Vicksburg Housing Authority officials want the county to defer seeking a payment in lieu of taxes on housing authority property.

The request came Monday as the officials met with the Board of Supervisors during a Monday morning work session to update the supervisors on VHA’s participation in a Department of Housing and Urban Development’s Rental Assistance Demonstration, or RAD, program, that will convert public housing to Section 8.

RAD allows the housing authority to get a mortgage to repair and upgrade the VHA’s 430 units and then pay off the loan using the rent paid by the tenants. Rent would be paid by the tenants and supplemented by HUD vouchers to a nonprofit company that in turn would pass the payments to VHA to pay off the mortgage.

Because the project would make the housing authority a for-profit business under RAD, the county would be able to seek a payment in lieu of taxes; an agreement where VHA would agree to pay the county a specified amount each year. The county has never received a payment in lieu of taxes from VHA because the property is tax exempt.

According to an agreement presented to the board Monday, the county would delay seeking a payment in lieu of taxes until the rehabilitation project is completed. The board took no action and referred it to board attorney Blake Teller.

The Board of Mayor and Aldermen in September 2016 approved a waiver of VHA’s payment in lieu of taxes to the city, freeing up an extra $1 million to $1.2 million to help with the project costs.

VHA Housing Director Ben Washington said the RAD program grew out of a $26 million backlog of building rehabilitation and upgrade projects at public housing sites nationwide.

“The (public housing) program has been going on since 1937, and there are properties in Mississippi that have been in existence since 1937 that need upgrades, so HUD came up with this new program,” Washington said.

The RAD program, he said, removes restrictions on the housing authority and allows it to borrow money to fix the homes and do a wholesale upgrade of the properties.

The estimated cost of renovating and upgrading VHA’s 430 housing units to meet the requirements under RAD is $36 million.

VHA is taking out a $9 million mortgage, will use tax credits, apply $2.5 million in reserve capital improvement funds, a grant from the Mississippi Home Corporation, a grant from the Federal Home Loan Bank in Dallas, and “sell back funds” from the purchase of the properties by the new non-profit company, which will take the place of VHA to cover the costs.

Washington said after the meeting officials should know soon if they will get the tax credits.

“The (VHA) board allowed us to look into this in 2014,” he said. “It’s been a long process, and now we’re at the looking to close and get to start rehabbing.”

During the rehabilitation, Washington said, tenants will be relocated while the work is being done on their units.

After the project, he said, the tenants will be issued vouchers from the Jackson Housing Authority, which is the contract administrator for Section 8 vouchers. The units will be managed by Vicksburg Housing Management and Development Corp., a nonprofit subsidiary of the VHA that will manage the units for 15 years.

“The tenants will still pay their rent based on their income, as well as the subsidies provided by HUD through the voucher,” he said. “By going Section 8, we are able to get the deed restrictions off the property and get the mortgage.”

The money will go from the nonprofit to the housing authority to pay off the mortgage.