HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

AUTHORIZATION:

Housing and Urban Development Act of 1965, Public Law 89-117, 12 U.S.C. 1701(s).

OBJECTIVES:

To make good quality rental housing available to low income families at a cost they can afford.

TYPES OF ASSISTANCE:

Direct Payments for Specified Use.

USES AND USE RESTRICTIONS:

HUD makes payments to owners of approved HUD-insured and non-insured multifamily rental housing projects to supplement the partial rental payments of eligible tenants. Rental projects were required to be part of an approved workable program for community improvement or be approved by local government officials. Assistance covers the difference between the tenant's payment and the basic market rental, but may not exceed 70 percent of the market rental. The tenant's payment is between 25 and 30 percent of monthly adjusted income or 30 percent of market rental, whichever is greater. THIS PROGRAM IS INACTIVE, i.e., NO NEW PROJECTS ARE BEING APPROVED; however tenants may apply for admission to existing projects.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   Eligible sponsors included nonprofit, cooperative, builder-seller, investor-sponsor, and limited-distribution mortgagors.

Beneficiary Eligibility:   Families must be within the income limits prescribed for admission to Section 8 housing in order to qualify for benefits under this program. Families may continue in occupancy if 30 percent of monthly income exceeds the market rent.

Credentials/Documentation:   Applications for new projects are no longer being accepted. This program is excluded from coverage under OMB Circular No. A-87.

APPLICATION AND AWARD PROCESS:

Preapplication Coordination:   The sponsor arranged a preapplication conference with the local HUD Field Office to determine the need for rent supplement assistance to the project before a formal application is submitted. Applications for new projects and unit increases for existing projects are no longer being accepted. All existing FHA-insured projects are being converted to the Section 8 Housing Assistance Payments program. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under E.O. 12372.

Application Procedure:   No applications for new projects are being accepted. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedure:   None.

Deadlines:   None.

Range of Approval/Disapproval Time:   Not applicable.

Appeals:   None.

Renewals:   Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:   HUD makes monthly payments to project owners to make up the difference between the partial rentals paid by assisted tenants and the market rental. Assisted tenants must pay between 25 and 30 percent of their adjusted monthly income (after certain deductions) or 30 percent of the market rent, which-ever is greater. This program has maintenance of effort (MOE) requirements, see funding agency for further details. Statistical factors used for fund allocation do not apply for this program. The statistical factor used for eligibility is 80 percent of the median family income by HUD field office region, the source calculated by HUD from P-25, Census; 1990 Census; County Business Patterns; P-60, Census; and the Annual Housing Survey.

Length and Time Phasing of Assistance:   The rent supplement contract is limited to the term of the mortgage or 40 years from the date of the first payment made under the contract, whichever is less. Individual family's assistance ceases when 30 percent of income is equal to or exceeds the market rent.

POST ASSISTANCE REQUIREMENTS:

Reports:   Any change of the mortgagor during the period of mortgage insurance must be approved by HUD. Defaults in meeting the mortgage terms must be reported. All mortgagors of HUD-insured projects are required to submit an annual financial statement to HUD.

Audits:   The Department of Housing and Urban Development reserves the right to audit the accounts of either the mortgagee or mortgagor in order to determine their compliance and conformance with HUD regulations and standards.

Records:   Mortgagees are required to maintain records in accordance with acceptable mortgage practices of lending institutions and the HUD regulations. All tenants who benefit from supplements must have their incomes recertified annually.

FINANCIAL INFORMATION:

Account Identification:   86-0129-0-1-604.

Obligations:   (Outlays) FY 99 not separately identifiable; FY 00 est not separately identifiable; and FY 01 est not separately identifiable.

Range and Average of Financial Assistance:   See USES AND USE RESTRICTIONS.

PROGAM ACCOMPLISHMENTS:

No new commitments for additional projects will be made under this program. At the end of fiscal year 1992, approximately 19,270 units were eligible for rent supplement payments.

REGULATIONS, GUIDELINES, AND LITERATURE:

Fact Sheet: Rent Supplements, no charge; 24 CFR 215; HUD Handbook 4520.1; HUD Handbook 4350.3.

INFORMATION CONTACTS: