Capital Needs Assessment e-Tool Requirement for PRACs Suspended

A recent HUD memo suspended use of the CNA etool for Project Rental Assistance Contract (PRAC) budgeting purposes. Until further notice, HUD directs PRAC projects needing to submit a rent increase to follow previous guidance in HUD Handbook 4350.1, Chapter 7: Processing Budgeted Rent Increases.

The "CNA eTool for PRAC requirement" memorandum reads:

Housing Notice 2016-18 was issued to guide the process and timeline for CNA eTool implementation across the Office of Multifamily Housing. The original effective date was November 1, 2017, which was delayed to February 1, 2018. The Office of Asset Management and Portfolio Oversight (OAMPO) required eTool implementation for three groups of properties: 10-year update CNAs for assets with insured mortgages; Partial Payment of Claims or Loan Modifications; and Section 202-811 properties with PRAC assistance.

In the Housing Notice, it is noted that while the first two OAMPO groups will be submitted by the servicing lender, CNAs for Section 202-811 properties will be prepared and submitted to HUD by a needs assessor as no servicing lender exists. HUD does 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 eTool has been inefficient and cumbersome.

Therefore, OAMPO is suspending the requirement for PRACs to utilize the CNA eTool until such time as technological updates can be made that would enable needs assessors to submit the CNA eTool on behalf of PRAC projects. PRAC projects needing to submit a rent increase in the interim should follow previous guidance in HUD Handbook 4350.1, Chapter 7: Processing Budgeted Rent Increases.