HUD Housing Notice § 2023-02
Supportive Housing for the Elderly--Supportive Services Plans and Supportive Services Funds in 202 Capital Advance Projects with Project Rental Assistance Contracts (HUD Housing Notices)
HUD guidance — not codified law
In Force
Verified 10/6/2026 · Next check 10/13/2026
effective 10/6/2026FederalAffordable Housing ProgramsOperative Text
HUD Housing Notice § 2023-02
Special Attention of: Notice H–2023–02
All Multifamily Regional Center Directors
All Multifamily Satellite Office Directors Issued: 2/9/2023
All Multifamily Asset Management Division Expires: This Notice remains in effect
Directors until amended, superseded, or
All Multifamily Project Owners rescinded
_________________________
Cross-reference: Notice H 2019-09
Handbook 4350.1, Chapter 7
Handbook 4381.5, Chapter 8
SUBJECT: Supportive Housing for the Elderly—Supportive Services Plans and Supportive
Services Funds in 202 Capital Advance Projects with Project Rental Assistance
Contracts
I. Background
Section 202 Capital Advance properties with Project Rental Assistance Contracts (hereafter
referred to as “202 PRAC”) provide affordable supportive housing for very low-income
elderly households. Rental subsidies for these properties are based on the operating budget
for the property, which may include the costs for a full or part-time Service Coordinator
position and up to $15 per unit per month for direct provision of supportive services. To
ensure supportive service needs are adequately addressed, properties are expected to
coordinate with community service providers and access other funding streams consistent
with the property Supportive Services Plan.
Project Sponsors were first required to prepare a Supportive Services Plan as part of the
original Notice of Funding Opportunity (NOFO) requirements for Section 202 Capital
Advances. A Supportive Services Plan was submitted with the initial application for
funding for a property and is required to be updated by a property’s Service Coordinator
based on the original NOFO. The timeline for updating the Supportive Services Plan varied
in the multiple published NOFOs. Also, the Supportive Services Plan must address how
202 PRAC subsidies support service coordination and service provision as well as how
other funding streams are used to address additional resident needs. The Office of
Multifamily Housing Programs has determined that many 202 PRAC owners have not
updated their Supportive Services Plan according to the applicable NOFO, resulting in the
Support Service Plans becoming outdated.
Service coordination activities are subject to additional budgetary planning and
performance requirements. The Service Coordinator is a social service staff
person/contractor hired by the property owner who is responsible for ensuring that the
elderly residents of the project, especially those who are frail and disabled, are linked to
the supportive services they need to continue living independently in that project.
Handbook 4381.5, REV-2, Chapter 8, provides the requirements for implementing and
maintaining the Service Coordinator Program. Additional guidance may be found on the
HUD Exchange website under programs, Service Coordinators in Multifamily Housing
Programs. HUD funding for service coordination activities is approved and monitored
separately from the per-unit funding available for direct provision of supportive services.
II. Purpose
This Notice explains the purpose and allowable uses of supportive services funds and the
requirements and process for requesting U.S. Department of Housing and Urban
Development (HUD) approval to include these funds in the annual operating budget for
Section 202 PRACs. Also, this Notice reiterates the Supportive Services Plan requirements
to have one in place and provides additional guidance for the scope, content, and
standardization of the timeline for required updates to the plans to be every three (3) years,
as noted in Section V. This Notice does not, however, address requirements for the review
and approval of Service Coordinator funding that is found in resource noted above in the
Background Section.
Section 202(g) of the Housing Act of 1959, 12 U.S.C. § 1701q(g), requires the provision of
tailored supportive services for elderly persons in Section 202 PRAC properties. Pursuant to
24 C.F.R. § 891.225, HUD provides limited funds for supportive services through 202
PRACs. Funding for 202 PRACs that include supportive services and Service Coordinators
is provided in the annual appropriations Acts.
Providing supportive services to 202 PRAC residents may help meet the needs of elderly
persons aging in place and avoid unnecessary, unwanted, and more costly
institutionalization. The HUD funding amounts (up to $15 per unit per month; see Section
V.E below) are not expected to cover all the supportive services needs of residents at the
property. Properties are expected to provide necessary services and access to services using
other non-project sources.
III. Applicability
This Notice applies to the use of supportive services funds by owners/agents of Section 202
PRACs. Owners of Section 202 PRAC properties converting under the Rental Assistance
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Demonstration Program should also refer to Notice H 2019–09, or any successor notices.
IV. Uses of Supportive Services Funds
The purpose and general categories of supportive services allowed in Section 202 PRACs
are provided in 12 U.S.C. § 1701q(g)(1). The requirements and guidance on the general and
specific eligible and ineligible uses governing supportive services funds are as follows:
A. Requirements
1. The use of HUD supportive services funds is one component of a property’s
comprehensive Supportive Services Plan for the resident community (see 24
C.F.R. § 891.225 — Provision of services) to ensure that the residents live
independently and avoid unnecessary institutionalization. The balance of service
costs shall be provided from other sources, which may include co-payment by the
tenant receiving the service. Such co-payment must not be included in the Total
Tenant Payment. (See 24 C.F.R. § 891.225 (b)(2).) (See Section IV below for
more information about comprehensive Supportive Services Plans.)
2. The supportive services funds may be used to provide services to all elderly
residents of the property. The supportive services funds must be used to provide a
range of services as determined through a resident assessment noted in paragraph
IV.B.2 of this Notice and tailored to the needs of any category or categories of
elderly persons (see 12 U.S.C. § 1701q(k)(1), (2) and (7) for definitions)
occupying the housing. For example, the funds may support activities and
services that address the needs of the general resident population (e.g., fall
prevention programs) or that addresses subgroups with specific needs (e.g.,
housekeeping services for frail elderly (“frail elderly” is defined by 12 U.S.C.
§ 1701q(k)(1) and (2), counseling for residents with diabetes, etc..). Owners must
not require residents to accept any supportive services as a condition of
occupancy or admission or limit resident choice of providers.
3. HUD may approve the use of supportive services funds for services that support
elderly persons who are unassisted, but reside in the project, or who do not reside
in the project, if the participation of such persons will not significantly add to the
operating budget of the property, or adversely affect the operation of the program
(e.g., increased liability insurance, security, or building maintenance expenses).
See 12 U.S.C. § 1701q(g)(1).
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4. Supportive services funds must not be used to supplant another source of federal,
state, or local funding that is available for the purposes listed in paragraph III, C
of this Notice.
5. Supportive services funds must not be expended for capital items for which
Reserve for Replacement funds are available, even if such replacement items are
related to providing supportive services for residents. Such expenditures must be
requested and paid with Reserve for Replacement or Residual Receipts funds with
HUD approval. As an example, sidewalks around the building that need repair to
be safe for resident exercise programs would be a Reserve for Replacement
expense.
B. Goals of Service Provisions
Supportive services funds may be used to further the following general goals:
1. To supplement programming, activities, and services that facilitate independent
living in the community by helping participants proactively address their health
and social support needs. In turn, this may lead to increases in resident tenure and
reduction of unit turnover (e.g., prevent evictions and transitions to nursing homes
and higher levels of care).
2. To provide an ongoing benefit to maximize the impact of the funds; for example,
equipment available for all residents that has repeated use; programming that
increases participants’ ability to self-manage their health and wellness.
3. To provide programming and support that may benefit multiple participants. HUD
encourages the use of evidence-based programming (EBP) or evidence-informed
programs. EBPs include initiatives that have been scientifically evaluated and
found effective in improving the health and wellbeing, or reducing disease,
disability, or injury among older adults. Numerous evidence-based health
promotion and disease-prevention programs have been developed to address
many common health and functional issues that older adults experience, such as
managing chronic disease, experiencing falls, and feeling depressed. Sources of
EBPs include the National Council on Aging, local Areas Agencies on Aging
(AAA), YMCA/YWCA, and local public health departments, hospitals, and
health plans.
4. To support programming and services that exceed the amount allowed in Section
VI.F. below, owners are encouraged to seek other funding sources for resident
services, whenever possible.
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C. Eligible Uses of Supportive Services Funds
1. Services that, if provided, may be provided to an individual resident:
i. Meal services to meet nutritional needs, such as grocery shopping, meal
preparation service, or supporting collaboration with a food bank; and,
meals, if not covered by a food assistance program such as Supplemental
Nutritional Assistance Program (SNAP) (formerly called food stamps).
ii. Housekeeping aid. Assistance with tasks in residents’ units such as
cleaning, laundry, trash removal.
iii. Personal assistance. Assistance with activities of daily living (ADLs) (i.e.,
basic self-care tasks that include, but are not limited to, bathing, dressing,
eating, transferring (e.g.., getting in and out of chairs, grooming, using the
toilet, and walking), and instrumental activities of daily living (IADLs)
(i.e., skills related to independent living that include, but are not limited to,
meal planning and preparation, managing finances, shopping for food,
clothing, and other essential items, performing essential household chores,
communicating by phone or other media, and traveling around and
participating in the community). IADLs include escort services to
accompany or physically assist a resident who is unable to travel to
medical appointments or wait alone.
2. Services that, if provided, must be provided to the entire community:
i. Transportation services. To support transportation of residents for off-site
group health and wellness programs and activities, essential shopping,
medical appointments, and other essential services.
ii. Health-related services.
a. End-user equipment necessary to support telehealth for residents.
If the property offers such equipment, all residents must have
access, and technical support (i.e., digital navigation) must be
provided. The number of computer devices purchased should not
exceed ten percent (10%) of the total number of units. Equipment
maintenance must be covered by supportive services funds.
b. Fees for activities and educational programs that address common
health and wellness challenges of residents including health
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behaviors (e.g., disease management, fall prevention,
fitness/exercise, or nutrition education).
c. Programs and activities to reduce social isolation and encourage
social interaction, which have a positive impact on health,
including supplies for group activities (e.g., arts and craft
materials, puzzles, games). If congregate activities have been
suspended for public health reasons, supplies for recreational
activities to help enforce social distancing required in a public
health emergency are allowable.
d. Materials, supplies, and limited physical modifications to common
areas to support health and wellness programs, activities, or events
(e.g., exercise equipment, pedometers, lumber to build a raised
garden bed, gardening supplies, instructional books, health
journals, or videos). This includes ingredients and equipment
necessary to teach hands-on classes on nutrition and healthy meal
preparation.
e. Educational materials that may be used or shared with participants
around specific health needs (e.g., posters, brochures, booklets).
f. Discussion group facilitator to assist residents struggling with
issues that may impede the ability to manage their own needs (e.g.,
grief, loneliness, depression, trauma).
g. Individual education/counseling sessions to assist residents who
could benefit from a more intensive or focused interaction (e.g.,
counseling to address hoarding, nutrition, grief).
h. Access to medical services (e.g., transportation, aide to accompany
resident to medical appointment).
iii. Fees for education and outreach to protect residents from telemarketing
and internet fraud and identity theft.
D. Ineligible Uses
1. Programs and services funded by federal, state, and local government agencies;
Medicare, Medicaid, or private insurance; or community-based, philanthropic,
and other sources or that duplicate such services.
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2. Expenses related to providing safe, decent, and affordable housing, and
relocation. Supportive services funds may not be used to cover basic housing
services for residents (e.g., clean water, utilities, pest control, maintenance,
upkeep, and improvements).
3. Service Coordinator Program costs. The cost for Service Coordinators are
separate eligible expenses from the supportive services allowance (up to $15 per
unit per month) in the Section 202 PRAC operating budget. Please see Handbook
4381.5, REV-2, Chapter 8 for discussion of eligible uses of Service Coordinator
funds.
4. The direct cost of medical services. Project owner/management agent/service
coordinators may coordinate with appropriate third parties (e.g., federal, state, and
local government agencies; Medicare, Medicaid, or private insurance; or
community-based and philanthropic sources) to have such services provided by
those entities, consistent with state and local law.
5. Compliance with physical accessibility requirements, program access
requirements, and providing reasonable accommodations (e.g., physical
modifications to units, language interpreters). Owners of federally assisted
housing are required to provide applicants and residents with disabilities
reasonable accommodations that are needed to enable those individuals to make
effective use of the federal programs and provide equal access to persons with
limited English proficiency. Reasonable accommodation expenses are funded by
Reserve for Replacement, Residual Receipts, project operations or owner
contributions.
6. Promotional materials, including but not limited to, T-shirts, water bottles, coffee
cups, or hats.
7. Admission tickets to entertainment events and locales.
8. Party refreshments.
9. Wi-Fi networks and/or internet access for individual residents in their units.
10. Computer or telecommunication devices for individual residents or units.
V. Supportive Services Plans
As required in 24 C.F.R. § 891.225(b)(1), HUD must ensure that Owners have the
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managerial capacity to perform the coordination of services described in the statute (12
U.S.C. § 1701q(g)(2)). One of the methods for fulfilling this requirement is to ensure that
the owner has a Supportive Services Plan. As discussed under Section III.A.1 above, the use
of HUD supportive services funds is one component of a property’s comprehensive
Supportive Services Plan for the resident community. The guidance in this Notice on
eligible uses of supportive services funds does not apply to the elements in the Supportive
Services Plan that are paid for through non-HUD sources.
A. Requirements
1. Owners are required to maintain and update (every three (3) years, with
exceptions as described below in Section VI. A. of this Notice), over the useful
life of the housing, a comprehensive Supportive Services Plan to accommodate
the provision of supportive services that are expected to be needed by the
category or categories of elderly persons the housing is intended to serve (12
U.S.C. § 1701q(k)(7)).
2. The comprehensive Supportive Services Plan describes how the property will
provide the range of services that is both tailored to the needs of the residents and
essential for maintaining independent living (12 U.S.C. § 1701q(g)).
3. The cost of the services described in the Supportive Services Plan that is not
covered by the supportive services funds in the HUD approved budget, i.e., up to
$15 per unit per month, shall be provided from other sources, which may include
co-payment by the tenant receiving the service. Such co-payment shall not be
included in the Total Tenant Payment. (See 24 C.F.R. § 891.2254 (b)(2)).
4. If the Supportive Services Plan is not current and the owner does not submit
an updated Supportive Services Plan or certification, any existing supportive
services funds in the operating budget will not be renewed.
B. Supportive Services Plan Components
Owners/agents are encouraged to include the following information in their Supportive
Services Plan. Based on each project’s respective Section 202 Capital Advance NOFO
that the project was originally funded under, some or all of these items may be required
and be updated upon each 3-year submission:
1. Service Coordination: How the project is meeting the needs of residents either
through a Service Coordinator (full-time or part-time) funded through the annual
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project budget or through another service coordination/service provision
arrangement.
2. Resident Assessment: How the property assesses the supportive services needs of
individual residents and the resident community as a whole.
3. Resident Access to Community-Based Supportive Services: How the property
assists individual residents to identify and access local, state, and federal benefits
or community-based services that support independent living (such as personal
care services).
4. Supportive Services Activities: How the property ensures that the resident
community has access to supportive services essential for maintaining
independent living.
5. Outreach Strategies: How the property conducts outreach and engages residents
in the supportive services offered. This must include a description of how the
property provides access to supportive services for residents who have a
communication-related disability (e.g., ASL interpretation, Braille documents,
accessible electronic communication), require a reasonable accommodation,
and/or have limited English proficiency, including the following:
a. Compliance with physical accessibility requirements, program access
requirements, and providing reasonable accommodations. Owners of
federally assisted housing must ensure that their properties (including
common areas, routes, and designated accessible units) comply with all
applicable physical accessibility requirements, including under Section
504, the Americans with Disabilities Act, and the Fair Housing Act.
Additionally, owners of federally assisted housing must ensure program
access for individuals with disabilities, which could include providing
auxiliary aides and services for individuals with communication-related
disabilities (e.g., ASL interpreters), and are required to provide applicants
and residents with disabilities with reasonable accommodations that are
needed to enable those individuals to make effective use of the federal
program.
b. Translation and language interpretation to provide meaningful access to
persons who are limited English Proficient (LEP). Owners of federally
assisted housing are required to provide translation and language
interpretation to comply with Title VI. See
https://www.hud.gov/sites/documents/FINALLEP2007.PDF
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6. Community Partnerships: What community partnerships, if any, the property is
using or plans to use to facilitate resident access to supportive services.
7. Resource Terms: How any funding required for providing the services outlined in
the plan will remain available over time.
8. Spending Plan: A detailed explanation of how the supportive services funds will
be spent and how that fits into the property’s comprehensive Supportive Services
Plan.
Additional information that may be helpful to owners in developing a Supportive
Services Plan is available on HUD Exchange in Service Coordinators in the Multifamily
Housing Program section (https://www.hudexchange.info/programs/scmf/).
VI. Requests for Supportive Services Funds
The following requirements apply when an owner’s operating budget includes supportive
services funds, or an owner’s plans to request supportive services funds. These requirements
are not applicable to Service Coordinator funding, which is addressed in other HUD
guidance.
A. Submission Requirements
1. Owners that have supportive services in their operating budget on the effective
date of this Notice must ensure their Supportive Services Plan is current (updated
within 3 years of the date of this Notice). If not, the owner will submit a
Supportive Services Plan within 180 days of the effective date of this Notice, or
within 90 days of the date of their next contract renewal if the plan on file with
HUD has not been updated within 3 years. An owner with extenuating
circumstances beyond their control may request an extension of the time to submit
the updated Supportive Services Plan. This may include a natural disaster that is
affecting the routine operations of the property or change of ownership of the
property within 120 days of the anniversary date of the 202 PRAC contract. An
approved extension will allow the funding to continue during the extension
period. The extension must be approved by the Regional or Satellite Asset
Management Division Director. An owner may evaluate the Supportive Services
Plan at the 3-year expiration and if no changes have occurred, provide a
certification that the plan is still current for the next 12 months.
2. Owners that are requesting supportive services for the first time must submit an
updated or new Supportive Services Plan with their next contract renewal.
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B. Process for requesting HUD approval with the submission of the operating budget
1. Follow Chapter 7 of HUD Handbook 4350.1 and subsequent guidance for
requesting a budget-based rent increase.
2. Include the supportive services funds expense amount in Line 6900 “Nursing
Homes/Assisted Living/ Board & Care/Other Elderly Care Expenses” or any
future account or subaccount created for this purpose.
C. Threshold conditions
Owners must include the following in their request:
1. The owner’s most recent Supportive Services Plan for the resident community if
one of the following conditions applies.
a. The Owner has not submitted an updated plan within 3 years since the last
submitted Supportive Services Plan or provided a certification that the plan is
still current; or
b. The Owner is requesting a budget-based increase that includes supportive
services; or
c. The Owner is changing the spending plan for the supportive services funds.
2. A cover letter (as described in Chapter 7 of HUD Handbook 4350.1) that includes
the following information:
a. Amount of supportive services funds being requested; and
b. A detailed explanation for how the supportive services funds will be spent and
how the spending plan fits into the property’s comprehensive Supportive
Services Plan. The explanation may describe specific planned expenditures or
categories of expenditures as outlined in this Notice.
D. Partial funding requests
Owners are not required to request the full amount of supportive services funds; requests
should be aligned with resident needs and resource gaps.
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E. No carry-over of funds
Supportive services funds must be spent on eligible supportive services only in the
budget year for which they are approved. Owners cannot redirect these funds to other
operating expenses. Unspent funds remain project funds and must be deposited into the
Residual Receipts account annually and will be subject to 24 C.F.R.§ 891.400(e).
F. Funding limits
Pursuant to 24 C.F.R. § 891.225(b)(2), and notwithstanding guidance published in
Handbook 4571.3 REV-1, Para 1-8, PRAC funds may be used to cover up to $15 per
unit per month of supportive services costs. For Section 202 Capital Advance properties
converting under the Rental Assistance Demonstration (RAD) program, HUD may
approve an increase in supportive services up to $27 per unit per month, if necessary, to
provide effective supportive services if supported by a Supportive Services Plan. See
Notice H 2019–09, Section 4.4.T.
VII. HUD Review of Supportive Services Funds Spending Plan
A. Amount requested. The HUD Account Executive (AE) will review the requested
supportive services funds amount in the annual operating budget to ensure it does not
exceed the amount established by regulation.
B. Eligibility. The HUD AE will review the proposed supportive services funds expenses
to ensure the requested supportive services uses are eligible.
C. Responsive to needs of residents. The HUD AE will review the explanation of how the
proposed expenditure of supportive services funds will address the needs of residents, as
described in the Supportive Services Plan.
VIII. Financial Accounting
Owners shall report HUD supportive services funds expenses on the Annual Financial
Statement, Statement of Activities (Statement of Profit and Loss) in a subaccount entitled
“Other Services” under account 6900—Nursing Homes/Assisted Living/Board &
Care/Other Elderly Expenses—or any future subaccount created specifically for supportive
services funds expense reporting.
IX. Paperwork Reduction Act
The information collection requirements in this Housing Notice are approved under OMB
Approval number 2502-0470, issued under the Paperwork Reduction Act of 1995 (44
12
U.S.C. 3501-3520). In accordance with the Paperwork Reduction Act, an agency may not
conduct or sponsor, and a person is not required to respond to, a collection of information
unless the collection displays a currently valid OMB control number.
Julia R. Gordon
FHA Commissioner - Assistant Secretary for
Housing
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Source: Legislative text reproduced verbatim
Plain English
Housing Notice H-2023-02 governs how owners of Section 202 Capital Advance properties with Project Rental Assistance Contracts (202 PRACs) may use HUD-approved supportive services funds—capped at up to $15 per unit per month—to help elderly residents live independently. The notice establishes which services are eligible (such as meal assistance, housekeeping, transportation, and health-related programming) and which are not (such as direct medical costs, basic housing maintenance, and Service Coordinator expenses). It also standardizes the requirement that each property maintain a comprehensive Supportive Services Plan, updated every three years, as a condition of receiving and renewing these funds.
Written by anthropic/claude-sonnet-4.6 · Reviewed on October 6, 2026
Plain English — not legal advice.
For Property Managers
Owners and agents of 202 PRAC properties operating under Housing Notice H-2023-02 are generally expected to maintain a current Supportive Services Plan—updated on a three-year cycle—and to submit it alongside any operating budget request that includes supportive services funds. Compliant operators document how HUD funds (up to $15 per unit per month) fit within a broader plan that draws on additional non-HUD funding sources, and they ensure that spending is limited to eligible uses such as resident transportation, health and wellness programming, and individual assistance with daily living activities. Owners should also be aware that unspent supportive services funds cannot be redirected to other operating expenses; per Section VI.E of the notice, those funds must be deposited into the Residual Receipts account at year-end.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For Tenants
Elderly residents of Section 202 PRAC properties have a right, under Housing Notice H-2023-02 and 24 C.F.R. § 891.225, to access a range of supportive services funded in part through their property's HUD-approved budget—and owners are explicitly prohibited from requiring residents to accept any service as a condition of occupancy or admission. Residents who believe their property is not maintaining an adequate Supportive Services Plan, or that supportive services funds are being misused, may consider reaching out to HUD's Office of Multifamily Housing Programs or the relevant HUD Regional or Satellite Office that oversees their property. Tenant-rights organizations and local Area Agencies on Aging can also be resources for understanding what services a property is expected to provide under this notice.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 6, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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