Portrait of senior man in front of suburban home
(Credit; MoMo Productions / Getty Images)

Up to $174.6 million in federal grant funding was announced Wednesday to support the development of new rental affordable senior housing.

In a notice posted by the US Department of Housing and Urban Development under its Section 202 Supportive Housing for the Elderly program, HUD said the funding will support new affordable housing units along with ongoing project rental assistance and supportive services.

Compared with previous funding opportunity notices from HUD, LeadingAge Director of Housing Operations and Policy Juliana Bilowich said during a Wednesday membership call, this year’s notice places more emphasis on intergenerational housing, internet access for residents, the mental and physical health of residents, and property enhancements to make housing healthier and more energy efficient. 

This year’s grants, Bilowich added, also place a decreased emphasis on leveraging, meaning that providers will not have to layer on other funding sources, making projects easier to finance.

And although the overall pool of funds is greater than the previous round, the funding opportunity notice anticipates that fewer awards will be made (35 in this round compared with 45 in the previous round), which LeadingAge Vice President of Housing Policy Linda Couch said she hopes points to higher grantee award amounts. 

The overall maximum award remains $20 million, but Couch pointed out in a blog post that no awardee since the program’s restart in 2018 has received more than $10 million, with most awards ranging from $1 million to $5 million in the past.

According to HUD, intergenerational households will receive up to $15 million to support residents acting as caregivers. Enhancements that support safer, healthier and more efficient homes will include new minimum requirements for energy and water efficiency, as well as climate resiliency.

“The need has never been greater to increase the supply of affordable and safe rental homes for our nation’s low-income senior population,” HUD Assistant Secretary for Housing Julia Gorden said in a news release. “This funding opportunity to support the development of new, deeply affordable senior rental homes is the largest since 2013,” she added.

Nonprofit organizations have until Jan. 25 to apply for the funds through capital advances or Project Rental Assistance Contracts, or PRACs.

Capital advances cover the cost of developing, acquiring or rehabilitating eligible properties. Repayment of the grant funds is not required if the housing remains available for occupancy by very low-income older adults for at least 40 years.

PRACs are renewable project-based funding that covers the difference between residents’ contributions toward their rent and the cost of operating the property. Section 202 project eligibility requires residents to be very low-income, earning less than 50% of the area median income. Most households in the Section 202 program earn less than 30% of the median income for the area.

Last year, HUD awarded $143 million in grants to finance the development of more than 30 new properties and more than 2,100 new rental homes under the Section 202 program. 

Bilowich called the Section 202 program “unique” in that it’s a “really targeted housing program” that focuses on rents for very low-income older adults. She said the program also supports independent aging through “light-touch services,” including service coordination.