Section 202 Housing - Low-Income Senior Apartments That Care
As our senior population increases, the demand for senior housing goes up accordingly. While there has been much growth in the presence of senior living communities around our nation, the monthly rents can be very cost-prohibitive to many in our senior population. The average cost of an Assisted Living Facility is $4,000 per month, almost $50,000 a year. In contrast, the average senior tenant within the Section 8 sector only earns about $11,000 a year which is quite a financial gap to bridge.
In addition, seniors tend to require more care as they age, placing a bigger burden on them financially and also placing a burden on loved ones trying to find affordable living choices that include some measure of care services within their communities. But how does a family go about finding a suitable senior living environment that is safe, clean, decent, and affordable that also includes care services? An attractive option may be the Section 202 program for low-income seniors.
What is the Section 202 Supportive Housing for the Elderly?
Also known as HUD’s “Affordable Senior Housing”, Section 202 is a branch of HUD’s Section 8 program and is formally known as the Section 202 Supportive Housing for the Elderly. It was established back in 1959 to address the rising concerns at that time about the lack of availability of low-income housing for seniors and has since gone through several iterations to address funding issues, evolving aging needs, and resident concerns.
When HUD established the program, it extended low-cost loans and grants to builders to create and maintain low-income units for seniors who are over the age of 62 to increase the number of available low-income units. After completion of construction, the units are maintained and inspected regularly to ensure that the elderly tenants have a safe and appropriate living environment that meets their needs.
Up until recently, there had been no new funding for the creation of new communities, so availability had become scarce and some of the communities that did exist were starting to show signs of wear and tear. But in 2019 over 51 million dollars was poured back into the program to create new communities, where they were most needed and improve older communities to bring them up to modern living standards.
Over the years, several studies released by HUD have indicated that the cost to provide low-cost housing and basic care services to the elderly so that seniors could age in place was substantially lower (about $13,000 per tenant) than the cost to provide medical care in a skilled nursing environment (about $43,000) when senior care needs were properly addressed.
Embedded within the Section 202 program is the Services Coordinator Program which provides additional funding for those communities that employ the use of a community-based senior Services Coordinator. Service Care Coordinators add a measure of aid to elderly tenants to help them manage things like health concerns, social needs, and transportation to medical services. Read more about the Service Coordinator’s role in Section 202 housing below.
Qualifications for HUD’s Supportive Housing for the Elderly
Section 202 housing is available for seniors who are over the age of 62 and who meet the Eligibility Requirements established by HUD. The program is only available to those seniors who are Low Income or Very Low Income as determined by HUD’s Income Limits Criteria, which is generally 50% or less of the area median family income.
In addition to income limits, there are also limits on the number and type of household members that reside in a Section 202 unit. The head of the household must be at least 62 years old or must be the spouse of a person who is at least 62 years old. Single elderly tenants may live in the units alone and a single elderly tenant may live with another single elderly tenant, but in this case, both tenants must be at least 62 years old. The unit that the elderly household is applying for must be the household’s only residence.
Because all household members’ incomes are counted toward low-income eligibility, tenants tend to qualify better with a smaller number of income-generating household members. There is a limit to the number of household members as it relates to the number of bedrooms in a unit. Typically, Section 202 communities have only one and two-bedroom units so these households are rarely approved for more than two tenants. Adult children can reside with an elderly parent but their incomes are considered part of the household income and they must go through the same verification and qualification process as the elderly resident.
Because the family model has been undergoing some changes, HUD has established study programs that are currently looking at the impact of allowing children under the age of 18 in Section 202 Housing units when the elderly tenant is the child’s only caregiver. Each community may have specific policies regarding children under the age of 18.
Aids may live-in with elderly tenants only if they are needed for the elderly tenant’s care and well-being as stated by a health care provider. The income of the aid is not counted toward the household income so the aid’s income does not affect the income eligibility of the elderly tenant. Adult children can reside with an elderly tenant as an aid but a health care provider is required to certify that the care that they provide is essential to the well-being of the elderly parent. If an adult child lives with an elderly parent solely to provide live-in care that a health care provider determines is necessary for the well-being of the elderly tenant, then the adult child’s income is not counted as part of the household income.
Although an elderly tenant may have slept over guests, guests are not permitted to move into the unit, even if they are family, without the written permission of the property owners. Because tenant selection relies on annual recertification, those tenants whose household incomes have changed may lose their eligibility to keep the unit, especially if their household income increases due to new household members.
How Much Does Rent at a Section 202 Senior Apartment Cost?
Not only does a household’s income determine eligibility, it also determines how much rent the household will have to pay. This is because Section 202 rent amounts are income-based, meaning that the less income a household makes, the less rent they will have to pay. Typically rents will be about 25% - 30% of what the household members make.
Since Section 202 housing is primarily for seniors the households tend to be smaller. The average unit has usually only one or two bedrooms, which limits the number of people that can reside within the unit. HUD places strict guidelines that limit a unit’s household size depending on the number of bedrooms the unit has. It is very unlikely that a family of five would be offered a two-bedroom unit if one of those members must be at or above the age of 62.
Since households are smaller, rents are usually smaller because there are fewer people to earn an income. The average Section 202 tenant is a single-member household, mostly women, with a median age of 74 years old. The average adjusted income for Section 202 residents is around $1,050 per month. The average monthly rent paid for a Section 202 unit is around $300 per month.
The rent a family will pay is the highest of the following amounts:
- 30% of the family’s monthly adjusted income
- 10% of the family’s monthly income
- Welfare rent or welfare payment from the agency
To figure out which of the above is the highest, one must first figure out what the household’s monthly adjusted income (MAI) is and what the monthly income (MI) is.
The Monthly Adjusted Income (MAI) amount is calculated this way:
Gross Income - Income Exclusions = Annual Income
Annual Income - Deductions = Adjusted Income
Adjusted Income ÷ 12 = Monthly Adjusted Income
- Gross Income is the total of all income for every member that will reside in the unit except live-in aids and children under the age of 18.
- Income Exclusions are incoming monies that are not counted, like medical reimbursements or payments from other supportive programs like income specifically for childcare.
- Deductions are credits that help to reduce the household income so that rent won’t be too burdensome. A household automatically receives a $400 deduction for being an elderly household.
The Monthly Income (MI) amount is simply the total of all income from any household member who is not a live-in aid or a child under the age of 18 without any deductions or exclusions.
Here is an example of determining a senior applicant’s rent:
Mildred is 68, she will be applying to live in a unit alone.
Her income is $1,200 a month, which is $14,400 a year.
She receives no welfare
She has no income exclusions.
She qualifies for a $1,000 medical expense deduction and a $400 elderly household deduction.
So, her annual adjusted income is $13,000 which means her AMI is $1,084 per month
Determining her rent would look like this:
- 30% of $1,084 (her adjusted monthly income) = $325.25
- 10% of $1,200 (her monthly income without adjustments) = $120.00
- Welfare income: $0.00
Since HUD requires using the highest amount, Mildred’s rent would be about $325.25 per month.
What is included in Section 202 Senior Housing?
Communities generally provide protected entry, elevators, and laundry centers, and many also provide wearable safety devices and security cameras to keep their residents safe. A certain number of units within each community are required to be wheelchair accessible, and many provide grab bars and non-slip flooring. It is not uncommon to find communities with units that include appliances, window blinds, and space for storage.
The way that utilities are charged depends on how the community’s utility services are billed. If each individual unit is billed directly from the utility to the tenant, then the tenant will receive a credit from the community to use toward the payment of the utility bills. Since the credit is based on standard usage rates, it is important that the tenant be watchful of utility consumption so that the utility bills don’t climb higher than the utility credit given.
What is a Service Coordinator?
One of the unique and wonderful features of the Section 202 program is the presence of an on-site senior Service Coordinator who can be found in most, although not all, of these communities.
A Service Coordinator is a staff member, paid for by the property owner, who plays a key role in providing supportive and care services for the senior residents of the community. Service Coordinators assess resident needs; identify and link residents to appropriate services and monitor the delivery of those services. Services may involve activities of residents' daily living (ADLs), such as eating, dressing, bathing, grooming, transferring, and home management. A service coordinator may also educate residents about what services are available and how to use them, and help residents build informal support networks with other residents, family, and friends.
The Service Coordinator is completely free and optional to the senior tenant and residents are welcome to reject any services or guidance that is offered.
For a low-income working family trying to manage the day-to-day difficulties of life in addition to the time and effort required to help manage an elderly parent or loved one, a Services Coordinator onsite can be a great support system for both senior tenants and family members alike.
How to Apply for a Section 202 Low-Income Senior Apartment
The important thing to note with the Section 202 program is that there are no vouchers needed, no need for Open Enrollment, and no need to contact a local Public Housing Agent (PA), as is the case with the Housing Choice Voucher Program (HCVP) .
Anyone who is eligible can contact a community directly to set up an application and qualification appointment. The qualification process is multi-step and is made up of a series of background checks and follow-ups, income verifications, and citizenship verification for all members of the household. For details about the qualification process, what to expect, and how to prepare for it, please see our guide: 5 Sure Steps to Qualify for Low-Income Housing.
Although access to the Section 202 Program is definitely much less complex than some of the other elderly housing programs, demand for the units is very high and long waiting lists are very common. Section 202 Senior communities that are in highly populated areas tend to have longer waiting lists, while communities in rural areas may have immediate availability. If locating an elderly unit is time-critical then selecting a community in an area further out away from highly populated areas, even if the location isn’t ideal, will have faster results. There is no limit to the number of waiting lists that a tenant can sign up on, so if there are several full communities in a desired area getting on each community’s waiting list will reap the fastest rewards.
Section 202 Supportive Housing for the Elderly Summary
While there are other, very good low-income housing options for seniors, the HUD Section 202 program helps aging families by providing safe, decent, and affordable housing to vulnerable senior citizens in an environment that helps them to maintain their independence and their dignity so that they may effectively age in place. Among the Affordable Housing Program communities, those communities that provide for Service Coordinators give seniors the greatest opportunity to access resources that would otherwise be difficult to obtain on their own and help to lessen the burden of care for caregivers and family members.
If you are interested in finding low income senior living options near you, take a look at the Low Income Communities listed on Senioridy:
