On June 29, 2018, HUD published a list of allowable owner-adopted preferences for RAD properties, including direction for owners wanting to establish an owner-adopted elderly preference. The guidance highlights current HUD policy located in the RAD Notice (PIH 2012-32[HA] H-2017-03, REV-3), HUD Handbook 4350.3, REV-1, the Section 8 Statute, the regulation at 24 CFR §5.655, and Housing Notice 2013-21.
The guidance clarifies that owners of RAD properties are not permitted to establish an elderly “designation” (i.e., a set-aside of units for the elderly) because the Section 8 statute, unlike the statute governing public housing, does not authorize designations. However, owners of RAD properties may adopt a selection “preference” for elderly individuals and/or elderly families, which permits those applicants to be selected from the waiting list and housed before other eligible families. Any preference adopted as part of the conversion that will alter the occupancy of the property is subject to an upfront civil rights review during the RAD conversion process. Certain preferences also require approval from HUD’s Multifamily Field Office, as described below.
Owner-Adopted Preferences That Do Not Require HUD Multifamily Field Office Approval
Project owners may adopt a preference for any or all of the populations 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; and/or
- Single persons with disabilities over other single persons.
Preferences That Require HUD Multifamily Field Office Approval
As stated in §V.b of Housing Notice 2013-21 (issued July 25, 2013), Section 8 project owners may establish an owner-adopted preference for populations other than those noted above but must obtain local HUD office approval to do so. Examples include but are not limited to:
- Elderly families;
- Near-elderly single persons; and/or
- Near-elderly families
RAD Conversions Prior to June 15, 2015
RAD conversions prior to Revision-2 of the RAD Notice (PIH 2012-32) may have established the statutory elderly preference following 24 CFR 880.612a. In addition, properties may have incorrectly identified and implemented an elderly “preference” as an elderly “designation.” This is because 24 CFR 880.612a was not included in Appendix I of the RAD Notice prior to June 15, 2015. Owners who have done either are required to review their policies and, if necessary, modify them to comply with RAD Notice-Revision 3, 24 CFR 5.655(c), and Housing Notice 2013-21.
Fair Housing Requirements for Preferences
An owner may not adopt a preference that would have the purpose or effect of substantially delaying or denying the participation of other eligible families in the program on the basis of race, color, national origin, religion, sex, disability, or familial status, or would create or perpetuate segregation.
Identifying Preferences in the Tenant Selection Plan
Owners must also include a description of any preference in use at the property. This includes the regulatory approved preferences found at 24 CFR 5.655(c)(5) and any preferences that have been approved by HUD (e.g., elderly families, near-elderly single persons, near-elderly families). Owners must inform all applicants about available preferences and give all applicants an opportunity to show that they qualify for available preferences. This notification to applicants must be made when a new preference is implemented.