(Source: HUD) — 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. 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 local awardees.
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.