Section 8 Project-Based Rental Assistance Program

1. Section 8 Project-Based Rental Assistance Program Fort Worth Multifamily HUB

2. Basic Definitions • HUD-subsidized project means a project whose owners or tenants receive payments for rent or operating expenses. • Subsidy provides qualified tenants a way to pay less rent for their units. The Major program is called Section 8 and includes Project Based and Tenant Based Rental Assistance. • Carries use and affordability restrictions. Assistance contracts are common. • Projects can be both HUD-subsidized and HUD- insured. They also can be one or the other.

3. The Section 8 Program was authorized by Congress in 1974. • Provides Rental Subsidies for eligible tenant families (including single persons) residing in newly constructed, rehabilitated and existing rental apartments. • Code of Federal Regulations Under 24 CFR Provide Guidance Relative Section 8 Program. • 880 Section 8 New Construction • 881 Section 8 Substantial Rehabilitation • 882 Section 8 Moderate Rehabilitation • 883 Section 8 State Housing Agencies • 884 Section 8 New Construction Set-Aside for Section 515 Rural Rental Housing Developments

4. Code of Federal Regulations (continued) • 886 Section 8 Special Allocations • 888 Section 8 Fair Market Rents and Contract Rent Annual Adjustment Factors • 891 Supportive Housing for the Elderly and Persons with Disabilities

5. Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA) • Renewal rents based on market instead of Fair Market Rent (FMR) • Multi-year contract subject to appropriations • Authority to renew project based contracts • With or without restructuring • Most rents set at market • Exception rents for certain projects

6. Project (Asset) Management Function • Project (Asset) Management administers both HUD-insured and HUD-subsidized projects. • Each project is assigned to a project manager. Fort Worth Multifamily HUB jurisdiction covers the State of Texas.

7. Example of 9% HTC Leveraged Deal • Gulf Coast Arms Apartments, Houston, TX; Section 221d3, 160 Units, 100% Section 8 Subsidized, 2012 9% HTC Award with other Funding Sources, Total Reconstruction • Funding Sources: HTC $1,750,000, CDBG $6,750,000, Conventional Financing $3,750,000 • Relocation of Residents for 12-18 months • Project reconstructed Platinum LEED Green • Residents moved back in first building June 2014

15. Project (Asset) Management Function • Region VI Web site can be found at:http://www.hud.gov

16. Other Funding Considerations • State (TDHCA) Low Income Housing Tax Credits (LIHTC) • State Bonds • City/County HOME & CDBG Funds • TDHCA HOME & CDBG Funds

17. Housing Tax Credits • Created by the TAX Reform Act of 1986. Section 42 of the Internal Revenue Code of 1986. • Used to direct private capital towards affordable housing • To qualify development must be new construction or substantial rehabilitation. • A total of four or nine percent based on rent restricted units offered. • www.tdhca.state.tx.us

18. State Bonds • Multifamily Housing Revenue Bond Rule, Title 10, Par 1, Chapter 35, Texas Administrative Code. • Used to construct, acquire, rehabilitate, operate, manage, or maintain a Development. • Tenants must be low income, very low income, or extremely low income.. • Issued in varying denominations. • www.tdhca.state.tx.us/multifamily/bond/docs/07-BondRule.pdf

19. State of Texas HOME Funds • Funds are provided to States, City, and local government on a formula allocation base. • Funds can be used to acquire property, construct new housing, moderate or rehabilitate housing, site improvements, demolition of dilapidated housing, pay for relocation, and other reasonable expanses. • Bricks and mortar program for affordable housing. • City or Local Government administered. • www.tdhca.state.tx.us/home-division/mf-home/index.pdf

20. Questions