June 24, 2013 in Funding/Grants

New Uses of Funding for Supportive Housing for the Elderly and Disabled

New Uses of Funding for Supportive Housing for the Elderly and Disabled

New Uses of Funding for Supportive Housing for the Elderly and Disabled
Effective July 22, 2013 there will be changes in the requirements (of 24 CFR Part 891) for the use of funding for supportive housing for people who are elderly and/or disabled.

Some of the changes:

  • The owner or sponsor of a Section 202 property can be an instrument of a public body as long as it meets the proper criteria, and the definition of “owner” changed from a single-purpose entity to a single-asset entity.
  • A sponsor of multiple developments may create criteria to transfer the responsibilities of ownership to its board of directors.
  • A rehab project must be improved to a useful life of 40 years (rather than 55), and this “life” starts at the time of the capital advance agreement.
  • Balconies and decks, dishwashers, trash compactors, and washers and dryers for individual units are no longer considered to be excess amenities. Smoke detectors and alarm devices are required in each bedroom.
  • Two-bedroom units are allowed if the additional size is financed by other sources and will be treated as an excess amenity.
  • Sale of land between an owner and the sponsor/nonprofit affiliate will not be considered to be a conflict of interest.
  • The duration of the capital advance has been extended from 18 months to 24 months with an option to extend to 36 months at HUD’s discretion.
  • Non-capital advance funds may now be disbursed before capital advance funds. The capital advance can be used to pay off bridge or construction financing.
  • Funds can be used to repay or collateralize bonds. Prohibited Facilities will only apply to the capital advance-funded portion of a 202 development. The identity of interest provisions which prohibit a relationship between the owner and development team members, and between development team members will no longer apply.

FR-5167-F-O2, Streamlining Requirements Governing the Use of Funding for Supportive Housing for the Elderly and Persons with Disabilities Programs, was published in the Federal Register on June 20, 2013.