On April 4, 2019, HUD released the Notice of Funding Availability for the new Section 202 funds appropriated by Congress in FY17 and a portion of those appropriated in fiscal year 2018. In total, the NOFA announces the competition for $50 million in Section 202 funds for the construction and ongoing rental subsidy of Section 202 homes. From the funds made available through this NOFA, HUD expects to make approximately 30 awards. The deadline to apply for the funds under FR-6200-N-52 is August 28, 2019.

These funds are the first funds for new construction under the Section 202 program since 2010. LeadingAge led the advocacy charge to re-start the Section 202 program. LeadingAge members impressed upon Members of Congress the significant and growing need for affordable housing for older adults with very low incomes as well as the unique qualities of the Section 202 program to meet these needs. Re-started Section 202 construction funds, as well as ongoing operating subsidies were approved by Congress in fiscal years 2017 ($5 million), 2018 ($105 million), and 2019 ($51 million). For fiscal year 2020, LeadingAge is urging Congress to appropriate $600 million for new Section 202 homes, an amount in line with new construction funding regularly appropriated annually prior to 2010.

In this NOFA, HUD has chosen to announce the competition for $50 million of these new Section 202 dollars. A second tranche, including the balance of the FY18 funds and all the FY19 funds, will be released by a second NOFA in 2020. Preferences are provided in the NOFA for applications that leverage outside resources; HUD believes that releasing the second tranche of new Section 202 funds will allow eligible applicants the lead time they need to secure these leveraged sources, particularly to pay for the construction, reconstruction, moderate or substantial rehabilitation, or acquisition of a structure with or without rehabilitation of the new homes, and therefore allow more of the limited funds’ use for the ongoing operating subsidy of units in the form of Project Rental Assistance Contracts. Thus, the combined $166 million for new Section 202 homes be used to help as many very low income older adults as possible.

In the section, “Changes from Previous NOFA,” HUD notes, “Funding for this program was last provided in 2010. Since that time there have been major changes to the program delivery systems in several areas including emphasis on the following: Physical design standards that will facilitate aging in place; and Mixed-finance development that leverages Capital Advance funding with other sources.” The NOFA strongly emphasizes aging in community and the leveraging of external funding.

The 100 possible points an applicant responding to this NOFA might receive are spread out over four broad “rating factor” categories: concept and project proposal; market; capacity, leverage and committed funding; and, land use / zoning. These are in addition to threshold requirements to be eligible to submit an application. The threshold requirements are: a timely application; a complete application; and a precise description of need based on 2016 American Community Survey 5-Year Census data.

The NOFA can be found via www.grants.gov. HUD will also be hosting a single, national webinar on the NOFA, on April 25 from 2 – 3pm ET.