In 1994, HUD issued regulations implementing legislation that has expanded FHA’s nursing home program to include mortgage insurance for the refinancing of non-FHA-insured projects and for assisted living facilities. The nursing home program has not been targeted to serve specific populations or communities, and HUD does not collect and analyze information on whom the program is serving. 1.) Both Programs Appear to Have Incurred Losses to Date

HUD has not done any complete assessments of the financial performance of the nursing home and retirement service center programs. Available data indicate that the terminated retirement service center program has incurred losses as well. Moreover, recent legislative changes may result in the growth of the nursing home program and potentially riskier loans, placing additional strains on HUD’s management capacity. However, it is unclear what all of these actions will involve and how soon some of them will be completed. However, we still have concerns about HUD’s ability to effectively manage the nursing home and retirement service center programs in the near future.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO evaluated the Federal Housing Administration's (FHA) nursing home, retirement service center, and hospital insurance programs, as well as the Department of Housing And Urban Development's (HUD) ability to manage these programs.

What GAO Found

GAO found that: (1) the nursing home program has not been targeted to serve specific populations or communities, and HUD does not collect or analyze information on whom the program is serving; (2) FHA has not done any complete assessments of the financial performance of the nursing home and retirement service center programs and it is unlikely that HUD will be able to effectively manage the nursing home and retirement service center programs in the future; (3) it is unclear whether HUD consolidation of its multifamily underwriting and asset management responsibilities will be implemented; and (4) HUD has implemented legislative changes that authorize FHA mortgage insurance for assisted living facilities, which may result in the nursing home program's growth and in potentially riskier loans.