(a) Maximum project size. Projects funded under §§ 891.655 through 891.790 are subject to the following project size limitations:
(1) Group homes may not be designed to serve more than 15 persons on one site;
(2) Independent living complexes for chronically mentally ill individuals may not be designed to serve more than 20 persons on one site; and
(3) Independent living complexes for handicapped families in the developmental disability or physically handicapped occupancy categories may not have more than 24 units nor more than 24 households on one site. For the purposes of this section, household has the same meaning as handicapped family, except that unrelated handicapped individuals sharing a unit (other than a handicapped person living with another person who is essential to the handicapped person's well-being) are counted as separate households. For independent living complexes for handicapped families in the developmental disability or physically handicapped occupancy categories, units with three or more bedrooms may only be developed to serve handicapped families of one or two parents with children.
(b) Additional limitations. Based on the amount of loan authority appropriated for a fiscal year, HUD may have imposed additional limitations on the number of units or residents that may be proposed under an application for Section 202 loan fund reservation, as published in the annual notice of funding availability or the invitation for Section 202 fund reservation.
(c) Exemptions. On a case-by-case basis, HUD may approve independent living complexes that do not comply with the project size limitations prescribed in paragraphs (a)(2), (a)(3), or (b) of this section. HUD may approve such projects if the Sponsor demonstrates:
(1) The increased number of units is necessary for the economic feasibility of the project;
(2) A project of the size proposed is compatible with other residential development and the population density of the area in which the project is to be located;
(3) A project of the size proposed can be successfully integrated into the community; and
(4) A project of the size proposed is marketable in the community.