HUD Flexible Subsidies
Two types of loans are available under HUD’s flexible subsidy program (1) operating assistance loans and (2) capital improvement loans. Both types of loans are generally made to projects with mortgages that are either insured or held by HUD. Operating assistance loans are made to projects that are experiencing operating deficits. They are designed to provide temporary funding to replenish project reserves, cover operating costs, and pay for limited physical improvements. Capital improvement loans are intended to assist projects with costs of major repair and replacement of building components when project reserves are insufficient to fund the improvements.
