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Most of HUD's multifamily housing properties designed for the elderly
and people with disabilities operate with some kind of rental subsidy.
This subsidy is provided by HUD to the owner of the property and is
tied to that development.
Most sites receive either project-based Section 8 or Section 202
Project Rental Assistance Contract (PRAC) funds, which pays for
a proportion of the property's operating expenses. If expenses at
the site increase, HUD can sometimes provide additional Section
8 or PRAC funds.
In developments funded by project-based Section 8 and in others
where the original mortgage loan was subsidized, housing managers
often accrue rental subsidy that isn't needed to pay operating costs
over a certain period of time. Because the funds are excess subsidy
provided by HUD, the monies usually must be spent on activities
that will benefit the property and the residents. These "excess"
funds are normally referred to as "residual receipts"
or "excess income".
Housing owners can include the Service Coordinator position in
the development's operating budget, where the position is supported
by project-based Section 8. Owners can also use residual receipts
or excess income to pay for a Service Coordinator program. The Department
urges housing owners and managing agents to use these project-related
funding sources to fund a Service Coordinator program, whenever
possible. These funding streams are more stable and consistent over
time. Grants, by their nature, are temporary sources of assistance
and the future availability of such funds is never certain.
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