The Department of Housing and Urban Development ("HUD") is providing Capital Advance funding and project rental subsidies for the development and ongoing operation of supportive rental housing for very low-income persons, aged 62 years or older and project rental subsidies in the form of a Project Rental Assistance Contract (“PRAC”) to maintain ongoing affordability. This funding, leveraged with other financing sources, will expand affordable housing opportunities that are physically designed and that have a robust set of services that will allow seniors to live independently and age in community.
Capital Advance funds must be used to finance construction, reconstruction, moderate or substantial rehabilitation, or acquisition of a structure with or without rehabilitation. Section 202 program funds cannot be used to construct or operate assisted living facilities. Capital Advance funds bear no interest and repayment is not required when the housing remains available for occupancy by very-low-income elderly persons for at least 40 years.
PRACs are used to cover the difference between the tenants' contributions toward rent and the HUD-approved cost to operate the project. PRAC funds may also be used to provide supportive services and to hire a service coordinator.
HUD seeks to fund Section 202 properties that advance housing for the elderly as a platform for living independently and aging in community even as residents may require more assistance with activities of daily living over time. HUD seeks to fund properties that will be at the forefront of design, service delivery and efficient use of federal resources that will provide models for replication by other providers of supportive housing for very-low income elderly persons. To meet this outcome, HUD expects successful applicants to demonstrate best practices or innovation in both physical design and supportive services. Proposals must promote the long-term physical and mental health and wellness of very-low-income elderly persons and the efficient delivery of government assistance. Finally, HUD aims to provide Capital Advance funding to those applicants who leverage Capital Advance funds with other financing sources to meet the goal of building supportive housing for very-low-income elderly persons and to demonstrate ways to maximize the number of units created per dollar of HUD funding.