RAD/Section 18 blends, tier by tier

A blend exists because RAD rents are often too low to pay for heavy rehab or rebuilding. RAD rents equal what the property already receives in public housing funding. Tenant protection vouchers (TPVs), which come from a Section 18 disposition, are funded at voucher levels, generally the lower of 110% of fair market rent (or the exception payment standard) less utilities, or reasonable rent. Mixing the two raises the property’s average rent, and with it the debt and equity a deal can carry.

How a blend works

1. The housing authority applies for RAD for the whole project.
2. In the Financing Plan it proposes a share of the units for disposition under Section 18, justified by the tier its scope qualifies for.
3. HUD’s Office of Recapitalization processes both pieces. The Section 18 units generate TPV assistance (“Converting TPV Assistance”); the rest is “Converting Public Housing Assistance”.
4. At closing, both kinds of assistance convert to the same form of Section 8, PBV or PBRA, under a single RAD HAP contract and a single RAD Use Agreement, governed by the RAD notice.
5. Every resident, including those in the Section 18 units, gets the same RAD relocation rights and right to return.

The tiers

From Notice PIH 2026-23 (August 28, 2026), which restates the blend criteria, and HUD’s RAD Contract Rents Look-Up Tool (May 27, 2026). HCC means HUD’s published Housing Construction Costs for the market area. Hard costs here include general requirements, overhead and profit, and payment and performance bonds.

Tier (Section 18 / RAD)	Qualifies when
90/10: up to 90% Section 18, at least 10% RAD	Rehab hard costs exceed 90% of HCC; or demolition and redevelopment; or transfer of assistance to a new site; or the project is designated severely distressed in an approved Choice Neighborhoods Planning Grant; or certain mixed-finance units
60/40: up to 60% Section 18, at least 40% RAD	Rehab hard costs exceed 60% of HCC
30/70: up to 30% Section 18, at least 70% RAD	Rehab hard costs exceed 30% of HCC
Small PHA blend: up to 90% Section 18, at least 10% RAD	The housing authority has 250 or fewer public housing ACC units and submits a board-approved Repositioning Plan to remove all its public housing
Sequenced blend: at least 10% RAD	The housing authority already holds a Section 18 approval under another justification and gets HUD’s Special Applications Center to conditionally rescind it for the RAD units

The percentages are maximums. A housing authority can propose less Section 18 than its tier allows. HUD can also, in limited cases, approve demolition or disposition before construction financing closes and sign a “Converted Awaiting Transfer” agreement that converts both kinds of assistance for a HAP contract placed later.

What the tiers do to rent

HUD’s Look-Up Tool estimates a blended contract rent at each tier for every unconverted project. Across the 6,191 projects in the May 2026 tool, compared with each project’s 2026 RAD contract rent, the median increase is:

HUD estimate	Median increase over the RAD contract rent
90/10 blend rent	+35%
60/40 blend rent	+23%
30/70 blend rent	+11%

These are HUD’s estimates, unit-weighted across the RAD and TPV units; the final schedule is set in the Financing Plan. Every project’s three blend rents are on the rent check, and the Section 18 blend calculator turns a unit split into a blended rent and the debt it supports.

Blends in the data

In HUD’s RAD Resource Desk data as of October 24, 2026:

• 267 closed conversions were flagged as blends, covering 31,349 RAD units plus 27,795 other assisted units. Another 88 blends were in the pipeline.
• 235 of the 267 chose PBV and 32 chose PBRA.
• Blends have grown: 2 closed in 2018, 33 in 2020, 61 in 2025 and 43 so far in 2026.
• Median hard cost was $155,167 per unit in blends that reported it (258 deals), against $60,128 per unit for other conversions. Blends are where the heavy rehab and rebuilding happens.

Each blend appears with its housing authority’s record in the tracker and on the state pages.

Faircloth effects

The Faircloth limit caps how many public housing units a housing authority may own or build with public housing funds. Under the RAD notice, a conversion reduces the limit by the units that generate Converting Public Housing Assistance. Units that generate Converting TPV Assistance do not reduce it.

HUD’s own example: a housing authority with a 1,000-unit Faircloth limit that signs a 100-unit RAD HAP contract using 40 public housing units and 60 TPV units ends with a limit of 960, not 900.

TPVs converting to PBV or PBRA

Before 2024, TPV assistance in a partial conversion could only become project-based vouchers. The FY2024 appropriations act (P.L. 118-42, Div. F §221, March 9, 2024) let that assistance convert to PBRA or PBV. The RAD notice, as amended by Supplemental 4C, now requires that both kinds of assistance in a blend go to the selected form, so a blend can be all PBRA, with HUD Multifamily as administrator, or all PBV.

The notice also lets an owner with an older RAD PBRA contract and separate PBV units on the same property ask HUD to terminate the PBV contract and put everything under one PBRA contract, with no re-screening and with residents’ choice-mobility clocks preserved.

What Supplemental 4C and 2026 changed

Date	Change	Source
Jan 2025 (effective June 16, 2025)	All blend units under one RAD HAP and one Use Agreement; TPV units do not reduce Faircloth; at least 10% RAD under normal Section 18 processing	Supplemental 4C §II
Jan 2025	Higher Section 18 shares for blends, including small PHAs up to 90%	Reported by NLIHC and Nixon Peabody; tiers now confirmed in PIH 2026-23
May 6, 2026	For TPV-triggering events after May 6, 2026, vacant units qualify for replacement TPVs only if occupied by an assisted family in the previous 12 months, down from 24. Blend Financing Plans relying on TPVs submitted before May 6 keep the 24-month rule	PIH 2026-12 as described in HUD’s 2026 RADBlast
Aug 28, 2026	New Section 18 demolition and disposition notice restates blend tiers, small PHA and sequenced blends	Notice PIH 2026-23 (amends PIH 2024-40)
June 2026	Partial RAD/Section 18 blends no longer eligible for the Asset Repositioning Fee (RAD conversions already were not)	Reported by CLPHA; not confirmed on a HUD document

The 12-month rule matters most for properties with long-vacant units: a unit empty for 18 months used to count toward replacement TPVs and now may not.

Financing a blend

A blend’s higher rent schedule is what makes debt possible, but lenders underwrite the whole contract. Points that come up:

• The blended rents are fixed in the CHAP amendment and Financing Plan, so debt sizing has to wait for HUD’s numbers.
• 4C’s feasibility tests apply: a leveraged deal should show debt service coverage of at least 1.11 over ten years at 2% revenue and 3% expense growth.
• FHA’s underwriting for properties with 90% or more of units under rental assistance allows up to 90% loan-to-cost or loan-to-value at 1.11 coverage (ML 2025-03).

The financing guide and the 4% LIHTC and bonds guide go further. If you are weighing a blend, Janover Capital LLC’s desk can size the debt against HUD’s blend rents at get financing.

Sources

• HUD, Notice PIH 2026-23, Demolition and/or Disposition of Public Housing Property, Eligibility for Tenant-Protection Vouchers, issued August 28, 2026, §II.C.
• HUD, RAD Notice Revision 4 as amended by Supplementals 4B and 4C, §1.5.B.2 (blends) and §1.5.D (Faircloth).
• HUD, RAD Supplemental Notice 4C, H-2025-01 / PIH-2025-03; Federal Register, June 16, 2025, 90 FR 25356.
• HUD, RADBlast 2026: Restore-Rebuild wind-down and TPV changes.
• HUD, RAD Contract Rents Look-Up Tool, May 27, 2026; medians computed by Conversion Ledger.
• HUD OGC, RAD statute compilation, March 19, 2024 (P.L. 118-42 TPV proviso).
• HUD, Mortgagee Letter 2025-03, January 8, 2025.
• HUD’s RAD Resource Desk data as of October 24, 2026.
• Secondary: NLIHC on Supplemental 4C; CLPHA RAD page.

This guide is general information, not legal advice. Blend eligibility is decided by HUD on each application.