HUD's FY99 Budget
Congressional Justifications
Office of Housing

Housing for Special Populations

(Housing for the Elderly or Handicapped Program)

PROGRAM HIGHLIGHTS

1. Amounts for 1997 were appropriated under the Development of Additional New Subsidized Housing Account. Amounts for 1998 were appropriated under the Housing for Special Populations program. Amounts for 1999 have been requested under the HOME Partnership Investment program in Community Planning and Development (CPD).
1. Funded in 1998 as a set-aside under the Community Development Block Grants program.

SUMMARY OF BUDGET ESTIMATES

SUMMARY OF BUDGET REQUEST

No appropriation is requested for fiscal year 1999 for the Supportive Housing for the Elderly and Disabled under the Housing for Special Populations program. As part of HUD's transformation, the fiscal year 1999 Budget proposes the reformation of the Section 202 and 811 programs of capital advances and project rental assistance. For 1999, the Supportive Housing for Special Populations Block Grants program, which will be administered by CPD under the HOME program, will provide funding for housing assistance for the elderly and disabled. The requested funds will finance activities such as construction, rehabilitation and acquisition.

2. CHANGES FROM 1997 ESTIMATED INCLUDED IN THE 1998 BUDGET

Estimates in the 1998 Budget assumed that $1.9 billion would be used to support approximately 25,000 capital grants and rental assistance units for the elderly and disabled in 1997. Actual reservations were $1.2 billion.

3. CHANGES FROM 1998 BUDGET ESTIMATES

The fiscal year 1998 Budget requested a total of $474 million for the elderly and disabled programs. However, the 1998 Appropriations Act provided $839 million for these programs. As a result of the increased funding, outlay estimates have been revised accordingly.

EXPLANATION OF INCREASES AND DECREASES

The 1999 Budget assumes that elderly and disabled activities will be funded from the HOME program under CPD.

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 at least 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. For 1998, $7.6 million is provided for the Service Coordinator program through the Community Development Block Grants program in CPD.

Supportive Housing for Special Populations Block Grants Program. Funding for the Supportive Housing for Special Populations Block Grants Program for fiscal year 1999 has been requested under the HOME program. This program will provide funds to the 50 States, Puerto Rico, Virgin Islands and Guam to develop housing for the elderly and persons with disabilities. The funds will be distributed under the HOME program for low-income elderly persons and persons with disabilities, to the States, Puerto Rico and Guam. The funds will be used to finance the acquisition, construction, reconstruction or rehabilitation of housing intended for use as supportive housing for elderly persons or persons 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.

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.

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.