24 C.F.R. § 891.809
§ 891.809 Limitations on capital advance funds. (24 CFR Part 891)
Operative Text
Capital advances are not available in connection with: (a) Acquisition of facilities currently owned and operated by the sponsor as housing for the elderly, except with rehabilitation as defined in 24 CFR 891.105; (b) The financing or refinancing of federally assisted or insured projects; (c) Facilities currently owned and operated by the sponsor as housing for persons with disabilities, except with rehabilitation as defined in 24 CFR 891.105; or (d) Units in Section 202 direct loan projects previously refinanced under the provisions of section 811 of the American Homeownership and Economic Opportunity Act of 2000, 12 U.S.C. 1701q note.
Section 891.809 of 24 CFR Part 891 identifies four categories of projects that are ineligible to receive HUD capital advance funds. These include facilities a sponsor already owns and operates as elderly or disability housing (unless substantial rehabilitation is involved as defined elsewhere in the regulation), projects that are already federally assisted or insured and being financed or refinanced, and Section 202 direct loan units that were previously refinanced under a specific 2000 federal homeownership law. The rule draws a clear boundary around the types of transactions and existing assets for which this particular funding stream is available.
Plain English — not legal advice.
Operators and sponsors pursuing HUD capital advance funding under 24 CFR Part 891 § 891.809 should be aware that certain existing assets and transaction types fall outside the program's scope. A compliant applicant generally confirms that the proposed project is not an already-owned and operating senior or disability housing facility (unless qualifying rehabilitation is part of the proposal), is not a federally assisted or insured project being refinanced, and does not involve Section 202 units previously refinanced under the 2000 American Homeownership and Economic Opportunity Act. Reviewing eligibility against each of the four exclusions in § 891.809 before submitting an application is a standard part of due diligence in this program.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For residents living in HUD-assisted housing for the elderly or persons with disabilities, § 891.809 of 24 CFR Part 891 shapes which projects can receive capital advance funding in the first place, which can affect the availability and character of affordable housing in a community. Tenants who believe a project's funding structure may not comply with these eligibility rules can raise concerns with their local HUD field office or a tenant-rights organization familiar with federally assisted housing. Understanding these limitations can also be a useful starting point when seeking information about how a particular development was financed.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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