Multiple Agencies Provide Housing Assistance

Twenty different entities administered 160 programs, tax expenditures,  and other tools that supported homeownership and rental housing in  fiscal year 2010, reflecting the fragmentation in federal housing delivery. Although selected HUD, USDA, and  Treasury multifamily housing programs had overlapping purposes, the  products, areas served, and delivery methods differed to varying degrees. While a larger percentage of RHS borrowers with  guaranteed loans were located in more remote rural areas compared with  FHA and VA borrowers, FHA served a larger number of borrowers in  these areas. Overall, the task force’s efforts have not  incorporated key principles on effective collaboration. According to HUD, as of April 2012, no milestones or  resource estimates were available for the task force and no results were  expected until a more formal approach for the task force was established. Although the efforts of the working group have  been consistent with a majority of our key practices, the group has yet to  take additional steps to reinforce agency accountability for collaborative  efforts. In particular, the agencies,  through the Rental Policy Working Group, defined and articulated a common outcome; established mutually reinforcing or joint strategies in soliciting  suggestions from federal, state, local, and private officials; allocated resources and identified key initiatives, including estimating  the resources and time frames necessary for implementation; agreed on roles and responsibilities, including designating a  responsible lead office and participating offices to help implement the  alignment activities; established compatible policies and procedures and collected and  analyzed information that led to the prioritization and development of  the recommendations for rental policy alignment; developed mechanisms to monitor, evaluate, and report on their  efforts, established milestones for alignment activities, and launched  pilots to test some alignment activities; and used performance-management systems to strengthen individual  accountability for results for some senior agency executives. By not  expanding its guiding principles to include statutory changes, the  agencies may miss additional opportunities to highlight those areas in  which statutory action could help respond to additional stakeholder  concerns and generate savings and efficiencies in housing programs. Coordinated Reviews of Housing Tax Expenditures and Related Programs Would Be Beneficial

As we recommended in September 2005 and reiterated in March 2011,  coordinated reviews of tax expenditures and related housing spending  programs with similar goals could help assess the relative effectiveness  of tax expenditures in terms of their benefits and costs, and help  policymakers reduce overlap and inconsistencies and direct scarce  resources to the most-effective or least-costly methods to deliver federal  support. Consolidating Single- Family Loan Guarantee Programs Could Improve Programs and Produce Savings

Consolidation or greater coordination of RHS and HUD single-family loan  programs that serve similar markets and provide similar products may  offer opportunities for savings in the long term. Additionally, we  noted the potential for administrative savings by consolidating programs  that provided similar products and served similar markets. For  example, VA’s housing program is an entitlement earned by veterans and  RHS’s guaranteed program is only available to low- and moderate- income households in rural areas. In 2000,  when we first recommended that Congress consider requiring USDA and  HUD to examine the benefits and costs of merging programs such as  their single-family guaranteed programs, USDA noted that such a merger  could be detrimental to rural areas, which could lose a federal voice. In relation to concerns about the level of focus on rural housing in HUD,  HUD currently serves a larger number of homeowners in rural areas than  RHS serves, and HUD administration officials told us that they considered  HUD an agency that served housing needs in all communities—urban,  suburban, and rural. A recently created task force may help evaluate the potential  for coordinating or consolidating the single-family housing loan programs  at HUD, USDA, and VA and the agencies have been working to  consolidate and align certain requirements in multifamily housing  programs through the Rental Policy Working Group. Certain aspects of the single-family programs show great potential for  consolidation—as we have reported, overlap exists in products offered,  service delivery, and geographic areas served. However, any  consolidation of multifamily programs would require statutory changes. To further improve HUD, USDA, and Treasury’s efforts through the Rental  Policy Working Group to consolidate and align certain requirements in  multifamily housing programs, the Rental Working Group should take  steps to document collaborative efforts in strategic and annual plans to  help reinforce agency accountability for these efforts. Key contributors to this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

This report assesses (1) programs and activities the federal government  uses to support rental housing and homeownership; (2) the extent to  which overlap or fragmentation exists in the goals, products, geographic  coverage, service delivery mechanisms, and recipient income levels of  selected housing programs and activities of the Departments of Housing  and Urban Development (HUD), Agriculture (USDA), Veterans Affairs  (VA), and Treasury; and (3) the extent to which federal efforts have  increased coordination for selected housing programs and activities, and  implications of further coordinating or consolidating selected housing  programs or activities. Extent to Which Overlap or Fragmentation Existed in Selected Housing Programs or Activities

To determine the extent to which overlap or fragmentation occurred in the  selected housing programs or activities of HUD, USDA, VA, and  Treasury, we updated and expanded the work from our 2000 report on  opportunities and barriers to reducing overlap and fragmentation in   We focused  delivering single-family and multifamily housing programs.on selected single-family and multifamily programs at HUD, USDA, and  VA, and on Treasury’s Low-Income Housing Tax Credit (LIHTC) program  and the mortgage interest and property tax deductions as of 2010.
Why GAO Did This Study

The federal government plays a major role in providing housing assistance to homebuyers, renters, and state and local governments. It incurred about $170 billion in obligations for federal assistance and estimated forgone tax revenue in fiscal year 2010. However, fiscal realities raise questions about the efficiency of multiple housing programs and activities across federal agencies with similar goals, products, and sometimes parallel delivery systems. This report assesses the (1) extent to which there is overlap or fragmentation in selected housing programs, (2) federal collaborative efforts, and (3) implications of consolidating selected housing programs.
For this report, GAO updated and expanded prior work and collected and analyzed new data, focusing on the largest programs in terms of funding. In addition to addressing these objectives, GAO developed a catalog of federal programs and activities that support rental housing and homeownership and identified what is known about the purpose, cost, eligibility, and populations served. The catalog (GAO-12-555SP) is an electronic supplement to this report.

What GAO Found

Housing assistance is fragmented across 160 programs and activities. Overlap exists for some products offered, service delivery, and geographic areas served by selected programsparticularly in the Department of Agricultures (USDA) Rural Housing Service (RHS) and Department of Housing and Urban Developments (HUD) Federal Housing Administration (FHA). For instance, RHS, FHA, and the Department of Veterans Affairs (VA) all guarantee mortgage loans for homeowners. According to fiscal year 2009 data (the most recent available), FHA served a larger number of households than RHS in all areas, including a larger number of low- and moderate-income households in rural areas. Although selected HUD, USDA, and Department of the Treasury (Treasury) multifamily programs had overlapping purposes, the products, areas served, and delivery methods differed. For example, HUD, RHS, and Treasury provide financing for development and rehabilitation of multifamily housing for low- and moderate-income households, but RHS-financed properties were more concentrated in rural areas and HUDs and Treasurys tax credit properties were more concentrated in urban and suburban areas.
Opportunities exist to increase collaboration among the agencies and potentially realize efficiencies. In February 2011, the Administration announced a task force to evaluate the potential for coordinating or consolidating homeownership loan programs at HUD, USDA, and VA. But the task forces efforts have not yet incorporated key collaborative practices GAO identified. Practices such as identifying goals and resources and defining strategies and outcomes will be important as the task force moves forward. HUD, USDA, and Treasury also have been working to consolidate and align requirements in rental housing programs through the Rental Policy Working Group. Although its efforts have been consistent with many key collaborative practices, the group has not taken full advantage of opportunities to reinforce agency accountability for collaborative efforts through the agencies annual and strategic plans, or expanded its guiding principles to evaluate areas requiring statutory action to generate savings and efficiencies. Also, in 2005 and in 2011, GAO recommended coordinating reviews of tax expenditures and related spending programs. Such reviews could help reduce overlap and inconsistencies and direct scarce resources to the most effective or efficient methods to deliver federal support.
Consolidating programs carries certain implications for users, existing programs, personnel, portfolios, and associated information systems. Nevertheless, GAO suggested in 2000 that Congress consider requiring USDA and HUD to examine the benefits and costs of merging programs serving similar markets and providing similar products. Since then, certain aspects of the RHS and FHA homeownership programs have shown evidence of growing similarity, such as RHS shift toward loan guarantees. However, the current statutory framework imposes additional challenges on the agencies ability to further consolidate similar programs. Thus, any evaluations of which programs, products, systems, and processes to retain, revise, consolidate, or eliminate would involve complex analyses, trade-offs, and difficult policy decisions. The task force offers opportunities for these agencies to identify potential areas for consolidation or greater coordination and which actions would require statutory change.

What GAO Recommends

To enhance evaluation of coordination or consolidation of single-family programs, HUD, the Office of Management and Budget (OMB), USDA, and VA should adopt a more rigorous approach for their task force that incorporates collaborative practices. To further improve initiatives to consolidate and align requirements in multifamily programs, HUD, USDA, and Treasury should document their efforts in annual and strategic plans. As part of these collaborative efforts, these agencies also should identify specific programs for consolidation, including those requiring statutory changes. HUD, USDA, and VA generally agreed with the recommendations; however, HUD and OMB stated that actions should wait until after the housing markets stabilize. GAO noted that achieving efficiencies and cost savings also were important.