B. Owner-Adopted Elderly Restrictions in Certain Federally Assisted Housing Projects…

Section 658 of Title VI of Subtitle D of the Housing and Community Development Act of 1992 (HCDA) permits owners of certain federally assisted projects to restrict occupancy in such projects (or portions of projects) to elderly families in accordance with the rules, standards, and agreements governing occupancy in effect at the time of the development of the project.

1. Applicability. Only owners of properties that were originally designed for the elderly and assisted through the following programs are eligible to apply this restriction:

   • a. Section 236 (insured and non-insured);

   • b. Section 221(d)(3) BMIR; and

   • c. Section 202 of the Housing Act of 1959, as Section 202 existed before the enactment of the Cranston-Gonzalez National Affordable Housing Act (i.e., Section 202 projects developed prior to 1991). See paragraph 3-20 B for 202/8 eligibility requirements.

NOTE: In order to restrict occupancy to the elderly in accordance with Section 658, the project must have continuously operated solely as an elderly project.

2. Definitions. The following definitions are used when implementing this restriction:

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• a. For Section 236 projects (insured and noninsured with or without Rent Supplement, RAP, or LMSA) and for the Section 221 (d) (3) BMIR projects (with or without Rent Supplement) the following definitions are used:

  • (1) An Elderly person or family is defined as a household where the head or spouse is age 62 or older.

  • (2) A disabled or handicapped person or family is defined by the Section 202 definition in effect at the time the project was endorsed. See the definitions for Section 202 projects in Figure 3-5 for projects endorsed prior to the change of definition in 1974. In 1974 the definition of handicap was amended to include other categories of disabilities. See the definition for Section 202/8 in Figure 3-5)

• b. For the Section 202 Direct Loan Program funded from Fiscal Year 1960 through Fiscal Year 1964 the following definitions are used:

  • (1) Elderly is defined as single people aged 62 or older; households the head of which (or the spouse) is aged 62 or more.

  • (2) Nonelderly Disabled are not included in the definition and are not eligible.

• c. For the Section 202 Direct Loan Program funded from Fiscal Year 1965 through Fiscal Year 1974 the following definitions and requirements are used:

  • (1) Elderly is defined as single people aged 62 or more or households the head of which (or the spouse) is aged 62 or more.

• (2) The definition of elderly was amended to include “handicapped” in 1965. A person shall be considered handicapped if such person is determined to have a physical impairment which is (a) expected to be of longcontinued and indefinite duration; (b) substantially impedes his ability to live independently; and, (c) is of such a nature that such ability could be improved by more suitable housing conditions.

  • (3) Ten percent of the units in a Section 202 project for the elderly were designed for people with mobility impairments and could house persons (elderly or nonelderly) who required the accessibility features of the unit; a Section 202 project could also be developed just for non-elderly persons with physical disabilities.

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• (4) To qualify for admission to one of the units for the elderly, the applicant must be an elderly family (see definitions in Figures 3-5 and 3-6).

• (5) To qualify for admission to one of the units specifically designed for persons with physical disabilities, the head or spouse must be at least 18 years old and have a disability requiring the accessible design features of the unit.

NOTE: Persons with degenerative conditions (e.g., AIDS, multiple sclerosis, or cancer) qualify for one of these units if they require the accessible design features of the unit.

• (6) Any Section 202 direct loan project developed specifically for persons with disabilities is not covered under Section 658.

• (7) Persons who meet the definition of a "person with disabilities" and who do not require the accessible features of these units may be admitted to the project only if they qualify as elderly for one of the units designed for elderly occupancy.

• (8) In assigning units designed for disabled persons needing accessible features, owners must treat elderly applicants with disabilities and nonelderly applicants with disabilities equally, unless one applicant has a preference adopted by the owner such as a residency preference or a preference for working families, disability or other groups as described in paragraph 4-6 C.

3. Owners must be able to demonstrate that the property was originally designed for occupancy only by elderly families in order to restrict occupancy to the elderly. Owners must be able to produce one primary source of information or two secondary sources of information showing that the project was intended to house elderly families.

   • a. Primary sources. Identification of the project (or portion of the project) as serving elderly families in at least one primary source such as:

     • (1) The application submitted in response to the notice of funding availability;

     • (2) The terms of the notice of funding availability under which the application was solicited;

     • (3) The regulatory agreement;

     • (4) The loan commitment;

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• (5) The bid invitation;

• (6) The owner's management plan;

  • (7) Any underwriting or financial document collected at or before loan closing; or

  • (8) Application for Mortgage Insurance

• b. Secondary sources. If an owner does not have at least one primary source, two or more secondary sources of evidence may be used such as:

  • (1) Lease records from the first two years of occupancy for which records are available showing that occupancy has been restricted primarily to households where the head, spouse, or sole member is 62 years of age or older;

  • (2) Evidence that services for elderly persons have been provided, such as services-funding by the Older Americans Act, transportation to senior citizen centers, or programs coordinated with the Area Agency on Aging;

  • (3) Project unit mix with more than 50% efficiencies and onebedrooms; and

  • (4) Other relevant historical data, unless clearly contradicted by other comparable evidence.

• c.