The Office of Multifamily Housing at HUD released new procedures related to budget-based rent adjustments, which increase replacement reserve deposits for properties assisted under Section 202 Project Rental Assistance Contracts (PRACs).
In July of 2019, HUD temporarily suspended approval but has now resumed routine processing and approval. Owners who intend to apply for a RAD conversion within the next year should indicate this in their cover letter for any budget-based rent increase request. HUD asks that these requests be submitted 120 days prior to the annual contract renewal or amendment effective date.
Questions should be referred to the property’s Account Executive or Asset Management leadership in the field offices.