HUD recently released a Federal Register Notice to solicit comments on the Senior Preservation Rental Assistance Contracts (SPRACs) awards processes. The Section 202 Supportive Housing for the Elderly Act of 2010, signed into law in January 2011, authorizes HUD to provide SPRACs with 20-year terms to prevent displacement of elderly residents of certain projects assisted under HUD’s Section 202 Supportive Housing for the Elderly program in the case of refinancing or recapitalization and to further preserve and maintain affordability of Section 202 Direct Loan projects. The purpose of a SPRAC is to prevent displacement of income-eligible elderly residents of Section 202 Direct Loan properties with original interest rates of 6% or less, when the property is refinanced and the Owner does not anticipate debt service savings from the refinance. SPRAC is an important preservation tool for affordable multifamily properties and it is expected that this could fund up to 2,000 units. HUD is specifically soliciting comments on the proposed process for awarding SPRACs and the associated criteria for establishing eligibility to apply for a SPRAC. Comments are due March 11, 2013.
Click here to read the Federal Register Notice.
