.

Section 811 and Other HUD Housing
Programs for Persons with Disabilities

Libby Perl
Analyst in Housing Policy
August 4, 2009
Congressional Research Service
7-5700
www.crs.gov
RL34728
CRS Report for Congress
P
repared for Members and Committees of Congress
c11173008

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Section 811 and Other HUD Housing Programs for Persons with Disabilities

Summary
The ability of persons with disabilities to live independently in affordable, accessible housing
became a prominent issue starting in 1999 as the result of a Supreme Court decision, Olmstead v.
L.C.
The court held that institutionalization of persons with mental disabilities in lieu of
community-based care may constitute discrimination. Shortly after the Olmstead decision, on
February 1, 2001, the President announced the New Freedom Initiative, an effort through multiple
federal agencies to ensure full participation in society of persons with disabilities. Part of the New
Freedom Initiative was Executive Order 13217, which implemented the Olmstead decision by
ensuring (among other things) that all people with disabilities, not just those with mental illness,
benefit from community-based treatment.
In order to ensure that persons with disabilities may live in community settings rather than in
institutions, affordable and accessible housing is necessary. The Department of Housing and
Urban Development (HUD) operates a number of programs that provide housing for persons with
disabilities in various ways. The Section 811 Supportive Housing for Persons with Disabilities
program provides capital grants and project rental assistance to nonprofit developers of housing
targeted specifically to persons with disabilities. Prior to creation of Section 811, persons with
disabilities lived together with elderly residents (defined by HUD as households with one or more
adults age 62 or older) in developments funded through the Section 202 Supportive Housing for
the Elderly program. The project-based Section 8 and Public Housing programs give project
owners the option of dedicating facilities to elderly residents, residents with disabilities, or both
populations together. Both the Section 811 and Section 8 programs set aside housing vouchers for
persons with disabilities. And two HUD block grant programs—HOME and the Community
Development Block Grant—may be used by states and communities to construct or rehabilitate
housing for persons with disabilities.
In addition to these HUD programs, the Low Income Housing Tax Credit (LIHTC), administered
by the Internal Revenue Service, may be used by states to target housing to special needs
populations, including persons with disabilities. The LIHTC may be used in conjunction with
HUD grants, including capital grants through the Section 811 program. The Housing and
Economic Recovery Act of 2008 (P.L. 110-289) made it possible for developers of Section 811
housing to qualify for a higher tax credit rate, which could potentially make these mixed
financing developments more feasible.
In the 111th Congress, a bill to make changes to the Section 811 program, the Frank Melville
Supportive Housing Investment Act (H.R. 1675), was introduced on March 23, 2009. On July 22,
2009, the House passed H.R. 1675 under suspension of the rules. Among the changes proposed
by H.R. 1675 are turning over funding of Section 811 vouchers to the Section 8 program; creating
a demonstration program in which Section 811 rental assistance would be used in conjunction
with other sources of financing, including the LIHTC and HOME program; reducing the
concentration of housing units for persons with disabilities by limiting the units in multifamily
housing dedicated to persons with disabilities to 25% of the total; and delegating the processing
of mixed finance developments to state housing finance agencies. A nearly identical bill, S. 1481,
also called the Frank Melville Supportive Housing Investment Act, was introduced in the Senate
on July 21, 2009.
This report will be updated as warranted.

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Section 811 and Other HUD Housing Programs for Persons with Disabilities

Contents
Introduction ................................................................................................................................ 1
Housing for Persons with Disabilities and the Fair Housing Act.................................................. 2
Reasonable Modifications ............................................................................................... 3
Reasonable Accommodations.......................................................................................... 4
Section 811 Supportive Housing for Persons with Disabilities Program ...................................... 4
Evolution of the Section 811 Program ................................................................................... 5
Section 202 Housing for the Elderly or Handicapped....................................................... 5
Section 202 Set Aside for Non-elderly Handicapped Households..................................... 6
Creation of the Section 811 Program ............................................................................... 8
Definition of Person with Disabilities in HUD Housing Programs ........................................ 9
The Section 811 Program Definition ............................................................................... 9
The Definition in Other HUD Programs ........................................................................ 10
Capital Grants and Project Rental Assistance....................................................................... 11
Eligible Facilities .......................................................................................................... 12
Rental Assistance .......................................................................................................... 13
Supportive Services ...................................................................................................... 13
Tenant-Based Vouchers ....................................................................................................... 14
Section 811 Mainstream Vouchers ................................................................................. 14
Other HUD Housing Designated for Persons with Disabilities .................................................. 16
Public Housing ................................................................................................................... 17
Project-Based Section 8 Rental Assistance .......................................................................... 18
Section 8 Vouchers for Persons with Disabilities ................................................................. 18
Housing Financed by Low-Income Housing Tax Credits and HUD Block Grants ...................... 20
The Low-Income Housing Tax Credit.................................................................................. 20
The HOME Investment Partnerships Program ..................................................................... 21
The Community Development Block Grant Program........................................................... 22
Issues and Trends ...................................................................................................................... 23
Using Section 811 Funds with Low-Income Housing Tax Credits ....................................... 23
Housing Need for Persons with Disabilities......................................................................... 25
Homeless Persons with Disabilities ..................................................................................... 27
Section 8 Vouchers and the Money Follows the Person Demonstration ................................ 28
Legislation .......................................................................................................................... 29

Tables
Table 1. Section 811 Funding Levels, FY2003 to FY2009 ......................................................... 16
Table A-1.Definitions of Disability Applicable to HUD Housing Programs................................ 31

Appendixes
Appendix. Definitions of Disability Applicable to HUD Housing Programs............................... 31

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Section 811 and Other HUD Housing Programs for Persons with Disabilities

Contacts
Author Contact Information ........................................................................................................ 1

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Section 811 and Other HUD Housing Programs for Persons with Disabilities

Introduction
Persons with physical disabilities, developmental disabilities, or mental illnesses frequently face
difficulty in finding suitable housing, together with supportive services (often referred to as
person-directed or consumer-directed services), in which they can live as active members of their
community. For those individuals with physical disabilities, it may be difficult to find rental units
that are accessible, and some prospective residents with disabilities may face discrimination in
their search for housing.1 Zoning laws may also prevent the construction of homes where persons
with disabilities live together.2 In addition, the affordability of housing and services may be an
issue. Individuals with disabilities may have low incomes due to the inability to work, the need
for additional education and training to find suitable employment, or employer discrimination.3
Insufficient income can put the costs of in-home care and supportive services out of reach, and
services are not always available in all states through programs such as Medicare and Medicaid.4
As a result of these limitations, among other causes, persons with disabilities may be
institutionalized in nursing homes, psychiatric hospitals, or similar facilities rather than living
independently.5 Those individuals not in such facilities may still live in group homes or small
multifamily housing developments dedicated to persons with disabilities instead of on their own.6
However, national recognition of the need for appropriate housing for persons with disabilities
gained support after the 1999 Supreme Court decision in the case of Olmstead v. L.C. In that case,
two women who had spent years in a psychiatric hospital argued that their institutionalization
constituted discrimination under the Americans with Disabilities Act. The Supreme Court agreed,
finding that “[s]tates are required to provide community-based treatment for persons with mental
disabilities when the State’s treatment professionals determine that such placement is appropriate,
and the placement can be reasonably accommodated ... ”7 Shortly after the ruling in Olmstead, on
February 1, 2001, President Bush announced the “New Freedom Initiative,” an effort through
multiple federal agencies, in cooperation with the states, to ensure full participation in society of
persons with disabilities. Part of the New Freedom Initiative was an Executive Order
implementing the Olmstead decision to ensure that all people with disabilities, not just those with
mental illnesses, benefit from community-based treatment.8 However, for many states and

1 See, for example, Margery Austin Turner, Carla Herbig, Deborah Kaye, Julie Fenderson, and Diane Levy,
Discrimination Against Persons with Disabilities: Barriers at Every Step, U.S. Department of Housing and Urban
Development, May 2005, pp. 2-4, http://www.huduser.org/Publications/pdf/DDS_Barriers.pdf.
2 Claudia Center et al., “The Garrett History Brief,” Journal of Disability Policy Studies 12, no. 2 (2001): 72-73
(hereafter “The Garrett History Brief”).
3 See, for example, O’Day, Bonnie, and Marcie Goldstein. “Advocacy Issues and Strategies for the 21st Century: Key
Informant Interviews.” Journal of Disability Policy Studies 15, no. 4 (January 1, 2005): 244.
4 Laurie E. Powers, Jo-Ann Sowers, and George H. S. Singer, “A Cross-Disability Analysis of Person-Directed, Long-
Term Services,” Journal of Disability Policy Studies 17, no. 2 (January 1, 2006): 72.
5 The Garrett History Brief, pp. 71-72.
6 See, for example, Ann O’Hara, “HR 5772—The Frank Melville Supportive Housing Investment Act of 2008—
Promotes Community Integration for People with Disabilities,” Opening Doors, a Publication of the Technical
Assistance Collaborative and the Consortium for Citizens with Disabilities Housing Task Force, May 2008,
http://www.tacinc.org/Docs/HH/OpeningDoors/ODIssue31.pdf.
7 Olmstead v. L.C., 527 U.S. 581, 607 (1999).
8 Executive Order 13217, “Community-Based Alternatives for Individuals with Disabilities,” Federal Register, vol. 66,
no. 120, June 21, 2001, p. 33155.
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Section 811 and Other HUD Housing Programs for Persons with Disabilities

communities, it may be difficult to achieve the goal of treatment in a community environment
without the availability of accessible and affordable housing.9
The federal government makes available funds to finance subsidized rental housing for persons
with disabilities primarily through the Department of Housing and Urban Development (HUD).
The Section 811 Supportive Housing for Persons with Disabilities program is the only federal
program that funds supportive housing exclusively for persons with disabilities. However, the
Section 811 program is not the only source of funds to provide housing units for persons with
disabilities. Over the years, a number of other HUD programs have been used to fund housing
units dedicated to persons with disabilities, and many of those units are still in service. These
programs include the Section 202 Supportive Housing for the Elderly program, Public Housing,
the project-based Section 8 rental assistance program, and the Section 8 voucher program. In
recent years, federal block grant programs—the Community Development Block Grant and
HOME Investment Partnerships program—have been a source of funds used by states and local
communities to develop and rehabilitate housing for persons with disabilities. Another source of
funds is the Low Income Housing Tax Credit, administered by the Internal Revenue Service,
through which state governments have the discretion to prioritize housing for persons with
disabilities.
This report describes how federal funds are used to develop housing designated for persons with
disabilities. It also discusses current issues surrounding housing for persons with disabilities,
including mixed financing arrangements, worst case housing needs, persons with disabilities who
are homeless, and legislation in the 110th Congress.
Housing for Persons with Disabilities
and the Fair Housing Act

This report discusses federal programs that provide funds to develop affordable rental housing
units specifically for persons with disabilities. Individuals with disabilities may also live in
housing that has not been specifically designed for their needs, however. The Fair Housing Act
(FHA), enacted as part of the Civil Rights Act of 1968, contains provisions that are meant to
ensure that persons with disabilities may obtain accessible rental housing even in facilities not
specifically designed for them.
The FHA was created to prevent discrimination in the provision of housing based on “race, color,
religion, and national origin.”10 In 1988, the Fair Housing Amendments Act (P.L. 100-430)
amended the FHA to prevent discrimination based on “handicap.” The Fair Housing Act defines a
“handicap” as (1) having a physical or mental impairment that substantially limits one or more
major life activities, (2) having a record of such impairment, or (3) being perceived as having

9 See, for example, Linda Velgouse and Molly Dworken, Olmstead Update, Presentation for the American Association
of Homes and Services for the Aging Annual Meeting, October 2002.
10 The Fair Housing Act is codified at Title 42, Chapter 45 of the United States Code. See sections 3601-3619. For
more information about the Fair Housing Act, see CRS Report 95-710, The Fair Housing Act: A Legal Overview, by
David H. Carpenter.
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such impairment.11 In addition to prohibiting discrimination against persons based on handicap,
the FHA imposes affirmative duties on housing providers.
Under the Fair Housing Amendments Act of 1988, if a landlord fails to follow certain
requirements to make housing accessible to persons with disabilities, it is considered
discrimination. In the area of new construction, beginning 30 months after implementation of P.L.
100-430 (in 1988), it became unlawful for multifamily housing developers to design and
construct housing of four or more units that fails to: (1) have common areas that are accessible
and useable by persons with disabilities, (2) have doors wide enough to accommodate
wheelchairs, and (3) include units with accessible routes through the unit; bathrooms and kitchens
that are wheelchair accessible; electrical outlets, light switches and thermostats that are
accessible; bathrooms with reinforcements where grab bars may be installed; and kitchens and
baths that may be maneuvered through with a wheelchair.12
For units in older facilities, or in units not covered by the FHA, the Fair Housing Amendments
Act recognized that modifications to units may be necessary to make them accessible to persons
with disabilities. Under the law, it is discriminatory for landlords to refuse to allow tenants to
make physical changes to the premises—referred to as “reasonable modifications”—where
changes are necessary to afford tenants full enjoyment of the premises.13 In addition, the law
gives tenants the right to ask their landlords for “reasonable accommodations” in the rules,
policies, practices, or services that ordinarily apply to tenants living in rental property. It is
considered discrimination under the FHA for a landlord to refuse to make a reasonable
accommodation where it is necessary to give residents with disabilities an equal opportunity to
use and enjoy their dwelling unit.14 Reasonable modifications and reasonable accommodations
are described below.
Reasonable Modifications
While the FHA may require landlords to permit tenants to make reasonable modifications to the
rental premises, the statute neither defines the term “reasonable modification,” nor the
circumstances under which modifications might be required to ensure a tenant’s enjoyment of the
premises. However, HUD and the Department of Justice (DOJ) have published joint guidance
describing reasonable modifications.15 They may include changes to a rental unit such as
widening doorways, installing a ramp or grab bars, or lowering cabinets.16 The HUD/DOJ
guidance requires that there be an identifiable relationship between the tenant’s disability and the
modification; if there is not, a landlord may refuse to allow the alteration.17 Landlords are not
required to pay for modifications, and, if the modifications would prevent a future tenant’s
enjoyment of the premises, the landlord may require tenants to restore the unit to its original state
when moving out. In order to ensure that this occurs, a landlord may require tenants to deposit

11 42 U.S.C. § 3602(h).
12 42 U.S.C. § 3604(f)(3)(C).
13 42 U.S.C. § 3604(f)(3)(A).
14 42 U.S.C. § 3604(f)(3)(B).
15 Examples of reasonable modifications are also in regulation. See 24 C.F.R. § 100.203.
16 See Reasonable Modifications Under the Fair Housing Act, Joint Statement of The Department of Housing and
Urban Development and the Department of Justice, March 5, 2008, p. 4, http://www.hud.gov/offices/fheo/disabilities/
reasonable_modifications_mar08.pdf.
17 Ibid., p. 3.
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funds into an escrow account to pay for restoration.18 However, landlords cannot require tenants
to pay a higher security deposit because of modifications to the property.
While no federal program exists specifically to help tenants with disabilities pay for home
modifications, funding may be available at the state or local level. For example, some states make
funds available through their Medicaid waiver programs to allow persons with disabilities to
make modifications.19 States may also set up grant or loan programs using state, local, or federal
funds to assist with home modifications. Sources of federal funds that could be used for this
purpose include the HOME Investment Partnerships block grant and the Community
Development Block Grant (these programs are described later in this report).
Reasonable Accommodations
In addition to permitting tenants to make reasonable modifications to their units under the FHA,
landlords may be required to make “reasonable accommodations” to ensure that tenants with
disabilities may use and enjoy their dwelling. Reasonable accommodations may involve altering
or making an exception to rules, policies, practices, or services that would otherwise apply to
tenants, but when applied to an individual with a disability may prevent them from maintaining
their tenancy or fully enjoying use of the facility.20 As with reasonable modifications, there must
be a relationship between the disability and the requested accommodation. However, unlike
reasonable modifications, a tenant may request an accommodation that will involve a cost to the
housing provider, although the requested accommodation cannot pose an undue financial or
administrative burden, and cannot fundamentally alter the provider’s operations.21 If the requested
accommodation is reasonable, tenants cannot be charged an extra fee or be required to make a
deposit into an escrow account. Examples of reasonable accommodations include changing the
manner of rental payment for a tenant with a mental illness so that he or she need not leave the
apartment or allowing assistance animals in a building that does not otherwise allow pets.
Section 811 Supportive Housing for Persons
with Disabilities Program

The Section 811 Supportive Housing for Persons with Disabilities program is administered by
HUD and funds permanent supportive housing for very low-income persons with disabilities
(those with household income at or below 50% of area median income). The program primarily
provides capital grants and project rental assistance to nonprofit housing developers. Section 811
capital grants can be used for construction, rehabilitation, or acquisition of buildings to be used as
housing for persons with disabilities.22 Nonprofit developers need not repay the capital grants as

18 24 CFR § 100.203(a).
19 Terry Moore and Beth O’Connell, Compendium of Home Modification and Assistive Technology Policy and Practice
Across the States
, Abt Associates, prepared for the U.S. Department of Health and Human Services, October 27, 2006,
http://www.hcbs.org/files/138/6854/assistive_tech_final_report.pdf.
20 See Reasonable Accommodations Under the Fair Housing Act, Joint Statement of the Department of Housing and
Urban Development and the Department of Justice, May 17, 2004, http://www.nhl.gov/offices/fheo/library/
huddojstatement.pdf.
21 Ibid., pp. 8-9.
22 42 U.S.C. § 8013(b).
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long as the housing is available and affordable for at least 40 years to very low-income persons
with disabilities. The Section 811 program also distributes tenant-based vouchers—sometimes
referred to as “mainstream vouchers”—that can be used by eligible tenants to rent housing in the
private market.
Evolution of the Section 811 Program
The Section 811 Supportive Housing for Persons with Disabilities program was created as part of
the Cranston-Gonzalez Affordable Housing Act of 1990 (P.L. 101-625). Until enactment of
Cranston-Gonzalez, HUD had funded housing units for persons with disabilities largely through
the Section 202 Supportive Housing for the Elderly program, created in 1959. Over the years, the
individuals with disabilities who were eligible for Section 202 housing expanded from persons
with physical disabilities to those with developmental disabilities and eventually to individuals
with chronic mental illnesses. Over time, Congress also began to implement a split between
housing for elderly residents23 and those with disabilities, ultimately resulting in creation of the
Section 811 program. However, units for persons with disabilities that were created as part of the
Section 202 program continue to be financed through that program and governed by its rules, so
the history of their development continues to be important.24
Section 202 Housing for the Elderly or Handicapped
The Section 202 program was created as part of the Housing Act of 1959 (P.L. 86-372) and
provided low-interest loans to non-profit developers to construct multifamily housing for families
where one or more person is age 62 or older. Section 202 did not initially provide housing for
persons with disabilities. Five years after the creation of the Section 202 program, the Housing
Act of 1964 (P.L. 88-560) added non-elderly “handicapped” individuals and families to the
definition of “elderly families” under the Section 202 program. At the time, “handicapped” was
defined by P.L. 88-560 as a physical impairment (1) expected to be of long-continued or
indefinite duration, (2) that substantially impedes the ability to live independently, and (3) is of
such a nature that the ability to live independently could be improved by more suitable housing
conditions. A mental or developmental disability was not included in the definition. The Housing
Act of 1964 also changed the name of the Section 202 program to “Housing for the Elderly or
Handicapped.” However, the law did not require that a certain number of units be set aside for
tenants with disabilities or direct that units be made accessible. Very few tenants who were
considered non-elderly handicapped participated in the Section 202 program between 1964 and
1974. Although data were not collected, HUD estimated that through 1977, less than 1% of
Section 202 tenants were non-elderly handicapped,25 and that “the vast majority of Section 202
projects [were] not designed to serve the handicapped ... ”26

23 Although other terms may be preferred, this report uses the term “elderly” to refer to those individuals eligible for
HUD-assisted housing for persons age 62 or older because it is the term used by HUD.
24 For more information about the Section 202 program, see CRS Report RL33508, Section 202 and Other HUD Rental
Housing Programs for Low-Income Elderly Residents
, by Libby Perl.
25 U.S. Department of Housing and Urban Development, Housing for the Elderly and Handicapped: The Experience of
the Section 202 Program from 1959 to 1977
, January 1979, p. 36 (hereafter Housing for the Elderly and Handicapped).
26 Ibid., p. 67.
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The Housing and Community Development Act of 1974 (P.L. 93-383) removed the word
“physical” from the term “physical impairment” in the definition of handicap and also expanded
the definition of handicap to include developmental disabilities.27 The removal of the word
“physical” was meant to make persons with mental illnesses eligible for Section 202 housing.28
However, the development of housing for this population did not occur immediately. In 1978, in
the Conference Report accompanying the Housing and Community Development Amendments
(P.L. 95-557), Congress acknowledged that “there has been some confusion over whether
chronically mentally ill persons are eligible for section 202 housing,” and that it was “never the
intent of Congress to exclude chronically mentally ill persons from participating in the section
202 program.”29 The report went on to direct HUD to develop criteria and standards for providing
housing for this population. In 1978, HUD undertook a demonstration program together with the
Department of Health and Human Services (then the Department of Health, Education, and
Welfare), “to better understand the housing needs of the mentally ill.”30 In FY1982, the Section
202 program funded housing for chronically mentally ill individuals for the first time, making
funds available for group homes and independent living facilities.31
Section 202 Set Aside for Non-elderly Handicapped Households
In 1978, the Housing and Community Development Amendments (P.L. 95-557) required that,
beginning in FY1979, at least $50 million of the amounts available for loans under the Section
202 program be devoted to housing for non-elderly “handicapped” individuals.32 The new
requirement was meant to “meet special needs [of the handicapped] which have not been
adequately addressed in Section 202 projects.”33 Until enactment of the Housing and Community
Development Amendments of 1978, a small number of accessible units in larger Section 202
developments designed primarily for elderly residents had been dedicated to persons with
disabilities (about 1% of units). These Section 202 developments tended to be large multifamily
rental buildings—the average number of units in Section 202 developments built prior to
enactment of the Housing and Community Development Act of 1974 was 135.34 HUD suggested
that one of the reasons for the low number of units designed for persons with disabilities through

27 See Section 210 of P.L. 93-383. “A person shall also be considered handicapped if such person is a developmentally
disabled individual as defined in section 102(5) of the Developmental Disabilities Services and Facilities Construction
Amendments of 1950.”
28 See discussion in U.S. Department of Housing and Urban Development, Standards and Criteria for Housing for the
Chronically Mentally Ill in the Section 202/8 Direct Loan Program
, April 1983, pp. 1-3 (hereafter Standards and
Criteria for Housing for the Chronically Mentally Ill
).
29 Conference Report to accompany S. 3084, The Housing and Community Development Amendments of 1978, 95th
Cong., 2nd sess., H.Rept. 95-1792.
30 Standards and Criteria for Housing for the Chronically Mentally Ill, p. 2.
31 See U.S. Department of Housing and Urban Development, “Section 202 Loans for Housing for the Elderly or
Handicapped; Announcement of Fund Availability, FY1982,” Federal Register, vol. 47, no. 76, April 20, 1982, pp.
16892-16894.
32 Housing provided for persons with disabilities through the Section 202 program is sometimes referred to as “Section
202(h)” housing, referring to the subparagraph that was added to the Section 202 statute by P.L. 95-557.
33 See Senate Committee on Banking, Housing, and Urban Affairs, S.Rept. 95-871, Senate report to accompany S.
3084, the Housing and Community Development Act of 1977, 95th Cong., 2nd sess., May 15, 1978. The Senate bill
became the Housing and Community Development Amendments of 1978 (P.L. 95-557).
34 Housing for the Elderly and Handicapped, pp. 16-17.
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the Section 202 program was the additional cost of making units accessible, putting project
sponsors at a disadvantage in applying for funds.35 The set-aside was meant to address this issue.
In addition, P.L. 95-557 specified that non-profit sponsors of Section 202 housing were expected
to develop innovative ways of providing housing for persons with disabilities, including group
homes and independent living complexes integrated into the surrounding community, together
with supportive services tailored to resident needs.36 After enactment of the Housing and
Community Development Amendments of 1978 with its set-aside for housing for persons with
disabilities, the number of developments built specifically for these households (versus elderly
households) increased.37 HUD estimates that by the end of the 1980s, approximately 10% of units
funded through the Section 202 program were in facilities designed for persons with disabilities.38
Nearly ten years after enactment of the Housing and Community Development Amendments,
another law made changes to the way in which persons with disabilities were served under the
Section 202 program. The Housing and Community Development Act of 1987 (P.L. 100-242)
amended the law to require that 15% of the total amount available for Section 202 loans be set
aside for persons with disabilities rather than the $50 million established in the 1978 Act (P.L. 95-
557). In appropriations acts from FY1988 through FY1991, Congress went beyond the statutory
set aside, however, and required that 25% of Section 202 loan authority be used for housing for
persons with disabilities.39
Another change made by P.L. 100-242 involved rental subsidies for those Section 202 units for
persons with disabilities. Since the enactment of the Housing and Community Development Act
of 1974, Section 202 units for both elderly and disabled residents had been subsidized through the
project-based Section 8 rental assistance program. However, there was a growing
acknowledgment that Section 8 rental assistance was not sufficient to support units for persons
with disabilities because it did not take account of the higher cost of providing housing in smaller
developments such as group homes.40 P.L. 100-242 specified that rental assistance in projects for
persons with disabilities should be provided through a separate subsidy program based on the
“total actual and necessary reasonable costs of developing and operating the project,” not
including, however, the costs of supportive services.41 The FY1989 HUD Appropriations Act
(P.L. 100-404) provided rental assistance funds for housing for persons with disabilities
separately from those for elderly residents. This separate rental assistance was the means of

35 U.S. Department of Housing and Urban Development, FY1980 Budget Justifications, p. K-3.
36 See H.Rept. 95-1161, House Committee on Banking, Finance, and Urban Affairs Report to accompany H.R. 12433,
The Housing and Community Development Amendments of 1978, 95th Cong., 2nd sess. Portions of H.R. 12433 were
inserted in the Senate version of the Housing and Community Development Amendments (S. 3084) which was enacted
as P.L. 95-557.
37 House Committee on Aging, Subcommittee on Housing and Consumer Interests, The 1988 National Survey of
Section 202 Housing for the Elderly and Handicapped
, 101st Cong., 1st sess., December 1, 1989, p. 99.
38 U.S. Department of Housing and Urban Development, Evaluation of Supportive Housing Programs for Persons with
Disabilities
, July 1995, p. 8, http://www.huduser.org/Publications/pdf/suphous1.pdf.
39See H.Rept. 100-498, Conference Report to accompany H.J.Res. 395, a joint resolution making continuing
appropriations for FY1988; P.L. 100-404, the FY1989 HUD Appropriations Act; P.L. 101-144, the FY1990 HUD
Appropriations Act; and P.L. 101-507, the FY1991 HUD Appropriations Act.
40 House Committee on Banking, Finance, and Urban Affairs, H.Rept. 100-122, to accompany H.R. 4, the Housing,
Community Development, and Homeless Prevention Act of 1987, 110th Cong., 1st sess., June 2, 1987.
41 See Section 162 of P.L. 100-242.
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subsidizing Section 202 units for persons with disabilities until the creation of the Section 811
program.42
Creation of the Section 811 Program
The incremental separation of housing for persons with disabilities from housing for elderly
residents that began in 1978 with a set aside in the Section 202 program and continued with
separate rental assistance in 1987 was made permanent in the Cranston-Gonzalez National
Affordable Housing Act of 1990 (P.L. 101-625). Congress completely separated housing for
persons with disabilities from the Section 202 program by creating the Section 811 Supportive
Housing for Persons with Disabilities program.
Not only did P.L. 101-625 separate the housing for persons with disabilities program from the
housing for the elderly program, it also changed the way in which units would be financed under
both the Section 202 and Section 811 programs. Until the enactment of P.L. 101-625, units
created through the Section 202 program had been financed with a combination of loans and
project-based Section 8 rental assistance contracts. P.L. 101-625 instituted a method of financing
in which Section 202 and Section 811 developments would be financed through capital grants
rather than loans. As long as units remain affordable to very low-income residents for at least 40
years, project owners need not repay the capital grants. The law also created a new form of rental
assistance similar to Section 8, called PRAC, or project rental assistance contracts. In addition,
the law instituted a new way of determining development cost limitations for both Section 202
and Section 811 facilities. The new method was to take account of special design features for
persons with disabilities and congregate space for supportive services, among other factors.
The provisions creating the Section 811 program originated in the Senate version of the bill (S.
566) that would become the Cranston-Gonzalez National Affordable Housing Act. The Senate
Banking Committee, in its report regarding the bill, described the reasons behind creating a
program separate from Section 202:
The Committee believes that separation of the programs for elderly and persons with
disabilities would further the goal of developing a program that meets the housing and
related needs of nonelderly persons with disabilities. A separate program would spur the
development of a bureaucracy knowledgeable about and sensitive to the special needs of
tenants with disabilities, needs which can differ from those of many elderly residents. ... A
separate program would also create an institutional voice for housing concerns that are
particular to this constituency.43
The report also stressed the importance of changing the terminology used to refer to persons
served through the Section 811 program, replacing “handicapped persons” with “persons with
disabilities.”44 Community integration was another important goal of the new Section 811
program. In the years leading up to the enactment of P.L. 101-625, group homes and other
facilities dedicated only to those persons with disabilities had been the focus of housing funded

42 The Section 202 units funded with this new rental assistance are sometimes called “Section 202/162 PACs,” referring
to the section of the Housing and Community Development Act of 1987, as well as the new “project assistance
contracts” created by P.L. 100-242.
43 S.Rept. 101-316, Report of the Senate Committee on Banking, Housing, and Urban Affairs, to accompany S. 566, the
National Affordable Housing Act, 101st Cong., 2nd sess., June 8, 1990, p. 148.
44 Ibid.
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Section 811 and Other HUD Housing Programs for Persons with Disabilities

through the Section 202 set aside. Under the Section 811 program, however, the HUD Secretary
was to look to a variety of housing options, including scattered units in multifamily housing
developments, condominiums, and cooperative housing.
Cranston-Gonzalez authorized capital grants for the new Section 811 program at $271 million for
FY1992 and project rental assistance at $246 million. In FY1992, Congress funded the new
Section 811 program by appropriating $103 million for capital grants and $100 million for new
project rental assistance contracts (P.L. 102-139). The Section 811 program was last authorized
from FY2001 through FY2003 at “such sums as necessary” as part of the American
Homeownership and Economic Opportunity Act of 2000 (P.L. 106-569). (For recent Section 811
funding levels, see Table 1 at the end of this section.)
Definition of Person with Disabilities in HUD Housing Programs
Resident eligibility for Section 811 housing is based on both income and disability status. The
population served by the program, according to the statute, are very low-income persons with
disabilities (those with incomes at or below 50% of area median income). Families of persons
with disabilities are included in the definition, so that households composed of one or more
persons, at least one of whom is an adult with a disability, may be served by the program.45 The
way in which the Section 811 program defines “person with disabilities” differs in some ways
from the way HUD defines “person with disabilities” in other programs. This section describes
the definition in the Section 811 program, the Section 8 and Public Housing programs, and the
Section 202 program. For a table comparing the definitions, see Appendix.
The Section 811 Program Definition
Under the Section 811 statute, a person with disabilities is defined as an individual having a
physical, mental, or emotional impairment: (1) that is expected to be of long-continued and
indefinite duration, (2) that substantially impedes his or her ability to live independently, and (3)
is of such a nature that the ability to live independently could be improved by more suitable
housing conditions.46 In addition, under the Section 811 statute, persons with developmental
disabilities as defined under the Developmental Disabilities and Bill of Rights Act (P.L. 106-402)
qualify for Section 811 housing.47
The regulations governing Section 811 elaborate further on the definition of “person with
disabilities.”48 First, the regulation details what it means to be “developmentally disabled”
(described in the section below) and specifies that a person with a “chronic mental illness” that
seriously limits his or her ability to live independently and whose impairment could be improved
by suitable housing meets the Section 811 definition of person with disabilities. The regulation
goes on to state that persons with acquired immunodeficiency virus (HIV), alcoholism, or drug
addiction may be considered disabled if they also have a disability as defined by the Section 811
statute. According to the regulation, “a person whose sole impairment is a diagnosis of HIV

45 42 U.S.C. § 8013(k)(2).
46 Ibid.
47 42 U.S.C. § 15002(8).
48 24 C.F.R. § 891.305.
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Section 811 and Other HUD Housing Programs for Persons with Disabilities

positive or alcoholism or drug addiction (i.e., does not meet the qualifying criteria in [the statute])
will not be eligible for occupancy in a section 811 project.”49
Developmental Disability
According to Section 811 regulations—which mirror the Developmental Disabilities and Bill of
Rights Act—a person has a developmental disability if he or she has a severe, chronic disability
that (1) is attributable to a physical or mental impairment (or combination of physical and mental
impairments); (2) manifests before age 22; (3) is likely to continue indefinitely, and (4) results in
substantial functional limitations in at least three major life activities. Life activities are defined
as
• self care;
• receptive and expressive language;
• learning;
• mobility;
• self direction;
• capacity for independent living; and
• economic self-sufficiency.
A fifth component of the definition is that the developmental disability reflects the need for
individually planned and coordinated care, treatment, or other services for a lifetime or an
extended duration.
The Definition in Other HUD Programs
The definition of the term “person with disabilities” in the Section 811 program differs somewhat
from the definition for both the Section 8 and Public Housing programs, which are defined
together in the same statute and regulation,50 and properties developed under the Section 202 loan
program, which is found in regulation.51
While the Section 8/Public Housing definition of person with disabilities includes the Section 811
statutory definition—a physical, mental, or emotional impairment and developmental
disabilities—it also adds to the definition persons who are considered disabled under Title II of
the Social Security Act.52 Neither the Section 811 statute nor the regulations governing the
program include the Social Security definition of disability. Under the Social Security definition,
a person is considered disabled if he or she is unable to work (“engage in any substantial gainful
activity”) due to a medically determinable physical or mental impairment that is expected to last

49 HUD funds housing specifically for persons living with HIV/AIDS through the Housing Opportunities for Persons
with AIDS (HOPWA) program. For more information about HOPWA, see CRS Report RL34318, Housing for Persons
Living with HIV/AIDS
, by Libby Perl.
50 The definition of person with disabilities for the Section 8 and Public Housing programs is at 42 U.S.C. §
1437a(b)(3) and 24 C.F.R. § 5.403.
51 24 C.F.R. § 891.505.
52 See 42 U.S.C. § 423(d).
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Section 811 and Other HUD Housing Programs for Persons with Disabilities

at least 12 months or to result in death. A person may also be considered disabled under the Social
Security Act definition if he or she is age 55 or older, is blind, and is unable to engage in
substantial gainful activity.53
The statute governing disability under Section 8 and Public Housing further specifies that the
term person with disabilities “shall not exclude” those living with acquired immunodeficiency
syndrome (AIDS) or conditions arising from its etiologic agent. Unlike the Section 811
regulation, the Section 8/Public Housing definition does not exclude persons whose only
diagnosis is that of HIV positive. However, the Section 8/Public Housing regulation is similar to
the Section 811 regulation in stating that an individual shall not be considered a person with
disabilities based solely on drug or alcohol dependence.
The term “handicapped person or individual” for purposes of facilities developed with Section
202 loans54—which contain units for persons with disabilities—is defined in regulation. The
Section 202 program definition is very similar to the Section 811 definition, and differs only in
the way in which it describes a person who is infected with HIV/AIDS. According to the
regulation, those who are infected with HIV, and who are disabled as a result of the infection, are
eligible for housing built through the Section 202 loan program. The type of housing for which
those individuals would be eligible, according to the regulation, depends upon the nature of the
person’s disability—i.e. housing that is designed for persons with physical disabilities,
developmental disabilities, or chronic mental illnesses. Finally, like the law and regulations
governing Section 811, Section 8, and Public Housing, Section 202 regulations make ineligible
any person whose “sole impairment” is alcoholism or drug addiction.
Capital Grants and Project Rental Assistance
Most Section 811 funding is distributed as capital grants and project rental assistance to nonprofit
housing sponsors (the program also funds tenant-based vouchers, described in the next section).
With the capital grants, nonprofit grantees build or rehabilitate housing to be used for persons
with disabilities and their families. HUD distributes the Section 811 capital grants through a two-
step process. First, a formula is used to allocate available funds to the 51 local HUD offices based
on the number of non-institutionalized persons within the jurisdiction of the local office who are
between 16 and 64 years of age and have a disability.55 Each of the 51 jurisdictions is ensured
funding sufficient to support a minimum of ten Section 811 units. HUD then awards Section 811
grants through a competitive process in which nonprofit organizations submit applications, and
awards are limited by the amount allocated to the local office.
Grantees need not pay back the capital grants as long as the property remains affordable to very
low-income tenants with disabilities (those with incomes at or below 50% of area median
income) for at least 40 years.56 The project sponsors also receive rental assistance from HUD to

53 For a more detailed discussion of the Social Security Act definition of “disability” see CRS Report RL32279, Primer
on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)
, by Scott
Szymendera.
54 Non-elderly persons with disabilities do not reside in Section 202 developments funded through capital grants.
55 U.S. Department of Housing and Urban Development, “FY2008 SuperNOFA for HUD’s Discretionary Programs,”
Federal Register, vol. 73, no. 92, May 12, 2008, p. 27320. The NOFA is available on the HUD website with different
pagination at http://www.hud.gov/offices/adm/grants/nofa08/811sec.pdf (hereafter “FY2008 HUD NOFA”).
56 42 U.S.C. § 8013(e)(1).
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make up the difference between the rent paid by residents and the costs of operating the housing
development. In addition, project sponsors must ensure that residents in Section 811 housing
receive appropriate supportive services. As of 2007, HUD reported that a total of 26,656 units had
been built with Section 811 capital grants and were receiving rental assistance.57 This section of
the report describes these components of the Section 811 program.
Eligible Facilities
The Section 811 statute governs the type of housing that may be provided through the program,
but in some cases, the statutory definitions have been further refined through HUD regulation and
policy. The physical design of Section 811 housing may take on several forms:58
Group Home: The Section 811 statute defines a group home as a single-family
residence designed for occupancy by not more than eight individuals with
disabilities. However, HUD’s annual Notice of Funding Availability (NOFA) that
guides applicants for Section 811 funds specifies that no more than six
individuals with disabilities may live in a group home.59 Bedrooms may be single
or double occupancy, but in the latter case, only when requested by the
residents.60 There must be at least one bathroom for every four residents,61 and an
additional bedroom may be provided for a staff person.62 Project sponsors may
not place more than one group home on a single site or on a site adjacent to
another group home.63
Independent Living Facility: According to the Section 811 statute, an
independent living facility has individual dwelling units with separate bedrooms,
kitchens, and baths for each resident, with a maximum occupancy of 24 persons
with disabilities per development (higher numbers may be allowed with approval
from HUD).64 However, the Section 811 NOFA further restricts the maximum
number of persons in an independent living facility to 14 with some exceptions
allowed.65 The independent living units may be located on scattered sites, and a
unit may be provided for a staff person.66
Condominium Projects: Condominium units are similar to independent living
facilities, with separate bedrooms, baths and kitchens for each resident. Standards
for condominium units under the Section 811 program are not provided in statute
or regulation, but are outlined in the annual HUD NOFA. The maximum number

57 U.S. Department of Housing and Urban Development, FY2007 Performance and Accountability Report, November
15, 2007, p. 439, http://www.hud.gov/offices/cfo/reports/2007/2007par.pdf.
58 42 U.S.C. § 8013(c)(1).
59 FY2008 HUD NOFA, p. 27325.
60 Ibid.
61 24 C.F.R. § 891.310.
62 FY2008 HUD NOFA, p. 27325.
63 42 U.S.C. § 8013(k)(1).
64 42 U.S.C. § 8013(k)(4).
65 FY2008 HUD NOFA p. 27325. Project sponsors may request an exception to the project size limitation if they can
show site control.
66 Ibid.
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of units allowed on a site or scattered sites is the greater of 14 units or 10% of
units in a development, not to exceed 24 units.67 Unlike independent living
facilities, a unit may not be used by a staff person.
Project sponsors may choose to serve residents that fall within one of three major disability
categories—physical disability, developmental disability, and chronic mental illness—or any
combination of the three.68 In addition, with HUD approval, project sponsors may further restrict
residency to a subcategory of disability that falls within one of these three categories. For
example, a group house dedicated to individuals with developmental disabilities could choose
specifically to serve those persons with autism (with HUD’s consent). However, if HUD approves
the restriction, a project sponsor cannot deny occupancy to an otherwise qualified applicant who
meets the definition of the broader disability category.69 For example, in the case of a group home
for persons with autism, the owners could not deny a qualified application from a person with
another developmental disability, but could deny a qualified application from a person with a
physical disability. In order to qualify to restrict residency by categories of disability, applicants
for Section 811 funds must explain why it is necessary to restrict residency, and why it is not
possible to serve residents in a more integrated setting.70
Rental Assistance
Nonprofit organizations that are awarded capital grants to build or rehabilitate Section 811
housing facilities also enter into contracts with HUD to receive project rental assistance (referred
to as PRAC). The rental assistance is paid to project sponsors by HUD in order to make up the
difference between the rent paid by tenants and the cost of operating the Section 811 housing
facility.71 Residents in Section 811 housing must be “very low income” (with income at or below
50% of area median income),72 and they pay the higher of 30% of their adjusted income or 10%
of their gross income toward rent.73 The initial term of PRAC contracts is three years, and they
are renewable on an annual basis subject to appropriations.
Supportive Services
Housing developed through Section 811 capital grants must be supportive housing, that is, owners
must make supportive services available to residents to help them live independently. Supportive
housing is a model used to assist a variety of populations for whom it might be difficult to
maintain housing, not just persons with disabilities. These groups include elderly residents,
families with young children whose parents are making the transition to work, formerly homeless
individuals, and those living with HIV/AIDS. Services are to be tailored to the individual needs
of residents and so depend upon the population being served. Specifically, the Section 811 statute
requires property owners to ensure the availability of supportive services to address the health

67 Ibid., pp. 27325-27326.
68 Ibid., p. 27319.
69 Ibid.
70 Ibid., p. 27332.
71 42 U.S.C. § 8013(d)(2).
72 42 U.S.C. § 8013(d).
73 42 U.S.C. § 8013(d)(3).
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(including mental health), and other individual needs of residents.74 However, Section 811 funds
cannot themselves be used to fund supportive services for residents.75 Owners may provide
supportive services directly to residents, or may coordinate the availability of services through
outside agencies or service providers. Services may include assistance with activities of daily
living; counseling for mental health issues, drug, or alcohol addictions; case management; and
employment assistance.
When organizations apply to HUD for Section 811 capital grants, they must submit a supportive
services plan that has been certified by the appropriate state or local agency responsible for
overseeing services to persons with disabilities as being well-designed to serve the needs of the
prospective residents.76 The supportive services plans must include the following information
(among other requirements): (1) a detailed description of the service needs of the population that
will be served; (2) a list of community service providers that will provide services, and letters of
intent from those providers; (3) the experience of the proposed service providers; (4) a description
of how state and local agencies will be involved in the project; and (5) the applicant’s
commitment to provide services for residents.77 While project sponsors are required to ensure that
supportive services are available, they cannot require residents to accept them.
Tenant-Based Vouchers
Tenant-based rental assistance allows individuals and families to find rental housing on the
private market rather than in specific housing developments. The rental assistance goes with the
tenant rather than being tied to a specific housing unit. Rental assistance is provided in the form
of a voucher, through which HUD pays a portion of a tenant’s rent to landlords who are willing to
accept the voucher (federal law does not require landlords to accept vouchers). The Section 8
voucher program is the primary way in which HUD provides tenant-based rental assistance,
although tenant-based assistance is available through other programs, including Section 811.78 In
both programs, tenants with vouchers pay between 30% and 40% of their income toward rent and
HUD pays the difference between the family’s contribution and the rent for the unit, subject to
certain limits.
This section of the report describes Section 811 vouchers for persons with disabilities; Section 8
vouchers for persons with disabilities are described later in the report. (For more information
about the Section 8 program, see CRS Report RL32284, An Overview of the Section 8 Housing
Programs
, by Maggie McCarty).
Section 811 Mainstream Vouchers
The Housing and Community Development Act of 1992 (P.L. 102-550) made tenant-based rental
assistance part of the Section 811 program by authorizing the use of vouchers for eligible

74 42 U.S.C. § 8013(k)(3).
75 FY2008 HUD NOFA, p. 27334.
76 Ibid.
77 FY2008 HUD NOFA, pp. 27332-27333.
78 For example, HUD’s Shelter Plus Care and Supportive Housing Programs make tenant-based rental assistance
available for homeless individuals. For more information about these programs see CRS Report RL33764, The HUD
Homeless Assistance Grants: Distribution of Funds
, by Libby Perl.
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households.79 The vouchers, sometimes referred to as “mainstream vouchers,” are administered
using the same rules that govern the Section 8 voucher program. Unlike Section 8 vouchers,
however, these vouchers are funded through the Section 811 account for initial five-year terms
(Section 8 vouchers are funded on an annual basis). The first year in which Congress set aside
funding for mainstream vouchers was FY1997. The HUD Appropriations Act for that year (P.L.
104-204) specified that HUD could use up to 25% of the amount appropriated for the Section 811
program for five-year vouchers.
In the first two years that the Section 811 vouchers were distributed, only public housing
authorities (PHAs) could administer the vouchers, but beginning in FY1999, private nonprofit
organizations were eligible to apply to administer them.80 HUD makes vouchers available through
an annual Notice of Funding Availability (NOFA) process through which PHAs and private
nonprofit organizations interested in administering the vouchers apply to HUD. Applicants are
scored based on a number of factors, which include the number of persons with disabilities at or
below poverty in the area to be served by the applicant as well as the existence of agreements
with organizations that will provide supportive services to voucher holders.81 Since 2005, HUD
has required voucher administrators (PHAs and private nonprofit organizations) to help persons
with disabilities who have Section 811 vouchers to obtain supportive services if they request
them, as well as to provide technical assistance to landlords in making reasonable
accommodations or reasonable modifications.82
The NOFAs issued by HUD in FY1997-FY1999 specified that the Section 811 vouchers should
remain available to disabled families during the initial funding term of the voucher (five years),
but were silent on who could use the voucher if the original family left the program (either
voluntarily or due to eviction or other non-voluntary reason) after the initial funding period was
over. Advocates for persons with disabilities have pointed out that these vouchers may have been
provided to non-disabled households after the original tenant left the program.83 However, in
annual appropriations acts since FY2005, Congress has required that Section 811 vouchers be
made available to disabled families upon turnover.84 Further, in 2004, HUD began to require that
PHAs track the disability status of families using Section 811 vouchers and provide the records to
HUD.85 Prior to 2004, HUD did not collect this information. As of 2007, HUD reported that a
total of 14,836 Section 811 vouchers were funded through the Section 811 account.86

79 42 U.S.C. § 8103(d)(4).
80 U.S. Department of Housing and Urban Development, “Mainstream Housing Opportunities for Persons with
Disabilities FY1999 Funding Availability,” Federal Register, vol. 64, no. 44, March 8, 1999, p. 11303.
81 For more information on criteria used to select applicants, see, for example, U.S. Department of Housing and Urban
Development, “Notice of Funding Availability for FY2005 Mainstream Housing Opportunities for Persons with
Disabilities Program,” Federal Register, vol. 70, no. 211, November 2, 2005, pp. 66730-66732.
82 See Department of Housing and Urban Development Notice PIH-2005-5, “New Freedom Initiative, Executive Order
13217: ‘Community-Based Alternatives for Individuals with Disabilities,’ and the Housing Choice Voucher Program,”
February 1, 2005, http://www.hud.gov/offices/adm/hudclips/notices/pih/files/05-5PIHN.doc (hereafter, “HUD Notice
PIH-2005-5”). PIH-2005-5 was extended indefinitely by PIH Letter L-2007-01, http://www.hud.gov/offices/adm/
hudclips/letters/07-1PIHL.doc.
83 See, for example, the Consortium for Citizens with Disabilities, Letter to Josh B. Bolton, Director of the Office of
Management and Budget, January 14, 2005. “[T]he CCD Housing Task Force believes there is a high likelihood that at
least some of these precious 811 tenant based funds are being used to support non-disabled households.”
84 The first appropriations act to have this requirement was the FY2005 Consolidated Appropriations Act, P.L. 108-
447.
85 In a notice dated August 5, 2004, HUD noted that mainstream vouchers would be tracked in its data set. See Notice
(continued...)
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Table 1. Section 811 Funding Levels, FY2003 to FY2009
(dollars in thousands)
Fiscal Year
Section 811 Capital
Section 811
Total for
Grants and PRACa
Vouchersb
Section 811c
2003 166,787
81,851
248,886
2004 173,721
74,904
249,092
2005 149,455
88,179
238,080
2006 152,603
78,269
231,268
2007 158,697
77,517
236,610
2008 161,655
74,745
237,000
2009 —d 87,000
250,000
Source: Department of Housing and Urban Development Budget Justifications FY2005 through FY2009 and the
FY2009 Omnibus Appropriations Act, P.L. 111-8.
a. PRAC refers to “project-based rental assistance contracts.” Amounts for PRAC include renewals of existing
contracts as well as rental assistance for new units.
b. Amounts for Section 811 vouchers include funds to renew existing vouchers.
c. The total may be slightly greater than the sum of funds allocated for capital grants, PRAC, and vouchers due
to funds appropriated for the working capital fund that are included in the total.
d. P.L. 111-8 did not specify a funding level for capital grants and PRAC.
Other HUD Housing Designated for
Persons with Disabilities

While the Section 811 program is dedicated solely to persons with disabilities, HUD also funds
housing for persons with disabilities through programs that serve all tenant populations, but that
also give project owners the ability to designate buildings to special populations, including
elderly persons and persons with disabilities.87 In addition to housing historically provided
through the Section 202 program (described in the “Evolution of Section 811” section of this
report), property owners that participate in the project-based Section 8 rental assistance program
and Public Housing Authorities (PHAs) that administer the Public Housing program may choose
to designate buildings specifically for elderly residents and residents with disabilities together
(sometimes referred to as “mixed population” developments) or for residents with disabilities
alone. In addition, the Section 8 voucher program sets aside housing vouchers specifically for
persons with disabilities.

(...continued)
PIH-2004-13, “Codes for Special Programs Reported on the Family Report,” available at http://www.hud.gov/offices/
adm/hudclips/notices/pih/files/04-13PIHN.doc.
86 HUD FY2007 Performance and Accountability Report, p. 439.
87 Tenants with disabilities may also live in assisted housing units that are not specifically designated for their use.
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Public Housing
Public housing is the original federally assisted housing program for low-income families, created
as part of the Housing Act of 1937 (P.L. 75-412). The program provides housing for very low-
income households (those with incomes at or below 50% of area median income) and requires
tenants to pay 30% of their income toward rent. The Housing Act of 1956 (P.L. 84-1020)
authorized the Public Housing Administration (a predecessor to HUD) to provide units
specifically for low-income elderly individuals.88 The first elderly-only public housing
development was built by 1960.89 Beginning in 1961, the HUD definition of “elderly family” was
amended to include individuals with disabilities of any age.90 Since then, persons with disabilities
have lived in public housing facilities designated for elderly residents (defined as households
where one or more person is age 62 or older).
Public housing developments designated for elderly residents, and where a mixed population of
elderly residents and residents with disabilities live together, have been controversial. During the
early years of public housing for elderly persons, disabled residents made up only a small
proportion of residents. The number of residents with disabilities living in public housing for the
elderly began to increase in the 1980s and early 1990s for at least two reasons. First, individuals
with mental illnesses were less likely to be institutionalized as a result of the availability of
outpatient mental health care, and were therefore in need of affordable housing.91 A second factor
was passage of the 1988 Fair Housing Act Amendments (P.L. 100-430). The amendments added
persons with a “handicap” to the class of individuals protected from discrimination in the
provision of housing. The definition of “handicap” included individuals with alcohol and drug
addictions.92 Following these changes, Public Housing experienced an increase in the number of
younger residents with disabilities, often with mental illnesses and addictions. Along with the
increase, Public Housing Authorities reported a greater number of incidents of disruptive
behavior, and some elderly residents reported feeling unsafe.93
Due to tension between elderly residents and residents with disabilities, in the Housing and
Community Development Act of 1992 (P.L. 102-550) Congress allowed PHAs to designate
buildings as elderly only, disabled only, or as mixed population facilities.94 In 1996, The Public
Housing Opportunity Extension Act of 1996 (P.L. 104-120) streamlined the process for
designating public housing projects. If a PHA wants to change the composition of a building to
elderly residents only or to residents with disabilities, it must submit a plan to HUD to ask for

88 Prior to this, HUD’s definition of elderly families did not include single individuals.
89 Frances Merchant Carp, A Future for the Aged, Victoria Plaza and Its Residents (Austin: University of Texas Press,
1966).
90 The Housing Act of 1961 (P.L. 87-70) made all households in which an adult member has a disability eligible for
public housing. Prior to this, in the Housing Act of 1959 (P.L. 86-372), near-elderly households with an adult member
with a disability were made eligible. Near-elderly households are those with an adult member age 50 and older.
91 See General Accounting Office (now the Government Accountability Office), Housing Persons with Mental
Disabilities with the Elderly
, GAO/RCED-92-81, August 1992, pp. 10-11, http://archive.gao.gov/d33t10/147294.pdf.
92According to the House Judiciary Committee Report accompanying H.R. 1158, the Fair Housing Act Amendments of
1988, enacted as P.L. 100-430, the bill used the same definitions and concepts from the Rehabilitation Act of 1973
(P.L. 93-112), which included drug addiction and alcoholism as physical or mental impairments (see 28 CFR §41.31).
However, under P.L. 100-430, handicap does not include “current, illegal use of or addiction to a controlled substance.”
93 Housing Persons with Mental Disabilities with the Elderly, p. 17. See, also, remarks of Representative Peter Blute,
Congressional Record, daily edition, vol. 142 (February 27, 1996), p. H1274.
94 The provisions are codified at 42 U.S.C. § 1437e; the regulations are at 24 CFR §§ 945.101-945.303.
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approval. If the plan is approved, PHAs cannot evict non-eligible residents. For example, if a
PHA designates a building with a mix of elderly residents and residents with disabilities as
elderly only, tenants with disabilities may not be evicted. If tenants want to move, however, PHAs
may help them relocate. According to HUD data, of the 180 Public Housing projects that are
designated for elderly tenants, tenants with disabilities, or both populations together, 25 projects
set aside units for tenants with disabilities.95
Project-Based Section 8 Rental Assistance
Between 1974 and 1983, the Section 8 new construction and substantial rehabilitation program
made rental assistance available to developers that were creating new and rehabilitated rental
housing for low-income families.96 From the inception of the program, owners were able to
develop properties designated for use by elderly residents together with tenants with disabilities.
The Housing and Community Development Act of 1992 (P.L. 102-550) gave owners of properties
designed primarily for occupancy by mixed populations—elderly families together with tenants
with disabilities—the ability to establish a preference for elderly families when selecting
tenants.97 However, unlike Public Housing, most Section 8 properties may not completely exclude
residents with disabilities. The statute requires owners that choose to create a preference for
elderly residents to continue to reserve some units for households where an adult member has a
disability and where the household is not considered elderly or near elderly (defined as at least 50
years old but below the age of 98). Specifically, owners are required to set aside the lower of the
number of units occupied by disabled families in 99 or 10% of units. If owners are unable to rent
the units reserved for elderly residents to eligible families, they may give a preference to near
elderly families with an adult member who has a disability.100 If owners are unable to rent units
designated for non-elderly and non-near elderly persons with disabilities, they may rent them to
near elderly persons with disabilities.
Section 8 Vouchers for Persons with Disabilities
In addition to housing vouchers made available through the Section 811 program (described
earlier in this report), HUD has set aside Section 8 vouchers for families with an adult member
who has a disability. The voucher portion of the Section 8 program was created in 1983 as part of
the Supplemental Appropriations Act of 1984 (P.L. 98-181). Unlike project-based Section 8 rental
assistance, which is tied to specific rental units, tenants may use Section 8 vouchers to rent any
eligible housing unit. To be eligible, a unit must meet minimum housing quality standards and a
family’s portion of the rent cannot exceed 40% of their income.101 In addition, a landlord must
agree to accept the voucher.102

95 HUD Designated Housing Status Report, http://www.hud.gov/offices/pih/programs/ph/dhp/designated.cfm.
96 The new construction and substantial rehabilitation program was created in P.L. 93-383; authority to enter into new
contracts was suspended in P.L. 98-181. For more information on Section 8 housing, see CRS Report RL32284, An
Overview of the Section 8 Housing Programs
, by Maggie McCarty.
97 The provisions are codified at 42 U.S.C. §§ 13611-13620.
98 42 U.S.C. § 1437a(b)(3).
99 Specifically, the statute refers to the higher of the number of units occupied by individuals or families with
disabilities on either October 28, 1992 or January 1, 1992. 42 U.S.C. § 13612(b).
100 42 U.S.C. § 13613.
101 This 40% cap on a tenant’s contribution is in effect only for the first year. After the first year, if rent increases and
(continued...)
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Congress appropriated funds for Section 8 vouchers for persons with disabilities, sometimes
referred to as “designated housing vouchers,” in response to enactment of the Housing and
Community Development Act of 1992 (P.L. 102-550). As discussed earlier, provisions in P.L.
102-550 permitted owners of Public Housing and project-based Section 8 developments where
elderly residents and residents with disabilities lived together to either designate buildings as
elderly only or to prioritize elderly tenants.103 Section 8 owners were given the authority to create
a preference for elderly families in these designated buildings, though they could not exclude
disabled families altogether. PHAs were given the authority to designate entire buildings as
elderly only. Although PHAs cannot evict tenants with disabilities if a building is designated as
elderly only, with attrition, eventually a building may have only elderly residents. These policy
changes affected the ability of tenants with disabilities to live in these facilities.
From FY1997 through FY2002, Congress appropriated funds for Section 8 vouchers in order to
assist tenants with disabilities who would have been eligible to reside in those Section 8 and
Public Housing developments prior to their designation as elderly only or elderly preference.
PHAs applied for these designated housing vouchers, which they then provided to eligible
tenants. In FY2008, for the first time since FY2002, Congress appropriated additional funds for
designated housing vouchers.104 The FY2008 Consolidated Appropriations Act (P.L. 110-161)
provided $30 million for Section 8 vouchers for tenants with disabilities affected by the
designation or restriction of tenant populations to elderly only.
Unlike Section 811 mainstream vouchers, Section 8 designated housing vouchers for persons with
disabilities shall remain available to other disabled households upon turnover “to the extent
practicable
[emphasis added].”105 (Section 811 vouchers must be made available only to families
where an adult member has a disability.) HUD defines the term “to the extent practicable” to
mean that before a voucher can be provided to a non-disabled household, every eligible non-
elderly disabled family on a PHA’s waiting list must have received a voucher, and that outreach
must not have resulted in finding an eligible family.106 As with Section 811 vouchers, PHAs must
assist tenants who request help in finding supportive services, and provide technical assistance to
landlords in providing reasonable accommodations and modifications.

(...continued)
the family wishes to continue to live in the unit, then the family can choose to contribute more than 40% of its income
toward rent.
102 For more information about the Section 8 program, see CRS Report RL32284, An Overview of the Section 8
Housing Programs
, by Maggie McCarty.
103 See Title VI, Subtitle B of P.L. 102-550 for Public Housing and Title VI, Subtitle D for Section 8. The law also gave
authority to owners of Section 202, Section 221(d)(3), and Section 236 properties to continue to restrict occupancy to
elderly families according to the rules in place at the time the projects were developed (see Section 658).
104 Amounts appropriated from FY1997 through FY2002 were $50 million in FY1997 (P.L. 104-204) and $40 million
in each of FY1998 (P.L. 105-65), FY1999 (P.L. 105-276), FY2000 (P.L. 106-74), FY2001 (P.L. 106-377), and FY2002
(P.L. 107-73).
105 The phrase “to the extent practicable” appeared in appropriations laws beginning in FY2003 (P.L. 108-7) through
FY2006 (P.L. 109-115). The FY2007 House-passed HUD appropriations bill (H.R. 5576) also contained this phrase,
but a year-long continuing resolution was enacted in lieu of separate appropriations laws. The FY2008 HUD
Appropriations Act did not contain this phrase.
106 HUD Notice PIH-2005-5.
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Housing Financed by Low-Income Housing Tax
Credits and HUD Block Grants

Beginning in the 1980s, the federal government took a less direct role in the development of
affordable housing. At the same time, the production and rehabilitation of housing at the state and
local level began to increase.107 This occurred, in part, due to the enactment of the Low-Income
Housing Tax Credit (LIHTC) and the HOME Investment Partnerships program. These programs
distribute funds to states and localities for the production of affordable housing. States and
localities may, in turn, decide to target a portion of the funds from these programs to develop
affordable housing for persons with disabilities. This section of the report describes the LIHTC
and the HOME program, as well as the Community Development Block Grant (CDBG), a
program created in 1974 to assist states and localities with economic development, including
housing activities that benefit low- and moderate-income households.
The Low-Income Housing Tax Credit
The Low-Income Housing Tax Credit (LIHTC) was enacted as part of the Tax Reform Act of
1986 (P.L. 99-514). The program provides incentives for the development of affordable rental
housing through federal tax credits administered by the Internal Revenue Service (IRS). The IRS
allocates tax credits to states based on population, and states award the credits to developers to
use as a source of financing for the development of affordable rental housing.108
The states, generally through their state housing finance agencies (HFAs), award the tax credits to
housing developers through a competitive process that is based on state priorities as set out
annually in their Qualified Allocation Plan (QAP). Developers may either retain the credits
themselves or sell them in exchange for equity to fund a housing development. Developers of
LIHTC-financed housing must ensure that at least 40% of the units are affordable to households
with incomes at or below 60% of the area median income, or that at least 20% of units are
affordable to households with incomes at or below 50% of the area median income.109 The
projects must remain affordable for at least 15 years, although there are incentives in place to
encourage developers to maintain affordability for 30 years. Rent charged for the rent-restricted
units in a development may not exceed 30% of an imputed income limitation—calculated based
on area median incomes.
In their Qualified Allocation Plans, states set forth the criteria they will use in selecting projects to
receive the tax credits.110 By statute, states must prioritize LIHTC projects that serve the lowest
income tenants for the longest period of time in their QAPs. In addition, the LIHTC statute
requires states to consider certain criteria in determining how they will set housing priorities in
the QAP. One of the ten criteria that states must consider is tenant populations with special

107 For more background on the evolution of federal housing assistance policy, see CRS Report RL34591, Overview of
Federal Housing Assistance Programs and Policy
, by Maggie McCarty et al.
108 For more information on the LIHTC, see CRS Report RS22389, An Introduction to the Design of the Low-Income
Housing Tax Credit
, by Mark P. Keightley.
109 26 U.S.C. § 42(g).
110 26 U.S.C. § 42(m)(1)(B).
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needs.111 Tenant populations with special needs may include persons with disabilities (others with
special needs include individuals and families who are homeless, elderly individuals, or other
populations in need of housing with supportive services).112
States may choose to make housing units for populations with special needs one of the priorities
in the competition for tax credits in a number of ways.113 These methods include:
• requiring developers to set aside a portion of units for special needs
populations—for example, North Carolina requires that the greater of five units
or 10% of units in each tax credit development be devoted to persons with
disabilities or those who are homeless;114
• setting aside a certain dollar value or percentage of available tax credits for a
specified population—for example, Illinois sets aside $2 million of the total
available tax credits for developments where at least 50% of units serve persons
with special needs;115
• developing a scoring system in the competition for tax credits that awards
additional points for proposals that take account of certain special needs
populations—for example, New Mexico awards 15 points in the tax credit
competition to developers that propose to build housing in which at least 25% of
units are dedicated to persons with special needs.116
The HOME Investment Partnerships Program
The HOME Investment Partnerships program (referred to as the HOME program) is a block grant
to states and local jurisdictions—referred to as “participating jurisdictions”—distributed via a
formula for the purpose of developing both affordable rental housing and affordable housing for
homeowners.117 The factors used to distribute HOME funds to eligible states and jurisdictions
include population, the number of rental units occupied by households in poverty, housing
overcrowding, the number of units with incomplete kitchens or plumbing, and the age of
housing.118 HOME funds can be used to build or rehabilitate housing, to provide tenant-based
rental assistance, and to provide assistance to homeowners and homebuyers. Assistance must go

111 Until enactment of P.L. 110-289, the Housing and Economic Recovery Act of 2008, the LIHTC statute contained
eight selection criteria. P.L. 110-289 added two more. See 26 U.S.C. §42(m)(1)(C).
112 See Joseph Guggenheim, Tax Credits for Low Income Housing (Glen Echo, MD: Simon Publications, 1996) p. 33.
113 For more information about how state QAPs promote housing for populations with special needs, see James Tassos,
Housing Credit Policies in 2007 That Promote Supportive Housing, The Corporation for Supportive Housing and
Enterprise Community Partners, http://www.practitionerresources.org/cache/documents/657/65721.pdf. The report was
updated with an addendum for 2008. That report is available at http://documents.csh.org/documents/pubs/
QAPStudy2008Update.pdf.
114 Housing Credit Policies in 2007 That Promote Supportive Housing, p. 9.
115 Ibid., p. 10.
116 Ibid., p. 13.
117 The HOME program is codified at 42 U.S.C. §§ 12741-12756. For more information about HOME, see CRS Report
R40118, An Overview of the HOME Investment Partnerships Program, by Katie Jones.
118 24 C.F.R. § 92.50(c). In general, in order to be considered a “participating jurisdiction” eligible for HOME funds, a
locality must qualify for at least $750,000 under the HOME formula. 42 U.S.C. § 12746. All states receive allocations
under the HOME formula. 42 U.S.C. § 12747(b)(2).
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to low-income households (at least 90% of funds must assist those with incomes at or below 60%
of area median income), and any housing provided must be affordable.
Like funds provided to states through the LIHTC, states and localities that receive HOME funds
have discretion in choosing the populations they wish to serve. Also like the LIHTC, jurisdictions
that receive HOME funds develop a plan regarding how they will distribute funds. This is done
through HUD’s Consolidated Plan process. Jurisdictions applying for funds from four HUD
formula grant programs, including HOME,119 submit a single Consolidated Plan to HUD. The
plan includes an assessment of community needs and a proposal to address those needs, using
both federal funds and community resources. State and local plans must also contain a housing
needs assessment, including the need for housing for persons with disabilities.120 In developing
the plan, states and communities must adopt a citizen participation plan, through which they are
encouraged to consult with citizens with disabilities.121 States are further required to consult with
organizations that provide services (including fair housing services) to persons with disabilities
when preparing their consolidated plan.122
After taking into consideration the needs of persons with disabilities, HOME recipient
jurisdictions may choose to prioritize housing for persons with disabilities as part of their
Consolidated Plans.123 In the tenant-based rental assistance portion of the program, the HOME
regulations specify that recipient jurisdictions may choose to establish a preference for tenants
with special needs, including persons with disabilities.124 Further, recipients of HOME funds may
choose to target tenant-based rental assistance to individuals with a specific disability. In terms of
new or rehabilitated rental housing that may be developed with HOME funds, communities can
choose to develop not only multifamily rental housing and single family homes, but also
transitional housing, single room occupancy projects, and group homes.125 Some jurisdictions
may find that these types of housing developments are well suited for tenants with disabilities.
The Community Development Block Grant Program
The Community Development Block Grant (CDBG) program was enacted as part of the Housing
Act of 1974 (P.L. 93-383) with the purpose of developing viable urban communities by funding
housing, community, and economic development activities that principally benefit low- and
moderate-income households.126 The CDBG program distributes 70% of total funds through
formula grants to entitlement communities—central cities of metropolitan areas, cities with
populations of 50,000 or more, and urban counties—and the remaining 30% goes to states for use
in small, non-entitlement communities.127 The allocation of CDBG funds is determined through a
formula that targets an area’s need for community development using a variety of factors

119 The other three programs are the Community Development Block Grant, Housing Opportunities for Persons with
AIDS, and the Emergency Shelter Grants.
120 24 C.F.R. § 91.205 and § 91.305.
121 24 C.F.R. § 91.105 and § 91.115.
122 24 C.F.R. § 91.110.
123 24 C.F.R. § 91.215 and § 92.209.
124 24 C.F.R. § 92.209(c)(2).
125 24 C.F.R.§ 92.2.
126 42 U.S.C. § 5301(c).
127 42 U.S.C. § 5306.
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including population, poverty, overcrowded housing, age of housing, and the lag in community
growth.128 The CDBG program is subject to the same Consolidated Plan requirements as the
HOME program (described previously) in which the needs of persons with disabilities must be
taken into consideration. In addition, in response to the Bush Administration’s New Freedom
Initiative, HUD issued guidance to assist CDBG recipients with “identifying the needs of persons
with disabilities and targeting CDBG resources to meet those needs during the development of
the jurisdictions’ consolidated plans.”129
While many of the purposes of CDBG funds involve the improvement of neighborhoods, the
creation of public facilities, or the promotion of economic opportunity, funds may also be used to
rehabilitate housing, including making housing accessible for persons with disabilities. CDBG
funds may also be used to make public facilities accessible to persons with disabilities.130 In
addition, communities may use CDBG funds for “public services,” which include such services
as employment counseling. According to HUD, promoting economic opportunities for persons
with disabilities through job training and employment counseling are valid uses of CDBG
funds.131
Issues and Trends
Using Section 811 Funds with Low-Income Housing Tax Credits
Financing affordable housing, including housing for persons with disabilities, may require
multiple streams of funding in order to support the design, construction, and ongoing operating
costs of a project. In addition to federal funds provided through HUD programs, affordable
housing developers may use mortgage revenue bonds, tax credits, and local housing trust fund
resources, among other sources, to develop housing for low-income and special needs
populations. While HUD funds once might have been sufficient on their own to develop an
affordable housing project, that is rarely the case today. This is true for Section 811 developers,
who often must bring together multiple sources of funding to develop a project. In 2000, in order
to help Section 811 (and Section 202) developers bring together multiple financing sources,
Congress enacted a law that makes the interaction of Section 811 funds and the Low-Income
Housing Tax Credits (LIHTCs) more feasible by changing the definition of “private nonprofit
organization” in the Section 811 statute. This change, and its implication for Section 811
developers, is described below.
The value of LIHTCs are determined, in part, based on the cost of developing a property—
referred to as the qualified basis.132 The costs of constructing, acquiring, and rehabilitating a

128 Ibid.
129 HUD Notice CPD-050-03, “Implementing the New Freedom Initiative and Involving Persons with Disabilities in
the Preparation of the Consolidated Plan through Citizen Participation,” June 6, 2005, http://www.hud.gov/offices/adm/
hudclips/notices/cpd/05-3c.doc.
130 42 U.S.C. § 5305(a)(5).
131 HUD Notice CPD-050-03.
132 Specifically, a property’s qualified basis is determined as follows: (1) the cost of constructing, acquiring, or
rehabilitating the property is calculated, (2) this amount is reduced by federal grants received by the developer, and (3)
the resulting value is then multiplied by the percentage of space in the housing development that is devoted to low-
income use. This percentage is the lower of either the “unit fraction”—the ratio of low-income units to all units in the
(continued...)
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property (among other costs133) are included in calculating the qualified basis, but the amount
must then be reduced by any federal grants received by the developer, which in turn reduces the
value of the tax credits. Therefore, if a nonprofit developer were to receive a Section 811 capital
grant, its value would be subtracted in calculating the qualified basis which could result in
minimal LIHTCs. The Homeownership and Economic Opportunity Act (P.L. 106-569), enacted in
2000, allowed for-profit limited partnerships, where a nonprofit organization is the sole general
partner, to be eligible Section 811 owners. The changed law allows a nonprofit Section 811
grantee to loan the Section 811 capital grant to the limited partnership. Under this arrangement,
the Section 811 funds are no longer a “federal grant” to be subtracted in calculating the qualified
basis, potentially increasing the value of LIHTCs.
The change in the law to allow for-profit limited partnerships to own Section 811 housing
developments has not immediately made mixed financing arrangements common, however. The
transactions are complicated and may require extensive expertise in housing finance to make
them work. HUD acknowledges that “most developers seek to avoid the use of federal grant
financing in most LIHTC projects.”134 In addition, the treatment of Section 811 PRAC in tax
credit transactions has been unclear. Although the IRS has created exceptions to the rule that
federal grants do not count toward the qualified basis of a property for certain categories of rental
assistance, Section 811 PRAC has not been among the exceptions. The programs that have been
exempted from the requirement include Section 8 project-based rental assistance payments and
public housing capital and operating funds,135 the Native American Housing Block Grant
Program,136 Rent Supplement and Rental Assistance Payments programs,137 and the Shelter Plus
Care and Single Room Occupancy programs.138 Despite language in the Homeownership and
Economic Opportunity Act of 2000 indicating that Congress intended Section 811 (and Section
202) assistance to be included in calculating qualified basis (rather than subtracted from it), the
IRS has not issued a ruling that would be necessary to make this possible.139
Another possible limitation in developing mixed finance projects using federal grants such as
Section 811 together with the LIHTC was removed with passage of the Housing and Economic
Recovery Act of 2008 (P.L. 110-289). Under LIHTC law, developers may qualify for tax credits

(...continued)
building—or the “floor space fraction”—the ratio of square footage in low-income units to total square footage. 26
U.S.C. § 42(c). The qualified basis is then multiplied by the value of the tax credits—these are roughly either 9% or
4%—to determine the total annual value of the tax credits.
133 In addition to the costs of materials, construction, and/or rehabilitation, among the costs included in determining
qualified basis are: contractor fees, developer fees, engineering fees and the cost of drawing up architectural
specifications. Among the costs that are not included are the cost of land and fees associated with long-term financing.
See Joseph Guggenheim, Tax Credits for Low Income Housing (Glen Echo, MD: Simon Publications, 1996) p. 37.
134 See HUD website, “Calculating the Qualified Basis,” http://www.hud.gov/offices/cpd/affordablehousing/training/
web/lihtc/calculating/qualifiedbasis.cfm.
135 26 C.F.R. § 1.42-16.
136 Rev. Rul. 2008-6.
137 Rev. Rul. 2002-65.
138 Rev. Rul. 98-49.
139 P.L. 106-569 amended the Section 811 statute to state that “[n]otwithstanding any other provision of law, assistance
amounts provided under this section may be treated as amounts not derived from a Federal grant.” See Section 842. On
September 17, 2003, the IRS issued a letter stating that it was reviewing the applicability of the LIHTC section of
federal grants to PRAC under the Section 202 program. The letter is available at http://www.irs.gov/pub/irs-wd/04-
0061.pdf.
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worth roughly 9% or 4%.140 Under previous LIHTC law, the higher 9% credit was available for
new construction that was not federally subsidized, while the 4% credit was available for either
federally subsidized new construction or existing buildings. The statutory definition of “federally
subsidized” included below market federal loans (the structure used by limited partnerships to
loan Section 811 capital grants).141 The fact that developers of federally subsidized buildings did
not qualify for the higher tax credit made financing projects with the LIHTC less lucrative.
Developers either had to accept the lower, 4% credit, or to set up a system through which federal
grants were loaned to the project at a market rate of interest.142
However, P.L. 110-289 removed the phrase “below market federal loans” from the definition of
federal subsidy in the LIHTC statute. This makes all federally subsidized new construction placed
in service after the effective date of P.L. 110-289 eligible for 9% tax credits. The 9% credits are
very competitive,143 however, and it may still be difficult for Section 811 developers to obtain
them.
Housing Need for Persons with Disabilities
According to both advocates for persons with disabilities and HUD, persons with disabilities have
a need for affordable housing. Since 1991, HUD has regularly released reports (ten to date) on the
worst case needs for affordable housing in the United States.144 HUD defines households with
worst case housing needs as very low-income renter households (those households with incomes
at or below 50% of area median income) that do not receive rental assistance and either (1) pay
more than half their income toward rent, or (2) live in severely substandard housing.145
Substandard housing is measured using the American Housing Survey definition of housing with
severe physical problems. These are varying degrees of problems with plumbing, heating,
electrical wiring, and upkeep of the physical unit or public areas.146 Using data from the 2005
American Housing Survey, in its most recent report—Affordable Housing Needs 2005—HUD
found that 5.99 million households had worst case housing needs, a statistically significant
increase of 16% over the 5.18 million households that had worst case needs in 2003.147 This
represented an increase from 4.89% of all U.S. households to 5.50% of all households.

140 These credit rates are not set exactly at 9% and 4%—they vary depending on the current interest rate used in the
Department of the Treasury credit rate formula. For more information about this issue, see CRS Report RS22917, The
Low-Income Housing Tax Credit Program: The Fixed Subsidy and Variable Rate
, by Mark P. Keightley.
141 The statute also specifically exempted funds received under CDBG, HOME, and Native American Housing and Self
Determination Act programs from the definition of federally subsidized, so those projects have been eligible for the 9%
credit all along.
142 See U.S. Department of Housing and Urban Development, “Mixed Finance Development for Supportive Housing
for the Elderly or Persons with Disabilities: Final Rule,” Federal Register vol. 70, no. 176, September 13, 2005, p.
54202.
143 See, for example, Liz Enochs, “Affordable Housing Equity: Developers Share Tips for Converting Projects That
Fail to Win 9% LIHTCs into 4% Deals,” Affordable Housing Finance, July 2007, http://www.housingfinance.com/ahf/
articles/2007/jul/AFFORDABLE0707.htm.
144 For the most recent report see U.S. Department of Housing and Urban Development, Affordable Housing Needs
2005
, May 2007, http://www.huduser.org/Publications/pdf/AffHsgNeeds.pdf (hereafter Affordable Housing Needs
2005
).
145 HUD developed the definition using preference rules for admission to assisted housing. See Affordable Housing
Needs 2005
, p. 7.
146 For more information see Affordable Housing Needs 2005, pp. 85-86.
147 Ibid., p. 13.
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The Affordable Housing Needs 2005 report also included an estimate of the number of persons
with disabilities who have worst case housing needs. Because disability status is not reported in
the American Housing Survey, HUD used three sources of income as proxies to estimate
households where a non-elderly adult member has a disability. These three proxies were: (1)
Social Security and Railroad Retirement Benefits, (2) Supplemental Security Income (SSI), and
(3) public assistance such as welfare. Using these three income sources as proxies, HUD
estimated that there were 542,000 households with a non-elderly adult member with a disability
that had worst case housing needs.148 These estimates did not include households with children.
Less than a year after releasing the Affordable Housing Needs 2005 report, however, HUD
released a supplement in which it revised the estimate of households with a non-elderly adult who
has a disability and that has worst case housing needs.149 The supplement used an additional
income proxy to arrive at an increased number of persons with disabilities with worst case
housing needs over the number that had been estimated in the original report. In addition to
Social Security/Railroad Retirement benefits, SSI, and public assistance, the supplemental report
included cases where respondents to the American Housing Survey reported that they received
Social Security Disability Insurance (SSDI), workers’ compensation, veterans’ disability
payments, or other disability payments.
Using these four income sources as a proxy for disability status, the HUD supplement estimated
the number of households having a non-elderly adult member with a disability in two different
categories: those households with children, and those without children. (The original Affordable
Housing Needs 2005
report did not report the number of households with children and an adult
with a disability.) Of very low-income households without children and an adult with a disability,
HUD reported that 694,000 had worst case housing needs, making up 11.6% of all households
with worst case housing needs (the original estimate in the Affordable Housing Needs 2005 report
was 542,000). Of those very low-income households with children and an adult with a disability,
the supplement estimated that 365,000 had worst case housing needs, making up 6.1% of all
households with worst case housing needs. Nonetheless, HUD noted that even its updated
estimates are an undercount of persons with disabilities who have worst case housing needs.150
This is due to the fact that homeowners, homeless persons, and persons living in institutions are
not part of the worst case needs calculation.
The HUD supplement to its Affordable Housing Needs 2005 report was in part in response to an
analysis commissioned by the Consortium for Citizens with Disabilities (CCD) Housing Task
Force, a coalition of groups that advocates for persons with disabilities.151 The CCD report,
whose author had been an author on previous HUD Affordable Housing Needs reports, like the
HUD supplement, used the fourth income proxy—SSDI, workers’ compensation, veterans’
disability or other disability benefits—for estimating disability status. Unlike the HUD
methodology, however, the CCD report used as an adjustment factor data on persons with
disabilities from two other surveys, the Survey of Income and Program Participation and the

148 Ibid., p. 19.
149 U.S. Department of Housing and Urban Development, Housing Needs of Persons with Disabilities: Supplemental
Findings to the Affordable Housing Needs 2005 Report
, February 2008, http://www.huduser.org/Publications/pdf/
Affhsgneedsdis.pdf (hereafter Supplemental Findings to the Affordable Housing Needs 2005 Report).
150 Ibid., pp. 1-2.
151 Kathryn P. Nelson, The Hidden Housing Crisis: Worst Case Housing Needs Among Adults with Disabilities,
Consortium for Citizens with Disabilities Housing Task Force, March 2008, http://www.tacinc.org/Docs/HH/
HiddenHousingCrisis.pdf.
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National Health Interview Survey. According to the CCD report, these two surveys ask more
questions about disability than the American Housing Survey. Using these adjusted data, the CCD
report estimated that between 1.3 and 1.4 million childless non-elderly adults with disabilities had
worst case housing needs, while between 840,000 and 960,000 households with children and a
non-elderly adult with a disability had worst case housing needs.152
Homeless Persons with Disabilities
Although homelessness in the United States has always existed, it became a more prevalent
phenomenon in the 1970s and 1980s, when the homeless population began to grow and become
more visible to the general public. Explanations for the growth in homelessness include the
demolition of skid rows,153 the decreased availability of affordable housing generally, the reduced
need for seasonal unskilled labor, the reduced likelihood that relatives will accommodate
homeless family members, the decreased value of public benefits, and changed admissions
standards at mental hospitals.154
Early in the current decade, attention was again turned to homeless individuals, this time to those
persons who experience so-called “chronic homelessness,” when President Bush announced an
initiative to end chronic homelessness within ten years. In the late 1990s, researchers identified
chronically homeless individuals as those who have a disability (including those who suffer from
mental illness and/or substance abuse disorders) and who have been homeless for long periods of
time.155 According to HUD, a person is chronically homeless if they have been continuously
homeless for one year or have experienced four episodes of homelessness in the past three
years.156 Estimates of the number of chronically homeless individuals as a percentage of the total
homeless population range from 18% to 27%.157 Rates of mental health problems are estimated to
exist in more than 60% of chronically homeless individuals, and more than 80% of individuals
are estimated to have alcohol or drug problems.158 Medical problems, including HIV/AIDS, are
also prevalent among chronically homeless individuals.159

152 Ibid.
153 Peter H. Rossi, Down and Out in America: The Origins of Homelessness (Chicago: The University of Chicago
Press, 1989), p. 33.
154 Ibid., pp. 181-194, 41. See, also, Martha Burt, Over the Edge: The Growth of Homelessness in the 1980s (New
York: Russell Sage Foundation, 1992), pp. 31-126.
155 See Randall Kuhn and Dennis P. Culhane, “Applying Cluster Analysis to Test a Typology of Homelessness by
Pattern of Shelter Utilization: Results from the Analysis of Administrative Data,” American Journal of Community
Psychology
26, no. 2 (April 1998): 210-212.
156 24 C.F.R. § 91.5.
157 U.S. Department of Housing and Urban Development, The Third Annual Homeless Assessment Report to Congress,
July 2008, p. 16, http://www.hudhre.info/documents/3rdHomelessAssessmentReport.pdf; Carol L. M. Caton, Carol
Wilkins, and Jacquelyn Anderson, People Who Experience Long-Term Homelessness: Characteristics and
Intervention
, 2007 National Symposium on Homelessness Research, September 2007, p. 4-3, http://www.huduser.org/
publications/pdf/p4.pdf (hereafter People Who Experience Long-Term Homelessness: Characteristics and
Intervention
).
158 People Who Experience Long-Term Homelessness: Characteristics and Intervention, p. 4-4.
159 See, for example, D.P. Culhane, E. Gollub, R. Kuhn, and M. Shpaner, “The Co-Occurrence of AIDS and
Homelessness: Results from the Integration of Administrative Databases for AIDS Surveillance, and Public Shelter
Utilization in Philadelphia,” Journal of Epidemiology and Community Health 55, no. 7 (2001): 515-520. Marjorie
Robertson, et al., “HIV Seroprevalence Among Homeless and Marginally Housed Adults in San Francisco,” American
Journal of Public Health
94, no. 7 (2004): 1207-1217. Angela A. Aidala and Gunjeong Lee, Housing Services and
(continued...)
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Communities across the country have addressed chronic homelessness through a strategy called
“housing first,” in which permanent supportive housing is found for homeless individuals prior to
treatment of their illnesses and addictions. HUD makes funds available through its Homeless
Assistance Grants for the construction or rehabilitation of new permanent supportive housing for
chronically homeless individuals.160 In the first four years after the announcement of President
Bush’s initiative to end chronic homelessness, an estimated 37,500 new permanent supportive
housing units were added to the stock of housing available for homeless individuals with
disabilities.161
Section 8 Vouchers and the Money Follows the
Person Demonstration

Money Follows the Person (MFP) is a demonstration program created in 2005 as part of the
Deficit Reduction Act (P.L. 109-171) and administered by the Department of Health and Human
Services (HHS). The purpose of MFP is to give states the flexibility to use Medicaid funds to
transition elderly people and persons with disabilities from institutional settings such as nursing
homes to home- and community-based care. MFP awards were announced in 2007—in January
of that year, 17 states were awarded funds, and in May additional awards were announced for 13
states plus the District of Columbia. 162 As of January 2009, grantee states planned to transition
approximately 34,000 individuals from institutional care to the community.163
In general, MFP funds may be used to pay for services once individuals have transitioned from
institutional care to the community. However, the statute allows grantees to use funds for certain
supplemental services to help an individual make the transition.164 These supplemental services
could include housing-related services such as housing or vehicle modifications to make them
suitable for MFP participants, security and utility deposits, basic furnishings and groceries, and
other housing-related transitional planning activities. 165 Some states are also using MFP funds as
a bridge subsidy to pay for rent until participants qualify for HUD-assisted housing or to
encourage developers to set aside units for MFP participants.166 These supplemental services may
be funded through MFP during the first 12 months of the demonstration.

(...continued)
Housing Stability Among Persons Living with HIV/AIDS, Joseph L. Mailman School of Public Health, May 30, 2000,
http://www.nyhiv.org/pdfs/chain/CHAIN%20Housing%20Stability%2032.pdf.
160 For more information about these grants, see CRS Report RL33764, The HUD Homeless Assistance Grants:
Distribution of Funds
, by Libby Perl.
161 People Who Experience Long-Term Homelessness: Characteristics and Intervention, p. 4-23.
162 U.S. Department of Health and Human Services, Money Follows the Person Award Summary, June 1, 2007,
http://www.cms.hhs.gov/DeficitReductionAct/Downloads/MFP_FactSheet.pdf. Since the award announcement, South
Carolina has withdrawn from the demonstration.
163 Debra J. Lipson and Susan R. Williams, Implications of State Program Features for Attaining MFP Transition
Goals
, The National Evaluation of the MFP Demonstration Grant Program, Reports from the Field, Number 2, June
2009, p. 9, http://www.cms.hhs.gov/DeficitReductionAct/Downloads/MFPfieldrpt2.pdf (hereinafter Implications of
State Program Features for Attaining MFP Transition Goals
).
164 U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, Funding Opportunity
Announcement for Money Follows the Person Rebalancing Demonstration
, July 26, 2006, p. 14,
http://www.cms.hhs.gov/NewFreedomInitiative/downloads/MFP_2007_Announcement.pdf.
165 Ibid., Appendix C.
166 Implications of State Program Features for Attaining MFP Transition Goals, pp. 4-5.
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Despite the availability of supplemental services for housing, one of the difficulties with
transition programs such as MFP is funding permanent housing for those individuals who are
leaving institutions. According to a report regarding MFP, “[t]he ability to find and secure
affordable, accessible housing is a key determinant of successful transition programs—as well as
the most frequently cited barrier.”167 Shortly after MFP was enacted, then-HUD Secretary
Alphonso Jackson issued a letter to Public Housing Authority (PHA) directors encouraging them
to use their resources to work with state Medicaid offices to provide housing options for those
involved with MFP.168
HUD plans to make a portion of the FY2008-funded Section 8 vouchers for persons with
disabilities available to individuals participating in MFP or similar programs. On June 22, 2009,
HUD released a NOFA for these FY2008 vouchers in which it stated that approximately 1,000
vouchers would be available to nonelderly individuals with disabilities who are leaving
institutions and moving into the community.169 In applying for the vouchers, PHAs in those states
with MFP grants would only need to show that the relevant agency is participating in MFP. PHAs
in states that were not awarded MFP grants would still have the option of applying for vouchers.
They would have to contact the state Medicaid office to determine if services similar to those
under MFP would be made available to transitioning individuals and to describe those resources
in their applications.170
Legislation
On July 22, 2009, a bill to amend the Section 811 program, the Frank Melville Supportive
Housing Investment Act of 2009 (H.R. 1675) was passed by the House under suspension of the
rules. The bill is identical to a bill of the same name that was also passed by the House in the
110th Congress, H.R. 5772. Just a day before the House passed H.R. 1675, a nearly identical bill
with the same title was introduced in the Senate (S. 1481).
H.R. 1675 would make a number of changes to the Section 811 program. One of these would be
to eliminate the funding of tenant-based rental assistance through the Section 811 program
account. Advocates for persons with disabilities contend that Section 811 vouchers are poorly
targeted and may not always be used to serve households with disabilities.171 Instead, existing and
future vouchers would be funded through the Section 8 account. The bill would authorize
sufficient Section 8 funds in FY2010 to support the number of Section 811 vouchers that were
funded in FY2009. H.R. 1675 also would codify the requirement that Congress has inserted in
recent appropriations acts requiring vouchers funded under the Section 811 program to be turned
over to households where an adult member has a disability when the current voucher holders give

167 Ibid, p. 4.
168 A copy of the letter is available on the HHS website, http://www.cms.hhs.gov/DeficitReductionAct/Downloads/
MFP_PHALetterSigned.pdf.
169 U.S Department of Housing and Urban Development, “Proposed Notice of Funding Availability for HUD’s FY2009
Rental Assistance for Non-Elderly Persons with Disabilities; Request for Comments,” 74 Federal Register 29504-
29510, June 22, 2009.
170 Ibid., p. 29507.
171 See, for example, Written Statement of Ann O’Hara, Consortium for Citizens with Disabilities Housing Task Force,
for the hearing before the House Financial Services Committee, Subcommittee on Housing and Community
Opportunity, H.R. 5772, The Frank Melville Supportive Housing Investment Act of 2008, 110th Cong., 2nd sess., June
20, 2008, http://financialservices.house.gov/hearing110/o%27hara062008.pdf.
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them up. This requirement would also extend to any Section 8 vouchers for persons with
disabilities that are currently funded or that may be funded in the future.
Another proposed change under H.R. 1675 would reduce the concentration of persons with
disabilities living in Section 811-funded housing by limiting the number of units in multifamily
housing developed with Section 811 capital grants to 25% of the total units in the building. Due
to the need to finance the remaining 75% of units, this limitation would also encourage
developers to use other funding sources, such as the Low Income Housing Tax Credit (LIHTC),
to supplement the Section 811 funding. This 25% limitation would not apply to group homes or
independent living facilities. In cases where grantees combine Section 811 capital grants with
funding from other sources such as LIHTCs for the development of multifamily housing, the bill
would delegate the review and processing of the project to state or local housing finance agencies
(HFAs) rather than HUD. Because HFAs are the agencies that administer tax credits, delegating
the processing of the Section 811 capital grant to the HFA, together with the tax credit, is thought
to be more efficient. This provision is similar to one that was enacted regarding the Section 202
Supportive Housing for the Elderly Program. The Housing and Economic Recovery Act of 2008
(P.L. 110-289) included a provision to direct HUD to delegate to state HFAs the ability to process
Section 202 capital grants when developers also intend to use other funding sources.
In addition, H.R. 1675 would create a Project Rental Assistance-Only Competitive Demonstration
Program to encourage mixed finance developments where rental units for persons with
disabilities would be interspersed with units for non-disabled households. The rental assistance
awarded through the demonstration program, instead of subsidizing units developed through
Section 811 capital grants, would be used to subsidize units of housing developed through
LIHTCs, the HOME program, or projects developed with government funds from other sources.
Under the demonstration program, only extremely low-income persons with disabilities would be
eligible for the assisted units (those with incomes at or below 30% of area median income) and no
more than 25% of units in LIHTC and HOME developments would be allowed to be set-aside for
those households. The initial term of the rental assistance would be 15 years, although facilities
would be required to operate for at least 30 years as supportive housing for persons with
disabilities.
The bill also would amend the definition of “person with disabilities” in the Section 811 program
to include a person who meets the Social Security Act definition of disability. As noted earlier in
this report, the current Section 811 definition does not reference the Social Security definition. In
addition, the bill would expand the Section 811 definition to include those individuals who are
living with HIV/AIDS consistent with the Public Housing and Section 8 programs. (See
Appendix) Current Section 811 regulations state that a “person whose sole impairment is a
diagnosis of HIV positive ... (i.e. does not meet the qualifying criteria in [the statute]) will not be
eligible for occupancy in a section 811 project.” The proposed language would instead state that
the term person with disabilities “shall not exclude persons who have the disease of acquired
immunodeficiency syndrome or any conditions arising from the etiologic agent for acquired
immunodeficiency syndrome.” H.R. 1675 also would make clear that persons age 62 and older
may not be considered a “person with disabilities” for purposes of the Section 811 program.

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Appendix. Definitions of Disability Applicable to HUD Housing Programs
Table A-1.Definitions of Disability Applicable to HUD Housing Programs
Provision
Section 811
Section 8 and Public Housing
Section 202 Loan Program
Mental, Physical,
A physical, mental, or emotional impairment that is (1)
Same. Same.
or Emotional
expected to be of long-continued and indefinite duration, (2)
Impairment
substantially impedes a person’s ability to live independently,
and (3) could be improved by more suitable housing
conditions.
Chronic Mental Illness
A severe and persistent mental or emotional impairment.
No Provision
Same as Section 811.
Developmental
A severe, chronic disability that (1) is attributable to a mental
Same. Same.
Disability
or physical impairment or a combination of mental or physical
impairments, (2) manifests before age 22, (3) is likely to
continue indefinitely, and (4) results in substantial functional
limitations in three or more major life activities.
Social Security
No provision
Inability to engage in substantial gainful
No Provision
Definition
activity by reason of a physical or mental
impairment which can be expected to
result in death or to last for not less
than 12 months.
HIV/AIDS Status
“A person infected with the human acquired immunodeficiency The term person with disabilities “shall
“Persons infected with the human
virus (HIV)” if they meet the definition of “person with
not exclude persons who have the
acquired immunodeficiency virus (HIV)
disabilities” in the statute. “A person whose sole impairment is disease of acquired immunodeficiency
who are disabled as a result of infection
a diagnosis of HIV positive ... (i.e. does not meet the qualifying
syndrome or any conditions arising from with the HIV are eligible for occupancy in
criteria in [the statute]) will not be eligible for occupancy in a
the etiologic agent...”
Section 202 projects ...”
Section 811 project.”
Drug and/or
“A person whose sole impairment is a diagnosis of ...
Substantially the same.
Substantially the same.
Alcohol Addiction
alcoholism or drug addiction ... will not be eligible for
occupancy in a Section 811 project.”
Source: 42 U.S.C. § 4013(k)(2) and 24 C.F.R. § 891.305 (Section 811); 42 U.S.C. § 1437a(b)(3)(E) and 24 C.F.R. § 5.403 (Section 8 and Public Housing); and 24 C.F.R. § 891.505
(Section 202).

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Section 811 and Other HUD Housing Programs for Persons with Disabilities


Author Contact Information

Libby Perl

Analyst in Housing Policy
eperl@crs.loc.gov, 7-7806



Congressional Research Service
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