HUD Project Rental Assistance Contracts (PRAC)
A project rental assistance contract, or PRAC, is an agreement that enables the owner of HUD Section 202 properties to receive project rental assistance funds.
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What Is a Project Rental Assistance Contract?
A project rental assistance contract, or PRAC, is an agreement between the Department of Housing and Urban Development and the owner of a property operating under HUD’s Section 202 program for the elderly.
This contract enables the owner to receive project rental assistance funds, which make up the difference between a community’s approved operating costs and rents received from the property’s residents. These agreements typically span three years, and may be renewed depending on the availability of funding.
RAD for PRAC Conversions
Toward the end of 2019, HUD announced the creation of a program to convert properties operating under PRACs into RAD — or rental assistance demonstration — communities.
Converting an asset through RAD can be a critical component in addressing capital improvements needed at a senior housing community and can ensure the financial stability of the property through the remainder of its HAP contract.