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Lee Jones
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May 8, 2013

Participation in nationwide pilot will maintain apartments as affordable housing while increasing owners' access to capital for building maintenance or upgrades

SEATTLE - The U.S. Department of Housing and Urban Development has approved the participation of the privately-owned, 35-unit Raymond Manor in Raymond, Washington, in a new nationwide Rental Assistance Demonstration (RAD) pilot project proposed by the Obama Administration and authorized by the Congress to increase the access of public housing and certain privately-owned, HUD-assisted rental properties to private capital to maintain and upgrade the properties. In addition, its participation in RAD will insure that the Raymond Apartments remain affordable for another 15 years.

Raymond Manor is the first privately-owned, HUD-assisted apartments in Washington state chosen to participation in the RAD pilot. Public housing authorities in Vancouver and Yakima were selected as the first public housing authorities in Washington state and just 68 public housing authorities nationwide to participate in the RAD pilot.

For more than 39 years, Raymond Manor has had a HUD-insured mortgage and has received HUD rent subsidies under the HUD Rent Supplement Program. Under the terms of the Rent Supplement Program, the rent subsidies end of 40 years or once the mortgage matures, whichever occurs earlier. Raymond Manor rent supplements end in July, 2013.

Prior to HUD's RAD pilot, Federal law prohibited Rent Supplement properties from receiving rent subsidies following mortgage maturity or at the end of their use agreement. As a result of the RAD pilot, Raymond Manor has been approved to convert its 35 units to HUD project-based rental vouchers, thereby maintaining rent subsidies for another 15 years which, in turn, mean that its residents need pay no more than 30 percent of their monthly income to rent. The RAD pilot also means its owners could seek loans or to enlist private investors in addressing the property's capital needs. The vouchers will be administered by the Longview Housing Authority.

"This win-win," said HUD Northwest Regional Administrator Mary McBride. "Thanks to the RAD pilot, owners of Raymond Manor could gain increased access to private capital to maintain and upgrade the property while the City of Raymond preserves an vital affordable housing resource for the residents of Raymond. We thank the owners of the Raymond Apartments for stepping forward and being in the first in Washington state to make use of this groundbreaking innovation."

In 2011, HUD released Capital Needs in the Public Housing Program, a study that found the nation's 1.2 million public housing units need $26 billion to keep these homes in safe and decent condition for families, a figure well in excess of the roughly $2 billion Congress appropriates for capital repairs annually. Beyond the potential loss of this public housing stock, the Moderate Rehabilitation, Rent Supplement, and older Rental Assistance Payment (RAP) programs are also at risk of being lost from the affordable housing stock.

RAD is part of the Obama Administration's comprehensive strategy to preserve public and HUD-assisted housing. In November 2011, Congress authorized HUD to implement RAD as a budget-neutral demonstration program with two components, allowing for the conversion of assistance for both public housing and HUD-assisted properties that have expiring subsidies. When fully-implemented, the RAD pilot is expected to cover more than 60,000 public housing and privately-owned, HUD-assisted properties nationwide.


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