Testimony 

Before the Senate Committee on Banking, 

Housing, and Urban Affairs 

United States Government Accountability Office

GAO 

For Release on Delivery 

Expected at 10:00 a.m. EDT 

Thursday, June 16, 2005 ELDERLY HOUSING

Federal Housing Programs 

and Supportive Services 

Statement of David G. Wood, Director 

Financial Markets and Community Investment 

GAO-05-795T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-795T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David G. Wood 

at (202) 512-8678 or woodd@gao.gov. 

Highlights of GAO-05-795T, a testimony to 

the Senate Committee on Banking, 

Housing, and Urban Affairs 

June 16, 2005

ELDERLY HOUSING

Federal Housing Programs and 

Supportive Services 

Of the 23 housing assistance programs GAO reviewed, only 4 require the 

owners of participating properties to ensure that services such as meals 

or transportation are available to residents. Three are HUD programs: 

the Section 202 Supportive Housing for the Elderly Program, which 

subsidizes multifamily properties for elderly households with very low 

incomes; the Assisted Living Conversion Program, which subsidizes the 

conversion of HUD-subsidized multifamily properties into assisted living 

facilities; and the Section 232 Mortgage Insurance Program, which 

insures mortgages for licensed facilities that provide varying levels of 

skilled care and services. USDA’s Section 515 Rural Rental Housing Loan 

program, which makes loans for the construction and rehabilitation of 

rural multifamily properties, has a Congregate Housing Services 

subprogram that requires the provision of supportive services. 

HUD administers four programs that can be used with various housing 

programs to help the elderly with supportive services: 

• Congregate Housing Services Program, which provides grants for the 

delivery of meals and nonmedical supportive services to elderly and 

disabled residents of public and multifamily housing; 

• Neighborhood Networks Program, which encourages the development of

computer centers in HUD-supported housing; 

• Resident Opportunities and Self Sufficiency (ROSS) Program, which 

links public housing residents with services; and 

• Service Coordinator Program, which funds coordinators who help 

elderly residents access services such as transportation and health care 

at some multifamily properties. 

Supportive services may also be available to elderly residents of 

subsidized housing through partnerships between individual properties 

and local organizations and through Department of Health and Human 

Services (HHS) programs. For example, HHS’s Public Housing Primary 

Care Program provides public housing residents with access to 

affordable primary and preventive health care through clinics that are 

located in or near the properties. GAO did not obtain data on the extent 

to which such services are made available. 

According to a congressionally 

established bipartisan commission, 

decreased investment in affordable 

housing and an elderly population 

that is projected to grow from 

about 12 percent of the population 

in 2002 to 20 percent by 2030 are 

likely to increase the number of 

elderly who must spend large 

portions of their incomes on 

housing. Moreover, according to 

this commission, more than onethird of the elderly tenants of 

government-subsidized housing 

require assistance with some type 

of activity of daily living, such as 

making a meal or getting in and out 

of bed. 

This testimony, which is based on a 

report issued in February 2005, 

discusses (1) the federal housing 

assistance programs requiring that 

supportive services be made 

available to elderly residents, (2) 

other Department of Housing and 

Urban Development (HUD) 

programs that assist the elderly in 

obtaining supportive services, and 

(3) private partnerships and federal 

health care programs that may 

provide supportive services to 

elderly beneficiaries of federal 

housing assistance. 
Page 1 GAO-05-795T 

Mr. Chairman and Members of the Committee: 

I appreciate the opportunity to be here today as the Committee considers 

ways to promote coordination among federal programs that provide 

housing and other services to the elderly. According to the report of the 

congressionally established Commission on Affordable Housing and 

Health Facility Needs for Seniors in the 21st Century, decreased 

investment in affordable housing and a burgeoning elderly population that 

is projected to grow from about 12 percent of the population in 2002 to 20 

percent by 2030 are likely to increase the number of elderly who must 

spend large portions of their incomes on housing.1

 Moreover, according to 

the Commission, about a third of the elderly tenants of governmentsubsidized housing required assistance with some type of activity of daily 

living, such as preparing meals or getting in and out of bed or a chair. 

My statement is based largely on our recent report to the Senate’s Special 

Committee on Aging, which requested that we identify federal programs 

that provide housing assistance to the elderly and the extent to which 

supportive services, such as meals and transportation, were affiliated with 

these programs.2

 Beginning in the 1930s, a number of federal housing 

programs have subsidized the construction of housing for the poor, 

provided rental assistance to tenants in existing privately owned housing, 

and insured mortgages for both single- and multifamily properties. Today, 

the Department of Housing and Urban Development (HUD) administers 

the majority of federal housing assistance programs in urban areas, and 

the U.S. Department of Agriculture’s (USDA) Rural Housing Service (RHS) 

implements housing programs in rural areas. Among the programs they 

administer are a number that either target the elderly specifically or 

provide benefits for which the elderly are eligible. My statement discusses 

(1) housing assistance programs that serve the elderly and require that 

supportive services be made available to elderly residents, (2) other HUD 

programs that can be used in conjunction with housing programs to assist 

the elderly in obtaining supportive services, and (3) private partnerships 

 1

Commission on Affordable Housing and Health Facility Needs for Seniors in the 21st 

Century, A Quiet Crisis in America (Washington, D.C.: June 30, 2002). Available at 

http://www.seniorscommission.gov.

2

GAO, Elderly Housing: Federal Housing Programs That Offer Assistance for the Elderly, 

GAO-05-174 (Washington, D.C.: February 14, 2005). For this report, we defined elderly as 

individuals aged 62 and older.
Page 2 GAO-05-795T 

and federal health care programs that may provide some services in 

conjunction with federally assisted housing. 

In preparing this information, we consulted with HUD and USDA officials 

to identify housing assistance programs that benefit the elderly. We 

reviewed laws and regulations to determine which of the housing 

assistance programs within our scope were required to ensure that 

supportive services were available. We identified programs providing 

supportive services that could be used with various housing assistance 

programs, whether or not such services were required. We reviewed 

literature and descriptions of housing assistance programs and 

interviewed administrators of the housing assistance programs within our 

scope, as well as representatives of advocacy organizations and 

professional associations interested in elderly housing issues and 

supportive services. We obtained descriptions of the supportive services 

programs by interviewing and obtaining documentation from officials 

from HUD, USDA, and the Department of Health and Human Services 

(HHS). We performed our work in Baltimore, Maryland; Greensboro and 

Raleigh, North Carolina; Columbus, Ohio; Oklahoma City and Stillwater, 

Oklahoma, and Washington, D.C., between December 2003 and December 

2004 in accordance with generally accepted government auditing 

standards. 

In brief: 

• Of 23 federal housing assistance programs that we reviewed, only 4 

required property owners to ensure that services such as meals or 

transportation were available to their residents. Three are HUD programs: 

the Section 202 Supportive Housing for the Elderly Program, which 

subsidizes the development and operating costs of multifamily properties 

for elderly households with very low incomes; Assisted Living Conversion 

Program, which subsidizes the conversion of HUD-subsidized multifamily 

properties into assisted living facilities; and Section 232 Mortgage 

Insurance Program, which insures mortgages for licensed facilities that 

provide varying levels of skilled care and services. In addition, USDA’s 

Section 515 Rural Rental Housing Loan program, which makes loans for 

the construction and rehabilitation of rural multifamily properties, has a 

Congregate Housing Services subprogram that requires the provision of 

supportive services. 

• HUD administers four service-related programs that can be used in 

conjunction with various housing programs to assist the elderly in 

obtaining supportive services: the Congregate Housing Services Program, 
Page 3 GAO-05-795T 

which provides meals and other services in public and multifamily housing 

properties; the Neighborhood Networks Program, which provides 

resources for establishing computer networks at these sites; and the 

Resident Opportunities and Self Sufficiency (ROSS) and Service 

Coordinator programs, which link residents with services in the 

community. 

• Supportive services may also be available to elderly residents of 

subsidized housing through partnerships between individual properties 

and local organizations and through programs provided by HHS. For 

example, HHS’s Public Housing Primary Care Program provides public 

housing residents with access to affordable comprehensive primary and 

preventive health care through clinics that are located either in or near 

public housing properties. 

Beginning in the 1930s, a number of federal housing programs have 

provided assistance to low-income renters and homeowners, including 

rent subsidies, mortgage insurance, and loans and grants for the purchase 

or repair of homes. Housing developments can be assisted by multiple 

programs. For example, a loan or mortgage on a multifamily property may 

be insured through a HUD or USDA program, and the property may have 

tenants that receive rental assistance from these agencies. In our earlier 

report, we identified a total of 23 federal housing programs that target or 

have special features for the elderly.3

 Of these programs, 2 are intended for 

the elderly only, 3 target the elderly and disabled, and another 18 have 

special features for the elderly, such as income adjustments that lower 

elderly households’ rental payments. Appendix I lists these housing 

assistance programs. 

In general, both HUD and USDA programs target families at lower income 

levels. HUD programs target families with incomes that are extremely low 

(no more than 30 percent of an area’s median), very low (no more than 50 

percent of an area’s median), and low (no more than 80 percent of an 

area’s median). USDA programs also target families with incomes that are 

very low and low. In addition, some USDA programs target families with 

moderate incomes (no more than 115 percent of an area’s median). 

However, these programs do not reach all needy households, and waiting 

 3

GAO-05-174. 

Background 
Page 4 GAO-05-795T 

lists for many types of subsidized housing, including housing for the 

elderly, are often long. 

HUD has specific goals for increasing housing opportunities for the 

elderly, including one goal specifically related to supportive services. As 

outlined in its fiscal year 2004 Annual Performance Plan, these goals 

include (1) increasing the availability of affordable housing for the elderly, 

(2) increasing the number of assisted-living units, (3) increasing the 

number of elderly households living in privately owned, federally assisted 

multifamily housing served by a service coordinator, and (4) increasing 

elderly families’ satisfaction with their Section 202 units. USDA does not 

have specific goals related to the elderly in its fiscal year 2004 Annual 

Performance Plan. 

As GAO has previously reported, virtually all the results that the federal 

government strives to achieve require the concerted and coordinated 

efforts of two or more agencies. This shared responsibility is an outgrowth 

of several factors, including the piecemeal evolution of federal programs 

and service delivery efforts.4

 Achieving results on public problems, such as 

the potentially large service needs of a growing elderly population, 

increasingly calls for effective interagency coordination. However, our 

work has shown that a number of barriers inhibit coordination among 

agencies. For example: 

• In reporting on the coordination of programs for the homeless, we noted 

that the federal government’s system for providing assistance to lowincome people is highly fragmented. Each federal assistance program 

usually has its own eligibility criteria, application, documentation 

requirements, and time frames; moreover, applicants may need to travel to 

many locations and interact with many caseworkers to receive assistance.5

• A review of federally assisted transportation services for “transportationdisadvantaged” seniors (who are more likely to have difficulty accessing 

transportation due to physical ailments) found that 5 federal agencies 

administer 15 programs. Service providers told GAO that certain 

characteristics of federal programs, such as what the providers view as 

 4

GAO, Managing for Results: Barriers to Interagency Coordination, GAO/GGD-00-106

(Washington, D.C.: March 29, 2000). 

5

GAO, Homelessness: Improving Program Coordination and Client Access to Programs, 

GAO-02-485T (Washington, D.C.: March 6, 2002). 
Page 5 GAO-05-795T 

burdensome reporting requirements and limited program guidance, can 

impede the implementation of practices that enhance senior mobility.6

• More generally, we have noted the range of barriers to coordination that 

agencies often face, including missions that are not mutually reinforcing or 

that may even conflict; concerns about protecting jurisdiction over 

missions and control over resources; and incompatible procedures, 

processes, data, and computer systems.7

Generally, HUD and USDA’s housing assistance programs are not required 

to provide supportive services to the elderly. Of the 23 housing assistance 

programs that target or include the elderly among potential beneficiaries, 

only 4 require the owners of properties developed under the programs to 

ensure that supportive services are available. Appendix II provides 

summaries of the four programs, which include: 

• HUD’s Section 202 program, which subsidizes the development and 

operating costs of multifamily properties for elderly households with very 

low incomes. It is the only federal housing program that targets all of its 

rental units to very-low-income elderly households. Applicants for Section 

202 funding must demonstrate that services will be available at the 

development or in the community where new construction is proposed. 

• HUD’s Assisted Living Conversion Program, which provides private 

nonprofit owners of eligible properties with grants to convert some or all 

of their units into assisted living facilities for the frail elderly. The 

reconfigured facilities must include enough community space to 

accommodate a central kitchen or dining area, lounges, and recreation and 

other multiple-use areas. The facilities must provide supportive services 

such as personal care, transportation, meals, housekeeping, and laundry. 

• HUD’s Section 232 Mortgage Insurance Program, which provides mortgage 

insurance for the construction or substantial rehabilitation of nursing 

homes (facilities that provide skilled nursing care and have 20 or more 

beds); intermediate care facilities (those that provide minimum but 

continuous care and have 20 or more beds); board and care homes 

 6

GAO, Transportation-Disadvantaged Seniors: Efforts to Enhance Senior Mobility Could 

Benefit from Additional Guidance and Information, GAO-04-971 (Washington, D.C.: 

August 30, 2004).

7

GAO/GGD-00-106. 

Four Housing 

Assistance Programs 

Require That 

Supportive Services 

Be Made Available to 

Elderly Residents 
Page 6 GAO-05-795T 

(facilities that provide room, board, and continuous protective oversight 

and have at least 5 accommodations); and assisted living facilities (those 

with 5 or more units designed for frail elderly persons who need 

assistance with at least 3 activities of daily living). All insured facilities 

must provide supportive services, but these services vary according to the 

type of facility. 

• USDA’s Section 515 Program, which provides loans to construct or to 

purchase and substantially rehabilitate multifamily rental or cooperative 

housing and recreational facilities in rural communities. Tenants eligible 

to live in program properties may also receive rental assistance through 

HUD or USDA programs. The Congregate Housing subprogram funds the 

development of assisted, group living environments that must provide 

meals, transportation, housekeeping, personal services, and recreational 

and social activities. 

Generally, HUD and USDA do not provide funding for the services 

required under these housing programs.8

 The property owners typically 

obtain other funds, either from federal programs, local charities, and civic 

groups to provide supportive services or must ensure that appropriate 

services are available in the community. 

HUD administers four service-related programs that can be used in 

conjunction with subsidized housing programs: two programs that provide 

supportive services to residents of public and multifamily properties 

developed under HUD programs, and two that link residents to supportive 

services. None of these programs are targeted exclusively to the elderly, 

but they either can be used in properties designated for the elderly or offer 

funding specifically for services for the elderly. 

• The Congregate Housing Services Program provides grants for the delivery 

of meals and nonmedical supportive services to elderly and disabled 

residents of public and multifamily housing, including USDA’s Section 515 

housing. While HUD provides up to 40 percent of the cost of supportive 

services, grantees must pay at least 50 percent of the costs, and program 

 8

Under the Section 202 capital advance program, if a sponsor indicates that at least 25 

percent of tenants are expected to be frail elderly, HUD allows the sponsor to use funds 

from the project rental assistance contract to pay for a service coordinator. A portion of 

the funds (up to $15 per month per unit) may also be used to cover some of the cost of 

supportive services. 

Other HUD Programs 

Can Assist the Elderly 

in Obtaining 

Supportive Services 
Page 7 GAO-05-795T 

participants pay fees to cover at least 10 percent.9 Like the 

Elderly/Disabled Services Coordinator Program under ROSS, the 

Congregate Housing Services Program has provided no new grants since 

1995, but Congress has provided funds to extend expiring grants on an 

annual basis. 

• The Neighborhood Networks program encourages property owners, 

managers, and residents of HUD-insured and -assisted housing to develop 

computer centers. Although computer accessibility is not a traditional 

supportive service for the elderly, a senior HUD official noted that having 

computers available enhances elderly residents’ quality of life. HUD does 

not fund each center’s planned costs but encourages property owners to 

seek cash grants, in-kind support, and donations from sources such as 

state and local governments, educational institutions, private foundations, 

and corporations.10

• The ROSS grant program links public housing residents with appropriate 

services. This program differs from the Service Coordinator Program in 

that it is designed specifically for public housing residents. The ROSS 

program has five funding categories, including the Resident Service 

Delivery Models for the Elderly and Persons with Disabilities (Resident 

Services) and the Elderly/Disabled Service Coordinator Program. Resident 

Services funds can be used to hire a project coordinator; assess residents’ 

needs for supportive services and link residents to federal, state, and local 

assistance programs; provide wellness programs; and coordinate and set 

up meal and transportation services. The Elderly/Disabled Service 

Coordinator Program has not provided new grants since 1995 but still 

services existing grants.11

• The Service Coordinator Program provides funding for managers of 

multifamily properties designated for the elderly and disabled to hire 

coordinators to assist residents in obtaining supportive services from 

community agencies. These services, which may include personal 

assistance, transportation, counseling, meal delivery, and health care, are 

intended to help the elderly live independently and to prevent premature 

and inappropriate institutionalization. Service coordinators can be funded 

 9

Fees cannot exceed 20 percent of an individual’s adjusted income. 

10Grant funding for Neighborhood Networks centers can also be provided to public housing 

authorities through HUD’s Office of Public and Indian Housing. 

11In fiscal year 2004, new grants for the program were funded through the Public Housing 

Operating Fund. 
Page 8 GAO-05-795T 

through competitive grant funds, residual receipts (excess income from a 

property), or rent increases. According to HUD’s fiscal year 2003 

Performance and Accountability Report, service coordinators were 

serving more than 111,000 units in elderly properties. 

Elderly residents of public and federally subsidized multifamily housing 

can also receive supportive services through partnerships between 

property owners and local organizations and through programs provided 

by HHS. For example, property owners can establish relationships with 

local nonprofit organizations, including churches, to ensure that residents 

have access to the services that they need. At their discretion, property 

owners may establish relationships that give the elderly access to meals, 

transportation, and housekeeping and personal care services. Although 

GAO did not obtain data on the extent to which such services are made 

available at all public and federally subsidized multifamily housing, in site 

visits to HUD and USDA multifamily properties, we found several 

examples of such partnerships: 

• In Greensboro, North Carolina, Dolan Manor—a Section 202 housing 

development—has established a relationship with a volunteer group from 

a local church. The volunteer group provides a variety of services such as 

transportation for the residents. 

• In Plain City, Ohio, residents of a Section 515 property called Pleasant 

Valley Garden receive meals five times a week in the community’s senior 

center (a $2 donation is suggested). A local hospital donates the food and 

a nursing home facility prepares it. Volunteers, including residents, serve 

the meals. The senior center uses the funds collected from the lunch for its 

activities. In addition, local grocery stores donate bread products to the 

senior center daily. The United Way provides most of the funding for the 

senior center. 

• In Guthrie, Oklahoma, Guthrie Properties—also a Section 515 property— 

has established a relationship with the local Area Agency on Aging. The 

agency assists residents of Guthrie Properties in obtaining a variety of 

services, including meals and transportation to a senior center. 

Some elderly residents of public and federally subsidized housing may also 

obtain health-related services through programs run by HHS. For example, 

HHS’s Public Housing Primary Care Program provides public housing 

residents with access to affordable comprehensive primary and preventive 

health care through clinics that are located either within public housing 

Private Partnerships 

and Federal Health 

Care Programs May 

Provide Some 

Supportive Services 
Page 9 GAO-05-795T 

properties or in immediately accessible locations. The program awards 

grants to public and nonprofit private entities to establish the clinics. The 

organizations must work with public housing authorities to obtain the 

physical space for the clinics and to establish relationships with residents. 

Currently, there are 35 grantees, 3 of which are in rural areas. According to 

a program administrator, although clinics are not specifically geared 

toward public housing designated for the elderly, they can be established 

at such properties. 

Elderly residents of federally subsidized housing may also be eligible for 

the Medicaid Home and Community-Based Services (HCBS) Waiver 

Program, which is administered by HHS’s Centers for Medicare and 

Medicaid Services. Through this waiver program, individuals eligible for 

Medicaid can receive needed health care without having to live in an 

institutional setting.12 HUD has identified these waivers as an innovative 

model for assisting the frail elderly in public housing. 

In addition, eligible elderly residents of federally subsidized housing may 

receive health care through the Program of All-Inclusive Care for the 

Elderly (PACE), which is also administered by the Centers for Medicare 

and Medicaid Services.13 Like the HCBS waiver program, this program 

enables eligible elderly individuals to obtain needed services without 

having to live in an institutional setting. The program integrates Medicare 

and Medicaid financing to provide comprehensive, coordinated care to 

older adults eligible for nursing homes. Figure 1 provides information on 

the housing assistance programs that can use federally funded supportive 

services programs that assist the elderly. 

 12In order to be eligible for health care services through the HCBS waiver program, 

individuals must meet a “level of care” requirement that varies by state but that typically is 

measured by standards of care for either hospitals, nursing facilities, or intermediate care 

facilities for persons with mental retardation. 

13PACE participants must be at least 55 years old, live in the service area, and be certified 

as eligible for nursing home care by the appropriate state agency. 
Page 10 GAO-05-795T 

Figure 1: Housing Assistance Programs That Can Use Federally Funded Supportive Services Programs 

Notes: Congregate Housing Services Program grants cannot be awarded to Section 221(d)(4) 

housing. Information on the extent to which elderly residents actually utilized these supportive 

services was generally not available at the federal level. 

Mr. Chairman, this concludes my prepared statement. I would be happy to 

answer any questions at this time. 
Page 11 GAO-05-795T 

For further information on this testimony, please contact David G. Wood 

at (202) 512-8678. Individuals making key contributions to this testimony 

included Emily Chalmers, Natasha Ewing, Alison Martin, John McGrail, 

Marc Molino, Lisa Moore, John Mingus, Paul Schmidt, and Julianne 

Stephens. 

Contacts and 

Acknowledgements 
Page 12 GAO-05-795T 

Appendix I: Housing Programs Targeted to or 

with Special Features for the Elderly 

Program Type

S

S

M

M

P

R

R

R

R

R

Agency

HUD Section 202 Supportive Housing for the Elderly

USDA Section 504 Rural Housing Repair and Rehabilitation Grants

HUD Assisted Living Conversion Program

Section 231 Mortgage Insurance for the Elderly

Section 232 Mortgage Insurance for Nursing Homes, Intermediate Care, 

Board and Care, and Assisted Living Facilities

HUD Housing Choice Vouchers

Project-based Rental Assistance (Section 8 and Rent Supplement) (inactive)c

Public Housing

Section 8 Moderate Rehabilitation (inactive)c

Section 207 Mortgage Insurance for Manufactured Home Parks

Section 207/223(f) Mortgage Insurance for Existing Multifamily Properties

Section 213 Mortgage Insurance for Cooperatives

Section 221(d)(3) Below-Market Interest Rate (inactive)c

Section 221(d)(3)/(d)(4) Mortgage Insurance

Section 236 Mortgage Insurance and Interest Reduction Payments (inactive)c M

M

USDA Section 502 Rural Housing Loans (Direct)

Section 502 Direct Housing Natural Disaster Loans

Section 502 Guaranteed Rural Housing Loans

Section 504 Rural Housing Repair and Rehabilitation Loans S

Section 515 Rural Rental Housing Loans

Section 521 Rural Rental Assistance

Section 538 Guaranteed Rural Rental Housing Loans

Section 542(b)/(c) Risk Sharing

Targeted to

the elderly

Targeted to

the elderly

and 

disabled

With

special

features

for the

elderly

Single family

Multifamily

Public housing

Rental assistance

M

M

M

M

M

M

S

S

M

M

M

M

Assisted living facilities and properties make supportive services available

Properties can be designated for occupancy by the elderly

The elderly are the only beneficiaries

The elderly receive income adjustments when determining program eligibility or rent

Sources: GAO analysis of authorizing legislation, program regulations, program handbooks, and other HUD and USDA documents.

M

P

S

R
Page 13 GAO-05-795T 

a

Before fiscal year 1992, the Section 202 program also supported the development of housing for the 

disabled. 

b

Inactive programs no longer provide assistance or insurance to new properties, but existing 

properties continue to operate under the programs. 

c

The Section 515 program’s Congregate Housing subprogram requires properties to provide 

supportive services. 

Description Features specific to elderly

Subsidizes development and operating costs of multifamily properties for elderly households with very low incomes

Subsidizes conversion of HUD-subsidized multifamily properties to assisted living facilities

Insures mortgages for multifamily properties for the elderly and disabled; no income limits

Insures mortgages for licensed facilities that provide varying levels of skilled care and services; no income limits

Partially insures mortgages for affordable multifamily properties, sharing risk with lenders; no income limits

Provides grants to elderly rural homeowners with very low incomes for home repair or rehabilitation

Provides tenant-based rental assistance for households with extremely low to low incomes

Provides project-based rental assistance in multifamily properties for households with extremely low to low incomes 

Provides subsidized housing operated by public housing authorities for households with extremely low to low incomes

Provides project-based rental assistance for households with extremely low to low incomes in properties that required moderate rehabilitation 

Insures mortgages for manufactured home parks; no income limits 

Insures mortgages to purchase or refinance existing multifamily properties; no income limits 

Insures mortgages for multifamily cooperatives; no income limits

Insured below-market interest rate mortgages for multifamily properties for households with incomes below 95 percent of the area median

Insures mortgages for multifamily properties; no income limits

Insures and subsidizes the interest rate of mortgages for multifamily properties for households with low incomes

Makes loans to households with low incomes for the purchase of rural single-family homes

Makes loans to households with very low and low incomes for single-family homes in rural disaster areas

Guarantees mortgages for households with low and moderate incomes to purchase rural single-family homes

Makes loans to rural homeowners with very low incomes for home repair or rehabilitation

Makes loans for the construction and rehabilitation of rural multifamily properties for households with very low to moderate incomesb

Provides rental assistance to tenants with very low and low incomes in Section 515 and other USDA-financed multifamily properties

Guarantees mortgages for rural multifamily properties for households with low and moderate incomes

a
Page 14 GAO-05-795T 

Figure 3: Section 202 Supportive Housing for the Elderly Description 

a

Elderly units are designated for occupancy by the elderly. Elderly or nonelderly households may 

occupy nonelderly units. Elderly households had an elderly head, cohead, or spouse, regardless of 

whether the unit was designated for the elderly. The number of households was less than the number 

of units because HUD only had occupancy data on households receiving project-based rental 

assistance. 

Appendix II: Housing Assistance Programs 

That Require That Supportive Services Be 

Made Available to Elderly Residents 

 Since fiscal year 1992, the Section 202 program has provided capital advances (essentially grants) to nonprofit 

organizations and nonprofit consumer cooperatives to fund the construction and rehabilitation of multifamily rental 

housing for very low-income elderly people. The capital advance need not be repaid as long as the property 

remains available for at least 40 years to elderly households with very low incomes. Capital advances are subject 

to per-unit development cost limits, which can be adjusted to reflect higher costs in certain areas. Property 

sponsors also receive project-based rental assistance under the Section 202 program to defray some of the 

operating expenses. The combination of a debt-free project and rental assistance payments enables sponsors to 

offer units at rents that are generally equal to 30 percent of a tenant’s adjusted income. 

 Prior to fiscal year 1992, the Section 202 program provided direct loans to facilitate the construction of 

multifamily rental housing for elderly and disabled people. Existing properties financed with Section 202 direct 

loans continue to operate. Income limitations for tenants varied over the life of the direct loan program. Although 

the direct loan program did not include project-based rental assistance, some remaining properties also receive 

subsidies that reduce tenants’ rents under HUD’s separate project-based rental assistance programs. 

Administering

agency:

Type of

assistance:

Type of

housing:

HUD

Capital advance

Project-based rental assistance

Multifamily

 HUD national and field office staff administer the programs. HUD is responsible for awarding capital advances 

to sponsors and monitoring and approving properties through development, construction, and occupancy. 

Sponsors develop and operate the properties, select tenants, and calculate rents.

 HUD announces the availability of Section 202 funds and the selection criteria for proposals through an annual 

Notice of Funding Availability. HUD allocates Section 202 funds among its field office jurisdictions using a formula 

that considers the size and income of the elderly population and that sets aside 15 percent of the funds for 

nonmetropolitan areas.

 Elderly families that have very low incomes are eligible to rent units financed with capital advances. 

 Elderly and disabled families are eligible to rent units funded with direct loans. Generally, only households with 

very low or low incomes may rent units that receive project-based rental assistance. Income eligibility requirements 

for other units in direct loan properties vary depending on the year the property was financed. 

 When applying for a capital advance, sponsors must demonstrate how they will address tenants’ needs for 

supportive services, either by providing them on-site or by providing access to off-site services. Capital advance 

properties that principally serve frail elderly residents may use project-based rental assistance funds to hire 

service coordinators. Direct loan properties can apply for HUD’s Service Coordinator grants program. In addition, 

property owners can establish computer centers through the Neighborhood Networks program.

Program administration and funding

Overview

Beneficiary eligibility

Supportive services

 Capital advance properties are intended exclusively for the elderly. Direct loan properties are intended 

exclusively for the elderly and disabled. 

Special features for the elderly

Section 202 Units

and Households,

as of May 2004a

Source: GAO analysis of program information and HUD data.

Program statistics

Section 202 Supportive

Housing for the Elderly

0

50

100

150

200

250

300

350

Nonelderly

Elderly

Units Households

Number in thousands
Page 15 GAO-05-795T 

Figure 4: Assisted Living Conversion Program Description 

a

Assisted living facilities are designed to accommodate the frail elderly and persons with disabilities 

who can live independently but need assistance with activities of daily living. These facilities must 

provide supportive services such as personal care, transportation, meals, housekeeping, and laundry. 

 The ALCP, authorized by Section 202(b) of the Housing Act of 1959 as amended, provides private nonprofit 

owners of eligible properties with a grant for the conversion of some or all of their units into assisted living facilities 

for the frail elderly.a

 The properties must have been designated for the elderly and occupied for at least 5 years 

and must be funded with at least one of the following housing programs: Section 202, Section 515 properties 

receiving Section 8 rental assistance, other properties receiving Section 8 project-based rental assistance, Section 

221(d)(3) Below-Market Interest Rate, and Section 236. In addition, unused and underutilized commercial 

properties owned by private nonprofits are also eligible.

 Grant funds are used to cover the physical costs of configuring units, creating common areas and space for 

supportive services, and making other changes that are consistent with HUD or the state’s regulations for assisted 

living facilities. The reconfigured facilities must include enough community space to accommodate a central 

kitchen or dining area, lounges, recreation and other multiple use areas, as well as offices or staff spaces. 

Administering

agency:

Type of

assistance:

Type of

housing:

HUD

Conversion grant

Multifamily

 HUD’s Office of Housing Assistance and Grant Administration is responsible for administering the program. 

Applicants compete for program funds through an annual Notice of Funding Availability. HUD will rate the 

applications that successfully complete technical processing using specific rating criteria. Funds are allocated to 

HUD’s eighteen Hub Offices, and the staff there review applications and make funding decisions. 

 Elderly or disabled persons that meet the admissions and discharge requirements for assisted-living in 

accordance with state and local requirements or HUD frailty requirements, whichever are more stringent. 

Residents must be able to live independently but may need assistance with activities of daily living (e.g., eating, 

bathing, grooming, dressing, and home management). 

 Residents must meet income eligibility requirements that apply to the property. These requirements vary 

according to the program under which the property was financed.

 While HUD funds only the physical costs of conversion, property owners must provide supportive services 

either directly or through a third party. All ALCP sites must link low-income residents to supportive services. 

Program administration and funding

Overview

Beneficiary eligibility

Supportive services

 This program creates assisted living units, which provide supportive services to the frail elderly. 

Special features for the elderly

Units Approved for Conversion to

Assisted Living by Property Type,

Fiscal Years 2000-2003

Source: GAO analysis of program information and HUD data.

Program statistics

Assisted Living

Conversion Program (ALCP)

63%

10%

11%

16%

Project-Based Rental

Assistance (Section 8)

Other

Section 202

Section 236

Number of units: 1,891
Page 16 GAO-05-795T 

Figure 5: Section 232 and 232/223(f) Mortgage Insurance Description 

a

Combination refers to properties that featured multiple facility types. Unknown refers to properties 

where data on facility type were unavailable. HUD did not have sufficient data to determine the total 

number of beds or units in all properties. Approximately 16,972 units were designated for the elderly. 

 The Section 232 program provides mortgage insurance for the construction or substantial rehabilitation of: 

 • Nursing homes—facilities that provide skilled nursing care and have 20 or more beds,

 • Intermediate care facilities—facilities that provide minimum but continuous care and have 20 or more beds,

 • Board and care homes—facilities that provide room, board, and continuous protective oversight and have at 

 least 5 accommodations (bedrooms with a maximum of 4 people each), and

 • Assisted living facilities—facilities with 5 or more units designed for frail elderly persons who need assistance 

 with at least 3 activities of daily living.

 The Section 232/223(f) program insures the refinancing or purchase of similar facilities that do not require 

substantial rehabilitation. Under both programs, the facilities must be licensed by appropriate state or local 

agencies. A responsible state agency must certify that nursing homes and intermediate care facilities are needed, 

generally by providing a “certificate of need.”

 Under the Section 232 program, HUD insures up to 90 percent of a facility’s appraised value (95 percent for 

nonprofit borrowers) for new construction or substantial rehabilitation. Under Section 232/223(f), HUD insures up 

to 85 percent of the value (90 percent for nonprofit borrowers). In the event of default, HUD pays the lender the 

unpaid principal amount and related charges.

Administering

agency:

Type of

assistance:

Type of

housing:

HUD

Mortgage insurance

Nursing homes, intermediate care

facilities, board and care homes,

and assisted living facilities

 HUD national and field office staff administer the programs. HUD approves and monitors lenders that 

underwrite and service the loans. The lenders submit project sponsors’ applications to HUD field office staff, who 

review the applications for compliance with HUD guidelines and standards. 

 This program is intended for elderly and disabled residents. There are no income requirements. 

 The level of services varies according to the type of facility, but all facilities insured under this program provide 

supportive services to residents, ranging from meal services to protective oversight and skilled care. 

Program administration and funding

Overview

Beneficiary eligibility

Supportive services

 Assisted living facilities are intended for frail elderly residents. 

Special features for the elderly

Section 232 Properties by Facility Type,

as of April 2004a

Source: GAO analysis of program information and HUD data.

Program statistics

Section 232 and 232/223(f) Mortgage

Insurance for Nursing Homes, 

Intermediate Care Facilities, Board and 

Care Homes, and Assisted Living 

Facilities

70%

2% Unknown

6% Board and care

21%

1% Combination

Nursing homes

Assisted living

Number of properties: 1,807
Page 17 GAO-05-795T 

Figure 6: Section 515 Rural Rental Housing Loan Description 

a

Elderly units are designated for occupancy by the elderly or disabled. Elderly or nonelderly 

households may occupy nonelderly units. Elderly households had an elderly head, cohead, or 

spouse, regardless of whether the unit was designated for the elderly. 

(250251) 

0

100

200

300

400

500

 The Section 515 loan program, authorized by the Housing Act of 1949 as amended, was first implemented in 

1962. Section 515 loans are made directly to individuals or organizations to construct, or to purchase and 

substantially rehabilitate, multifamily rental or cooperative housing and recreational facilities in rural communities. 

Section 515 loans also fund independent living facilities, such as congregate housing and group homes for elderly 

or disabled families. 

 Tenants eligible to live in properties built with these loans may also receive rental assistance through HUD’s 

Project-Based Section 8 program or USDA’s Section 521 program.

Administering

agency:

Type of

assistance:

Type of

housing:

USDA

Direct loans

Multifamily

 Originally, Section 515 funding was distributed to each state based on the state’s percentages of the national: 

rural population, number of rural occupied substandard units, and number of rural families with incomes below 

poverty level. This system was replaced by a national competition, which is announced through a Notice of 

Funding Availability. Applicants apply to build developments in designated areas. State USDA offices accept, 

review, score, and rank loan applications, and USDA’s national office makes final decisions on requests and 

distributes funds. Developments cannot be granted more than $1 million each, and states cannot receive a total of 

more than $2.5 million each year. Loans have a maximum repayment period of 30 years, with a 50-year 

amortization. 

 Families with very low, low, or moderate incomes. 

 Not required except for congregate housing, which must provide meals, transportation, housekeeping, personal 

services, and recreational and social activities. Section 515 loan funds cannot be used to pay for supportive 

services. Owners of congregate housing properties must seek other funding sources, such as HUD’s Congregate 

Housing Services grant program. 

Program administration and funding

Overview

Beneficiary eligibility

Supportive services

 In determining eligibility, adjusted income, and rent, elderly families receive the following deductions from their 

annual income: $400 and certain medical expenses.

 Owners can designate developments for the elderly. 

Special features for the elderly

Section 515 Units and Households,

as of May 2004a

Source: GAO analysis of program information and USDA data.

Program statistics

Section 515 Rural

Rental Housing Loan

Households

Number in thousands

Nonelderly

Elderly

Units
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