HUD Updates Preservation Rent Boost for RAD-Converting Properties

Recommend

Advocacy win: LeadingAge submitted feedback to HUD in 2023 asking for increased rent boosts for preservation transactions and carve-outs for small properties, both of which the agency has now allowed.

The Department of Housing and Urban Development (HUD) on September 22, 2025 announced increases to a rent boost for Section 202 Project Rental Assistance Contract (PRAC) properties undergoing a preservation transaction through the Rental Assistance Demonstration (RAD).

HUD's Notice H-2025-04 increases rents for converting PRACs immediately prior to conversion through RAD, which helps the property remain financially feasible over the course of its new contract with HUD.

HUD had initially made Preservation Rent Increases (PRIs) available in 2023 following Congressional appropriation of the funding, and while LeadingAge supported the funds, in October 2023 we submitted early feedback to the agency asking for increased rent boosts and carve-outs for small properties, which the agency has now allowed.

This latest Notice allows for an increase in rents of up to $300 per unit per month, instead of $250, for any RAD preservation transaction that will undertake new construction or substantial rehab where hard construction costs exceed 60% of the Housing Construction Costs (HCCs) for the market area, or $200 per unit per month, instead of $100, where the hard construction costs fall between 30-60% of the HCCs for the area.

In addition, an increase of $50 per unit per month is available to projects that include installation or upgrades of broadband infrastructure, and any small properties (20 units or fewer) can increase their rents up to 120% of the area's Fair Market Rent.

LeadingAge fully supports these changes and applauds HUD for committing to feasible preservation transactions.