a relationship

with a bank in town they've been dealing with over the years. they may also find other grant sources, othe they may also choose to sort of go after the low income housing tax credit program. they can either going to the competitive credit for 9% or the

noncompetitive with taxes and financing for 4%. then in addition to all of those sources, any of which is permissible. we don't prescribe any particular one. but we do prescribe that it has to be fixed rate -pbs --

financing for one. the term of the mortgage cannot be longer than 40 years, because we want something sort of con we can't be any balloon payments that plight be due during the term of the contract. we just don't want to put any

sort of undue risk on the property. and i guess maybe the last comment to make is that pha's, when they're sort of their project and looking at how much the project can support in first mortgage financing, if the project itself add current

funding -- let's say the property needs 25,000 per unit in rehab, but the first board can only support 20,000 in rehab. the pha could look to reserves or funding program and bring over any of those sources necessary.

>> so it would be very common to other affordable housing projects where basically there is likely the gap is going to have to be solved through the creative financing. really every project will be different.

some the current funding might be just right in the zone, and other cases they'll need to sort of get a little haircut, and other places, leap. >> financing sources, renters and investors are always interested in who owns and who

manages the project. now, how is that going to work under the public housing portion of the bill? >> so under public house, at conversion, the proper stay in either public or nonprofit hands, so the pha can either own it outright as its

own, so as the pha, it might decide to create a nonprofit if that's what it wanted to do, and it cannot -- initial conversion cannot be transferred to any sort of with one exception, and that is if the pha needs to come out and get low income housing tax

credits, that's a requirement of the program. if order to raise credits, you need a for-profit ownership bed bo. that's that conversion. are provisions if there where -- for which we don't expect many instances for it to occur, but

if there is a foreclosure or default or bankruptcy, any of those sort of did he veer, unusual first options are to try to find another public body and then, if not, a nonprofit, and then it can go into normal for-profit body.

so let's talk a minute now about so diane talked about pbv, providence of public housing, and the pha's will continue to play their role in the vouchers. what happens and they convert to who oversees that at hud. >> when it converts to pbra, and i'm a pha or a mod rehas been

owner, i as a pha, my property leaves the public housi it will no longer be are the pa of the public housing program, and it will be administered by hud's office of housing. another 1 to 1.5 million students through long-term assistance contracts.

the office of housing is that the day to day hap administration is performed by performance based contract administrators pbca's. they will do all of those duties, bulb if a pha decides to convert to pbv's, then that project still

remains in the voucher program, and it's still, we would say, within the one last provision that i know that everyone has had a lot of interest in, a lot of questions, how the choice mobility component that we're offering remember debts will work under

the first component of the bill relating to public housing and also to mod rehab. can you walk us th choice mobility can work for residents? i think i'm going to go to that diagram or the white board to help us out.

here we have choice mobility and the rules are different whether you convert under the first component of the bill excuse me, whether you convert from either part of the bill from pbv or pbra. if i convert my property, whether i'm pha or mod property

owner, and i couldn't verdict to pli, which means after one year, the residents, if they want to move with a voucher, then they get really the first -- they get the opportunity for the first available v agency's voucher turnover list. so go to pbv.

under the demonstration, no different than the standard rules for the pbv program. residents get to move after one year subject to the availability of vouchers in that program. there are a few more bells whistles without going into much greater detail.

under pbra, if i'm a housing authority and i convert my public house, remember, the only two under demonstration that can convert to pbra housing and mod rehappen, because rent sup rap only goes to bpv. to bpra, what's difference is,

rather than one year, proposal says the residents would get two years or the latter of two years or if it takes the initial repairs, the construction after conversion, so it's two years for there. there's also a 20% project cap. so the ph

wants to limit the amount of turnover from the choice mobility, it can say no more than 20% annually of that project would be subject to choice mobility. >> i'll stop you on that. all of the residents are eligible, but you're just

talking about turnover in any there could be other reasons for people leaving the property, but just those leaving to take advantage of choice mobility, the housing authority could put a 20% cap. the thousandsing authority could also decide

authority could also decide that -- they could establish a one third sort of inventory cap of its whole voucher program. it could decide that not more than a third of the voucher turnover would be used for rad pbra conversions. and so those are some of the

three major things, but then also there is an exemption, and the department reserves the awards under the demonstration to those that would be exempt from the choice mobility pha would ask for that in its application, or mod rehab would ask for that in the application.

in order to either is an agency without any vouchers, or it would be an agency that already uses a third of its vouchers for the homeless or vets it certified it would be providing. those exemptions would be awarded through the competition

ess with ranking factors overall, that those with the highest ranking factors would receive the exemption. >> let's end the formal presentation for now and get ready to take that's a gentle reminder to

everybody tuning in today that if you haven't got your questions, please submit them by e-mail to rad at hud dot gov. while we're waiting for the questions to come in and logging them in, let me just take a minute to webcast that we'll be doing

really the rest of this week. as we said, we want to go into more detail on public housing and mod rehab, section 1 for public housing, section 2 for mod rehab, rent supp and rap. the first section, 1, public housing webcast, is scheduled

for march 15th at 3 p.m. eastern time. the second section webcast for day, march 16th at 2 p.m. eastern time, and then the third section on rent sup and rap, and you'll be seeing more margaret for that, diane for mod rehab, greg for public housing.

the webcast will be also on march 16th; and we'll that right after the mod rehappen. you can find the updated schedule of all of these webcasts on our website, www dot hud dot gov, slash, forward slash rad. further, you can send queries

but not official comments that the specifics on how to do that are detailed in the notice, but if you have just general questions about anything, please feel free to submit them by e-mail, also to rad at hut of hud dot gov now let's take some questions

that we've gotten from those who have joined in today's webcast. let's see. here we have one, greg, that probably looks best for you. can you confirm that under rad could be used for capital upgrades in conjunction with traditional financing and how

that would work? it was a great question. >> so again, every pha will apply project by project, and if it runs its feasibility review and finds out that the first mortgage is not going to be enough to meet the needs, then it can use existing

public housing program funds, and that's public housing capital funds, whether it's the traditional capital fund program or repl funds, but it also could use any operating reserves that it has. and the p ha -- so those are all permitted uses.

normally you wouldn't be allowed to use public housing funds for something that is essentia subject will program. section 8 program. what they would do is put that in their financing plan. we mentioned earlier they apply, they're selected, they sign a

contract that says over a back with a financing plan, and it's when they present their financing plan back to us and it says, here are my sources of funds and my uses of funds and one of those sources, you'd identifying early on that i need to go into reserves to help

support the conversion of t so yeah, we definitely want to facilitate the ability of these projects to convert. >> let's stay on financing theme for a minute, because this is the sort of major purpose, is to secure this kind of financing to be able to address the capital

backlog. we talked about the different places you could go. one of the things we mentioned was fha. margaret, that's sort of your division, maybe you can help out with this question. what fha products do we

investigation might work for rad? thinking about? do we need a new product or do we think some existing products are going to work well enough? >> it's a great question, one we've been thinking about quite a bit here at hud, fha financing

and how folks might be able to utilize it for these conversions. greg mentioned a couple of programs that i wanted to highlight and just under score again. so section 223 f program is kind of our bread and butter program

here at hud for refinancing. you can either use it for acquisition, refinance or a and that's something that our field offices know very well. borrowers would work with an fha approved lender, and you would approach your local hu to discuss your into in pursuing

a loan. the other program is the section 221 d-4 program, which is a program that's used for either new construction or substantial rehab, and so obviously the substantial rehab co would probably be a good fit for rad, as well.

it's the same kind of a process where a pha or owner would find a map approved lender and would work with their local hud office to make application for a loan. >> so one of the things we may also a webinar on just fha products for rad, and we can sort of spend more time on that.

but maybe if you could just explain the benefit of, say, the 223 f, sort of why that's a in terms of sort of one loan as opposed to two loans. >> the 223 f program is sort of our bread and butter program. about 75% of the loans that we do through fha

it's not construction and permanent debt. it's just a fully funding loan, and so you can do what we call a direct to firm application, where you just submit one application for a firm commitment, and then the processing is done, like i said,

at the local and there is a moderate level of repair work that's allowed, whereas a 221 d 4 is little bit lengthier process because we drop require preapplication, and then an application. the 221 d 4, i don't want to say it's a disadvantage, because

when you compare it to the other financing sources out there, what's great about the 221 d 4 is that we sort of call it one-stop shopping. it's your construction and your permanent dead all in one, and it's up to a 40 year term, so product for folks.

>> there is a follow on question about this. when we think about fha projects, we think about housing finance agencies. they do a risk share program. will the risk share program be something that can work for a conversion?

maybe you can talk about tax exempt bonds and how that works for a minute. >> we have the risk share program under section 542 c. that might not be familiar with folks, but it is a very popular ub in of -- number of hfa's. they should meet with their

local hfa's and discuss it, find a little more out underwriting process works. they delegate most of the review to the partners. >> greg, it looks like we have a follow on the first question about the use of public housing capital funds.

interesting question. public housing capital funds are really restricted to public about converting public housing to actually section 8 housing. so six 9 -- section 9 to section 8. how can it be that we can use public housing capital funds in

a ra >> normally it would be a big no-no. you wouldn't be allowed to use the public housing funds but anything for the public housing here, the 2012 appropriation act gave us enormous broad waver

authority for allow for these conversions, and that's one of the authorities we're going to use, which is to say, to facilitate the movement of this project from hubble housing over to the long-term section 8. that's the pha can take --

unobligated, funds monies, if that decides where it wants to spend it and use it towards the conversion, one thing we'll do is just ask you to put that in your financing plan. here disclose, this is what i'm doing it.

once you convert, then you won't be able to go back to the well. so the financing plan so we can review it and see it, and then it is approved. very helpful. let's stay on the public housing side of this for a minute.

a up canel questions have come in. one has to do with, this is voluntary, so on the part of completely voluntary. there will be an application process, and hud will have a role, but doesn't the public housing authority itself have a

role in sort of assessing what's the best project to submit and how will that work? because we asked, you know, first, 2012, we asked for 200 million for the conversion under rad and the asked for sort of other authorities, and that -- we realize that with no

current -- with no not every project is going to make it. not every project is an ideal candidate for rad. and so what we would expect most housing authorities to do as they've been doing over the past five or ten years is looking

across their assessing, what is it i get for funding? what is my capital fund formula grant specific to this project and what are my tenant rents to this project? thinks about that, of as, okay by the way, soon we'll post on

the rad website for pha's so that those calculations, that what we know to be, their current capital fund allocation for that project, their operating fund and tenant ren to come up with what that funding will be. we fully expect the pha's will

look to the portfolio and say these are properties more easy to convert, these are take more effort. the last group, i really can only do these if i bring in some outside funding, either grant funding or for larger tax credits.

there are a couple more questions that have come in related to public housing. let's take a few more there, and then there are some that are starting to come in on mod rehab and rent sup. let's sta again, we'll have an opportunity

this coming thursday to dig in more into section 1 of the public housing section of the bill, so we would urge folks that want to participate in that to think about their questions ahead of time and begin to submit them. >> we will spend more time at

application procedure and the selection process and the milestones and sort of all of that. we'll definitely get more chances to drill down later in the week. >> here is a very common question that comes in related

to public housing all the time, and it's >> so there's no additional funding associated with public housing conversions or rad really in general? so what's the advantage for a public housing authority thinking about this, if there is

no additional funding. why would a housing authority, developme about converting its acc into a section 8 contract, be it be pbv or pbr funding? >> the main advantage is to for them to go out and access under the public housing

program, it's so difficult to approach a lender and say, hey, i have this property. i'm looking for a 30-year loan because i have 20,000 unit and rehab to do, and the lender asks, well, what's collateral? what's your pledge of how you're

going to pay this back. while we have some ability of pha's to do some of the mixed finance public housing, it's very difficult relative to it's a much more it let's lenders know the section 8 program very well. we don't have the equivalent in

public housing of long-term contract. we have a contract that is really subject to not just annual appropriations but a lender can't be sure what the terms a so section 8, it's a more readily understood platform, and

the fact that they'll be signing a 20 year contract with sort of built in operating costs adjustment factors makes it far more attractive to someone to the lending product or feasibility than the public housing program. >> just to follow on that, and

this goes to a question about rents that we talked a little bit about that. so at current funding, convert from acc to a section 8 contract, and we know that section 8 program is really oriented to market based rents in that platform and i think as

much as we can in, say, the mixed financial program, is to get rents for affordable housing relative to market. so currently funding. how do we know that this program will be able to to, frankly, the comparable market rents that housing

authorities and owners are facing out there? just because of the way that the legislation is constructed by not providing additional funding for it, that you are -- you' market rents, if your market is higher. have you to look at your current

have you to decide whether, when i talk up my tenant results, operating eligibility for this project and capital allocation, what can i do with that in for a moment -- for a moment, assume the tenant rents and operating is going to pay for the operating costs.

those two of the three pieces of the pie covering operating. what's my capital fund grant for this project, and to what extent am i buying sort of defendant service by sort of converting around the country, on the order the capital fund grant $1,450 per unit per month,

again, this is back of the nfl, as you say. i've got my operating subsidies operating my operating costs. how much will i be able with my capital fund grant to go out and rather than getting a grant that's payi repairs in a year, i'm going to

use that to leverage for a long-term mortgage, and every $150 in debt service raises about 25,000 in today's market. >> and there should be, if it operating, funding and capital funding, and there is a tenant rent contribution that factors into this, there should be some

margin in there to be able to direct replacement reserves over time s that with -- is that we review the financing plan. we want to make sure that not only are you taking care of your existing capital needs if there is a 100 unit property, may have 3 or 4 million of existing

needs, but what are the needs over the next five, ten, 15, 20 years, and so the pha 20 years and size a replacement reserve to sort of fit those needs. ultimately the pha has to look at its current funding, operating capital, tenant rents,

what ever other sources it need project is both meeting the -- going out and meeting existing needs but also the long-term needs through the buildup of replacements in the account. >> one last question on public house, which actually sort of transitions to the question

about multipae it's an important question. i'm a resident of public housing now. my housing authority, and presumably i've had some role in saying this might make sense to convert, et cetera. let's assume that happens.

when i live in th it's converted, i have a set of rights and procedures and responsibility as a resident of public housing. how will that work when we convert really from the section 9 platform, if you will, to section 8, project based

assistance. margaret, you familiar. diane, you know both sides of this, so maybe either of the two of you could help with that question. >> so under the conversion of public housing to pbra

contrac rights that are currently in place for public housing will carry over into the new contracts, which is something that's unique for those public housing residents. that was something that was in the rad language and we think

it's an that's carried over in the >> and in addition to those procedural rights, we also have sort of important tenant consultation, requirements fo converting through the demonstration so that we've got input from the residents through

>> margaret, here is a specific i think it's for you that's come in, and that is, my rap contract expired last year, and my residents were issued most of them have chosen to stay in the project. is my project eligible under rad even though i don't have a wrap

contract on the project right now? saturdays like the retrospective -- i'm sorry. as we mentioned, for this section 3 of rad, which is rent sup and rap, as well as from mod rehab, there are provisions for

retroactive what's nice about that, it also means the owner doesn't have to kind of race against the clock to try to get an application or request in for the cop version before -- conversion before the contract expires. this takes time, all of this

that we've discussed. you can pursue in retroactive. so only have tenant protection vouchers that were provided when the contract expired or terminated, it's only those households that are eligible to have their system converted, and the

households have to still be in place at the property. so residents receive vouchers, but only five of those families are still residing in the property, it's only those five families that would have their assistance potentially converted.

and again, it's only families that provide written consent to the conversion. that was a question specifically about rap. but that also applies to mod is that create, as well, the whole restroe active and the prospective?

we went -- retroactive and prospective. we went through this. in the second bill, as we call it, we have this retroactive and prospective that provide to both rents and mod rehab. >> yes.

the owner will have the ability to request the conversion for contracts that expire, either the initial contract or renewly contract that expired in 2006 up until the time of this and they will be able to convert those vouchers it he property to assistance, again as margaret

said, provided that the families consent to the conversion. >> and th question i think applies again to you diane, and greg mentioned this. let's go back over this again, and that is, i thought the requires that not more than 25%

of the units in a building be assisted. is that going to prevent my mod rehas been or i guess also under rents up? >> that's a great question. actually we will go into a lot more detail on subsequent webinars this week, however,

just to answer the question, we have certain waiver authority component of rad, and one of those things is to allow for a different income mixing standard or to weight it completely, and hud has decided that it was important to preserve certain provisions of the pbb program

but also to insure that rad is go reserving these projects. one thing we've done is we've allowed for the income mixing requirement to be set at 50% rather than 25%. so 50% of the units will be able to be project based, and the

regular exceptions under the project based vouche will apply, which may allow in order to go to up to 100% of assisted units under the pwropblg -- project based voucher program. that's helpful. it looks like we have just a few

more minutes. looks like time for maybe two more questions. here is one about choice mobility. let's go back to this for a minute. question is this, when a resident exercises his or her

choice mobility or right to move option, does the subsidy remain on the property or leave with the resident and his or her family? how does that work? who wants to take >> the subsidy will remain on the project.

it is a project based subsidy, so as this family exercises its right to move, the housing authority would issue that family denent based assistance to do so, and the project based voucher assistance would continue. the unit would remain under the

actually that is the last question that we've had posted from our participants today. so what we'd like to do is just wrap it up. i'd like to thank greg and diane and margaret for helping and i want to remind those of you that are participating in

the webcast today that this webcast will be archived and posted on www.hud.gov/rad. so without any further questions, we'll wrap up webcast and encourage you to tune in to the next webcast or actual multiple webcasts that we have on public housing on mod

rehab and on rent supp and rap. thank you very much. captioning provided by