Congressional Justifications for 1998 Budget Estimates

Office of Housing
Housing for Special Populations (Housing for the Elderly or Handicapped Program)

Program Highlights

NA = Not Applicable

a/ Amounts for 1997 were appropriated under the Development and Additional New Subsidized Housing account. Amounts for 1998 and subsequent years will be requested under the Housing for Special Populations program. Amounts for both 1997 and 1998 are shown in brackets for comparative purposes.

Summary of Budget Estimates

1. Summary of budget request

   A total of $474 million is requested for Housing for Special Populations. The proposed funding request provides capital grants and rental assistance for 3,865 rental housing units for elderly households and 1,488 rental housing units for disabled persons. Section 8 tenant-based assistance will be provided with 25 percent of the funding made available for supportive housing for the disabled. The tenant based assistance will consist of 5-year vouchers, and the use of tenant-based assistance will provide an additional 1,630 units for the disabled. This further supports the Administration's objective of "mainstreaming" people with disabilities by helping them rent private units in the local housing market.

2. Changes from 1996 estimated included in the 1997 budget

   Estimates in the 1997 Budget assumed that $1.2 billion would be used to support approximately 12,877 capital grants and rental assistance units for the elderly and disabled in 1996. Actual obligations were $211 million and funded only cost amendments. Due to the delay in enactment of fiscal year 1996 appropriations, the Department could not complete necessary processes in the typical annual schedule. As a result, selection of the 1996 grantees did not occur until fiscal year 1997. A total of 8,669 Section 202 units were awarded in November 1997 utilizing $765.9 million of carryover budget authority. Also, 1,971 Section 811 units were awarded using $182.9 million of carryover 1996 budget authority. Vouchers for disabled tenants will also be available in 1997 utilizing $58.3 million of carryover 1996 budget authority.

3. Changes from 1997 budget estimates

   The 1997 Budget proposed a program level of $769 million which would support a total of 8,312 elderly and disabled units and 1,412 vouchers for the disabled. However, the 1997 Appropriations Act provided a total of $839 million which will support an estimated 10,228 elderly and disabled units and 1,865 vouchers for the disabled.

Explanation of Increases and Decreases

The 1998 Budget requests a total of $474 million to fund elderly and disabled activities under the Housing for Special Populations account.

Program description

The Supportive Housing Programs. The Supportive Housing programs were authorized by Section 801 and Section 811 of the Cranston-Gonzalez National Affordable Housing Act to provide eligible private non-profit organizations with capital grants and rental assistance to provide housing for very low-income elderly or disabled individuals. The capital grants will be used to finance the acquisition, acquisition and moderate rehabilitation, construction, reconstruction, or rehabilitation of housing intended for use as supportive housing for elderly people or people with disabilities. Supportive housing is designed to meet the special physical needs of elderly or disabled individuals and to accommodate the provision of supportive services.

Vouchers. Section 8 tenant-based assistance will be provided with 25 percent of the funding made available for supportive housing for the disabled to increase program flexibility. The assistance will allow disabled renters to search for and rent a standard unit in the private market. This is known as "mainstreaming" recipients into the housing market.

Service Coordinators. Section 808 of the Cranston-Gonzalez National Affordable Housing Act authorized the use of Service Coordinators within existing projects for the elderly or frail elderly. Sections 674 and 676 of the Housing and Community Development Act of 1992 expanded the universe of projects eligible to receive service coordinator assistance by authorizing funding for service coordinators in Section 8 and Sections 221(d) and 236 projects. The purpose of the service coordinator program is to enable residents who are elderly, especially those who are frail or handicapped, to live independently. Services provided include meal services, housekeeping and chore assistance, personal care, laundry assistance, transportation services, and health related services.

The Direct Loan Program. The Housing for the Elderly or Handicapped Direct Loan program was authorized by Section 202 of the Housing Act of 1959, as amended. The program is no longer active, although projects developed under it continue to operate. The program provided direct loans to nonprofit organizations sponsoring the construction and management of rental housing for the elderly or handicapped. Projects originally developed under Section 202 also receive Section 8 subsidies to enable low-income households to afford the rents in these projects. The 1992 VA, HUD-Independent Agencies Appropriations Act (P.L. 102-139) provided language to enable the conversion of Section 202 direct loan projects to the Supportive Housing program starting January 1, 1992. All of the projects were converted in fiscal year 1992. The Department is currently reviewing options for Section 202 loan fund debt forgiveness.

	Actual 1996	Budget Estimate 1997	Current Estimate 1997	Estimate 1998	Increase + Decrease - 1998 vs 1 997
(Dollars in Thousands)
Section 202 Loan Program:
Budget Authority (Net Mandatory)	...	...	...	...	...
Outlays	-$181,666	-$250,705	-$124,433	-$311,341	-$186,908
Direct loans outstanding, end of year	8,305,886	8,399,874	8,424,376	8,352,769	-71,607

Program activity

Any remaining activity for the loan program includes amendments for projects reaching final endorsement, payment of interest and repayment of borrowings to Treasury, and management of the loan portfolio.