HUD Budget Includes Limited Funding for a New Section 202 Program

The U.S. Department of Housing and Urban Development (HUD) budget did relatively well under the two-year budget deal that the Congress negotiated last month, increasing the department's funding above the previously set sequestration levels. Unfortunately, the bill failed to provide for the development of new Section 202 construction as we had advocated. HUD's fiscal year 2014 budget did however include funding and authorization language to permit a demonstration for a new Section 202 rental assistance only program.

Under this demonstration, providers would have to find non-HUD funding sources to build the property, including funding through the Low Income Housing Tax Credit (LIHTC) program. The rental assistance demonstration would then be layered on the property to provide affordability for very low income seniors. According to HUD officials there is an estimated $40 million available for the demonstration from the fiscal year 2014 funding and recaptures.

The new rental assistance contracts will provide for an "enhanced service coordinator" position.  It is still unclear how the service coordinator position and reporting requirements will change.  In addition, HUD will have $4 million available to fund research related for an evaluation of the demonstration.

LeadingAge will inform our members when this funding becomes available.

Contact: Ken Harris, kharris@leadingageny.org, 518-867-8835