CITIZENS’ REPORT

FY 2008 SUMMARY OF PERFORMANCE

AND FINANCIAL RESULTS

 DISASTER REVITALIZATION FAIR HOUSING HOMEOWNERSHIP AFFORDABLE HOUSING 
TABLE OF CONTENTS

 Page 

Introduction to the Citizens’ Report............................................................................................... 1

Mission of HUD................................................................................................................................. 1

Secretary’s Message.......................................................................................................................... 2

HUD’s Strategic Plan........................................................................................................................ 4

Strategic Framework Diagram........................................................................................................ 4

Agency Snapshot............................................................................................................................... 5

Performance Overview..................................................................................................................... 6

Programs............................................................................................................................................ 8

Housing ....................................................................................................................................... 8

Ginnie Mae................................................................................................................................ 11

PIH............................................................................................................................................. 12

CPD............................................................................................................................................ 14

FHEO......................................................................................................................................... 16

Other.......................................................................................................................................... 17

Management Challenges ................................................................................................................ 18

President’s Management Agenda.................................................................................................. 22

Auditor Opinion (Excerpts) and Management Assurances........................................................ 23

Financial Statements (Excerpts).................................................................................................... 24

This report and prior year Performance and Accountability Reports are at: 

(www.hud.gov/offices/cfo/reports/2008par.cfm)
Page 1

FY 2008 CITIZENS’ REPORT

The Citizens’ Report contains a summary of significant performance and financial information 

published in the full PAR. The PAR is segregated into four sections: 1) Management’s 

Discussion and Analysis, 2) Performance Information, 3) Financial Information and 4) Other 

Accompanying Information. Further detailed information and analyses is available online at: 

INTRODUCTION TO THE CITIZENS’ REPORT

This Citizens’ Report is a summary of the Department of Housing and Urban Development’s 

(HUD) FY 2008 Performance and Accountability Report (PAR), and is designed to provide an 

understanding of the Agency’s performance and financial results for the year. 

http://www.hud.gov/offices/cfo/reports/2008par.cfm.

The first FHA Insured Home

MISSION OF HUD

INCREASE HOMEOWNERSHIP,

SUPPORT COMMUNITY DEVELOPMENT, AND

INCREASE ACCESS TO AFFORDABLE HOUSING 

FREE FROM DISCRIMINATION.

These words, from HUD’s Strategic Plan, go back to the heart of the United States Housing Act 

of 1937 which declared it a national policy to “assist the several states and their political 

subdivisions to remedy the unsafe and unsanitary housing conditions and the acute shortage of 

decent, safe, and sanitary dwellings for families of lower income and ... to vest in local public 

housing agencies the maximum amount of responsibility in the administration of their housing 

programs.”
Page 2

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

MESSAGE FROM THE SECRETARY

January 15, 2009

I am pleased to present the U.S. Department of Housing and Urban 

Development’s Citizens’ Report. This report provides a summary 

of our financial and performance results for the last year as we 

pursued promoting sustainable homeownership, community and 

urban development, and access to affordable housing free from 

discrimination. Our work touches the lives of millions of 

American families, and never has this work been more critical than 

in the past year. 

I was appointed Secretary in June 2008, and from the moment I 

stepped through the front doors, I’ve been impressed by the dedication and commitment of the 

HUD staff as they work to modernize, develop, and implement programs to address the 

challenges confronting America’s housing and financial markets. At the heart of the nation’s 

financial system are our housing and mortgage markets. Resetting interest rates for adjustable 

rate subprime mortgages and falling home prices have contributed to the current and unique 

challenges affecting the stability of our communities. This summary report will briefly discuss, 

at a high level, the actions HUD has taken to help homeowners, including HUD’s FHASecure

program, and other newly legislated programs. HUD’s Federal Housing Administration has been 

particularly successful, helping over 500,000 families stay in their homes. 

In the 43 year history of the U.S. Department of Housing and Urban Development (HUD), never 

has the agency’s mission been more important. We remain very focused on continuing to 

efficiently and effectively serve our customers, including:

 The chronically homeless;

 Those who cannot afford market prices for rent;

 Those looking to buy or refinance a home;

 Those looking to keep their homes;

 People confronting disasters; and

 People working to rebuild or revitalize our cities.

The Department’s success in these areas is truly noteworthy. Year after year, the Department 

reports on its delivery of rental assistance to households. In FY 2008, HUD assisted 4.7 million 

households. Additionally, the homeownership market recognized the stability of FHA, as 

reflected by a 125 percent increase in business with over 1.2 million single family mortgages 

insured during the year.

The full PAR addresses the Federal Managers’ Financial Integrity Act (FMFIA) reporting 

requirements. FMFIA requires that federal programs be operated efficiently, effectively, and in 

compliance with relevant laws. The financial and performance data presented in this summary 
Page 3

FY 2008 CITIZENS’ REPORT

report and in the full PAR are complete and reliable. Throughout the year, our senior managers 

analyze financial and program performance data to assess the efficiency and effectiveness of 

each organization. Management relies on these data to identify control deficiencies and material 

inadequacies in our financial and program performance to help determine corrective tasks needed 

to resolve them. 

This report provides an overview of the activities the Department has taken, and is taking, to 

address the housing crisis during this very critical time for our nation. It briefly describes the 

many successes of our existing core programs that ensure Americans have roofs over their heads. 

HUD’s successes can be overwhelmingly attributed to the Department’s most valuable asset –

our employees. I am confident that the new initiatives HUD has implemented, along with our 

existing programs, will continue to receive the full support of the employees of the Department 

and will result in HUD remaining a critical factor in the recovery of the housing market.

Steven C. Preston

Secretary
Page 4

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

H

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D’S

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A

T

E

G

I

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PL

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In order to accomplish its mission, HUD has devised a Strategic Plan (available online at (http://www.hud.gov/offices/cfo/stratplan.cfm) consisting of six Strategic Goals (Goals A-F), as shown in the chart below. 

HUD’s strategic planning process provides a framework for effective planning, budgeting, program evaluation, and accountability for results. Goals A, B, and C are Program Goals, which emphasize HUD’s Mission. Goals D, E, and F are Cross-Cutting Goals, which support the Program Goals.

H

U

D’S

S

T

R

A

T

E

G

I

C

F

R

A

M

E

W

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FY 2008 CITIZENS’ REPORT

Mission: The mission of the Department of Housing and Urban Development is to increase homeownership,

support community development, and increase access to affordable housing free from discrimination. 

(http://www.hud.gov/offices/cfo/stratplan.cfm )

Organization: The Department’s headquarters is in Washington, D.C., with 80 field offices across the Nation. 

The organizational model for the Department includes the use of third party intermediaries or business partners 

in the delivery of most of HUD’s community development, rental housing assistance, and housing mortgage 

insurance programs. These partnerships include state and local governments, non-profit sponsors, public housing 

agencies, private landlords, and mortgage lending institutions.

(http://www.hud.gov/utilities/intercept.cfm?/offices/adm/about/admguide/orgcharts/hud.pdf)

Personnel: The Department has 9,433 full time equivalent employees, including headquarter employees, with 

the majority of employees located in field offices. (http://www.hud.gov/jobs/index.cfm )

Budgetary Resources: Discretionary resources of $52.3 billion equates to $171 for every American.

Total Spending FY 2005-2009

$42,435

$52,269

$42,453 $45,561 $45,630

$0

$10,453

$20,906

$31,359

$41,812

$52,265

$62,718

2005 2006 2007 2008 2009

$ in millions

Top 5 Programs By Budget

$0

$3,206

$6,412

$9,618

$12,824

$16,030

$19,236

$ in millions

2008 $15,697 $6,378 $6,864 $4,200 $2,422

2007 $16,031 $6,995 $2,791 $4,300 $2,009

Tenant-Based Rental 

Assistance

Project Based Rental 

Assistance

Community 

Development Block 

Grant Program

Public Housing 

Operating Fund

Public Housing 

Capital Fund

WHO WE ARE

BUDGET, PERFORMANCE AND FINANCIAL SNAPSHOT

FISCAL YEAR 2008

BUDGET SNAPSHOT

PERFORMANCE SNAPSHOT

Accomplishments: In FY 2008, the Department assisted in strengthening homeownership including 1.2 million 

Federal Housing Administration endorsements, providing housing counseling for over 1 million clients, and 

exceeding the pace for adding 5.5 million minority homeowners between 2002 and 2010. The Department assisted 

communities across the nation through the $4 billion formula Community Development Block Grant program and 

HOME, homeless, and Housing for Opportunities for Persons With AIDS programs. HUD programs also assisted 

4.7 million targeted low-income clients with affordable housing. The Department continued to enforce and educate 

the nation on Fair Housing rights and responsibilities. 

HUD's audited financial statements were submitted ahead of schedule, and for the ninth year in a row, HUD attained 

an unqualified (i.e., “clean”) audit opinion, with no material weaknesses identified by the auditors.

Challenges: The Department continues to support the national mortgage market through FHA’s insurance programs 

that provide a safe, affordable financing option that is particularly needed by first-time homeowners and those 

threatened by foreclosure. The Department continues to support community and economic development seeking to 

target limited resources to the areas of greatest need and provides substantial resources in response to natural disasters 

and other emergencies. Work continues to further reduce housing discrimination, end lead poisoning in children, and 

preserve 4.7 million affordable rental housing units.

FINANCIAL SNAPSHOT

Clean Financial Audit Opinion: Yes Material Weaknesses: None

Improper Payment Rate 3.5% Total Assets $125,036

Total Liabilities $30,521 Net Cost of Operations $57,154
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

65%

70%

75%

80%

85%

90%

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

75.9%

87.0%

89.7%

84.9% 85.6%

Summary of Performance Indicators Met

By Fiscal Year

$3.01

$26.17

$18.88

$.13

$5.75

$.002

Strategic Goals 

Gross Budget Authority FY 2008 ($53.94 billion)*

(Dollars in billions)

Goal A: Increase Homeownership Opportunities Goal B: Promote Decent Affordable Housing

Goal C: Strengthen Communities Goal D: Ensure Equal Opportunity In Housing

Goal E: Embrace High Standards of Ethics, Management & Accountability Goal F: Promote Participation of Faith-Based & Community Organizations

SUMMARY OF DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

BUDGET RESOURCES BY STRATEGIC GOAL FOR FISCAL YEAR 2008

*Gross budget authority does not include enacted $1.25 billion overall rescission directed to be from any available 

HUD resources and does not include the $723 million enacted rescission directed from the Section 8 Tenant Based 

Rental program, or $37.6 million directed from the Section 236 RAP program.

The ensuing graphs illustrate HUD’s performance by percent of performance goals met/missed 

(1) from a historical perspective, (2) by strategic goal, and (3) by a summary of performance 

goals met by program office.

HUD’S PERFORMANCE OVERVIEW
Page 7

FY 2008 CITIZENS’ REPORT

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

A B C D E F All

78.6%

70.8%

90.5% 85.7%

100.0% 100.0%

85.6%

Percent of FY 2008 Performance Indicators Met

By Strategic Goal

Fiscal Year 2008 performance reflects a slight increase over FY 2007 results, though it is still 

below the levels established in FY 2005 and FY 2006. The Department’s ability to achieve a 

higher success rate was hindered by the downturn in the economy as it has affected the housing 

industry, as well as from a relative reduction in funding available for HUD program monitoring, 

assistance, enforcement, and for needed IT systems improvement. For a broader explanation of 

HUD’s means, strategies, and plans for accomplishing its Strategic Goals, refer to Section 2, the 

Performance Section, of the full FY 2008 Performance and Accountability Report (PAR). 

In order to most efficiently and effectively fulfill the Mission of HUD, the Department has 

established the following major program offices:

 Office of Housing (including the Federal Housing Administration),

 Government National Mortgage Association (Ginnie Mae),

 Public and Indian Housing (PIH),

 Community Planning and Development (CPD), and

 Office of Fair Housing and Equal Opportunity (FHEO).

Each office has a primary focus on one or more of the Strategic Goals of HUD’s Mission, and 

their programs are generally focused on a particular housing program delivery constituency, such 

as state and local governments (CPD), public housing agencies (PIH), private sector lenders and 

owners (Housing/FHA), or the secondary mortgage market (Ginnie Mae). Additionally, HUD 

has a number of other administrative, financial, and support offices that directly support the 

strategic goals and/or provide valuable support to the five major program offices.
Page 8

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

73.1%

100.0%

78.9%

85.7%

75.0%

100.0%

Percent of FY 2008 Performance Indicators Met

By Program Office

The following pages provide a brief summary of the Department’s major organizations and their 

respective programs, how they work and who they serve, and their accomplishments and 

challenges during FY 2008. Additionally, other program and support organizations are identified 

that address a specific housing area and/or perform a specific function. Each office’s specific 

performance measures are discussed in depth in the Performance Section (Section 2) of the full 

PAR, which details the FY 2008 results, explaining HUD’s successes and challenges, and how 

HUD addressed the challenges.

MISSION

To contribute to building and preserving healthy neighborhoods and communities, maintain 

and expand homeownership, rental housing and healthcare opportunities, and stabilize credit 

markets in times of economic disruption.

HOUSING

Primary Focus: Increase Homeownership Opportunities and Affordable Rental 

Housing

Major Programs: FHA Single Family and Multifamily Housing Mortgage 

Insurance, Section 8 Project-Based Rental Assistance, Section 202 Housing for the 

Elderly, Section 811 Housing for the Disabled, Housing Counseling

FY 2008 Budget Authority:

Gross Appropriated Budget Authority: $7.6 Billion

Insurance and Loan Guarantees: $181+ Billion 

FHA Collections: $15.7 Billion

Authorized Staffing: 3,108 Full Time Equivalent

Performance Indicators:

Number of Measures: 26 Number Met: 19 Number Missed: 7
Page 9

FY 2008 CITIZENS’ REPORT

MAJOR PROGRAMS (http://www.hud.gov/offices/hsg)

 FHA provides mortgage insurance on loans for the purchase of new or existing homes, 

condominiums, manufactured housing, and houses needing rehabilitation; facilitates the 

construction, substantial rehabilitation, refinancing, and purchase of multifamily housing 

projects and healthcare facilities; and provides elderly homeowners with reverse equity 

mortgages. FHA has insured over 35 million single family home mortgages and 47,205 

multifamily project mortgages, representing approximately 5.8 million insured units since 

its inception in 1934.

 Housing Counseling provides counseling and advice with respect to property 

maintenance, financial management and other matters, as appropriate, to assist persons in 

improving their housing conditions, and to meet their responsibilities of homeownership.

 Project Based Rental Assistance (Section 8) is attached to multifamily housing 

properties and ensures that the properties remain affordable to low-income families.

 Housing for the Elderly (Section 202) provides interest-free capital advances to private, 

non-profit sponsors to finance the development of supportive housing for the elderly. 

Rent subsidies are also provided in order to make the facilities affordable.

 Housing for the Disabled (Section 811) provides affordable housing for very lowincome households in which at least one member, 18 years or older, has a physical or 

developmental disability or chronic mental illness.

FY 2008 PERFORMANCE RESULTS

FHA (http://www.hud.gov/offices/hsg/fhafy08annualmanagementreport.pdf)

FHA has been, and continues to be, a stabilizing presence for credit markets in times of 

economic disruption, as it did when private insurers tightened standards and some closed their 

businesses during the deep regional recessions of the 1980s. In the current credit crisis, FHA is 

providing a financially conservative and stabilizing presence. 

Housing and Economic Recovery Act of 2008 (http://www.hud.gov/offices/hsg)

On July 30, 2008, the President signed the Housing and Economic Recovery Act of 2008 

(HERA). HERA established many provisions to address the housing and economic crisis. One 

provision created the HOPE for Homeowners (H4H) Program, which was established to allow 

FHA to insure up to $300 billion in mortgages to assist homeowners to refinance with FHA to 

avoid foreclosure. The H4H program is now operational, available to all FHA-approved 

mortgage lenders, and should serve the borrowers most in need of the refinancing option it 

provides. The program has features useful for those with no other choice than foreclosure.

FHA’s role in improving homeownership opportunities is tracked by the volume of FHA insured 

loans. During FY 2008, FHA endorsed new mortgage insurance for over 1.2 million single 

family mortgages, including 111,661 Home Equity Conversion Mortgages (HECM), 

representing $177 billion of new mortgage endorsements and potential liability. Of the new 

endorsements in FY 2008, 77.9 percent were to first time homebuyers, with 31.2 percent being 

made to minorities. 
Page 10

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

Borrower Loan Workout Plans and Foreclosures

(Calendar Quarterly Data) 

322,909 333,393 335,572

140,401

170,090

220,326

257,444

135,330 151,403

312,225 302,561

75,326

264,139

246,192

202,970

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

CY 2007 Q3 CY 2007 Q4 CY 2008 Q1 CY 2008 Q2 CY 2008 Q3

Borrowers Applying

to HOPE NOW

Repayment Plans Modifications Foreclosure Sales

The financial stability of the Mutual Mortgage Insurance fund is a major concern of HUD and 

the Congress. To ensure the stability of this fund, Congress has mandated a minimum level for 

the capital ratio, currently set at 2.0 percent. The capital ratio is defined as the ratio of estimated 

economic value of the Fund to outstanding insurance-in-force. The capital ratio has consistently 

exceeded this minimum requirement, and was 6.4 percent in FY 2007. In FY 2008, HUD again 

surpassed the minimum level, though this ratio decreased significantly to 3.0 percent. The 

estimated economic value of the fund decreased significantly with the forecast of expected house 

price declines due to the declining housing market. Conversely, the total MMI insurance-inforce increased significantly due to the volume of new endorsements.

Housing Counseling

In FY 2008 over 2,000,000 homeowners (about 70 percent of those who have sought counseling) 

avoided foreclosure through HOPE NOW. HOPE NOW is a private, independent coalition for 

counseling troubled homeowners regarding refinancing or restructuring their loans to avoid 

foreclosure. This expanded HUD’s Housing Counseling outreach activities significantly as the 

coalition began to assist affected homeowners. In the chart below, based on national data from 

HOPE NOW, the Repayment Plans and the Modifications together represent homeowners who 

have avoided foreclosure through workout plans made with HOPE NOW assistance.

Many foreclosures are being prevented without a major restructuring of debt, and many lenders 

are willing to take actions to keep homeowners solvent. HOPE NOW counselors are all HUD 

intermediaries and are approved by HUD to provide Housing Counseling.

Multifamily Insurance

This year, the FHA endorsed mortgage insurance for 647 new multifamily housing loans 

(70,914 units) and 8 new healthcare facilities, representing a FY 2008 total of $4.17 billion of 

new insurance coverage, bringing the totals to 11,931 multifamily housing loans and 

81 healthcare facilities. Although the number of multifamily endorsements fell short of the 

FY 2008 goal to insure 750 multifamily projects, the results still represent a significant 

achievement in light of the major economic downturn impacting our country.
Page 11

FY 2008 CITIZENS’ REPORT

Project Based Rental Assistance (Section 8) 

Section 8 was named for the section of the U.S. Housing Act of 1937 under which the original 

subsidy program was authorized, and differs from the Housing Choice Voucher program 

(described in the PIH section of this report) in that the assistance is not provided to individual 

families, but is instead attached to multifamily housing properties to ensure that these properties 

remain affordable to low income families. In FY 2008, approximately 1.3 million units were 

provided Section 8 assistance. 

Housing For The Elderly (Section 202) and Housing For The Disabled (Section 811)

The goals for Section 202 and Section 811 were combined in FY 2008. The target was to reach 

initial closing on 200 projects. The actual number closed was 224 projects, which resulted in an 

additional 4,560 Section 202 units and 1,137 Section 811 units, bringing the total to 

142,046 units assisted in the Sections 202 and 811 programs.

For the Section 8, 202, and 811 Programs, ensuring the quality and viability of subsidized 

housing is a major commitment of the Department, and HUD has established a goal to monitor 

the physical and financial condition of insured and assisted multifamily housing projects. As of 

the end of FY 2008, 93 percent of 31,497 assisted properties met physical condition standards. 

This result fell short of the FY 2008 target by 2.0 percentage points.

GINNIE MAE

MISSION

To expand affordable housing in America by linking global capital markets to the nation’s 

housing markets.

MAJOR PROGRAMS (http://www.ginniemae.gov/)

Under the umbrella of HUD’s efforts to promote affordable homeownership, the Government 

National Mortgage Association, commonly known as Ginnie Mae, has been effectively working 

in the secondary housing market to channel funds to lenders, enhancing the availability of funds 

for new mortgages and reducing the mortgage interest rates consumers pay. 

Primary Focus: Increase Homeownership Opportunities

Major Programs: Mortgage-Backed Securities Guarantees

FY 2008 Budget Authority:

Gross Budget Authority: $8.25 Million for Salaries and Expenses

Commitment Authority: $258.3 Billion

Mortgage-Backed Securities Income and Interest Income: $1.0 Billion

Ginnie Mae Securities Outstanding: $576.8 Billion

Authorized Staffing: 69 Full Time Equivalent

Performance Indicators:

Number of Measures: 4 Number Met: 3 Number Missed: 1
Page 12

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

In the current uncertain environment of the housing and financial crisis due to mortgage 

foreclosures, Ginnie Mae is strong and stable. Ginnie Mae securitizes loans that are insured by 

FHA, VA, USDA, and PIH (HUD). Thus, it is able to offer investors a Mortgage Backed 

Security (MBS) that is backed by the full faith and credit of the United States government. Not 

only are the underwriting standards for these loans very high, but the backing gives Ginnie Mae 

an edge in times of market insecurity

FY 2008 PERFORMANCE RESULTS

Ginnie Mae exceeded its major goal for FY 2008 of securitizing at least 93.5 percent of eligible 

single family, fixed-rate FHA loans, by securitizing 96.9 percent. The organization also 

exceeded its goals for securitizing at least 95 percent of FHA multifamily mortgages and 

84 percent of Veterans Affairs single family, fixed-rate loans.

Ginnie Mae experienced a rise in the level of MBS issuance from $85.0 billion in FY 2007 to 

$220.6 billion in FY 2008, increasing its market share from 4 percent to 19 percent, at least 

partially due to the current financial crisis in the nation.

MISSION

To ensure safe, decent, and affordable housing for low-income households.

PUBLIC AND INDIAN HOUSING

MAJOR PROGRAMS (http://www.hud.gov/offices/pih/)

 Section 8 Housing Choice Vouchers provide a cost-effective means for delivering 

decent, safe, and affordable housing to low-income families. These vouchers assist 

eligible families to obtain housing in the private market, and in a neighborhood of their 

choosing.

 Public Housing Operating Funds assist PHAs in meeting public housing project and 

management expenses, such as administration, routine maintenance, anti-crime and antidrug activities, resident participation in management, insurance costs, energy costs, and 

other costs.

Primary Focus: Promote Decent Affordable Rental Housing

Major Programs: Section 8 Tenant-Based Rental Assistance, Public Housing 

Operating and Capital Funds, and Indian and Native Hawaiian Housing Block Grants 

and Loan Guarantee Funds

FY 2008 Budget Authority:

Gross Budget Authority: $23.3 Billion

Authorized Staffing: 1,513 Full Time Equivalent

Performance Indicators:

Number of Measures: 11 Number Met: 11 Number Missed: 0
Page 13

FY 2008 CITIZENS’ REPORT

 Public Housing Capital Funds provide grants to finance capital improvements, 

including the development, financing, and modernization of public housing 

developments and for management improvements. Additionally, a PHA may borrow 

funds from the private markets, pledge a portion of its future year annual capital funds, 

subject to the availability of appropriations, and then repay the financing as they receive 

their capital funds.

 HOPE VI, Section 184 Loan Guarantee Program, Section 184A Loan Guarantee 

program for Native Hawaiians, and the homeownership option under the Housing 

Choice Voucher, Family Self-Sufficiency, and Moving to Work programs each focus 

on a particular housing program delivery constituency.

FY 2008 PERFORMANCE AND FINANCIAL RESULTS

Section 8 Housing Choice Vouchers

HUD provided assistance to approximately 2.1 million households through vouchers 

administered by more than 2,400 PHAs. HUD has noted an increase in the PHAs utilization rate 

of vouchers provided by the Department from 90.0 percent in FY 2006, to 91.7 percent in 

FY 2007, and to 93.3 percent in FY 2008. Although this is an improvement, HUD still expects 

much greater utilization of these funds. To achieve improved utilization in the future, HUD 

plans to continue outreach to PHAs and to link future administrative fee payments to PHA 

leasing levels.

Public Housing Operating Funds

Operating Funds are provided to over 3,100 PHAs, supporting approximately 1.1 million units of 

assisted housing, to assist them in meeting public housing project and management expenses. 

The “Public Housing Cost Study” recommended a transition to asset management to increase the 

focus and accountability of PHAs for each of their individual public housing properties as a 

valuable low-rent real estate asset. FY 2008 was the second year of the new Operating Fund 

formula, which requires conversion to asset management. Asset management includes adoption 

of project-based budgeting, accounting, and asset management to align PHA accounting and 

management practices to those used by private industry for PHAs with 400 or more units. At the 

end of FY 2008, 99 percent of PHAs in this category had implemented asset-based accounting 

and had completed the conversion to asset management, exceeding the goal by 60 percent.

The physical condition of PHAs, like multifamily housing projects, is very important to HUD 

and thus is monitored very closely. As of September 30, 2008, the percentage of public housing 

units meeting HUD’s physical condition standards was 84.5 percent, substantially meeting the 

goal of 85.0 percent. Once the Department has completed the transition to asset management, 

the physical condition goal will be tracked on a property level versus on a PHA level.

Public Housing Capital Funds

During FY 2008, over 3,100 PHAs were recipients of public housing capital funds, with an 

average grant amount up to $750,000, to finance capital improvements including the 

development, financing, and modernization of public housing developments and for management 

improvements. Also, HUD’s Office of Capital Improvements approved approximately 

$504 million of leveraged funds through the Capital Fund Financing Plan. This approval 
Page 14

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

provided 15 PHAs with funding to modernize and develop public housing, thus protecting and 

enhancing the affordable housing stock.

MISSION

To develop viable communities by promoting integrated approaches that expand economic 

opportunities for low- and moderate-income persons, and provide decent housing with a suitable 

living environment. 

COMMUNITY PLANNING AND DEVELOPMENT

MAJOR PROGRAMS (http://www.hud.gov/offices/cpd/)

 Community Development Block Grant (CDBG) program provides grants to units of 

general and local government and states for the funding of local community development 

programs. CDBG also provides disaster recovery assistance to states impacted by 

hurricanes and other disasters such as 

hurricanes Katrina, Rita and Wilma of 2005 

and Gustav and Ike of 2008, the 2008 Midwestern states’ floods, as well as emergency 

assistance to state and local governments to 

use for the redevelopment of abandoned and 

foreclosed homes and residential properties. 

Ninety six percent of the 2005 appropriated 

funds for hurricanes Katrina, Rita and Wilma 

were allocated to the states of Louisiana and 

Mississippi, with Louisiana receiving 

$13.4 billion and Mississippi $5.5 billion. Of 

the total awarded to Louisiana, 75 percent of 

the monies are designated for the Road Home 

program. Fifty percent of the funds awarded to Mississippi is for the Homeowner 

Program, which is designed to provide financial assistance to homeowners that were 

outside the flood plains. In addition to the Gulf Coast hurricane disasters of 2005, 

Congress appropriated $300 million in emergency disaster assistance in 2008 for the 

Primary Focus: Strengthen communities and expand economic and community 

development opportunities for low- and moderate-income households

Major Programs: Community Development Block Grants, Special Needs 

Assistance, and Affordable Housing

FY 2008 Budget Authority: 

Gross Budget Authority: $21.3 Billion 

CPD Core Programs: $7.6 Billion

CPD Disaster Relief: $13.7 Billion

Authorized Staffing: 777 Full Time Equivalent

Performance Indicators: 

Number of Measures: 19 Number Met: 15 Number Missed: 4
Page 15

FY 2008 CITIZENS’ REPORT

Midwestern states which were affected by the floods in late spring. Congress also 

appropriated $6.5 billion as enacted for disaster relief, long-term revitalization in 

federally declared disaster areas affected by hurricanes (including Ike and Gustav), 

floods, and other natural disasters occurring during 2008.

The Housing and Economic Recovery Act of 2008 provided $3.92 billion for the 

Neighborhood Stabilization Program (NSP) in emergency assistance to state and local 

governments to use for the redevelopment of abandoned and foreclosed homes and 

residential properties. Further details are available on HUD’s website at 

(http://www.hud.gov/nsp).

 Special Needs Assistance Programs focus on assisting in the reduction of homelessness 

in the Nation by funding programs to help persons who are homeless by offering 

permanent supportive housing. Special needs efforts also involve housing opportunities 

for low-income persons living with HIV/AIDS (also known as HOPWA). 

(http://www.hud.gov/offices/cpd/aidshousing/programs/index.cfm)

 Affordable Housing Programs such as the HOME Investment Partnerships 

(http://www.hud.gov/offices/cpd/affordablehousing/programs/home/), Self-Help 

Homeownership Opportunity 

(http://www.hud.gov/offices/cpd/affordablehousing/programs/shop/), and 

Homeownership Zones 

(http://www.hud.gov/offices/cpd/affordablehousing/programs/hoz/) programs provide 

federal resources directly to the state and local level for use in the development of 

affordable housing units, or to assist income-eligible households in purchasing, 

rehabilitating, or renting safe and decent housing.

 Other CDBG Programs provide financial and technical assistance to local communities 

to develop and implement their own economic development and community 

revitalization strategies. 

FY 2008 PERFORMANCE RESULTS

Community Development Block Grants (CDBG) 

(http://www.hud.gov/offices/cpd/communitydevelopment/programs/index.cfm)

During FY 2008, CDBG grantees (Entitlement and State Programs) expended approximately 

$4.3 billion in grant funds for programs and activities such as housing ($1.1 billion), economic 

development ($343 million), public improvements ($1.4 billion), public services ($466 million), 

and others ($1 billion). The percentage of CDBG entitlement and state CDBG funds that are 

used to directly benefit low- and moderate-income persons is a key indicator for the Department, 

as it supports the overall goal of the CDBG program, i.e., that funds principally benefit low- and 

moderate-income persons. In FY 2008, the share of CDBG entitlement and state CDBG funds 

that benefited low- and moderate-income persons averaged 95.6 percent, exceeding the goal of 

90 percent.

In FY 2008, Louisiana provided $7.1 billion to 118,335 Road Home applicants while Mississippi 

provided $1.7 billion to 23,651 Homeowner Program applicants. The Road Home program is 

designed to provide compensation to citizen homeowners affected by Hurricanes Katrina or Rita 

for damages of their homes, and is administered by the State of Louisiana. The Homeowner 
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

Program is designed to provide assistance to homeowners of Mississippi that were outside of the 

flood plains. 

Special Needs Assistance Programs (http://www.hud.gov/offices/cpd/homeless/index.cfm)

In FY 2008, HUD exceeded its targeted assistance goals to reduce the effects of chronic 

homelessness. The Department achieved 75.1 percent of formerly homeless persons remaining 

in permanent housing for at least six months, achieving a 5 percent increase above the target of 

71.5 percent. Similar progress was evidenced in transitional housing, wherein 71.1 percent of 

homeless persons moved from transitional housing into permanent housing. This is an increase 

of 7.6 percentage points, or 12 percent increase above the 63.5 percent target for FY 2008. 

Employment of homeless persons exiting permanent housing increased by 2.9 percentage points, 

or 15 percent, from its targeted goal of 19 percent, thereby yielding 21.9 percent for FY 2008. 

Approximately 21,405 households received support through HOPWA’s permanent housing 

projects, 40,805 households received benefits to reduce risks of homelessness under the shortterm and transitional housing projects, and 35,253 eligible persons benefited under housing 

assistance leveraged from other state, local or private sources operating under the community’s 

HIV housing efforts. 

Affordable Housing Programs (http://www.hud.gov/offices/cpd/affordablehousing/index.cfm)

During FY 2008, 642 Participating Jurisdictions used HOME funds to complete 30,999 new 

homebuyer units and/or directly assist homebuyer households. Additionally, 384 American 

Dream Down Payment Initiative (ADDI) recipients received funds to complete 4,209 new 

homebuyer units and/or directly assist first-time homebuyer households.

FAIR HOUSING AND EQUAL OPPORTUNITY

MISSION

To create equal housing opportunities by enforcing laws including the Federal Fair Housing Act

that prohibit discrimination in housing on the basis of race, color, religion, sex, national origin, 

disability, familial status, and age. 

Primary Focus: Create Equal Housing Opportunities

Major Programs: Fair Housing Assistance Program, Fair Housing Initiatives 

Program and Enforcement

FY 2008 Budget Authority:

Gross Budget Authority: $50 Million 

Authorized Staffing: 583 Full Time Equivalent

Performance Indicators:

Number of Measures: 7 Number Met: 6 Number Missed: 1
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FY 2008 CITIZENS’ REPORT

MAJOR PROGRAMS (http://www.hud.gov/offices/fheo/)

 Fair Housing Assistance Program reduces discrimination and 

unfair practices by increasing public awareness of fair housing laws, 

housing discrimination, lending discrimination and predatory 

lending, as well as educating the public about what they can do and 

where to go for assistance. 

 Fair Housing Initiatives Program provides a fair, effective, 

expeditious, and efficient fair housing complaint process essential to 

maintaining the public’s confidence that victims of housing 

discrimination will receive relief from discriminatory housing 

practices and that violators will be disciplined.

FY 2008 PERFORMANCE RESULTS

Fair Housing Assistance Program

In FY 2008, the Department completed 60 percent of new complaints filed within 100 days, 

exceeding its goal by 5 percent. HUD also exceeded its goals related to “aged” cases during the 

year. The Department did not achieve its goal related to Fair Housing Assistance Program 

agencies closing 53 percent of fair housing complaints referred by HUD within 100 days, closing 

only 50 percent.

Fair Housing Initiatives Program

HUD has continued to surpass its education and awareness goals, conducting 1,783 education 

and outreach events during FY 2008, 1,483 more than the target. These events reached nearly 

300,000 people, 120,000 more than their target. 

HUD investigates complaints of housing discrimination, including discriminatory lending 

complaints, at no cost to individuals who believe they have experienced discrimination. To learn 

more go to (http://www.hud.gov/offices/fheo/complaint-process.cfm).

OTHER ORGANIZATIONS IN HUD

Healthy Homes and Lead Hazard Control (http://www.hud.gov/offices/lead/)

The elimination of lead poisoning in children as a major public health problem by 2010 is one of 

the President’s and Secretary’s priorities. In the 1990 to 1994 time period, the number of 

children with elevated blood lead levels was 890,000. As of the end of FY 2008, that number 

was 215,000. This effort is the responsibility of the Office of Healthy Homes and Lead Hazard 

Control. With an FY 2008 appropriation of $145 million, this Office directs programs that 

address the health and safety needs of homes, including the Lead Hazard Control Program and 

the Healthy Homes Initiative, and enforcing lead safety regulations. 

Faith Based and Community Initiatives (http://www.hud.gov/offices/fbci/)

The Center for Faith-Based and Community Initiatives’ goal is to 

implement the President’s vision of a compassionate community, where 

faith-based and community organizations work with government to help the 

needy in a more effective manner. One of the key principles is that all 

groups, whether religious or secular, should compete on a level playing field 
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

when applying for federal funds. As a result, an important part of the Center’s work is 

empowering faith-based and community organizations to apply for HUD grants. One of the 

Center’s activities is to assist organizations to obtain federal grants through grant writing training 

sessions. In FY 2008, 68 training sessions were held, 38 more than the goal.

Other Support Offices

In addition to the program offices described above, HUD has the following support 

organizations. More extensive and detailed information for these offices can be found at their 

respective links, as well as in the full PAR.

The Office of Administration (http://www.hud.gov/offices/adm/)

The Office of the Chief Financial Officer (http://www.hud.gov/offices/cfo/)

The Office of the Chief Information Officer (http://www.hud.gov/offices/cio/)

The Office of the Chief Procurement Officer (http://www.hud.gov/offices/cpo/)

The Office of Field Policy and Management (http://www.hud.gov/offices/fpm/)

The Office of Congressional and Intergovernmental Relations 

(http://www.hud.gov/offices/cir/)

The Office of Departmental Operations and Coordination 

(http://www.hud.gov/directory/dirodoc.cfm)

The Office of General Counsel (http://www.hud.gov/offices/ogc/)

The Office of Inspector General (http://www.hud.gov/offices/oig/)

The Office of Policy Development and Research (http://www.huduser.org/)

The Office of Public Affairs (http://www.hud.gov/news/index.cfm)

Management Challenges and Performance

Conditions which can either hinder or threaten to hinder HUD’s mission include the economy, 

demographic and social trends, the physical environment, and internal organization and 

management limitations. (A thorough discussion of this topic can be found in the full PAR in the 

sections titled “Risks, Trends, and Factors Affecting Goals,” “Inspector General’s Summary 

of Management and Performance Challenges,” and “Management and Performance 

Challenges – HUD Management Perspectives.”)

HUD’s Inspector General reported six management challenges the Department faced in 

FY 2008. As discussed in the following sections, four of these challenges are being addressed as 

initiatives of the President’s Management Agenda (PMA), and the other two challenges – the 

“nations’ financial crisis” and “victims of natural disasters” – are being addressed through HUDspecific initiatives.

Human Capital Management

HUD’s management recognizes the challenges in the management of human capital and in 

implementing the three main initiatives of its Strategic Human Capital Management Plan: be 

“mission-focused,” maintain a “high quality workforce,” and conduct “effective succession 

planning.” Both the Office of Personnel Management and the Office of Management and 
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FY 2008 CITIZENS’ REPORT

Budget have recognized HUD’s progress in this area by scoring HUD as “Green” on the PMA’s 

Human Capital initiative for the 3rd quarter of FY 2008.

One of the greatest challenges HUD and other federal agencies face is the fact that more than 

58 percent of HUD’s aging workforce will be eligible to retire within three years. Workforce 

planning is hindered by a lack of funding for maintaining requested full-time equivalent staffing 

levels and adequately training and developing HUD staff. The requirement to fund salary 

increases without corresponding increases in annual appropriations worsens the funding gap.

Along with succession planning, employee surveys, and a centralized training strategy, which are 

helpful in upgrading staff capabilities, HUD is refining and strengthening the use of risk-based 

program monitoring techniques in order to better assure adequate program oversight and 

accountability with available resources.

Financial Management Systems

HUD’s OIG has raised specific management challenge issues in this area, including: the 

implementation of the HUD Integrated Financial Management Information Project (HIFMIP), 

the need for improved financial system security and other controls, and adequate funding for 

system development to upgrade or replace antiquated systems applications. 

HUD recognizes the need to modernize its core financial system, and the challenge of having and 

maintaining strong internal controls over financial systems and financial reporting. HUD has 

already implemented new financial systems at FHA and Ginnie Mae, addressing previously 

identified weaknesses. The contract for a Shared Service Provider/Systems Integrator to 

modernize the financial system for the rest of HUD was scheduled for award during the first 

quarter of FY 2009 as the next step under the HIFMIP. In the interim, HUD’s ability to produce 

timely, accurate financial statements and essential financial data has not been deterred by the 

lack of a modern core financial system.

OMB has recognized HUD’s progress on the Improving Financial Performance initiative of the 

PMA by scoring HUD’s status as “Green.” Specifically, OMB recognized HUD’s use of 

financial information by managers for decision making. HUD’s Financial Data Mart has over 

400 users, primarily those who are responsible for financial decision-making, with over 530 

web-based or broadcast reports, mostly financial in nature.

HUD has resolved the two OIG identified material weaknesses identified in the FY 2007 

financial audit related to the Home Equity Conversion Mortgage (HECM) program.

In response to the IG’s concerns about system security controls, in FY 2008, HUD obtained 

sufficient audit record storage capacity, established an audit reduction and report generation 

capability, ensured that security audit log events are monitored, analyzed, reported and followedup, and restricted access to log files to those whose job function requires that access.

FHA Single-Family Management

HUD’s challenge in this area is to demonstrate that it is managing against the potential losses 

that threaten the rapidly growing portfolio of more than $450 billion in single-family mortgages 

while enabling millions of first-time borrowers, minority, low-income, elderly, and other 

underserved households to realize the benefits of homeownership. With the collapse of the 

credit industry, partially due to the national subprime mortgage crisis that came to a head in 

FY 2008, the value of FHA’s reserves are being diminished by increasing default rates, while the 
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

increased use of FHA to insure new and refinanced loans is increasing the exposure of those 

reserves to future risk. While HUD’s capital reserve ratio of 3.0 percent is still above the 

congressionally required limit of 2.0 percent, HUD must maintain a watchful eye on future risk 

relative to the increasing portfolio of single-family mortgages.

FHA is striving to conduct the actions noted by the IG including performing a formal, systematic 

annual risk assessment of its programs and administrative functions, planning and conducting 

ongoing management control reviews, establishing an overall strategy regarding its risk-based 

monitoring of program activities and participants, and identifying corrective actions required to 

improve its management controls in a timely manner.

Public and Assisted Housing Administration

While much progress has been made in strengthening controls over this program area, HUD 

remains challenged in providing sufficient monitoring of public housing agencies and assisted 

multifamily housing projects to assure they are fully and properly utilizing program funds to 

provide quality housing to eligible households at the correct subsidy levels. 

As of June 30, 2008, indicators of public housing agency use of Section 8 voucher program 

funds and voucher utilization rates showed that the 2,335 public housing agencies have 

accumulated $1.9 billion in excess funds since 2005, of which $1.4 billion is classified as 

unusable under current program rules. While HUD has noted an increase in the utilization rate 

from 90.0 percent in FY 2006, to 91.7 percent in FY 2007, and to 93.3 percent in FY 2008, 

efforts are needed to remove statutory barriers and improve program management to increase 

utilization. HUD plans to continue to work with the Congress on legislative changes and to 

increase outreach to PHAs with linkage of future PHA administrative fee payments to leasing 

levels. 

HUD has taken a number of actions to enhance its monitoring efforts during FY 2008, and also 

set and communicated clear measurable goals and corrective actions for further reducing 

improper rental housing assistance payment, and for improving public and assisted housing 

conditions. HUD also is implementing regulatory changes to the public housing operating 

subsidy program to move public housing agencies towards more effective asset management 

practices and greater energy efficiency. PHAs will be able to reduce operating costs, retain 

savings, and take advantage of financial incentives and strategies for reducing utility 

consumption. HUD is also addressing this challenge by conducting on-site reviews at PHAs and 

multifamily projects, developing an Operating Subsidy Review Guide, training staff, developing 

automated tools to be used by field office staff, completing a review of all operating subsidy 

calculations, and providing increased access to, and use of, the Enterprise Income Verification 

(EIV) System to validate tenant income. 

Of the actions listed above, EIV is one of the most notable and successful. EIV has allowed 

HUD to improve its verification of tenant income for households receiving rental assistance to 

ensure the fair allocation of resources. Under-reporting of wages, social security benefits, and 

unemployment income, and failure of assisted housing providers to verify reported income have 

historically been two main causes of improper payments. The expansion of the Enterprise 

Income Verification system in FY 2008 will eliminate the majority of these kinds of improper 

payments and HUD anticipates improved results will begin to be reported in the FY 2009 PAR.
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FY 2008 CITIZENS’ REPORT

The Nation’s Financial Crisis

A major challenge to the Department is a result of the credit and financial crisis. The enacting of 

several laws in response to this crisis has impacted HUD profoundly and requires significant 

resources to implement the laws, including the Housing and Recovery Act of 2008 (HERA), 

that have been enacted. HERA restructured the oversight of Government-Sponsored Enterprise 

(GSE) corporate giants Fannie Mae and Freddie Mac, which were placed under conservatorship 

in September 2008, and established a $300 billion HOPE for Homeowners program to help 

qualified homeowners avoid foreclosure.

Other programs/actions developed by HUD include:

 Technology Open To Approved Lenders (TOTAL) scorecard for automating 

underwriting approval;

 HOPE NOW Alliance of counselors, servicers, lenders, and other groups to help 

homeowners experiencing financial distress with in-depth counseling on debt 

management, credit, and foreclosure prevention; and

 FHASecure, which helps homeowners with subprime Adjustable Rate Mortgages 

(ARMs) to refinance into affordable, fixed-rate, FHA loans.

HERA established the Neighborhood Stabilization Program that provides $3.92 billion of 

emergency assistance grants under CDBG to stabilize communities harmed by concentrated 

foreclosures by acquiring and redeveloping foreclosed properties that would otherwise trigger 

further abandonment and blight.

The Home Equity Conversion Mortgage (HECM) or “reverse mortgage” program promotes 

“aging in place” as well as supplemental income for elderly homeowners by allowing them to tap 

into home equity. The HECM program endorsed 111,661 reverse mortgages in FY 2008, raising 

the total since the program’s inception to 454,745 loans.

Victims of Natural Disasters

In 2005, HUD responded quickly to assist the victims affected by hurricanes Katrina, Rita and 

Wilma, to help meet temporary housing needs of displaced households, assess the impacts on 

HUD-supported housing, and plan the long-term recovery of the devastated region. While 

HUD’s response was immediate and comprehensive, it also recognized that the enormous 

amount of relief funds creates the potential for fraud and abuse. The CPD Disaster Recovery 

Assistance Division was provided an influx of disaster funding beginning in FY 2005 and 

continuing into FY 2008 to address the hurricane disaster recoveries. In total, HUD has 

oversight of approximately $30 billion in disaster supplemental funding.

Management recognizes the program vulnerability, and the need for oversight of disaster funds. 

To address such concerns, in FY 2008, CPD awarded a contract to examine grantee oversight of 

the Gulf Coast disaster recovery funds by assessing the design and execution of the program 

delivery structure and internal controls for the States of Louisiana and Mississippi. Funding for 

these states comprises more than 90 percent of the $19 billion in Gulf Coast disaster recovery 

funds. 

The contractor’s report suggested best-practices and recommended more stringent monitoring 

protocols over disaster recovery funds to reduce program vulnerabilities. Action on a number of 

recommendations was already underway because the issues had previously been identified as 
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

part of HUD program monitoring, grantee internal audit, or audits by the Office of Inspector 

General. Additionally, CPD recognizes the shortcomings of staffing, support, and systems and is 

proposing funding in the FY 2010 budget to address them.

(

PRESIDENT’S MANAGEMENT AGENDA

http://www.whitehouse.gov/results/agenda/scorecard.html)

In FY 2002, the Office of Management and Budget (OMB) published the President’s 

Management Agenda (PMA), as set forth by President George W. Bush, to implement 

government reform that is citizen-centered, results-oriented, and market based. The following is 

a summary table reflecting the past seven years of HUD’s PMA activities and results as of 

June 30, 2008. The colors RED, GREEN, and YELLOW are indicators of levels of 

accomplishment, with GREEN representing success, YELLOW representing mixed results, and 

RED indicating unsatisfactory results. 

 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008

- Status Improvement to Yellow or Green - Maintains Current Status 

Score

 - Initiative Complete - Status Downgrade to

Yellow or Red

Strategic Management

of Human Capital

Improved Financial

Performance

Expanded

E-Government

HUD Management and

Performance

Performance

Improvement Initiative

Commercial Services/

Competitive Sourcing

Faith-Based and

Community Initiatives N/A

Eliminate Improper 

Payments N/A N/A N/A

Credit Program 

Management N/A N/A N/A N/A
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FY 2008 CITIZENS’ REPORT

INDEPENDENT AUDITOR’S REPORT [EXCERPTS]

The Office of Inspector General (OIG) of HUD performed an independent financial audit for 

FY 2008. The subsequent information below is a brief summary of the audit. External 

accounting firms conducted independent audits of GNMA and FHA. Audit results provide an 

important indication of the financial performance, reliability, and management of the public 

funds entrusted to HUD. The result of this audit represents the ninth consecutive year that HUD 

has received an unqualified or “clean” audit opinion.

The HUD OIG’s concluded opinion is stated below. A copy of the full audit report and HUD’s 

response can be found on (http://www.hud.gov/offices/oig/reports/index.cfm):

In our opinion, based on our audit and the reports of other auditors, for the 

accompanying fiscal years 2008 and 2007, the principal financial statements present 

fairly, in all material respects, the financial position of HUD as of September 30, 2008 

and 2007 and its net costs, changes in net position, and budgetary resources for the fiscal 

years then ended, in conformity with accounting principles generally accepted in the 

United States of America. 

Financial Audit Findings

Attainment of an unqualified opinion is a high-water mark for any organization. In HUD’s case, 

this is even more noteworthy because the audit noted the elimination of the two material 

weaknesses which were first identified in the prior year financial audit. The elimination of these 

two material weaknesses, i.e., FHA’s Home Equity Conversion Mortgage Systems (HECM) Risk 

Assessment, and the HECM Credit Subsidy Cash Flow Model, was accomplished due to 

tremendous efforts of HUD staff. 

Management Assurances

HUD’s management is responsible for establishing and maintaining effective internal controls 

and financial management systems that meet the objectives of the Federal Managers’ 

Financial Integrity Act of 1982 (FMFIA), Sections 2 and 4. HUD conducted its assessment of 

the effectiveness of its internal control over the efficiency and effectiveness of operations and 

compliance with applicable laws and regulations in accordance with OMB Circular A-123, 

and with A-123 Appendix A, and based on the results of this evaluation, can provide 

reasonable assurance that its internal control was operating effectively and that no material 

weaknesses were found in the design or operations of the internal controls over financial 

reporting.

Audit Opinion: Unqualified or “Clean”

2000 2001 2002 2003 2004 2005 2006 2007 2008

 
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FY 2008 CITIZENS’ REPORT

In addition, the Federal Financial Management Improvement Act (FFMIA) requires federal 

agencies to implement and maintain financial management systems that are in substantial 

compliance with federal financial management systems requirements, federal accounting 

standards, and the United States Government Standard General Ledger at the transaction level. 

HUD provides reasonable assurance that its financial management systems substantially 

comply with FFMIA for FY 2008.

FINANCIAL STATEMENTS [EXCERPTS]

Following are excerpted tables from selected financial reports that provide an overview of 

HUD’s financial position. An analysis of HUD’s financial condition can be found in “Section 1: 

Management’s Discussion and Analysis” of the full FY 2008 PAR on pages 71 through 81.

Summarized Financial Data

(Dollars in Millions)

2008 2007

Total Assets $125,036 $111,074

Total Liabilities $30,521 $20,360

Net Position $94,515 $90,714

FHA Insurance-In-Force $573,196 $399,960

Ginnie Mae Mortgage-Backed Securities Guarantees $576,800 $427,600

Other HUD Program Commitments $57,027 $65,472

Consolidated Balance Sheet (condensed)

As of September 30, 2008 and 2007

(Dollars in Millions)

ASSETS 2008 

Total Intragovernmental Assets

2007

$114,106 $100,324

 Credit Program Receivables and Related

 Foreclosed Property 9,565 9,567

 Other Assets 1,366 1,183

TOTAL ASSETS $125,036 $111,074

LIABILITIES

Total Intragovernmental Liabilities $7,274 $9,272

 Loan Guarantees 19,613 7,551

 Other Governmental Liabilities 3,634 3,537

TOTAL LIABILITIES $30,521 $20,360

NET POSITION

 Unexpended Appropriations - Earmarked (Note 18) ($376) ($376)

 Unexpended Appropriations 66,832 54,871

 Cumulative Results of Operations - Earmarked (Note 

18)

14,089 13,266

 Cumulative Results of Operations 13,970 22,953

TOTAL NET POSITION $94,515 $90,714

TOTAL LIABILITIES AND NET POSITION $125,036 $111,074

Figures may not add to totals because of rounding.
If you have any questions or comments, please call

Frank Murphy

Assistant Chief Financial Officer for Financial Management

at 202-402-3466.

Written comments or suggestions for improving this report

may be submitted by mail to:

U.S. Department of Housing and Urban Development

451 7th St. SW, Room 2210

Washington, DC 20410

Attention: Frank Murphy

Assistant Chief Financial Officer for Financial Management

Or by e-mail to

Frank.J.Murphy@hud.gov

For additional copies of this report, please call the

CFO’s Office for Financial Management

at 202-402-6544

or e-mail Anthony.A.Twyman@hud.gov

To view the report on the internet, go to the following website:

www.hud.gov/offices/cfo/reports/cforept.cfm