Final Ruling Issued on HUD Section 202 / 811 Mixed Financing Development

On June 20, the Federal Register posted a final ruling for “Streamlining Requirements Governing the Use of Funding for Supportive Housing for the Elderly and Persons With Disabilities Programs.” To view the ruling, which will be effective July 22, click here.

This final rule amends HUD’s regulations governing the Section 202 Supportive Housing for the Elderly Program (Section 202) and the Section 811 Supportive Housing for Persons with Disabilities Program (Section 811) to streamline the requirements applicable to Section 202 and Section 811 mixed-finance developments. This rule removes restrictions on the portions of developments not funded through capital advances, lifts barriers on participation in the development of the projects, and eliminates burdensome funding requirements. These changes are anticipated to attract private capital and the expertise of the private developer community to create attractive and affordable supportive housing developments for the elderly and for persons with disabilities.

The Section 202/811 mixed-finance program, established by interim and final rules issued in 2003 and 2005, allows for the participation of the private developer community, leveraging their capital and expertise, to create attractive and affordable supportive housing developments This rule allows for more flexibility in such areas as the drawdown of capital advance funds and noncapital advance funds and removes certain restrictions relating to noncapital advance funds. In addition, this rule would update certain regulations governing all Section 202 and Section 811 developments, which have not been updated since 2005, to conform to changes in law, policy, and practices that affect these developments.

This final rule is part of a larger effort to reform the Section 202 and Section 811 programs, which will include implementation of the changes made to these programs by the Frank Melville Supportive Housing Investment Act of 2010 and the Section 202 Supportive Housing for the Elderly Act of 2010. LeadingAge and LeadingAge New York was instrumental in developing the Section 202 reform initiative.

A subsequent rule, which will focus on the statutory changes that require rulemaking for implementation, is expected to be published in 2013.

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