Blog December 18, 2020

Meeting the challenges of RAD conversion for public housing agencies

By Chris Vroman

Through the utilization of MRI Software’s technology and consulting, Saint Paul Public Housing Agency (PHA) successfully closed its Rental Assistance Demonstration (RAD) transaction, the largest RAD conversion in the history of the program, converting 3,836 units to RAD Project-based Rental Assistance (PBRA). This historic conversion is a huge achievement for both Saint Paul PHA and MRI, and it’s been a long process to arrive at this point. Let’s take a look at how Saint Paul was able to complete this conversion in order to ensure the future stability of their finances and provide top-of-the-line service for all of their residents.

An introduction

Saint Paul PHA has been a longtime believer in the traditional Public Housing and Housing Choice Voucher (HCV) programs. They’re a housing agency with about 9,000 affordable housing units – about 4,300 traditional LIPH and about 4,900 HCV. Their mission statement is to help families and individuals with low incomes achieve greater stability and self-reliance by providing safe, affordable and quality housing and links to services.

The promise of RAD and the need to convert

RAD was created in order to give public housing authorities a precious tool to preserve and improve public housing properties and address the $26 billion nationwide backlog of deferred maintenance. RAD also gives owners of three HUD “legacy” programs (Rent Supplement, Rental Assistance Payment, and Section 8 Moderate Rehabilitation) the opportunity to enter into long-term contracts that facilitate the financing of improvements.

The biggest motivator for Saint Paul PHA to start the RAD conversion were the numbers, which indicated that their capital fund (and operating fund) history over 20 years was trending down. Saint Paul knew that the traditional funding vehicle was severely challenged. While this served as an indication that a conversion might be necessary, the call wasn’t officially made in-house until the Trump Administration’s 2019 proposed capital fund budget was reduced to $0. The year before, in 2018, the proposed budget was a 60% reduction from the prior year. This got the attention of Saint Paul leadership, who quickly begin making inquiries about RAD.

Why MRI Software?

Saint Paul PHA began the conversion to RAD in 2018. Given the more complex compliance and regulatory requirements surrounding the combination of Public Housing and Section 8 programs, they decided to procure and adopt a more state-of-the-art technology platform to oversee its portfolio. Saint Paul PHA selected MRI Software, a leading provider of technology for public housing authorities and owner-operators of affordable housing. MRI provides the PHA with the following:

  • Housing management, including extensive tools to simplify the PHA’s process with HUD’s PIC system (Public and Indian Housing Information Center),
  • SaaS services, allowing PHA staff to access their systems and data remotely,
  • Ongoing software maintenance and software, and
  • RAD conversion services.

How the conversion was completed

For their near portfolio-wide RAD conversion, MRI assisted Saint Paul PHA by providing services such as project management for oversight of the conversion and ensuring alignment with agency staff goals and timelines set forth. Saint Paul also utilized MRI’s technical data services to convert, configure, and prepare their systems for the transition to the new subsidy and tracking methodology. Functional assistance with handling waiting lists and validation calculations for accuracy was provided, as was dedicated assistance for the initial Multi-Family voucher submissions. All of this resulted in continued support through voucher acceptance and signature collection for all required documentation.

Throughout the entire process, MRI had staff on-site to assist, especially during the biggest push to complete certifications. The team was agile and accepted staff recommendations for how to streamline the process in light of the size of Saint Paul’s conversion, and they had a dedicated MRI staff member that they could directly access for questions and fixes.

Through their historic conversion to RAD Project-based Rental Assistance, Saint Paul PHA now has the stability and agility to stay ahead of the curve and tackle any incoming financial challenges in the public housing space. If your housing agency is considering a RAD conversion, contact us to learn more about MRI’s software and services and how we can help you navigate this process.

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