HUD released a proposed rule on March 28 that would simplify the requirements for Section 202 Supportive Housing for the Elderly Program and Section 811 Supportive Housing for Persons with Disabilities Program mixed-finance developments.
The proposed rule is intended to simplify the process by which Section 202 and Section 811 projects can be financed with a variety of funding sources. HUD says in its summary of the proposed rule that the rule’s release is a first step in the reform of the regulations governing the Section 202 and Section 811 programs. HUD says that a subsequent rule, which will focus on the statutory changes made in the Frank Melville Supportive Housing Investment Act of 2010 and the Section 202 Supportive Housing for the Elderly Act of 2010, “is expected to be published later in 2012.”
Currently, Section 202 and Section 811 capital advance and project rental assistance dollars cannot be used for “atriums, bowling alleys, swimming pools, saunas, Jacuzzis, balconies and decks on individual units, and dishwashers, trash compactors, and washers and dryers in individual units.” The proposed rule will permit the use of capital advance and project rental assistance dollars for balconies and decks, dishwashers, trash compactors, and washers and dryers for individual units, while retaining the restrictions on the other aforementioned prohibited uses of funds.
The proposed rule would also lift the prohibition of facilities for infirmaries, nursing stations, or spaces for overnight care in Section 202 developments, although HUD would require that such facilities be funded by other sources. The proposed rule would maintain the restriction in the Section 811 program, as “HUD is committed to preventing the isolation of persons with disabilities that might occur should medical facilities be contained in Section 811 developments.”
Under current regulations, all types of property rehabilitation activities fall into one category. The proposed rule would create two categories, “repairs, renovations, and improvements” and “substantial rehabilitation.” For the first category, the investment made per unit must fall below $6,500.
The proposed rule would also adapt current regulations to reflect changes made to the definition of “private nonprofit organizations” made in the Melville Act and the Section 202 Supportive Housing for the Elderly Act of 2010, and would streamline and modernize other parts of the existing regulations that govern portions of developments that are not funded through capital advances “thereby lifting barriers on participation in the development of the projects, and eliminating burdensome funding requirements.”
HUD will hold a webcast on the proposed rule on April 24 from 2 to 3 pm ET. HUD requests that questions be submitted in advance to Shalonda Lincoln at Shalona.S.Lincoln@hud.gov. Participants are not required to RSVP. The webcast will be available at: http://portal.hud.gov/hudportal/HUD?src=/press/multimedia/videos.
Also on April 24, HUD will hold a stakeholder convening, “Presentation on the Future of the Section 202 Program: Discussion of Policies and Proposed Rule Changes,” from 3:30 to 5 pm ET. The convening will be held at HUD Headquarters at 451 7th Street, SW, Washington, DC, with an option for participation via conference call. HUD advises that space is limited and asks that interested parties RSVP to email@example.com. Conference call information will be sent to individuals who RSVP.
Comments in response to the proposed rule are due May 29.
The text of the proposed rule is attached.