The Department of Housing and Urban Development (HUD) announced a $115 million notice of funding opportunity (NOFO) for Capital Advances and Project Rental Assistance Contracts for new Section 202 Supportive Housing for the Elderly homes on February 21. This is the fourth consecutive year HUD has issued a national competition for Section 202 homes.

LeadingAge has worked tirelessly with our members and other advocates to revive and strengthen the Section 202 program, which is needed now more than ever as severe housing costs burden most older adults with very low incomes and homelessness is on the rise among older adults. Congress paused funding for new Section 202 homes from 2011 to 2018.

“These funds, allocated for both rental assistance and development costs, offer a solution to address the persistent housing needs of seniors across the nation,” HUD Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon said in HUD’s press release. “We are maintaining our commitment to supporting safer, healthier, more energy efficient homes that help address both the climate crisis and the housing crisis together.”

HUD expects to make about 20 awards of up to $20 million each with the $115 million in funding. The Section 202 program provides affordable housing, in which residents pay no more than about 30% of their income for housing, to households 62+ with incomes below 50% of area median. Nationally, the average annual household income of a Section 202 household is $16,262.

The Section 202 Capital Advance provided by HUD pays a portion of the building construction costs and the award’s accompanying Project Rental Assistance Contract provides 40 years of operating subsidy to cover the difference between what residents pay toward rent and what it costs providers to operate quality housing, typically including a Service Coordinator to connect residents to services and supports they need, on a voluntary basis, to age in community. Only nonprofit organizations are eligible to apply for Section 202 awards.

LeadingAge will share more on the new Section 202 NOFO as more information becomes available.