HUD ANNOUNCES NEARLY $14.8 MILLION TO PRESERVE RENTAL ASSISTANCE
IN SENIOR HOUSING DEVELOPMENTS Funding to Midland, Mich., development will help to prevent displacement of elderly tenants
CHICAGO – The U.S. Department of Housing and Urban Development (HUD) today announced $14.8 million to preserve affordable rental assistance for elderly tenants living in subsidized properties. This funding is provided through HUD’s Senior Preservation Rental Assistance Contracts (SPRACs) and is targeted for properties in HUD’s Section 202 “Supportive Housing for the Elderly” program where rental assistance may expire without this important preservation tool. This funding will preserve rental assistance for an estimated 105 units in Cleveland Manor I in Midland, Mich.
SPRACs are an important tool for preserving the nation’s affordable multifamily properties. Funding will continue to support affordable rent for seniors living in more than 1,700 units located in 12 properties in six states. See attached list of the Region V awardees.
“This funding means these seniors will have the security of knowing they can afford to stay in their homes,” said Antonio R. Riley, HUD’s Midwest Regional Administrator.
The Section 202 Supportive Housing for the Elderly Act of 2010authorizes HUD to provide SPRACs with 20-year terms to prevent displacement of elderly residents of certain projects assisted under HUD’s Section 202 Supportive Housing for the Elderly program in the case of refinancing or recapitalization and to further preserve and maintain affordability of Section 202 Direct Loan projects. The purpose of SPRACs is to prevent displacement of income-eligible elderly residents of Section 202 Direct Loan properties with original interest rates of 6% or less in the case of financing changes.
The majority of the mortgages in this portfolio of properties will reach their respective maturity dates over the next ten years. HUD estimates that without interventions like SPRACs, maturing mortgages will signal the elimination of affordability protections for approximately 19,000 low- and very-low income seniors.
HUD staff will provide guidance for completing the funding process so the subsidy can flow to the unassisted seniors at the projects. HUD’s Multifamily Hub/Program Center Staff will oversee the execution of SPRAC contract and use agreement; will close any FHA financing; and will perform ongoing contract administration and servicing/monitoring of projects.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and http://espanol.hud.gov. You can also follow HUD on twitter @HUDgov, on facebook at www.facebook.com/HUD, or sign up for news alerts on HUD's emaillist.
Preservation Rental Assistance Contract Awards
Senior Housing Development
Estimated # of Units*
Cleveland Manor I
2200 Cleveland Avenue
Lakewoods I & II
980 Wilmington Avenue
* Final # of units to be supported will be determined when rent contracts are executed.