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Section 236 Program

Program (?) Section 236 Program
Program Description

Congress enacted the Section 236 Program in the Housing and Urban Development Act of 1968. While developers secured loans from private lenders, the government provided an interest rate reduction payment to subsidize debt service costs, effectively operating as a subsidy to the developer to reduce the cost of the project and thus the rent levels needed to support it. Section 236 contracts were often coupled with Rental Housing Assistance Payments in order to reach lower-income households. Under Section 236 two rent schedules were worked out for residents with incomes at or below 80 percent of AMI-one: (1) a “market rent” based on the cost of a market rate mortgage, and (2) a “basic rent,” a figure based on a one percent mortgage. Under Section 236, the tenant paid the greater of the basic rent or 25 percent of his/her income, but in no case would rent payments exceed the market rent. In 1973, President Nixon placed a moratorium on all HUD financed and subsidized rental housing, which effectively ended new production under the Section 236 Program.

Benefit Classification (?)  
Supply or Demand Supply
One-Time or Ongoing One-Time
Benefit Type (?) Grant
Government Agency (?) US Dept of Housing and Urban Development
Program Information (?)  
Scale Medium Scale (between 1,000 and 4,999 units produced)
Timeframe 1968-1974
Developer/Owners (?) For-Profit, Non-Profit
Property Information (?)  
Property Occupancy Vacant
Property Type Land
Building Type Multi-family
Construction Type New Construction
Occupant Tenure (?) Rental
Occupant Income Restrictions (?) Low-Income
More Information HEIN Online
Available on CoreData.nyc? No

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