Understanding the technical language behind a repositioning or RAD conversion is essential when planning one. These five key terms are foundational to navigating the landscape of affordable housing consulting. Here’s what every Public Housing Authority (PHA) and affordable housing developer should know and how D3G can help.
1. Repositioning
Repositioning is the process of transitioning from traditional public housing operating subsidies and capital fund-based funding to the Housing Choice Voucher (Section 8) platform. This type of funding shift, often referred to as RAD repositioning, can provide more stable and predictable annual funding. However, repositioning is not one-size-fits-all. Each PHA must consider several key factors:
- Organizational and staffing capacity
- Current and projected capital needs
- Financial feasibility of the transition
D3G offers repositioning advisory services to help PHAs determine whether repositioning is a sound and sustainable option based on their portfolio, goals, and funding outlook.
2. RAD Rents
RAD rents refer to the initial rent levels established for public housing properties converting through the RAD program. These are calculated using a property’s existing operating subsidy and capital funds and are designed to be cost-neutral. In many cases, the calculated RAD rent may not fully support a project’s financing needs. That’s where tools like RAD/Section 18 Blends, utility savings, and other HUD incentives come into play. D3G’s rental assistance demonstration experts help PHAs evaluate their eligibility for:
- RAD/Section 18 Blend arrangements
- RAD/Section 18 Construction Blend strategies
- Utility allowance savings, rent increases
- Necessary CHAP updates of RAD rents
Our RAD repositioning team works closely with PHAs to identify practical rent-boosting options that improve project feasibility.
3. DDTF (Demolition Disposition Transition Funds)
DDTF is a HUD funding tool used to support repositioning and Section 18 transactions. When units are removed from PIC after Section 18 approval, HUD may allocate up to five years’ worth of capital funds as DDTF. This funding can be used to:
- Supplement project financing as a funding source
- Increase RAD rents for RAD/Section 18 Blends (often up to 110% of Fair Market Rent)
- Support smaller PHAs with limited local resources
D3G provides Section 18 consulting and RAD/Section 18 Blend support to help calculate DDTF eligibility and integrate this funding into repositioning strategies.
4. Commitment to Enter into a HAP Contract (CHAP)
HUD issues a CHAP after approving a RAD application. It lists the initial RAD rents and locks them in for that transaction. This can be particularly important if public housing operating subsidies or capital fund levels are expected to decline.
By securing a CHAP early, PHAs can protect against future funding risk and move forward with a clearer financing plan. D3G’s consulting team helps PHAs navigate the RAD application process and lock in favorable rent levels through well-timed submissions.
5. Capital Needs Assessment (CNA)
A Capital Needs Assessment is a third-party report that outlines a property’s short-term and long-term physical needs. It includes accessibility compliance (504/UFAS) and energy performance recommendations. A CNA isn’t just a compliance requirement—it’s a planning tool that supports repositioning decisions and informs budget development. It is also critical in LIHTC planning and HUD’s environmental review process.
D3G provides full CNA services and helps PHAs and developers interpret the results. Our team turns CNA data into actionable strategies that align with HUD expectations, long-term sustainability goals, and funding timelines.
Explore Repositioning with D3G
Understanding these five terms is the first step in planning a successful repositioning strategy. Whether you’re evaluating a RAD/Section 18 Blend, applying for a CHAP, or reviewing your CNA, D3G’s consulting experts can guide the process. Our work supports:
- PHA repositioning feasibility
- RAD transactions
- Section 18 and Section 22 consulting
- Restore Rebuild feasibility
- Layered strategies that include RAD, LIHTC, and energy improvements
Looking to get started? Contact our team or learn more about our Affordable Housing Consulting Services.