My Website

Section 202

Under Section 202 of the Housing Act of 1959, as amended, HUD provides a Capital Advance to single purpose not for profit corporation to provide rental housing for very low income elderly. See attached a brief description of the Section 202 program.

Section 811

Under Section 811 of the National Housing Affordability Act of 1990, as amended, HUD provides a Capital Advance to a single purpose not for profit corporation to provide housing for very low income disabled. The term "disability" includes persons with developmental disabilities, persons who are chronically mentally ill and persons who are mobility impaired. See attached a brief description of the Section 811 program.

Current Income Limits. Eligible occupants of projects funded under Section 202 and Section 811 must be very low income. Click to view current income limits.

Brief Overview of Major Changes to the Section 202 and Section 811 Program

Prior to 1990, the Section 202 program had been referred to as the "Section 202 Direct Loan Program for Housing for the Elderly and Handicapped" and, as the title indicated, included funding for development of housing projects serving both the elderly and persons with disabilities. At that time, HUD funding included interest charges during the construction period and the contract rent charged to tenants also included interest and amortization charges as well as housing operating expenses.

With the adoption of the National Housing Affordability Act of 1990, significant changes occurred: the Section 202 program was to provide funding only to very low income elderly and the newly created Section 811 program was only to serve very low income persons with disabilities. Further, among other changes, projects funded from 1990 forward were to receive a "capital advance" rather than to obtain a "direct loan". The capital advance, although in fact a mortgage, is very much like a grant. The capital advance does not have to be repaid and there are no interests charges due, provided that the owner corporation, which receives the capital advance from HUD, continues to operate the housing for the elderly or disabled and abides by HUD requirements for the term of the regulatory period.

In 1996, HUD implemented another significant change, which is reflected in Notice H 96-102, "Redesigned Section 202 Supportive Housing for the Elderly and Section 811 Supportive Housing for Persons with Disabilities Programs - Firm Commitment Processing to Final Closing". References to this Notice appear a number of times in the Guide and until HUD issues a revision, it is recommended as a key reference source. HUD Notice H 96-102 is a signal to the sponsor that it must take on more responsibility to prepare and submit a well-researched and thought out firm commitment application to HUD. Major changes included the elimination of the "Conditional Commitment" application so that exhibits previously required at the conditional stage are to be combined with exhibits for the "Firm Commitment"; the requirement for the owner to retain a "cost estimator" to prepare an independent construction cost estimate as a way to evaluate the estimate prepared by the project general contractor; new guidelines for the housing consultant; the creation of a development cost line item called "Developer's Fee", a schedule which includes project contingency, organization fee, and fees for the housing consultant, cost estimator, and appraiser. Other changes are summarized in Section I of the Notice.

Recent changes to the Section 202 and Section 811 programs have included a tighter timetable required by HUD to conclude a final closing and the initial term of operations following construction. HUD also is encouraging the use of mixed-financing in Section 202 and Section 811 Independent Living Apartments as a way to fund additional units in the project not covered by HUD. Click to see the final rule on mixed-financing, published in the Federal Register, September 13, 2005.

Most recently, HUD has published Notice H 2014-10, Update to Housing Notice 2011-18, Processing Guidance
for the Section 202 Supportive Housing for the Elderly and Section 811 Supportive Housing for Persons with Disabilities Programs. This Notice replaces Notice H 2011-18, which had provided updated processing guidance
and states revised guidelines for the calculation of Developer's Fee and for processing projects that are using Low Income Housing Tax Credits as a source of secondary financing.