The SPRAC program awards rental assistance to Section 202 Direct Loan projects financed prior to 1974 with original interest rates of six percent or less.
In 2012, HUD authorized the provision of Senior Preservation Rental Assistance Contracts (SPRAC) to Section 202 Direct Loan projects financed prior to 1974 with original interest rates of six percent or less. In order to receive SPRAC, the project Owner was required to prepay and refinance the existing mortgage in accordance with HUD’s Housing Notice 2012-08. The Owner was required to commit to making capital improvements or to completing substantial rehabilitation at the project.
SPRAC provided rental assistance on previously unassisted units for 20-year terms. In addition, this assistance provided revenue that was able to offset the cost of a service coordinator and other operating costs.
The provision of SPRAC funding was contingent on HUD approval of the Section 202 Direct Loan prepayment. Furthermore, any applicant who received notification to proceed from HUD had to successfully close on the refinance before the mortgage maturity date to remain eligible for SPRAC assistance.
While the SPRAC program has not been funded since 2012, we anticipate that SPRAC funds may become available again in the near future.