On Nov. 18, 2011, the House and Senate gave final approval to the FY 2012 budget for the U.S. Department of Housing and Urban development (HUD), including funding for critical programs providing affordable housing for non-elderly adults living with serious mental illness. This is part of a combined “mini-bus” appropriations bill that President Obama signed shortly after it passed.
For FY 2012, the HUD Section 811 program will receive a $15 million increase above the FY 2011 level, up to $165 million. This is $31 million below the President’s request for FY 2012 of $196 million, the same amount that was in the House bill. The draft Senate bill would have imposed a freeze at the FY 2011 level, $150 million.
Section 811 provides grants to non-profit agencies to develop permanent supportive housing for non-elderly people with disabilities, including people living with serious mental illness. Under legislation passed in 2010, important reforms were made to the Section 811 program. This new law, known as the Frank Melville Supportive Housing Investment Act is designed to streamline the development and application process and create new efficiencies to leverage additional capital funding and increase the capacity of the program to develop new units.
While NAMI is somewhat disappointed that the final funding level for 811 is below both the House level and the President’s request, there is good news. The final bill does include the Senate language directing HUD to take all funds after funding renewals of all expiring project-based rental assistance contracts (PRACs) and amendments for a state competition for the “PRAC-only” option authorized in the Melville Act. PRAC operating subsidies are a critical piece as they fund the operating costs of supportive housing – the difference between operating costs (e.g., utilities, insurance, reserves, etc.) and tenant contribution toward rent (capped at 1/3 of a tenant’s monthly income).
HUD projects that $85 million will be needed in FY 2012 to renew all of the existing 811 projects. This would leave $80 million available for a competition for new units in 2012. The final agreement dictates that all of this $80 million go toward a competition among state housing finance agencies for PRACs as authorized under the “PRAC only” option authorized in the Melville Act. It projected that this $80 million could fund as a many as 2,500 new units of supportive housing in 2012, significantly more than 949 new units that were developed under 811 in 2010 and 2011 combined.
More information on HUD 811, the Melville Act and the new “PRAC only” supportive housing development option are available at:
On Nov. 16, 2011, HUD announced awards for Section 811 for 2010 and 2011. This announcement covers both the FY 2010 and FY 2011 appropriations, $137 million in capital advance grants and $12.6 million in PRACs. This covers 92 HUD 811 projects in 35 states or 949 units in total (213 units for group homes, 652 units for independent living apartments and 84 units in integrated projects).
Posted: Nov. 30, 2011
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