Guide to Financing Supportive Housing:
Department of Housing and Urban Development-Shelter Plus Care (S+C)

INTRODUCTION
PROGRAM DESCRIPTION
REGULATIONS/GUIDELINES
ADMINISTRATIVE AGENCIES
ELIGIBILITY INFORMATION
GRANT/LOAN TERMS
APPLICATION PROCESS
CDFA CODE
AUTHORIZING LEGISLATION/STATUTE
ADDITIONAL RESOURCES

INTRODUCTION

The Shelter Plus Care Program (S+C) is a rental subsidy intended for homeless persons with chronic disabilities (typically mental illness, substance use or AIDS).  The subsidy, which can be essential for projects that do not have local or state subsidy programs, is offered in several forms – tenant-based, project-based or sponsor-based.  These subsidies are accessed through the annual SuperNOFA (released in the spring), and non-profit sponsors can only apply through eligible public agencies (state or local government or PHA).  Funds from the S+C must be matched by an equal amount of services dollars.  S+C is widely used for permanent supportive housing projects, particularly when Section 8 subsidies are in short supply.

S+C rental assistance is modeled on the Section 8 program, with tenants paying 30% of their adjusted income for rent and the program paying the difference between the tenant’s share and the HUD-established Fair Market Rent for the unit.  The program is somewhat more flexible than Section 8, making it a highly desirable operating source for supportive housing sponsors.  For example, S+C allows grantees to exceed the HUD-established Fair Market Rent for a unit, so long as the rent is reasonable (i.e. comparable to similar units) and the grantee has sufficient grant funds to pay the higher rent.  Also, tenants do not have to be selected from the local Housing Authority’s Section 8 waiting list.

S+C is widely used for permanent supportive housing projects, since the funds are restricted to serving only homeless individuals with serious disabilities and because grantees are required to provide supportive services.   S+C is the only federal funding source for supportive housing that explicitly allows a project sponsor to require participation in services as a condition of tenancy.  However, many S+C programs have elected to make services voluntary, which CSH encourages.

PROGRAM DESCRIPTION

This is a competitive grant program that functions within a formula allocation.

The Shelter Plus Care (S+C) Program is one of three sources collectively known as Continuum of Care funding (the other two are the Supportive Housing Program and the Section 8 Moderate Rehabilitation SRO Programs).  These programs are also often referred to as HUD McKinney funding or Targeted Homeless Assistance Programs.

S+C is designed to provide permanent supportive housing for homeless persons with disabilities, primarily those with serious mental illness, chronic problems with alcohol and/or drugs, and AIDS or related diseases and their families.  The program provides rental assistance, which must be matched with supportive services funded from sources outside the program.  The rental assistance is offered in several forms (tenant-based, project-based or sponsor-based) and can be provided in a variety of housing settings, including both single site and scattered site units.  

REGULATIONS/GUIDELINES

24 CRF Part 582

S+C Resource Manual:
http://www.hud.gov/offices/cpd/homeless/library/spc/resourcemanual/index.cfm

Understanding S+C:
http://www.hud.gov/offices/cpd/homeless/library/spc/understandingspc/index.cfm

Enhancing S+C Program Operations:
http://www.hud.gov/offices/cpd/homeless/library/spc/shelterplusguide.PDF 

ADMINISTRATIVE AGENCIES (Federal):          

Department of Housing and Urban Development, Office of Community Planning and Development, Office of Special Needs Assistance Program (SNAPS)  (202) 708-4300

http://www.hud.gov/offices/cpd/homeless/programs/splusc/index.cfm

State/Local:    

For local Continuum of Care contact information, go to:

http://www.hud.gov/offices/cpd/homeless/programs/cont/coc/index.cfm 

ELIGIBILITY INFORMATION

Eligible Target Populations:

• Eligible participants must be homeless.   The definition of homelessness that applies to S+C may be found here
• Eligible participants must have one of the following targeted disabilities: serious mental illness, chronic substance abuse, both serious mental illness and chronic substance abuse, AIDS or related diseases, or other disabilities.  The definition of disability that applies to S+C may be found here
• Applicants must specify number of people with the different disabilities they will be focused on serving in their application.

Eligible Projects/Programs:

The S+C Program has four components.  Applicants must specify the component(s) for which they are applying.

1.   Tenant-Based Rental Assistance  (TRA)

This component provides funding for tenant-based rental assistance modeled after the Section 8 Program.  Tenants select their own housing in the private rental market and retain the rental assistance if they move.  Grantees are allowed to limit the geographic area where participants may live if necessary to facilitate the coordination of supportive services.

2.   Sponsor-Based Rental Assistance (SRA)

This component provides rental assistance through contracts between the local Housing Authority and sponsor organizations, usually non-profit providers of housing and/or services.  The sponsor may either own or lease the units that receive the subsidy.  The units may be located in a single structure or in scattered sites.  Sponsors are allowed to change the location of units over the life of the grants.

3.   Project-Based Rental Assistance (PRA)

This component provides rental assistance through contracts between the Local Housing Authority and the owner of a housing structure, where the owner agrees to lease the subsidized units to participants.  Changing the location of the units is not permitted and tenants do not keep the rental assistance if they move.

4.   Moderate Rehab for Single Room Occupancy Dwellings (SRO)

This component provides rental assistance for 10 years in connection with the moderate rehabilitation of single room occupancy housing units.  It is very similar to the Section 8 Moderate Rehabilitation SRO Program.  The major differences are that the S+C version is limited to assisting persons who are homeless and have a disability, and requires that support service be provided.  Other differences between the two programs are detailed here:

http://www.hud.gov/offices/cpd/homeless/library/spc/understandingspc/attachmentb.cfm

Eligible Use of Funds/Activities/Types of Assistance:

• The only eligible use of S+C funding is rental assistance.
• Eight percent of each  S+C grant may be used for program administration.
• Information about combining S+C funding with other funding sources can be found in HUD's S+C Resource Manual, section 1.5

Eligible Applicants/Sponsors:

Only a locally constituted Continuum of Care may apply to HUD for CoC funding, which includes requests for S+C, SHP and SRO.  (Technically, HUD does allow an individual organization to submit a “solo” application for SHP funding, but such proposals, since they are not submitted as part of an overall Continuum of Care plan, will rarely, if ever, receive funding.)

Applicants eligible to request SRO funds through the local CoC process and receive an award from HUD include:

• Housing Authorities
• Other governmental entities (such as a County Mental Health Department)

Non-profit organizations are not eligible to become S+C grantees, but are often sponsors of projects under the SRA component.

GRANT/LOAN TERMS

Minimum/Maximum Awards:

The grant amount is determined by multiplying the number of units to be assisted times the applicable Fair Market Rent times 60 months (for five year grants).

Average Awards:  Award info for years starting 2002 available here.

Term of Awards:

• The initial term of a TRA or SRA grant is five years, with renewals in one-year increments.
• The initial term of a PRA grant can be either five years or ten years.  To qualify for ten years of rental subsidies, the owner must complete at least $3,000 of eligible rehabilitation for each unit. This rehabilitation must be completed within 12 months of grant award.
• The initial term of an SRO grant is 10 years.

All S+C grants are renewable.

Matching Requirements:

• S+C Program sponsors must match every dollar of HUD funding with a dollar of leveraged support services.  This service match must be tracked and documented on an annual basis. In-kind and donated services can satisfy the match requirement, but providers must comply with HUD’s guidelines on documenting the match. (See the HUD S+C resource manual for more info, or 24 CFR 582.110.)
• Use of leveraged resources is among the criteria used to score the overall CoC application.  CoCs are strongly encouraged to seek out mainstream resources to support activities within their housing and service system.

Formula:

HUD allocates for each CoC a certain “pro rata need” funding amount.  The pro rata need is calculated based on a formula that uses the same indices of need as are used in the CDBG program (including such factors as poverty and poor housing conditions). The pro rata need is adjusted to help communities meet the burden of renewing existing SHP and SRO grants. There is no adjustment for S+C renewals, as these are not counted towards a community’s pro rata need.

APPLICATION PROCESS

Each year, as part of the SuperNOFA, HUD issues a NOFA announcing the availability of Continuum of Care funding.  CoCs are required to conduct a community-based planning process to determine goals and strategies for addressing homelessness and priorities for funding for the coming year.  The CoC also is required to conduct a broadly publicized application process whereby individual project sponsors submit proposal to the CoC body, which rates and ranks all applications received.  The CoC then submits its CoC Plan along with a ranked set of funding applications to HUD.  HUD awards funding to projects in the order they have been ranked by the CoC, up to the community’s adjusted pro rata need amount. 

CFDA CODE:  14.238

AUTHORIZING LEGISLATION/STATUTE

McKinney-Vento Homeless Assistance Act of 1987, Title IV, as amended. 

ADDITIONAL RESOURCES

2003 Continuum of Care NOFA:

http://www.hud.gov/library/bookshelf18/supernofa/nofa03/thhasec.pdf

HUD Guidebook on Shelter Plus Care Operations (February 2001)

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