Real estate for seniors with very low incomes

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The U.S. Department of Housing and Urban Development (HUD) Section 202 provides capital in advance to real estate developers for constructing, acquiring, or rehabilitating existing housing for seniors with very low incomes. These structures are considered “supportive housing” to accommodate frail or elderly persons. HUD provides rent subsidies for these real estate projects to help residents afford to live in them.

HUD financing for senior housing expands the available supply of housing and supportive services for elderly persons. Section 202 is intended to help very low-income Americans live independently while providing environmental support services such as transportation, cleaning, cooking, and so on. Section 202 is similar to Section 811 subsidies for persons with disabilities.

Real estate for seniors with very low incomes

Non-Profit Private Sponsors and HUD Advance Capital

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HUD makes interest-free capital available to non-profit private organization (NPO) sponsors to finance supportive housing projects for elderly people. NPOs don’t need to repay HUD if the entity serves low-income residents for at least 40 years.

HUD Rent Subsidies for Low-Income Elderly Tenants

Rental assistance funds for the project are intended to cover the shortfall between the operating costs of the HUD-approved project and low-income elderly residents’ contributions towards rental costs. Rental assistance for the project is approved for three years and, based on the availability of funds, are renewable.

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HUD Section 202 Requirements

Nonprofit consumer cooperatives and private nonprofit organizations (NPOs) must meet the requirements of HUD’s “General Section” and the Notice of Funding Availability under Section 202. Some entities are prohibited from participation, including public bodies, tribes, or an agent or instrument of a public body or tribe. In order to access Section 202 funds, the entity must provide an attorney’s written opinion that it is neither a public body nor tribe.

In order to meet Section 202 requirements, the applicant must meet the definition of private NPO (part 891), present articles of incorporation to demonstrate that its majority control is neither a tribe nor a public body, and show that it doesn’t receive most of its operational funding from a tribe or public body.

Eligible Tenants

Section 202 housing is available to very low-income households comprised of one or more people at least 62 years old at initial occupancy. Applicants must complete an application in response to a HUD Notice of Funding.

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Real estate for seniors with very low incomes
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