HUD Section 202: Supportive Housing for the Elderly


Established in the Housing Act of 1959, Section 202: Supportive Housing for the Elderly, is a Housing and Urban Development (HUD) program that provides capital advances to private, nonprofit sponsors to finance the development of housing for elderly residents. In FY 2010, Congress appropriated $825 million for Section 202 construction and rental assistance projects.

Section 202 is comprised of two components: capital advances and operating assistance. The capital advances are provided to nonprofits to cover construction, acquisition, or rehabilitation related expenses. HUD also provides rental assistance (known as Project Rental Assistance Contracts), which makes up the difference between the reduced rents that eligible seniors are required to pay (30 percent of adjusted income) and the operating expenses of a particular development. HUD also offers predevelopment grants to assist nonprofit use of Section 202 funds, financial assistance to organizations to hire service coordinators, and emergency repair grants.

Private nonprofit organizations can apply to develop Section 202 projects. The organizations must contribute a minimum capital investment of 0.5 percent of the amount that HUD advances. Eligible residents of a Section 202 project must be at least 62 years of age and of very-low income.

As the population ages, the number of senior citizens continues to grow. Included in this growing population are an increasing number of senior citizens that cannot afford to pay for housing. Community development organizations, such as housing cooperatives and community development corporations, can work to create new projects in their communities and help senior citizens find existing Section 202 projects.