HUD Multifamily Office Issues Notice Explaining Uses of Supportive Services for Section 202 Supportive Housing for Low-Income Elderly Projects with PRACs

HUD’s Office of Multifamily Housing Programs (Multifamily) issued Notice H-2023-02 on February 9, explaining the purpose and allowable uses of supportive services funds and the requirements for requesting Multifamily approval to include those funds in the annual operating budget for Section 202 PRAC projects (formerly known as Section 202 Supportive Housing for Low-Income Elderly Capital Advance properties with Project Rental Assistance Contracts (PRACs)). The Notice also reiterates that Section 202 PRAC properties must have a Supportive Services Plan in place that is updated every three years.


Section 202 PRAC properties provide affordable supportive housing for very low-income elderly households. Rental subsidies for these properties are based on their operating budget, which may include the costs for a full- or part-time Service Coordinator position and up to $15 per unit per month for direct provision of supportive services. To ensure supportive service needs are adequately addressed, properties are expected to coordinate with community service providers and to access other funding streams consistent with a property’s Supportive Services Plan.

Property sponsors were required to prepare a Supportive Services Plan as part of the original Notice of Funding Opportunity (NOFO) requirements for Section 202 Capital Advances. Sponsors submitted Supportive Services Plans with their initial applications for funding, which must be updated by a property’s Service Coordinator based on the original NOFO. The Supportive Services Plan must address how Section 202 PRAC subsidies support service provision and coordination, as well as how other funding streams are used to address additional resident needs. Multifamily has determined that many Section 202 PRAC owners have not updated their Supportive Services Plans.

Service coordination activities are subject to additional budgetary planning and performance requirements. A Service Coordinator is a social service staff person/contractor responsible for ensuring that the elderly residents of a project, especially those who are frail and disabled, are linked to the supportive services they need to continue living independently in a project. Handbook 4381.5, REV-2, Chapter 8, provides the requirements for implementing and maintaining a Service Coordinator Program. Additional guidance is also available on the HUD Exchange website under Service Coordinators in Multifamily Housing Programs. HUD funding for service coordination activities is approved and monitored separately from the $15-per-unit funding available for direct provision of supportive services.

Funding for 202 PRACs that include supportive services and Service Coordinators is provided through the annual appropriations acts. The HUD funding amounts, up to $15 per unit per month, are not expected to cover all the supportive services needs of residents; therefore, properties are expected to provide necessary services and access to services using other non-project sources.

Guidance Sections of the Notice

Section IV, “Uses of Supportive Services Funds,” summarizes (1) Requirements, (2) Goals of Service Provisions, (3) Eligible Uses of Supportive Services Funds, and (4) Ineligible Uses.

Regarding Requirements: The $15 per unit per month provided by Multifamily for supportive services comprise just one component of a property’s comprehensive Supportive Services Plan to ensure that residents live independently and avoid unnecessary institutionalization. The balance of service costs must be provided from other sources.

Supportive services funds must be used to provide a range of services determined through a resident assessment. Supportive services funds may be used to provide services to all elderly residents of a property, addressing the needs of the general resident population (e.g., fall prevention programs), or they may address subgroups with specific needs (e.g., housekeeping for frail elderly people). Owners must not require residents to accept any supportive services as a condition of admission or occupancy or limit resident choice of providers.

HUD may approve use of supportive services funds for services that support elderly people living in a property who are not Multifamily-assisted, or who do not live in a project, if this will not significantly add to a property’s operating budget.

Regarding Eligible Uses: Notice H-2023-02 discusses services provided to individuals and to the entire community. Examples of services for individuals, include meal services, housekeeping assistance, and personal assistance, as well as “activities of daily living” (ADLs), such as basic self-care tasks including bathing, dressing, and eating. Personal assistance can also include “instrumental activities of daily living” (IADLs), such as skills related to independent living, including meal planning, grocery shopping, and financial management. Examples of services provided to the entire community, if part of a Supportive Services Plan, include transportation, health-related programs, activities to reduce social isolation, and materials, supplies, and limited physical modifications to common areas to support health and wellness programs.

Section V, “Supportive Services Plans,” describes Supportive Services Plan components and requirements pertaining to them. Regarding the requirements, owners must maintain and update Supportive Services Plans every three years for the entire useful life of the property. The Plan must describe how a range of services will be provided that are tailored to residents’ needs and essential for maintaining independent living. 

Notice H-2023-02 is available at:

Read more about the Section 202 program on page 4-73 of NLIHC’s 2022 Advocates’ Guide.