HUD Handbook 4350.3 § 3-20

202 PAC, and Section 202 and Section 811 PRAC Projects

          A.          Section 202 (SH) projects serve the elderly as defined in Definition B in Figure 3-
                      6.

          B.          Section 202/8 projects for the elderly serve:

                      1.     Elderly families as defined in Definition B in Figure 3-6; and

                      2.     For 10% of the units which are accessible, persons (elderly or nonelderly)
                             who require the accessible features of the unit.

                             NOTE: When assigning accessible units, owners must treat equally
                             elderly and nonelderly applicants with disabilities who require the
                             accessible features of the unit, unless one applicant has an owner-
                             adopted restriction or preference. See paragraphs 3-18 B and 4-6 C.

          C.          Section 202/8 and Section 202 PAC projects for persons with disabilities serve
                      one or more of the following statutorily recognized categories of disability based
                      upon the population to be served as described in the application for funding and
                      defined in Definition H in Figure 3-6.

                      1.     Persons with physical disabilities;

                      2.     Persons with development disabilities; and/or

                      3.     Persons with chronic mental illness

          D.          Section 202 PRAC projects serve a household composed of one or more
                      persons at least one of whom is 62 years of age or more at the time of initial
                      occupancy. See definition C in Figure 3-6.

          E.          Section 811 projects serve one or any combination of the following statutorily
                      recognized categories of disability based upon the population to be served as
                      described in the application for funding and defined in definition H in Figure 3-6.

                      1.     Persons with physical disabilities;

                      2.     Persons with developmental disabilities; or

                      3.     Persons with chronic mental illness.

In addition, sponsors of Section 811 projects may propose in their applications to
                      restrict occupancy to a subcategory of one of the statutorily recognized
                      categories of disability (e.g., AIDS is a subcategory of physical disability),
                      provided they do not deny occupancy to any otherwise qualified person with a
                      disability in the overall category that the subcategory falls under.

          F.          Applicants with disabilities who meet the eligibility requirements for admission to
                      a Section 202/8 project for the elderly or for persons with disabilities or a Section
                      811 project for persons with disabilities cannot be excluded on the basis of
                      having another disability in addition to the one served by the particular project.

Examples – Eligible Applicants with Disabilities

                          An owner of a project with accessible units cannot exclude an otherwise
                           eligible person with a disability requiring an accessible unit, who also has
                           another disability such as chronic mentally illness.

                          An owner of a project for the chronically mentally ill cannot exclude an
                           otherwise eligible person from the project because of his or her physical
                           disability.

G.          Leasing Units to Non-Eligible Families

                      1.       If the owner is temporarily unable to lease all units to eligible families, he
                               may request HUD approval to lease one or more units to families that do
                               not meet the income eligibility requirements of 24 CFR Part 5 as follows:

                               a.      Section 202/8 or Section 202 PAC

                                       (1)      A written request for a waiver must be submitted to the
                                                HUD Field Office in accordance with Exhibit 3-1.

                                       (2)      The request must provide documentation of the owner’s
                                                continuing marketing efforts to attract eligible applicants
                                                and that an increased level of occupancy will prevent
                                                financial default and foreclosure.

                                       (3)      HUD’s approval of a request must be for a limited time –
                                                initially one year. HUD may impose other terms and
                                                conditions to the approval that are consistent with program
                                                objectives and necessary to protect the loan.

                                       (4)      HUD may reduce the number of units covered by either a
                                                HAP or PAC contract if the owner does not comply with the
                                                requirements for leasing to families that do not meet the
                                                eligibility requirements; or, if HUD determines that the
                                                owner’s inability to lease to families that do not meet the
                                                eligibility requirements is not a temporary problem.

b.     Section 202 PRAC or Section 811 PRAC

                                     The owner’s written request providing the information specified in
                                     Situation 6 of Exhibit 3-1 must be submitted to HUD Headquarters
                                     with the recommendation of the HUD Field Office.

                      2.     If permitting over-income families to lease one or more units is not
                             sufficient to solve the vacancy problem, in order to protect the financial
                             viability of the project, an owner may request approval to serve a
                             population other than the one(s) it was approved to serve.

                             a.     A request to waive the age requirement for a Section 202 project
                                    for the elderly must provide documentation of the owner’s
                                    continuing marketing efforts to attract eligible applicants and that
                                    an increased level of occupancy will prevent financial default and
                                    foreclosure. The request with the recommendation of the HUD
                                    Field Office is sent to the Multifamily Hub for approval except that
                                    in the case of a Section 202 PRAC project, the request and
                                    recommendation must be sent by the Multifamily Hub to
                                    Headquarters for approval.

          H.          For projects serving persons with disabilities, the owner must apply to the HUD
                      Field Office for permission to serve a different disabled population. The owner
                      must demonstrate a plan to the HUD Field Office that shows the following:

                      1.     The owner can adequately serve the proposed disabled population based
                             on past experience in serving the proposed population;

                      2.     Funds are available from the state or local government or from other
                             outside sources to pay for any necessary supportive services and a
                             written commitment for funding is provided by the source or the owner;

                      3.     The need for the original occupancy category no longer exists;

                      4.     The current tenants can choose to remain in the project or move. If the
                             tenants remain, the owner can begin housing persons in the newly
                             approved category only as vacancies occur; and

                      5.     There are sufficient subsidized units available in the area to house current
                             tenants who are willing to move, as well as to house individuals who no
                             longer qualify for the housing because of the changed category.

                      6.     The request and recommendation of the HUD field office is sent to the
                             HUD Multifamily HUB Director for approval.