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. One way in which property owners may obtain funds for improving their properties is by paying off the original Section 202 loan and refinancing. In the 111th Congress, the Section 202 Supportive Housing for the Elderly Act (P.L. 111-372) removed one of the impediments to the ability of owners of older Section 202 developments to refinance and make improvements. Under previous law, owners could only refinance into loans with lower interest rates and reduced debt service—the oldest Section 202 developments (those funded prior to 1974) were financed with low interest rate loans, and it was difficult, if not impossible, to enter into a new loan with a lower interest rate and reduced debt service. These owners can now refinance as long as they address the physical needs of the property. In addition to P.L. 111-372’s refinancing provisions, the new law authorizes “Senior Preservation Rental Assistance” for use in cases of refinancing, establishes a new category of housing with services within the Assisted Living Conversion Program called “Service Enriched Housing,” and creates a National Senior Housing Clearinghouse to help eligible seniors find affordable housing.


Date of Report: May 5, 2011
Number of Pages: 33
Order Number: RL33508
Price: $29.95

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