This Highlights version of the Performance and Accountability Report (PAR), the full PAR and 

prior year reports are available at: 

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

The following is a list of direct web links to HUD program offices: 

Center for Faith-Based and Community Initiatives www.hud.gov/offices/fbci/index.cfm

Community Planning and Development www.hud.gov/offices/cpd/

Fair Housing and Equal Opportunity www.hud.gov/offices/fheo/

Federal Housing Administration www.hud.gov/offices/hsg/hsgabout.cfm

Field Policy and Management www.hud.gov/offices/fpm/

Government National Mortgage Association www.ginniemae.gov/

Government Sponsored Enterprises www.hud.gov/offices/hsg/gse/gse.cfm

Healthy Homes and Lead Hazard Control www.hud.gov/offices/lead/

Multifamily Housing www.hud.gov/offices/hsg/hsgmulti.cfm

Single Family Housing www.hud.gov/offices/hsg/sfh/hsgsingle.cfm

Public and Indian Housing www.hud.gov/offices/pih/

Policy Development and Research www.huduser.org/
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 1

Message from the Secretary 

February 1, 2008 

 

I am pleased to share, with the American Public, highlights from 

our Annual Performance and Accountability Report (PAR) for 

Fiscal Year 2007. This report highlights HUD’s contributions as 

the nation’s chief provider of housing to those most in need, 

whether it be by increasing homeownership, providing support 

for community development, or increasing access to affordable 

rental housing, free from discrimination. This is our mission and 

this report presents our progress in meeting our strategic and 

annual performance goals. The full FY 2007 PAR can be found at 

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

Highlights of the Department’s accomplishments for 2007 include: 

 Eliminated “High Risk” Designation. In January 2007, for the first time since 1994, the 

Government Accountability Office removed HUD’s single-family housing mortgage 

insurance and rental housing assistance programs from the list of “High Risk” federal 

programs. This significant outcome resulted from HUD’s multi-year effort to strengthen 

internal controls to reduce both the risks of FHA’s housing mortgage insurance programs and 

the level of improper rental housing assistance payments. FHA’s demonstrated ability to 

manage its risks and assure the financial soundness of its self-sustaining programs is a key 

consideration as we seek congressional approval of FHA reforms that will enable FHA to 

offer homebuyers lower risk and less cost alternatives to the subprime lending market. Since 

2001, HUD has reduced the level of improper rental assistance payments, as a percentage of 

total assistance payments, from 17.1 percent to 5.5 percent, a reduction of $1.9 billion. 

 FHASecure. HUD will help nearly one-quarter of a million homeowners avoid foreclosure 

and the loss of their homes by enhancing FHA’s refinancing program. In August, 2007, 

HUD launched a new foreclosure avoidance initiative called FHASecure. This mortgage 

insurance program is geared toward borrowers who have good credit, but who have been 

caught up in the subprime lending wave and may not have made all of their payments on 

time because of resetting interest rates. For the first time, FHA is able to offer many of these 

homeowners an affordable option to refinance their existing mortgage so they can make their 

payments and keep their homes. This change, in addition to other existing FHA products, 

will bring the total number of families that FHA estimates it will help to avoid foreclosure 

next fiscal year to approximately 240,000.

 Increased Minority Homeownership. HUD helped increase the minority homeownership 

rate from 49.2 percent in 2002 to 51.0 percent in 2007. The proportional gain represents 

approximately 3.74 million additional minority homeowners since mid-2002. The continued 

progress supports the challenging 2002 Presidential goal of adding 5.5 million new minority 

homeowners by the end of the decade in 2010. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 2 

 Targeted Rental Assistance. HUD expended over $27.5 billion for rental assistance to 

house approximately 4.8 million families in need, 3.6 million through direct rental assistance 

and 1.2 million in public housing. 

 Community Development. HUD continued to assist communities, awarding $3.7 billion in 

FY 2007 to state and local governments to target their own community development 

priorities. The Community Development Block Grant program allows the communities to 

prioritize and use the funds to best serve the community, with oversight by HUD. With 

regard to CDBG-funded housing activities during FY 2007, grantees reported that more than 

117,800 owner-occupied housing units and 37,000 rental units were rehabilitated with CDBG 

funds, while more than 6,900 households received direct homeownership assistance. With 

regard to job creation and retention activities, grantees reported more than 39,000 jobs were 

created or retained through the use of CDBG funds. 

 Response to Natural Disasters. The Department continues to be a major participant in the 

federal government’s response to the hurricanes of 2005 by coordinating the long-term 

housing solutions for Gulf Coast residents displaced by Hurricanes Katrina, Rita, and Wilma. 

o The Disaster Housing Assistance Program assists displaced families in the Gulf States, 

helps them to rebuild their lives, get on a path to self-sufficiency, and have the 

opportunity to return to their home, if they choose. HUD is assisting approximately 

28,500 families referred by FEMA under this program, and assured payments to 

landlords as of December 1, 2007. 

o In FY 2007, $6.2 billion of HUD’s CDBG Disaster Assistance Grant funding for the Gulf 

Coast States was disbursed to the five states affected by the hurricanes. The disbursed 

funds were primarily directed to the states of Louisiana and Mississippi for compensation 

payments to more than 59,000 homeowners in Louisiana and more than 15,000 in 

Mississippi. 

o HUD also created the nation’s first National Housing Locator (NHL) system to facilitate 

rental housing assistance in disaster areas. The intergovernmental NHL web site was 

launched in January 2007 as a direct response to lessons learned from Hurricane 

Katrina – most notably the need for a nationwide, single point of entry, easily searchable 

system to identify available rental housing in times of disaster. 

 Lead Hazard Control. The number of children under the age of 6 with elevated blood lead 

levels has been reduced to approximately 235,000 from a level in excess of 890,000 in the 

1990 to 1994 time period. This downward trend is a result of HUD’s efforts – in partnership 

with the Centers for Disease Control and Prevention, the Environmental Protection Agency, 

and other agencies – to control lead hazards in housing through grants and enforcement of 

HUD’s lead regulations, expanded outreach on this issue, and expansion of the required 

public-private infrastructure to implement the program. HUD’s goal is to eliminate this 

totally avoidable epidemic – lead poisoning caused by housing – by the end of the decade. 

 Management Excellence. The Department was upgraded to a score of “Green” on the 

Improved Financial Performance initiative of the President’s Management Agenda. This 

improvement was a result of HUD’s seventh consecutive unqualified audit opinion on its 

annual consolidated financial statements, elimination of its remaining longstanding material 

weaknesses, meeting all accelerated financial reporting requirements, initiating FHA activity 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 3

based costing, and development of improved financial reporting to enhance budget and 

program execution, with plans for continued improvement. The Department has “Green” 

scores on five of nine Presidential initiatives and is working to improve the scores on the 

initiatives not currently “Green.” 

By law, I am required to make certain assurances concerning the reliability and completeness of 

the data contained in this report. The following provides that assurance. 

The Federal Managers’ Financial Integrity Act (FMFIA) requires that the Secretary 

report to the President and the Congress on the adequacy of management controls in 

safeguarding resources. Based on the year-end assurances given by principal agency 

officials, the Office of Inspector General’s unqualified audit opinion on HUD’s 

consolidated financial statements, and the lack of any material internal control weakness 

issues, I assert that HUD’s internal controls and financial systems comply with 

Sections II and IV of the FMFIA. Further discussion of my assurances and plans for 

further improvement of our financial management during FY 2008 can be found in the 

Financial Management Accountability section of the full FY 2007 PAR. 

Additionally, the Federal Financial Management Improvement Act of 1996 requires 

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

compliance with OMB Circular A-127 and other Financial System Integration Office 

requirements, federal accounting standards, and the United States Government Standard 

General Ledger at the transaction level. This is the third year in which the Department 

has reported substantial compliance with these requirements. In general, the performance 

and financial data in this report are complete and reliable, and any data limitations noted 

in Section II, Performance Information, or Section III, Financial Information of the full 

PAR, are not considered significant to overall information reliability and usefulness. 

The Department is honored to serve as a strong advocate for increasing homeownership, 

particularly among minorities, creating affordable rental housing opportunities for low-income 

Americans, and supporting the homeless, elderly, those with disabilities, and people living with 

AIDS. We pledge to continue our work to serve the most vulnerable populations, fight 

discrimination, and revitalize America’s communities. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 4 

INCREASE HOMEOWNERSHIP, 

SUPPORT COMMUNITY DEVELOPMENT, AND

INCREASE ACCESS TO AFFORDABLE HOUSING

FREE FROM DISCRIMINATION. 

These words, from HUD’s Strategic Plan, go 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.” 

Subsequent legislative and political changes have broadened the scope of the nation’s housing 

policy, and in 1965 the United States Congress established the Department of Housing and 

Urban Development (HUD) as an Executive, Cabinet-level agency, to: 

• Foster the orderly growth and development of the nation’s urban areas, 

• Coordinate Federal activities affecting housing and urban development, 

• Provide technical assistance and information to aid state, county, town, village, or other local 

governments in developing solutions to community and metropolitan development problems, 

• Encourage effective regional cooperation in the planning and conduct of community and 

metropolitan development programs and projects, 

• Encourage and develop the fullest cooperation with private enterprise in achieving the 

objectives of the Department, and 

• Conduct continuing comprehensive studies, and make available findings, with respect to the 

problems of housing and urban development. 

In order to accomplish this mission, HUD has developed a Strategic Plan (available online at 

http://www.hud.gov/offices/cfo/reports/hud_strat_plan_2006-2011.pdf) consisting of six 

Strategic Goals, as shown in the chart on the next page. The three programmatic goals reflect the 

three elements of the HUD Mission: to increase homeownership, support community 

development, and increase access to affordable housing free from discrimination. The three 

cross-cutting goals support each of the three programmatic goals. 

Also shown in the chart are the Strategic Objectives that HUD has determined to be essential for 

accomplishing those goals. It is from the Strategic Objectives that the Annual Performance Plan 

is devised, which enumerates the various performance indicators and targets that measure HUD’s 

progress. The main focus in this document is on the key performance indicators pertaining to the 

three programmatic Strategic Goals and one Cross-cutting Goal pertaining to Fair Housing.

THE MISSION OF HUD

HUD’S STRATEGIC PLAN
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 5

HUD’S STRATEGIC FRAMEWORK

GOAL B 

Promote Decent 

Affordable 

Housing 

Indicators: 23 

Met: 19 

Missed: 4 

Appropriated 

Funds: $25.4B 

Staff: 2,888 

GOAL C

Strengthen

Communities

Indicators: 30

Met: 26

Missed: 4

Appropriated

Funds: $4.7B

Staff: 797

GOAL D

Ensure Equal

Opportunity in

Housing

Indicators: 10

Met: 7

Missed: 3

Appropriated

Funds: $46M

Staff: 559

GOAL E 

Embrace High 

Standards of 

Ethics, 

Management 

and 

Accountability 

Indicators: 25 

Met: 22 

Missed: 3 

Appropriated 

Funds: $4.9B 

Staff: 3,275 

GOAL F

Promote

Participation of

Faith-Based and

Community

Organizations

Indicators: 4

Met: 4

Missed: 0

Appropriated

Funds: $1.5M

Staff: 8

STRATEGIC OBJECTIVES

Expand national

homeownership

opportunities

Ensure access to

a fair and

effective

administrative

process to

investigate and

resolve

complaints of

discrimination

Improve public

awareness of

rights and

responsibilities

under fair housing

laws

Improve housing

accessibility for

persons with

disabilities

Ensure that HUDfunded entities

comply with fair

housing and other

civil rights laws

Strategically 

manage HUD's 

human capital to 

increase 

employee 

satisfaction and 

improve HUD 

performance 

Improve HUD’s 

management and 

internal controls 

to ensure 

program 

compliance and 

resolve audit 

issues 

Improve 

accountability, 

service delivery 

and customer 

service of HUD 

and its partners 

Capitalize on 

modernized 

technology to 

improve the 

delivery of HUD's 

core business 

functions 

Reduce barriers

to faith-based and

community

organizations'

participation in

HUD-sponsored

programs

Conduct outreach

and provide

technical

assistance to

strengthen the

capacity of faithbased and

community

organizations to

attract partners

and secure

resources

Encourage

partnerships

between faithbased /community

organizations and

HUD grantees

and subgrantees

Increase minority

homeownership

Foster a suitable

living environment

in communities by

improving

physical

conditions and

quality of life

Enhance

sustainability of

communities by

expanding

economic

opportunities

Address housing

conditions that

threaten health

End chronic

homelessness

and move

homeless families

and individuals to

permanent

housing

Assist disaster

recovery in the

Gulf region

Facilitate more 

effective delivery 

of affordable 

housing by 

reforming public 

housing and the 

Housing Choice 

Voucher program 

Promote housing 

self-sufficiency 

Improve housing 

opportunities for 

the elderly and 

persons with 

disabilities 

Improve the 

management 

accountability and 

physical quality of 

public and 

assisted housing

Expand access to 

and availability of 

decent, affordable 

rental housing 

Keep existing

homeowners from

losing their homes

Help HUDassisted renters

become

homeowners

Reduce predatory

lending through

reform, education

and enforcement

Make the homebuying process

less complicated

and less

expensive

GOAL A

Increase

Homeownership

Opportunities

Indicators: 25

Met: 20

Missed: 5

Appropriated

Funds: $3.1B

Staff: 1,189

STRATEGIC GOALS

Programmatic Goals Cross-Cutting Goals 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 6 

HUD’s Performance 

Below are three graphs comparing HUD’s performance: a) on all performance indicators over 

the past four years, b) for all FY 2007 performance indicators by Strategic Goal, and c) for all 

FY 2007 performance indicators by Program Office. 

The Department attributes the drop in the percentage of performance indicators met primarily to 

the downturn in the economy as it has affected the housing industry (see the section entitled 

Risks, Trends, and Factors Affecting Goals contained in Section I of the full FY 2007 PAR 

available online at http://www.hud.gov/offices/cfo/reports/2007/2007par.pdf) 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, see the introduction to Section II, the 

Performance Section, of the full FY 2007 PAR. 

The chart above reflects similar results for HUD’s three Strategic Program Goals A, B, and C, 

with an average of 83.1 percent of performance goals met. Strategic Program Goal D consists of 

10 Fair Housing and Equal Opportunity performance measures, of which two were missed due to 

an increased emphasis on addressing backlogged complaints and one due to a facility change that 

slowed performance. Goal E measures management and ethics and, while not a topic for this 

report, demonstrates HUD’s commitment to excellence in management. Goal F measures five 

indicators of HUD’s commitment to promote Faith-Based and Community Organizations’ 

participation in HUD programs. 

75.9%

87.0% 89.7%

84.9%

50%

60%

70%

80%

90%

100%

FY 2004 FY 2005 FY 2006 FY 2007

Summary of Performance Indicators 

Met

 (All Indicators)

81.5% 85.7% 81.8%

70.0%

91.7%

100.0%

84.9%

0%

20%

40%

60%

80%

100%

A B C D E F All

Percent of FY 2007 Performance Indicators Met 

(by Strategic Goal)
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 7

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

established the following program offices: 

• Office of Housing and the Federal Housing Administration (HSG in the above chart), 

• Public and Indian Housing (PIH), 

• Community Planning and Development (CPD), 

• Office of Fair Housing and Equal Opportunity (FHEO), 

• Government National Mortgage Association (GNMA, also called Ginnie Mae), and 

• Office of Healthy Homes and Lead Hazard Control (OHHLHC). 

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, including the Center for 

Faith-Based and Community Initiatives, that directly support the Mission goals and/or provide 

valuable support to the six major program offices. 

The following is a synopsis of HUD’s largest program offices, their performance in meeting key 

performance indicators, and their most notable accomplishments and challenges:

84.8% 80.0% 85.7% 76.9% 75.0%

100.0%

90.6%

0%

20%

40%

60%

80%

100%

HSG PIH CPD FHEO GNMA OHHLHC All

Others

Percent of FY 2007

Performance Indicators Met 

By Program Office
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 8 

 OFFICE OF HOUSING AND FEDERAL HOUSING ADMINISTRATION (FHA).. 

Strategic Goals Supported: A, B, C & E

FY 2007 SELECTED MEASURES FOR THE OFFICE OF HOUSING

Performance Indicators Year Target Actual Results

A1.3: The number of FHA single-family mortgage 

insurance endorsements nationwide. 

2004 

2005 

2006 

2007 

N/A 

N/A 

N/A 

N/A 

997,000 

556,000 

502,000 

532,000 

A1.4: The share of first time homebuyers among FHA 

home-purchase endorsements. 

2004 

2005 

2006 

2007 

N/A 

79.0% 

71.0% 

71.0% 

72.8% 

79.3% 

79.3% 

79.5% 

A1.8: The percentage of clients receiving pre-purchase 

counseling who purchase a home or become mortgageready within 90 days. 

2004 

2005 

2006 

2007 

N/A 

30.0% 

30.0% 

30.0%

42.0% 

37.1% 

42.7% 

53.0% 

A2.5: The share of first time minority homebuyers 

among FHA first time home-purchase endorsements. 

2004 

2005 

2006 

2007 

N/A 

N/A 

35.0% 

35.0% 

37.2% 

34.4% 

31.7% 

33.0%

Goal A: Increase Homeownership Opportunities

A6.2: The percentage of mortgagors seeking help with 

resolving or preventing mortgage delinquency that 

successfully avoid foreclosure. 

2004 

2005 

2006 

2007 

N/A 

N/A 

N/A 

80.0% 

90.8% 

96.7% 

92.5% 

94.7% 

For this chart and all following charts, N/A means “not applicable” (i.e., the measure could be a new goal, a change 

in reporting structure, or a tracking indicator for which no performance goal could reasonably be set). 

The goal of the Office of Housing is to provide vital public services through its nationally administered 

housing programs. These programs include various mortgage insurance, homeownership subsidy, 

housing counseling, rental subsidy, and grant programs that are designed to provide housing to low- and 

moderate-income households. 

Major Programs 

• FHA Single/Multifamily Insurance - insures mortgages to guarantee payments, making it much easier for homeowners 

and landlords to borrow funds needed from private lenders.

• Section 8 Project-Based Rental Assistance – serves to maintain nearly 1.25 million units of affordable rental housing 

for lower income families.

• Section 202 Housing for the Elderly and Section 811 Housing for the Disabled – provides interest-free capital 

advances to finance the construction, rehabilitation, or acquisition of affordable housing with rental assistance and supportive 

services for the elderly and persons with disabilities.

• Housing Counseling – provides various forms of housing counseling including: homebuyer education, pre-purchase, and 

loss mitigation/default counseling to rental, fair housing and homeless clients.

More information about the Office of Housing can be found at: http://www.hud.gov/offices/hsg/
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 9

Performance Indicators Year Target Actual Results 

B1.4: FHA endorses multifamily project mortgages. 

2004 

2005 

2006 

2007 

1,000 

1,000 

1,000 

1,000

1,497 

1,017 

1,016 

881

B2.3: The share of assisted and insured privatelyowned multifamily properties that meet 

HUD-established physical standards. 

2004 

2005 

2006 

2007 

94.7% 

95.0% 

95.0% 

95.0% 

94.4% 

96.0% 

95.0% 

93.8%

B2.5: The share of assisted and insured multifamily 

properties that meets HUD’s financial management 

compliance is maintained at no less than 98 percent. 

2004 

2005 

2006 

2007 

95.0% 

95.0% 

98.0% 

98.0% 

98.0% 

98.0% 

98.0% 

99.0% 

Goal B: Promote Decent Affordable Housing 

B3.1: Increase the availability of affordable housing 

(via capital advances for expansion) for the elderly and 

persons with disabilities by bringing 200 projects to 

initial closing under Sections 202 and 811. 

2004 

2005 

2006 

2007 

250 

250 

250 

200 

305 

302 

315 

245 

Performance Indicators Year Target Actual Results 

Goal C: 

Strengthen 

Communities 

C3.2: The share of multifamily properties in 

underserved areas insured by FHA. 

2004 

2005 

2006 

2007 

25.0% 

25.0% 

25.0% 

33.0% 

34.0% 

43.0% 

41.0% 

46.0% 

ACCOMPLISHMENTS AND CHALLENGES 

The next four sections discuss the FY 2007 performance of the Office of Housing/FHA with 

respect to selected measures pertaining to HUD’s Strategic Goals for increasing homeownership 

opportunities, promoting decent affordable rental housing, and strengthening communities.

GOAL A: INCREASE HOMEOWNERSHIP OPPORTUNITIES

Measure A1.3: While FHA’s insurance endorsements dramatically dropped from FY 2004 to 

FY 2005 and in FY 2006, they began to rise again in FY 2007. This increase is primarily due to 

the collapse of the subprime mortgage market. The subprime market consists of mortgages 

designed to serve people who lacked the credit history or income to qualify for a regular or 

“prime” mortgage. Prospective borrowers who had opted for subprime loans in recent years 

have begun to choose the dependability and safety of FHA’s traditional products. 

Measure A1.4: First-time homebuyers continued to make up a large percentage (79.5 percent) 

of FHA’s single family endorsements. This favorable trend towards FHA by first-time home 

buyers significantly exceeded the goal of 71.0 percent. 

Measure A2.5: A significant share of first-time buyers are minority homebuyers. Though the 

minority homebuyer goal of 35.0 percent was not met, the actual number of minority first-time 

homebuyers assisted by FHA increased by an estimated 241,000 homebuyers since June 2006. 

FHA continues to contribute to the President’s aggressive 2002 national goal to increase 

minority homeownership by 5.5 million households by the end of the decade in 2010. As of the 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 10 

third quarter of 2007, there has been a net increase of 3.19 million (additions of 3.74 million less 

reductions of 0.55 million) minority homeowners, representing 58 percent of the President’s 

goal. 

Measure A1.8: HUD provides pre-purchase counseling to those who are preparing to 

purchase a home or working to become mortgage-ready. In the third quarter of FY 2007, HUD 

substantially exceeded its goal of 30 percent with 53 percent of those receiving pre-purchase 

counseling able to purchase a home or become mortgage-ready within 90 days. 

Measure A6.2: HUD also tries to assist those in danger of losing their homes due to foreclosure 

through its counseling efforts. Results from the first three quarters of calendar year 2007 show 

that 12,024 out of 12,690 mortgagors receiving assistance successfully avoided foreclosure, 

exceeding its goal of 80.0 percent with a 94.7 percent success rate. 

The President and the Secretary announced the FHASecure Program in August 2007 as a 

temporary program that will provide refinancing opportunities to homeowners for various types 

of adjustable rate mortgages (ARMs). FHASecure is designed to increase liquidity in the 

mortgage market and help people who have good credit, but who have missed or been late on 

some payments because of rising mortgage payments due to ARMs that have “reset.” This 

program and other FHA efforts will provide an estimated 240,000 homeowners with options to 

help make their payments and keep their homes next year. For more information visit the 

FHASecure Internet web site at: http://www.fha.gov/fhasecure. 

GOAL B: PROMOTE DECENT AFFORDABLE HOUSING 

Measure B1.4: FHA’s Multifamily Housing Mortgage Insurance programs endorsed 881 

mortgages totaling $4.19 billion in FY 2007, providing 90,614 housing units/beds across every 

state, but two. While this was short of HUD’s goal of 1,000 endorsements, the downward trend 

over the last four years can be attributed, in part, to a weakening housing market beyond the 

Department’s control. HUD’s FY 2007 goal also anticipated a level of refinancing activity that 

did not materialize due to rising interest rates. 

Measure B2.3: The results of the most recent physical inspections conducted on the multifamily 

housing portfolio of 30,173 properties shows that 28,294 met or exceeded HUD’s physical 

condition standards. This represents 93.8 percent of the inventory, a very high proportion. 

While this represents a slight increase of substandard properties of less than one percent, this is 

an aging housing stock, and the 6 percent of properties with substandard conditions are under 

management improvement operating plans or are facing an enforcement action to bring those 

projects up to acceptable standards. 

Measure B2.5: HUD exceeded its 98 percent financial compliance goal by achieving a 

99 percent rate of insured and assisted properties with no financial compliance deficiencies. This 

better assures that those properties can meet their operating needs and HUD’s physical condition 

standards, and reduces the risk of defaults and claims on FHA-insured mortgages. 

Measure B3.1: The Section 202/811 Programs provide capital advances for the expansion of 

the number of units available to assist the elderly and the disabled. In FY 2007, there were 245 

initial project closings, exceeding the goal by 23 percent. This resulted in 5,590 additional 

Section 202 units for the elderly and 1,123 additional Section 811 units for disabled households. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 11

GOAL C: STRENGTHEN COMMUNITIES

Measure C3.2: FHA multifamily insurance in underserved communities is an important 

contributor to strengthening the social and economic fabric by providing affordable housing in 

areas of critical short supply. FHA programs include those that insure loans for new construction 

and substantial rehabilitation of multifamily rental units. These programs improve the quality 

and affordability of rental housing, increase their availability in underserved neighborhoods, and 

promote revitalization of those neighborhoods. The share of insured multifamily properties in 

underserved areas insured by FHA continued its upward trend increasing from a rate of 

41.0 percent for FY 2006 to 46.0 percent for FY 2007. 

OTHER ACCOMPLISHMENTS/CHALLENGES

In addition to the above noted selected measures, reducing the level of improper payments has 

been a challenge for all of HUD’s complex Rental Housing Assistance Programs – given the 

size, complexity and decentralized administration of the programs – and significant progress has 

been made in reducing improper payments. For both the Multifamily and Public and Indian 

Housing portfolios, HUD has reduced its combined baseline gross improper rental assistance 

payment estimates by over 55 percent since 2000. As program funding has grown, HUD has 

also reduced the improper payment rate from 17.1 percent of rental assistance payments in 

FY 2000 to 5.5 percent of payments in FY 2007. As a result of HUD’s improved controls and 

progress on this issue, HUD’s Rental Housing Assistance Programs were removed from the 

Government Accountability Office’s “High Risk” federal programs watch list in FY 2007. 

Further information on the improper payment issue is provided in the Improper Payments 

Information Act Reporting Details found on pages 432 through 438 of Section IV of the full 

FY 2007 PAR. 

Another challenge to HUD’s ability to promote homeownership is the competitive nature of the 

private lending market. While FHA continues to make homeownership possible for families and 

individuals who are either unserved or underserved by the conventional market, many 

prospective homeowners have been unable to participate in FHA financing options due to the 

rigid restrictions placed on FHA loans by the authorizing legislation. Some of those who might 

otherwise have applied for an FHA insured loan have become victims of predatory lending, subprime balloon notes, and other unscrupulous practices. As part of the President’s FY 2007 

budget submission, FHA submitted a modernization proposal requesting legislative flexibility 

to support key FHA policy objectives to: 

o Increase the FHA loan limits, 

o Create a new risk-based insurance premium structure for FHA, 

o Enhance downpayment flexibility requirements, 

o Simplify requirements for condominium loans, 

o Expand use of Home Equity Conversion Mortgages (“reverse mortgages”), and 

o Increase access to pre-purchase and post-purchase counseling for low- and moderateincome homeowners. 

Passage of this legislation will reduce statutory barriers and increase FHA’s flexibility to respond 

to changes in the marketplace. This will allow FHA to serve more prospective homebuyers by 

providing lower risk and lower cost alternatives to subprime loans. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 12 

Neighborhood Network Centers do make a difference in resident’s lives, like the Santa 

Maria Village Neighborhood Networks Learning Center located in a 200-unit complex in 

Austin, TX. The Neighborhood Networks program is a community based initiative 

whose goal is to provide a resource and computer center at each HUD property. The 

Center’s main goal is to help residents obtain professional skills to be gainfully employed 

and ultimately become homeowners. 

 Government National Mortgage Association (GNMA).. 

FY 2007 SELECTED MEASURES FOR GNMA

Performance Indicators Year Target Actual Results

A1.5: Securitize eligible single family fixed rate FHA 

loans. 

2004 

2005 

2006 

2007 

85.0% 

85.0% 

90.0% 

93.0% 

87.3% 

92.7% 

91.4% 

93.0% 

Goal A: Increase 

Homeownership 

Opportunities

A1.6: Securitize eligible single family VA loans (New). 

2004 

2005 

2006 

2007 

N/A 

N/A 

N/A 

83.0% 

N/A 

N/A 

N/A 

92.0% 

GNMA (also known as “Ginnie Mae”) is a wholly-owned government corporation within HUD that 

administers the Mortgage-Backed Securities (MBS) program. GNMA provides guarantees for pools of 

mortgages that are issued by private mortgage institutions and insured by various government programs 

including HUD. The MBS program contributes to the growth of the mortgage-backed securities market in 

the United States through its guarantees. This allows lenders to reinvest funds otherwise tied up in 

existing mortgages, thereby leading to increased availability of funds as well as to the expansion of 

homeownership opportunities for American families. GNMA also provides incentives for lenders to 

increase loan volumes in traditionally underserved areas. 

Major Programs: 

 

• Mortgage-Backed Securities Guarantees (GNMA Securities Outstanding: $427.6 Billion)

For more information concerning Ginnie Mae, go to: http://www.ginniemae.gov, or to view an online copy of Ginnie Mae’s 

annual report to Congress, go to: http://www.ginniemae.gov/ReportToCongress
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

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Performance Indicators Year Target Actual Results 

Goal B: Promote 

Decent Affordable 

Housing 

B1.5: Securitize eligible FHA multifamily loans. 

2004 

2005 

2006 

2007 

80.0% 

80.0% 

90.0% 

95.0% 

92.4% 

91.1% 

96.9% 

98.0% 

ACCOMPLISHMENTS AND CHALLENGES 

The following three sections discuss the FY 2007 performance of the GNMA with respect to 

selected measures pertaining to HUD’s Strategic Goals for increasing homeownership, 

promoting decent affordable housing, and other challenges facing GNMA. 

GOAL A: INCREASE HOMEOWNERSHIP OPPORTUNITIES

Measure A1.5: Through the securitization of eligible single-family fixed rate FHA loans,

GNMA continues to address the specific need of promoting liquidity and the flow of investment 

capital. GNMA continued the upward trend, increasing that share from 91.4 percent to 

93.0 percent 

Measure A1.6: This is the first year HUD has set goals for the securitization of VA single 

family mortgages similar to those for FHA. Those goals were substantially exceeded reaching a 

rate of 92.0 percent. GNMA was able to meet its goal by guaranteeing securities that provide the 

best execution from a pricing standpoint, by reducing issuers’ back-end processing cost, and by 

improving security disclosures. 

GOAL B: PROMOTE DECENT AFFORDABLE HOUSING

Measure B1.5: GNMA strives to maintain a strong supply of decent, affordable rental housing. 

By promoting access to mortgage credit and enhancing the liquidity of mortgage investment, 

GNMA has increased the availability of affordable rental housing for millions of Americans. 

This year, GNMA securitized 98.0 percent of eligible FHA multifamily mortgages, exceeding 

its goal of 95.0 percent. 

OTHER ACCOMPLISHMENTS/CHALLENGES

During FY 2007, the increase of default risk introduced uncertainty into the secondary mortgage 

market, along with other capital markets. This has potential both to 1) influence demand for 

GNMA’s mortgage-backed securities, and 2) limit the availability and increase the cost of the 

underlying loans. To alleviate the challenge, GNMA plans to strengthen oversight and the pool 

verification matching process. GNMA is also creating a new security backed by FHA-insured 

Home Equity Conversion Mortgage loans (reverse mortgages) that will provide efficient market 

pricing for these loans (see additional discussion in the section on Risks, Trends, and Factors 

Affecting Goals in Section I of the full FY 2007 PAR). 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 14 

 OFFICE OF PUBLIC AND INDIAN HOUSING.. 

FY 2007 SELECTED MEASURES FOR THE OFFICE OF PUBLIC AND INDIAN HOUSING

Performance Indicators Year Target Actual Results

A2.9: Section 184 mortgage financing of $197.3 million 

is guaranteed for Native American homeowners during 

FY 2007. 

2004 

2005 

2006 

2007 

N/A 

$150.0 

$120.0 

$197.3 

$62.3 

$76.8 

$172.2 

$223.9 

Goal A: Increase 

Homeownership 

Opportunities

A5.1: The cumulative homeownership closings under 

the homeownership option of the Housing Choice 

Voucher/Housing Certificate Fund. 

2004 

2005 

2006 

2007 

1,674 

4,000 

6,000 

8,000 

 2,052 

 5,121 

 7,528 

10,429 

The goal of the Office of PIH is to ensure safe, decent, and affordable rental housing; create opportunities 

for residents’ housing self-sufficiency; and ensure fiscal integrity by all program administrators and 

participants. 

Major Programs

• Section 8 Housing Choice Voucher – Provides vouchers to eligible families seeking housing in the private market and 

in a neighborhood of their choice.

• Public Housing Operating Funds – Helps Public Housing Agencies meet project operating and management costs. 

• Public Housing Capital Funds – Provides financing for capital improvements (developing, rehabilitating, and 

demolishing units), replacing housing, and funding management improvements.

• Indian Housing Block Grants and Home Loan Guarantees – Provides funding for housing development in Indian 

areas, provides housing assistance to eligible families, and helps promote homeownership for Native Americans by providing 

loan guarantees to private lenders to increase the availability of mortgages and other financing for housing. 

More information about the Office PIH can be found at: http://www.hud.gov/offices/pih/. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 15

Performance Indicators Year Target Actual Results 

B1.10: Improve the utilization rate of Housing Choice 

Voucher funding to 97 percent by 2011. (When a new 

assessment system under development becomes 

functional, HUD will develop new performance goals. In 

the interim, the Department will report this measure as 

a tracking indicator.) 

2004 

2005 

2006 

2007 

N/A 

N/A 

N/A 

N/A 

100.0% 

97.0% 

90.0% 

93.0% 

B2.2: The share of public housing units that meet HUD 

established physical inspection standards. 

2004 

2005 

2006 

2007 

87.4% 

85.0% 

85.1% 

85.0% 

85.0% 

85.1% 

85.8% 

85.7% 

B2.6: The percentage reduction of public housing units 

under management of troubled housing agencies. 

(When a new assessment system under development 

becomes functional, HUD will develop new performance 

goals.) 

2004 

2005 

2006 

2007 

N/A 

N/A 

N/A 

N/A 

43.5% 

33.0% 

31.0% 

33.9% 

Goal B: Promote Decent Affordable Housing 

B2.7: The proportion of the Housing Choice Voucher 

Program funding administered by troubled housing 

agencies. 

2004 

2005 

2006 

2007 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

6.1% 

4.5% 

ACCOMPLISHMENTS AND CHALLENGES 

The following three sections discuss the FY 2007 performance of the Office of Public and Indian 

Housing with respect to selected measures pertaining to HUD’s Strategic Goals for increasing 

homeownership opportunities, promoting decent affordable rental housing, and for other 

significant accomplishments for the Office of Public and Indian Housing. 

GOAL A: INCREASE HOMEOWNERSHIP OPPORTUNITIES

Measure A2.9: Homeownership rates on reservations have been historically low. Lenders have 

been hesitant to assume the risk of providing mortgage financing for property that cannot be used 

as collateral due to the unique status of reservation lands. HUD’s Section 184 Program

provides credit subsidies that support loan guarantees to address this problem. This year, the 

goal of $197.3 million was exceeded by more than 13.5 percent, guaranteeing $223.9 million in 

loans. The Section 184 mortgage financing program had a successful year due to a team 

approach used to educate tribes and individual Native Americans about the benefits of 

homeownership. HUD relied on a network of approved lenders to finance mortgage transactions 

through a public/private partnership.

Measure A5.1: By FY 2007, 10,429 households have become homeowners through the 

Housing Choice Voucher, Family Self-Sufficiency and Moving to Work homeownership 

programs, exceeding the FY 2007 cumulative goal of 8,000 closings. 

GOAL B: PROMOTE DECENT AFFORDABLE HOUSING

Measure B1.10: The Housing Choice voucher program provides low-income participants with 

the ability to seek rental housing of their choice, with certain rent parameters and portability 

features enabling families to take their vouchers to other rental markets in pursuit of available 

job and other economic opportunities. The utilization rate increased 3 percent from the 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 16 

previous year toward the goal of 97 percent by 2011. Although this is an improvement, HUD 

continues to encourage greater utilization through outreach to PHAs and by linking future 

administrative fee payments to PHA leasing levels.

Measure B2.2: The share of public housing units that meet HUD’s physical condition 

standards has been holding relatively constant near 85 percent for the past four years. To 

improve the physical quality of public housing and achieve program efficiencies, PIH is 

implementing the recommendations of a three-year study by Harvard University on the cost of 

operating a well-run PHA. HUD is using a new formula to provide operating subsidies based on 

the profile of each public housing project’s size, location, age of facilities, and occupancy. Also 

in keeping with the Harvard Study and negotiated rulemaking on the Operating Fund Program, 

all PHAs of 250 or more units are required to convert to project-based asset management for 

budgeting, accounting, and management reporting. This greater focus at a project-level will 

improve the PHAs ability to address operating issues and thus improve the effectiveness of 

resources, which in turn improve the physical quality of the public housing stock. PIH exceeded 

its goal to have project-based accounting implemented at 20 percent of PHAs in FY 2007, with 

30 percent actually implemented. 

Measure B2.6: During FY 2007, HUD reduced the number of housing units managed by 

housing agencies rated as “substandard” or “troubled” by 34 percent from the previous year, 

returning them to at least a rating of “standard.” At the beginning of FY 2006, there were 197 

troubled PHAs administering 71,391 low-rent housing units. Program improvements positively 

affected the management and conditions at over 24,166 low-rent housing units of the 73 PHAs 

removed from troubled agency status in FY 2007. However, relative reductions in federal 

funding for the Public Housing Operating and Capital Funds are having an adverse impact on 

PHAs’ ability to better manage and maintain the public housing stock. 

Measure B2.7: HUD tracks the amount of Housing Choice Voucher Program funds managed 

by “troubled” PHAs. While plans are under way to implement a new performance assessment 

system and project-based asset management, in FY 2007 the portion of Housing Choice Voucher 

payments managed by troubled PHAs declined from 6.1 percent in FY 2006 to 4.5 percent. 

OTHER ACCOMPLISHMENTS OR CHALLENGES

In addition to the above selected measures, in FY 2007, PIH, in partnership with the Office of the 

Chief Information Officer, created the nation’s first National Housing Locator (NHL) system 

for rental housing assistance in disaster areas. The intergovernmental NHL web site 

(https://hudapps.hud.gov/nhls/) was launched in January 2007 as a direct response to lessons 

learned from Hurricane Katrina, most notably the need for a nationwide, single point of entry, 

easily searchable system identifying available rental housing in times of disaster. 

Legislative change is needed to provide PHAs with the flexibility to manage their programs 

according to local needs and priorities. Congress did not enact HUD’s proposed State and Local 

Housing Flexibility Act of 2005 to streamline the program and give more flexibility to PHAs to 

administer the program to better address local needs within their set annual funding amount. 

PIH is in the process of overhauling its systems, processes, training, and operations in order to 

ensure that PHAs comply with the conversion to project-based asset management. 

Implementation will put a strain on budgetary resources and will put PIH’s performance of the 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 17

following oversight functions at risk, all of which are essential for the implementation of 

project-based asset management: 

• Accept project-level financial statements from PHAs 

• Conduct project-level property inspections 

• Conduct on-site management reviews 

• Accept project-level operating subsidy submissions from PHAs 

• Perform project-based performance assessments 

In FY 2007, the PIH Office of Capital Improvements approved 23 proposals under the Capital 

Fund Financing Program involving approximately $191 million in financing through PHA 

leveraging of their capital funds. The financed funds were used for the modernization and 

development of public housing at 37 PHAs. 

Grand Ronde Tribal Housing Authority Rental Units 

This housing development in Grand Ronde, Oregon included 72 rental units; 36 of the 

units are designated for low-income families and 36 units are market-rate rentals. The 

project was funded by the Confederated Tribes of Grand Ronde and HUD Indian 

Housing Block Grant funds.
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 18 

 OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT..

FY 2007 SELECTED MEASURES FOR THE OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT

Performance Indicators Year Target Actual Results

Goal A: Increase 

Homeownership 

Opportunities

A1.9: The number of homebuyers who have been 

assisted with the HOME Investment Partnerships 

Program. 

2004 

2005 

2006 

2007 

47,190 

34,806 

33,501 

30,221 

30,780 

32,307 

55,652 

34,985 

Performance Indicators Year Target Actual Results 

Goal B: Promote 

Decent Affordable 

Housing 

B1.3: The number of rental assisted household and 

rental housing units with CDBG, HOME, Housing 

Opportunities for Persons with AIDS, Indian Housing 

Block Grants, and Native Hawaiian Housing Block 

Grants. 

2004 

2005 

2006 

2007 

N/A 

131,720 

126,773 

135,929 

143,424 

157,733 

177,757 

141,787 

The Office of CPD administers a variety of housing, community, and economic development grant 

programs, as well as HUD’s homeless assistance programs. Together, these programs promote decent 

housing, a suitable living environment, and expanded economic opportunities for low- and moderateincome persons. These goals are achieved through partnerships with and among all levels of the 

government and the private sector, including for-profit and non-profit organizations. 

Major Programs

• Community Development Block Grants (CDBG) – Provides grants to units of general local governments and states 

for the purpose of developing viable urban and rural communities by providing decent housing, a suitable living environment, 

and by expanding economic opportunities.

• Disaster Assistance – Provides supplemental CDBG disaster assistance to areas impacted by disasters, such as 

Hurricanes Katrina, Rita, and Wilma in 2005. The Gulf Coast states have designed programs to address a number of 

immediate and longer term needs including homeowner compensation programs, housing for renters, state and local 

infrastructure reconstruction, economic development, public services, rent support, and restoration of homeless services.

• HOME Investment Partnerships Program – Provides funding to states and localities to create, often in partnership 

with local non-profit groups, affordable housing for low-income households.

• Homeless Assistance Grants Program – Provides Federal support to address the needs of one of the nation’s most 

vulnerable populations.

• Housing Opportunities for Persons with AIDS (HOPWA) – Provides funding to states and cities for assistance to 

low-income persons living with HIV/AIDS and their families.

More information about the Office of CPD can be found at: http://www.hud.gov/offices/cpd/
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 19

Performance Indicators Year Target Actual Results 

C2.3: The share of CDBG entitlement funds that benefit 

low- and moderate-income persons. 

2004 

2005 

2006 

2007 

92.0% 

92.0% 

92.0% 

92.0%

94.9% 

95.3% 

95.1% 

94.8% 

C4.3: The percentage of homeless persons in HUD 

transitional housing at the beginning of the year who 

have moved into permanent housing. 

2004 

2005 

2006 

2007 

N/A 

N/A 

61.0% 

61.5% 

59.4% 

60.0% 

62.4% 

68.9% 

Goal C: Strengthen Communities 

C4.5: Create new permanent housing beds for 

chronically homeless persons. 

2004 

2005 

2006 

2007 

N/A 

N/A 

N/A 

4,000 

N/A 

N/A 

4,397 

3,865

ACCOMPLISHMENTS AND CHALLENGES 

The next four sections discuss the FY 2007 performance of the Office of CPD with respect to 

selected measures pertaining to HUD’s Strategic Goals for increasing homeownership 

opportunities, promoting decent affordable rental housing, strengthening communities, and other 

significant CPD accomplishments.

GOAL A: INCREASE HOMEOWNERSHIP OPPORTUNITIES

Measure A1.9: The number of homebuyers who have been assisted with the Home Investment 

Partnerships program exceeded its goal by 4,764 (16 percent). (Note: Higher than usual 

numbers in FY 2006 represent a more complete reporting of results as part of a data 

improvement effort.) 

GOAL B: PROMOTE DECENT AFFORDABLE HOUSING 

Measure B1.3: HUD employs a number of assistance programs including rehabilitation of 

rental housing to meet the affordable rental housing needs of various low-income and special 

needs populations. Yearly results through these individual programs may vary depending on 

available appropriations, economic conditions, and local discretion. The number of Rental 

Households/Rental Units receiving aid in FY 2007 totaled 141,787. The various programs that 

contributed to this achievement were: CDBG (rental units rehabilitated), HOME (tenant based 

assistance), HOME (rental units completed), Housing Opportunities for Persons with AIDS, and 

Indian Housing Block Grants. Specific results for each program can be found in the full PAR in 

Section II, pages 166 through 170. 

GOAL C: STRENGTHEN COMMUNITIES

Measure C2.3: HUD has consistently met this measure. In FY 2007, 94.8 percent of CDBG 

funds were expended for activities that primarily benefit low- and moderate-income persons, 

exceeding the goal by 2.8 percent. 

In FY 2007, HUD proposed that Congress consider legislation to modernize CDBG’s formula 

for allocating funding based on need. This legislation would help ensure that resources are 

targeted to areas with the greatest need due to demographic change. There have not been any 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 20 

substantial changes to the CDBG entitlement formula since 1978 or to the State CDBG formula 

since its introduction in 1981. 

Measure C4.3: Providing permanent Housing and ending chronic homelessness is one of the 

first steps toward self-sufficiency and the goal of homeownership. HUD continues to improve 

its effectiveness in assisting homeless persons to move from transitional housing into permanent 

housing. In FY 2007, 68.9 percent of homeless persons leaving transitional housing moved into 

permanent housing. 

Measure C4.5: The chronically homeless persons are often the most visible and difficult-toserve homeless population. The coordination of housing and supportive services is crucial to the 

outcome of improving self-sufficiency, stability, and ultimately breaking the cycle of chronic 

homelessness. The creation of new permanent housing units for this population is one of 

HUD’s primary strategies for working toward the goal of ending chronic homelessness. In 

FY 2006, HUD set an ambitious goal in its first reporting year toward a goal of 20,000 new 

permanent housing beds in the next five years. Homeless Assistance Grants appropriation levels 

have increased steadily, which has contributed significantly to achieving this goal. HUD missed 

its annual goal of 4,000 new beds in FY 2007, however, to date, HUD has created 8,262 beds. 

As production increases, HUD should meet its five year goal, having already achieved 

41.3 percent of this goal over the last two years. 

OTHER ACCOMPLISHMENTS OR CHALLENGES

In addition to the selected measures, in FY 2007, CPD also provided disaster assistance in 

response to the hurricanes of 2005. On December 30, 2005, President Bush signed an 

appropriation which provided $11.5 billion in CDBG disaster supplemental funding to the states 

of Alabama, Florida, Louisiana, Mississippi and Texas to address the affects of Hurricanes 

Katrina, Rita, and Wilma. In June 2006, President Bush signed into law an appropriation of an 

additional $5.2 billion in CDBG supplemental funds for distribution to the five states. The states 

have designed programs to address a number of immediate and longer term needs including: 

homeowner compensation programs, housing for renters, state and local infrastructure 

reconstruction, economic development, public services, rent support, and restoration of homeless 

services. During FY 2007, the states expended more than $6.2 billion of the available funds, 

with the vast funds having been disbursed primarily for the homeowner compensation programs 

in Louisiana and Mississippi. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 21

 Healthy Homes and Lead Hazard Control 

The Office of Healthy Homes and Lead Hazard Control directs programs that address the health and 

safety needs of homes: the Lead Hazard Control Program, the Healthy Homes Initiative, and enforcing 

lead safety regulations. The Office provides funds to state and local governments, and to the private 

sector, to develop and implement cost-effective ways to reduce lead-based paint hazards and other 

residential safety and health hazards. The Office enforces the Lead Disclosure Rule and supports 

enforcement by Program Offices of the Lead Safe Housing Rule. 

Major Programs:

• Lead Hazard Control Program – Provides grant funds targeted to help low-income, privately owned homes that are 

most likely to expose children to lead-based paint hazards. 

• Healthy Homes Initiative – Provides grants and contracts to address housing-related hazards.

More information about the Office of Healthy Homes and Lead Hazard Control can be found at: 

http://www.hud.gov/offices/lead/

The city of Rogers, located in northwest Arkansas, is home to a national award winning affordable 

housing project with a unique, eco-friendly design. Built by Habitat for Humanity of Benton County, 

the project resulted from a partnership with several key entities including the City’s Community 

Development Block Grant Program and the University of Arkansas Community Design Center and 

Ecological Department. 

 

Photos above: 1) Foundation being laid for a “green” Habitat Trails subdivision in 

Rogers, Arkansas; 2) framing going up; and 3) outside of one of the eco-friendly homes. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 22 

FY 2007 SELECTED MEASURES FOR THE OFFICE OF HEALTHY HOMES AND LEAD HAZARD CONTROL

Performance Indicators Year Target Actual Results 

C5.2: Decrease the number of children under the age of 

6 who have elevated blood levels. 

2004 

2005 

2006 

2007 

N/A 

N/A 

270,000 

240,000 

N/A 

N/A 

270,000 

235,000 

C5.3: Units will be made lead safe through Lead Hazard 

Control Grant programs. 

2004 

2005 

2006 

2007 

 8,390 

 9,500 

 9,250 

10,500 

 8,811 

 7,500 

 9,638 

10,602 

Goal C: Strengthen Communities 

C5.5: As part of a 10-year effort to eradicate lead 

hazards, units will be made lead safe pursuant to 

enforcement of the Department’s lead safety 

regulations. 

2004 

2005 

2006 

2007 

N/A 

N/A 

N/A 

8,800 

 14,867 

 7,576 

 6,037 

9,696 

ACCOMPLISHMENTS AND CHALLENGES 

The next two sections discuss the FY 2007 performance of the OHHLHC with respect to 

selected measures pertaining to HUD’s Strategic Goal for strengthening communities, and other 

significant OHHLHC accomplishments.

GOAL C: STRENGTHEN COMMUNITIES

Measure C5.2: HUD’s efforts to to control lead hazards in housing, in partnership with the 

Centers for Disease Control and Prevention, Environmental Protection Agency, and other 

agencies, have reduced the number of children with elevated blood lead levels from 890,000 in 

the 1990 to 1994 time period to 235,000 children for 2007. 

Measure C5.3: Contributing to this reduction, HUD’s Lead Hazard Control grants made over 

10,600 low-income housing units lead safe in FY 2007, and over 95,300 units since the 

program’s inception in FY 1993. 

Measure C5.5: Enforcing HUD’s lead safety regulations is an essential component of 

reaching the President’s 10 year goal of eradicating lead poisoning in children as a major public 

health problem by 2010. During FY 2007, HUD made 9,696 additional homes lead-free, 

exceeding its goal by 10 percent. 

OTHER ACCOMPLISHMENTS/CHALLENGES

In addition to the above selected measures, the OHHLHC, in FY 2007, reduced allergen levels in 

975 housing units through interventions using Healthy Homes principles, and continued the 

“Healthy Homes for Healthy Kids” campaign. This campaign was initiated by HUD in April 

of 2006. This three-year, 30-city outreach effort will inform parents about health and safety 

hazards in the home, including information on lead paint, mold, moisture, and pests like mice 

and cockroaches. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 23

 FAIR HOUSING AND EQUAL OPPORTUNITY.. 

FY 2007 SELECTED MEASURES FOR THE OFFICE OF FAIR HOUSING AND EQUAL OPPORTUNITY

Performance Indicators Year Target Actual Results 

D1.1: Increase the percentage of fair housing 

complaints closed in 100 days. 

2004 

2005 

2006 

2007 

N/A 

75.0% 

60.0% 

65.0% 

N/A 

77.0% 

73.0% 

63.0%

D1.2: Percentage of Fair Housing Assistance Program 

complaints closed in 100 days. 

2004 

2005 

2006 

2007 

N/A 

45.0% 

50.0% 

53.0%

N/A 

48.0% 

51.0% 

46.0% 

Goal D: Ensure Equal Opportunity 

in Housing 

D2.1: Attendance and public events held by recipients 

of Fair Housing Initiatives Program education and 

outreach grants. (Number of events/attendees) 

2004 

2005 

2006 

2007 

N/A 

150/120,000 

200/160,000 

300/180,000 

 N/A 

 405/519,000 

 697/250,799 

1,486/247,201 

ACCOMPLISHMENTS AND CHALLENGES 

The following sections discuss the FY 2007 performance of the Office of Fair Housing and 

Equal Opportunity with respect to selected measures pertaining to HUD’s Strategic Goals and 

other challenges.

GOAL D: ENSURE EQUAL OPPORTUNITY IN HOUSING 

Measure D1.1: Enforcement of fair housing laws is crucial to enhancing housing 

opportunities for all of our citizens. The ability to provide a fair, effective, expeditious, and 

efficient fair housing complaint process is essential to maintain public confidence that victims of 

housing discrimination will receive relief from discriminatory housing practices and that 

violators will be disciplined. HUD did not meet its goal this year, largely due to the substantial 

increase in new cases and emphasis on resolving the backlog of older more complex cases. 

Measure D1.2: The Fair Housing Act authorizes HUD to establish a program (FHAP) which 

certifies state and local jurisdictions to assist in fair housing enforcement. HUD and partner 

agencies closed over 3,177 cases within 100 days, representing 46 percent of all cases closed 

during the year. However, the case closure rate fell behind due to the increased number of 

The Office of Fair Housing and Equal Opportunity (FHEO) strives to create equal housing opportunities 

by enforcing the Federal laws that prohibit discrimination in housing on the basis of race, color, religion, 

sex, national origin, disability, familial status, and age. 

Major Programs

• Fair Housing Assistance Program - Provides formula-based grants to state and local agencies that administer and 

enforce fair housing laws that are substantially equivalent to the Fair Housing Act.

• Fair Housing Initiatives Program – Provides grant funds competitively to private and public entities formulating or 

carrying out local, regional, and national programs that assist in eliminating discriminatory housing practices. 

• Enforcement – Implements and enforces the Fair Housing Act and other civil rights laws.

More information about FHEO can be found at: http://www.hud.gov/offices/fheo/index.cfm.
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 24 

filings, and increased emphasis on closing older cases, resulting in a longer average period to 

close cases. 

Measure D2.1: The first step towards reducing discrimination and unfair practices is to 

increase 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. HUD has continued to surpass its education and awareness goals for both number 

of events and attendance. 

OTHER ACCOMPLISHMENTS/CHALLENGES

HUD’s public education program is now showing positive results as reflected in the substantial 

increase in complaint filings during FY 2007. This presents a challenge to HUD in managing 

and closing the resulting case loads in an expeditious manner, as reflected in the results of 

Measures D1.1 and D1.2 above.

 PRESIDENT’S MANAGEMENT AGENDA.. 

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 Secretary 

and Deputy Secretary have emphasized, and HUD’s Strategic and Annual Performance Plans 

reflect, activities designed to achieve the outcome goals of the PMA. 

The following is a summary table of HUD’s FY 2007 PMA results. OMB instituted a 

“stoplight” scoring system to evaluate the status and progress of each agency. As of the latest 

annual reporting cycle, ending June 30, 2007, HUD earned five GREEN scores, two YELLOW, 

and two RED status scores. OMB also rates agencies on their progress for each of these 

initiatives. HUD earned GREEN progress scores on all initiatives on the June Report. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 25

 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

Strategic Management of Human Capital 

Build, sustain, and deploy effectively a skilled, knowledgeable, diverse and high-performing workforce aligned with mission

objectives and goals.

Competitive Sourcing 

Achieve efficient, effective competition between public and private sources and establish infrastructure to support competitions.

Improved Financial Performance 

Provide world-class financial services that support strategic decision-making, mission performance, and improved accountability to

the American public.

Expanded E-Government 

Expand the federal government’s use of electronic technologies (such as e-procurements, e-grants, and e-regulations) so that

Americans can receive high-quality government service.

Performance Improvement Initiative 

Improve the performance and management of the federal government by linking performance to budget decisions and improve

performance tracking and management.

HUD Management and Performance 

Eliminate the GAO-designated high-risk program areas and material internal control weaknesses not addressed by the other

initiatives of the PMA.

Faith-Based and Community Initiatives 

Reduce barriers to participation by faith-based and community organizations; conduct outreach and provide technical assistance to

strengthen their capacity to attract partners and secure resources; and encourage partnerships with HUD’s traditional grantees.

Eliminate Improper Payments 

Reduce improper payment risks, measure improper payment levels and report on progress in reducing those levels in accordance

with the Improper Payments Information Act of 2002.

Credit Program Management 

Ensure direct and guaranteed loan programs to ensure that HUD’s credit programs are reaching the targeted borrowers at an

acceptable, manageable risk level.

THE PRESIDENT’S MANAGEMENT AGENDA

N/A

N/A N/A N/A

 N/A N/A N/A N/A 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 26 

..INDEPENDENT AUDITOR’S REPORT [EXCERPTS].. 

Below are excerpts from HUD’s financial audit for FY 2007. This independent audit was 

performed by the Office of the Inspector General (OIG) of HUD. External accounting firms 

conducted the 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 eighth consecutive year that HUD has received 

an unqualified or “clean” audit opinion. 

The HUD OIG opined, “...based on our audit and the reports of other auditors, the 

accompanying fiscal years 2007 and 2006 principal financial statements present fairly, in all 

material respects, the financial position of HUD as of September 30, 2007 and 2006 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.” 

Two auditor identified material weaknesses relating to FHA were identified in the OIG Audit 

Report and summarized in the table below. A copy of the full audit report and HUD response 

can be found on: http://www.hud.gov/offices/oig/reports/files/ig08F0003.pdf 

AUDIT OPINION: UNQUALIFIED OR “CLEAN” 

 2000 2001 2002 2003 2004 2005 2006 2007 

 9 9 9 9 9 9 9 9

Restatement (of Financial Statements): NO 

Material Weaknesses 

Beginning 

Balance New Resolved Consolidated Ending 

Balance 

HECM Risk Assessment 0 1 0 0 1 

HECM Credit Subsidy 0 1 0 0 1 

Total material 

Weaknesses 0 2 0 0 2 

The material weaknesses assessed in internal controls in FY 2007 related to the need to 

• Develop a risk assessment and systems development plan for FHA’s Home Equity 

Conversion Mortgage (HECM) systems and transactions; and 

• Enhance the HECM credit subsidy cash flow model. 

While HUD management disagrees that these issues warranted reporting as material weaknesses, 

corrective actions have been planned to address these issues in FY 2008. 

The Department and FHA reported no material weaknesses for their Federal Managers’ Financial 

Integrity Act reporting in the FY 2007 Performance and Accountability Report and the FHA 

FY 2007 Annual Management Report, respectively. 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 27

..FINANCIAL STATEMENTS [EXCERPTS].. 

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

HUD’s financial position. More detailed and comprehensive statements can be found in 

“Section III: Financial Information” of the full FY 2007 PAR. 

Summarized Financial Data

(Dollars in Millions) 

 2007 2006 

Total Assets $111,074 $123,063 

Total Liabilities $20,361 $17,323 

Net Position $90,713 $105,740 

FHA Insurance-In-Force $399,960 $395,777 

Ginnie Mae Mortgage-Backed Securities Guarantees $427,600 $409,990 

Other HUD Program Commitments $65,472 $72,355 

Figures may not agree with statements because of rounding. 

Consolidated Balance Sheet (condensed) 

As of September 30, 2007 and 2006 

(Dollars in Millions)

2007 2006 

ASSETS 

 Total Intragovernmental Assets $100,324 $111,847 

 Credit Program Receivables and Related 

 Foreclosed Property 9,567 10,045 

 Other Assets 1,183 1,171 

 TOTAL ASSETS $111,074 $123,063 

LIABILITIES 

 Total Intragovernmental Liabilities $9,272 $9,919 

 Loan Guarantees 7,551 3,589 

 Other Governmental Liabilities 3,537 3,815 

TOTAL LIABILITIES $20,360 $17,323 

NET POSITION 

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

 Unexpended Appropriations 54,871 66,616 

 Cumulative Results of Operations - Earmarked 13,266 12,504 

 Cumulative Results of Operations 22,953 26,996 

Total Net Position 90,714 105,740 

Total Liabilities and Net Position $111,074 $123,063 
FY 2007 PERFORMANCE AND ACCOUNTABILITY REPORT HIGHLIGHTS

Page 28 

* In these two charts, the “Other” category consists of net cost for HUD’s Smaller Program Areas and 

two major program areas, FHA, and GNMA. FHA and GNMA are primarily non-appropriated 

programs for which there is no net cost to the taxpayer. 

HUD FY 2007 Consolidated Statement of Net Cost - 

$51,034 

(Dollars in Millions)

Section 8

$24,640

CPD

$10,966

Hsng for the Elderly & 

Disabled

$898

Costs not Assigned 

to Programs

$332

HOME

$1,902

Low Rent Publicng 

Hsng Loans & Grants

$3,479

Operating Subsidies

$3,831

Other *

$4,986

Section 8

Community Planning &

Development (CPD)

Other *

Operating Subsidies

Low Rent Public Housing

Loans & Grants

HOME

Housing for the Elderly &

Disabled

Costs not Assigned to

Programs

HUD FY 2006 Consolidated Statement of Net Cost -

$39,628 

(Dollars in Millions)

Section 8

$23,827

CPD

$5,093

Housing for the Elderly 

& 

Disabled

$764

Costs not Assigned to 

Programs

$332

HOME

$1,853

Low Rent Public Hsng 

Loans & Grants

$3,566

Operating

Subsidies

$3,600

Other*

$593

Section 8

Community Planning &

Development (CPD)

Other* (Includes GNMA & FHA

Net Income)

Operating Subsidies

Low Rent Public Housing

Loans & Grants

Home

Housing for the Elderly &

Disabled

Costs not Assigned to

Programs
 

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 full report on the internet, go to the following website: 

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