US HUD Grants for Developers of Low-income Housing

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22. Section 202 Grants ($511.9 million nationwide to assist
very low-income elderly) HUD's Section 202 grants program
helps expand the supply of affordable housing with supportive
services for the elderly. It provides very low-income elderly
with options that allow them to live independently but in an
environment that provides support activities such as cleaning,
cooking, and transportation. In addition to funding the
construction and rehabilitation of projects to create
apartments, HUD Section 202 grants will subsidize rents for
three years so that residents will pay only 30 percent of
their adjusted incomes as rent. To be eligible for the
assistance a household must be classified as "very low-income,
"which means n income less than 50 percent of the area median.
Nationally, based on 50 percent of the national median family
income with an applicable adjustment for household size, a
one-person household would need to have an income equal to or
less than $20,850 a year. Section 811 Grants ($121.3 million
nationwide to assist very low-income people with disabilities)
This housing, most of which will be newly constructed, typically
is small apartment buildings, group homes for three to four
people per home, or condominium units. Residents will pay 30
percent of their adjusted income for rent and the federal
government will pay the rest. The grants are awarded under
HUD's Section 811 program, which provides housing for households
with one or more very low-income individuals, at least one of
whom is at least 18 years old and has a disability, such as a
physical or developmental disability or chronic mental illness.
The term "person with disabilities" also includes two or more
people with disabilities living together, and one or more persons
with disabilities living with one or more live-in attendants.
The program allows persons with disabilities to live
independently in their communities by increasing the supply of
rental housing with the availability of supportive services.
To be classified as "very low-income," a household income cannot
exceed 50 percent of the area median income. However, most
households that receive Section 811 assistance have an income
less than 30 percent of the area median. Generally, this means
that a one-person household will have an annual income of about
$12,550. HUD provides the Section 202 and Section 811 funds to
non-profits in two forms: *Capital advances. This is money that
covers the cost of developing the housing. It does not need to
be repaid as long as the housing is available for at least 40
years for occupancy by very low-income seniors (under Section 202)
or very low-income people with disabilities (under Section 811).

*Project rental assistance. This is money that goes to each
non-profit group to cover the difference between the residents'
contributions toward rent and the cost of operating the project.