LeadingAge Washington

5/9/12

Prepayment & Refinancing of Section 202 Changes

HUD has announced updated guidance for the prepayment and refinancing of Section 202 Direct Loan projects.  This notice implements the Section 202 Supportive Housing for the Elderly Act of 2010 and should help owners preserve older 202 units by enabling them to refinance and address the physical needs of the property.

This Notice supersedes all prior HUD guidance on Direct Loan prepayment and refinance. It outlines requirements for the prepayment and refinance of all Section 202 Direct Loan prepayments that require prior approval of the Secretary;  Section 202 Direct Loan prepayments and refinancing where debt service savings are anticipated; and Section 202 Direct Loan projects with original interest rates of six (6) percent or less, where no debt service savings are anticipated.

The Notice can be found here.

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