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Thursday, September 30, 2010

Section 202 and Other HUD Rental Housing Programs for Low-Income Elderly Residents

Libby Perl
Specialist in Housing Policy

The population of persons age 65 and older in the United States is expected to grow both in numbers and as a percentage of the total population over the next 25 years, through 2030. In 2002, a bipartisan commission created by Congress issued a report, A Quiet Crisis in America, that detailed the need for affordable assisted housing and supportive services for elderly persons and the shortage the country will likely face as the population ages. The Department of Housing and Urban Development (HUD) operates a number of programs that provide assisted housing and supportive services for low-income elderly persons (defined by HUD as households where one or more persons are age 62 or older) to ensure that elderly residents in HUD-assisted housing can remain in their apartments as they age. This report describes those programs, along with current developments in the area of housing for elderly households.

HUD operates five programs that designate assisted housing developments for either low-income elderly residents alone, or low-income elderly residents and residents with disabilities. The primary HUD program that provides housing for low-income elderly households is the Section 202 Supportive Housing for the Elderly program. Established in 1959, it is the only HUD program that currently provides housing exclusively for elderly residents. The Section 221(d)(3) Below Market Interest Rate and Section 236 programs are mortgage subsidy programs that provide housing for all age levels, but have properties specifically dedicated to elderly households. The Public Housing and project-based Section 8 housing programs also have projects dedicated to elderly households.

In addition to providing housing, HUD operates four supportive services programs for elderly persons residing in HUD-assisted properties. The Congregate Housing program, Service Coordinator program, and Resident Opportunity and Self-Sufficiency (ROSS) Service Coordinator program each provide services such as meals and assistance with activities of daily living to help residents remain independent. The Assisted Living Conversion program makes grants to HUD-assisted developments so that they can convert units or entire buildings into assisted living facilities.

Among current issues involving Section 202 housing for elderly residents is the need to rehabilitate and modernize aging structures. While some owners may prepay their Section 202 loans and refinance in order to obtain funds for improvements, owners of the oldest Section 202 developments financed with low interest rate loans (those funded prior to 1974) cannot refinance under current law. In the 111
th Congress, language in both the FY2009 Omnibus Appropriations Act (P.L. 111-8) and the FY2010 Consolidated Appropriations Act (P.L. 111-117) made changes to current law regarding the refinancing of Section 202 loans. The change is meant to make it feasible for owners of older Section 202s to refinance their loans and use proceeds to improve the properties. However, HUD has not released guidance yet on how the provisions would be implemented. The change is similar to provisions in the Section 202 Supportive Housing for the Elderly Act (S. 118), a bill that was introduced on January 6, 2009, as well as provisions in H.R. 4868, the Housing Preservation and Tenant Protection Act, which was approved by the House Financial Services Committee on July 27, 2010. .

Date of Report: September 13, 2010
Number of Pages: 32
Order Number: RL33508
Price: $29.95

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