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HUD Suspends e-Tool Requirement for PRAC Properties

HUD's Office of Multifamily Housing released a Memorandum on August 3, 2018 which suspended the use of the HUD CNA e-tool for Section 202 or 811 properties with PRAC assistance.

Originally the HUD Notice 2016-18 was issued to guide the process and timeline for implementation of the CNA e-tool across the Office of Multifamily Housing. This was initially required to be put into effect by November 1, 2017, and final implementation was delayed until February 1, 2018, and required the use for (a) ten-year updates on insured properties, (b) partial payment of claims, and (c) 202 and 811 PRACs. The requirement still remains in place for 10 year updates on insured properties and partial payment of claims.

In the Memorandum released this August, HUD states that they do not have the technological capacity for needs assessors to submit CNAs on behalf of PRAC projects, and despite attempts at a workaround, the process for PRACs to submit CNAs using the CNA e-tool has been inefficient and cumbersome.

The CNA e-tool may be reinstated for PRAC properties at some point in the future, but for the time being, budget based rent increases will no longer require an e-tool submission. Account Executives at HUD can use traditional Capital Needs Assessments for budget based rent increases and restructuring of reserve for replacement accounts. 

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