House Passes Section 202 Reform Bill

On December 5, 2007, the House of Representatives passed H.R. 2930, the Section 202 Supportive Housing for the Elderly Act, by a unanimous voice vote. The bill, introduced by Rep. Tim Mahoney (D-FL), would reform HUD’s Section 202 program by making significant changes. The bill unanimously passed the House Financial Services Committee on September 25, 2007 and will now move to the Senate.

The following is a summary of the changes.To view the full bill click here.

Section 202 Supportive Housing for the Elderly Act of 2007 – Amends the Housing Act of 1959 regarding project rental assistance for supportive housing for the elderly.

Changes from discretionary to mandatory the authority of the Secretary of Housing and Urban Development to adjust the annual amount of a contract for project rental assistance to provide for reasonable project costs.

Directs the Secretary to delegate review and processing of selected capital advance projects to a state or local housing agency meeting specified criteria.

States that owner deposits shall be used only to cover operating deficits during the first three years of operations and shall not be used to cover construction shortfalls or inadequate initial project rental assistance amounts.

Allows a national private nonprofit organization that owns multiple housing projects assisted under such Act to satisfy the local governing board requirement by having a local advisory board to its national governing board.

Amends the American Homeownership and Economic Opportunity Act of 2000 to revise requirements governing: (1) prepayment of debt for project-based rental housing assistance programs; (2) use of unexpended amounts; and (3) use of project residual receipts.

Sets forth requirements governing senior preservation rental assistance contracts in order to: (1) prevent displacement of elderly project residents in the case of refinancing or recapitalization; and (2) further project preservation and affordability.

Directs the Secretary to carry out a demonstration program to sell to state housing finance agencies portfolios of mortgages associated with loans related to supportive housing for the elderly.

Expands the definition of assisted living facility with respect to grants for conversion of elderly housing to such facilities.

Amends the United States Housing Act of 1937 with respect to rental assistance on behalf of a family that uses an assisted living facility as a principal place of residence. Provides that a family may be required at the time it initially receives such assistance to pay rent in an amount exceeding 40% of its monthly adjusted income.

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