URBAN ECONOMIC POLICY

TRANSPORTATION AND COMMUNICATIONS

JOBS, EDUCATION
AND THE WORKFORCE


INTERNATIONAL AFFAIRS

HEALTH AND
HUMAN SERVICES

ENERGY AND ENVIRONMENT

CRIMINAL AND SOCIAL JUSTICE

COMMUNITY DEVELOPMENT AND HOUSING
Preserving Section 8 Housing
Celebrating the 25th Anniversary of the
Community Development
Block Grant (CDBG) Program

Community
Reinvestment Act (CRA)

The Shelter Plus Care Program
Section 202/811 Gap Funding
Federal Home Loan
Banks

Sunset of Hope VI Program
Housing for the Elderly
Celebrating Homeownership Week
The Historic Homeownership Assistance Act
Public Insurance
Funding for
Empowerment Zones and Strategic Planning
Communities

Housing and Community Development Committee Resolution on the President's FY2000 Budget for the Department of Housing and Urban Development

ARTS, CULTURE AND RECREATION

MISCELLANEOUS

USCM HOME

RESOLUTIONS INDEX

COMMUNITY DEVELOPMENT AND HOUSING

SECTION 202/811 GAP FUNDING

WHEREAS, the Department of Housing and Urban Development (HUD) Section 202/811 Capital Advance Program has been considered a 100% financing program reserved for non profit 501 c (3) sponsors/developers; and

WHEREAS, local high cost adjustments factors are applied where required to make project economically feasible; and

WHEREAS, in the Housing Market, it is difficult to develop Section 202/811 projects with the initial fund reservation amount, even with the application of the high cost factor; and

WHEREAS, projects in cities like Chicago have typically required further increases in HUD funding between award of a fund reservation and issuance of a commitment, which were permitted under the Section 202/811 regulations; and

WHEREAS, as of November 1996, the program was modified to limit the available HUD funds to the amount originally reserved until after the initial closing of Capital Advance and commencement of construction; and

WHEREAS, unless the formula by which funds are reserved is revised to be more realistic for the housing market, it is unlikely that Section 202/811 projects funded will be able to achieve initial closing without secondary financing or owner’s equity; and

WHEREAS, because many of the Section 202/811 sponsors/owners are lightly capitalized nonprofits, such as churches, a significant amount of the owner’s equity is not likely to be available; and

WHEREAS, the Section 202/811 programs only permits secondary financing from another public source, such as a state or local agency; and

WHEREAS, Section 202/811 sponsors will be turning to the local governments for secondary financing because a significant amount of owners equity is not available; and

WHEREAS, the funds will allow cities to assist these critically important developments without taking away from other necessary affordable housing,

NOW, THEREFORE, BE IT RESOLVED, that the U.S. Conference of Mayors urges the 106th Congress to pass legislation that would apply high cost adjustments factors to the current Section 202 Capital Advance Program formula to make projects economically feasible; and

BE IT FURTHER RESOLVED, that the U.S. Conference of Mayors supports legislation that would revise the current formula by which funds are reserved to be more realistic for the current housing market; and

BE IT FURTHER RESOLVED, that the U.S. Conference of Mayors supports earmark requests made by cities for the purpose of filling the gap in Section 202/811 financing for projects for these special populations.

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