The U.S. Department of Housing and Urban Development is preparing to revoke agreements with the Little Rock public housing authority for Rental Assistance Demonstration (RAD) program conversions tied to 137 units of housing, according to a letter delivered on Tuesday.

The letter addressed to Metropolitan Housing Alliance Executive Director Ericka Benedicto said that the housing authority faces a revocation of the Commitments to enter into a Housing Assistance Payment (CHAP) contract for the following projects:

40 units at the Senior Homes at Granite Mountain.

59 units at Madison Heights Phase I.

38 units at Madison Heights II.

The commitments were awarded on Feb. 26, 2015 and were intended to convert the aforementioned public housing units to Section 8 project-based rental assistance, according to the letter.

Financing plans for each project were originally due on March 11, 2016, and despite “numerous extensions,” the housing authority has not submitted plans for the projects, the letter said.

The letter dated Monday was signed by Thomas R. Davis, the director of HUD’s Office of Recapitalization, and was delivered to Benedicto via email on Tuesday, records show. Benedicto provided the records to the Arkansas Democrat-Gazette pursuant to an open-records request.

[DOCUMENT: Read letter from HUD to MHA »]

The letter cited the housing authority’s recent score of 40 out of 100 on an assessment based on the Public Housing Assessment System that resulted in the housing authority being labeled “troubled” in August, as well as the “serious delinquencies” revealed in a separate HUD review. Because of the “troubled” designation, the housing authority soon will have to enter into a binding recovery agreement with HUD.

In order to be eligible for the RAD program, among other requirements, local public housing agencies must be classified as a “standard” or “high” performer under the Public Housing Assessment System; in order to be eligible if labeled “troubled,” the agency must be making “substantial progress” as part of a recovery plan, or propose a revision to the plan that incorporates the RAD program, the letter said. “HUD must have determined that the factors resulting in the [agency’s] Troubled status will not affect its capacity to carry out a successful conversion under this Demonstration,” the letter said.

The Office of Recapitalization has proposed the revocation based on “the apparent noncompliance of programmatic requirements, as well as the issuance of the ‘Troubled’ designation,” the letter said.

The housing authority has 30 business days from the receipt of the letter “for concurrence with the revocations or to appeal the decision,” the letter said. “HUD will review your submission and, in its sole discretion, determine whether to accept the recovery plan or to revoke the [commitments].”

Later on Tuesday, members of the Little Rock Board of Directors voted to oust two commissioners from the housing authority’s five-seat board in an attempt to address the financial and management problems at the agency.

H. Lee Lindsey, the chairman of the housing authority’s board, and Leta Anthony, the vice chair, were removed in 6-2 votes of the city board.

The city board voted to allow Kerry Wright to remain on the housing authority’s board. He was confirmed to the position in March.


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