111TH CONGRESS 

2D SESSION S. 118 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Section 202 Supportive Housing for the Elderly Act of 

4 2010’’. 

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

6 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 SERVICEENRICHED 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. 

7 TITLE I—NEW CONSTRUCTION 

8 REFORMS 

9 SEC. 101. SELECTION CRITERIA. 

10 Section 202(f)(1) of the Housing Act of 1959 (12 

11 U.S.C. 1701q(f)(1)) is amended— 

12 (1) by redesignating subparagraphs (F) and 

13 (G) as subparagraphs (G) and (H), respectively; and 
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1 (2) by inserting after subparagraph (E) the fol2 lowing new subparagraph: 

3 ‘‘(F) the extent to which the applicant has en4 sured that a service coordinator will be employed or 

5 otherwise retained for the housing, who has the 

6 managerial capacity and responsibility for carrying 

7 out the actions described in subparagraphs (A) and 

8 (B) of subsection (g)(2);’’. 

9 SEC. 102. DEVELOPMENT COST LIMITATIONS. 

10 Section 202(h)(1) of the Housing Act of 1959 (12 

11 U.S.C. 1701q(h)(1)) is amended, in the matter preceding 

12 subparagraph (A), by inserting ‘‘reasonable’’ before ‘‘de13 velopment cost limitations’’. 

14 SEC. 103. OWNER DEPOSITS. 

15 Section 202(j)(3)(A) of the Housing Act of 1959 (12 

16 U.S.C. 1701q(j)(3)(A)) is amended by inserting after the 

17 period at the end the following: ‘‘Such amount shall be 

18 used only to cover operating deficits during the first 3 

19 years of operations and shall not be used to cover con20 struction shortfalls or inadequate initial project rental as21 sistance amounts.’’. 

22 SEC. 104. DEFINITION OF PRIVATE NONPROFIT ORGANIZA23 TION. 

24 Section 202(k)(4) of the Housing Act of 1959 (12 

25 U.S.C. 1701q(k)(4)) is amended to read as follows: 
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1 ‘‘(4) The term ‘private nonprofit organization’ 

2 means— 

3 ‘‘(A) any incorporated private institution 

4 or foundation— 

5 ‘‘(i) no part of the net earnings of 

6 which inures to the benefit of any member, 

7 founder, contributor, or individual; 

8 ‘‘(ii) which has a governing board— 

9 ‘‘(I) the membership of which is 

10 selected in a manner to assure that 

11 there is significant representation of 

12 the views of the community in which 

13 such housing is located; and 

14 ‘‘(II) which is responsible for the 

15 operation of the housing assisted 

16 under this section, except that, in the 

17 case of a nonprofit organization that 

18 is the sponsoring organization of mul19 tiple housing projects assisted under 

20 this section, the Secretary may deter21 mine the criteria or conditions under 

22 which financial, compliance and other 

23 administrative responsibilities exer24 cised by a single-entity private non25 profit organization that is the owner 
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1 corporation responsible for the oper2 ation of an individual housing project 

3 may be shared or transferred to the 

4 governing board of such sponsoring 

5 organization; and 

6 ‘‘(iii) which is approved by the Sec7 retary as to financial responsibility; and 

8 ‘‘(B) a for-profit limited partnership the 

9 sole general partner of which is— 

10 ‘‘(i) an organization meeting the re11 quirements under subparagraph (A); 

12 ‘‘(ii) a for-profit corporation wholly 

13 owned and controlled by one or more orga14 nizations meeting the requirements under 

15 subparagraph (A); or 

16 ‘‘(iii) a limited liability company whol17 ly owned and controlled by one or more or18 ganizations meeting the requirements 

19 under subparagraph (A).’’. 

20 SEC. 105. NONMETROPOLITAN ALLOCATION. 

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

22 of 1959 (12 U.S.C. 1701q(l)(3)) is amended by inserting 

23 after the period at the end the following: ‘‘In complying 

24 with this paragraph, the Secretary shall either operate a 

25 national competition for the nonmetropolitan funds or 
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1 make allocations to regional offices of the Department of 

2 Housing and Urban Development.’’. 

3 TITLE II—REFINANCING 

4 SEC. 201. APPROVAL OF PREPAYMENT OF DEBT. 

5 Subsection (a) of section 811 of the American Home6 ownership and Economic Opportunity Act of 2000 (12 

7 U.S.C. 1701q note) is amended— 

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

9 inserting ‘‘, for which the Secretary’s consent to pre10 payment is required,’’ after ‘‘Affordable Housing 

11 Act)’’; 

12 (2) in paragraph (1)— 

13 (A) by inserting ‘‘at least 20 years fol14 lowing’’ before ‘‘the maturity date’’; 

15 (B) by inserting ‘‘project-based’’ before 

16 ‘‘rental assistance payments contract’’; 

17 (C) by inserting ‘‘project-based’’ before 

18 ‘‘rental housing assistance programs’’; and 

19 (D) by inserting ‘‘, or any successor 

20 project-based rental assistance program,’’ after 

21 ‘‘1701s))’’; 

22 (3) by amending paragraph (2) to read as fol23 lows: 

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

25 the loan if such refinancing results in— 
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1 ‘‘(A) a lower interest rate on the principal 

2 of the loan for the project and in reductions in 

3 debt service related to such loan; or 

4 ‘‘(B) a transaction in which the project 

5 owner will address the physical needs of the 

6 project, but only if, as a result of the refi7 nancing— 

8 ‘‘(i) the rent charges for unassisted 

9 families residing in the project do not in10 crease or such families are provided rental 

11 assistance under a senior preservation 

12 rental assistance contract for the project 

13 pursuant to subsection (e); and 

14 ‘‘(ii) the overall cost for providing 

15 rental assistance under section 8 for the 

16 project (if any) is not increased, except, 

17 upon approval by the Secretary to— 

18 ‘‘(I) mark-up-to-market contracts 

19 pursuant to section 524(a)(3) of the 

20 Multifamily Assisted Housing Reform 

21 and Affordability Act (42 U.S.C. 

22 1437f note), as such section is carried 

23 out by the Secretary for properties 

24 owned by nonprofit organizations; or 
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1 ‘‘(II) mark-up-to-budget con2 tracts pursuant to section 524(a)(4) 

3 of the Multifamily Assisted Housing 

4 Reform and Affordability Act (42 

5 U.S.C. 1437f note), as such section is 

6 carried out by the Secretary for prop7 erties owned by eligible owners (as 

8 such term is defined in section 202(k) 

9 of the Housing Act of 1959 (12 

10 U.S.C. 1701q(k)); and’’; and 

11 (4) by adding at the end the following: 

12 ‘‘(3) notwithstanding paragraph (2)(A), the 

13 prepayment and refinancing authorized pursuant to 

14 paragraph (2)(B) involves an increase in debt service 

15 only in the case of a refinancing of a project assisted 

16 with a loan under such section 202 carrying an in17 terest rate of 6 percent or lower.’’. 

18 SEC. 202. USE OF UNEXPENDED AMOUNTS. 

19 Subsection (c) of section 811 of the American Home20 ownership and Economic Opportunity Act of 2000 (12 

21 U.S.C. 1701q note) is amended— 

22 (1) by striking ‘‘USE OF UNEXPENDED

23 AMOUNTS.—’’ and inserting ‘‘USE OF PROCEEDS.— 

24 ’’; 
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1 (2) by amending the matter preceding para2 graph (1) to read as follows: ‘‘Upon execution of the 

3 refinancing for a project pursuant to this section, 

4 the Secretary shall ensure that proceeds are used in 

5 a manner advantageous to tenants of the project, or 

6 are used in the provision of affordable rental hous7 ing and related social services for elderly persons 

8 that are tenants of the project or are tenants of 

9 other HUD-assisted senior housing by the private 

10 nonprofit organization project owner, private non11 profit organization project sponsor, or private non12 profit organization project developer, including—’’; 

13 (3) by amending paragraph (1) to read as fol14 lows: 

15 ‘‘(1) not more than 15 percent of the cost of in16 creasing the availability or provision of supportive 

17 services, which may include the financing of service 

18 coordinators and congregate services, except that 

19 upon the request of the non-profit owner, sponsor, 

20 or organization and determination of the Secretary, 

21 such 15 percent limitation may be waived to ensure 

22 that the use of unexpended amounts better enables 

23 seniors to age in place;’’; 

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

25 semicolon the following; ‘‘, including reducing the 
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1 number of units by reconfiguring units that are 

2 functionally obsolete, unmarketable, or not economi3 cally viable’’; 

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

5 end; 

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

7 a pro rata allocation of shared savings resulting 

8 from the refinancing.’’ and inserting a semicolon; 

9 and 

10 (7) by adding at the end the following new 

11 paragraphs: 

12 ‘‘(5) rehabilitation of the project to ensure long13 term viability; and 

14 ‘‘(6) the payment to the project owner, sponsor, 

15 or third party developer of a developer’s fee in an 

16 amount not to exceed or duplicate— 

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

18 through a State low income housing tax credit 

19 program, the fee permitted by the low income 

20 housing tax credit program as calculated by the 

21 State program as a percentage of acceptable de22 velopment cost as defined by that State pro23 gram; or 
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1 ‘‘(B) in the case of a project refinanced 

2 through any other source of refinancing, 15 

3 percent of the acceptable development cost. 

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

5 development cost’ shall include, as applicable, the cost of 

6 acquisition, rehabilitation, loan prepayment, initial reserve 

7 deposits, and transaction costs.’’. 

8 SEC. 203. USE OF PROJECT RESIDUAL RECEIPTS. 

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

10 Homeownership and Economic Opportunity Act of 2000 

11 (12 U.S.C. 1701q note) is amended— 

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

13 and 

14 (2) by inserting before the period at the end the 

15 following: ‘‘or other purposes approved by the Sec16 retary’’. 

17 SEC. 204. ADDITIONAL PROVISIONS. 

18 Section 811 of the American Homeownership and 

19 Economic Opportunity Act of 2000 (12 U.S.C. 1701q 

20 note) is amended by adding at the end the following new 

21 subsections: 

22 ‘‘(e) SENIOR PRESERVATION RENTAL ASSISTANCE

23 CONTRACTS.—Notwithstanding any other provision of 

24 law, in connection with a prepayment plan for a project 

25 approved under subsection (a) by the Secretary or as oth-
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1 erwise approved by the Secretary to prevent displacement 

2 of elderly residents of the project in the case of refinancing 

3 or recapitalization and to further preservation and afford4 ability of such project, the Secretary shall provide project5 based rental assistance for the project under a senior pres6 ervation rental assistance contract, as follows: 

7 ‘‘(1) Assistance under the contract shall be 

8 made available to the private nonprofit organization 

9 owner— 

10 ‘‘(A) for a term of at least 20 years, sub11 ject to annual appropriations; and 

12 ‘‘(B) under the same rules governing 

13 project-based rental assistance made available 

14 under section 8 of the Housing Act of 1937 or 

15 under the rules of such assistance as may be 

16 made available for the project. 

17 ‘‘(2) Any projects for which a senior preserva18 tion rental assistance contract is provided shall be 

19 subject to a use agreement to ensure continued 

20 project affordability having a term of the longer of 

21 (A) the term of the senior preservation rental assist22 ance contract, or (B) such term as is required by the 

23 new financing. 

24 ‘‘(f) SUBORDINATION OR ASSUMPTION OF EXISTING

25 DEBT.—In lieu of prepayment under this section of the 
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1 indebtedness with respect to a project, the Secretary may 

2 approve— 

3 ‘‘(1) in connection with new financing for the 

4 project, the subordination of the loan for the project 

5 under section 202 of the Housing Act of 1959 (as 

6 in effect before the enactment of the Cranston-Gon7 zalez National Affordable Housing Act) and the con8 tinued subordination of any other existing subordi9 nate debt previously approved by the Secretary to 

10 facilitate preservation of the project as affordable 

11 housing; or 

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

13 subordination described in paragraph (1)) of the 

14 loan for the project under such section 202 in con15 nection with the transfer of the project with such a 

16 loan to a private nonprofit organization. 

17 ‘‘(g) FLEXIBLE SUBSIDY DEBT.—The Secretary 

18 shall waive the requirement that debt for a project pursu19 ant to the flexible subsidy program under section 201 of 

20 the Housing and Community Development Amendments 

21 of 1978 (12 U.S.C. 1715z–1a) be prepaid in connection 

22 with a prepayment, refinancing, or transfer under this sec23 tion of a project if the financial transaction or refinancing 

24 cannot be completed without the waiver. 
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1 ‘‘(h) TENANT INVOLVEMENT IN PREPAYMENT AND

2 REFINANCING.—The Secretary shall not accept an offer 

3 to prepay the loan for any project under section 202 of 

4 the Housing Act of 1959 unless the Secretary— 

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

6 project has notified the tenants of the owner’s re7 quest for approval of a prepayment; and 

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

9 project has provided the tenants with an opportunity 

10 to comment on the owner’s request for approval of 

11 a prepayment, including on the description of any 

12 anticipated rehabilitation or other use of the pro13 ceeds from the transaction, and its impacts on 

14 project rents, tenant contributions, or the afford15 ability restrictions for the project, and that the 

16 owner has responded to such comments in writing. 

17 ‘‘(i) DEFINITION OF PRIVATE NONPROFIT ORGANI18 ZATION.—For purposes of this section, the term ‘private 

19 nonprofit organization’ has the meaning given such term 

20 in section 202(k) of the Housing Act of 1959 (12 U.S.C. 

21 1701q(k)).’’. 
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1 TITLE III—ASSISTED LIVING FA2 CILITIES AND SERVICE-EN3 RICHED HOUSING 

4 SEC. 301. AMENDMENTS TO THE GRANTS FOR CONVERSION 

5 OF ELDERLY HOUSING TO ASSISTED LIVING 

6 FACILITIES. 

7 (a) TECHNICAL AMENDMENT.—The section heading 

8 for section 202b of the Housing Act of 1959 (12 U.S.C. 

9 1701q–2) is amended by inserting ‘‘AND OTHER PUR10 POSES’’ after ‘‘ASSISTED LIVING FACILITIES’’. 

11 (b) EXTENSION OF GRANT AUTHORITY.—Section 

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

13 2(a)(2)) is amended— 

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

15 and inserting the following: 

16 ‘‘(2) CONVERSION.— 

17 ‘‘(A) ASSISTED LIVING FACILITIES.—Ac18 tivities’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(B) SERVICE-ENRICHED HOUSING.—Ac21 tivities designed to convert dwelling units in the 

22 eligible project to service-enriched housing for 

23 elderly persons.’’. 

24 (c) AMENDMENT TO APPLICATION PROCESS.—Sec25 tion 202b(c)(1) of the Housing Act of 1959 (12 U.S.C. 
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1 1701q–2(c)(1)) is amended by inserting ‘‘for either an as2 sisted living facility or service-enriched housing’’ after ‘‘ac3 tivities’’. 

4 (d) REQUIREMENTS FOR SERVICES.—Section 

5 202b(d) of the Housing Act of 1959 (12 U.S.C. 1701q– 

6 2(d)) is amended to read as follows: 

7 ‘‘(d) REQUIREMENTS FOR SERVICES.— 

8 ‘‘(1) SUFFICIENT EVIDENCE OF FIRM FUNDING

9 COMMITMENTS.—The Secretary may not make a 

10 grant under this section for conversion activities un11 less an application for a grant submitted pursuant 

12 to subsection (c) contains sufficient evidence, in the 

13 determination of the Secretary, of firm commitments 

14 for the funding of services to be provided in the as15 sisted living facility or service-enriched housing, 

16 which may be provided by third parties. 

17 ‘‘(2) REQUIRED EVIDENCE.—The Secretary 

18 shall require evidence that each recipient of a grant 

19 for service-enriched housing under this section pro20 vides relevant and timely disclosure of information 

21 to residents or potential residents of such housing 

22 relating to— 

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

24 the property to each resident, including— 
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1 ‘‘(i) the right to accept, decline, or 

2 choose such services and to have the choice 

3 of provider; 

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

5 contracted through the grantee; 

6 ‘‘(iii) the identity of, and relevant in7 formation for, all agencies or organizations 

8 providing any services to residents, which 

9 agencies or organizations shall provide in10 formation regarding all procedures and re11 quirements to obtain services, any charges 

12 or rates for the services, and the rights 

13 and responsibilities of the residents related 

14 to those services; 

15 ‘‘(B) the availability, identity, contact in16 formation, and role of the service coordinator; 

17 and 

18 ‘‘(C) such other information as the Sec19 retary determines to be appropriate to ensure 

20 that residents are adequately informed of the 

21 services options available to promote resident 

22 independence and quality of life.’’. 

23 (e) AMENDMENTS TO SELECTION CRITERIA.—Sec24 tion 202b(e) of the Housing Act of 1959 (12 U.S.C. 

25 1701q–2(e)) is amended— 
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1 (1) in paragraph (2)— 

2 (A) by inserting ‘‘or service-enriched hous3 ing’’ after ‘‘facilities’’; and 

4 (B) by inserting ‘‘service-enriched hous5 ing’’ after ‘‘facility’’; 

6 (2) in paragraph (5), by inserting ‘‘or service7 enriched housing’’ after ‘‘facility’’; and 

8 (3) in paragraph (6), by inserting ‘‘or service9 enriched housing’’ after ‘‘facility’’. 

10 (f) AMENDMENTS TO SECTION 8 PROJECT-BASED

11 ASSISTANCE.—Section 202b(f) of the Housing Act of 

12 1959 (12 U.S.C. 1701q–2(f)) is amended— 

13 (1) in paragraph (1), by inserting ‘‘or service14 enriched housing’’ after ‘‘facilities’’ each time that 

15 term appears; and 

16 (2) in paragraph (2), by inserting ‘‘or service17 enriched housing’’ after ‘‘facility’’. 

18 (g) AMENDMENTS TO DEFINITIONS.—Section 

19 202b(g) of the Housing Act of 1959 (12 U.S.C. 1701q– 

20 2(g)) is amended to read as follows: 

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

22 ‘‘(1) the term ‘assisted living facility’ has the 

23 meaning given such term in section 232(b) of the 

24 National Housing Act (1715w(b)); 
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1 ‘‘(2) the term ‘service-enriched housing’ means 

2 housing that— 

3 ‘‘(A) makes available through licensed or 

4 certified third party service providers supportive 

5 services to assist the residents in carrying out 

6 activities of daily living, such as bathing, dress7 ing, eating, getting in and out of bed or chairs, 

8 walking, going outdoors, using the toilet, laun9 dry, home management, preparing meals, shop10 ping for personal items, obtaining and taking 

11 medication, managing money, using the tele12 phone, or performing light or heavy housework, 

13 and which may make available to residents 

14 home health care services, such as nursing and 

15 therapy; 

16 ‘‘(B) includes the position of service coor17 dinator, which may be funded as an operating 

18 expense of the property; ; 

19 ‘‘(C) provides separate dwelling units for 

20 residents, each of which contains a full kitchen 

21 and bathroom and which includes common 

22 rooms and other facilities appropriate for the 

23 provision of supportive services to the residents 

24 of the housing; and 
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1 ‘‘(D) provides residents with control over 

2 health care and supportive services decisions, 

3 including the right to accept, decline, or choose 

4 such services, and to have the choice of pro5 vider; and 

6 ‘‘(3) the definitions in section 1701(q)(k) of 

7 this title shall apply.’’. 

8 SEC. 302. MONTHLY ASSISTANCE PAYMENT UNDER RENTAL 

9 ASSISTANCE. 

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

11 States Housing Act of 1937 (42 U.S.C. 

12 1437f(o)(18)(B)(iii)) is amended by inserting before the 

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

14 may be required at the time the family initially receives 

15 such assistance to pay rent in an amount exceeding 40 

16 percent of the monthly adjusted income of the family by 

17 such an amount or percentage that is reasonable given the 

18 services and amenities provided and as the Secretary 

19 deems appropriate.’’. 

20 TITLE IV—COMPLIANCE WITH 

21 STATUTORY PAY-AS-YOU-GO 

22 ACT OF 2010 

23 SEC. 401. BUDGETARY EFFECTS. 

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

25 complying with the Statutory Pay-As-You-Go-Act of 2010, 
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1 shall be determined by reference to the latest statement 

2 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 

3 Act, submitted for printing in the Congressional Record 

4 by the Chairman of the Senate Budget Committee, pro5 vided that such statement has been submitted prior to the 

6 vote on passage. 

Passed the Senate December 18, 2010. 

Attest: 

Secretary. 
111TH CONGRESS 

2D SESSION S. 118 

AN ACT 

To amend section 202 of the Housing Act of 1959, 

purposes. supportive housing for the elderly, and for other to improve the program under such section for