Plan required. For any project not subject to mandatory project-based assistance under § 401.420, the PAE must develop a Rental Assistance Assessment Plan in accordance with section 515(c)(2) of MAHRA to determine whether assistance should be renewed as project-based assistance or whether some or all of the assisted units should be converted to tenant-based assistance.

Matters to be assessed. The PAE must include an assessment of the impact of converting to tenant-based assistance and the impact of renewing project-based assistance on:

The ability of the tenants to find adequate, available, decent, comparable, and affordable housing in the local market;

The types of tenants residing in the project (such as elderly families, disabled families, large families, and cooperative homeowners);

The local housing needs identified in the applicable Consolidated Plan developed under part 91 of this title;

The cost of providing assistance, comparing the applicable payment standard to the rent levels permitted by §§ 401.410 and 401.411;

The long-term financial stability of the project;

The ability of residents to make reasonable choices about their individual living situations;

The quality of the neighborhood in which the tenants would reside; and

The project's ability to compete in the marketplace.

Conversion may be phased in. Any conversion from project-based assistance to tenant-based assistance may occur over a period of not more than 5 years if the PAE decides the transition period is needed for the financial viability of the project.

Reports to HUD. The PAE must report to HUD on the matters specified in section 515(c)(2)(C) of MAHRA at least semi-annually.