Many property owners and managers, such as CCH, are tasked to find adequate financing to renovate existing properties to keep them decent, safe and up to code. A bigger challenge is often having the ability to maintain affordable rents while necessary repairs are made. At best, this can be a very difficult juggling act. In the past, subsidies might be available through a one-year contract with a limited funding level. This made it difficult to complete major repairs in a timely manner.
The good news is that some new options are available. Properties may now qualify for a conversion through a Rental Assistance Demonstration, or RAD. HUD recently increased available funding to convert short term Section 202 Project Rental Assistance Contracts (PRAC) to long-term RAD Section 8 contracts, stabilizing the way in which property operations and repairs may be funded.
Development Project Manager Jevon Allen was successful in completing the close of financing for only the second RAD for PRAC conversion on the West Coast and the first full rehabilitation conversion through HUD for CCH’s Antioch Rivertown community in Antioch, CA.
“We were pleased to be able to work with HUD in bringing this financing to a close,” Jevon said. “There was a lot of required detail in completing the necessary paperwork, but it all worked out for everyone’s benefit. This is most especially a win for our residents who will benefit from the property upgrades.”
Among the benefits of a RAD conversion are:
- The new contract provided through RAD places the property under a long-term Section 8 contract (typically 15-20 years) that assures its affordability during this period, enabling the building units to remain subsidized and protected as affordable housing,
- The property is provided funding for repairs and modernization to ensure building safety and upkeep, making residents feel safer and more at home;
- Residents are comforted knowing they can continue to pay affordable rent, typically set at 30 percent of a household’s adjusted income.
Construction at Antioch Rivertown has begun and is slated for completion later this year. The financing will enable the property to undergo full electrical and mechanical repairs, including an updated elevator modernization, a more efficient HVAC system, a new roof and other building amenities and updates. During the process, CCH will work closely with residents to ensure a smooth operation and that their needs are met while construction is underway.
“The best part is that we will be able to maintain the affordable rents our residents depend on while making the needed repairs and renovations,” Jevon says.
