Section 236 Preservation Guide
HUD’s Office of Recapitalization published Preservation Options for Section 236 Properties, a guide that explains how property owners can preserve Section 236 properties as affordable housing. As these loans mature, owners have the option to convert Section 236 affordable units to market rate, which will decrease the overall number of affordable homes available to low-income households.
In the current housing crisis, the demand for affordable rental properties far outpaces the supply so preservation of existing affordable homes is a critical strategy to meet this demand. The new guide describes incentives to help owners recapitalize their Section 236 properties and preserve them as affordable housing choices.
The guide provides detail on owners' various financing options, including refinancing, prepaying the original Section 236 loan and other strategies. The guide also describes rental assistance options for preserved properties, including renewing expiring Section 8 contracts with a potential increase for contract rents, providing vouchers to residents, and converting properties to Project-Based Vouchers under the Rental Assistance Demonstration’s Component 2.