Center for Public Enterprise

HUD Rebrands Faircloth-to-RAD as Restore Rebuild

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On November 12th, the Office of Multifamily Housing at the Department of Housing and Urban Development (HUD) announced they have officially rebranded the process widely known as “Faircloth-to-RAD,” doing away with the bureaucratic moniker in favor of “Restore-Rebuild.”

For the past few years, Faircloth-to-RAD, (hereafter referred to as Restore-Rebuild), has generated interest as a new pathway for public housing authorities to bring new deeply affordable, subsidized housing online with federal rental subsidy.

The rebrand to Restore-Rebuild more clearly communicates the goals and purpose of the program. Restore-Rebuild is about restoring rental assistance subsidies that PHAs are entitled to and rebuilding homes that have been demolished or sold over the years.

Last week’s name change represents an inflection point for the program, as it moves from an innovative concept to a program that is successfully delivering new affordable housing, with over 50 public housing authorities (PHAs) having started Restore-Rebuild projects.

Along with the name change, HUD announced a few key policy and guidance tweaks. Among the most notable: 

  • Continued rent augmentation: Non-Moving to Work (MTW) agencies will be permitted to continue to augment their post-conversion Restore-Rebuild rents with existing voucher program reserves. HUD had been required to study the use of augmentation in September 2024, casting some doubt on whether the ability would be extended. It is now permitted indefinitely.

  • Clarifying PHA partnerships: HUD previously did not have clear guidance on how PHAs could partner with one another to complete Restore-Rebuild projects. The updated Restore-Rebuild guide now clarifies that PHAs with overlapping jurisdictions can partner to, for example, use one agency’s Faircloth authority and another agency’s voucher reserves to augment rents. This offers interesting options for agencies with the jurisdiction to provide vouchers across the state (such as in Georgia) to help spur these types of developments more broadly.  

  • Faster processing for Restore-Rebuild acquisitions: When existing housing doesn’t require significant rehab, a PHA can implement the RAD closing in lockstep with the Mixed Finance closing, as opposed to waiting until after construction activities are complete. This should help speed up the process and cut down on costs for multiple closings.

PHAs considering RAD conversions more generally should be aware that HUD is set to release updated RAD rents based off of FY24 public housing funding levels in the coming months. Because FY24 funding levels were lower than FY22 funding levels (which the current RAD rents are set on) and the Operating Cost Adjustment Factors used to inflate RAD rents have come down from pandemic-related highs, PHAs should anticipate potentially lower RAD rents in 2025 and beyond. PHAs with projects on the bubble should consider locking in their RAD rents as soon as possible.