Housing Assistance for the Elderly Reflects the Programs’ Intent

The Section 202 program, far more often than the HOME program, is the source of funds for increasing the supply of multifamily rental housing for low-income elderly people. From fiscal year 1992 through fiscal year 1996, over 1,400 Section 202 and HOME program multifamily rental housing projects for the elderly opened nationwide. Most of the elderly households that obtained assistance from the HOME program—over 70 percent—used that assistance to rehabilitate the homes they already owned and in which they still lived. The remaining HOME assistance benefiting the elderly did so by providing tenant-based rental assistance; helping new homebuyers make down payments and pay the closing costs associated with purchasing homes; and acquiring, constructing, or rehabilitating single-family and multifamily rental housing. As a result, HOME projects typically attract significant levels of additional public and private funding from sources such as other federal programs, state or local housing initiatives, low-income housing tax credit proceeds, and donations or equity contributions from nonprofit groups. Availability of Supportive Services at Section 202 and HOME Projects

HUD does not pay for supportive services through the HOME program but does, under limited circumstances, do so through the Section 202 program. For most of the Section 202 and HOME projects we visited, some supportive services, such as group social activities or subsidized meals programs, were available to the residents on-site, but usually only to the extent that the projects could generate operating income to pay for them. In addition to keeping up to date with the needs of their residents, the sponsors or management companies of the Section 202 projects we visited expected their service coordinators or resident managers to refer residents to community-based services as needed or to bring community-based services to their facilities on a regular or occasional basis. HUD also questioned whether our data included all HOME projects that might be comparable to Section 202 projects by taking into account the (1) projects developed through the substantial rehabilitation of existing buildings (as opposed to new construction), (2) projects in which vacant units might later be occupied by the elderly in sufficient numbers to achieve comparability with Section 202 projects, (3) projects in which 50 percent or more of the residents were elderly, and (4) projects that were under way but had not been completed at the close of fiscal year 1996. We acknowledge that the HOME program provides housing assistance to the elderly in several ways other than through the production of new multifamily rental housing that is set aside almost exclusively for the elderly. However, because this report describes comparable Section 202 and HOME-funded housing assistance and because the Section 202 program provides only one kind of housing assistance, we focused on the multifamily rental projects funded by the HOME program that are comparable to those funded by the Section 202 program. Our analysis of the HOME data also provided information on the amount and sources of funding for multifamily projects developed under the HOME program.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the similarities and differences between the Department of Housing and Urban Development's (HUD) Section 202 Supportive Housing for the Elderly Program and HOME Investment Partnership Program, focusing on: (1) the amount and types of new multifamily rental housing that each program has provided for the elderly; (2) the sources of each program's funding for multifamily rental projects; and (3) the availability of supportive services for elderly residents.

What GAO Found

GAO noted that: (1) during fiscal year (FY) 1992 through FY 1996, the Section 202 program substantially exceeded the HOME program in providing multifamily rental housing that was set aside for elderly households; (2) over 1,400 Section 202 projects opened during this time, providing homes for nearly 48,000 elderly residents; (3) at the same time, the HOME program provided housing assistance to 21,457 elderly households, including 675 elderly residents in 30 multifamily rental projects comparable to those developed under the Section 202 program; (4) the Section 202 program produced new multifamily rental housing for low-income elderly households through new construction, rehabilitation of existing buildings, and acquisition of existing properties that the Federal Deposit Insurance Corporation obtained through foreclosure; (5) the HOME program provided housing assistance to address the most pressing housing needs that local communities and states identified among low-income people of all ages; (6) for the elderly, HOME assistance helped rehabilitate the homes they already owned and in which they still lived, provided tenant-based rental assistance, helped new homebuyers make down payments and pay closing costs, and made funds available to acquire, construct, or rehabilitate single-family and multifamily rental housing; (8) in the Section 202 program, the capital advance, which HUD provides to a project's sponsor, is the only significant source of funds for developing the project; (9) in general, a HOME project typically attracts significant levels of additional public and private funding; (10) HOME multifamily housing that is similar to Section 202 projects is usually financed with a combination of HOME funds and other federal and nonfederal funds; (11) HUD does not pay for supportive services, such as transportation or subsidized meals programs, through the HOME program but does do so under limited circumstances through the Section 202 program; (12) the extent to which the Section 202 and HOME projects provided these services on-site for their residents usually depended on each project's ability to generate the operating income needed to pay for the services; (13) these projects often depended on and referred their residents to community-based supportive services; (14) five of the eight Section 202 projects that GAO visited employed a staff person or expected their on-site resident manager to coordinate services; and (15) both projects in many cases had common areas or activity rooms that service providers or residents could use for community-based services, group social or educational activities, and dining.