Supportive Housing for the Elderly

To expand the supply of multifamily housing with supportive services for very low income elderly persons.

The Section 202 program helps expand the supply of affordable housing with supportive services for the elderly. It provides very low-income elderly with options that allow them to live independently but in an environment that provides support activities such as cleaning, cooking, transportation, etc.

Eligible Sponsors include private nonprofit organizations and nonprofit consumer cooperatives. Eligible Owner entities include private nonprofit corporations, nonprofit consumer cooperatives, and if the proposed project involves mixed-financing, for-profit limited partnerships with a nonprofit entity as the sole general partner. Public bodies and their instrumentalities are not eligible Section 202 applicants.

Beneficiaries of housing developed under this program must be elderly (62 years of age or older) and have very low-incomes.

Capital advances may be used to finance the development of housing through new construction or rehabilitation of a structure or portion of a structure, or for the acquisition of a structure to provide supportive housing for the elderly, which may include the cost of real property acquisition, site improvement, conversion, demolition, relocation and other expenses of supportive housing for the elderly. Project rental assistance is used to cover the difference between the HUD-approved operating cost per unit and the amount the tenant pays, 30% of their adjusted income. Funds cannot be used to service debt on construction or permanent financing of any units; cash flow distributions to owners or creation reserves of non-811 units.

Prohibited facilities include housing currently operating for persons with disabilbities or the elderly, except in cases of rehabilitation as defined in 24 CFR 891.105; infirmaries, nursing stations, or respite care; nursing homes, hospital, intermediate or transitional care facilities; manufactured housing; and assisted living facilities.

The capital advance is not repayable so long as the project is available to very low income elderly for 40 years. Projects are expected to start construction within 18 months of the date of the fund reservation, with limited provision for extensions. Funds will be advanced on a monthly basis during construction for work in place. See the following for information on how assistance is awarded/released:

Preapplication coordination is required. An environmental impact assessment is required for this listing. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. Applicants must forward a copy of their applications to the appropriate state or local agency for a review of the supportive services plan and a completed certification from the agency as to whether the provision of services is well designed to meet the needs of the anticipated occupancy must be included in the applicant's submission of its application to the HUD Field Office. An environmental assessment is required for applications containing evidence of site control.

Criteria for selection is listed in the NOFO.

Applications are reviewed and selected for funding within the funding allocation area. Those selected for funding must meet basic program requirements including, but not limited to: eligibility as a private nonprofit organization, commitment to provide the minimum capital investment and prior experience in housing or related supportive service activities. The request for Capital Advance Financing is reviewed to update the determination of acceptability of project site and market, correctness of zoning, and effect on environment, as well as to determine the value of site, total development cost, and financial feasibility.

At the fund reservation stage, the Sponsor usually is advised of the decision within 4 to 5 months from the end of the application period.

Project Rental Assistance Contract payments may not exceed one year. However, contracts are renewable for up to a one-year term based on availability of funds.

During the period of competition, Sponsors whose applications are rejected by the HUD Office due to noncompliance with program requirements, have the right to appeal the rejection within 14 calendar days from the date of HUD's written notice of rejection.