S. 118 

One Hundred Eleventh Congress 

of the 

United States of America 

AT THE SECOND SESSION 

Begun and held at the City of Washington on Tuesday, 

the fifth day of January, two thousand and ten 

An Act 

To amend section 202 of the Housing Act of 1959, to improve the program under 

such section for supportive housing for the elderly, and for other purposes. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Section 202 

Supportive Housing for the Elderly Act of 2010’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act 

is as follows: 

Sec. 1. Short title and table of contents. 

TITLE I—NEW CONSTRUCTION REFORMS 

Sec. 101. Selection criteria. 

Sec. 102. Development cost limitations. 

Sec. 103. Owner deposits. 

Sec. 104. Definition of private nonprofit organization. 

Sec. 105. Nonmetropolitan allocation. 

TITLE II—REFINANCING 

Sec. 201. Approval of prepayment of debt. 

Sec. 202. Use of unexpended amounts. 

Sec. 203. Use of project residual receipts. 

Sec. 204. Additional provisions. 

TITLE III—ASSISTED LIVING FACILITIES AND SERVICE-ENRICHED 

HOUSING 

Sec. 301. Amendments to the grants for conversion of elderly housing to assisted 

living facilities. Sec. 302. Monthly assistance payment under rental assistance. 

TITLE IV—COMPLIANCE WITH STATUTORY PAY-AS-YOU-GO ACT OF 2010 

Sec. 401. Budgetary effects. 

TITLE I—NEW CONSTRUCTION 

REFORMS 

SEC. 101. SELECTION CRITERIA. 

Section 202(f)(1) of the Housing Act of 1959 (12 U.S.C. 

1701q(f)(1)) is amended— 

(1) by redesignating subparagraphs (F) and (G) as subparagraphs (G) and (H), respectively; and 

(2) by inserting after subparagraph (E) the following new 

subparagraph: 

‘‘(F) the extent to which the applicant has ensured that 

a service coordinator will be employed or otherwise retained 
S. 118—2 

for the housing, who has the managerial capacity and responsibility for carrying out the actions described in subparagraphs 

(A) and (B) of subsection (g)(2);’’. 

SEC. 102. DEVELOPMENT COST LIMITATIONS. 

Section 202(h)(1) of the Housing Act of 1959 (12 U.S.C. 

1701q(h)(1)) is amended, in the matter preceding subparagraph 

(A), by inserting ‘‘reasonable’’ before ‘‘development cost limitations’’. 

SEC. 103. OWNER DEPOSITS. 

Section 202(j)(3)(A) of the Housing Act of 1959 (12 U.S.C. 

1701q(j)(3)(A)) is amended by inserting after the period at the 

end the following: ‘‘Such amount shall be used only to cover operating deficits during the first 3 years of operations and shall not 

be used to cover construction shortfalls or inadequate initial project 

rental assistance amounts.’’. 

SEC. 104. DEFINITION OF PRIVATE NONPROFIT ORGANIZATION. 

Section 202(k)(4) of the Housing Act of 1959 (12 U.S.C. 

1701q(k)(4)) is amended to read as follows: 

‘‘(4) The term ‘private nonprofit organization’ means— 

‘‘(A) any incorporated private institution or foundation— 

‘‘(i) no part of the net earnings of which inures 

to the benefit of any member, founder, contributor, 

or individual; 

‘‘(ii) which has a governing board— 

‘‘(I) the membership of which is selected in 

a manner to assure that there is significant representation of the views of the community in which 

such housing is located; and 

‘‘(II) which is responsible for the operation of 

the housing assisted under this section, except 

that, in the case of a nonprofit organization that 

is the sponsoring organization of multiple housing 

projects assisted under this section, the Secretary 

may determine the criteria or conditions under 

which financial, compliance and other administrative responsibilities exercised by a single-entity 

private nonprofit organization that is the owner 

corporation responsible for the operation of an individual housing project may be shared or transferred to the governing board of such sponsoring 

organization; and 

‘‘(iii) which is approved by the Secretary as to 

financial responsibility; and 

‘‘(B) a for-profit limited partnership the sole general 

partner of which is— 

‘‘(i) an organization meeting the requirements 

under subparagraph (A); 

‘‘(ii) a for-profit corporation wholly owned and controlled by one or more organizations meeting the 

requirements under subparagraph (A); or 

‘‘(iii) a limited liability company wholly owned and 

controlled by one or more organizations meeting the 

requirements under subparagraph (A).’’. 
S. 118—3 

SEC. 105. NONMETROPOLITAN ALLOCATION. 

Paragraph (3) of section 202(l) of the Housing Act of 1959 

(12 U.S.C. 1701q(l)(3)) is amended by inserting after the period 

at the end the following: ‘‘In complying with this paragraph, the 

Secretary shall either operate a national competition for the nonmetropolitan funds or make allocations to regional offices of the 

Department of Housing and Urban Development.’’. 

TITLE II—REFINANCING 

SEC. 201. APPROVAL OF PREPAYMENT OF DEBT. 

Subsection (a) of section 811 of the American Homeownership 

and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) 

is amended— 

(1) in the matter preceding paragraph (1), by inserting 

‘‘, for which the Secretary’s consent to prepayment is required,’’ 

after ‘‘Affordable Housing Act)’’; 

(2) in paragraph (1)— 

(A) by inserting ‘‘at least 20 years following’’ before 

‘‘the maturity date’’; 

(B) by inserting ‘‘project-based’’ before ‘‘rental assistance payments contract’’; 

(C) by inserting ‘‘project-based’’ before ‘‘rental housing 

assistance programs’’; and 

(D) by inserting ‘‘, or any successor project-based rental 

assistance program,’’ after ‘‘1701s))’’; 

(3) by amending paragraph (2) to read as follows: 

‘‘(2) the prepayment may involve refinancing of the loan 

if such refinancing results in— 

‘‘(A) a lower interest rate on the principal of the loan 

for the project and in reductions in debt service related 

to such loan; or 

‘‘(B) a transaction in which the project owner will 

address the physical needs of the project, but only if, as 

a result of the refinancing— 

‘‘(i) the rent charges for unassisted families 

residing in the project do not increase or such families 

are provided rental assistance under a senior preservation rental assistance contract for the project pursuant 

to subsection (e); and 

‘‘(ii) the overall cost for providing rental assistance 

under section 8 for the project (if any) is not increased, 

except, upon approval by the Secretary to— 

‘‘(I) mark-up-to-market contracts pursuant to 

section 524(a)(3) of the Multifamily Assisted 

Housing Reform and Affordability Act (42 U.S.C. 

1437f note), as such section is carried out by the 

Secretary for properties owned by nonprofit 

organizations; or 

‘‘(II) mark-up-to-budget contracts pursuant to 

section 524(a)(4) of the Multifamily Assisted 

Housing Reform and Affordability Act (42 U.S.C. 

1437f note), as such section is carried out by the 

Secretary for properties owned by eligible owners 

(as such term is defined in section 202(k) of the 
S. 118—4 

Housing Act of 1959 (12 U.S.C. 1701q(k)); and’’; 

and 

(4) by adding at the end the following: 

‘‘(3) notwithstanding paragraph (2)(A), the prepayment and 

refinancing authorized pursuant to paragraph (2)(B) involves 

an increase in debt service only in the case of a refinancing 

of a project assisted with a loan under such section 202 carrying 

an interest rate of 6 percent or lower.’’. 

SEC. 202. USE OF UNEXPENDED AMOUNTS. 

Subsection (c) of section 811 of the American Homeownership 

and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) 

is amended— 

(1) by striking ‘‘USE OF UNEXPENDED AMOUNTS.—’’ and 

inserting ‘‘USE OF PROCEEDS.—’’; 

(2) by amending the matter preceding paragraph (1) to 

read as follows: ‘‘Upon execution of the refinancing for a project 

pursuant to this section, the Secretary shall ensure that proceeds are used in a manner advantageous to tenants of the 

project, or are used in the provision of affordable rental housing 

and related social services for elderly persons that are tenants 

of the project or are tenants of other HUD-assisted senior 

housing by the private nonprofit organization project owner, 

private nonprofit organization project sponsor, or private nonprofit organization project developer, including—’’; 

(3) by amending paragraph (1) to read as follows: 

‘‘(1) not more than 15 percent of the cost of increasing 

the availability or provision of supportive services, which may 

include the financing of service coordinators and congregate 

services, except that upon the request of the non-profit owner, 

sponsor, or organization and determination of the Secretary, 

such 15 percent limitation may be waived to ensure that the 

use of unexpended amounts better enables seniors to age in 

place;’’; 

(4) in paragraph (2), by inserting before the semicolon 

the following; ‘‘, including reducing the number of units by 

reconfiguring units that are functionally obsolete, unmarketable, or not economically viable’’; 

(5) in paragraph (3), by striking ‘‘or’’ at the end; 

(6) in paragraph (4), by striking ‘‘according to a pro rata 

allocation of shared savings resulting from the refinancing.’’ 

and inserting a semicolon; and 

(7) by adding at the end the following new paragraphs: 

‘‘(5) rehabilitation of the project to ensure long-term 

viability; and 

‘‘(6) the payment to the project owner, sponsor, or third 

party developer of a developer’s fee in an amount not to exceed 

or duplicate— 

‘‘(A) in the case of a project refinanced through a 

State low income housing tax credit program, the fee permitted by the low income housing tax credit program as 

calculated by the State program as a percentage of acceptable development cost as defined by that State program; 

or 

‘‘(B) in the case of a project refinanced through any 

other source of refinancing, 15 percent of the acceptable 

development cost. 
S. 118—5 

For purposes of paragraph (6)(B), the term ‘acceptable development 

cost’ shall include, as applicable, the cost of acquisition, rehabilitation, loan prepayment, initial reserve deposits, and transaction 

costs.’’. 

SEC. 203. USE OF PROJECT RESIDUAL RECEIPTS. 

Paragraph (1) of section 811(d) of the American Homeownership 

and Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) 

is amended— 

(1) by striking ‘‘not more than 15 percent of’’; and 

(2) by inserting before the period at the end the following: 

‘‘or other purposes approved by the Secretary’’. 

SEC. 204. ADDITIONAL PROVISIONS. 

Section 811 of the American Homeownership and Economic 

Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended by 

adding at the end the following new subsections: 

‘‘(e) SENIOR PRESERVATION RENTAL ASSISTANCE CONTRACTS.— Notwithstanding any other provision of law, in connection with 

a prepayment plan for a project approved under subsection (a) 

by the Secretary or as otherwise approved by the Secretary to 

prevent displacement of elderly residents of the project in the 

case of refinancing or recapitalization and to further preservation 

and affordability of such project, the Secretary shall provide projectbased rental assistance for the project under a senior preservation 

rental assistance contract, as follows: 

‘‘(1) Assistance under the contract shall be made available 

to the private nonprofit organization owner— 

‘‘(A) for a term of at least 20 years, subject to annual 

appropriations; and 

‘‘(B) under the same rules governing project-based 

rental assistance made available under section 8 of the 

Housing Act of 1937 or under the rules of such assistance 

as may be made available for the project. 

‘‘(2) Any projects for which a senior preservation rental 

assistance contract is provided shall be subject to a use agreement to ensure continued project affordability having a term 

of the longer of (A) the term of the senior preservation rental 

assistance contract, or (B) such term as is required by the 

new financing. 

‘‘(f) SUBORDINATION OR ASSUMPTION OF EXISTING DEBT.—In 

lieu of prepayment under this section of the indebtedness with 

respect to a project, the Secretary may approve— 

‘‘(1) in connection with new financing for the project, the 

subordination of the loan for the project under section 202 

of the Housing Act of 1959 (as in effect before the enactment 

of the Cranston-Gonzalez National Affordable Housing Act) and 

the continued subordination of any other existing subordinate 

debt previously approved by the Secretary to facilitate preservation of the project as affordable housing; or 

‘‘(2) the assumption (which may include the subordination 

described in paragraph (1)) of the loan for the project under 

such section 202 in connection with the transfer of the project 

with such a loan to a private nonprofit organization. 

‘‘(g) FLEXIBLE SUBSIDY DEBT.—The Secretary shall waive the 

requirement that debt for a project pursuant to the flexible subsidy 

program under section 201 of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a) be prepaid in 
S. 118—6 

connection with a prepayment, refinancing, or transfer under this 

section of a project if the financial transaction or refinancing cannot 

be completed without the waiver. 

‘‘(h) TENANT INVOLVEMENT IN PREPAYMENT AND REFINANCING.— The Secretary shall not accept an offer to prepay the loan for 

any project under section 202 of the Housing Act of 1959 unless 

the Secretary— 

‘‘(1) has determined that the owner of the project has 

notified the tenants of the owner’s request for approval of 

a prepayment; and 

‘‘(2) has determined that the owner of the project has 

provided the tenants with an opportunity to comment on the 

owner’s request for approval of a prepayment, including on 

the description of any anticipated rehabilitation or other use 

of the proceeds from the transaction, and its impacts on project 

rents, tenant contributions, or the affordability restrictions for 

the project, and that the owner has responded to such comments 

in writing. 

‘‘(i) DEFINITION OF PRIVATE NONPROFIT ORGANIZATION.—For 

purposes of this section, the term ‘private nonprofit organization’ 

has the meaning given such term in section 202(k) of the Housing 

Act of 1959 (12 U.S.C. 1701q(k)).’’. 

TITLE III—ASSISTED LIVING FACILITIES 

AND SERVICE-ENRICHED HOUSING 

SEC. 301. AMENDMENTS TO THE GRANTS FOR CONVERSION OF 

ELDERLY HOUSING TO ASSISTED LIVING FACILITIES. 

(a) TECHNICAL AMENDMENT.—The section heading for section 

202b of the Housing Act of 1959 (12 U.S.C. 1701q–2) is amended 

by inserting ‘‘AND OTHER PURPOSES’’ after ‘‘ASSISTED LIVING

FACILITIES’’. 

(b) EXTENSION OF GRANT AUTHORITY.—Section 202b(a)(2) of 

the Housing Act of 1959 (12 U.S.C. 1701q–2(a)(2)) is amended— 

(1) by striking ‘‘(2) CONVERSION.—Activities’’ and inserting 

the following: 

‘‘(2) CONVERSION.— ‘‘(A) ASSISTED LIVING FACILITIES.—Activities’’; and 

(2) by adding at the end the following: 

‘‘(B) SERVICE-ENRICHED HOUSING.—Activities designed 

to convert dwelling units in the eligible project to serviceenriched housing for elderly persons.’’. 

(c) AMENDMENT TO APPLICATION PROCESS.—Section 202b(c)(1) 

of the Housing Act of 1959 (12 U.S.C. 1701q–2(c)(1)) is amended 

by inserting ‘‘for either an assisted living facility or service-enriched 

housing’’ after ‘‘activities’’. 

(d) REQUIREMENTS FOR SERVICES.—Section 202b(d) of the 

Housing Act of 1959 (12 U.S.C. 1701q–2(d)) is amended to read 

as follows: 

‘‘(d) REQUIREMENTS FOR SERVICES.— 

‘‘(1) SUFFICIENT EVIDENCE OF FIRM FUNDING COMMITMENTS.—The Secretary may not make a grant under this section for conversion activities unless an application for a grant 

submitted pursuant to subsection (c) contains sufficient evidence, in the determination of the Secretary, of firm commitments for the funding of services to be provided in the assisted 
S. 118—7 

living facility or service-enriched housing, which may be provided by third parties. 

‘‘(2) REQUIRED EVIDENCE.—The Secretary shall require evidence that each recipient of a grant for service-enriched housing 

under this section provides relevant and timely disclosure of 

information to residents or potential residents of such housing 

relating to— 

‘‘(A) the services that will be available at the property 

to each resident, including— 

‘‘(i) the right to accept, decline, or choose such 

services and to have the choice of provider; 

‘‘(ii) the services made available by or contracted 

through the grantee; 

‘‘(iii) the identity of, and relevant information for, 

all agencies or organizations providing any services 

to residents, which agencies or organizations shall provide information regarding all procedures and requirements to obtain services, any charges or rates for the 

services, and the rights and responsibilities of the residents related to those services; 

‘‘(B) the availability, identity, contact information, and 

role of the service coordinator; and 

‘‘(C) such other information as the Secretary determines to be appropriate to ensure that residents are adequately informed of the services options available to promote resident independence and quality of life.’’. 

(e) AMENDMENTS TO SELECTION CRITERIA.—Section 202b(e) of 

the Housing Act of 1959 (12 U.S.C. 1701q–2(e)) is amended— 

(1) in paragraph (2)— 

(A) by inserting ‘‘or service-enriched housing’’ after 

‘‘facilities’’; and 

(B) by inserting ‘‘service-enriched housing’’ after 

‘‘facility’’; 

(2) in paragraph (5), by inserting ‘‘or service-enriched 

housing’’ after ‘‘facility’’; and 

(3) in paragraph (6), by inserting ‘‘or service-enriched 

housing’’ after ‘‘facility’’. 

(f) AMENDMENTS TO SECTION 8 PROJECT-BASED ASSISTANCE.— 

Section 202b(f) of the Housing Act of 1959 (12 U.S.C. 1701q– 

2(f)) is amended— 

(1) in paragraph (1), by inserting ‘‘or service-enriched 

housing’’ after ‘‘facilities’’ each time that term appears; and 

(2) in paragraph (2), by inserting ‘‘or service-enriched 

housing’’ after ‘‘facility’’. 

(g) AMENDMENTS TO DEFINITIONS.—Section 202b(g) of the 

Housing Act of 1959 (12 U.S.C. 1701q–2(g)) is amended to read 

as follows: 

‘‘(g) DEFINITIONS.—For purposes of this section— 

‘‘(1) the term ‘assisted living facility’ has the meaning given 

such term in section 232(b) of the National Housing Act 

(1715w(b)); 

‘‘(2) the term ‘service-enriched housing’ means housing 

that— 

‘‘(A) makes available through licensed or certified third 

party service providers supportive services to assist the 

residents in carrying out activities of daily living, such 

as bathing, dressing, eating, getting in and out of bed 
S. 118—8 

or chairs, walking, going outdoors, using the toilet, laundry, 

home management, preparing meals, shopping for personal 

items, obtaining and taking medication, managing money, 

using the telephone, or performing light or heavy housework, and which may make available to residents home 

health care services, such as nursing and therapy; 

‘‘(B) includes the position of service coordinator, which 

may be funded as an operating expense of the property; 

‘‘(C) provides separate dwelling units for residents, 

each of which contains a full kitchen and bathroom and 

which includes common rooms and other facilities appropriate for the provision of supportive services to the residents of the housing; and 

‘‘(D) provides residents with control over health care 

and supportive services decisions, including the right to 

accept, decline, or choose such services, and to have the 

choice of provider; and 

‘‘(3) the definitions in section 1701(q)(k) of this title shall 

apply.’’. 

SEC. 302. MONTHLY ASSISTANCE PAYMENT UNDER RENTAL ASSISTANCE. 

Clause (iii) of section 8(o)(18)(B) of the United States Housing 

Act of 1937 (42 U.S.C. 1437f(o)(18)(B)(iii)) is amended by inserting 

before the period at the end the following: ‘‘, except that a family 

may be required at the time the family initially receives such 

assistance to pay rent in an amount exceeding 40 percent of the 

monthly adjusted income of the family by such an amount or 

percentage that is reasonable given the services and amenities 

provided and as the Secretary deems appropriate.’’. 

TITLE IV—COMPLIANCE WITH STATUTORY PAY-AS-YOU-GO ACT OF 2010 

SEC. 401. BUDGETARY EFFECTS. 

The budgetary effects of this Act, for the purpose of complying 

with the Statutory Pay-As-You-Go-Act of 2010, shall be determined 

by reference to the latest statement titled ‘‘Budgetary Effects of 

PAYGO Legislation’’ for this Act, submitted for printing in the 
S. 118—9 

Congressional Record by the Chairman of the Senate Budget Committee, provided that such statement has been submitted prior 

to the vote on passage. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.