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The Fair Housing Amendments Act of 1988 defines “housing for older persons” as housing:
- Provided under any state or federal program that the HUD secretary determines is specifically designed and operated to assist elderly persons
- Intended for, and solely occupied by, persons 62 years or older; or
- Intended and operated for occupancy by persons 55 or older, with at least 80% of the occupied units occupied by at least one person who is 55 or older
HUD’s policy is not based on statutory or regulatory requirements, and it is not provided to applicants for FHA insurance in writing. In fact, several NAHB members were not told about the policy until they were preparing to close their FHA loans. Although HUD provided waivers to allow the projects to go forward, the department has made it clear that such waivers will no longer be granted.
HUD’s policy makes it more difficult and costly for owners to finance affordable seniors-only housing. Many of these projects are financed with Low Income Housing Tax Credits, which must be obtained on a competitive basis. Because they regard the provision of elderly housing as a high priority, many states award more points to developers who promise to provide housing restricted to elderly occupants. Securing FHA insurance ensures lower long-term financing costs, which increases affordability to the residents.
In addition, some localities have chosen to provide special zoning districts exclusively for the development of communities for seniors. To obtain building approval, owners must restrict occupancy to persons who are 55 or older, which is permitted by the Fair Housing Amendments Act. If developers are not able to use FHA insurance in these districts, then these communities will be deprived of needed affordable seniors housing.
“HUD’s policy could have a significant impact on the ability of builders to do business in the area of housing for older persons,” said Sheila Salmon, a senior attorney with Washington, DC-based Coan & Lyons and chair of the NAHB Seniors Housing Council's Advocacy Committee. “The result could be a significant reduction in the amount of affordable housing available to many older Americans.”
HUD’s current policy prevents many seniors from living in affordable properties for older persons only, impedes the production of affordable housing for seniors and circumvents the intent of Congress to ensure that older persons have a right to live in age-restricted housing, according to NAHB.
If HUD fails to change its policy, NAHB will urge Congress to direct HUD to provide FHA insurance to age-restricted housing intended solely for older persons, as provided for under the Fair Housing Amendments Act of 1988 and HOPA.
For more information, e-mail Claudia Kedda or call her at 800-368-5242 x8352.
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