Persons with physical disabilities, intellectual or developmental disabilities, or mental illnesses may face difficulty in finding suitable housing, together with supportive services (often referred to as person-directed or consumer-directed services), in which they can live as active members of their community. For individuals with physical disabilities, it may be difficult to find rental units that are accessible, and some prospective residents with disabilities may face discrimination in their search for housing. Zoning laws may also prevent the construction of homes where persons with disabilities live together. In addition, the affordability of housing and services may be an issue due to lower participation in the workforce and lower incomes. Individuals with disabilities have lower employment rates than those without disabilities, which may be the result of factors like employer attitudes and insufficient or improper job training. Insufficient income can put the costs of in-home care and supportive services out of reach, and state funding of home and community-based services through Medicaid varies by state. As a result of these limitations, among other causes, persons with disabilities may have difficulty finding housing, and may live in restricted settings such as nursing homes, psychiatric hospitals, or board and care homes rather than living independently. Individuals with disabilities not in such facilities may still live in group homes or small multifamily housing developments dedicated to persons with disabilities instead of on their own in the community. However, national recognition of the need for appropriate housing for persons with disabilities gained support after the 1999 Supreme Court decision in the case of Olmstead v. L.C. In that case, two women who had spent years in a psychiatric hospital argued that their institutionalization constituted discrimination under the Americans with Disabilities Act. The Supreme Court agreed, finding that "[s]tates are required to provide community-based treatment for persons with mental disabilities when the State's treatment professionals determine that such placement is appropriate, and the placement can be reasonably accommodated." Shortly after the ruling in Olmstead , on February 1, 2001, President Bush announced the "New Freedom Initiative," an effort through multiple federal agencies, in cooperation with the states, to ensure full participation in society of persons with disabilities. Part of the New Freedom Initiative was an executive order implementing the Olmstead decision to ensure that all people with disabilities, not just those with mental illnesses, benefit from community-based treatment. However, for many states and communities, it may be difficult to achieve the goal of treatment in a community environment without the availability of accessible and affordable housing. The federal government makes funds available to finance subsidized rental housing for persons with disabilities primarily through the Department of Housing and Urban Development (HUD). The Section 811 Supportive Housing for Persons with Disabilities program is the only federal program that funds supportive housing exclusively for persons with disabilities. However, the Section 811 program is not the only source of funds to provide housing units for persons with disabilities. Over the years, a number of other HUD programs have been used to fund housing units dedicated to persons with disabilities, and many of those units are still in service. These programs include the Section 202 Supportive Housing for the Elderly program, Public Housing, the project-based Section 8 rental assistance program, and the Section 8 voucher program. Federal block grant programs—the Community Development Block Grant and HOME Investment Partnerships program—have also been a source of funds used by states and local communities to develop and rehabilitate housing for persons with disabilities. Another source of funds is the Low Income Housing Tax Credit, administered by the Internal Revenue Service, through which state governments have the discretion to prioritize housing for persons with disabilities. This report describes how federal funds are used to develop housing designated for persons with disabilities. It also discusses recent funding for the Section 811 program and current issues surrounding housing for persons with disabilities, including mixed financing arrangements, worst case housing needs, and persons with disabilities who are homeless. This report discusses federal programs that provide funds to develop affordable rental housing units specifically for persons with disabilities. Individuals with disabilities may also live in housing that has not been specifically designed for their needs, however. The Fair Housing Act (FHA), enacted as part of the Civil Rights Act of 1968, contains provisions that are meant to ensure that persons with disabilities may obtain accessible rental housing even in facilities not specifically designed for them. The FHA was created to prevent discrimination in the provision of housing based on "race, color, religion, and national origin." In 1988, the Fair Housing Amendments Act ( P.L. 100-430 ) amended the FHA to prevent discrimination based on "handicap." The Fair Housing Act defines a "handicap" as (1) having a physical or mental impairment that substantially limits one or more major life activities, (2) having a record of such impairment, or (3) being perceived as having such impairment. In addition to prohibiting discrimination against persons based on handicap, the FHA imposes affirmative duties on housing providers. Under the Fair Housing Amendments Act of 1988, if a landlord fails to follow certain requirements to make housing accessible to persons with disabilities, it is considered discrimination. In the area of new construction, beginning 30 months after implementation of P.L. 100-430 (in 1988), it became unlawful for multifamily housing developers to design and construct housing of four or more units that fails to (1) have common areas that are accessible and useable by persons with disabilities, (2) have doors wide enough to accommodate wheelchairs, and (3) include units with accessible routes through the unit; bathrooms and kitchens that are wheelchair accessible; electrical outlets, light switches and thermostats that are accessible; bathrooms with reinforcements where grab bars may be installed; and kitchens and baths that may be maneuvered through with a wheelchair. For units in older facilities, or in units not covered by the FHA, the Fair Housing Amendments Act recognized that modifications to units may be necessary to make them accessible to persons with disabilities. Under the law, it is discriminatory for landlords to refuse to allow tenants to make physical changes to the premises—referred to as "reasonable modifications"—where changes are necessary to afford tenants full enjoyment of the premises. In addition, the law gives tenants the right to ask their landlords for "reasonable accommodations" in the rules, policies, practices, or services that ordinarily apply to tenants living in rental property. It is considered discrimination under the FHA for a landlord to refuse to make a reasonable accommodation where it is necessary to give residents with disabilities an equal opportunity to use and enjoy their dwelling unit. Reasonable modifications and reasonable accommodations are described below. While the FHA may require landlords to permit tenants to make reasonable modifications to the rental premises, the statute neither defines the term "reasonable modification," nor the circumstances under which modifications might be required to ensure a tenant's enjoyment of the premises. However, HUD and the Department of Justice (DOJ) have published joint guidance describing reasonable modifications. They may include changes to a rental unit such as widening doorways, installing a ramp or grab bars, or lowering cabinets. The HUD/DOJ guidance requires that there be an identifiable relationship between the tenant's disability and the modification; if there is not, a landlord may refuse to allow the alteration. Landlords are not required to pay for modifications, and, if the modifications would prevent a future tenant's enjoyment of the premises, the landlord may require tenants to restore the unit to its original state when moving out. In order to ensure that this occurs, a landlord may require tenants to deposit funds into an escrow account to pay for restoration. However, landlords cannot require tenants to pay a higher security deposit because of modifications to the property. While no federal program exists specifically to help tenants with disabilities pay for home modifications, funding may be available at the state or local level. For example, some states make funds available through their Medicaid waiver programs to allow persons with disabilities to make modifications. States may also set up grant or loan programs using state, local, or federal funds to assist with home modifications. Sources of federal funds that could be used for this purpose include the HOME Investment Partnerships block grant and the Community Development Block Grant (these programs are described later in this report). In addition to permitting tenants to make reasonable modifications to their units under the FHA, landlords may be required to make "reasonable accommodations" to ensure that tenants with disabilities may use and enjoy their dwelling. Reasonable accommodations may involve altering or making an exception to rules, policies, practices, or services that would otherwise apply to tenants, but when applied to an individual with a disability may prevent them from maintaining their tenancy or fully enjoying use of the facility. As with reasonable modifications, there must be a relationship between the disability and the requested accommodation. However, unlike reasonable modifications, a tenant may request an accommodation that will involve a cost to the housing provider, although the requested accommodation cannot pose an undue financial or administrative burden, and cannot fundamentally alter the provider's operations. If the requested accommodation is reasonable, tenants cannot be charged an extra fee or be required to make a deposit into an escrow account. Examples of reasonable accommodations include changing the manner of rental payment for a tenant with a mental illness so that he or she need not leave the apartment or allowing assistance animals in a building that does not otherwise allow pets. This report discusses several HUD housing programs that designate housing units for persons with disabilities. These are the Section 811 Supportive Housing for Persons with Disabilities program, Public Housing, and the tenant- and project-based Section 8 programs. In addition, prior to creation of the Section 811 program, the Section 202 Supportive Housing for the Elderly program set aside units for persons with disabilities. Each of the programs defines "person with disabilities," and while the definitions are similar, there are some differences among them. This section of the report uses the Section 811 program definition as the baseline with which to compare the definitions in the other three programs (Section 8, Public Housing, and Section 202).