Section 8 New Construction
The Section 8 Program was authorized by Congress in 1974 and developed by HUD to provide rental subsidies for eligible tenant families (including single persons) residing in newly constructed, rehabilitated and existing rental and cooperative apartment projects.
The rents of some of the residential units are subsidized by HUD under the Section 8 New Construction ("New Construction"), Substantial Rehabilitation ("Substantial Rehabilitation"), and/or Loan Management Set-Aside ("LMSA") programs. All such assistance is "project-based", i.e.; the subsidy is committed by HUD for the assisted units of a particular mortgaged property for a contractually determined period.
The New Construction and Substantial Rehabilitation programs provide rental assistance in connection with the development of newly constructed or substantially rehabilitated privately owned rental housing financed with any type of construction or permanent financing, including the applicable FHA Multifamily Mortgage Insurance programs. The maximum term of assistance provided by HUD under the New Construction and Substantial Rehabilitation programs for a project financed with the proceeds of a loan insured by FHA is 20 years. For any mortgaged property which received a notice of selection from JUD for New Construction or Substantial Rehabilitation assistance prior to November 15, 1970 or February 20. 1980, respectively, the subsidy is made available to the project owner in five-year increments, subject to renewal at the owner's option at the end of each five-year incremental term for a further five years or until the end of the maximum term of assistance; for projects which received a notice of selection for New Construction or Substantial Rehabilitation assistance from HUD on or after such dates (collectively, the "New Regulation Projects"), the subsidy is generally committed to the project for a single 20-year term without provision for owner cancellation of the assistance prior to expiration of the term. The Housing and Urban Rural Recovery Housing Act of 1983 repealed the statutory authority for the New Construction and Substantial Rehabilitation programs.
HADC presently owns one Section 8 New Construction project, Hairston Lake, which consists of 170 units.