Navigating BABA Compliance in RAD and Public Housing: Strategic Considerations for Waivers
The Build America, Buy America Act (BABA) introduces significant procurement and compliance challenges for federally funded infrastructure projects. Within HUD programs, particularly the Rental Assistance Demonstration (RAD) initiative, understanding how BABA applies is critical for development teams, housing authorities, and private-sector partners. Complicating matters is a broken link on the HUD waiver portal (https://babawaiver.hud.gov/s/) that directs users to “Information on general applicability waivers,” which currently leads nowhere following the recent HUD website overhaul. This paper outlines BABA’s scope, identifies available waiver types, and provides practical guidance for navigating compliance successfully.
RAD Conversions and BABA
RAD is a tool to preserve public housing by converting units to long-term Section 8 rental assistance. Although RAD itself does not provide direct funding, many conversions leverage HUD resources—such as HOME, CDBG, or Capital Fund dollars—to support rehabilitation or new construction. When these funds are used for infrastructure activities and are obligated after May 14, 2022, BABA applies. Key triggers for BABA compliance in RAD projects include:
- The use of HUD funds post-May 2022 for physical improvements;
- A scope of work encompassing infrastructure (defined as rehab, new construction, or modernization);
- Mixed-finance transactions where at least one funding source triggers BABA compliance.
Waiver Types and Strategic Use
HUD acknowledges the complexities of implementing BABA and has developed waiver pathways that may apply to RAD and public housing projects. Several public interest waivers have been issued and, as policy analysts noted during a recent NAHRO conference, some do not require formal application but must be well-documented. According to the HUD waiver portal and NAHRO subject matter experts:
- Public Interest Waivers (Do Not Require Application; Must Be Documented)
– Small Grant Waiver: Applies to grants below a certain threshold (e.g., $250,000), where the administrative burden of compliance would outweigh its benefit.
– De Minimis Waiver: Permits a small percentage (typically up to 5%) of non-domestic, incidental materials to be used.
– Project-Specific Public Interest Waiver: May be appropriate if BABA compliance would delay or jeopardize project delivery. Though project-specific, this waiver does not require a formal submission but must be justified and documented internally. - Unreasonable Cost Waiver (Application Required)
– Can be sought when domestic sourcing significantly inflates project costs. A detailed cost comparison and justification are necessary. - Quality Issues Waiver (Application Required)
– Intended for situations where U.S.-made materials do not meet the project’s technical or performance requirements. These waivers are difficult to obtain and require strong documentation, including procurement records and technical assessments. - De Minimis Waiver (General Applicability)
– A broadly applicable, blanket public interest waiver that facilitates compliance by covering incidental products in most projects.
Navigational Strategies for Housing Authorities and Developers
Start by clearly identifying infrastructure elements in your project to determine whether BABA applies. Engage vendors early to confirm domestic sourcing options and identify risks. Maintain waiver readiness by keeping thorough documentation, procurement records, cost analyses, supply chain constraints, and professional opinions – all of which support the case for exemption where needed. Stay up to date on HUD guidance and evolving policies, especially regarding transitional and blanket waivers. This is a dynamic regulatory environment, and the current Administration continues to explore ways to minimize the regulatory and cost burden for affordable housing development.
Conclusion
Let’s face it: BABA compliance is yet another obstacle the affordable housing industry arguably should not have to face. Until a full Blanket Public Interest Waiver is granted for affordable housing, the sector remains bound by these requirements. That said, by proactively identifying funding triggers, planning procurement in advance, and strategically using available waivers, PHAs and their partners can ensure federal compliance without sacrificing project viability. Staying informed and coordinated with HUD’s evolving guidance will remain critical.
For more information on how D3G can support your BABA waiver process, contact our team.
