RENTAL 

ASSISTANCE 

DEMONSTRATION

HUD Needs to Take 

Action to Improve 

Metrics and Ongoing 

Oversight

Report to the Ranking Member, 

Committee on Financial Services, 

House of Representatives

February 2018

GAO-18-123

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-18-123, a report to the 

Ranking Member, Committee on Financial 

Services, House of Representatives

February 2018

RENTAL ASSISTANCE DEMONSTRATION

HUD Needs to Take Action to Improve Metrics and 

Ongoing Oversight

What GAO Found

The Department of Housing and Urban Development (HUD) put procedures in 

place to evaluate and monitor the impact of conversion of public housing 

properties under the Rental Assistance Demonstration (RAD) program. RAD’s 

authorizing legislation requires HUD to assess and publish findings about the 

amount of private-sector leveraging. HUD uses a variety of metrics to measure 

conversion outcomes. But, the metric HUD uses to measure private-sector 

leveraging—the share of private versus public funding for construction or 

rehabilitation of assisted housing—has limitations. For example, HUD’s 

leveraging ratio counts some public resources as leveraged private-sector 

investment and does not use final (post-completion) data. As a result, HUD’s 

ability to accurately assess private-sector leveraging is limited. 

HUD does not systematically use its data systems to track effects of RAD 

conversions on resident households (such as changes in rent and income, or 

relocation) or monitor use of all resident safeguards. Rather, since 2016, HUD 

has required public housing agencies (PHA) or other post-conversion owners to 

maintain resident logs and collect such information. But the resident logs do not 

contain historical program information. HUD has not developed a process for 

systematically reviewing information from its data systems and resident logs on 

an ongoing basis. HUD has been developing procedures to monitor compliance 

with some resident safeguards—such as the right to return to a converted 

property—and begun a limited review of compliance with these safeguards. 

However, HUD has not yet developed a process for monitoring other 

safeguards—such as access to other housing voucher options. Federal internal 

control standards require agencies to use quality information to achieve 

objectives, and obtain and evaluate relevant and reliable data in a timely manner 

for use in effective monitoring. Without a comprehensive review of household 

information and procedures for fully monitoring all resident safeguards, HUD 

cannot fully assess the effects of RAD on residents. 

RAD authorizing legislation and the program’s use agreements (contracts with 

property owners) contain provisions intended to help ensure the long-term 

availability of affordable units, but the provisions have not been tested in 

situations such as foreclosure. For example, use agreements between HUD and 

property owners specify affordability and use restrictions that according to the 

contract would survive a default or foreclosure. HUD officials stated that HUD

intends to develop procedures to identify and respond to risks to long-term 

affordability, including default or foreclosure in RAD properties. However, HUD 

has not yet done so. According to federal internal control standards, agencies 

should identify, analyze, and respond to risks related to achieving goals and 

objectives. Procedures that address oversight of affordability requirements would 

better position HUD to help ensure RAD conversions comply with program

requirements, detect potential foreclosure and other risks, and take corrective 

actions.

View GAO-18-123. For more information, 

contact Daniel Garcia-Diaz at (202) 512-8678

or garciadiazd@gao.gov

Why GAO Did This Study

HUD administers the Public Housing 

program, which provides federally 

assisted rental units to low-income 

households through PHAs. In 2010, 

HUD estimated its aging public 

housing stock had $25.6 billion in 

unmet capital needs. To help address 

these needs, the RAD program was 

authorized in fiscal year 2012. RAD 

allows PHAs to move (convert) 

properties in the public housing 

program to Section 8 rental assistance

programs, and retain property 

ownership or transfer it to other 

entities. The conversion enables PHAs

to access additional funding, including 

investor equity, generally not available 

for public housing properties.

GAO was asked to review public 

housing conversions under RAD and 

any impact on residents. This report 

addresses, among other objectives,

HUD’s (1) assessment of conversion 

outcomes; (2) oversight of resident 

safeguards; and (3) provisions to help 

preserve the long-term affordability of 

units. GAO analyzed data on RAD 

conversions through fiscal year 2017; 

reviewed a sample of randomly 

selected, nongeneralizable RAD 

property files; and interviewed HUD 

officials, PHAs, developers,

academics, and affected residents.

What GAO Recommends

GAO makes five recommendations to 

HUD intended to improve leveraging

metrics, monitoring of the use and 

enforcement of resident safeguards,

and compliance with RAD 

requirements. HUD agreed with our 

recommendations to improve metrics 

and build on existing oversight. 
Page i GAO-18-123 Rental Assistance Demonstration

Letter 1

Background 4

Most RAD Conversions Involved Construction and Tax Credits, 

but HUD’s Leveraging and Construction Metrics Are Limited 8

HUD Has Not Systematically Analyzed Household-Level Data on 

Residents in RAD Conversions or Monitored Implementation of 

Some Resident Safeguards 19

PHAs Identified Benefits and Challenges of RAD Participation 28

Strength of Protections Intended to Preserve Affordability Is 

Unknown and HUD Does Not Have Procedures to Address 

Preservation Risks 32

Conclusions 38

Recommendations for Executive Action 39

Agency Comments and Our Evaluation 40

Appendix I Objectives, Scope, and Methodology 43

Appendix II HUD’s Reported Leverage Ratios and Our Recalculation Estimates 48

Appendix III RAD Resident Safeguard and Monitoring Requirements 55

Appendix IV Comments from the Department of Housing and Urban Development 59

Appendix V GAO Contact and Staff Acknowledgments 65

Tables

Table 1: Description and Implementation of Selected Rental 

Assistance Demonstration (RAD) Resident Safeguards 25

Table 2: Financial Source Data Collected by HUD as of 

September 30, 2017 48

Table 3: Financial Cost (Uses) Data Collected by HUD as of 

September 30, 2017 48

Contents
Page ii GAO-18-123 Rental Assistance Demonstration

Table 4: RAD Financing Source Fields That HUD Uses as Inputs 

for Its Leverage Ratio Calculation 50

Table 5: HUD Financial Sources (uncategorized) 50

Table 6: HUD Financial Sources (recategorized by GAO) 51

Table 7: GAO-Adjusted Leverage Ratio for RAD as of June 2017, 

with Recategorized Financial Sources 52

Table 8: GAO-Adjusted leverage Ratio for RAD as of June 2017, 

That Excludes Federal Funding Sources, and Including 

Tax Credits 52

Table 9: GAO-Calculated Private-Sector Leveraging Ratio for 

RAD, as of June 2017 53

Table 10: RAD Resident Safeguards and Monitoring 

Requirements 55

Figures

Figure 1: Number of Transactions Closed and Converted Rental 

Assistance Demonstration Units by Fiscal Year 7

Figure 2: HUD-Reported 2017 Leverage Ratio and GAO-Adjusted 

Leverage Ratio Estimates for RAD Using Recategorized 

Financial Sources, as of June 2017 16

Figure 3: Hypothetical Example of Monthly Contribution to Rent by 

Residents under Rental Assistance Demonstration 

Housing Assistance Payment Contract or RAD Use 

Agreement 34
Page iii GAO-18-123 Rental Assistance Demonstration

Abbreviations

CDBG Community Development Block Grant

EID earned income disregard

FSS Family Self-Sufficiency

FHA Federal Housing Administration

HAP contract Section 8 Housing Assistance Payment contract

HOME HOME Investment Partnerships Program

HUD Department of Housing and Urban Development

IMS/PIC Inventory Management System/Public and Indian 

 Housing Information Center

IRS Internal Revenue Service

LIHTC Low-Income Housing Tax Credit

MTW Moving To Work

PBRA Project-Based Rental Assistance

PBV Project-Based Voucher

PD&R Office of Policy Development and Research

PHA public housing agency

RAD Rental Assistance Demonstration

ROSS-SC Resident Opportunity and Self-Sufficiency Service 

 Coordinator

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-18-123 Rental Assistance Demonstration

441 G St. N.W.

Washington, DC 20548

February 20, 2018

The Honorable Maxine Waters

Ranking Member

Committee on Financial Services

House of Representatives

Dear Ms. Waters,

In 2011, the Department of Housing and Urban Development (HUD) 

reported that its public housing stock had approximately $25.6 billion in 

backlogged capital needs, with an average repair need of about $23,365 

per unit, and according to HUD these figures have increased since then.1

HUD’s Rental Assistance Demonstration (RAD) program was created, in 

part, to address these capital needs. Under the traditional public housing 

program, public housing agencies (PHA) generally cannot use private 

funding sources to address the capital needs of their properties.2

Furthermore, HUD estimates 10,000 units of public housing are 

demolished or disposed of each year due to disrepair.3 RAD allows PHAs 

to access other programs that create incentives for private investments, 

such as the Low-Income Housing Tax Credit (LIHTC) program or insured 

loans available through the Federal Housing Administration (FHA), or 

 1

HUD contracted with Abt Associates, Inc. to report on capital needs, which is the most 

recent assessment of its kind. See Meryl Finkel, Ken Lam, et al., Capital Needs in the 

Public Housing Program (Cambridge, Mass.: Nov. 24, 2011).

2

Under the Capital Fund Financing Program, a PHA may borrow private capital to make 

improvements to public housing properties and pledge, subject to the availability of 

appropriations, a portion of its future year annual capital funds to make debt service 

payments for a bond or conventional bank loan transaction. But according to HUD and 

PHAs, the financing program does not provide access to an amount required to address 

the deferred capital needs of most properties because it is subject to future Capital Fund 

appropriations. About 3,300 PHAs administer about 1.2 million units of public housing 

nationally. PHAs also administer other HUD programs that provide housing assistance for 

low-income households, including Section 8 voucher programs.

3

Separate from RAD, the demolition and disposition of public housing, which may include 

transferring the title (by sale), is authorized under Section 18 of the Housing Act of 1937, 

as amended. 42 U.S.C. § 1437p. HUD promulgated 24 C.F.R. Part 970, detailing the 

administrative steps required to perform demolition or disposition activity in accordance 

with the act. 

Letter
Page 2 GAO-18-123 Rental Assistance Demonstration

conventional loans to address capital needs.4 In RAD, properties move 

(convert) from the public housing program into Section 8 rental assistance 

programs. RAD also permits PHAs to transfer ownership of the public 

housing property as long as ownership or control of the Section 8 

assisted units is by a public or nonprofit entity, although PHAs may elect 

to retain ownership. If approved by HUD, the PHA can transfer the public 

housing property to a for-profit entity to facilitate private investment 

through tax credits provided that the PHA preserves its interest in the 

property.

You asked us to examine the public housing component of the RAD 

program to determine if it is achieving the goals it was enacted to 

accomplish, including the long-term preservation of affordable units and 

protection of residents. This report examines (1) HUD’s assessment of 

the physical and financial outcomes of RAD conversions to date; (2) how 

RAD conversions affected residents and what safeguards were in place 

to protect them, including while temporarily relocated; (3) what 

challenges, if any, PHAs faced in implementing RAD; and (4) the extent 

to which RAD provisions are designed to help preserve the long-term 

affordability of units.

To examine physical and financial outcomes in properties, we obtained 

and analyzed RAD data on conversions as of September 30, 2017. We 

assessed the reliability of the data by verifying that data fields—such as 

the total number of units converted, dates for conversions, and financial 

information—were reasonable and consistent with our data request, and 

by reviewing internal HUD procedures and data dictionaries, and 

determined that the data were sufficiently reliable for the purposes of 

describing rehabilitation and new construction in RAD projects and 

evaluating RAD leveraging metrics. In addition, we obtained HUD 

documentation to review the methodology used to calculate RAD 

leverage metrics. We also reviewed RAD documentation and selected 

conversion files. We randomly selected a nongeneralizable sample of 

files for converted properties (31 files closed as of July 19, 2017) that 

planned to incur construction costs (undergo rehabilitation or new 

 4

The LIHTC program, established under the Tax Reform Act of 1986, is the largest source 

of federal assistance for developing affordable rental housing. LIHTC encourages privateequity investment in low-income rental housing through tax credits. The program is 

administered by the Internal Revenue Service (IRS) and allocating agencies, which are 

typically state or local finance agencies established to meet affordable housing needs of 

their jurisdictions. GAO, Low-Income Housing Tax Credit: Actions Needed to Strengthen 

Oversight and Accountability, GAO-17-784T (Washington, D.C.: Aug. 1, 2017).
Page 3 GAO-18-123 Rental Assistance Demonstration

construction). We reviewed published RAD evaluations and metrics. We 

interviewed PHAs at each of eight locations we visited and developers at 

five of those locations (some PHAs acted as the developer). We selected 

site visit locations to include a range of PHA sizes from small to large, 

and PHAs that proposed a range of construction costs for RAD 

conversion (from no construction costs to $594 million in construction 

costs). Using a nonprobability sample based on PHA size, RAD subsidy 

type, planned rehabilitation and resident relocation, number and size of 

RAD transactions, transaction closing dates, construction costs, and 

location we selected and spoke with an additional 10 PHAs by telephone 

about HUD postclosing monitoring. We also reviewed HUD’s postclosing

procedures and interviewed HUD officials about their processes.

To determine how RAD affected residents in converted units, we 

analyzed HUD public housing and Section 8 household data before and 

after conversion including demographic characteristics of residents and 

changes in rent, income, and household location. We determined that 

some statistics were sufficiently reliable for the purpose of describing 

some characteristics of RAD households, while others were not. We 

discuss our assessment of household data reliability later in this report. 

Further, for additional information on our data reliability assessment and 

determination see appendix I. To describe safeguards for residents, we 

reviewed legal requirements in HUD notices and HUD documentation on 

RAD monitoring and compliance procedures. We also reviewed selected 

conversion files to help determine how HUD implemented safeguards and 

interviewed HUD about its implementation of resident safeguards. Finally, 

we held focus groups with residents during our site visits to better 

understand any effects on their living conditions.

To determine challenges PHAs faced in implementing RAD, we reviewed 

HUD guidance and related documents for PHAs in the program. We also 

interviewed 8 PHAs during our site visits and spoke with another 10 PHAs 

by telephone about the benefits and challenges of participating in the 

RAD program.

To examine provisions designed to help preserve long-term affordability 

of units, we reviewed the RAD authorizing statute and amendments and 

HUD notices.5 For a nongeneralizable sample of 31 randomly selected 

 5

In 2011, Congress passed legislation including RAD. It has since been amended multiple 

times. It can be found as a note to 42 U.S.C. §1437f.
Page 4 GAO-18-123 Rental Assistance Demonstration

properties, we examined templates for contractual agreements for RAD 

closings and analyzed closing contracts to determine if agreements 

matched program requirements. We interviewed HUD staff and staff of 18 

PHAs (8 site visit PHAs and 10 by teleconference) to obtain their views 

on the potential strengths or weaknesses of preservation provisions in the 

case of default or foreclosure.

We conducted this performance audit from February 2016 to February 

2018 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

The RAD program was authorized by Congress and signed into law by 

the President in November 2011 under the Consolidated and Further 

Continuing Appropriations Act, 2012 with amendments in 2014, 2015, 

2016, and 2017.6 The RAD program consists of two components. The 

first component of the RAD program—and the focus of our review—

provides PHAs the opportunity to convert units subsidized under HUD’s 

public housing program and owned by the PHAs to properties with longterm (typically, 15–20 years) project-based voucher (PBV) or projectbased rental assistance (PBRA) contracts. These are two forms of 

Section 8 rental assistance that tie the assistance to the unit to provide 

subsidized housing to low-income residents.7 In a RAD conversion, PHAowned public housing properties can be owned by the PHA, transferred to 

new public or nonprofit owners, or transferred to private, for-profit owners 

when necessary to access LIHTC financing, if the PHA preserves its 

 6

Pub. L. No. 112-55, 125 Stat. 552, 673 (2011); Consolidated Appropriations Act, 2014, 

Pub. L. No. 113-76, § 239, 128 Stat. 5, 635 (2014); Consolidated and Further Continuing 

Appropriations Act, 2015, Pub. L. No. 113-235, § 234, 128 Stat. 2130, 2757 (2014); 

Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, § 237, 129 Stat. 2242, 2897 

(2015); and Consolidated Appropriations Act, 2017, Pub. L. No. 115-31, § 239, 131 Stat. 

135, 789 (2017).

7

PBV contracts are between a PHA and the property owner, while PBRA contracts are 

between HUD and the property owner. HUD provides subsidies to PHAs to operate and 

maintain public housing units. The public housing, PBV, and PBRA programs serve 

eligible low-income families and individuals, including the elderly and persons with 

disabilities.

Background
Page 5 GAO-18-123 Rental Assistance Demonstration

interest in the property in a HUD-approved manner.8 The second 

component of RAD converts privately owned properties with expiring 

subsidies under old rental assistance programs to PBV or PBRA in order 

to preserve affordability and encourage property rehabilitation.9

The goals of the RAD program include preserving the affordability of 

federally assisted rental properties and improving their physical and 

financial condition. Specifically, postconversion owners (PHAs, nonprofits, 

or for-profit entities) can leverage the subsidy payments under the newly 

converted contracts to raise capital through private debt and equity 

investments, or conventional private debt, to make improvements. The 

RAD program provides added flexibility for PHAs to access private and 

public funding sources to supplement public housing funding. These 

financing sources may include debt financing through public or private

lenders; mortgage financing insured by FHA; PHA operating reserves; 

replacement housing factor funds; seller or take-back financing; deferred 

developer fees; equity investment generated by the availability of 4 

percent and 9 percent LIHTC; or other private or philanthropic sources.10

PHAs also may pursue various options for their conversions, which often 

depend on property needs and available financing, including property 

rehabilitation or new construction. Additionally, PHAs may undertake 

conversion involving no property rehabilitation or new construction to 

meet certain financial goals or for future rehabilitation or new 

construction, as long as the PHA can demonstrate to HUD that the 

property does not need immediate rehabilitation and can be physically 

 8

The LIHTC program encourages private-equity investment in low-income housing 

through tax credits and is administered by IRS and state or local housing finance 

agencies. Investors in projects that provide affordable housing can claim a tax credit. The 

9 percent tax credit can be claimed for financing representing a 70 percent subsidy for 

new construction not receiving other federal subsidies, while the 4 percent credit can 

generally be claimed for financing representing a 30 percent subsidy for new construction 

or rehabilitation.

9

GAO-14-402. 

10Replacement Housing Factor grants consist of Capital Fund grants awarded to PHAs 

that have removed units from inventory for the sole purpose of developing new public 

housing units. Seller take-back financing typically consists of a PHA lending the value of 

the housing units conveyed to the ownership entity (a limited liability corporation) in the 

form of a note subordinated to any first-mortgage financing. Deferred developer fees 

consist of a PHA lending or contributing a portion of its developer fee back to the project to 

be repaid from available cash flow.
Page 6 GAO-18-123 Rental Assistance Demonstration

and financially maintained for the term of the Section 8 Housing 

Assistance Payment contract (HAP contract).

The RAD authorizing legislation and RAD Notice also specify 

requirements for ownership and control of converted properties. That is, 

converted properties must have public or nonprofit ownership or control, 

with limited exceptions. The RAD authorizing legislation, RAD Notice, 

HAP contracts, and RAD Use Agreement also establish procedures to 

help ensure that public housing remains a public asset should challenges 

arise, such as default, bankruptcy, or foreclosure.

Oversight of RAD conversion and properties is primarily divided among 

three HUD offices. The Office of Recapitalization is responsible for 

administering the conversion process but generally does not oversee 

converted properties. Before conversion, the Office of Public and Indian 

Housing oversees the properties. After conversion, oversight remains with 

Public and Indian Housing for properties that convert to PBV contracts 

and transfers to the Office of Multifamily Housing Programs for PBRA.11

The RAD program has been implemented and expanded in phases. 

Since its authorization, the RAD unit cap gradually increased from 60,000 

units in 2011 to 225,000 units in May 2017. The RAD program is currently 

fully subscribed with all 225,000 units allocated. As of September 30, 

2017, 689 conversions were closed that involved a total of 74,709 units 

(see fig. 1 for a breakdown by fiscal year). Additionally, 706 conversions 

involving 79,078 units were in the process of structuring conversion plans. 

The remaining conversions under the cap were allocated to specific 

properties and in the process of having commitments issued or reserved 

under multi-phase or portfolio awards, according to HUD officials. 

 11Other HUD offices may be involved in the conversion process including the Office of Fair 

Housing and Equal Opportunity, Office of Community Planning and Development, Office 

of General Counsel, or Federal Housing Administration.
Page 7 GAO-18-123 Rental Assistance Demonstration

Figure 1: Number of Transactions Closed and Converted Rental Assistance 

Demonstration Units by Fiscal Year

RAD conversions begin with the submission of an application by PHAs 

after which they are notified of selection. The PHA is then required to 

submit a financing plan within 180 days or a later deadline based on the 

nature of the financing proposed.

A RAD conversion is considered closed when the HAP contract is signed 

and financial documents are executed. The properties are considered 

converted to Section 8 assisted housing on the effective date of the HAP, 

which is generally the first day of the following month. Once the RAD 

conversion is closed, the PHA or ownership entity can move forward with 

its submitted proposals or RAD-related rehabilitation or new construction 

and is responsible for complying with RAD requirements and associated 

contracts. In some cases, rehabilitation can take place in advance of 

conversion closing if public housing funds are being used.
Page 8 GAO-18-123 Rental Assistance Demonstration

Most RAD conversions involved some type of construction. Our analysis 

of HUD data showed that as of September 30, 2017

• 417 of 689 closed conversions (61 percent) involved planned 

rehabilitation to the property, 86 (12 percent) new construction, and

186 (27 percent) no construction; and 

• 361 of 706 active RAD conversions (51 percent) involved planned 

rehabilitation, 89 (13 percent) new construction, and 256 (36 percent) 

no construction.12

HUD officials stated that they approve conversions that involve no 

immediate planned rehabilitation or new construction as long as the 

property has no immediate needs to be addressed. Such conversions 

allow PHAs to better position themselves to access additional capital to 

address future rehabilitation or construction plans.

Our review of 31 conversion files also showed that the scope of proposed 

physical changes varied among RAD conversions. For properties that 

 

12As discussed previously, a closed conversion is one in which financial documents and a 

contract for housing assistance payments have been signed or executed.

Most RAD 

Conversions Involved 

Construction and Tax 

Credits, but HUD’s 

Leveraging and 

Construction Metrics 

Are Limited

Most RAD Conversions 

Involved Property 

Rehabilitation or New 

Construction, and 

Financing Often Included 

Tax Credits

Most Conversions Involved 

Construction and Many Used 

Tax Credits
Page 9 GAO-18-123 Rental Assistance Demonstration

included scope of work narratives, physical changes included renovations 

to mitigate hazardous materials, aesthetic renovations, code and 

accessibility compliance, and construction of new buildings, among other 

changes.

Financing for RAD conversions involved multiple public and private 

sources, but many conversions used LIHTC. Our analysis of HUD data 

showed that as of September 30, 2017, 173 of 689 closed RAD 

conversions (25 percent) utilized 4 percent LIHTC, 99 (14 percent) 

utilized 9-percent LIHTC, and 416 (60 percent) did not use LIHTC.13 By 

dollar amount, major financing sources were 4 percent LIHTC at $2.4

billion; new first mortgages at $1.8 billion; and 9 percent LIHTC at $1.1 

billion.

Construction costs constituted the highest-dollar use of financing for RAD 

conversions, but not all conversions incurred construction costs, as 

discussed earlier.14 On average, construction costs per closed conversion 

were $6.4 million (ranging from no construction costs to $236 million) and 

nearly $60,000 per-unit converted to RAD. Construction costs 

represented the highest-dollar use of financing for closed RAD 

conversions at $4.4 billion followed by building and land acquisition costs, 

and developer fees. For more information on financing sources and uses, 

see appendix II.

PHA officials and developers we interviewed cited various factors that 

influence financing sources needed for RAD conversions. For example, 

property needs assessments help establish the level of rehabilitation or 

new construction that would address the capital needs of the property. In 

turn, needs assessments can derive from physical assessment results 

and incorporate federal, state, or local compliance requirements. For 

instance, rehabilitation or construction would need to address the 

accessibility requirements of the Americans with Disabilities Act and local 

building codes, among other requirements.

 13As noted earlier, the LIHTC program encourages private-equity investment in lowincome housing through tax credits. The 9 percent tax credit can be claimed for financing 

representing a 70 percent subsidy for new construction not receiving other federal 

subsidies, while the 4 percent credit generally can be claimed for financing representing a 

30 percent subsidy for new construction or acquisition cost of existing buildings.

14Construction costs include planned rehabilitation or new construction. 

Stakeholders Cited Various 

Factors Influencing Financing 

for RAD Conversions
Page 10 GAO-18-123 Rental Assistance Demonstration

PHA officials and developers we interviewed also said they had to 

consider competition or access to financing for RAD conversions. For 

example, PHAs noted that tax credit applications and other financing had 

to be competitive. Some PHAs we interviewed also noted that while the 9 

percent LIHTC provides more equity to finance low-income units 

(finances 70 percent of the costs of the units), there is more competition 

for the 9 percent LIHTC, while the 4 percent LIHTC can be automatically 

awarded for certain deals involving tax exempt bonds and federally 

subsidized projects. Thus, while some PHAs and developers might prefer 

to obtain 9 percent LIHTC, they often apply for 4 percent LIHTC to 

increase the chances of obtaining some tax credit equity. For example, 

one particular PHA that had used both 4 percent and 9 percent LIHTCs 

noted that in one transaction it had to compete against 74 applicants for 

25 available awards of 9 percent credits.

The RAD authorizing statute requires HUD to assess and publish findings 

regarding the amount of private capital leveraged as a result RAD

conversions. A leverage ratio relates the dollars other sources provide to 

the dollars a program provides to an institution or a project. HUD uses 

various quantitative, qualitative, and processing and efficiency metrics to 

measure conversion outcomes. To meet the RAD statutory requirement, 

HUD published an overall RAD leverage ratio that has fluctuated between 

19:1 and 9:1 since 2014.15 HUD’s most recent leverage ratio in fiscal year 

 15HUD’s Office of Policy Development and Research (PD&R) has an ongoing RAD 

evaluation to assess the preservation of affordable housing, the amount of private capital 

leveraged as a result of RAD conversion, and the effect of RAD conversion on unit 

residents and contracted with Econometrica, Inc. for the analysis and reporting. U.S. 

Department of Housing and Urban Development, Status of HUD’s Rental Assistance 

Demonstration (RAD) Evaluation and Results to Date (Washington, D.C.: Sept. 30, 2014).

HUD’s Metric for Financial 

Outcomes—the RAD 

Leverage Ratio—May Not 

Be Accurately Calculated, 

Partly because Final 

(Postcompletion) Financial 

Information Is Not Used

The RAD Leverage Ratio Does 

Not Reflect the Amount of 

Private-Sector Leveraging
Page 11 GAO-18-123 Rental Assistance Demonstration

2017 was 19:1, nearly double what the agency reported the prior year.16

We asked HUD officials why the leverage ratio nearly doubled between 

2016 and 2017 and received conflicting information during the course of 

our audit.

• Initially, officials noted that the ratio was intended to replicate the 

methodology used by PD&R in its September 2016 report.

• Subsequently, the officials clarified that they did not follow PD&R’s 

methodology for categorizing financial source data. Specifically, 

officials did not review or make manual adjustments to the financial 

data PHAs entered in open source fields to ensure sources actually 

represented public, private, or other funding categories when 

calculating the leverage ratio.

• Finally, they noted that they disagreed with the methodology used in 

the PD&R September 2016 report and stated that there are various 

ways to calculate leverage. For the purposes of announcing the most 

recent leverage ratio in 2017, HUD officials decided that a leverage 

ratio comparing federally appropriated public housing resources would 

reflect the amount of financing leveraged had RAD not existed.17

 16In September 2014, PD&R published a RAD report, researched and written by an 

independent contractor, which found a leverage ratio of 19:1 (investment capital for every 

dollar of public housing funds used). The overall leverage ratio was calculated by dividing 

total non-HUD funds by total HUD funds for 323 awarded RAD projects (both active and 

closed): $3.7 billion in non-HUD funds and $189 million in public housing funds. Within the 

323 awarded RAD projects, the report compared the proposed and actual financing 

sources and construction costs of 51 closed conversions. With proposed financing, the 

leverage ratio for the 51 closed conversions was 8.83:1, and with the actual financing, the 

leverage ratio was 9.20:1. U.S. Department of Housing and Urban Development, Status of 

HUD’s Rental Assistance Demonstration (RAD) Evaluation and Results to Date 

(Washington, D.C.: Sept. 30, 2014). In September 2016, PD&R published an interim 

report that found RAD had yielded almost a 9:1 leverage for 185 closed properties. The 

report identified $2.5 billion in total financing, of which $250 million came from public 

housing authority funds for the 185 closed conversions. U.S. Department of Housing and 

Urban Development, Interim Report Evaluation of HUD’s Rental Assistance 

Demonstration, (Washington, D.C.: September 2016). During fiscal year 2017, HUD 

reported a leverage ratio of 19:1. U.S Department of Housing and Urban Development, 

“Rental Assistance Demonstration Generates $4 Billion in Public-Private Investment in 

Distressed Public Housing,” press release no. 17-033 (Washington, D.C.: May 11, 2017).

17During fiscal year 2017, HUD issued a press release announcing that RAD generated 

$4 billion in public-private investment, leveraging $19 in private investment for every 

taxpayer dollar in public housing funds. U.S Department of Housing and Urban 

Development, “Rental Assistance Demonstration Generates $4 Billion in Public-Private 

Investment in Distressed Public Housing,” press release no. 17-033 (Washington, D.C.: 

May 11, 2017).
Page 12 GAO-18-123 Rental Assistance Demonstration

We found, and officials from HUD acknowledged, three limitations to the 

RAD leverage calculation. First, HUD generally had data on funding 

sources and amounts a RAD conversion proposed to use (at the time of 

its application to HUD and at the time of closing of construction financing) 

rather than data after construction is completed on funding sources and 

amounts. HUD officials stated that they were reviewing final closing 

packages to confirm that the data reflect the latest reported information 

on sources and uses of funds for each conversion at closing. However, 

sources and uses of funds and amounts at the time the RAD conversion 

is closed may differ from amounts upon completion of construction. In 

October 2017, HUD implemented procedures to verify completion of 

planned construction activities and costs, which we discuss later in this 

report.

Second, HUD’s leverage ratio, published in 2017, did not manually adjust 

funding source data to accurately account for all sources in calculating 

the leverage ratio for RAD.18 Specifically, HUD did not isolate funding 

sources that were federally appropriated, contributed by the PHA, or 

contributed by state or local municipalities to calculate leverage. For 

example, among approximately $2 billion from other financial sources, 

HUD included Moving to Work (MTW) funding (which may include public 

housing capital funds, public housing operating funds, and voucher funds) 

and tax credit equity as leveraged sources. However, these are not 

necessarily private sources, which we explain later in this report.19 As a 

result, HUD’s current calculation does not reflect the amount of privatesector leveraging. HUD calculated and published a RAD leverage ratio in 

May of 2017 using the following formula:

 18In HUD’s September 2016 interim report, Econometrica noted that HUD’s reported data 

on closed transactions do not provide detailed descriptions of “other sources”, abbreviated 

descriptions were provided in the form of notes that are not always clear or consistent, 

and data required crosswalks between applications and closed transactions to develop 

estimates for the allocation of other sources across their four categories (PHA funds, 

additional third-party loans, seller or take-back financing, and other sources). U.S. 

Department of Housing and Urban Development, Interim Report Evaluation of HUD’s 

Rental Assistance Demonstration, (Washington, D.C.: September 2016). 

19HUD’s Moving to Work demonstration program gives participating PHAs the flexibility to 

design and test innovative strategies for providing and administering housing assistance in 

their communities. To implement such strategies, participating agencies may request 

waivers of certain provisions in the United States Housing Act of 1937, as amended. 42 

U.S.C. § 1437 et seq. For example, agencies may request to waive certain provisions in 

order to combine the funding they are awarded annually from different programs into a 

single, authority-wide funding source.
Page 13 GAO-18-123 Rental Assistance Demonstration

Total leverage ratio = (total dollars from all sources – public housing dollars)

public housing dollars

To calculate the RAD leverage ratio, HUD uses some but not all financial 

source data it collects (see app. II for a list of data fields collected by 

HUD). For example, HUD mistakenly excluded data that capture private 

funds, reducing the amount of total sources in the numerator. HUD 

calculates “public housing dollars” by adding data that capture 

replacement factor funds, public housing operating reserve funds, and 

prior-year public housing capital funds. HUD considers tax credit equity, 

new first mortgages, and “other funding” data to be non-public housing 

dollars (see app. II for a list of fields in HUD’s calculation). PHAs enter a 

description and amount for other funding sources in “other funding” data 

fields (see app. II). For example, a PHA may enter a federal financial 

source in one of the open-entry “other funding” data fields, requiring a 

manual adjustment to properly account for the financial source. 20

According to HUD, additional fields were included in mid-2016 to better 

differentiate certain sources such as from the HOME Investment 

Partnerships Program (HOME) and seller take-back financing. Prior to 

this point, these financial sources were placed into “other” fields, and the 

standard resource desk report had not been updated until mid-2017 to 

include all of these fields.21

Third, HUD does not categorize and report its leveraging by private and 

public sources. According to HUD officials, informative leverage 

methodologies could calculate the ratio based on the leveraging of public 

housing program funds, the leveraging of all federally appropriated funds, 

 20Econometrica noted that HUD’s reported data on closed transactions do not provide 

detailed descriptions of “other sources.” Abbreviated descriptions are available from RAD 

applications, but they are not always clear or consistent, and applications show proposed 

financing sources and amounts that may not accurately represent the financial structure 

finalized at closing. U.S. Department of Housing and Urban Development, Interim Report 

Evaluation of HUD’s Rental Assistance Demonstration, (Washington, D.C.: September 

2016).

21The RAD Resource Desk, an Internet portal, is accessible to the public, HUD 

employees, and PHA staff. It serves as a comprehensive database that includes all 

published guidance on RAD and also serves as the main portal for PHAs to ask questions, 

search for information and forms, upload documents, and track their progress toward 

closing. The database does not contain a variable to indicate that rehabilitation was 

planned for a converted property but instead includes construction costs planned by the 

property and a variable indicating whether new construction was planned. We inferred that 

when construction costs were listed and no new construction was listed, the property 

planned rehabilitation. We verified the accuracy of this inference with staff from HUD.
Page 14 GAO-18-123 Rental Assistance Demonstration

or the leveraging of PHA funds (i.e., sources in the transaction that have 

come from the PHA itself even if not federally appropriated through the 

public housing program), among other methodologies. The RAD 

authorizing statute requires HUD to assess and publish findings on the 

amount of private-sector leveraging. In addition, Standards for Internal 

Control in the Federal Government require agencies to communicate 

quality information with external parties, such as other government 

entities, to make informed decisions and evaluate the entity’s 

performance in achieving key objectives.22

HUD also does not use final (postcompletion) funding data in another 

metric of RAD leveraging. Specifically, in June 2017 HUD publicly 

reported that RAD “has leveraged more than $4 billion in capital 

investment in order to make critical repairs and improvements.”23 HUD 

calculates this figure by summing the construction costs—a 

subcomponent of total costs—with data from the time a conversion closes 

and not upon completion of construction.24 HUD officials we spoke with 

clarified that this metric solely reports construction investments and does 

not reflect any conclusion regarding private leverage of public funds. But, 

HUD publically characterized this measure in different ways, including as 

the amount of “public-private investment in distressed public housing,” the 

amount of “construction achieved under RAD,” and the amount of “new 

private and public funds leveraged by RAD.”25

HUD’s 2016 interim report calculated and published multiple leverage 

ratios, but chose to highlight a RAD leverage ratio that is consistent with 

ratios used for other HUD programs. However, the ratio does not 

specifically follow the prescribed ratio language in the authorizing statute 

because the report states that the ratio represents the amount of private 

and public external sources invested for every dollar invested by PHAs

 22GAO, Standards for Internal Control in the Federal Government, GAO-14-704G 

(Washington, D.C.: Sept. 10, 2014). 

23House Appropriations Committee, Subcommittee on Transportation, Housing and Urban 

Development, and Related Agencies, 115th Cong., 1st sess. (June 8, 2017); testimony by 

Secretary Ben Carson, Department of Housing and Urban Development.

24Construction costs refer to projected costs at the time of the construction financing 

closing, as submitted by PHAs in the RAD resource desk.

25Department of Housing and Urban Development, “Rental Assistance Demonstration 

Generates $4 Billion in Public-Private Investment in Distressed Public Housing,” press 

release no. 17-033 (Washington, D.C.: May 11, 2017).
Page 15 GAO-18-123 Rental Assistance Demonstration

but the statutory language only discusses private-sector leveraging.

26

Officials further noted that the statute does not require a particular 

methodology and HUD relies on PD&R—and its independent contractor—

to determine the appropriate methodology for purposes of compliance 

with the statute. Lastly, the statute does not preclude the use of other 

leverage metrics for other purposes, such as using the ratio to measure 

the amount of nonpublic housing funds leveraged in RAD transactions 

that would not be available to the property absent RAD. As a result, 

HUD’s leverage metrics announced in May 2017 do not accurately reflect

the amount of private-sector leveraging achieved through RAD, do 

include public funding as private sources, and inconsistently measured 

sources that were federally appropriated or contributed by PHAs, 

potentially under- or over-reporting the program’s performance. 

Additionally, in October 2017, HUD began implementing procedures to 

collect data after construction is completed and is not yet able to calculate 

a leverage metric using final (postcompletion) financial sources rather 

than the financial sources collected at closing. The lack of a consistent 

metric for private leveraging could also lead to inconsistent reporting of 

the leverage ratio, as has occurred in prior years.

We recalculated RAD leverage ratios in a number of different ways, 

including to correct errors we identified during our review. For example, 

HUD’s 2016 interim report noted that data on closed transactions do not 

provide detailed description of “other sources,” requiring a crosswalk 

between applications and closed transactions to develop estimates for the 

allocation of “other sources” across financial source categories. 

Abbreviated descriptions are provided in the form of notes that are not 

always clear and consistent; therefore public housing sources may 

include federally appropriated sources, as well state, city, or county 

sources. Through our estimates, we found that the overall leverage ratio 

could range from 7.44:1 for a ratio recalculating HUD’s leverage ratio to 

1.23:1 for a ratio estimating private-sector leveraging.

 26HUD’s September 2016 interim report states that for 185 closed RAD public housing 

transaction in the study, PHAs contributed $250 million and raised an additional $2,227 

million in external funds, for an overall adjusted leverage ratio of 8.91:1. This ratio means 

that for every $1 invested by the PHAs in their RAD projects, private and public external 

sources invested an additional $8.91. U.S. Department of Housing and Urban 

Development, Interim Report Evaluation of HUD’s Rental Assistance Demonstration, 

(Washington, D.C.: September 2016).

Recalculations, Including of 

Funding Sources, Can 

Increase Accuracy of the RAD 

Leverage Ratio
Page 16 GAO-18-123 Rental Assistance Demonstration

Figure 2: HUD-Reported 2017 Leverage Ratio and GAO-Adjusted Leverage Ratio 

Estimates for RAD Using Recategorized Financial Sources, as of June 2017

• Recalculation with HUD methodology and financial source 

recategorization. As discussed previously, HUD’s methodology does 

not account for all financial data collected by HUD and includes 

“other” funding sources erroneously considered as leveraged funds. 

Thus, we manually adjusted RAD funding source data and found that 

nearly $1.2 billion were erroneously considered leveraged funds 

because they are not private funds. For example, HUD included MTW 

funds; public housing operating reserves; public housing capital funds; 

replacement housing factor funds; other federal funds; other state, 

local, or county funds; and take-back financing funds as leveraged 

financial sources. For more information, see appendix II.

We obtained documentation from HUD to replicate their methodology and 

recategorized financial sources that corrected errors in the data, and 

found that the RAD leverage ratio was less than half of HUD’s most 
Page 17 GAO-18-123 Rental Assistance Demonstration

recently publicly reported leverage ratio (19:1), approximately 7.44:1 (see 

app. II).27

• Recalculation to exclude LIHTC and other federal sources. We 

previously reported that LIHTCs are considered a federal source 

because tax credit equity represents foregone federal tax revenue 

and, therefore, are a direct cost to the government.28 Accordingly, we 

recalculated the RAD leverage ratio by excluding all federal funding 

sources and obtained a ratio of approximately 1.43:1 (see app. II).

• Recalculation of private-sector leveraging. Lastly, the RAD 

authorizing statute requires HUD to assess and publish findings on 

the amount of private-sector leveraging, but HUD’s current calculation 

does not present the amount of private-sector leveraging and does 

not include all available data (for example, the “Other Private” funds 

collected by HUD). We estimated the amount of private-sector 

leveraging by grouping public housing sources, other public sources, 

and private sources, resulting in a leverage ratio of approximately 

1.23:1 (see app. II).

In October 2017, HUD implemented procedures to certify completion after 

developers finish RAD-approved rehabilitation or construction. Previously, 

HUD had a limited ability to monitor and evaluate final (postcompletion)

physical and financial changes in RAD projects with existing data. 

According to HUD officials, HUD did not implement completion 

certification procedures before October 2017 because it had been 

addressing what it considered to be the highest risks first (such as 

clarifying requirements for RAD participants, resident safeguards, and 

other procedural and administrative requirements).

 27As noted earlier, abbreviated descriptions are not always clear or consistent. PHA 

sources may be federally appropriated; come from state, local, or county sources; or may 

be from other income-generating lines of business used to support their affordable 

housing missions. To properly account for PHA sources, we created the category “Other 

PHA Sources” which captures sources attributable to a PHA that were considered 

leveraged by HUD in the “other” fields.

28The LIHTC program will represent an estimated $8.5 billion in foregone revenue in 2017. 

GAO, Low-Income Housing Tax Credit: Actions Needed to Strengthen Oversight and 

Accountability, GAO-17-784T (Washington, D.C.: Aug. 1, 2017), and Leveraging Federal 

Funds for Housing, Community, and Economic Development, GAO-07-768R (Washington, 

D.C.: May 25, 2007).

HUD Implemented 

Procedures to Verify 

Completion of Planned 

Construction Activities and 

Costs in October 2017, but 

Does Not Collect Final 

Comprehensive Financial 

Data
Page 18 GAO-18-123 Rental Assistance Demonstration

HUD’s October 2017 completion certification procedures include 

instructions for owners to report final construction costs and 

documentation on completion of repairs or construction within 45 days of 

the completion date recorded in the RAD Conversion Commitment. More 

specifically, HUD requires owners to list a final construction cost 

amount—a subcomponent of total costs—in the RAD resource desk, 

describe variances from the approved construction cost amount in a 

comment box, and describe how increases in costs were addressed. 

Additionally, a third-party must certify that the repairs in the scope of work 

were completed by providing an attestation to HUD.

However, HUD’s procedures do not require documentation from the 

owners to support the final total cost figures, which include not only 

construction costs but also building and land acquisition costs, and 

developer fees, among others as noted earlier in this report. These 

procedures also do not require a certification from owners on all financing 

sources and costs recorded in the RAD Conversion Commitment.29

Standards for Internal Control in the Federal Government require that 

management implement control activities through documented policies 

and procedures to provide reasonable assurance that the objectives of 

the agency will be achieved, and also communicate quality information 

with external parties to make informed decisions and evaluate the entity’s 

performance in achieving key objectives.30

While HUD now has certification completion procedures in place, this 

process provides the agency limited financial information from owners. As 

a result, HUD is unable to report metrics that reflect final (postcompletion)

RAD financial outcomes after construction is completed. Furthermore, 

HUD is limited in its ability to effectively oversee conversion budget and 

cost variances, and expenditures that require HUD approval. Lastly, the 

RAD authorizing statute requires that the Secretary of HUD demonstrate 

the feasibility of the RAD conversion model to recapitalize and operate 

public housing properties under various situations and by leveraging other 

sources of funding to recapitalize properties. Without metrics that reflect 

the final (postcompletion) financial outcomes of RAD after construction is 

 29A third-party completion certification is only required if the repairs exceeded $2,000 per 

unit. 

30GA0-14-704G. 
Page 19 GAO-18-123 Rental Assistance Demonstration

completed, HUD and congressional decisionmakers are unable to make 

informed decisions concerning the RAD program.

HUD has not systematically tracked or analyzed household data on 

residents in RAD-converted units that are available from its public 

housing or Section 8 databases or from PHAs or other postconversion 

owners—the main sources of resident data for the RAD program. In 

addition, HUD has not yet developed monitoring procedures for all the 

resident safeguards in the RAD program. Finally, residents told us of 

some concerns about information they received on RAD conversions, 

communications opportunities, and the relocation process.

HUD officials told us that the agency does not systematically track or 

analyze household-level data on residents in RAD-converted units across 

existing program databases (HUD maintains household data for the 

public housing and Section 8 rental assistance programs in two 

databases). In particular, HUD does not track changes in household 

characteristics before and after conversion, such as changes in rent, as 

well as relocations or displacement of individual households.

However, according to HUD officials, their databases are not designed to 

track the impact of RAD conversion on residents and they are unable to 

electronically link household information submitted before RAD 

conversion to information submitted after conversion. Once a property is 

converted, the property and corresponding household information are 

removed from the public housing database. Owners of converted 

properties are to use software to manually enter household information 

into the databases for the Section 8 program when submitting tenant 

HUD Has Not 

Systematically 

Analyzed HouseholdLevel Data on 

Residents in RAD 

Conversions or 

Monitored 

Implementation of 

Some Resident 

Safeguards

HUD Has Not 

Systematically Analyzed 

Household-Level Data on 

the Effects of RAD 

Conversion on Residents
Page 20 GAO-18-123 Rental Assistance Demonstration

certifications and information for assistance payments.31 This procedure 

is the standard for administration of all project-based Section 8 properties. 

HUD officials stated that they have explored the possibility of transferring 

household data from one system to another at the time of a property’s 

conversion.

While HUD has not systematically analyzed household information from 

its public housing and Section 8 databases, we were able to perform a 

limited analysis. We requested and received data from HUD on the 

households affected by RAD.32 Using the data provided that were current 

as of June 2017, we were able to identify about 26,000 households that 

lived in units that were converted to a PBV subsidy, but we were unable 

to identify the total number of households converted to a PBRA subsidy.33

Based on our analysis of 26,000 PBV households, we found

• about 2,700 (about 11 percent of) households were headed by an 

elderly individual;

• about 6,800 (about 26 percent of) households were headed by an 

individual with a disability;

• about 2,700 households (about 10 percent of) households were 

headed by an elderly person who also had a disability;

• over half (about 14,000 or 54 percent) of the households were headed 

by an individual identified as black; close to 11,000 households (about 

41 percent) were identified as white; and about 1,000 households 

(about 4 percent) were identified as Asian. Close to 3,100 households 

(about 12 percent) were headed by an individual identified as 

Hispanic;

• about half (about 49 percent) of the PBV households were singleperson households;

 31Data on public housing households are maintained in the Inventory Management 

System/Public and Indian Housing Information Center (IMS/PIC). Once a property is 

converted through RAD, the property is removed from IMS/PIC and household data are 

decoupled from the property. After RAD conversion, household information is submitted 

again into IMS/PIC for PBV conversions, or into a separate system—the Tenant Rental 

Assistance Certification System—for PBRA conversions. 

32HUD compiled and provided custom extracts of data from data systems used for the 

public housing and Section 8 program. 

33For more information on the limitations in the PBRA household data, see appendix I.
Page 21 GAO-18-123 Rental Assistance Demonstration

• the median annual income of PBV households both before and after 

RAD conversion was about $10,000; and

• about 5,300 (about 20 percent) of households were paying a flat rent 

rather than income-based rent before RAD conversion.34

However, the data on PBV households were not comprehensive. For 

example, while about 10,000 residents (about 57 percent) experienced a 

rent increase following RAD conversion under PBV, we could not 

determine if the rent increase was the result of an increase in resident 

income. We also could not determine changes in location among the PBV 

households following RAD conversion.

Rather than relying on the public housing and Section 8 databases for 

tracking household information during conversion, HUD officials indicated 

that the agency will rely on locally maintained resident logs, which contain 

household information collected by property owners, as the starting point 

when HUD determines a compliance review is warranted. The logs will be 

the primary way the agency collects household information for 

compliance reviews under the RAD program, according to HUD officials. 

In November 2016, HUD issued a notice, which requires the PHA or other 

postconversion owner to maintain a log about every household at a 

converting project, including information on race and ethnicity, household 

size, and disability.35 The notice also requires owners to track residence 

status throughout the relocation process, including whether the resident 

has returned, moved elsewhere, was permanently relocated or evicted; 

relocation dates; and details on any temporary housing and moving 

assistance provided. Owners are required to make the information 

available to HUD upon request for audits and other purposes. According 

to HUD officials, the agency expects the information in the resident logs 

to be more robust than what they would collect through the public housing 

 34The household counts and percentages included for each of the bulleted characteristics 

are not necessarily mutually exclusive. For example, a household can be both elderly and 

a single-person. However, the counts and percentages for elderly, disabled, and 

combined elderly-disabled households are mutually exclusive. Additionally, because 

heads of households could identify with more than one racial or ethnic category

percentages can add to more than 100.

35Department of Housing and Urban Development, Rental Assistance Demonstration 

(RAD) Notice Regarding Fair Housing and Civil Rights Requirements and Relocation 

Requirements Applicable to RAD First Component–Public Housing Conversions, Notice H 

2016-17/PIH 2016-17 HA (Washington, D.C.: Nov. 10, 2016).
Page 22 GAO-18-123 Rental Assistance Demonstration

and Section 8 databases, which do not track residents while they are 

relocated.

HUD officials stated that the agency plans to review selected resident 

logs as part of an ongoing limited compliance review of about 90 RAD 

conversion projects. HUD officials told us they are developing procedures 

for performing compliance reviews—such as developing a mechanism to 

review a sample of logs on a periodic basis—but they have not yet done 

so because they have been focusing on developing procedures for 

activities that present a high risk to the program as described in the 

following section. HUD has not established a time frame for developing 

these procedures. However, HUD officials indicated that they plan to 

select resident logs for review based on risk of noncompliance and do not 

plan to analyze program-wide information currently collected in the public 

housing and Section 8 databases for program monitoring. HUD officials 

also noted that that PD&R is planning to track a sample of residents 

through its evaluation of the program, which we previously mentioned.

While HUD has decided to rely on resident logs because of the difficulty 

of tracking household information across its program databases, using 

resident logs to assess the effects of the RAD program on residents has 

limitations. While the resident logs would contain detailed household 

information, they were not required prior to November 2016 and may not 

contain information on households converted before that date (RAD 

conversions started in 2013). HUD’s public housing and Section 8 

databases contain information on such households. Second, as 

previously mentioned, HUD plans to review resident logs only when there 

is a risk of noncompliance, but they collect household information in their 

databases on a rolling basis. Standards for Internal Control in the Federal 

Government require agencies to use quality information to achieve their 

objectives, and obtain and evaluate relevant and reliable data in a timely 

manner for use in effective monitoring.36

Without a comprehensive review of household information—one based 

on information in HUD data systems as well as resident logs—HUD 

cannot reasonably assess the effects of ongoing and completed RAD 

conversions on residents and compliance with resident safeguards, as 

discussed in the next section.

 36GAO-14-704G.
Page 23 GAO-18-123 Rental Assistance Demonstration

HUD has not yet developed monitoring procedures for certain resident 

safeguards under the RAD program. RAD requirements include those 

intended to ensure that residents whose units are converted through RAD

• are informed about the conversion process;

• can continue to live in a converted property following RAD conversion;

• are afforded certain protections carried over from the public housing 

program; and

• are afforded a phase-in of any rent increases under Section 8 

program requirements.

Currently, based on HUD notice requirements, PHAs must document 

compliance with three safeguards (PHA plan amendments, resident 

notification, and procedural rights) in their RAD application and other 

conversion paperwork.37 For example, PHAs must submit comprehensive 

written responses to resident comments received in connection with the 

required resident meetings with their RAD application. For one safeguard, 

PHAs are not required to report to HUD but must retain documentation of 

compliance to be made available to HUD as part of the monitoring for the 

program. For others, the HUD notice does not specify reporting and 

monitoring requirements.

Based on our review of files for selected conversions, which we 

previously discussed, we found PHAs generally submitted documentation 

of their efforts to inform residents about RAD conversion, such as 

providing evidence to HUD of meetings with residents and written 

responses to resident questions as required. However, the specific 

documents for these requirements were not available from HUD in all 

cases. HUD’s review of amendments to PHA plans was documented in all 

but one of the conversions we reviewed. Documentation requirements for 

resident relocations have changed since RAD was introduced, which 

made the documentation more difficult to assess.

HUD developed and started implementing procedures in October 2017 

that require owners to certify and provide data supporting compliance with 

the resident right-to-return requirements. For example, owners must 

certify the number of residents who exercised their right to return to a 

converted property compared with the number of residents who did not 

 37See appendix III for reporting and monitoring requirements for resident safeguards.

HUD Has Been 

Developing Procedures to 

Monitor Some RAD 

Resident Safeguards
Page 24 GAO-18-123 Rental Assistance Demonstration

return. HUD is also developing standard operating procedures to review 

each conversion for compliance with RAD relocation provisions. 

Specifically, the procedures would describe the review steps required at 

different stages of the conversion process, a process for identifying risks, 

and how to address instances of noncompliance with RAD requirements. 

Additionally, HUD noted that they have 2 compliance reviews under way 

including 1 involving a set of HUD requirements that affect relocations of 

more than 1 year and the limited compliance review of 90 projects that we 

previously described.38

HUD officials noted that they are developing additional guidance in other 

areas. First, HUD officials indicated that as part of an overall update of 

RAD standard operating procedures, they are developing additional 

protocols on resident notification and how residents’ comments are 

addressed through conversion planning. Second, the agency had not 

been consistently collecting required documentation on “house rules,”

which describe the conditions and procedures for evicting residents and 

terminating assistance at RAD PBRA properties, so it has developed and 

implemented additional legal review procedures as part of the 

implementation of RAD resident eviction and grievance procedural rights 

requirements. According to HUD officials, they have been focusing 

primarily on right-to-return and relocation requirements because they 

represent areas of highest risk.

HUD has not developed separate monitoring procedures for other 

resident safeguards—the phase-in of tenant rent increases, resident 

representation through tenant organizations, and choice mobility 

requirements. However, HUD officials told us that they plan to assess 

how administrative data can be used to monitor choice mobility as part of 

the planning for a separate PD&R evaluation of this safeguard. HUD 

officials also indicated that there are procedures for residents to report 

complaints to HUD if resident representation and organization 

requirements are not met. Standards for Internal Control in the Federal 

Government require agencies to implement control activities through 

documented policies and procedures to provide reasonable assurance 

that agency objectives will be achieved. These standards also require 

 38The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 

establishes minimum standards for programs or projects receiving federal financial 

assistance that include the acquisition of real property (real estate), displace persons from 

their homes, businesses, or farms, or both. PBV and PBRA are considered federal 

financial assistance for purposes of the act.
Page 25 GAO-18-123 Rental Assistance Demonstration

agencies to design procedures to achieve goals and objectives, and 

identify, analyze, and respond to risks related to achieving the defined 

objectives.39 Table 1 includes a description and information on 

implementation of resident safeguards that most directly affect residents’

experience with the conversion process and ability to live at the property 

following conversion. Appendix III describes these and other RAD 

resident safeguards.

Table 1: Description and Implementation of Selected Rental Assistance Demonstration (RAD) Resident Safeguards

Description of resident safeguard

Extent of development of

additional reporting and monitoring 

procedures outside of HUD notices

Notifying residents of RAD conversion

Public Housing Agency (PHA) must inform residents of proposed conversion changes 

through written notices and meetings and provide written responses to resident questions.

◐

No rescreening of residents for income eligibility

Residents cannot be excluded from living at the converted project based on income 

eligibility or other re-screening.

◐

Resident right to return

Any resident who may need to be temporarily relocated to facilitate rehabilitation or 

construction has a right to return to an assisted unit at the converted project once 

rehabilitation or construction is completed.

◐

Phase-in of tenant rent increases

Rent increases over a certain threshold will be phased in over 3 or 5 years, particularly for 

those residents who move from a flat (fixed) public housing rent structure to an incomebased one following RAD conversion.

○

Inclusion of RAD conversion in PHA plans with consultation from the resident 

advisory board

PHAs must include an amendment describing the conversion of assistance under RAD in 

their 5-year, annual, or Moving to Work plans with consultation from the PHA’s resident 

advisory board. Any substantial change to the conversion plan, such as changes in the 

number of assisted units, is required to undergo the significant amendment process or 

other Department of Housing and Urban Development (HUD) review.

●

Continued recognition of and funding for residents organizations

Residents have the right to establish and operate a resident organization and are eligible 

for resident participation funding. This is a protection carried over from the public housing 

program and is not typically available to Section 8 residents.

◐

Resident eviction and grievance procedural rights

Converted project owners (either the PHA-controlled or other entity that takes ownership 

control following RAD conversion) are required to establish termination (eviction) and 

grievance procedures that are more in line with public housing requirements, which are 

more formal than Section 8 requirements.

●

 39GA0-14-704G. 
Page 26 GAO-18-123 Rental Assistance Demonstration

Description of resident safeguard

Extent of development of

additional reporting and monitoring 

procedures outside of HUD notices

Choice mobility options for residents

Residents have the option to receive a voucher, or other tenant-based rental assistance, 

which can be used at a different property after 1 or 2 years of living in the converted 

property.

○

Legend:

○ = Additional reporting and monitoring procedures not developed;

◐ = Additional reporting and monitoring procedures are under development but not implemented;

● = Additional reporting and monitoring procedures developed and implemented.

Source: GAO analysis of Department of Housing and Urban Development requirements for the RAD program. | GAO-18-123

HUD officials indicated that the safeguards for the phase-in of tenant rent 

increases, resident representation, procedural rights, and choice mobility 

presented a lower risk than the right-to-return requirements, so they were 

a lower priority, and in some cases were addressed through general 

monitoring of the Section 8 program. For choice mobility options, HUD 

indicated that its data systems are not designed to track whether 

residents are able to exercise these options, such as tracking whether 

residents left a property to exercise choice mobility or for other reasons. 

All but two of the resident safeguards do not take effect until after a 

property has been converted and is part of the Section 8 program. For 

example, residents are only eligible to use vouchers through choice 

mobility after they have lived in the converted property for 1 or 2 years 

depending on the assistance contract involved (PBV or PBRA). Moreover, 

certain RAD safeguards are not typically available for Section 8 residents. 

For example, RAD establishes resident representation provisions and 

procedural rights that are more in line with public housing rather than 

Section 8 requirements. While HUD has indicated that the Section 8 

program has experience administering different types of assistance 

contracts, RAD nonetheless creates separate requirements for certain 

provisions from the public housing and Section 8 programs.

As previously mentioned, RAD conversions have been completed at an 

increasing pace in the last 5 years. However, because HUD has not yet 

developed separate monitoring procedures for certain requirements—the 

phase-in of tenant rent increases, resident representation through tenant 

organizations, and choice mobility requirements, many of which take 

effect after a conversion—and without using all available household data, 

the agency will not be able to reasonably ensure that these safeguards 

were implemented.
Page 27 GAO-18-123 Rental Assistance Demonstration

Residents who participated in our focus groups expressed some 

concerns about information they received on RAD conversions, 

communications opportunities, and the relocation process.40 Residents 

indicated that they were notified about RAD conversion in a variety of 

ways. Residents in 5 of 14 focus groups found the information presented 

to them on RAD to be helpful. Residents in 7 of 14 focus groups indicated 

that the information they received was not helpful. Across these focus 

groups, a range of concerns was expressed, including that the 

information provided was not always clear or reflective of the final 

changes resulting from RAD conversion, and that the PHA and 

management were not always forthcoming with information about the 

RAD changes.

Residents in some focus groups also indicated that they were not 

involved in the RAD conversion. Residents in 5 of 14 groups indicated 

that they were not given the opportunity to provide input into the RAD 

changes, while residents in 6 of 14 groups indicated that their concerns 

were not addressed and their suggestions were not incorporated.

Residents also described problems with relocations. Some of the 

concerns expressed by resident focus groups on relocation related to the 

location of the temporary units (3 of 14 focus groups), the timing of 

relocation or amount of notice given (7 of 14 focus groups), and moving 

issues (such as items damaged during moves).

Residents were asked to describe ways in which RAD conversion 

improved or harmed their living conditions. Residents in several focus 

groups indicated that RAD improved their living conditions, including both 

the condition (7 of 14 focus groups) and appearance of their units or the 

property in which they lived (6 of 14 focus groups). Some of the changes 

residents liked included the installation of new appliances, mold and pest 

removal, and safety and energy efficiency improvements. However, 

residents in several of the focus groups identified problems with their 

living conditions following RAD conversion. The problems residents 

identified included security concerns (10 of 14 focus groups); renovations 

that were of poor quality (6 of 14 focus groups); and other problems with 

the units (10 of 14 focus groups), such as pest problems; decreased 

 40We held a total of 14 focus group interviews with residents of the converted properties at 

eight locations (two focus groups per location except in Alameda County, California, and 

Tacoma, Washington, where we held one focus group). Each focus group had 6-15 

participants.

Residents Described 

Mixed Experiences during 

the RAD Conversion 

Process
Page 28 GAO-18-123 Rental Assistance Demonstration

amenities (8 of 14 focus groups), such as the removal of common areas 

or in-unit washing machines; and issues with property management (11 of 

14 focus groups). For example, in several instances, residents stated that 

new managers or owners in place following RAD conversion were not 

responsive to their needs or concerns.

During our site visits, residents described other experiences with RAD 

conversion. Residents in all of the groups identified being notified about 

RAD. Residents in 9 of 14 focus groups indicated that their rent was the 

same following RAD conversion. Residents in a few focus groups 

indicated that their rent had increased because of changes in their 

income or conversion from a flat rent. However, residents in a few focus 

groups experienced challenges in how their income was certified for the 

purpose of calculating rents, such as problems with requests for 

information (2 of 14 focus groups) and other issues with the process (4 of 

14 focus groups). For example, residents reported having to provide the 

same paperwork multiple times. No instances in which residents were 

permanently involuntarily displaced were reported. One resident 

organization expressed concerns about fewer eviction protections and 

resident representation after RAD conversion.

We spoke with 18 PHAs, some of which cited benefits as well as several 

challenges of RAD participation and some noted HUD responsiveness to 

their circumstances and concerns. According to many of the PHAs we 

spoke with, benefits of participating in the RAD program included 

reducing administrative requirements in Section 8 programs and opening 

avenues for additional sources of funding. In particular, many of the PHAs 

noted that RAD allowed them to access tax credit equity and other 

funding to complete the bulk of their repairs and renovations at once. 

Over half of the PHAs we spoke with also found HUD to be flexible and 

responsive to individual PHA circumstances. The majority of PHAs we 

spoke with indicated that remaining in the public housing program was 

not tenable because funding for the public housing program was not 

enough to meet their long-term capital needs.

PHAs we contacted also noted several challenges of participating in RAD: 

financing constraints, timing challenges, and evolving requirements.

Financing constraints. Some PHAs noted that program rent 

requirements can limit PHA participation in RAD. Each year, HUD 

calculates a contract rent—the total rent for a unit, including operating 

subsidy and resident contribution. PHAs must use the contract rent to 

PHAs Identified 

Benefits and 

Challenges of RAD 

Participation
Page 29 GAO-18-123 Rental Assistance Demonstration

calculate Section 8 subsidies for properties converting under RAD. 

According to HUD and several PHAs, contract rents for RAD-converted 

Section 8 units are lower than rents in traditional Section 8 assisted units, 

and are almost always lower than market-rate rents.41 Several PHAs and 

HUD officials have described the difficulty of converting units from the 

public housing program with this rent limitation. For example, when the 

cost of needed rehabilitation or construction is high, low allowable 

contract rents might not be sufficient to access appropriate capital for the 

conversion.

In certain localities, PHAs have found solutions to augment rents and 

have used RAD flexibilities to allow them to convert and plan for operating 

expenses. For example, the PHA in Tacoma, Washington, used the 

Moving to Work program flexibilities to increase contract rents and 

housing officials in San Francisco used an allowable procedure to transfer 

RAD assistance from converted buildings to properties throughout its 

portfolio (each is a blend of traditional project-based vouchers with higher 

contract rents and RAD assistance). In Montgomery County, Maryland, 

the PHA similarly included RAD assistance in some mixed-finance 

properties that contain other high-rent subsidies and market-rate rents.

Timing challenges. Some PHAs said they faced major challenges in 

coordinating RAD timelines with HUD, lenders, or other parties or with the 

requirements of the LIHTC process.42 HUD officials acknowledged that 

PHAs with more complex transactions, including those involved in the 

LIHTC process, struggle to implement their conversion plans within RAD 

time frames. HUD officials noted that because there is a statutory cap on 

the number of units that can be converted under RAD, they have 

established time frames to stay under the cap and ensure that PHAs that 

are planning to convert are ready to participate in the program. 

 41In traditional Section 8 assisted units, contract rents are based on an evaluation of fair 

market rents for the area, which are published on an annual basis by HUD’s PD&R. 

Contract rent in RAD converted units is not tied to fair market rent levels. No additional 

funds were authorized for public housing RAD conversions, therefore contract rents are 

established based on public housing funding levels.

42In 2015, we reported on interagency collaboration on rental assistance policy. For 

example, the Rental Policy Working Group was established in July 2010 and has 

representatives from HUD and other agencies. It works to better align rental requirements 

across programs and thereby increase the effectiveness of federal rental policy and 

improve participant outcomes. See GAO, Affordable Rental Housing: Assistance Is 

Provided by Federal, State, and Local Programs, but There Is Incomplete Information on 

Collective Performance, GAO-15-645 (Washington, D.C.: Sept. 15, 2015).
Page 30 GAO-18-123 Rental Assistance Demonstration

Additionally, according to HUD, it has made technical assistance 

available to all PHAs that receive a Commitment to enter into a Housing 

Assistance Payment contract during the RAD process to help ensure their 

readiness for RAD closing and to meet remaining conversion deadlines.

On the other hand, some PHAs expressed concern to us about delays in 

the conversion process that put them at risk for missing state LIHTC 

deadlines. HUD officials described putting conversions on a fast-track on 

a case-by-case basis to meet LIHTC deadlines. For example, in one case 

a PHA relocated residents before closing and without HUD approval. 

HUD required the PHA to fund an escrow account until it was able to 

determine any payments that might need to be made to residents and any 

other necessary corrective action. This was done so that HUD could look 

into the issue while mitigating additional harm to the residents and 

continuing to move the PHA toward closing and aligned with tax credit 

application deadlines.

The timing of conversion can also create gaps in the payment of Section 

8 funds to PHAs. Section 8 funding should begin in January of the year 

following conversion. PHAs rely on annual public housing subsidies for 

the conversion year—public housing program funds are paid to PHAs 

annually and are not recaptured by HUD following RAD conversion. 

However, according to some PHAs we interviewed, Section 8 funding did 

not begin on time. For example, in Baltimore, Maryland, subsidy flow after 

conversion had not begun as of June of the following year. HUD officials 

told us inadequate guidance from HUD and confusion from PHAs 

regarding the necessary steps to request payment in a timely manner 

have been the major cause of the problems. HUD has tried to remedy 

delays and updated its notice to provide clearer guidance on the timing of 

subsidy flow around the time of conversion to Section 8. Moreover, HUD 

officials indicated that there has been confusion among PHAs on how to 

request funds, so HUD is currently revising and updating the guidance on 

steps PHAs must take to request payment under the PBRA program. 

HUD officials also indicated that it has begun monitoring whether new 

participants are taking the steps needed well before their first request for 

funding.

Some PHAs we contacted also mentioned difficulty in coordinating with 

HUD on fulfilling internal RAD requirements and reviews. According to 

some, the different offices involved in RAD conversions within HUD were 
Page 31 GAO-18-123 Rental Assistance Demonstration

not well aligned and had different interpretations of the rules.43 For 

example, some RAD conversions require a civil rights review by HUD’s 

Office of Fair Housing and Equal Opportunity Office, including those 

transactions that require new construction or resident relocations. Some 

PHAs indicated that such reviews occurred too late in the conversion 

process even after other HUD offices had approved the conversion. HUD 

officials acknowledge that different HUD offices have different objectives 

in the RAD process. HUD officials indicated that the agency is trying to 

coordinate more effectively among these offices and streamline the 

conversion process as much as possible.

Evolving requirements. While the majority of PHAs with which we spoke 

said that HUD provided clear, sufficient, and timely information, some 

PHAs noted that it also was challenging to adapt to evolving 

requirements.44

Some PHAs noted that as HUD identified problems in the early years of 

the program, it would change the guidance in response. For example, 

HUD officials explained that it had clarified fair housing review 

requirements in response to PHA concerns that the fair housing review 

occurred too late in the process and could affect successful conversion of 

projects. The most recent RAD notice (effective January 2017) is the third 

version since 2013 and revisions have involved substantial changes.45

For example, this notice provided PHAs with greater flexibilities on the 

funding sources they can use to raise initial contract rents and the ways 

they can demonstrate ownership and control of a converted property. In 

addition, HUD introduced a notice in November 2016 to strengthen 

resident protections.46

 43As discussed previously, HUD’s Office of Public and Indian Housing oversees the 

properties prior to RAD conversion. The Office of Recapitalization administers the RAD 

conversion process. Following conversion, oversight remains with the Office of Public and 

Indian Housing for properties that convert to PBV contracts and transfers to the Office of 

Multifamily Housing Programs for PBRA contracts. Other offices, such as HUD’s Office of 

Fair Housing and Equal Opportunity, can also have a role in RAD conversion.

44HUD has provided multiple forms of guidance to PHAs, including its program notices, 

webinars, training, lengthy FAQs and responses, quick reference guides, and case 

studies.

45HUD Notice PIH-2012-32 (HA), H-2017-03 Rev-3.

46HUD Notice H 2016-17 and PIH 2016-17 (HA).
Page 32 GAO-18-123 Rental Assistance Demonstration

Some PHAs told us they found the pace or timing of the evolving 

requirements difficult to manage and also noted confusion about 

conversion instructions and guidance due to changing requirements. For 

example, one PHA indicated that the agency had problems reporting 

information into a new RAD data field in HUD’s Voucher Management 

System because there was no guidance at the time on how to complete 

this field. However, HUD has since included additional instructions in the 

user’s manual that became effective in April 2017.

The RAD authorizing statute and the program’s use agreements 

(contracts with property owners) contain provisions that are designed to 

help ensure the public interest in converted properties and long-term 

availability of affordable units, but the provisions have not been tested in 

situations such as foreclosure. For instance, the RAD authorizing statute 

specifies requirements for ownership or control of converted properties. 

Converted properties must have public or nonprofit ownership or control, 

with certain exceptions. Specifically, to facilitate the use of tax credit 

equity for the property, HUD may allow ownership of a property to be 

transferred to an entity controlled by a for-profit entity as long as the 

public housing agency preserves its interest in the property in a manner 

approved by HUD. For instance, the PHA can retain land ownership and 

ground lease the property to the new owner, act as general partner in the 

project (a role that involves controlling the development of the property, 

assembling financing, and ensuring compliance with LIHTC 

requirements), or assume leasing management responsibilities for the 

properties and the units. Each of the 18 PHAs we spoke with told us they 

had such arrangements in their conversion plans. The Senate 

Strength of 

Protections Intended 

to Preserve 

Affordability Is 

Unknown and HUD 

Does Not Have 

Procedures to 

Address Preservation 

Risks

RAD Provisions and Use 

Agreements Have Not 

Been Tested
Page 33 GAO-18-123 Rental Assistance Demonstration

Appropriations Committee also stated in the committee report that it 

included language in the initial 2011 RAD legislation to help ensure that 

the public interest in RAD properties is preserved:

The Committee has included language to establish procedures that will ensure 

that public housing remains a public asset in the that [sic] event that the project 

experiences problems, such as default or foreclosure.47

In each RAD conversion, HUD and the property owner execute a use 

agreement, which specifies affordability and use restrictions for the 

property. The use agreement generally exists concurrently with the HAP 

contract, which is executed to govern the provision of either the PBRA or 

PBV subsidy for the unit. The use agreement must be recorded in a 

superior position to new or existing financing or other encumbrances on 

the converted property.48 Under a Section 8 HAP contract, residents pay 

30 percent of adjusted household income.49 In the absence of the HAP 

contract, the use agreement is set up to control the amount paid:

• If the HAP contract is removed due to breach, noncompliance, or 

insufficiency of appropriations, under the use agreement new 

households in all units previously covered under the HAP contract 

must have incomes at or below 80 percent of the area median income 

for households of the size occupying an appropriately sized unit for 

their family size at the time of admission, and rents may not exceed 

30 percent of 80 percent of area median income for the remainder of 

the term of the use agreement.

• For new residents at or below 80 percent of the area median income, 

under the use agreement the resident rent contribution without a HAP 

contract generally would be higher than that paid under a HAP 

 47S. Rep. No. 112-83, at 109 (2011).

48On a converted property, the use agreement will run until the conclusion of the initial 

term of the HAP contract, automatically renews upon extension or renewal of the HAP 

contract, and remains in effect even if the HAP contract abates or terminates, for the term 

the HAP contract would have run, absent the abatement or termination.

49The total tenant payment is defined by regulation as the highest of (1) 30 percent of the 

family monthly adjusted income; (2) 10 percent of the family monthly income; (3) a 

calculation based in part on welfare income; or (4) minimum rent set under 24 C.F.R. § 

5.630. 24 C.F.R. § 5.628. For purposes of this report, we will refer to this as residents 

paying 30 percent of adjusted household income to encompass all definition of total tenant 

payment.
Page 34 GAO-18-123 Rental Assistance Demonstration

contract, which is based on household income instead of the 

universally determined area median income.

Although the use agreement maintains some level of affordability, the 

owner receives no subsidy under PBRA or PBV without a HAP contract 

and resident rent contribution is not tied to individual household income 

but rather based on a universal area income calculation (see fig. 3).

Figure 3: Hypothetical Example of Monthly Contribution to Rent by Residents under Rental Assistance Demonstration 

Housing Assistance Payment Contract or RAD Use Agreement

According to HUD officials, other program requirements support the goal 

of long-term preservation:

• HAP contracts are executed for 20 years for PBRA or 15–20 years for 

PBV properties and compliance with all affordability requirements in 

the HAP and statute and regulation governing the PBRA and PBV 

programs must be maintained while the contract is in force.

• According to the authorizing statute, PHAs (for PBV contracts) and 

HUD (for PBRA contracts) shall offer and project owners shall accept 

a renewal contract at the expiration of the initial HAP contract and at 

each subsequent renewal. Each renewal contract will be subject to a 

RAD use agreement, governing the use of the property consistent 

with HUD requirements.
Page 35 GAO-18-123 Rental Assistance Demonstration

• According to the RAD notice, the project owner also is to establish 

and maintain a replacement reserve to aid in funding extraordinary 

maintenance and repair and replacement of capital items. The reserve 

account must be built up to and maintained at a level determined by 

HUD to be sufficient to meet projected requirements.50 According to 

HUD officials, during the conversion, HUD staff review each capital 

needs assessment to try to determine whether a property’s capital 

needs can be addressed over the forthcoming 20-year period.

We reviewed 31 completed conversion files, the set of documentation 

required by HUD to enable a PHA to convert units from public housing to 

a Section 8 subsidy, and associated RAD contracts. In each file, key 

contractual protections appeared consistent with program requirements. 

Specifically, in all cases executed use agreements (which included 

requirements to limit residency eligibility to households making less than 

80 percent of area median income) were included and not altered from 

the HUD template. In most files we reviewed, we found foreclosure riders 

were included and that they stated that use agreements would survive 

foreclosure, meaning that any new owners would take ownership subject 

to the agreements. Executed HAP contracts, requiring that residents’

contributions be set at 30 percent of adjusted household income, also 

were present in all files we reviewed.

According to HUD officials, PHAs, and two housing groups we spoke 

with, provisions in the RAD use agreement to keep units affordable 

appear to be strong, with use and affordability protections designed to 

survive foreclosure, but the strength of provisions cannot yet be fully 

determined because the provisions have not yet been tested in 

foreclosure proceedings or in courts. According to HUD officials, as of 

October 2017 no RAD properties had entered foreclosure.

The RAD authorizing statute requires that ownership be transferred to a 

capable public entity or, if not one, a capable entity as determined by 

HUD, or if necessary to fulfill LIHTC requirements for the property, to a 

HUD-approved for-profit entity (provided the PHA retained sufficient 

 50The annual replacement reserve deposit should be equal to that amount which, if

deposited annually, will be sufficient to fund all capital needs, as identified in the capital 

needs assessment, arising during the first 20 years and otherwise not addressed upfront 

in either the rehabilitation or an initial deposit to the replacement reserve account.
Page 36 GAO-18-123 Rental Assistance Demonstration

interest in the property).51 HUD also subjects any subsequent transfer of 

the property to HUD review and requires the successor ownership to 

meet these same requirements. As stated in the use agreement, a lien 

holder must give HUD notice prior to declaring a default and provide HUD 

concurrent notice with any written filing of foreclosure (providing that the 

foreclosure sale must not be sooner than 60 days after the notice), but 

the use agreement does not prohibit a lien holder from foreclosing on the 

lien or accepting a deed in lieu of foreclosure. The RAD use agreement, 

which is recorded superior to other liens and places use and affordability 

restrictions on the property, survives foreclosure. With or without a HAP 

contract in place, the lender or new owner must maintain the units for lowincome households according to the terms of the use agreement. 

Therefore, according to HUD officials, the lender or new owner has an 

incentive to identify an appropriate owner and secure HUD approval to 

avoid a default under the HAP contract, which provides a Section 8 

subsidy to the owner. That is, if no HAP contract were in place, the owner 

would collect only the tenant rent contribution (30 percent of 80 percent of 

area median income), rather than the tenant rent contribution plus the 

subsidy.

HUD has discretion to enforce or waive certain use and affordability 

protections.

• According to the authorizing statute, in the case of foreclosure, 

bankruptcy, or termination and transfer of assistance for material 

violation or substantial default, the priority for ownership or control 

must be provided to a capable public entity, or, if no such entity can 

be found, to a capable entity as determined by the Secretary of HUD.

• Additionally, the statute allows the transfer of property to for-profit 

entities to facilitate the use of LIHTC financing, with requirements to 

maintain the PHA’s interest, which was discussed above. As of 

September 30, 2017, about 40 percent of RAD conversions involved 

LIHTC financing.

 51According to the RAD notice, preservation of a PHA’s sufficient interest in a project using 

tax credits could include the following cases: the PHA, or an affiliate under its sole control, 

could be the sole general partner or managing member; the PHA could retain fee 

ownership and lease the real estate to the tax credit entity pursuant to a long-term ground 

lease; the PHA could retain control over leasing units; the PHA could retain consent rights 

over certain acts of the project owner; or the PHA could use other means that HUD found 

acceptable.
Page 37 GAO-18-123 Rental Assistance Demonstration

• According to the RAD notice, in the event of a default of a property’s 

use agreement or HAP contract, HUD may terminate the HAP 

contract and transfer assistance to another location to retain 

affordable units.52 HUD will determine the appropriate location and 

owner entity for the transferred assistance consistent with statutory 

goals and requirements for RAD.

• The RAD use agreement will remain in effect even in the case of 

abatement or termination of the HAP contract for the term the contract 

would have run, unless HUD agreed differently in writing. In this case, 

the RAD notice limits HUD discretion to terminate the use agreement 

to only cases involving a transfer of assistance to another property.

HUD has not yet developed procedures to monitor RAD projects for risks 

to long-term affordability of units, including default or foreclosure. HUD 

officials described an ongoing effort to develop oversight procedures it 

would need to reasonably ensure compliance with RAD agreements and 

avoid risks to long-term affordability once conversions closed and units 

moved to Section 8 but, as previously discussed, the agency has not yet 

completed this effort or fully implemented a monitoring system.

HUD officials told us they also planned to develop protocols to more 

closely monitor properties at risk of foreclosure, including developing 

indicators, procedures, roles, and responsibilities within HUD, but they 

have not finalized the design of procedures or fully implemented them. To 

develop protocols, HUD created an asset management working group in 

September 2016. The officials also stressed that no one can take 

possession of or foreclose on a property without HUD involvement and 

approval. For example, HUD officials said they expect few foreclosures 

among RAD-converted properties because lenders tend to communicate 

with the agency early so that it can become involved to prevent 

foreclosure. HUD officials pointed to a robust structure to oversee 

program properties in the PBRA program, but stated PBV property 

oversight continues to be developed by the Office of Public and Indian 

Housing.

According to Standards for Internal Control in the Federal Government, 

agencies should design procedures to achieve goals and objectives, such 

as the preservation of unit affordability, and respond to risks, in this case 

the risk of default or foreclosure or noncompliance with program 

 52Department of Housing and Urban Development Notice H-2017-03 Rev-3.

HUD Does Not Have 

Procedures in Place to 

Identify and Respond to 

Preservation Risks
Page 38 GAO-18-123 Rental Assistance Demonstration

requirements. Additionally, management should identify, analyze, and 

respond to risks related to achieving its goals and objectives. According 

to HUD officials, the agency had not yet fully developed and implemented 

oversight procedures for postconversion monitoring because since 2012, 

the agency has focused on RAD start-up and review and oversight 

procedures for the conversion process. HUD officials also said that many 

projects would receive ongoing monitoring from other parties, which also 

could serve as a safeguard for unit affordability and help ensure the 

appropriate financial and physical condition of the property after RAD 

conversion. For example, just under half of all RAD properties use LIHTC 

financing as part of financing packages, which can also include local and

state bonds. According to HUD officials, oversight by tax credit allocating 

agencies, investors, and lenders, while not alone sufficient, helps secure 

affordable units in a property for the long-term.53 However, tax credit 

allocating agencies, investors, and lenders are not signatories to the HAP 

contract or use agreement and have no formal role in reasonably 

ensuring that properties meet requirements exclusive to RAD.

Although other entities may exercise some oversight of properties, by not 

developing and implementing procedures for ongoing oversight, HUD in 

its role as program administrator will not be able to reasonably ensure 

that properties adhere to requirements or meet basic program goals. 

Furthermore, without such monitoring HUD would be limited in its ability 

to identify and assist with properties at risk of foreclosure.

RAD was created to demonstrate the feasibility of converting public 

housing units to other rental assistance programs to help preserve 

affordable rental units and address the significant backlog of capital 

 53We have found that such oversight activities in LIHTC-funded projects, when conducted 

by state tax credit allocating agencies, typically focus on compliance with affordability 

requirements rather than on the long-term financial and physical health and viability of a 

property. In contrast, we reported that third-party investors are motivated to conduct a 

more complete asset management review that focuses on the long-term viability of a 

property. We have also reported on the role of syndicators in LIHTC-funded projects. 

Syndicators are project fund managers that act as an intermediary between the project 

developer and investors, and they conduct ongoing inspection, monitoring, and reporting 

on LIHTC-funded projects, and may help identify potential problems and intercede as 

needed, at times using the syndicator’s own funding to do so. See GAO, Recovery Act: 

Housing Programs Met Spending Milestones, but Asset Management Information Needs 

Evaluation, GAO-12-634 (Washington, D.C.: June 18, 2012); Low-Income Housing Tax 

Credit: Joint IRS-HUD Administration Could Help Address Weaknesses in Oversight, 

GAO-15-330 (Washington, D.C.: July 15, 2015); and Low-Income Housing Tax Credit: 

The Role of Syndicators, GAO-17-285R (Washington, D.C.: Mar. 1, 2017). 

Conclusions
Page 39 GAO-18-123 Rental Assistance Demonstration

needs in the public housing program. However, demonstrating the 

feasibility of RAD conversion is contingent on collecting and assessing 

quality information about the conversion projects. HUD has an opportunity 

to improve the demonstration’s metrics. For instance, implementing 

robust postclosing oversight and collecting information on financial 

outcomes upon completion of construction would not only improve HUD’s 

oversight capabilities but also allow it to report quality information. 

Moreover, limitations in HUD’s methodology for calculating leverage 

ratios for RAD may obscure the effect of funding sources used to help 

fund RAD conversions, potentially under- or over-reporting the program’s 

capital leveraging. By collecting comprehensive information on final 

(postcompletion) financing sources and costs and developing quality 

metrics, HUD would be better positioned to more accurately report the 

results of the demonstration program.

Additionally, a focus on the conversion process itself (and less on its 

results), and limitations in HUD’s data have contributed to limited 

monitoring by HUD in other areas. Specifically, by not developing and 

implementing monitoring procedures to assess the effect of RAD on 

residents HUD cannot ensure compliance with resident safeguards. 

Further, HUD collects and maintains household data for the public 

housing and Section 8 programs, yet it does not systematically use this 

information to ensure that resident safeguards are in place. Finally, HUD 

could benefit from additional procedures to assess RAD properties for 

risks to long-term preservation to be able to respond to property default or 

foreclosure.

We are making the following five recommendations to HUD:

HUD’s Assistant Secretary for Housing should include provisions in its 

postclosing monitoring procedures to collect comprehensive high quality 

data on financial outcomes upon completion of construction, which could 

include requiring third-party certification of and collecting supporting 

documentation for all financing sources and costs. (Recommendation 1)

HUD’s Assistant Secretary for Housing should improve the accuracy of 

RAD leverage metrics—such as better selecting inputs to the leverage 

ratio calculation and clearly identifying what the leverage ratio 

measures—and calculate a private-sector leverage ratio. 

(Recommendation 2)

Recommendations for 

Executive Action
Page 40 GAO-18-123 Rental Assistance Demonstration

HUD’s Assistant Secretary for Housing should prioritize the development 

and implementation of monitoring procedures to ensure that resident 

safeguards are implemented. (Recommendation 3)

HUD’s Assistant Secretary for Housing should determine how it can use 

available program-wide data from public housing and Section 8 

databases, in addition to resident logs, for analysis of the use and

enforcement of RAD resident protections. (Recommendation 4)

HUD’s Assistant Secretary for Housing should prioritize the development 

and implementation of procedures to assess risks to the preservation of 

unit affordability. (Recommendation 5)

We provided a draft of this report to HUD for comment. HUD provided 

written comments on the draft report, which are summarized below and 

reproduced in appendix IV. HUD also provided technical comments, 

which we incorporated as appropriate.

In its comment letter, HUD stated that it agreed with our findings that 

HUD can improve metrics used to assess program impact and build on 

existing oversight structures. HUD described actions it intends to take to 

implement our recommendations to the extent possible and consistent 

with resource limitations. 

More specifically, HUD agreed with our first recommendation to ensure it 

collects comprehensive quality data on financial outcomes in its 

postclosing monitoring procedures (which could include supporting 

documentation for all financing sources and costs). HUD agreed it should 

routinely collect an updated list of funding sources and uses and related 

documentation when projects had cost overruns or other significant 

changes. HUD intends to review and revise, as appropriate, required 

postcompletion certifications. HUD added that in most cases, funding 

sources and uses do not materially change between closing and 

construction completion. HUD stated that securing the postclosing 

information in such cases might be of minimal benefit relative to the 

additional reporting burden. However, it is not clear how HUD would 

determine if projects had significant changes in costs or uses because 

HUD lacks postcompletion information that would show the magnitude of 

changes. In relation to reporting burden, HUD already has implemented 

procedures to collect limited financial information following the completion 

of construction in October 2017. We believe any additional reporting 

would not be disproportionate to the benefits of improving HUD's 

Agency Comments

and Our Evaluation
Page 41 GAO-18-123 Rental Assistance Demonstration

oversight capabilities through project completion and enhancing its 

reporting to more accurately reflect the results of the demonstration 

program. 

For our second recommendation to improve the accuracy of RAD 

leverage metrics and calculate a private-sector leverage ratio, HUD 

agreed that RAD leverage metrics can be improved. HUD will ensure that 

the private-sector leverage ratio required by statute is clearly identified 

and included in its RAD evaluation. HUD also intends to identify a small 

number of relevant leverage ratios with distinct methodologies and will 

routinely publish these ratios with clear identification and explanations. In 

relation to our finding of misidentified funding sources, HUD plans to reexamine its chart of accounts and review prior transaction records to 

address errors and properly classify transaction sources.

In response to our third recommendation to prioritize the development 

and implementation of monitoring procedures for resident safeguards, 

HUD agreed that it is important to better document and expedite 

development and implementation of monitoring procedures. HUD also 

agreed that additional monitoring was needed to ensure the right of 

residents to request and move with a tenant-based voucher after a period 

of residency (choice-mobility). HUD noted that its Office of Policy 

Development and Research is seeking funding for additional research on 

RAD with a focus on the use and effect of choice-mobility options, which 

would inform HUD's monitoring efforts. Finally, while HUD said that we 

did not find the safeguards to be weak or inadequate, we did not perform 

an audit designed to assess the safeguards and therefore cannot opine 

on their adequacy. On the basis of our findings, we found that HUD’s

implementation of these safeguards could be strengthened. 

Regarding our fourth recommendation that HUD determine how it can use 

available program-wide data and resident logs for analysis of RAD 

resident protections, HUD agreed to examine how it could use its existing 

data systems to further enhance its monitoring efforts. HUD added that 

the systems have limitations, so that the agency also uses other 

mechanisms to track and monitor implementation of resident protections.

For our fifth recommendation to prioritize the development and 

implementation of procedures to assess risks to the preservation of unit 

affordability, HUD agreed that it is important to assess and mitigate risks 

to unit affordability. HUD stated that it employs robust underwriting 

standards prior to permitting conversion, and relies on existing 

procedures to conduct ongoing oversight of Project-Based Rental 
Page 42 GAO-18-123 Rental Assistance Demonstration

Assistance (PBRA) properties, which we discussed in the draft. However, 

as we noted, HUD has not yet developed procedures to more closely 

monitor RAD properties at risk of foreclosure, though it plans to establish

indicators of foreclosure risk and oversight roles and responsibilities 

within HUD. HUD said that since the summer of 2017, it has been 

evaluating what additional oversight procedures might be needed for RAD 

Project-Based Voucher properties. HUD also described plans to augment 

its existing oversight procedures to preserve affordable units in the event 

of foreclosure by developing protocols in the following areas: transfer of 

property ownership to a capable entity, transfer of the rental assistance to 

another site, and protection of residents in the event a Housing 

Assistance Payment contract was terminated. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretary of Housing 

and Urban Development and other interested parties. In addition, the 

report will be available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-8678 or garciadiazd@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs are listed on the last 

page of this report. GAO staff who made major contributions to this report 

are listed in appendix IV.

Sincerely yours,

Daniel Garcia-Diaz

Director, Financial Markets and

 Community Investment
Appendix I: Objectives, Scope, and 

Methodology

Page 43 GAO-18-123 Rental Assistance Demonstration

This report examines aspects of the Department of Housing and Urban 

Development’s (HUD) Rental Assistance Demonstration (RAD) program. 

More specifically, this report addresses (1) HUD’s assessment of the 

physical and financial outcomes of RAD conversion to date; (2) how RAD 

conversions affected residents and what safeguards were in place to 

protect them, including while temporarily relocated and during conversion; 

(3) what challenges, if any, public housing agencies (PHA) faced in 

implementing RAD; and (4) the extent to which RAD provisions are 

designed to help preserve the long-term affordability of units.

To address all four objectives, we analyzed agency documentation and 

interviewed officials from HUD. The documentation we reviewed included 

policies and procedures for RAD; manuals describing HUD data systems; 

draft policies and procedures for implementing postclosing oversight; and 

reports on RAD performance. We interviewed HUD headquarters officials 

from the Office of Recapitalization within the Office of Housing, which 

oversees the administration of RAD, and the Office of Policy 

Development and Research (PD&R). We also interviewed PHA officials 

and developers involved in RAD transactions, as well as selected experts 

and other stakeholders to obtain their perspectives on RAD. Additionally, 

we conducted a literature search to identify publications related to RAD.

We visited a nonprobability sample of eight PHAs in Maricopa County, 

Arizona; Alameda County, California; Montgomery County, Maryland; and 

in the cities of San Francisco, California; Baltimore, Maryland; New Bern, 

North Carolina; El Paso, Texas; and Tacoma, Washington, to observe 

housing units before, during, or after renovation when possible as well as 

common areas that had planned or undergone renovation. We selected 

sites to include varying PHA sizes, RAD subsidy types, planned 

rehabilitation and resident relocation, numbers and sizes of RAD 

transactions, closing dates, constructions costs, and geographic locations 

across the United States. At each site, we conducted semistructured 

interviews with PHA officials and, when available, developers (5 sites).

We also conducted one or two focus-group interviews with groups of 6–

15 residents who lived at the converted properties to obtain their 

perspectives and experiences. In each location, we asked the PHAs to 

invite residents to participate in the focus groups based on their 

availability. We also met with the Resident Advisory Board in each 

location that had one. For 7 of 8 site visits, we selected two RAD 

properties to conduct resident focus groups (in Alameda County, 

California we held one focus group). We conducted a content analysis 

based on resident focus group interviews to describe resident 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 44 GAO-18-123 Rental Assistance Demonstration

experiences and the RAD program’s effects on residents. Utilizing the 

selection criteria noted above, we conducted semistructured telephonic 

interviews with an additional nonprobability sample of 10 PHAs in Fresno, 

California; Fort Collins, Colorado; Dekalb County, Georgia; Chicago, 

Illinois; Ypsilanti, Michigan; Cuyahoga County, Ohio; Philadelphia; 

Pennsylvania; Spartanburg, South Carolina; McKinney, Texas; and 

Yakima, Washington. Because we selected a non-probability sample of 

PHAs to visit and interview, the information we obtained cannot be 

generalized more broadly to all PHAs. However, it provides context on

RAD particularly on implementation challenges and perspectives on 

physical and financial impacts, long-term affordability, and resident 

protections.

We also selected the following 11 individuals and organizations as 

experts and stakeholders:

1. Council of Large Public Housing Authorities

2. National Association of Housing and Redevelopment Officials

3. Center on Budget and Policy Priorities

4. Public Housing Authorities Directors Association

5. National Housing Law Project

6. Community Legal Services of Philadelphia

7. Maryland Legal Aid

8. Disability Rights Maryland

9. Jaime Alison Lee, Associate Professor of Law and Director, 

Community Development Clinic, University of Baltimore School of Law

10. Yumiko Aratani, Assistant Professor, Columbia University Mailman 

School of Public Health

11. University of California, Berkeley, Terner Center for Housing 

Innovation Researchers

We interviewed experts and stakeholders on resident impacts and 

implementation challenges associated with RAD. The entities may not 

represent all views on these topics, but their views provide insights on 

RAD. To select these individuals and groups, we met with three major 

PHA associations and two resident advocacy groups, and asked for 

referrals for organizations or individuals with expertise in RAD.
Appendix I: Objectives, Scope, and 

Methodology

Page 45 GAO-18-123 Rental Assistance Demonstration

We also selected a nonprobability, random sample of 31 RAD conversion 

files to review. Utilizing HUD RAD Resource Desk data, we randomly 

selected 31 RAD files for properties that had closed conversion as of 

June 30, 2017 and that planned to incur construction costs. We used the 

files to help us determine physical changes to RAD conversions and the 

impacts of RAD on residents through, for example, relocation. We 

excluded RAD conversions with no construction costs from the random 

sample because they would not have physical changes and no resident 

relocation would occur before or during our review.

To address our first objective on the physical and financial outcomes of 

RAD conversion to date and how HUD measured these outcomes, we 

first obtained and analyzed HUD data on RAD conversions since RAD’s 

authorization (from fiscal years 2013 through 2017).1 We assessed the 

reliability of these data by reviewing system documentation, interviewing 

knowledgeable officials about system controls, and conducting electronic 

testing. We determined that the data were sufficiently reliable for the 

purposes of describing rehabilitation and new construction in RAD 

projects and evaluating RAD leveraging metrics. We included in our 

analysis all RAD conversions that were active or closed. We used these 

data to determine the number of closed RAD conversions, associated 

financial sources and uses, subsidy types, and type of construction 

(rehabilitation, new construction, and no rehabilitation or new 

construction). In addition, during our interviews with PHAs and 

developers, we obtained their perspectives on potential contributing 

factors to financial decisions and type of construction pursued through 

RAD conversion. As noted earlier, we also reviewed 31 randomly 

selected files of converted properties with construction costs to describe 

property physical changes in RAD conversions.

Furthermore, we reviewed HUD documents, such as HUD and PD&R 

evaluations, publications, and policies and procedures to gain additional 

context for how HUD measures RAD outcomes. We also interviewed 

 1

The RAD Resource Desk, an Internet portal, is accessible to the public, HUD employees, 

and PHA staff. It serves as a comprehensive database that includes all published 

guidance on RAD and also serves as the main portal for PHAs to ask questions, search 

for information and forms, upload documents, and track their progress toward closing. The 

database does not contain a variable to indicate that rehabilitation was planned for a 

converted property but instead includes construction costs planned by the property and a 

variable indicating whether new construction was planned. We inferred that when 

construction costs were listed and no new construction was listed, the property planned 

rehabilitation. We verified the accuracy of this inference with staff from the HUD.
Appendix I: Objectives, Scope, and 

Methodology

Page 46 GAO-18-123 Rental Assistance Demonstration

HUD officials, including PD&R and Office of Recapitalization officials, on 

RAD data and metrics, as well as other performance monitoring activities. 

We further analyzed data from the HUD RAD Resource Desk to 

determine how these data support HUD’s metrics and performance 

monitoring activities. As previously mentioned, we determined that these 

HUD data were sufficiently reliable for the purposes of this report. 

Specifically, we assessed and calculated RAD leverage ratio and 

construction activity. We assessed HUD’s performance monitoring 

activities and reporting against the RAD authorizing statute, Standards for 

Internal Control in the Federal Government.

2

To recalculate estimates of the RAD leverage metric, we obtained 

documentation from the Office of Recapitalization to review the 

methodology used to calculate their most recent leverage ratio. We 

aligned the methodology they provided with RAD Resource Desk 

Transaction Log data that was downloaded on August 7, 2017. We 

replicated HUD’s methodology and matched the data utilized with the 

descriptors from the Transaction Log. To isolate financial sources and 

manually adjust the “other source” data, we compiled matched 

descriptors and funding amounts and categorized each observation 

based on the funding source description, as a federal source, 

state/county/city source, or PHA source, among others. For additional 

information and results, see appendix II.

To determine how RAD affected residents in converted units, we 

analyzed HUD public housing and Section 8 household data before and 

after conversion (demographic characteristics of residents and changes in 

rent, income, and location). Specifically, we examined data from 2013—

when the first transactions closed—through June 30, 2017. HUD 

compiled and provided custom extracts of data on households in RADconverted properties from the Inventory Management System/Public and 

Indian Housing Information Center (IMS/PIC) (public housing and Section 

8 PBV) and Tenant Rental Assistance Certification System (Section 8 

PBRA). We assessed the reliability of the data extracts provided by HUD 

by (1) performing electronic testing of required data elements, (2) 

reviewing existing information about the data and the system that 

produced them, and (3) interviewing agency officials knowledgeable 

about the data. We determined the data on PBV households were 

 2

GAO, Standards for Internal Control in the Federal Government, GAO-14-704G 

(Washington, D.C.: Sept. 10, 2014). 
Appendix I: Objectives, Scope, and 

Methodology

Page 47 GAO-18-123 Rental Assistance Demonstration

sufficiently reliable for the purposes of our reporting objectives, but that 

the data on PBRA households was not sufficiently reliable for purposes of 

describing some characteristics of RAD households. For example, in 

trying to determine participation in the RAD program by year, we received 

several thousand PBRA entries that preceded the establishment of the 

RAD program. Moreover, as we previously mentioned, the 

postconversion household data for PBRA conversions is in a separate 

data system, so some variables, such as those related to race, ethnicity, 

rent, and income, differ from the other household data for that program. 

Because of these limitations, the data for PBRA households were not 

reliable for purposes of comparing RAD household characteristics before 

and after conversion as we had intended. To describe safeguards for 

residents and help ascertain how HUD implemented protections, we 

reviewed legal protections and requirements in HUD notices, reviewed 

selected conversion files, and interviewed HUD officials about monitoring 

and compliance processes. Finally, as previously described, we held 

focus groups with residents to better understand any effects on their living 

conditions and quality of life.

To determine challenges PHAs faced in implementing RAD, we reviewed 

HUD guidance and related documents for PHAs in the program. We also 

interviewed eight PHAs during our site visits and spoke with another 10 

PHAs by telephone about the benefits and challenges of participating in 

the RAD program.

To examine provisions designed to help preserve long-term affordability 

of units, we reviewed the RAD authorizing statute and amendments and 

HUD notices and interviewed HUD staff to verify our understanding of 

agency affordability protections. For a sample of 31 randomly selected 

properties, we examined templates for contractual agreements for RAD 

closings and analyzed closing documents and contracts to determine if 

agreements matched program requirements. We interviewed HUD staff 

and staff of 18 PHAs to obtain viewpoints on the potential strengths or 

weaknesses of preservation in the case of default or foreclosure.

We conducted this performance audit from February 2016 to February

2018 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: HUD’s Reported Leverage Ratios 

and Our Recalculation Estimates

Page 48 GAO-18-123 Rental Assistance Demonstration

The Department of Housing and Urban Development’s (HUD) Office of 

Recapitalization collects financial sources and use data from Rental 

Assistance Demonstration (RAD) participants. Table 2 lists the financial 

source fields collected by HUD.

Table 2: Financial Source Data Collected by HUD as of September 30, 2017

Source Dollars

New first mortgage loan funds 1,833,895,044.00 

Public housing operating reserve funds 210,103,773.45 

Prior year public housing capital funds 214,159,903.19 

Replacement housing factor funds 97,106,136.00 

Low-income housing tax credit (LIHTC) equity – 4% 2,415,452,530.08 

Low-income housing tax credit (LIHTC) equity – 9% 1,109,711,958.52 

HOME investment partnerships program (HOME) funds 69,444,234.00 

Community development block grant (CDBG) funds 7,863,841.00 

Other federal funds 42,929,913.00 

Other state/local funds 102,254,308.00 

Other private funds 8,235,320.00 

Take-back financing funds 1,057,650,689.00 

Deferred developer fees 7,281,886.00 

Other funds (1-6) 2,195,637,734.16 

Source: Department of Housing and Urban Development. | GAO-18-123

Table 3 lists the financial cost fields collected by HUD.

Table 3: Financial Cost (Uses) Data Collected by HUD as of September 30, 2017

Costs (Uses) Dollars

Construction costs 4,424,818,546.12 

Building cost 2,238,137,745.42 

Developer fee 658,928,919.28 

Construction interest 282,554,066.87 

Initial deposit to replacement reserve 254,612,622.27 

Operating reserves 214,395,665.14 

Other professional fees amount 187,611,985.16 

Architecture 170,577,980.59 

Reserves other amount 129,807,097.45 

Relocation costs 125,901,300.26 

Loan fee other amount 117,846,360.15 

Appendix II: HUD’s Reported Leverage 

Ratios and Our Recalculation Estimates
Appendix II: HUD’s Reported Leverage Ratios 

and Our Recalculation Estimates

Page 49 GAO-18-123 Rental Assistance Demonstration

Costs (Uses) Dollars

Payoff existing loans 93,686,776.25 

Other acquisition costs 87,386,286.00 

Bond issuance 63,590,667.54 

Borrower’s legal counsel 42,657,133.84 

Initial operating deficit escrow 36,428,084.33 

Financing fee 33,028,858.00 

Construction loan fees 26,991,806.00 

Tax & insurance escrow 26,576,901.94 

Engineering 24,473,328.00 

Title inspection 19,376,144.80 

Environmental 17,983,061.92 

Lender’s legal counsel 14,531,019.00 

Accounting 9,891,746.82 

Feasibility study 8,384,651.00 

Survey 8,138,811.00 

Recordation fee 7,341,330.00 

Appraisal / market study 6,281,617.92 

Physical condition assessment 5,437,087.05 

Organizational costs 5,244,023.45 

FHA mortgage insurance premium 4,995,295.91 

FHA inspection fee 2,734,095.00 

FHA application fee 2,187,410.00 

Payables 1,814,907.92 

Closing escrow agent fee 347,278.00

Legend:

FHA=Federal Housing Administration.

Source: Department of Housing and Urban Development. | GAO-18-123

Note: HUD also has Acquisition Cost, Other Professional Fees Description, Prepay Penalty, Loan 

Fee Other Description, and Reserves Other Description fields which had zero values and did not list 

in the table above.

Table 4 provides additional financial source detail pertaining to HUD’s 

leverage ratio calculation.
Appendix II: HUD’s Reported Leverage Ratios 

and Our Recalculation Estimates

Page 50 GAO-18-123 Rental Assistance Demonstration

Table 4: RAD Financing Source Fields That HUD Uses as Inputs for Its Leverage Ratio Calculation

Total sources • Replacement housing factor funds

• Public housing operating reserve funds

• Prior year public housing capital funds

• New first mortgage loan funds

• 9% LIHTC equity

• 4% LIHTC equity

• Other funding 1

• Other funding 2

• Other funding 3

• Other funding 4

• Other funding 5

• Other funding 6

Public housing dollars • Replacement housing factor funds

• Public housing operating reserve funds

• Prior year public housing capital funds

Non-public housing sources • New first mortgage loan funds

• 9% LIHTC equity

• 4% LIHTC equity

• Other funding 1

• Other funding 2

• Other funding 3

• Other funding 4

• Other funding 5

• Other funding 6

Legend: LIHTC=low-income housing tax credit.

Source: Department of Housing and Urban Development. | GAO-18-123

Table 5 and Table 6 show the total financial source amounts collected by 

HUD. Specifically, Table 5 shows total financial source amounts prior to 

recategorization, while Table 6 shows total financial source amounts after 

manual adjustments. Manual adjustments included isolating funding 

source observations in “other funding” fields 1-6 and incorporating them 

into existing fields, as appropriate.

Table 5: HUD Financial Sources (uncategorized)

Financial Source Dollars

New first mortgage 1,705,380,940.00 

Public housing operating reserves 153,797,879.71 

Public housing capital fund 138,190,807.81 
Appendix II: HUD’s Reported Leverage Ratios 

and Our Recalculation Estimates

Page 51 GAO-18-123 Rental Assistance Demonstration

Financial Source Dollars

Replacement housing factor 81,495,730.00 

Low-income housing tax credit equity - 4% 2,300,777,174.08 

Low-income housing tax credit equity - 9% 979,567,243.52 

HOME investment partnerships program (HOME) 43,526,282.00 

Community development block grant (CDBG) 4,968,617.00 

Other federal funds 42,929,913.00 

Other state/local funds 99,241,345.00 

Other private funds 8,235,320.00 

Take-back financing 985,796,391.00 

Other 2,044,012,054.66 

Total sources 8,587,919,697.78 

Source: Department of Housing and Urban Development | GAO-18-123

Note: HUD also has a field for Deferred Developer Fees which had zero values and we did not list in 

the table above.

Table 6: HUD Financial Sources (recategorized by GAO)

Financial Sources Dollars

New first mortgage 1,705,380,940.00 

Public housing operating reserves 183,761,192.87 

Public housing capital funds 183,728,292.06 

Replacement housing factor 83,270,730.00 

Low-income housing tax credits - 4% 2,300,777,174.08 

Low-income housing tax credits - 9% 979,567,243.52 

HOME investment partnership program (HOME) 43,526,282.00 

Community development block grant (CDBG) 4,968,617.00 

Other federal funds 276,359,797.65 

Other state/local/county funds 398,510,024.00 

Other private funds 8,235,320.00 

Take-back financing 1,274,009,771.00 

Other 816,727,051.09 

Other public housing agency (PHA) sources 329,097,262.51 

Total Sources 8,587,919,697.78 

Source: Department of Housing and Urban Development and GAO analysis. | GAO-18-123

Note: To properly account for PHA sources, we created the category “Other PHA Sources” that 

captures sources attributable to a PHA that were considered leveraged by HUD in the “other” source 

fields.
Appendix II: HUD’s Reported Leverage Ratios 

and Our Recalculation Estimates

Page 52 GAO-18-123 Rental Assistance Demonstration

Table 7 replicates HUD’s methodology for calculating the RAD leverage 

metrics after manual adjustments in HUD data. See Table 4, above, to 

compare changes in each category.

Table 7: GAO-Adjusted Leverage Ratio for RAD as of June 2017, with Recategorized Financial Sources

Dollars Leverage ratio ($)

Total sources Public housing operating reserve 183,761,192.87 7.44:1

Prior year public housing capital funds 183,728,292.06 

Replacement housing factor 83,270,730.00 

New first mortgage loan 1,705,380,940.00 

LIHTC equity – 4% 2,300,777,174.08 

LIHTC equity – 9% 979,567,243.52 

Other 816,727,051.09 

Other PHA sources 329,097,262.51 

Total sources 6,582,309,886.13 

Public housing sources Public housing operating reserve 183,761,192.87 

Prior year public housing capital funds 183,728,292.06 

Replacement housing factor 83,270,730.00 

Other PHA sources 329,097,262.51 

Total public housing sources 779,857,477.44 

Total sources 6,582,309,886.13 

Legend: LIHTC=low-income housing tax credit. PHA=public housing agency.

Source: Department of Housing and Urban Development, GAO analysis. | GAO-18-123

Table 8 recalculates the leverage ratio by deducting federal sources as 

leveraged sources.

Table 8: GAO-Adjusted leverage Ratio for RAD as of June 2017, That Excludes Federal Funding Sources, and Including Tax 

Credits

Dollars Leverage ratio ($)

Public housing sources Public housing operating reserve 183,761,192.87 1.43:1

Prior year public housing capital funds 183,728,292.06 

Replacement housing factor 83,270,730.00 

Other PHA sources 329,097,262.51 

Take-back financing 1,274,009,771.00 

Total public housing sources 2,053,867,248.44 
Appendix II: HUD’s Reported Leverage Ratios 

and Our Recalculation Estimates

Page 53 GAO-18-123 Rental Assistance Demonstration

Dollars Leverage ratio ($)

Federal sources LIHTC equity – 4% 2,300,777,174.08 

LIHTC equity – 9% 979,567,243.52 

HOME 43,526,282.00 

CDBG 4,968,617.00 

Other federal funds 276,359,797.65 

Total federal funding sources 3,605,199,114.25 

Non-federal sources New first mortgage loan 1,705,380,940.00 

Other private funds 8,235,320.00 

Other 816,727,051.09 

Other state/local/county funds 398,510,024.00 

Total non-federal funding sources 2,928,853,335.09 

Total sources 8,587,919,697.78 

Legend: PHA=public housing agency. LIHTC=low-income housing tax credit. HOME=HOME Investment Partnerships Program. CDBG=Community 

Development Block Grant.

Source: Department of Housing and Urban Development, GAO analysis. | GAO-18-123

Table 9 recalculates the leverage ratio by deducting public sources as 

leveraged sources (compare to Table 8 above).

Table 9: GAO-Calculated Private-Sector Leveraging Ratio for RAD, as of June 2017

Dollars Leverage ratio ($)

Public housing sources Public housing operating reserve 183,761,192.87 1.23:1

Prior year public housing capital funds 183,728,292.06 

Replacement housing factor 83,270,730.00 

Take-back financing 1,274,009,771.00 

Other PHA sources 329,097,262.51 

Total public housing sources 2,053,867,248.44 

Non-private sources LIHTC equity – 4% 2,300,777,174.08 

LIHTC equity – 9% 979,567,243.52 

HOME 43,526,282.00 

CDBG 4,968,617.00 

Other federal funds 276,359,797.65 

Other state/local/county funds 398,510,024.00 

Total federal funding sources 4,003,709,138.25 
Appendix II: HUD’s Reported Leverage Ratios 

and Our Recalculation Estimates

Page 54 GAO-18-123 Rental Assistance Demonstration

Dollars Leverage ratio ($)

Private sources New first mortgage loan 1,705,380,940.00 

Other private funds 8,235,320.00 

Other 816,727,051.09 

Total private funding sources 2,530,343,311.09 

Total sources 8,587,919,697.78

Legend: PHA=public housing agency. LIHTC=low-income housing tax credit. HOME=HOME Investment Partnerships Program. CDBG=Community 

Development Block Grant.

Source: Department of Housing and Urban Development, GAO analysis. | GAO-18-123
Appendix III: RAD Resident Safeguard and 

Monitoring Requirements

Page 55 GAO-18-123 Rental Assistance Demonstration

The Rental Assistance Demonstration (RAD) program has numerous 

requirements intended to ensure residents whose units are converted 

through RAD receive certain protections. The following is a description of 

these safeguards and their reporting and monitoring requirements.

Table 10: RAD Resident Safeguards and Monitoring Requirements 

RAD Resident Safeguard Description of Safeguard Reporting and Monitoring Requirements

Conversion will be considered 

a significant amendment to a 

PHA plan.

Applies during conversion

PHAs must include an amendment describing 

the conversion of assistance under RAD in 

their 5-year, annual, or MTW plans with 

consultation from the PHA’s resident advisory 

board.

RAD January 2017 Notice

Following adoption of the required amendment 

describing the conversion of assistance under RAD, 

PHAs submit the amendment to HUD’s Office of 

Public and Indian Housing for review and approval.

Following review by HUD of the amendment, PHAs 

submit a letter from HUD approving the five-year, 

annual, or MTW plans or significant amendment as 

part of their financing plan submission.

Notification of proposed 

conversion, meetings during 

the conversion process, 

written response to residents 

comments on conversion, and 

notification of conversion 

approval and impact

Applies preconversion and 

during conversion

PHAs must notify residents and resident 

organizations of conversion plans. This 

includes:

• Issuing a RAD Information Notice at the 

very beginning of the RAD conversion 

process (prior to meeting with residents) to 

inform residents of projects proposed for 

conversion of their rights in connection 

with a proposed conversion.

• Issuing a General Information Notice to 

any individual who may be displaced as a 

result of RAD conversion. PHAs must also 

provide a written notice of relocation when 

applicable (30-days’ notice for relocations 

of 12 months or less or 90-days’ notice for 

relocations of more than 12 months), and 

should meet with each household to 

assess their needs and preferences prior 

to issuing this notice.

• Conducting meetings with residents of 

projects proposed for conversion to 

discuss conversion plans and provide 

opportunity for comment. These include

• at least two meetings prior to applying 

to RAD;

• one meeting following selection to 

participate in RAD; and 

• additional resident meetings upon 

material changes in utility allowance 

calculations and significant changes to 

the conversion plans from what was 

presented at previous meetings.

• Near the close of the RAD conversion, the 

RAD January 2017 Notice

PHAs submit comprehensive written responses to 

resident comments received in connection with the 

required resident meetings with the RAD application.

PHAs must provide date(s) of the resident meeting 

(or meetings, where applicable) held following the 

issuance of the Commitment to enter into a HAP

contract and a record of the responses (written or 

oral, or in subsequent actions) to resident comments 

on the proposed conversion that were received in 

connection with such meetings.

RAD November 2016 Fair Housing, Civil Rights,

and Relocation Notice

Requires PHAs to keep on file their communications 

to residents about their rights and information about 

the conversion planning and potential relocations, 

among other things.

Other HUD efforts

HUD is working on updating its standard operating 

procedures for transaction managers in order to 

better determine how thoroughly residents’

comments are reviewed and integrated into the 

financing plan.

Appendix III: RAD Resident Safeguard and 

Monitoring Requirements
Appendix III: RAD Resident Safeguard and 

Monitoring Requirements

Page 56 GAO-18-123 Rental Assistance Demonstration

RAD Resident Safeguard Description of Safeguard Reporting and Monitoring Requirements

PHA must notify each affected household 

that conversion of the project has been 

approved and inform households of the 

specific rehabilitation or construction plans 

and any other impacts.

No rescreening at conversion

Applies postconversion

Residents cannot be excluded from living at the 

converted project based on any rescreening, 

income eligibility, or income targeting. For 

example, a unit with a household that was 

over-income at time of conversion would 

continue to be treated as an assisted unit.

RAD January 2017 Notice

No ongoing reporting or monitoring efforts specified.

Other HUD efforts

See related efforts in right to return below 

Right to return after temporary 

relocation to facilitate 

rehabilitation or construction

Applies postconversion

Any resident who may need to be temporarily 

relocated to facilitate rehabilitation or 

construction has a right to return to an assisted 

unit at the covered project once rehabilitation or 

construction is completed.

RAD November 2016 Fair Housing, Civil Rights, 

and Relocation Notice

No ongoing reporting requirement. PHAs or other 

postclosing owners maintain a resident log of 

relocation activities to demonstrate compliance, 

including whether residents have returned to a 

property following relocation. PHAs must provide to 

HUD the resident logs upon request.

Other HUD efforts

HUD developed and started implementing 

procedures in October 2017 that require owners to 

certify compliance with the resident right-to-return 

requirements. For example, owners must certify the 

number of residents who exercised their right to 

return to a converted property compared with the 

number of residents who did not return.

HUD is also developing standard operating 

procedures to review each conversion for 

compliance with RAD relocation provisions. 

Specifically, the procedures would describe the 

review steps required at different stages of the 

conversion process, a process for identifying risks, 

and addressing instances of noncompliance with 

RAD requirements.

HUD also has been developing a new fair housing 

and relocation checklist that will outline the 

information and documentation PHAs and other 

owners must provide in order to facilitate HUD’s 

front-end fair housing and civil rights and relocation 

reviews (currently undergoing Paperwork Reduction 

Act review).

Current limited compliance review of around 90

sample resident logs and a review involving a set of 

HUD requirements that affect relocations of more 

than 1 year.

Phase-in of tenant rent 

increases

Applies postconversion

Particularly for those tenants who move from a 

flat (fixed) rent structure to an income-based 

one following RAD conversion, if a tenant’s 

RAD January 2017 Notice

No ongoing reporting or monitoring efforts specified.
Appendix III: RAD Resident Safeguard and 

Monitoring Requirements

Page 57 GAO-18-123 Rental Assistance Demonstration

RAD Resident Safeguard Description of Safeguard Reporting and Monitoring Requirements

monthly rent increases by more than the 

greater of 10 percent or $25 purely as a result 

of conversion, the rent increase will be phased 

in over 3 or 5 years. 

Continued participation in the 

ROSS-SC and FSS programs

Applies postconversion

Under certain conditions following RAD 

conversion, residents can continue to be 

served by two HUD assistance programs 

designed to encourage economic selfsufficiency.

They can continue to be served by FSS as long 

as the PHA is eligible to participate and applies 

for funding.

Residents can continue to be served by ROSSSC until the PHA’s grant for that program is 

completed. After this time, residents cannot be 

served by this program as it is required to serve 

only public housing residents.

HUD May 2016 Notice

FSS: PHA must submit an FSS exit or progress 

report once a project has been converted but before 

an end of participation in public housing record is 

submitted. HUD tracks family information for FSS 

participants with PBV, but not PBRA.

ROSS-SC: None specific to RAD

Other HUD efforts

None specific to RAD

Monitoring for FSS and ROSS-SC programs 

conducted by the Office of Public and Indian 

Housing and Office of Multifamily Housing Programs

as part of their monitoring of the public housing and 

Section 8 programs respectively.

Continued earned income 

disregard (EID)

Applies postconversion

The continued earned income disregard allows 

tenants to obtain employment without having 

their rent increase right away. Tenants who are 

employed and receive EID at the time of 

conversion will continue to receive EID after 

conversion. Once a resident’s EID expires, any 

rent adjustment will not be phased in but 

applied in total. 

RAD January 2017 Notice

No ongoing reporting or monitoring efforts specified.

Continued recognition of and 

funding for legitimate residents 

organizations

Applies postconversion

Residents of covered projects with assistance 

converted to PBV or PBRA assistance will have 

the right to establish and operate a resident 

organization and be eligible for resident 

participation funding. This is a protection 

carried over from the public housing program 

and is not typically available to Section 8 

residents.

RAD January 2017 Notice

No ongoing reporting or monitoring efforts specified.

Other HUD efforts

HUD officials indicated that there are procedures for 

residents to report complaints to HUD if resident 

representation and organization requirements are 

not met.

.

Resident eviction and 

grievance procedural rights

Applies postconversion

Converted project owners (either the PHAcontrolled or other entity that takes ownership 

control following RAD conversion) are required 

to administer termination (eviction) and 

grievance procedures that are more in line with 

public housing requirements, which are more 

formal than Section 8 requirements.

RAD January 2017 Notice

PBV: Must be incorporated into both the Section 8 

administrative plan and the project owner’s lease, 

which includes the required tenancy addendum, as 

appropriate.

Current PBV program rules require that hearing 

procedures must be outlined in the PHA’s Section 8 

administrative plan.

PBRA: Resident procedural rights must be included 

as part of the house rules for the associated project 

and the house rules must be furnished to HUD as 

part of the financing plan submission.
Appendix III: RAD Resident Safeguard and 

Monitoring Requirements

Page 58 GAO-18-123 Rental Assistance Demonstration

RAD Resident Safeguard Description of Safeguard Reporting and Monitoring Requirements

Evidence of such incorporation may be requested by 

HUD for purposes of monitoring the program.

Other HUD efforts

HUD had not been consistently collecting required 

documentation on “house rules,” so it has developed 

additional legal review procedures as part of the 

implementation of RAD resident eviction and 

grievance procedural rights requirements.

Choice-mobility option 

allowing a resident to move 

out of a RAD converted 

property with a tenant-based 

voucher

Applies postconversion

Tenants are eligible to receive a voucher or 

other tenant-based rental assistance, which 

can be used at a different property. Under PBV 

conversion, residents are eligible for a voucher 

or other tenant-based rental assistance after 1 

year of occupancy at the converted property. 

Under PBRA conversions, residents are eligible 

to receive a voucher after 2 years of residency 

at the converted property (or from the date of 

execution of the HAP contract—whichever is 

later).

RAD January 2017 Notice

No ongoing reporting or monitoring efforts specified.

Other HUD efforts

HUD officials told us that they plan to assess how 

administrative data can be used to monitor choice 

mobility as part of the planning for a separate Office 

of Policy Development and Research evaluation of 

this safeguard.

Legend: RAD=Rental Assistance Demonstration; PHA=public housing agency; MTW=Moving to Work; HUD=Housing and Urban Development; ROSSSC=Resident Opportunity and Self-Sufficiency Service Coordinators; FSS=Family Self-Sufficiency; EID=earned income disregard; PBV=project-based 

voucher; PBRA=project-based rental assistance; HAP=Section 8 Housing Assistance Payment.

Source: Department of Housing and Urban Development, GAO analysis.| GAO-18-123
Appendix IV: Comments from the Department 

of Housing and Urban Development 

Page 59 GAO-18-123 Rental Assistance Demonstration 

Appendix IV: Comments from the 

Department of Housing and Urban 

Development 
Appendix IV: Comments from the Department 

of Housing and Urban Development 

Page 60 GAO-18-123 Rental Assistance Demonstration 
Appendix IV: Comments from the Department 

of Housing and Urban Development 

Page 61 GAO-18-123 Rental Assistance Demonstration 
Appendix IV: Comments from the Department 

of Housing and Urban Development 

Page 62 GAO-18-123 Rental Assistance Demonstration 
Appendix IV: Comments from the Department 

of Housing and Urban Development 

Page 63 GAO-18-123 Rental Assistance Demonstration 
Appendix IV: Comments from the Department 

of Housing and Urban Development 

Page 64 GAO-18-123 Rental Assistance Demonstration 
The Government Accountability Office, the audit, evaluation, and investigative 

arm of Congress, exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability of the 

federal government for the American people. GAO examines the use of public 

funds; evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good government 

is reflected in its core values of accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through GAO’s website (https://www.gao.gov). Each weekday afternoon, GAO 

posts on its website newly released reports, testimony, and correspondence. To 

have GAO e-mail you a list of newly posted products, go to https://www.gao.gov

and select “E-mail Updates.” 

The price of each GAO publication reflects GAO’s actual cost of production and 

distribution and depends on the number of pages in the publication and whether 

the publication is printed in color or black and white. Pricing and ordering 

information is posted on GAO’s website, https://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, MasterCard, 

Visa, check, or money order. Call for additional information. 

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at https://www.gao.gov. 

Contact: 

Website: https://www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Orice Williams Brown, Managing Director, WilliamsO@gao.gov, (202) 512-4400, 

U.S. Government Accountability Office, 441 G Street NW, Room 7125, 

Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

James-Christian Blockwood, Managing Director, spel@gao.gov, (202) 512-4707 

U.S. Government Accountability Office, 441 G Street NW, Room 7814, 

Washington, DC 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone 

Connect with GAO 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

Strategic Planning and 

External Liaison 

Please Print on Recycled Paper.
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 65 GAO-18-123 Rental Assistance Demonstration

Daniel Garcia-Diaz, 202-512-8678, or garciadiazd@gao.gov

In addition to the individual named above, Paul Schmidt (Assistant 

Director), Julie Trinder-Clements (Analyst in Charge), Meghana Acharya, 

Enyinnaya David Aja, Alyssia Borsella, Juan J. Garcia, Ron La Due Lake, 

Amanda Miller, Marc Molino, Barbara Roesmann, Jessica Sandler, 

MaryLynn Sergent, Rachel Stoiko, and William Woods made major 

contributions to this report.

Appendix V: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100659)
The Government Accountability Office, the audit, evaluation, and investigative 

arm of Congress, exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability of the 

federal government for the American people. GAO examines the use of public 

funds; evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good government 

is reflected in its core values of accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through GAO’s website (https://www.gao.gov). Each weekday afternoon, GAO 

posts on its website newly released reports, testimony, and correspondence. To 

have GAO e-mail you a list of newly posted products, go to https://www.gao.gov

and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of production and 

distribution and depends on the number of pages in the publication and whether 

the publication is printed in color or black and white. Pricing and ordering 

information is posted on GAO’s website, https://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537.

Orders may be paid for using American Express, Discover Card, MasterCard, 

Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube.

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts.

Visit GAO on the web at https://www.gao.gov.

Contact:

Website: https://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Orice Williams Brown, Managing Director, WilliamsO@gao.gov, (202) 512-4400, 

U.S. Government Accountability Office, 441 G Street NW, Room 7125, 

Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

James-Christian Blockwood, Managing Director, spel@gao.gov, (202) 512-4707

U.S. Government Accountability Office, 441 G Street NW, Room 7814, 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Strategic Planning and

External Liaison

Please Print on Recycled Paper.