HUD has issued a discussion draft proposal regarding its Transforming Rental Assistance (TRA) initiative.

HUD included a request for $350 million in the FY 2011 budget for the first phase of TRA. HUD describes TRA as a multi-year effort to preserve HUD-funded public housing and privately owned assisted housing, stem the loss of affordable units, enhance housing choices for residents, and streamline the administration of HUD’s rental assistance programs. The discussion draft, issued March 31, 2010, attempts to address comments and criticisms that HUD received in response to the proposal included in the FY 2011 budget.

Under the proposal, eligible properties will have the option to voluntarily convert from their current subsidy to a new type of long-term, project-based, Section 8 contract. This would require new statutory authority. Small or partially assisted properties will have the option of converting to a project-based voucher contract. HUD believes that providing properties with stable, sustainable funding based upon a contract rent will further its goal of preservation of affordable housing.

Under this first phase of TRA, eligible properties include:

  • Public housing

  • Properties assisted under HUD’s multifamily programs owned by PHAs

  • Privately owned properties with contracts under the Rent Supplement program, Rental Assistance Program (RAP), or the Section 8 Mod Rehab program (excluding properties funded under the McKinney Act)  

HUD has not fully developed the criteria for eligibility for conversion or a selection process. The current proposal is to provide a 20-year assistance contract upon conversion and to require a long-term use agreement.

A key component of the TRA proposal is what HUD calls the “Residents’ Choice Option.” HUD proposes that residents in properties that have undergone conversion through the TRA initiative be eligible to receive a housing choice voucher. For properties receiving a project-based voucher contract, residents would be eligible for a voucher after one year of residency. For properties receiving a new project-based Section 8 contract, residents would be eligible after two years. HUD believes that this will benefit residents and will also provide market discipline that encourages owners to provide good quality housing. 

Many elements of HUD’s proposal are not yet finalized, and HUD continues to seek input. Comments can be submitted at

Ballard Spahr will continue to monitor and report on developments.

 In the area of housing law, Ballard Spahr has a nationally recognized practice marked by a history of leadership in the development and financing of housing and community development projects. The firm represents numerous state and local housing finance agencies and public housing authorities, as well as developers, mortgage and investment bankers, commercial lenders, and low-income housing tax credit investors in housing and community development transactions. The firm also advises clients on the programs and requirements of HUD, FHA, Fannie Mae, Freddie Mac, and GNMA. For a fuller description of our practice, click here.


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