a

GAO

United States General Accounting Office

Report to the Special Committee on 

Aging, U.S. Senate

May 2003 ELDERLY HOUSING

Project Funding and 

Other Factors Delay 

Assistance to Needy 

Households

GAO-03-512
HUD’s Section 202 program provides a valuable housing resource for very 

low income elderly households. Although they represent a small share of all 

elderly households, very low income elderly renters have acute housing 

affordability problems because of their limited income and the need for 

supportive services. The Section 202 program, which offers about 260,000 

rental units nationwide and ensures that residents receive rental assistance 

and access to services that promote independent living, is the only federal 

program devoted exclusively to providing this type of housing. However, 

even with the program’s exclusive focus, Section 202 has reached only about 

an estimated 8 percent of very low income elderly households. 

About three-quarters of Section 202 projects in GAO’s analysis did not meet 

HUD’s time guideline for gaining approval to start construction. These 

delays held up the delivery of housing assistance to needy elderly 

households by nearly a year compared with projects that met HUD’s 

guideline. Several factors contributed to these delays, in particular capital 

advances that were not sufficient to cover development costs. Project 

sponsors reported that insufficient capital advances often forced them to 

spend time seeking additional funds from HUD and other sources. Although 

HUD’s policy is to provide sufficient funding to cover the cost of 

constructing a modestly designed project, HUD has acknowledged that its 

capital advances for the Section 202 program sometimes fall short. Other 

factors affecting the timeliness of the approval process included inadequate 

training and guidance for field staff responsible for the approval process, 

inexperienced project sponsors, and local zoning and permit requirements. 

Housing Cost Burdens of Very Low Income Elderly Renter Households in 2001 

According to the Department of 

Housing and Urban Development 

(HUD), the most widespread and 

urgent housing problem facing 

elderly households is affordability. 

About 3.3 million elderly renter 

households in the United States 

have very low incomes (50 percent 

or less of area median income). 

The Section 202 Supportive 

Housing for the Elderly Program 

provides capital advances (grants) 

to nonprofit organizations to 

develop affordable rental housing 

exclusively for these households. 

GAO was asked to determine the 

role of the Section 202 program in 

addressing the need for affordable 

elderly housing and the factors 

affecting the timeliness of 

approving and constructing new 

projects. 

GAO is making recommendations 

to reduce the time required for 

projects to receive approval from 

HUD to start construction. 

Specifically, GAO is recommending 

that HUD assess the effectiveness 

of the methods it uses to calculate 

the size of the Section 202 capital 

advances and make any 

appropriate changes to them. GAO 

is also making other 

recommendations to improve 

HUD’s administration and 

oversight of the 202 program’s 

performance. 

GAO provided a draft of this report 

to HUD for comment. HUD agreed 

with the report’s conclusions and 

recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-03-512.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David G. Wood 

at (202) 512-8678 or WoodD@gao.gov. 

Highlights of GAO-03-512, a report to 

Special Committee on Aging, U.S. Senate 

May 2003

ELDERLY HOUSING 

Project Funding and Other Factors Delay 

Assistance to Needy Households 
Page i GAO-03-512 Section 202 Elderly Housing

Contents

Letter 1

Results in Brief 3

Background 5

Section 202 Is an Important Source of Housing for Elderly 

Households with Very Low Incomes 8

Section 202 Projects Reviewed Generally Did Not Meet Guidelines 

for Timeliness 13

Various Factors Can Impede the Timely Processing of Projects 18

Conclusions 25

Recommendations 25

Agency Comments and Our Evaluation 26

Appendixes

Appendix I: Scope and Methodology 28

Appendix II: Budget Information for the Section 202 Program 30

Section 202 Appropriations 30

Section 202 Unexpended Balances 31

Appendix III: Data Issues Concerning the American Housing Survey 33

Appendix IV: Federal Housing Programs and the Elderly 41

Housing Production Programs That Develop Elderly Housing 41

Target Households 43

Annual Housing Production Levels 44

Appendix V: Section 202 Program Data 46

Appendix VI: Survey of HUD Field Office Representatives 56

Appendix VII: Survey of Section 202 Sponsors and Consultants 64

Appendix VIII: Comments from the Department of Housing and Urban 

Development 70

Tables Table 1: HUD Income Categories 7

Table 2: Field Office Performance in Approving Projects for 

Construction within 18 and 24 Months 16

Table 3: Field Office Performance and Problems with Funding 

Issues 21

Table 4: Annual Appropriations for the Housing for Special 

Populations Account in Fiscal Years 1998-2002 31

Table 5: Annual Balances of Unexpended Appropriations for 

Section 202 in Fiscal Years 1998-2002 32
Contents

Page ii GAO-03-512 Section 202 Elderly Housing

Table 6: Housing Units Occupied by Homeowner and Renter 

Elderly Households in 2001 35

Table 7: Income Categories for Elderly Homeowner and Renter 

Households in 2001 36

Table 8: Elderly Renter Households with Very Low Incomes by 

Subsidy Status and Rent Burden in 2001 37

Table 9: Moderate or Severe Rent Burden of Unassisted Very Low 

Income Elderly Renter Households by Region in 2001 37

Table 10: Number of Elderly Renter Households with Very Low 

Incomes by Subsidy Status and Rent Burden in 

Metropolitan Areas in 2001 38

Table 11: Proportion of Elderly Renter Households with Very Low 

Incomes by Subsidy Status and Rent Burden in 

Metropolitan Areas in 2001 39

Table 12: Number of Elderly Renter Households with Very Low 

Incomes by Subsidy Status and Rent Burden in 

Nonmetropolitan Areas in 2001 39

Table 13: Proportion of Elderly Renter Households with Very Low 

Incomes by Subsidy Status and Rent Burden in 

Nonmetropolitan Areas in 2001 40

Table 14: Active Federal Rental Housing Production and Insurance 

Programs by Household Type Served and Program Rent 

Levels 43

Table 15: Approximate Volume of New Production of Housing Units 

by Active Federal Rental Housing Programs 45

Table 16: Distribution of Section 202 Projects, Capital Advance 

Funds, and PRAC Funds, by Fiscal Year and Construction 

Approval Status 46

Table 17: Status of Metropolitan and Nonmetropolitan Projects in 

Gaining Construction Start Approval, Projects Funded in 

Fiscal Years 1998 to 2000 47

Table 18: Field Office Performance in Approving Projects to Start 

Construction, All Projects Funded in Fiscal Years 1998 to 

2000 48

Table 19: Field Office Performance in Approving Metropolitan 

Projects to Start Construction, All Metropolitan Projects 

Funded in Fiscal Years 1998 to 2000 50

Table 20: Field Office Performance in Approving Nonmetropolitan 

Projects to Start Construction, All Nonmetropolitan 

Projects Funded in Fiscal Years 1998 to 2000 52
Contents

Page iii GAO-03-512 Section 202 Elderly Housing

Table 21: Average Duration of Stages of Section 202 Project 

Development, Projects Funded Fiscal Years 1998 to 2000 

That Were Approved to Start Construction 54

Table 22: Factors Cited by HUD in Approved Time Extensions for 

Section 202 Projects Funded in Fiscal Years 1998 to 

2000 55

Figures Figure 1: U.S. Homeowners and Renters in 2001 5

Figure 2: Housing Cost Burdens of Very Low Income Elderly 

Renter Households in 2001 9

Figure 3: Units Developed under Section 202 Compared with All 

Units Occupied by Very Low Income Elderly Renter 

Households, 1985 to 2001 12

Figure 4: Section 202 Project Processing 14

Figure 5: Average Elapsed Time for Completed Section 202 

Projects Funded in Fiscal Years 1998 and 1999 17

Figure 6: Section 202 Unexpended Fund Balances as of End of 

Fiscal Year End 2002 18

Figure 7: Survey Responses—Insufficient Capital Advances and 

Other Project Funding Issues 20

Figure 8: Survey Responses—Field Office Staff Issues 22

Figure 9: Survey Responses—HUD Program Administration 

Issues 23
Contents

Page iv GAO-03-512 Section 202 Elderly Housing

Abbreviations

AHS American Housing Survey

AMI area median income

BMIR below-market interest rate

DAP Development Application Processing System

FHA Federal Housing Administration

HFA housing finance agencies

HUD Department of Housing and Urban Development

PRAC project rental assistance contract

REMS Real Estate Management System

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Page 1 GAO-03-512 Section 202 Elderly Housing

United States General Accounting Office

Washington, D.C. 20548

A

May 30, 2003 Lret

The Honorable Larry Craig

Chairman

The Honorable John Breaux

Ranking Minority Member

Special Committee on Aging

United States Senate

According to the Department of Housing and Urban Development (HUD), 

the most widespread and urgent housing problem facing elderly 

households is affordability—that is, finding housing that is not too 

expensive relative to household income.1

 In 2001, there were about 26 

million households nationwide in which the householder or householder’s 

spouse was 62 years or older.2

 Of these elderly households, about 3.3 

million were renters with very low incomes, which HUD defines as 50 

percent or less of area median income. The Section 202 Supportive Housing 

for the Elderly Program (the Section 202 program) provides funds to 

nonprofit organizations to develop affordable rental housing exclusively 

for very low income elderly households that are not receiving other forms 

of housing assistance. In fiscal year 2002, the Section 202 program received 

about $783 million in appropriations to fund, among other things, the 

construction of over 6,000 rental units. 

The Section 202 program provides two types of financial support to 

nonprofit sponsors that develop and operate projects. First, project 

sponsors receive a capital advance, or a grant, to cover land and 

construction costs for projects of modest design that comply with HUD’s 

minimum property standards. HUD determines the amounts of capital 

advances using its published development cost limits, adjusted for areas 

with high construction costs. HUD’s policy is to have the capital advance 

cover total development costs without the need for sponsors to obtain 

additional funding from other sources. Second, after the project is 

completed and elderly tenants move in, the sponsor receives monthly 

1

U.S. Department of Housing and Urban Development. Housing Our Elders. (Washington, 

D.C.: 1999). Also see Commission on Affordable Housing and Health Facility Needs for 

Seniors in the 21st Century. A Quiet Crisis in America: A Report to Congress. (Washington, 

D.C.: 2003).

2

A householder is the person whose name is on the lease, deed, or mortgage. We chose 62 

years to be consistent with HUD’s definition of elderly.
Page 2 GAO-03-512 Section 202 Elderly Housing

rental assistance payments to defray some of the operating expenses. The 

combination of a debt-free project and rental assistance payments enables 

project sponsors to offer units at rents that are generally equal to 30 

percent of the renter’s income. Section 202 also has requirements to ensure 

that sponsors make the appropriate supportive services, such as 

housekeeping and transportation, available to elderly tenants.

Each year HUD announces the availability of Section 202 funds. Potential 

project sponsors submit their applications for these funds to HUD’s field 

offices. An application includes the description of the sponsor’s nonprofit 

status, past experiences in providing housing and supportive services, and 

the housing needs of the elderly in the market area to be served. Once the 

applications are ranked according to criteria published in the Federal 

Register, field offices make their selection recommendations to HUD 

headquarters. If HUD headquarters approves these recommendations, HUD 

reserves funds for these proposed projects and sends notification letters to 

project sponsors. Between the time HUD sends notification letters and 

approves the start of construction, the sponsors’ must complete, and HUD 

must approve, design plans and other documentation. These actions are 

referred to as project processing. Generally, 45 of HUD’s 81 field offices are 

responsible for processing Section 202 projects.

HUD’s guidelines stipulate that HUD field offices and project sponsors 

should complete project processing within 18 months of the date the 

funding is awarded.3

 However, the field offices may grant extensions of up 

to 6 months. Delays in processing hold up the distribution of funds and 

contribute to the program’s annual unexpended balances.4

 Between fiscal 

years 1998 and 2002, for example, the program’s unexpended balances 

increased from about $4.8 billion to $5.2 billion. Delays in processing also 

hinder efforts to provide much-needed housing to very low income elderly 

renter households.

This report addresses the role of the Section 202 program in responding to 

the housing affordability needs of elderly renter households with very low 

incomes and the program’s timeliness in processing projects for 

construction and expending appropriated funds. As agreed with your 

3

These guidelines are based on HUD regulation (24 C.F.R. 891.165).

4

Unexpended balances include cumulative budget authority that has not been spent 

(outlayed) and that may be carried over from one year to the next. These balances may 

include either obligated or unobligated funds.
Page 3 GAO-03-512 Section 202 Elderly Housing

offices, our report discusses: (1) the role of the Section 202 program in 

meeting the housing needs of elderly renter households with very low 

incomes, (2) the extent to which Section 202 projects meet HUD’s time 

guideline for project processing, and (3) the factors that keep Section 202 

projects from meeting HUD’s time guideline for project processing.

To address these objectives, we analyzed data from the American Housing 

Survey and other sources on the affordability of rental housing for very low 

income elderly households and the levels of assistance the Section 202 

program provides.5

 In addition, we reviewed HUD program and budget 

data, surveyed all HUD field offices that process Section 202 projects, 

conducted site visits at selected offices, surveyed and interviewed project 

sponsors and consultants experienced in working with the Section 202 

program, and observed a HUD training program on processing Section 202 

projects. Unless stated otherwise, our analysis focused on Section 202 

projects funded between fiscal years 1998 and 2000. Lack of reliable 

program data prevented us from reviewing all Section 202 projects funded 

before fiscal year 1998. Appendix I provides detailed information on our 

scope and methodology. 

We conducted our work primarily in Washington, D.C., between May 2002 

and March 2003, in accordance with generally accepted government 

auditing standards.

Results in Brief As the only federal housing program that targets all of its rental units to 

very low income elderly households, Section 202 is an important source of 

affordable housing for these households. Because very low income elderly 

households often have difficulty affording market rents, program funding is 

directed to localities based in part on their proportions of elderly renter 

households that have a housing affordability problem—that is, that pay 

over 30 percent of their income for rent. Nationwide, about half of the 3.3 

million elderly renter households with very low incomes have a housing 

affordability problem and do not receive government housing assistance. 

5

The survey, which the Bureau of the Census conducts for HUD, collects data on the nation’s 

housing in odd-numbered years. The national sample covers approximately 55,700 housing 

units. All numerical estimates derived from the American Housing Survey have sampling 

errors of ±10 percent or less of the value of those numerical estimates, unless otherwise 

noted. All percentage estimates have sampling errors of ±6 percentage points or less, unless 

otherwise noted. 
Page 4 GAO-03-512 Section 202 Elderly Housing

Section 202 insulates tenants in housing units subsidized by the program 

from increases in housing costs by limiting rents to 30 percent of household 

income. Section 202 provided housing for an estimated one-fifth of the 1.3 

million renter households that received government housing assistance. 

Even with the program’s exclusive focus on these households, Section 202 

has reached less than 8 percent of eligible households. And though some 

other federal programs provide more rental housing for the elderly, they do 

not focus exclusively on the very low income group.

More than 70 percent of Section 202 projects funded between 1998 and 

2000 were delayed—that is, these projects took longer than the 18 months 

set out in HUD’s guidelines to proceed from the date of the funding award 

to the date of HUD’s approval to start construction. However, a majority of 

projects were approved for construction within 24 months, or 18 months 

plus the 6-month discretionary extension. Projects located in metropolitan 

areas were more than twice as likely as projects in nonmetropolitan areas 

to exceed the 18-month guideline. Further, projects that exceeded the 18-

month guideline ultimately took an average of 11 months longer to finish 

than projects that met the time guideline, and these delayed projects 

contributed to the program’s unexpended fund balances. At the end of 

fiscal year 2002, 14 percent of the Section 202 program’s $5.2 billion in 

unexpended funds was associated with projects that had not yet been 

approved for start of construction after 18 months.

Several factors impeded the timely processing of projects, according to 

project sponsors, consultants, and HUD field office staff. First, despite 

HUD’s development cost policy, the capital advances that HUD awards do 

not always cover the cost of developing projects. Field offices, sponsors, 

and consultants reported that this factor often prolonged processing time, 

in part because sponsors needed to seek additional funding. We found that 

field offices that cited capital advance shortfalls and the need for sponsors 

to seek outside funding were less likely to have met the 18-month 

processing time guideline, compared with field offices that did not report 

these problems. Second, field offices, sponsors, and consultants reported 

that inconsistent implementation of procedures HUD adopted to 

streamline processing by field office staff, as well as limited training and 

out-of-date guidance on processing policies and procedures, impeded 

timely processing. Third, prolonged response times from HUD 

headquarters on requests for additional funds or time have affected 

processing times, according to project sponsors and consultants and HUD 

field offices. Fourth, HUD’s project monitoring system has limitations that 

may impede HUD’s ability to oversee project timeliness. Finally, field 
Page 5 GAO-03-512 Section 202 Elderly Housing

offices, sponsors, and consultants reported that other factors—including 

inexperienced sponsors and local requirements in areas such as permitting 

and zoning—negatively affected processing time for some projects.

This report contains recommendations to the Secretary of HUD designed to 

improve both the timeliness of project processing and program oversight.

Background Elderly households occupied about 25 percent (26 million) of the 

approximately 106 million housing units in the U.S. in 2001, according to 

the Housing Survey. A large majority of these elderly households were 

homeowners. The homeownership rate was considerably higher for elderly 

households than for nonelderly households (fig.1). A smaller share of 

elderly households (19 percent) rented their homes. These elderly renter 

households comprised about 15 percent of all renter households 

nationwide.

Figure 1: U.S. Homeowners and Renters in 2001

32%

68%

36%

64%

81%

19%

Overall

(106 million)

Elderly

(26 million)

Nonelderly

(80 million)

Renters

Homeowners

Source: GAO analysis of the American Housing Survey, 2001.
Page 6 GAO-03-512 Section 202 Elderly Housing

The Housing Act of 1959 (P.L. 86-372) established the Section 202 program, 

which began as a direct loan program that provided below-market interest 

rate loans to private nonprofit developers, among others, to build rental 

housing for the elderly and people with disabilities. In 1990, the CranstonGonzalez National Affordable Housing Act (P.L. 101-625) modified Section 

202 by converting it from a direct loan program into a capital advance 

program. In addition, the 1990 act created Section 811, another capital 

advance program, to produce housing specifically for people with 

disabilities and limited Section 202 to housing for the elderly.

In its current form, Section 202 provides capital advances—effectively 

grants—to private nonprofit organizations (usually referred to as sponsors 

or owners) to pay for the costs of developing elderly rental housing. As 

long as rents on the units remain within the program’s guidelines for at 

least 40 years, the sponsor does not have to pay back the capital advance. 

HUD calculates capital advances in accordance with development cost 

limits that it determines annually. These limits must account for several 

factors, including the costs of construction, reconstruction, or 

rehabilitation of supportive housing for the elderly that meets applicable 

state and local housing and building codes. HUD must, by statute, use 

current data that reflect these costs for each market area.6

 HUD’s policy is 

that these limits should cover the reasonable and necessary costs of 

developing a project of modest design that complies with HUD’s minimum 

property standards, accessibility requirements, and project design and cost 

standards. Once HUD calculates a capital advance, the amount is placed on 

reserve, and the funds are made available to the sponsor.7

To be eligible to receive Section 202 housing assistance, tenants must have 

(1) one household member who is at least 62 years old and (2) household 

income that does not exceed the program’s income limits. HUD has 

established general income categories that it and other federal agencies use 

to determine eligibility for many federal rental housing assistance 

programs (table 1).8

 These amounts are subject to adjustments in areas 

6

12 U.S.C. 1701q(h)(1).

7

In addition, HUD requires a minimum capital investment (generally not to exceed $10,000) 

to assure the sponsor’s commitment to the housing.

8

These other agencies include the Internal Revenue Service within the Department of the 

Treasury and Rural Housing Service within the Department of Agriculture. Both of these 

agencies administer affordable rental housing programs.
Page 7 GAO-03-512 Section 202 Elderly Housing

with unusually high or low incomes or housing costs and are published. 

Only very low income households—those with incomes below 50 percent 

of the area’s median income—are eligible for the Section 202 program.

Table 1: HUD Income Categories

Source: HUD.

Note: HUD does not officially refer to this category as “extremely low income,” but the term is 

commonly used by housing experts to describe households that have incomes that do not exceed 30 

percent of area median income.

Very low income households in Section 202 projects generally pay 30 

percent of their income for rent. Because tenants’ rent payments are not 

sufficient to cover the property’s operating costs, the project sponsor 

receives an operating subsidy from HUD, called a project rental assistance 

contract. Under the project rental assistance contract, HUD pays the 

difference between the property’s operating expenses (as approved by 

HUD) and total tenant rental receipts.9

 Section 202 rental assistance is a 

project-based subsidy and, as such, is tied to rental units. The households 

receiving assistance can benefit from a project-based subsidy only while 

living in Section 202 units. 

For fiscal year 2002, Congress appropriated about $783 million for the 

Section 202 program to fund the construction of over 6,000 new units as 

well as new multiyear rental assistance contracts, service coordinators, 

renewals of expiring rental assistance contracts, and other activities as 

authorized by Section 202. From year to year, the Section 202 program has 

carried balances of unexpended appropriated dollars. According to HUD, 

in fiscal year 2002, the unexpended balance for Section 202 was 

approximately $5.2 billion. About 41 percent of this balance was for capital 

advance funds and 59 percent for rental assistance funds. Generally, some 

of the program’s unexpended funds have not yet been awarded to projects, 

Income category Percent of area median income

Low income 80%

Very low income 50%

Extremely low income 30%

9

The term on rental assistance contracts is 5 years, although HUD has authorized these 

contracts for as long as 20 years. After these contracts expire, HUD renews them for 5 years, 

subject to the availability of funds.
Page 8 GAO-03-512 Section 202 Elderly Housing

and others are attributable to projects that have not begun construction. 

Once construction begins, funds are expended over several years during 

the construction phase and during the term of the project rental assistance 

contract. See appendix II for additional budgetary data for the Section 202 

program.

Section 202 Is an 

Important Source of 

Housing for Elderly 

Households with Very 

Low Incomes

Section 202 is the only federal housing program that targets all of its rental 

units to very low income elderly households. Because these households 

often have difficulty affording market rents, program funding is directed to 

localities based in part on their proportions of elderly renter households 

that have a housing affordability problem—that is, that pay over 30 percent 

of their income for rent and do not receive housing assistance. Nationwide, 

about 1.7 of the 3.3 million elderly renter households with very low 

incomes have a housing affordability problem. Section 202 insulates 

tenants in housing units subsidized by the program from increases in 

housing costs by limiting rents to 30 percent of household income. The 

program is a significant source of new and affordable housing for very low 

income elderly households: in 2001, 1.3 million such households received 

government housing assistance (about 40 percent of the total), and Section 

202 provided housing for roughly one-fifth of them. Even with the 

program’s exclusive focus on the very low income elderly, Section 202 has 

reached only a small share of eligible households. Though some other 

federal programs provide more housing for the elderly, they do not focus 

exclusively on these renter households.

Section 202 Targets Very 

Low Income Elderly 

Households and Makes 

Supportive Services 

Available

Congress specifically intended the Section 202 program to serve very low 

income elderly households and to expand the supply of affordable housing 

that can accommodate the special needs of this group.10 HUD takes into 

account the level of need for the kind of housing Section 202 provides when 

allocating program funds to the field offices. Thus, the criteria for 

allocating funds to the offices include, among other things, the total 

number of very low income elderly renters in the area and the number in 

this group that pay more than 30 percent of their incomes for rent.

HUD’s allocation formula takes into account the amount of rent households 

pay in relation to their income. According to the American Housing Survey, 

1012 U.S.C. 1701q(a).
Page 9 GAO-03-512 Section 202 Elderly Housing

in 2001 about 1.7 million households paid over 30 percent of their income 

for rent.11 HUD classified the “rent burden” these households face as either 

“moderate”—between 31 and 50 percent of household income—or 

“severe”—more than 50 percent of household income. As figure 2 

illustrates, about 35 percent (over 1 million) of all elderly renter 

households with very low incomes had severe rent burdens, and about 15 

percent (about 500,000) had moderate rent burdens.12 For detailed data on 

housing needs of these households, including data for metropolitan and 

nonmetropolitan areas, see appendix III.

Figure 2: Housing Cost Burdens of Very Low Income Elderly Renter Households in 

2001

Note: Other includes households that reported zero or negative income or no rent burden.

11As in other surveys, estimates from the American Housing Survey are subject to both 

sampling and nonsampling errors. Appendix III provides the sampling error for all estimates 

presented in this report and discusses the types of nonsampling errors that may affect the 

estimates.

12The sampling error for these half a million households with moderate rent burden was 

about ±78,410.

40%

50%

35% Severe rent burden

15% Moderate rent burden

Other

Rent

burdened

households

(1.7 million)

Unassisted

Assisted (subsidized)

Source: GAO analysis of the American Housing Survey, 2001.

Total: 3.3 million households

10%
Page 10 GAO-03-512 Section 202 Elderly Housing

Since Section 202 provides projects with rental assistance payments that 

cover a portion of the rent for each unit, the tenants themselves pay rents 

that equal a percentage of their household incomes—generally 30 percent. 

This percentage remains constant, so the amount of rent tenants pay 

increases only when household income rises, protecting them from rent 

increases that might be imposed in the private housing market when, for 

example, market conditions change. In contrast, low income elderly renter 

households that do not receive this type of assistance—especially those 

with very low incomes—are vulnerable to high rent burdens and increases 

in housing costs. Most of these households have few or no financial 

resources, such as cash savings and other investments, and rely primarily 

on fixed incomes that may not increase at the same rate as housing costs.

Section 202 serves another important function, potentially allowing 

households to live independently longer by offering tenants a range of 

services that support independent living—for example, meal services, 

housekeeping, personal assistance, and transportation. HUD ensures that 

sponsors have the managerial capacity to assess residents’ needs, 

coordinate the provision of supportive services, and seek new sources of 

assistance to ensure long-term support. HUD pays a small portion of the 

costs of providing these services through its rental assistance payments.13

Section 202 Provides an 

Estimated One-fifth of All 

Government-subsidized 

Housing for Very Low 

Income Elderly Renters

Section 202 is an important source of housing for elderly households with 

very low incomes.14 Between 1998 and 2001, Section 202 approved the 

construction of from 3,890 to 7,350 assisted units annually, for an average 

of about 5,690 units. According to the American Housing Survey, in 2001 

about 1.3 million, or 40 percent, of elderly renter households with very low 

incomes received some form of rental assistance in 2001 from a 

government housing program, including Section 202, public housing, or 

housing vouchers (fig. 2).15 According to our analysis of HUD program data, 

about 260,000 Section 202 units with rental assistance contracts (assisted 

units) generally served very low income elderly households through 2001.

Taken together, these two sources of data suggest that around one-fifth of

13Tenants can also make co-payments to defray some of the services expenses.

14The exact share of elderly units provided through the Section 202 program in relation to all 

federal housing programs cannot be calculated because many of these programs are used in 

combination with each other. 

15These programs are described in appendix IV. 
Page 11 GAO-03-512 Section 202 Elderly Housing

the 1.3 million assisted households identified in the American Housing 

Survey received assistance from Section 202.16

Although Section 202 is an important source of affordable elderly housing, 

the program reached a relatively small fraction of very low income elderly 

renter households. Between 1985 and 2001 the number of units assisted 

under the Section 202 program grew by about 4 percent annually, while the 

number of very low income elderly renter households declined by almost 1 

percent annually. Yet at any given point in this period, Section 202 had 

reached no more than about 8 percent of these households that were 

eligible for assistance under the program (fig. 3). Also, during this period, 

many of these elderly renter households with very low incomes—ranging 

from about 45 to 50 percent—had housing affordability problems.

16Since this estimate is derived from two different sources, we cannot give a precise 

percentage, and thus, this estimate is intended to be illustrative. Appendixes I and III 

contain discussions of the data limitations in both of these sources.
Page 12 GAO-03-512 Section 202 Elderly Housing

Figure 3: Units Developed under Section 202 Compared with All Units Occupied by 

Very Low Income Elderly Renter Households, 1985 to 2001

Other federal programs that develop rental housing generally target 

different income levels, serve other populations in addition to the elderly 

(including families with children and people with disabilities) and do not 

require housing providers to offer supportive services for the elderly. For 

example, the Low-Income Housing Tax Credit Program, the largest of all 

current production programs, subsidizes the construction of about 86,000 

units annually. However, according to one source, only around 13,200 of 

these units are intended for the elderly—and, unlike Section 202, not all of 

these units serve very low income elderly renter households.17 In addition, 

these programs also do not have specific requirements ensuring that 

supportive services be available to elderly tenants. Appendix IV provides 

additional information on other federal housing programs.

17Seniors Commission 2002, 53.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1985 1987 1989 1991 1993 1995 1997 1999 2001

Units in millions

Units occupied by elderly renters with very low income

Cumulative Section 202 units

Gap between eligible households and Section 202 units

Sources: GAO analysis of HUD Real Estate Management System and HUD tabulation of the American Housing Survey, 1985-2001.
Page 13 GAO-03-512 Section 202 Elderly Housing

Section 202 Projects 

Reviewed Generally 

Did Not Meet 

Guidelines for 

Timeliness 

According to HUD policy, Section 202 projects should complete project 

processing and be approved to start construction within 18 months after 

they are funded. Overall, 73 percent of Section 202 projects funded 

between fiscal years 1998 and 2000 did not meet this processing time 

guideline. However, about 55 percent of the projects were approved within 

24 months. Projects located in metropolitan areas were about twice as 

likely as projects in nonmetropolitan areas to take more than 18 months to 

be approved. The percentage of projects approved within the specified 

time frame differed widely across HUD’s field offices, with field offices 

located in the northeast and west approving the lowest percentages. As 

well as taking longer to complete than other projects—thus delaying 

benefits to very low income elderly tenants—projects that were not 

approved for construction after the 18-month time frame accounted for 14 

percent of the Section 202 program’s balance of unexpended 

appropriations. 

HUD Expects Projects to Be 

Approved to Start 

Construction within 18 

Months

Once HUD has made a funding award for a Section 202 project, HUD field 

office staff and project sponsors must complete various tasks, meetings, 

and paperwork before construction can commence (fig. 4). In this report, 

we refer to the tasks that take place between (1) the date when HUD sends 

a funding award letter to the sponsor and (2) the date that HUD authorizes 

the sponsor both to begin construction and to start drawing down the 

capital advance amount (initial closing) as project processing. The 

duration of the project processing period depends, in part, on project 

sponsors’ timeliness in submitting the required documentation to HUD’s 

field office reviewers. For example, sponsors must create owner 

corporations, hire consultants, obtain local permits and zoning approval, 

and design architectural and cost plans, among other things. HUD field 

offices must review all documentation before projects can be approved for 

construction.
Page 14 GAO-03-512 Section 202 Elderly Housing

Figure 4: Section 202 Project Processing

As figure 4 illustrates, HUD’s current time guideline for project processing 

is 18 months. Individual field offices have the discretion to extend 

processing for up to 6 more months without approval from HUD 

headquarters, but all extensions beyond those additional 6 months (that is, 

24 months after the funding award) require approval from headquarters. 

After construction is authorized to begin, HUD gradually expends capital 

advance funds to cover development costs incurred by the sponsor. When 

construction is completed, HUD approves the final costs, and sponsors can 

begin leasing to eligible tenants. Over time, sponsors draw down funds 

from the reserved rental assistance amounts to support operating costs.

To help assure that field office staff and project sponsors could complete 

project processing requirements within the 18-month time guideline, HUD 

adopted changes in 1996 that were intended to streamline procedures.18

One of the key changes included requiring field office staff to accept 

sponsor-provided certifications of architectural plans, cost estimates, and 

land appraisals. Previously, field office staff performed detailed technical 

reviews of these items. According to HUD policy, these streamlined 

procedures should have been used to process all projects in our analysis, 

which were funded between fiscal years 1998 and 2000.

Construction

begins

Approval for

construction

(initial

closing)

Firm

commitment

application

Funding

award

letter

Application

review

and selection

18-month guideline

Source: GAO presentation based on flowchart provided by HUD.

· Architectural

 plans

· Cost estimates

· Other required

 documentation

Sponsor 

prepares

and HUD 

reviews · Contractor

· Building permit

Sponsor

obtains

· Legal and

 other required

 documentation

HUD reviews

18HUD Notice H 96-102.
Page 15 GAO-03-512 Section 202 Elderly Housing

HUD Took Longer Than 18 

Months to Approve Most 

Projects for Construction

Most Section 202 projects that received funding awards did not receive 

approval to begin construction within the 18-month guideline set out by 

HUD. Altogether, 73 percent of projects funded from fiscal years 1998 

through 2000 did not meet the 18-month guideline. These projects 

accounted for 79 percent of the nearly $1.9 billion in funding awarded to 

projects during this period. The percentage of projects exceeding the 

guideline remained relatively stable over the years at around 72 percent 

(fiscal year 1998) to 75 percent (fiscal year 2000). During this period, the 

projects located in metropolitan areas (72 percent of all projects) were 

about twice as likely as projects in nonmetropolitan areas to exceed the 18-

month guideline (see app. V for more detail).19

HUD field offices may grant up to 6-month extensions after the 18-month 

guideline for projects needing more time to gain approval to start 

construction, and many projects were approved within that 6-month time 

frame. HUD approved 55 percent of the projects funded from fiscal years 

1998 through 2000 for construction within 24 months of the funding 

award—27 percent within 18 months and 28 percent within 19 to 24 

months. The remaining 45 percent of projects took more than 24 months to 

be approved. In addition, metropolitan projects were about twice as likely 

as nonmetropolitan projects to take more than 24 months to gain approval 

to start construction. 

Field Offices’ Performance 

in Meeting the Time 

Guideline Varied

We looked at the performance of the 45 individual HUD field offices that 

process Section 202 projects and found that they had varying degrees of 

success in meeting the 18-month guideline. We evaluated their performance 

by estimating the percentage of projects approved for construction (project 

approval rate) within 18 months for each field office. Among these offices, 

the median project approval rate for construction within 18 months was 22 

percent (table 2), but field offices’ performance varied widely. Eight field 

offices had no projects that met the 18-month guideline, while more than 90 

percent of projects at one office did (see app. V for a breakdown of 

approval rates by field office). Field offices’ performance varied by region, 

with those located in the northeast and west being least likely to approve 

19HUD allocates Section 202 funding among field offices using a formula that targets funds 

based on the unmet needs of elderly renter households with housing problems. Also, the 

program allocates 85 percent of funding to metropolitan areas and 15 percent to 

nonmetropolitan areas.
Page 16 GAO-03-512 Section 202 Elderly Housing

projects within 18 months of the funding award. Table 2 also shows the rate 

of projects approved within 24 months.

Table 2: Field Office Performance in Approving Projects for Construction within 18 

and 24 Months 

Source: GAO analysis of HUD’s Development Application Processing (DAP) System, December 2002.

Note: The Puerto Rico field office is included in the median calculation for all field offices, but it is not 

part of any region, according to the Bureau of the Census definition. 

Delayed Projects Affect the 

Program’s Production Times 

and Expenditures

Meeting processing time guidelines is important because most of the delays 

in total production time—that is, the time between funding award and 

construction completion—stem from the project processing phase. When 

we compared the average total production times for completed projects 

that did not meet HUD’s 18-month processing guideline and those that did, 

the delayed projects took 11 months longer than other projects to proceed 

from funding award to construction completion (fig. 5). Since the average 

time taken for the construction phase was very similar for all projects, 

most of the 11-month difference in total production time was attributable 

to the extra 10 months that delayed projects took to complete the 

processing phase. 

Median project approval rate for field offices

Within 18 months Within 24 months

All field offices 22% 60%

Offices in northeast 9% 36%

Offices in west 15% 41%

Offices in south 34% 71%

Offices in midwest 29% 71%
Page 17 GAO-03-512 Section 202 Elderly Housing

Figure 5: Average Elapsed Time for Completed Section 202 Projects Funded in 

Fiscal Years 1998 and 1999

Note: Projects funded in fiscal year 2000 are excluded from this analysis because no delayed projects 

had completed construction.

Delayed processing of Section 202 projects also affected the Section 202 

program’s overall balances of unexpended appropriations. At the end of 

fiscal year 2002, for example, HUD had a total of $5.2 billion in unexpended 

Section 202 funds (fig. 6). A relatively small part of these unexpended 

funds—about 14 percent—was attributable to projects that had not yet 

been approved to start construction, even though they had exceeded HUD’s 

18-month processing time guideline. Consequently, none of the funds 

reserved for these projects had been expended. By contrast, the remaining 

86 percent of unexpended funds were associated with projects for which 

HUD was in the process of expending funds for construction or rental 

assistance. For example, almost half of the unexpended balances—about 

48 percent—resulted from projects that had already been completed but 

were still drawing down their rental assistance funds as intended under the 

multiyear project rental assistance contract between HUD and the project 

sponsor. (For additional details on unexpended fund balances, see app. II.)

0 5 10 15 20 25 30 35 40

Other projects

Delayed projects

Months

Source: GAO analysis of HUD DAP system, December 2002.

Processing phase

Construction phase

24 months 12 months

14 months 11 months

Total time:

36 months

Total time:

25 months
Page 18 GAO-03-512 Section 202 Elderly Housing

Figure 6: Section 202 Unexpended Fund Balances as of End of Fiscal Year 2002

Note: Other includes projects under construction and funding for other program purposes.

Various Factors Can 

Impede the Timely 

Processing of Projects

Our review of projects funded from fiscal years 1998 through 2000 shows 

that several factors can prevent Section 202 projects from meeting the 18-

month processing time guideline, including: issues related to capital 

advances, field office practices and the training and guidance that HUD has 

provided to field office staff, and HUD’s program administration and 

oversight. First, despite HUD’s intent, capital advances were not always 

sufficient to meet development costs. According to some sponsors and 

consultants, this factor often led sponsors to seek funding from other 

sources, including other HUD programs, which takes time. Second, some 

field offices, sponsors, and consultants reported that some field office staff 

had not fully implemented HUD’s streamlined processing procedures and 

that HUD had offered only limited training and guidance to field office staff 

on processing policies and procedures. Third, additional time was needed 

for cases in which HUD headquarters responded to project sponsors’ 

requests for additional funds or processing time. Fourth, limitations in 

HUD’s project monitoring system impeded its ability to oversee project 

processing. Finally, factors external to HUD, such as sponsors’ level of 

development experience and requirements established by local 

governments, also hindered processing.

14%

14%

24%

48%

Completed projects 

Projects not approved for

construction after less than 18 months

Projects not approved for 

construction after more than 18 months

Other

Source: GAO analysis of HUD DAP system and budget data as of September 30, 2002.

Total: $5.2 billion
Page 19 GAO-03-512 Section 202 Elderly Housing

Insufficient Capital 

Advances Caused Some 

Sponsors to Seek Other 

Funding

Although HUD policy intends for capital advances to fund the cost of 

constructing a modestly designed project, capital advances have not 

always been sufficient to cover these expenses.20 HUD field staff, project 

sponsors, and consultants reported that program limits on capital advances 

often kept projects from meeting HUD’s time guideline for approving 

projects for construction. Most field offices, and every sponsor and 

consultant that we surveyed, reported that insufficient capital advances 

negatively affected project processing time, and a substantial majority of 

respondents indicated that this problem occurred frequently (fig. 7). Many 

respondents also reported that securing secondary financing to supplement 

the capital advance amount often added to processing time. According to 

some sponsors and consultants, the capital advance amounts set by HUD 

were often inadequate to cover land, labor, and construction costs as well 

as fees imposed by local government. As a result, sponsors had to seek 

secondary financing from other federal, state, and local resources—

including other HUD programs—or redesign projects to cut costs, or both. 

Some sponsors and consultants said that the search for secondary 

financing could add months to the construction approval process because 

funding application and award cycles for other programs varied and 

because sponsors had to meet HUD’s documentation requirements for 

every additional funding source before the agency could authorize 

construction.

20See 66 Fed. Reg. 6647 (22 Jan. 2001).
Page 20 GAO-03-512 Section 202 Elderly Housing

Figure 7: Survey Responses—Insufficient Capital Advances and Other Project 

Funding Issues

HUD has recognized that the development cost limits it uses to calculate 

capital advances have sometimes been inadequate and that, as a result, a 

number of sponsors have had to seek additional funding to construct their 

projects. According to a HUD official, the agency is currently considering 

initiating a study to determine how to calculate capital advances that can 

cover project development costs.

Our survey and program data showed that field offices that reported 

problems with insufficient capital advances and sponsors securing 

secondary financing had a lower percentage of projects that met the 18-

month time guideline than other offices (table 3).21 The median percentage 

of projects meeting the 18-month guideline was much lower for field offices 

that reported these problems than those that did not. In addition, field 

offices in the northeast and west—the regions with the lowest percentage 

of projects meeting the processing time guideline (see table 2 above)—

were more likely than those in the south and midwest to report having 

problems with these factors. 

21We considered a field office to have a problem with insufficient capital advances and 

securing secondary financing if it reported that both of these factors occurred often to 

always. We considered a field office not to have a problem with these two factors if it 

reported that both of them occurred seldom or sometimes. 

Factor that affects 

timely project processing

Has moderate to 

significant impact Occurs often to always

Capital advance 

insufficient to fund projects

Sponsor has difficulty designing 

project within capital advance amount

Securing secondary financing

Percent of respondents who said that factor:

89

100

64

90

91

90

70

62

77

71

57

52

Source: GAO survey of HUD field offices and Section 202 sponsors and consultants.

Field office representatives

Sponsors and consultants
Page 21 GAO-03-512 Section 202 Elderly Housing

Table 3: Field Office Performance and Problems with Funding Issues

Source: GAO survey of HUD field offices and Section 202 sponsors and consultants. 

Note: Of the 44 field offices that responded to the survey, 25 reported having problems with both 

factors and 15 reported having problems with neither factor. Three field offices reported problems with 

only one of the factors, and one field office did not respond to the questions.

Varying Field Office 

Practices and Inadequate 

Staff Training and Guidance 

Affected Timely Processing

Differences in the procedures field offices use to approve projects for 

construction and the extent of staff training and experience affected 

project processing time. For example, most consultants and sponsors in 

our survey responded that the unwillingness of field office staff to 

implement policy changes that HUD had adopted to streamline processing 

caused delays, as did insufficient training for and inexperience of field 

office staff (fig. 8). About 40 percent of them also reported that these 

problems occurred frequently. In addition, some consultants and sponsors 

whom we interviewed told us that some field offices continued to conduct 

much more detailed and time-consuming technical reviews of project plans 

than HUD’s current policies require. These sponsors and consultants said 

that field staff departing from program guidelines caused confusion for 

sponsors about the type of information HUD required and delayed the 

process of obtaining HUD’s approval to begin construction. A majority of 

HUD field office representatives also reported that a lack of staff training 

and experience can have a negative effect on processing time. However, 

HUD field office staff regarded these problems, as well as staff 

unwillingness to implement policy changes, as infrequent problems. HUD 

officials at headquarters acknowledged that some field staff were 

performing technical reviews contrary to program guidelines, but the 

officials did not know how many staff were doing so. 

Median rate of projects

approved within

18 months

All field offices 22%

Field offices that reported insufficient capital advances

and problems with sponsors obtaining secondary financing

Both factors are problems 18%

Neither factor is a problem 40%
Page 22 GAO-03-512 Section 202 Elderly Housing

Figure 8: Survey Responses—Field Office Staff Issues 

HUD has provided limited guidance for field office staff on processing 

policies and procedures, which would ensure that all staff are up to date on 

the most current guidelines and requirements. In 1999, HUD headquarters 

issued a memorandum that reminded field office staff to process projects 

in accordance with streamlined procedures that had been adopted in 1996, 

such as replacing detailed technical review of project plans by field office 

staff with sponsor-provided certifications. Yet at the time of our review, 

most field office staff had not received any formal training on Section 202 

project processing. According to HUD, in 2002, the agency required 

representatives from each field office to attend the first formal training on 

project processing for field office staff since at least 1992. Although HUD 

headquarters expected those who attended to relay what they had learned 

to other staff members in their own offices, our survey showed that by 

November 2002 no on-site training had occurred at about a quarter of the 

field offices. Also, only two field offices (5 percent) reported that training 

was relayed in a formal setting. 

We also found that HUD’s field office staff was relying on out-of-date 

program handbooks that did not reflect the streamlined processing 

procedures.22 Although HUD stated that the agency intended to issue 

22Handbook No. 4571.5 was issued on July 21, 1992. Handbook No. 4571.3 REV-1 was issued 

on April 9, 1993.

Factor that affects 

timely project processing

Has moderate to 

significant impact Occurs often to always

Staff lack Section 202 training

Staff lack Section 202 experience

Percent of respondents who said that factor:

55

90

11

38

52

90

7

38

Source: GAO survey of HUD field offices and Section 202 sponsors and consultants.

Field office representatives

Sponsors and consultants

Some staff unwilling to fully 

implement streamlining procedures

25

76

2

48
Page 23 GAO-03-512 Section 202 Elderly Housing

revised handbooks in order to ensure that all field offices follow current 

procedures, it had not yet done so at the time of our review. Based on 

written comments in our survey, some field office staff felt that an updated 

handbook would aid in the timely processing of Section 202 projects. 

Administrative and 

Oversight Weaknesses at 

HUD Headquarters 

Contributed to Delays

The time that HUD headquarters took to make certain administrative 

decisions also added to the time taken to process Section 202 projects. 

HUD headquarters must approve all requests for additional time to 

complete processing beyond 24 months after funding award and for 

additional capital advance funds. A HUD official noted that projects must 

already have exceeded the 18-month time guideline, and the discretionary 

6-month extension, before HUD headquarters would be called on to 

approve a request for a time extension beyond 24 months. However, most 

of the field office representatives and project sponsors and consultants in 

our survey agreed that the time HUD headquarters took to make these 

decisions further prolonged processing time, with many respondents 

reporting that this issue was a frequent problem (fig. 9). 

Figure 9: Survey Responses—HUD Program Administration Issues

Further, HUD’s project monitoring system was not as effective as it could 

have been and may have impeded HUD’s oversight of project processing. 

HUD officials stated that, to monitor project processing, headquarters has 

periodically used its Development Application Processing (DAP) system to 

identify projects that exceeded the 18-month processing time guideline. In 

addition, the officials stated that headquarters contacted field offices on a

Factor that affects 

timely project processing

Has moderate to 

significant impact Occurs often to always

Time spent by HUD headquarters

considering waiver requests

Percent of respondents who said that factor:

73

90

59

43

Source: GAO survey of HUD field offices and Section 202 sponsors and consultants.

Field office representatives

Sponsors and consultants
Page 24 GAO-03-512 Section 202 Elderly Housing

quarterly basis to discuss the status of these delayed projects.23

Nevertheless, HUD headquarters officials have acknowledged that there 

are data inaccuracies in the DAP system, and the agency has instituted 

efforts to improve the system’s reliability in identifying delayed projects. 

Furthermore, according to HUD, the DAP system does not collect data that 

would allow both headquarters and field office staff to follow a project 

through every stage of development and, as a result, many field offices 

maintain their own tracking systems to monitor projects through these 

stages. The lack of reliable, centralized data on the processing of Section 

202 projects has limited HUD headquarters’ ability to oversee projects’ 

status, determine problematic processing stages, and identify field offices 

that might need additional assistance. HUD officials stated that enhancing 

the DAP system is a priority, but that a lack of funding has hindered such 

efforts.

Issues External to HUD 

Caused Some Delays

Finally, other factors outside of HUD’s direct control kept some projects 

from meeting time guidelines. Ninety-five percent of field office 

representatives and 90 percent of sponsors and consultants surveyed 

reported that project processing time was negatively affected when project 

sponsors were inexperienced. Nearly 60 percent of field offices, and almost 

40 percent of sponsors and consultants, indicated that this problem 

occurred frequently. Local government requirements also negatively 

affected project processing, according to about 60 percent of field offices 

and about 85 percent of sponsors and consultants. About 35 percent of field 

offices and about 60 percent of sponsors and consultants reported that 

these requirements were frequently a problem. Also about 70 percent of 

field offices, sponsors, and consultants reported that, specifically, the local 

zoning process had a negative effect on project processing time, with about 

40 percent of field offices and about 50 percent of sponsors and consultants 

indicating that this problem was frequent.

Most field offices, sponsors, and consultants reported that other factors, 

such as community opposition and environmental issues, affected 

processing times but were not frequent problems for Section 202 projects. 

Although about 50 percent of field offices, and about 60 percent of 

23The agency has made some progress in approving some of these projects for construction 

or canceling them if they are no longer feasible. For example, 16 of the 169 projects that 

were pending construction approval at the end of fiscal year 2002 were approved for 

construction by December 2002, and 6 others had their funding awards canceled.
Page 25 GAO-03-512 Section 202 Elderly Housing

sponsors and consultants, reported that community opposition had a 

negative effect on project processing time when it occurred, less than 10 

percent of field offices, and about 30 percent of sponsors and consultants, 

reported such opposition to be a frequent problem. Also, about 50 percent 

of field offices, sponsors, and consultants indicated that environmental 

problems negatively affect processing when they occur, but only about 20 

percent of them considered environmental problems to occur frequently. 

Appendixes VI and VII provides additional details on the results of our 

survey of HUD field office staff, sponsors, and consultants.

Conclusions The housing affordability problems of very low income elderly renter 

households—although they represent a small share of all elderly 

households—are particularly acute. These households represent one of the 

more vulnerable populations in the nation given their small incomes and 

need for supportive services. Considering the urgent housing needs of the 

Section 202 program’s target population, ensuring that its projects are 

completed as soon as possible is critical. Delays in timely Section 202 

processing can prolong project completion, on average, by nearly a year 

and result in higher balances of unexpended funds. Awarding capital 

advances that are sufficient to cover project development costs can 

alleviate delays by averting the need for sponsors to seek secondary 

financing or request approval from HUD headquarters for additional 

funding. While sufficient capital advance funding for projects, absent 

additional appropriations, can result in fewer units funded annually, it can 

also result in the prompt delivery of housing assistance to needy 

households and in the reduction of unexpended balances attributable to 

delayed projects. In addition, issuing an updated program handbook and 

providing adequate formal training can help in timely project processing by 

ensuring that staff are accountable for applying and interpreting HUD 

policies and procedures in a consistent manner. Finally, HUD’s project 

monitoring system, in its current form, is not as effective as it can be and 

may hinder HUD’s oversight. Maintaining reliable, centralized data on the 

processing of Section 202 projects is essential to overseeing projects’ status 

as well as determining problematic processing stages.

Recommendations To reduce the time required for projects to receive approval to start 

construction, we recommend that the Secretary of Housing and Urban 

Development direct the Assistant Secretary for Housing to (1) evaluate the 

effectiveness of the current methods for calculating capital advances and 
Page 26 GAO-03-512 Section 202 Elderly Housing

(2) make any necessary changes to these methods, based on this 

evaluation, so that capital advances adequately cover the development 

costs of Section 202 projects consistent with HUD’s project design and cost 

standards. In addition, to improve the performance of HUD field office and 

headquarters staff in processing projects in a timely manner, we 

recommend that HUD

• provide regular training to ensure that all field office staff are 

knowledgeable of and held accountable for following current 

processing procedures,

• update its handbook to reflect current processing procedures, and

• improve the accuracy and completeness of information entered in the 

DAP system by field office staff and expand the system’s capabilities to 

track key project processing stages.

Agency Comments and 

Our Evaluation

We provided a draft of this report to HUD for its review and comment. In a 

letter from the Assistant Secretary for Housing (see app. VIII), HUD agreed 

with the report’s conclusions, stating that the report demonstrated an 

excellent understanding of the importance of the Section 202 program in 

delivering affordable housing to very low income elderly households. HUD 

also concurred with the recommendations and provided information on 

how it intends to implement them. Regarding our recommendations 

concerning HUD’s capital advance formula, the agency agreed that, in some 

locations, capital advances may be insufficient to cover project 

development costs and that delays can result when sponsors must seek 

additional funds from other sources. However, HUD also noted that 

increasing the per-unit development cost limits would result in fewer units 

constructed. Our draft report reached the same conclusion, but also stated 

that sufficient capital advances yield important benefits, such as the 

prompt delivery of housing assistance to needy households.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to interested 

members of Congress and congressional committees. We also will send 

copies to the HUD Secretary and make copies available to others upon 
Page 27 GAO-03-512 Section 202 Elderly Housing

request. In addition, the report will be available at no charge on the GAO 

Web site at http://www.gao.gov.

Please contact me at (202) 512-8678 or Paul Schmidt at (312) 220-7681, if 

you or your staff have any questions concerning this report. Key 

contributors to this report were Susan Campbell, Emily Chalmers, 

Mark Egger, Daniel Garcia-Diaz, Curtis Groves, Ron La Due Lake, 

Marc Molino, Melissa Roye, William Sparling, and Julianne Stephens.

David G. Wood

Director, Financial Markets and

 Community Investment 
Page 28 GAO-03-512 Section 202 Elderly Housing

Appendix I

Scope and Methodology AAppenendxIdeisi

We conducted this review to address: (1) the role of the Section 202 

program in meeting the housing needs of elderly renter households with 

very low incomes, (2) the extent to which Section 202 projects meet the 

Department of Housing and Urban Development’s (HUD) time guidelines 

for project processing, and (3) the factors that keep Section 202 projects 

from meeting HUD’s time guidelines for project processing.

To determine the role of the Section 202 program in meeting housing needs 

of elderly households, we analyzed household income and rental housing 

cost data from the American Housing Survey. The Bureau of the Census 

performs the survey for HUD every odd-numbered year. Appendix III 

provides a detailed discussion of the American Housing Survey. We also 

reviewed studies that involved the housing needs of elderly households.

To determine the extent to which HUD’s Section 202 and other housing 

programs serve elderly households, we used data from HUD’s Real Estate 

Management System (REMS) as of the beginning of calendar year 2003. 

Specifically, we analyzed information on the overall number of properties 

and their associated units under Section 202 and other housing programs 

that serve the needs of elderly households. Although we did not 

independently verify the accuracy of the program data, we did perform 

internal checks to determine (1) the extent to which the data fields were 

populated, (2) the reasonableness of the values contained in the data fields, 

and (3) if any aberrations existed in the data we used. We concluded that 

the REMS data was reliable for purposes of this report. We also reviewed 

relevant regulations, policies, and procedures for Section 202 and other 

active federal programs. 

To explore the issue of timeliness in processing and some of the factors 

that may impede timely processing, we reviewed HUD program and budget 

data from HUD’s Development Application Processing (DAP) System as of 

the end of calendar year 2002. Because HUD headquarters officials told us 

that program data from this system was not reliable for Section 202 

projects funded before fiscal year 1998, we limited our review of Section 

202 projects to those funded from fiscal years 1998 to 2000. While we did 

not independently verify the accuracy of the program data from this 

system, we periodically discussed the accuracy and interpretation of the 

data we used with HUD officials. In addition, we compared file records for 

projects funded since fiscal year 1998 with the data entered in the system 

for those projects by three HUD field offices that process Section 202 

projects and generally found the data to be accurate. Also, we performed 

internal checks to determine the extent to which the data fields in DAP 
Appendix I

Scope and Methodology

Page 29 GAO-03-512 Section 202 Elderly Housing

were populated and the reasonableness of the values contained in these 

fields. In cases where the data were not reasonable or questions arose, we 

contacted a HUD official to identify and correct errors. To determine the 

reasons why HUD awarded time extensions for certain projects listed in 

the system, we compiled and analyzed HUD’s published notices of these 

extensions in the Federal Register.

We also used a questionnaire to survey of all HUD field offices that process 

Section 202 projects. About 98 percent (44 out of 45) of the field offices that 

process Section 202 projects completed the questionnaire. We also 

conducted site visits at the Greensboro and Richmond field offices to 

obtain field office staff perceptions on factors that may impede timely 

processing. In addition, to gain a fuller perspective on these issues, we 

surveyed sponsors and consultants, identified by HUD and others, that 

were experienced in working with Section 202 projects. Collectively, these 

sponsors and consultants worked on approximately 260 projects since 

fiscal year 1998 representing approximately 40 percent of Section 202 units 

funded. In addition, we observed a HUD training session on processing 

Section 202 projects in August 2002.

We conducted our work primarily in Washington, D.C., between May 2002 

and March 2003, in accordance with generally accepted government 

auditing standards.
Page 30 GAO-03-512 Section 202 Elderly Housing

Appendix II

Budget Information for the Section 202 

Program ApenIdxi

This appendix provides information on the Housing for Special Populations 

appropriations account, which provides funding for the Section 202 and 

Section 811 programs.1

 In fiscal year 2002, Congress appropriated over $1 

billion for the Housing for Special Populations account—of which $783 

million was earmarked for the Section 202 program. From year to year, the 

Section 202 program carries significant balances of unexpended 

appropriated funds. In fiscal year 2002, the unexpended balance for the 

Section 202 program was $5.2 billion.

Section 202 

Appropriations

In fiscal year 2002, Congress appropriated over $1 billion for the Housing 

for Special Populations appropriations account, which provides funding for 

both the Section 202 Supportive Housing for the Elderly and the Section 

811 Supportive Housing for Persons with Disabilities Programs.2

 Since 

fiscal year 1998, a total of $4.6 billion in appropriations were made 

available for both programs (table 4). In fiscal year 2002, the lion’s share of 

the appropriations for the Housing for Special Populations account, about 

$783 million or 76 percent, went to the Section 202 program to fund, among 

other things, capital advances and project rental assistance contracts 

(PRACs) for new projects and PRAC renewals for existing projects.3

 Since 

fiscal year 1998, about $3.6 billion have been appropriated for the Section 

202 program. Appropriations for the Section 202 program in nominal 

dollars (that is, unadjusted for inflation) have increased since fiscal year 

1998 at an average annual rate of about 5 percent. However, appropriations 

for Section 202 in constant 1998 dollars have increased by an average rate 

of about 2 percent annually.

1

For fiscal year 2004, HUD proposed to separate the Housing for Special Populations 

account into two accounts—Housing for the Elderly and Housing for Persons with 

Disabilities.

2

The period of availability for obligating Section 202 funds has been limited in recent years. 

The fiscal year 2003 appropriations act, for example, requires HUD to obligate fiscal year 

2003 funds for the Section 202 program by the end of fiscal year 2006. Under 31 U.S.C. 1552, 

HUD is required to disburse, and the project owner to expend, all obligated Section 202 

funds by the end of the fifth fiscal year after the period of availability for obligation ends—in 

the case of Section 202 funds for fiscal year 2003, no later than the end of fiscal year 2011. 

Any remaining balance (whether obligated or unobligated) in the account after the fifth year 

is to be canceled and is not available for obligation or expenditure.

3

PRACs provide rental assistance payments to a property to pay the difference between the 

units’ approved operating costs and the tenant rental contributions (generally 30 percent of 

adjusted income).
Appendix II

Budget Information for the Section 202 

Program

Page 31 GAO-03-512 Section 202 Elderly Housing

Table 4: Annual Appropriations for the Housing for Special Populations Account in 

Fiscal Years 1998-2002

Source: GAO analysis of HUD data.

Section 202 

Unexpended Balances

The Section 202 program carries significant balances of unexpended 

appropriations from year to year. Unexpended balances include the 

cumulative amount of budget authority that has not been spent (outlayed) 

and may consist of either obligated or unobligated funds. Some of the 

unexpended balances are expected to be carried over annually for various 

programmatic reasons, including the time required for project sponsors to 

prepare their application for program funds and finalize plans as well as the 

time required for HUD’s field offices to review and process them. However, 

some unexpended funds can also result from problems in the timeliness of 

project processing. Between fiscal years 1998 and 2002, the program’s 

unexpended balance increased from about $4.8 billion to $5.2 billion. In 

nominal dollars, this balance has increased by an average annual rate of 

about 2 percent between fiscal years 1998 and 2002. In constant 1998 

dollars, unexpended balances for Section 202 actually decreased by an 

average rate of less than 1 percent annually. Table 5 shows the annual 

balances of unexpended appropriations for the Section 202 program since 

fiscal year 1998.

Nominal dollars in millions

Fiscal year

Housing for Special

Populations

Section 202

Supportive Housing

for the Elderly

Section 811 Supportive

Housing for Persons

with Disabilities

1998 $839 $645 $194

1999 854 660 194

2000 911 710 201

2001 994 777 217

2002 1,024 783 241

Total 4,622 3,575 1,047
Appendix II

Budget Information for the Section 202 

Program

Page 32 GAO-03-512 Section 202 Elderly Housing

Table 5: Annual Balances of Unexpended Appropriations for Section 202 in Fiscal Years 1998-2002

Source: GAO analysis of HUD data.

As table 5 shows, unexpended PRAC funds account for a large share of the 

total unexpended balances for the Section 202 program as well as for the 

overall Housing for Special Populations account. Before fiscal year 1997, 

HUD provided individual projects with PRAC amounts that covered rental 

assistance payments generally for 20 years. Since fiscal year 1997, HUD 

provided PRAC amounts that covered rental assistance payments for 5 

years. In both cases, PRAC funds are obligated, but remain unexpended, for 

multiple years after project occupancy—unlike capital advance funds, 

which are fully expended by project completion. With the reduction of the 

PRAC term from 20 to 5 years, HUD expects PRAC funds to comprise a 

declining share of the overall unexpended balance for the Section 202 

program.

Nominal dollars in millions

Fiscal year

1998 1999 2000 2001 2002

Section 202 Supportive Housing for the 

Elderly $4,839 $4,998 $5,048 $5,138 $5,219

Capital advance 1,774 1,789 1,949 2,041 2,164

PRAC (rental assistance) 3,065 3,209 3,099 3,097 3,055

Housing for Special Populations 6,343 6,547 6,701 6,899 7,074
Page 33 GAO-03-512 Section 202 Elderly Housing

Appendix III

Data Issues Concerning the American Housing 

Survey ApenIdxi

In reporting on the housing affordability problems of elderly renter 

households with very low incomes, this report relies on data from the 2001 

American Housing Survey (AHS). We assessed the reliability of the data by 

reviewing AHS documentation, performing electronic testing of the data 

files to check for completeness of data files, and replicating published 

tables.1

 We determined that the data are reliable enough for the purposes of 

this report.

AHS is a probability sample of about 55,700 housing units interviewed 

between August and November 2001.2

 Because this sample is based on 

random selections, the specific sample selected is only one of a large 

number of samples that might have been drawn. Since each sample could 

have provided different estimates, we express our confidence in the 

precision of this sample’s results as 95 percent confidence intervals (for 

example, +7 percentage points). This is the interval that would contain the 

actual population value for 95 percent of the samples that could have been 

drawn. As a result, we are 95 percent confident that each of the confidence 

intervals in this report will include the true values in the study population. 

In the following section, we provide 95 percent confidence intervals for the 

estimates used in this report. We calculated these confidence intervals by 

adding and subtracting the sampling error for each estimate to or from the 

estimate itself.3

Estimates from the survey are also subject to certain nonsampling errors, 

such as incomplete data and wrong answers. According to the survey 

documentation, errors due to incomplete data and wrong answers can be 

greater than sampling errors for some survey questions.4

 Of the survey 

questions we rely upon for our analysis (age, tenure, income, housing costs, 

rent subsidies, and location), the survey question on income was subject to 

1

U.S. Census Bureau, Current Housing Reports – Series H150/01, American Housing 

Survey for the United States: 2001. This report can be found at 

http://ww.huduser.org/datasets/ahs.html.

2

For a description of the sample design, refer to Appendix B of U.S. Census Bureau, Current 

Housing Reports – Series H150/01, American Housing Survey for the United States: 2001.

3

The formulas and methodology for computing these sampling errors are provided in 

Appendix D of U.S. Census Bureau, Current Housing Reports – Series H150/01, American 

Housing Survey for the United States: 2001.

4

A more complete discussion of these sources of error (including response inconsistencies 

for various questions) can be found in Appendix D of the Census’ Current Housing Reports 

for 2001.
Appendix III

Data Issues Concerning the American 

Housing Survey

Page 34 GAO-03-512 Section 202 Elderly Housing

a high level of inconsistency in survey responses. Also relevant to this 

report, AHS is known to underreport income when compared to the 

Current Population Survey and other independent sources. However, our 

analysis concentrates on elderly renters with very low income, for which 

this should be less of an issue. According to a Census study based on 

relatively older data (from the early 1980s), much of the underreporting of 

income in the survey seems to derive from interest and dividend income as 

well as wages and salary.5 Consequently, the underreporting of income may 

be less of a problem among very low income elderly households who do 

not tend to rely on these sources of income. Generally, HUD’s own internal 

analysis suggests that very low income renters in AHS tend to report their 

income more accurately than other groups. For example, in an unpublished 

analysis, HUD found that the income reported by very low income renters 

in the 1989 AHS was about 2 percent greater than the income reported in 

the 1990 Decennial Census. Nonetheless, current information on the extent 

of underreporting, especially among elderly renter households with very 

low incomes, is not available.

The survey also collects data on the type of government housing assistance 

the household receives. For example, it asks if the household lives in a unit 

owned by a public housing authority or receives vouchers. However, 

households surveyed may misreport their specific programs. As a result, 

the survey does not provide sufficient and reliable detail on the specific 

housing assistance program that is serving the household. According to the 

survey documentation, units requiring income verification are usually 

subsidized.

Table 6 shows the distribution of units that are occupied by homeowners 

and renters in 2001. A great majority of elderly households were 

homeowners. About 21 million (± 460,000) of 26 million (± 498,000) elderly 

households owned their homes. Elderly renter households consisted of 

about 5 million (± 242,000) households.

5

U.S. Census Bureau, Current Housing Reports – Series H121/95-01, American Housing 

Survey: A Quality Profile, July 1996.
Appendix III

Data Issues Concerning the American 

Housing Survey

Page 35 GAO-03-512 Section 202 Elderly Housing

Table 6: Housing Units Occupied by Homeowner and Renter Elderly Households in 

2001

Source: GAO analysis of the American Housing Survey, 2001.

Table 7 provides details on the estimated number of households who 

owned or rented their homes by income category (very low income and low 

income) in 2001. About 3.7 million (± 208,000) elderly renter households 

have very low incomes. About 4.3 million (± 223,000) elderly renter 

households have low incomes. These figures include households that do 

not pay cash rent. Based on the data from tables 6 and 7, over four-fifths (85 

± 2 percent) of elderly renter households have low incomes and 

approximately three-quarters (73 ± 3 percent) have very low incomes. 

Units in thousands

95 percent confidence 

interval

Estimate

Sampling

error From To

Elderly

Owner occupied 21,324 460 20,864 21,784

Renter occupied 5,028 242 4,787 5,270

 Cash rent 4,528 230 4,299 4,758

 No cash rent 500 78 422 578

Total 26,353 498 25,855 26,850

Nonelderly

Owner occupied 50,941 591 50,350 51,532

Renter occupied 28,968 514 28,454 29,483

 Cash rent 27,520 505 27,015 28,026

 No cash rent 1,448 132 1,316 1,580

Total 79,909 555 79,354 80,463

All

Owner occupied 72,265 579 71,686 72,844

Renter occupied 33,996 541 33,455 34,537

 Cash rent 32,049 532 31,517 32,580

 No cash rent 1,948 152 1,795 2,100

Total 106,261 345 105,917 106,606
Appendix III

Data Issues Concerning the American 

Housing Survey

Page 36 GAO-03-512 Section 202 Elderly Housing

Table 7: Income Categories for Elderly Homeowner and Renter Households in 2001 

Source: GAO analysis of the American Housing Survey, 2001.

Table 8 shows the number of units occupied by elderly renter households 

with very low incomes by subsidy status and rent burden. About 1.7 million 

(± 141,000) elderly renter households with very low incomes have 

moderate or severe rent burdens. The majority of these actually have 

severe rent burdens. About 1.3 million (± 125,000) renter households with 

very low incomes receive some form of government assistance. 

Households that do not pay cash rent appear in the tables above in this 

appendix for informational purposes. However, since they do not pay cash 

rents, we exclude these households from our estimates of rent burdens in 

this report.

Units in thousands

95 percent confidence 

interval

Very low income Estimate

Sampling

error From To

Owner occupied 9,394 324 9,070 9,718

Renter occupied 3,668 208 3,460 3,875

 Cash rent 3,287 197 3,090 3,484

 No cash rent 381 68 313 449

Total 13,061 375 12,686 13,437

Low Income

Owner occupied 13,351 379 12,972 13,729

Renter occupied 4,262 223 4,038 4,485

 Cash rent 3,806 211 3,595 4,017

 No cash rent 456 74 381 530

Total 17,612 426 17,186 18,038
Appendix III

Data Issues Concerning the American 

Housing Survey

Page 37 GAO-03-512 Section 202 Elderly Housing

Table 8: Elderly Renter Households with Very Low Incomes by Subsidy Status and 

Rent Burden in 2001

Source: GAO analysis of the American Housing Survey, 2001.

Table 9 looks at unassisted elderly renter households with rent burdens. Of 

the 1.7 million (± 141,000) households with rent burdens, about 60 percent 

are located either in the northeast or the south regions. The northeast and 

south contained about 542,000 (± 81,000) and 477,000 (± 76,000), 

respectively, of the nation’s rent burdened elderly renter households with 

very low incomes. 

Table 9: Moderate or Severe Rent Burden of Unassisted Very Low Income Elderly 

Renter Households by Region in 2001

Source: GAO analysis of the American Housing Survey, 2001.

Units in thousands

95 percent confidence 

interval

Renter households Estimate

Sampling

error From To

Subsidized 1,307 125 1,182 1,432

Unassisted 1,980 154 1,826 2,133

 Zero income 125 39 86 163

 No rent burden 201 49 152 250

 Rent burden 1,654 141 1,513 1,795

 Moderate rent burden 509 78 430 587

 Severe rent burden 1,145 117 1,028 1,263

Total 3,287 197 3,090 3,484

Units in thousands

95 percent confidence 

interval

Renter households Estimate

Sampling

error From To

Northeast 542 81 461 623

Midwest 284 59 226 343

South 477 76 401 553

West 350 65 285 415

Total 1,654 141 1,513 1,795
Appendix III

Data Issues Concerning the American 

Housing Survey

Page 38 GAO-03-512 Section 202 Elderly Housing

The following four tables show the number and proportion of units 

occupied by elderly renter households with very low incomes by subsidy 

status and rent burden in metropolitan areas (tables 10 and 11) and 

nonmetropolitan areas (tables 12 and 13). About 1.4 million (± 131,000) 

elderly renter households with very low incomes in metropolitan areas and 

234,000 (± 53,000) in nonmetropolitan areas have moderate or severe rent 

burden (tables 10 and 12). The proportion of households with rent burdens 

was generally higher in metropolitan areas than in nonmetropolitan areas 

(tables 11 and 13). In addition, households in nonmetropolitan areas were 

less likely than those in metropolitan areas to have severe rent burdens.

Table 10: Number of Elderly Renter Households with Very Low Incomes by Subsidy 

Status and Rent Burden in Metropolitan Areas in 2001

Source: GAO analysis of the American Housing Survey, 2001

Units in thousands

95 percent confidence 

interval

Renter households Estimate

Sampling

error From To

Subsidized 1,048 112 936 1,160

Unassisted 1,696 142 1,553 1,838

 Zero income 109 36 72 145

 No rent burden 167 45 122 212

 Rent burden 1,420 131 1,290 1,551

 Moderate rent burden 395 69 326 464

 Severe rent burden 1,025 111 914 1,137

Total 2,744 180 2,564 2,924
Appendix III

Data Issues Concerning the American 

Housing Survey

Page 39 GAO-03-512 Section 202 Elderly Housing

Table 11: Proportion of Elderly Renter Households with Very Low Incomes by 

Subsidy Status and Rent Burden in Metropolitan Areas in 2001

Source: GAO analysis of the American Housing Survey, 2001

Table 12: Number of Elderly Renter Households with Very Low Incomes by Subsidy 

Status and Rent Burden in Nonmetropolitan Areas in 2001

Source: GAO analysis of the American Housing Survey, 2001.

95 percent confidence 

interval

Renter households Estimate

Sampling

error From To

Subsidized 38% 3% 35% 41%

Unassisted 62% 3% 59% 65%

 Zero income 4% 1% 3% 5%

 No rent burden 6% 2% 4% 8%

 Rent burden 52% 3% 48% 55%

 Moderate rent burden 14% 2% 12% 17%

 Severe rent burden 37% 3% 34% 41%

Units in thousands

95 percent confidence 

interval

Renter households Estimate

Sampling

error From To

Subsidized 259 56 203 315

Unassisted 284 59 225 343

 Zero income 16 14 2 30

 No rent burden 34 20 14 55

 Rent burden 234 53 181 287

 Moderate rent burden 114 37 77 151

 Severe rent burden 120 38 82 158

Total 543 81 462 624
Appendix III

Data Issues Concerning the American 

Housing Survey

Page 40 GAO-03-512 Section 202 Elderly Housing

Table 13: Proportion of Elderly Renter Households with Very Low Incomes by 

Subsidy Status and Rent Burden in Nonmetropolitan Areas in 2001

Source: GAO analysis of the American Housing Survey, 2001

Excluded from these estimates are the housing affordability needs of very 

low income homeowners. Although homeowners can experience housing 

affordability problems, homeowners and renters face different challenges 

in affording their homes. Unlike renters, homeowners have equity in their 

homes—about 68 percent (± 1 percent) of elderly homeowners own their 

homes free and clear. In addition, elderly homeowners face certain 

challenges in maintaining their housing, such as paying for property 

maintenance and accessibility modification.6

 As a result, rental programs, 

such as Section 202, do not directly address the problems homeowners 

experience.

95 percent confidence 

interval

Renter households Estimate

Sampling

error From To

Subsidized 48% 7% 40% 55%

Unassisted 52% 7% 45% 60%

 Zero income 3% 3% 0% 5%

 No rent burden 6% 4% 3% 10%

 Rent burden 43% 7% 36% 50%

 Moderate rent burden 21% 6% 15% 27%

 Severe rent burden 22% 6% 16% 28%

6

In the absence of additional income, an elderly homeowner can, among other things, 

downsize to a more affordable home, seek property tax relief, or access the home’s equity 

through a home equity conversion mortgage (“reverse mortgage”).
Page 41 GAO-03-512 Section 202 Elderly Housing

Appendix IV

Federal Housing Programs and the Elderly ApenVIdxi

The federal government has multiple housing programs that subsidize the 

development of rental properties. Many of these programs also subsidize 

the development of properties that are intended to serve primarily elderly 

households. Unlike Section 202, most federal housing programs do not 

target a single type of household. Rather, they serve many different types 

of households, such as families with children, people with disabilities, and 

the elderly, and they produce units with rents that are affordable to 

households at different income levels. 

Housing Production 

Programs That 

Develop Elderly 

Housing

In addition to Section 202, the federal government has multiple active 

housing production programs that continue to expand the number of 

assisted households by subsidizing the development of new rental housing. 

These federal programs, described below, can also subsidize individual 

rental properties that are intended primarily to serve elderly households.

Active Housing Production 

Programs

• Low-Income Housing Tax Credits and Tax-Exempt Multifamily 

Housing Bonds provide federal tax incentives for private investment 

and are often used in conjunction with other federal and state subsidies 

in the production of new and rehabilitated rental housing.

• HOME Investment Partnerships provides formula-based grants to 

states and localities to build, acquire, or rehabilitate affordable rental 

housing or provide tenant-based rental assistance.1

• Section 515/521 Rural Rental Assistance provides below-market loans 

and rental assistance to support the development of rental housing in 

rural areas.

• Multifamily mortgage insurance programs provide mortgage 

insurance for the development of rental housing without federallyfunded interest rate subsidies or project-based rental assistance.2

1

HOME also provides homeownership assistance.

2

Although properties with FHA-insured multifamily mortgages today are often termed 

unassisted because they do not receive project-based rental assistance, projects may 

receive grants, tax concessions, subsidies, and other subsidies from federal, state, and local 

governments.
Appendix IV

Federal Housing Programs and the Elderly

Page 42 GAO-03-512 Section 202 Elderly Housing

The Housing Choice Voucher program (housing vouchers) is another 

important source of assistance for elderly households. The program 

supplements tenants’ rental payments in privately owned, moderately 

priced apartments chosen by the tenants. Currently, about 260,000 of the 

approximately 1.5 million voucher households are elderly. However, unlike 

the Section 202 or other programs discussed, housing vouchers is not a 

production program and does not directly subsidize the development of 

new or rehabilitated housing.

In addition to the active housing production programs, the federal 

government also has programs that no longer subsidize the development of 

rental properties but, in some cases, continue to provide operating 

subsidies, rental assistance payments, or other subsidies for rental 

properties that were developed under these programs in the past. Over the 

years, these inactive housing production programs, described in the next 

section, subsidized many rental properties that were intended primarily to 

serve elderly households.

Inactive Housing 

Production Programs

• Public Housing financed the development and operation of properties 

managed and owned by local housing authorities.3

• Section 236 and Section 221(d)(3) Below Market Interest Rate 

provided mortgage insurance for the development of rental housing 

with federally funded interest rate subsidies.

• Section 8 project-based rental assistance programs provided projectbased rental assistance to properties that were financed with 

Department of Housing and Urban Development (HUD) mortgage 

insurance, tax exempt bonds, and below-market interest rate loans.4

3

Since 1994, public housing has not received new appropriations to fund incremental units. 

HUD funds the replacement of existing public housing units through the HOPE VI program. 

This program, however, does not increase the supply of affordable housing.

4

These programs included Section 8 New Construction/Substantial Rehabilitation, Section 8 

Loan Management Set Aside, Section 8 Property Disposition, and Section 8 Moderate 

Rehabilitation. Some of these programs overlapped with other mortgage subsidy programs.
Appendix IV

Federal Housing Programs and the Elderly

Page 43 GAO-03-512 Section 202 Elderly Housing

Target Households Unlike Section 202, most active federal housing programs do not target a 

single type of household. Rather, they serve many different types of 

households, such as families with children, persons with disabilities, and 

the elderly. Furthermore, most federal housing programs target 

households at different income levels, not just households with very low 

incomes (50 percent or less of area media income) as does Section 202. 

Table 14 provides information on targeted household types and rent levels 

of the active housing production and insurance programs.

Table 14: Active Federal Rental Housing Production and Insurance Programs by Household Type Served and Program Rent 

Levels

Source: GAO.

a

These mortgage insurance programs are Section 221(d)(4), Section 221(d)(3), and Rental Housing 

for the Elderly (Section 231). In recent years, few mortgages have been insured with Section 231 

because borrowers who intend to develop elderly rental properties rely on Section 221(d)(4) or Section 

221(d)(3).

Low-Income Housing Tax Credits (tax credits), Tax-Exempt Multifamily 

Housing Bonds (tax-exempt bonds), and HOME set aside some of their 

units for very low-income households and can provide housing for the 

elderly (table 14). Congress has granted considerable latitude to state and 

local agencies that administer these programs in deciding who will be

Rental housing production program

Household type 

served Program rent levels affordable to households with:

Section 202 Supportive Housing Elderly 50% or less of area median income (AMI) for all units

Low-Income Housing Tax Credits Multiple household 

types

50% of AMI for 20% of units or

60% of AMI for 40% of units

Tax-Exempt Multifamily Housing Bonds Multiple household 

types

50% of AMI for 20% of units or

60% of AMI for 40% of units

HOME Investment Partnerships Multiple household 

types

65% of AMI for all units and 

50% of AMI for 20% of units

Section 811 Supportive Housing Persons with 

disabilities

50% or less of AMI for all units

Section 515 Rural Rental Housing with Section 521 

rental assistance

Primarily families and 

the elderly

80% of AMI or less for all 515 units with rental 

assistance

FHA multifamily mortgage insurancea Multiple household 

types

No income requirements/market rate rents
Appendix IV

Federal Housing Programs and the Elderly

Page 44 GAO-03-512 Section 202 Elderly Housing

served with federal housing resources.5 In addition, mortgage insurance 

programs for multifamily rental properties under HUD’s Federal Housing 

Administration (FHA) currently do not have any specific age or income 

requirements for tenants. However, since rents for newly developed FHAinsured properties are often set at market levels, these programs may not 

be able to reach very low-income households without the use of other 

subsidies. 

Annual Housing 

Production Levels

Although Section 202’s annual production levels are small when compared 

to the total production levels of other housing programs, such as tax 

credits—the largest of all current production programs—Section 202, 

nonetheless, is a relatively important source of subsidized rental housing 

units for the elderly. Table 15 presents the volume of new production by 

rental housing production program. The volume of housing production 

illustrates individual program activity but, due to limitations in the data, it 

is not possible to accurately estimate what percentage of elderly units 

produced through federal housing programs is from Section 202 because 

units produced through these programs can overlap with each other. For 

example, HOME funding can be used in conjunction with programs such as 

tax credits, tax-exempt bonds, or HUD mortgage insurance programs to 

finance new production. As a result, adding units together for any of the 

programs in table 15 will likely result in double counting.

5

For example, every year the Internal Revenue Service requires that the state agencies 

responsible for awarding tax credits under the tax credit program submit updated plans that 

outline how they will distribute their allocations of tax credits. See HUD’s 2002 report 

Analysis of State-Qualified Allocation Plans for the Low-Income Housing Tax Credit 

Program.
Appendix IV

Federal Housing Programs and the Elderly

Page 45 GAO-03-512 Section 202 Elderly Housing

Table 15: Approximate Volume of New Production of Housing Units by Active 

Federal Rental Housing Programs

Source: GAO.

Notes: For Section 202, Section 811, and the FHA multifamily mortgage insurance programs, we 

estimated the average number of total and elderly units endorsed annually from 1998 to 2001 based 

on HUD program data. We reported the number of elderly units for tax credits based on the 2002 

report from the Commission on Affordable Housing and Health Facility Needs for Seniors in the 21st

Century and for tax-exempt bonds based on the National Council of State Housing Agencies’ State 

HFA Factbook: 2001 NCSHA Annual Survey Results. In addition, for tax credits, we estimated the 

average number of units placed in service annually from 1998 to 2000 based on HUD’s Low-Income 

Housing Tax Credit Database. Finally, we relied on estimates from program officials for HOME and 

Section 515. 

Due to differing sources of data and, in some cases, lack of official data, these estimates are rough 

approximations of actual production activity and are intended to be illustrative. Many of these 

programs overlap with each other. As a result, adding units together for any of the programs will likely 

result in double counting.

Approximate number of new or 

rehabilitated per annum

Production program Elderly units Total units

Section 202 Supportive Housing 5,700 5,700

 Percent of total 100%

Low-Income Housing Tax Credits 13,200 86,000

 Percent of total 15%

Tax-Exempt Multifamily Housing Bonds 5,600 33,300

 Percent of total 17%

HOME Investment Partnerships 4,000 17,000

 Percent of total 24%

Section 515 Rural Rental Housing 800 1,800

 Percent of total 44%

Section 811 Supportive Housing NA 1,300

 Percent of total NA

FHA multifamily mortgage insurance 900 26,400

 Percent of total 3%
Page 46 GAO-03-512 Section 202 Elderly Housing

Appendix V

Section 202 Program Data ApenVdxi

This appendix provides additional information on the extent to which 

Section 202 projects meet the Department of Housing and Urban 

Development’s (HUD’s) 18-month processing time guideline. In particular, 

we present data on projects’ status in meeting the guideline, HUD field 

offices’ rate of success in meeting the guideline, and the factors cited by 

HUD in its approvals of processing time extensions. Table 16 profiles the 

projects funded in fiscal years 1998 through 2000 according to the projects’ 

status in gaining HUD’s approval to start construction.

Table 16: Distribution of Section 202 Projects, Capital Advance Funds, and PRAC Funds, by Fiscal Year and Construction 

Approval Status

Exceeded 18-month guideline

Fiscal 

year

Met 18-month

guideline

Approved for

construction after

18 months

Pending approval

for construction

Funding

award

cancelled

1998 Number of projects 47 108 11 0

Percent of projects 28% 65% 7% -

Capital advance funds $113 million $337 million $43 million -

PRAC funds (rental assistance) $23 million $68 million $9 million -

Total funds $136 million $406 million $52 million -

Percent of total funds 23% 68% 9% -

1999 Number of projects 44 84 34 3

Percent of projects 27% 51% 21% 2%

Capital advance funds $108 million $284 million $127 million $15 million

PRAC funds $22 million $57 million $28 million $3 million

Total funds $130 million $341 million $155 million $18 million

Percent of total funds 20% 53% 24% 3%

2000 Number of projects 41 40 82 0

Percent of projects 25% 25% 50% -

Capital advance funds $109 million $124 million $283 million -

PRAC funds $21 million $27 million $58 million -

Total funds $131 million $150 million $341 million -

Percent of total funds 21% 24% 55% -

Total Number of projects 132 232 127 3

Percent of projects 27% 47% 26% 1%

Capital advance funds $330 million $746 million $453 million $15 million

PRAC funds $66 million $152 million $94 million $3 million
Appendix V

Section 202 Program Data

Page 47 GAO-03-512 Section 202 Elderly Housing

Source: GAO analysis of HUD Development Application Processing (DAP) System, December 2002. 

Note: Percentages do not always add to 100 because of rounding. Total funds do not always equal the 

sum of capital advance and project rental assistance contract (PRAC) funds because of rounding.

Table 17 compares the status of projects located in metropolitan and 

nonmetropolitan areas in gaining approval to start construction within 

either 18 or 24 months. In both cases, metropolitan projects were about 

twice as likely as projects in nonmetropolitan areas to take more than 

either 18 or 24 months to be approved. That is, the odds of a metropolitan 

project taking more than 18 or 24 months to be approved for construction 

were about twice the odds of a nonmetropolitan project taking more than 

18 or 24 months, respectively.

Table 17: Status of Metropolitan and Nonmetropolitan Projects in Gaining Construction Start Approval, Projects Funded in 

Fiscal Years 1998 to 2000

Source: GAO analysis of HUD DAP system, December 2002.

Tables 18, 19, and 20 present the rate of project approvals within either 18 

or 24 months for all field offices that have responsibility for processing 

Section 202 projects. Table 18 shows the results for all projects, table 19 

shows the results only for projects located in metropolitan areas, and table 

20 shows the results for projects located in nonmetropolitan areas. The 

rate of project approvals for each field office is the percentage of projects, 

Exceeded 18-month guideline

Fiscal 

year

Met 18-month

guideline

Approved for

construction after

18 months

Pending approval

for construction

Funding

award

cancelled

Total funds $396 million $897 million $547 million $18 million

Percent of total funds 21% 48% 29% 1%

(Continued From Previous Page)

Construction start approval status

Metropolitan projects

Nonmetropolitan 

projects All projects

Number Percent Number Percent Number Percent

Approved within 18 months 78 22% 54 39% 132 27%

Not approved within 18 months 278 78% 84 61% 362 73%

Approved within 24 months 180 51% 92 67% 272 55%

Not approved within 24 months 176 49% 46 33% 222 45%
Appendix V

Section 202 Program Data

Page 48 GAO-03-512 Section 202 Elderly Housing

funded between fiscal years 1998 and 2000, that HUD approved for 

construction within the 18-month processing time guideline or within the 

24-month period after the funding award—that is, 18 months plus the 6-

month discretionary extension. 

Table 18: Field Office Performance in Approving Projects to Start Construction, All 

Projects Funded in Fiscal Years 1998 to 2000 

Project approval rate (%)

Field office Within 18 months Within 24 months Number of projects

Atlanta 11 67 9

Baltimore 18 36 11

Birmingham 80 80 5

Boston 0 15 20

Buffalo 29 64 14

Caribbean 0 0 2

Charleston 0 0 3

Chicago 21 57 14

Cleveland 8 58 12

Columbia 78 89 9

Columbus 50 56 16

Denver 33 58 12

Des Moines 29 71 7

Detroit 50 70 10

Fort Worth 43 71 14

Greensboro 93 93 14

Hartford 0 10 10

Houston 14 71 7

Indianapolis 67 83 6

Jackson 25 75 4

Jacksonville 13 50 16

Kansas City 29 71 7

Knoxville 50 100 6

Little Rock 83 100 18

Los Angeles 0 30 20

Louisville 67 92 12

Manchester 9 64 11

Milwaukee 6 39 18
Appendix V

Section 202 Program Data

Page 49 GAO-03-512 Section 202 Elderly Housing

Source: GAO analysis of HUD DAP system, December 2002.

Project approval rate (%)

Field office Within 18 months Within 24 months Number of projects

Minneapolis 45 91 11

Nashville 40 80 10

New Orleans 27 45 11

New York 0 36 22

Newark 0 22 9

Oklahoma City 67 67 3

Omaha 50 100 6

Philadelphia 18 41 17

Phoenix 0 22 9

Pittsburgh 11 33 9

Portland 27 64 11

Providence 40 40 5

Richmond 8 17 12

San Antonio 20 60 5

San Francisco 7 38 29

Seattle 22 44 9

St Louis 22 89 9

Total (all offices) 27 55 494

(Continued From Previous Page)
Appendix V

Section 202 Program Data

Page 50 GAO-03-512 Section 202 Elderly Housing

Table 19: Field Office Performance in Approving Metropolitan Projects to Start 

Construction, All Metropolitan Projects Funded in Fiscal Years 1998 to 2000 

Project approval rate (%)

Field office Within 18 months Within 24 months

Number of

metropolitan

projects

Atlanta 0 67 6

Baltimore 22 44 9

Birmingham 67 67 3

Boston 0 19 16

Buffalo 18 55 11

Caribbean 0 0 2

Charleston 0 0 1

Chicago 25 50 12

Cleveland 10 60 10

Columbia 100 100 4

Columbus 54 62 13

Denver 14 29 7

Des Moines 40 80 5

Detroit 56 67 9

Fort Worth 46 69 13

Greensboro 86 86 7

Hartford 0 10 10

Houston 14 71 7

Indianapolis 60 80 5

Jackson - - 0

Jacksonville 13 50 16

Kansas City 33 67 6

Knoxville 33 100 3

Little Rock 75 100 4

Los Angeles 0 30 20

Louisville 80 100 5

Manchester 25 50 4

Milwaukee 0 27 11

Minneapolis 33 83 6

Nashville 40 80 5

New Orleans 25 75 4

New York 0 36 22
Appendix V

Section 202 Program Data

Page 51 GAO-03-512 Section 202 Elderly Housing

Source: GAO analysis of HUD DAP system, December 2002.

Project approval rate (%)

Field office Within 18 months Within 24 months

Number of

metropolitan

projects

Newark 0 22 9

Oklahoma City 67 67 3

Omaha 50 100 4

Philadelphia 21 43 14

Phoenix 0 40 5

Pittsburgh 14 43 7

Portland 17 33 6

Providence 40 40 5

Richmond 13 25 8

San Antonio 25 75 4

San Francisco 0 43 21

Seattle 13 38 8

St Louis 17 83 6

Total (all offices) 22 51 356

(Continued From Previous Page)
Appendix V

Section 202 Program Data

Page 52 GAO-03-512 Section 202 Elderly Housing

Table 20: Field Office Performance in Approving Nonmetropolitan Projects to Start 

Construction, All Nonmetropolitan Projects Funded in Fiscal Years 1998 to 2000 

Project approval rate (%)

Field office Within 18 months Within 24 months

Number of

nonmetropolitan

projects

Atlanta 33 67 3

Baltimore 0 0 2

Birmingham 100 100 2

Boston 0 0 4

Buffalo 67 100 3

Caribbean - - 0

Charleston 0 0 2

Chicago 0 100 2

Cleveland 0 50 2

Columbia 60 80 5

Columbus 33 33 3

Denver 60 100 5

Des Moines 0 50 2

Detroit 0 100 1

Fort Worth 0 100 1

Greensboro 100 100 7

Hartford - - 0

Houston - - 0

Indianapolis 100 100 1

Jackson 25 75 4

Jacksonville - - 0

Kansas City 0 100 1

Knoxville 67 100 3

Little Rock 86 100 14

Los Angeles - - 0

Louisville 57 86 7

Manchester 0 71 7

Milwaukee 14 57 7

Minneapolis 60 100 5

Nashville 40 80 5

New Orleans 29 29 7

New York - - 0
Appendix V

Section 202 Program Data

Page 53 GAO-03-512 Section 202 Elderly Housing

Source: GAO analysis of HUD DAP system, December 2002.

Table 21 shows the average number of months that projects took to 

complete various stages of the development process between Congress’s 

appropriation of funds for the Section 202 program and completion of 

construction. For projects funded between fiscal years 1998 and 2000 that 

had been approved to start construction at the time of our analysis, the 

average time taken from appropriation to approval to start construction 

was 36 months. Projects that had also completed construction took 

another 11 months, on average, from beginning to end of construction. 

From appropriation to end of construction, the average time taken was 47 

months or almost 4 years.

Project approval rate (%)

Field office Within 18 months Within 24 months

Number of

nonmetropolitan

projects

Newark - - 0

Oklahoma City - - 0

Omaha 50 100 2

Philadelphia 0 33 3

Phoenix 0 0 4

Pittsburgh 0 0 2

Portland 40 100 5

Providence - - 0

Richmond 0 0 4

San Antonio 0 0 1

San Francisco 25 25 8

Seattle 100 100 1

St Louis 33 100 3

Total (all offices) 39 67 138

(Continued From Previous Page)
Appendix V

Section 202 Program Data

Page 54 GAO-03-512 Section 202 Elderly Housing

Table 21: Average Duration of Stages of Section 202 Project Development, Projects 

Funded Fiscal Years 1998 to 2000 That Were Approved to Start Construction

Source: GAO analysis of HUD DAP system, December 2002.

a

The average time for construction is based on a total of 193 projects that completed construction: 110 

from 1998, 69 from 1999, and 114 from 2000.

b

The number of projects includes only projects that were approved to start construction. An additional 

11 projects from 1998, 37 projects from 1999, and 82 projects from 2000 were not approved for 

construction at the time of our analysis.

Table 22 summarizes the factors that HUD cited in extending the 

processing time for projects beyond 24 months after the funding award. 

This table draws on extension waivers approved between January 1998 and 

June 2002 for projects funded between fiscal years 1998 and 2000, showing 

the number and percentage of extended projects affected by each factor.

Average months

Fiscal year

Stage of development 1998 1999 2000 1998-2000

Appropriation to notice of funding availability 6 4 4 5

Notice of funding availability to funding award 7 10 10 9

Funding award to firm commitment 21 19 15 19

Firm commitment to approval to start construction 3 2 2 3

Approval to start construction to construction 

completiona 12 11 9 11

Total time from appropriation to approval to start 

construction 37 35 31 36

Total time from appropriation to construction 

completion 49 46 40 47

Number of projectsb 155 128 81 364
Appendix V

Section 202 Program Data

Page 55 GAO-03-512 Section 202 Elderly Housing

Table 22: Factors Cited by HUD in Approved Time Extensions for Section 202 

Projects Funded in Fiscal Years 1998 to 2000

Source: GAO analysis of HUD data.

Note: GAO analyzed HUD-approved project processing time extensions. 84 projects received a total of 

103 extensions. Percentages do not total 100 because many projects received extensions for multiple 

reasons.

a

Construction issues include increased construction costs and difficulty finding a qualified contractor or 

obtaining a bid within the capital advance amount.

b

General delays in project processing include cases where HUD cited the need for time for sponsors to 

submit or modify required paperwork and for HUD to review paperwork, without stating a more specific 

reason.

Factor

Number of

extended

projects

affected

Percent of

extended projects

affected

Financing and cost issues 29 35%

Seeking additional funding 17 20%

Construction issuesa 11 13%

Other financial issues 5 6%

State and local government issues 27 32%

Historic preservation 1 1%

Local review, approval, or permits 17 20%

Zoning issues 11 13%

Other state and local issues 3 4%

Design/architect issues 15 18%

Site change 14 17%

Environmental issues 8 10%

Site control 8 10%

Community concerns/local opposition 8 10%

Other site issues 7 8%

Legal challenges 6 7%

General delay in project processingb 19 23%
Page 56 GAO-03-512 Section 202 Elderly Housing

Appendix VI

Survey of HUD Field Office Representatives ApenVdxiI

Section 202 Supportive Housing for the Elderly: Development Process Survey 1 

United States General Accounting Office 

Section 202 Supportive Housing for the Elderly: 

Development Process Survey 

Introduction 

The United States General Accounting Office is 

contacting HUD officials responsible for the 

administration of the Section 202 Supportive Housing 

for the Elderly program. The Senate Special Committee 

on Aging asked GAO to explore the issues involved in 

the processing of projects that have been awarded capital 

advances. 

We are interested in obtaining your valuable insights 

into the processing of Section 202 projects from fund

reservation to initial closing. We are especially 

interested in learning more about the implementation of 

HUD Notice H 96 - 102, which was designed to 

facilitate project processing. 

Instructions 

The official or officials in your office who are 

responsible for the day-to-day management of Section 

202 processing should complete this survey. 

Please complete this survey by November 18, 2002 

and fax it to (202) 512-2502. 

If you have any questions about this survey or have 

problems submitting your response, please contact 

Daniel Garcia-Diaz by phone at (202) 512-4529 or by 

email at garciadiazd@gao.gov.

BACKGROUND INFORMATION 

1. In case we would like to clarify any of your responses, please provide the name, title, office/location, telephone 

number, and e-mail address of the individual primarily responsible for gathering the information requested in this 

survey. 

Name: 

Title: 

Name of Office/Location: 

Telephone number: 

E-mail address:

FUND RESERVATION AND PROJECT MONITORING 

2. While HUD does not require systematic tracking of Section 202 project progress from fund reservation to initial 

closing, we are interested in learning about any steps you may take to monitor project progress from fiscal year 1998 

through the present.

a. Was every Section 202 Sponsor/Owner contacted to schedule a project planning conference within 30 to 

45 days of the sponsor’s acceptance of fund reservation award letter? (N=44)

1.  Yes, for all Section 202 projects. (81.8%)

2.  Yes, but only for projects needing special attention (i.e., for new sponsors or projects facing major 

obstacles). (13.6%)

3.  No, project planning conferences were not scheduled for all projects within 30 to 45 days. (4.6%)
Appendix VI

Survey of HUD Field Office Representatives

Page 57 GAO-03-512 Section 202 Elderly Housing

Section 202 Supportive Housing for the Elderly: Development Process Survey 2 

b. From fiscal year 1998 through the present, how frequently has your office monitored the progress of the 

project Sponsor/Owners between fund reservation and initial closing? For each category below, please 

indicate the frequency that best describes your contact. (Please check one box for each row) (N=44)

Office Contacts Sponsor/Owners to Monitor Project’s Progress: 

Monthly 

(1)

About 

Every 2 Months 

(2)

About 

Every 3 Months 

(3)

Other 

(4)

a. For all Section 202 projects? 

45.5% 34.1% 11.4% 

9.1% 

(please specify) 

__________________ 

b. For Section 202 Projects needing special 

attention? (6.8% did not respond) 52.3% 13.6% 0.0% 

27.3% 

(please specify) 

__________________ 

3. a. Does your office currently develop internal monitoring reports to track project progress of Section 202 fund 

reservations (other than the Aged Pipeline Report prepared at HUD Headquarters)? (N=44)

1.  Yes (86.4%)

2.  No  Please skip to question 4. (13.6%) 

b. How often are these reports prepared? 

(check all that apply) (N=38) 

1.  Weekly (31.6%)

2.  Biweekly (18.4%)

3.  Monthly (36.8%)

4.  Quarterly (0.0%)

5.  Semi-annually (0.0%)

6.  Annually (0.0%)

7.  Other (Please specify) (18.4%)

_______________________

c. Who receives these internal monitoring 

reports in your office? (check all that 

apply) (N=38)

1.  Hub Director (57.9%)

2.  Program Center Director (73.7%)

3.  Project Manager(s) (81.6%)

4.  Technical staff (71.1%)

5.  Program Center Assistant (39.5%)

6.  Other (Please specify title) (42.1%) 

____________________

7.  Other (Please specify title) (18.4%)

____________________

4. HUD Notice H 96-102 revised the Section 202 Handbook to bypass the conditional commitment application stage. It 

also directed that HUD technical staff must (1) accept Sponsor/Owner certifications (i.e., architecture and engineering 

final plans) rather than conduct detailed technical reviews; and (2) conduct detailed reviews only under specified 

circumstances. (N=44)

a. Does your office require submission of a conditional commitment application? 

1.  Yes (0.0%)

2.  No (100.0%)

b. Does your office have written standards for time spent by its technical staff on technical reviews? 

1.  Yes (9.1%)

2.  No (86.4%)

(4.6% did not respond)

(Note: If ‘Yes’ for questions 3a. and 4b., we may be contacting you to obtain copies of internal monitoring reports and/or 

any written standards.) 
Appendix VI

Survey of HUD Field Office Representatives

Page 58 GAO-03-512 Section 202 Elderly Housing

Section 202 Supportive Housing for the Elderly: Development Process Survey 3 

PROJECT PLANNING CONFERENCES 

5. HUD Notice H 96-102 stresses the importance of conducting a comprehensive project planning conference and 

includes a suggested agenda to be used at the conference. The agenda includes items such as project development, 

legal considerations, project design/contractor/construction issues, and project development schedule. 

We are interested in obtaining the following information on project planning conferences held at your office for fund 

reservations from fiscal year 1998 through the present. (Please check one box for each row) (Unless otherwise 

noted, N=44) 

Project Planning Conference Activities Never 

(1) 

Occasionally 

(2)

About half 

the time 

(3) 

Almost 

always 

(4) 

Always 

(5) 

a. How frequently have planning conferences been held 

within 30 to 45 days of the sponsor’s acceptance of fund 

reservation award letter? 4.6% 6.8% 2.3% 56.8% 29.6% 

b. How frequently have all relevant agenda items identified 

in section 3-1 of HUD Notice H 96-102 been covered 

during each planning conference? 0.0% 2.3% 0.0% 22.7% 75.0% 

c. How frequently have Sponsor/Owners, their consultant 

(if used), design architect, and attorney all participated 

in the project planning conferences? 2.3% 20.5% 13.6% 47.7% 15.9% 

d. How frequently have all HUD technical experts (design 

architect, cost analyst, attorneys, etc.), responsible for 

reviewing project paperwork participated in each project 

planning conference? 

2.3% 6.8% 9.1% 36.4% 45.5% 

e. Were there instances when specific HUD technical 

experts who were responsible for project paperwork did 

not participate in project planning conferences?

 Yes  Continue to question 5f.

(50.0%)

 No  Please read introduction 

below, then answer question 6 on next 

page. (47.7%) 

(2.3% did not respond)

f. When they did not participate in the planning 

conference, how frequently did these technical experts 

contact Sponsor/Owners directly to offer technical 

assistance? (N=23)

4.4% 17.4% 17.4% 30.4% 30.4% 

FACTORS IMPACTING TIMELY PROCESSING 

We are interested in identifying factors that may contribute to the untimely processing of Section 202 projects from fund

reservation to initial closing. We understand that there are three basic factors that can add to project processing time. 

These factors may include (1) the actions or characteristics of Project Sponsors/Owners; (2) HUD staff, funding, and 

policies; and (3) State, local, and/or other requirements. Your responses to the following questions (6, 7, 8) will provide 

valuable insight into the significance of these factors. 
Appendix VI

Survey of HUD Field Office Representatives

Page 59 GAO-03-512 Section 202 Elderly Housing

Section 202 Supportive Housing for the Elderly: Development Process Survey 4 

6. Based on your experience with all projects receiving fund reservations in your office since fiscal year 1998:

Part A: For each factor related to Sponsors or Owners, select a single box that most commonly describes the factor’s impact on the overall processing 

time. 

Part B: Indicate the frequency of each factor’s influence on the timely processing of Section 202 projects in your office by selecting a single box that most

commonly describes the frequency of the factor’s impact on the overall processing time. (For example, the factor ‘Seldom if ever’ prevents timely 

processing, ‘Sometimes’ prevents timely processing, etc.) 

Sponsor / Owner Factors That May Negatively Influence Timely Processing of Section 202 Projects 

(N=44)

Sponsor/Owner Factors:

A. Typical Impact of Factor on Processing 

Time 

(check one box for each factor) 

B. Frequency Of Factor Preventing Timely Processing 

(check one box for each factor)

No 

Impact 

(1) 

Minor 

Impact 

(2) 

Moderate 

Impact 

(3) 

Significant 

Impact 

(4) 

Seldom if 

ever 

(1) 

Sometimes 

(2)

Often 

(3)

Very often 

(4)

Always or 

almost 

always 

(5)

a. Doesn’t attend pre-application 

workshop (2.3% did not 

respond in part A and 4.6% 

in part B) 

11.4% 20.5% 22.7% 43.2% 50.0% 34.1% 2.3% 2.3% 6.8% 

b. Lacks experience in Section 202 

program/ multi-family project 

development 

0.0% 4.6% 31.8% 63.6% 4.6% 38.6% 27.3% 15.9% 13.6% 

c. Does not effectively manage 

project development process 0.0% 4.6% 22.7% 72.7% 0.0% 40.9% 22.7% 18.2% 18.2% 

d. Lacks effective consultant 0.0% 11.4% 0.0% 88.6% 6.8% 40.9% 13.6% 13.6% 25.0% 

e. Has difficulty designing project 

within fund reservation amount 0.0% 9.1% 27.3% 63.6% 4.6% 25.0% 13.6% 18.2% 38.6% 

f. Lacks sufficient funds for preconstruction costs required 

before receipt of capital 

advance (e.g., environmental 

reviews, site control, etc.) 

9.1% 43.2% 15.9% 31.8% 40.9% 27.3% 11.4% 13.6% 6.8% 

g. Doesn’t fulfill requirements in a 

timely fashion (e.g., set up 

Owner corporation, submit 

complete required forms, etc.) 

2.3% 13.6% 27.3% 56.8% 13.6% 27.3% 25.0% 22.7% 11.4% 

h. Other (Please specify) (84.1% did 

not respond in parts A/B) 0.0% 0.0% 0.0% 15.9% 0.0% 2.3% 4.6% 4.6% 4.6% 
Appendix VI

Survey of HUD Field Office Representatives

Page 60 GAO-03-512 Section 202 Elderly Housing

Section 202 Supportive Housing for the Elderly: Development Process Survey 5 

7. Based on your experience with all projects receiving fund reservations in your office since fiscal year 1998:

Part A: For each factor related to HUD staff, funding, or policies, select a single box that most commonly describes the factor’s impact on the overall processing time. 

Part B: Indicate the frequency of each factor’s influence on the timely processing of Section 202 projects in your office by selecting a single box that most commonly 

describes the frequency of the factor’s impact on the overall processing time. (For example, the factor ‘Seldom if ever’ prevents timely processing, ‘Sometimes’ prevents 

timely processing, etc.)

HUD Factors That May Negatively Influence Timely Processing of Section 202 Projects 

(N=44)

HUD Factors: 

A. Typical Impact of Factor on Processing 

Time 

(check one box for each factor) 

B. Frequency Of Factor Preventing Timely Processing 

(check one box for each factor) 

No 

Impact 

(1) 

Minor 

Impact 

(2) 

Moderate 

Impact 

(3) 

Significant 

Impact 

(4) 

Seldom if 

ever 

(1) 

Sometimes 

(2)

Often 

(3)

Very often 

(4)

Always or 

almost 

always 

(5)

a. Staff lack Section 202 experience 18.2% 29.6% 27.3% 25.0% 52.3% 40.9% 2.3% 2.3% 2.3% 

b. Staff lack Section 202 training 11.4% 34.1% 29.6% 25.0% 38.6% 50.0% 4.6% 4.6% 2.3% 

c. Section 202 workload (e.g., 

simultaneously reviewing new 

applications and paperwork for 

funded projects) 

6.8% 29.6% 45.5% 18.2% 15.9% 59.1% 18.2% 4.6% 2.3% 

d. FHA loan processing can be, at 

certain times, higher priority than 

Section 202 project processing 13.6% 18.2% 29.6% 38.6% 25.0% 34.1% 22.7% 13.6% 4.6% 

e. Some staff unwilling to fully 

implement HUD Notice H 96-102 59.1% 15.9% 11.4% 13.6% 79.6%% 18.2% 2.3% 0.0% 0.0% 

f. Insufficient project coordination 

(including turnover in project 

coordinator position) (2.3% did 

not respond in parts A/B)

36.4% 25.0% 29.6% 6.8% 63.6% 27.3% 4.6% 2.3% 0.0% 

g. Capital advance insufficient to 

fund projects (2.3% did not 

respond in part B) 6.8% 4.6% 27.3% 61.4% 11.4% 22.7% 9.1% 29.6% 25.0% 

h. Award letters not mailed during 

fiscal year of appropriation 20.5% 25.0% 29.6% 25.0% 31.8% 25.0% 2.3% 13.6% 27.3% 

i. Availability of HUD amendment 

funds (after other funding sources 

exhausted) (2.3% did not respond 

in parts A/B)

9.1% 25.0% 29.6% 34.1% 25.0% 20.5% 15.9% 20.5% 15.9% 

j. Time spent by HUD HQ 

considering waiver requests 

(extensions, amendment funds) 6.8% 20.5% 27.3% 45.5% 15.9% 25.0% 20.5% 13.6% 25.0% 

k. Other (Please specify) (90.9% did 

not respond in parts A/B) 0.0% 0.0% 2.3% 6.8% 0.0% 0.0% 2.3% 2.3% 4.6% 
Appendix VI

Survey of HUD Field Office Representatives

Page 61 GAO-03-512 Section 202 Elderly Housing

Section 202 Supportive Housing for the Elderly: Development Process Survey 6 

8. Based on your experience with all projects receiving fund reservations in your office since fiscal year 1998:

Part A: For each factor related to State, Local, and/or Other requirements, select a single box that most commonly describes the factor’s impact on the 

overall processing time. 

Part B: Indicate the frequency of each factor’s influence on the timely processing of Section 202 projects in your office by selecting a single box that most

commonly describes the frequency of the factor’s impact on the overall processing time. (For example, the factor ‘Seldom if ever’ prevents timely 

processing, ‘Sometimes’ prevents timely processing, etc.)

Factors Related to State, Local, or Other Requirements That May Negatively Influence Timely Processing of Section 202 Projects 

(N=44)

Factors Related to State, Local, or 

Other Requirements: 

A. Typical Impact of Factor on Processing 

Time 

(check one box for each factor) 

B. Frequency Of Factor Preventing Timely Processing 

(check one box for each factor) 

No 

Impact 

(1) 

Minor 

Impact 

(2) 

Moderate 

Impact 

(3) 

Significant 

Impact 

(4) 

Seldom if 

ever 

(1) 

Sometimes 

(2)

Often 

(3)

Very often 

(4)

Always or 

almost 

always 

(5)

a. Project is new construction (2.3%

did not respond in part B) 36.4% 34.1% 13.6% 15.9% 50.0% 22.7% 13.6% 2.3% 9.1% 

b. Project involves rehabilitation 

(4.6% did not respond in parts 

A/B) 25.0% 22.7% 27.3% 20.5% 45.5% 31.8% 6.8% 6.8% 4.6% 

c. Project site zoning approval (2.3%

did not respond in part A) 6.8% 22.7% 27.3% 40.9% 15.9% 43.2% 20.5% 13.6% 6.8% 

d. Local permits (i.e., obtaining 

and/or cost of permits) 9.1% 29.6% 29.6% 31.8% 25.0% 38.6% 15.9% 11.4% 9.1% 

e. State and local historic 

preservation approval 13.6% 45.5% 31.8% 9.1% 45.5% 43.2% 9.1% 2.3% 0.0% 

f. Site contamination mitigation 

(2.3% did not respond in part A) 13.6% 31.8% 25.0% 27.3% 52.3% 27.3% 13.6% 2.3% 4.6% 

g. Securing secondary financing (e.g., 

time needed to secure additional 

funding and obtain approval of 

financing documents) 

11.4% 11.4% 38.6% 38.6% 18.2% 25.0% 25.0% 25.0% 6.8% 

h. Legal challenges 11.4% 36.4% 27.3% 25.0% 22.7% 63.6% 9.1% 4.6% 0.0% 

i. General local opposition to project 15.9% 31.8% 27.3% 25.0% 40.9% 50.0% 4.6% 2.3% 2.3% 

j. Other (Please specify) (86.4% did 

not respond in parts A/B) 0.0% 0.0% 4.6% 9.1% 0.0% 4.6% 6.8% 0.0% 2.3% 
Appendix VI

Survey of HUD Field Office Representatives

Page 62 GAO-03-512 Section 202 Elderly Housing

Section 202 Supportive Housing for the Elderly: Development Process Survey 7 

9. What are the three most important factors (from those listed in the tables above) that can negatively impact timely 

processing of Section 202 projects? 

a)

b)

c)

HUMAN CAPITAL RELATED QUESTIONS 

10. a. Did any staff members from your office attend HUD’s Section 202/811 field office staff training titled “The 

Process Imperative: Moving Quickly from Fund Reservation to Initial Closing” held this past summer in St. Louis, 

Missouri or Washington, D.C.? (N=44)

1.  Yes (100.0%)

2.  No  Please skip to question 11 (0.0%)

b. How many staff members attended from your office? (Mean = 1.9 persons)_ 

c. How many staff members in your office process Section 202 projects (full time or part-time)? (Mean = 

6.8 persons)_

d. Have those who attended shared the content of the training with staff who did not attend? 

1.  Yes (75.0%)

2.  No  Please skip to question 11. (22.7%) 

(2.3% did not respond)
Appendix VI

Survey of HUD Field Office Representatives

Page 63 GAO-03-512 Section 202 Elderly Housing

e. How was the content of the training shared with staff members in your office who did not attend the 

training?(Unless otherwise noted, N=34)

Method of Instruction 

Formal training 

Check one box for each 

row 

If ‘Yes’ is checked, enter 

number of staff trained 

a. Training session held (at least 1 full day) 

1.  Yes (5.9%) 

2.  No (79.4%) 

(14.7% did not respond)

Mean = 5.3 persons 

(N=3) 

Informal training 

b. Meeting or information session held (less than 

1 full day) 

1.  Yes (64.7%)

2.  No (20.6%) 

(14.7% did not respond)

Mean = 5.4 persons 

(N=19)

c. Trained staff answer project processing 

questions and provide guidance to other staff 

on an hoc basis 

1.  Yes (82.4%)

2.  No (11.8%) 

(5.9% did not respond)

Mean = 4.6 persons 

(N=18)

d. Trained staff provided a written summary of 

training highlights 

1.  Yes (17.7%)

2.  No (55.9%) 

(26.5% did not respond)

Mean = 6.7 persons 

(N=6) 

e. Other (please explain) 

1.  Yes (14.7%) 

2.  No (0.0%) 

(85.3% did not respond)

Mean = 9 persons 

(N=1) 

f. 1.  Yes (2.9%)

2.  No (0.0%) 

(97.1% did not respond)

Mean = 5 persons 

(N=1) 

CONCLUSIONS 

11. Please identify up to three policy changes within HUD’s control that you believe would aid the timely processing of 

Section 202 projects from fund reservation to initial closing: 

a)

b)

c)
Page 64 GAO-03-512 Section 202 Elderly Housing

Appendix VII

Survey of Section 202 Sponsors and 

Consultants ApenVdxiI

1

United States General Accounting Office 

Section 202 Supportive Housing for the Elderly:

Introduction

The United States General Accounting Office is contacting sponsors and consultants who have 

significant experience with housing development under the Section 202 Supportive Housing 

for the Elderly program. The Senate Special Committee on Aging asked GAO to explore the 

issues involved in the processing of projects that have been awarded capital advances.

We are interested in obtaining your valuable insights into the processing of Section 202 

projects from fund reservation to initial closing. As you complete the survey, please 

consider your experience since 1998 with the Section 202 program only.

Instructions

Please complete this survey by December 13, 2002 and fax it to (202) 512-2502. 

If you have any questions about this survey or have problems submitting your response, please 

contact Melissa A. Roye by phone at (202) 512-6426 or by email at royem@gao.gov. 

BACKGROUND INFORMATION

1. In case we would like to clarify any of your responses, please provide your sponsor or 

consultant name, respondent name and title, location, telephone number, and e-mail 

address of the individual primarily responsible for gathering the information requested in 

this survey. 

Name of Sponsor or Consultant: 

Respondent name: 

Title:

Location:

Telephone number: 

E-mail address: 
Appendix VII

Survey of Section 202 Sponsors and 

Consultants

Page 65 GAO-03-512 Section 202 Elderly Housing

2

2. Based on your experience with all Section 202 projects (not Section 811) receiving fund 

reservations since 1998, please list the states in which you have sponsored or consulted 

on at least one project per year OR a total of at least three projects since 1998. 

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

3. Approximately how many Section 202 projects have you sponsored or consulted on in total 

since 1998 _Mean=12.3_ (N=21), since 1992 _Mean=25.6_ (N=21)?

FACTORS IMPACTING TIMELY PROCESSING

We are interested in identifying factors that may contribute to the untimely processing of only 

Section 202 projects from fund reservation to initial closing. We understand that there are 

three basic factors that can add to project processing time. These factors may include (1) the 

actions or characteristics of Project Sponsors/Owners; (2) HUD staff, funding, and policies; 

and (3) State, local, and/or other requirements. Your responses to the following questions (4, 

5, 6, 7) will provide valuable insight into the significance of these factors.
Appendix VII

Survey of Section 202 Sponsors and 

Consultants

Page 66 GAO-03-512 Section 202 Elderly Housing

3

4. Based on your experience with all projects you have sponsored or consulted on that have received fund reservations since 1998:

Part A: For each factor related to Sponsors or Owners, select a single box that most commonly describes the factor’s impact on the overall processing 

time.

Part B: Indicate the frequency of each factor’s influence on the timely processing of Section 202 projects by selecting a single box that most commonly 

describes the frequency of the factor’s impact on the overall processing time. (For example, the factor ‘Seldom if ever’ prevents timely processing, 

‘Sometimes’ prevents timely processing, etc.) 

Sponsor / Owner Factors That May Negatively Influence Timely Processing of Section 202 Projects 

(N=21)

Sponsor/Owner Factors:

A. Typical Impact of Factor on Processing 

Time

(check one box for each factor) 

B. Frequency Of Factor Preventing Timely Processing 

(check one box for each factor)

No 

Impact 

(1) 

Minor 

Impact 

(2) 

Moderate

Impact 

(3) 

Significant 

Impact 

(4) 

Seldom if 

ever

(1) 

Sometimes 

(2)

Often 

(3)

Very often 

(4)

Always or 

almost 

always 

(5)

a. Doesn’t attend pre-application workshop 

(9.5% did not respond for part B) 42.9% 38.1% 9.5% 9.5% 76.2% 14.3% 0.0% 0.0% 0.0% 

b. Lacks experience in Section 202 program/ 

multi-family project development (9.5% did 

not respond for part B) 28.6% 14.3% 9.5% 47.6% 28.6% 23.8% 0.0% 14.3% 23.8% 

c. Does not effectively manage project 

development process (9.5% did not respond 

for part B) 28.6% 4.8% 14.3% 52.4% 23.8% 28.6% 4.8% 9.5% 23.8% 

d. Lacks effective consultant (4.8% did not 

respond for part A and 19.1% for part B) 23.8% 4.8% 4.8% 61.9% 23.8% 14.3% 4.8% 0.0% 38.1% 

e. Has difficulty designing project within fund 

reservation amount (9.5% did not respond 

for part B) 4.8% 4.8% 33.3% 57.1% 4.8% 23.8% 4.8% 28.6% 28.6% 

f. Lacks sufficient funds for pre-construction 

costs required before receipt of capital 

advance (e.g., environmental reviews, site 

control, etc.) (9.5% did not respond for 

part B)

14.3% 23.8% 23.8% 38.1% 33.3% 19.1% 19.1% 9.5% 9.5% 

g. Doesn’t fulfill requirements in a timely 

fashion (e.g., set up Owner corporation, 

submit complete required forms, etc.) 

(14.3% did not respond to part B)

23.8% 28.6% 19.1% 28.6% 23.8% 33.3% 9.5% 4.8% 14.3% 

h. Other (Please specify) (71.4% did not 

respond to parts A/B) 0.0% 0.0% 4.8% 23.8% 0.0% 0.0% 9.5% 9.5% 9.5% 
Appendix VII

Survey of Section 202 Sponsors and 

Consultants

Page 67 GAO-03-512 Section 202 Elderly Housing

4

5. Based on your experience with all projects you have sponsored or consulted on that have received fund reservations since 1998:

Part A: For each factor related to HUD staff, funding, or policies, select a single box that most commonly describes the factor’s impact on the overall 

processing time. 

Part B: Indicate the frequency of each factor’s influence on the timely processing of Section 202 projects by selecting a single box that most commonly 

describes the frequency of the factor’s impact on the overall processing time. (For example, the factor ‘Seldom if ever’ prevents timely processing, 

‘Sometimes’ prevents timely processing, etc.) 

HUD Factors That May Negatively Influence Timely Processing of Section 202 Projects 

(N=21) 

HUD Factors: 

A. Typical Impact of Factor on Processing 

Time

(check one box for each factor) 

B. Frequency Of Factor Preventing Timely Processing 

(check one box for each factor) 

No 

Impact 

(1) 

Minor 

Impact 

(2) 

Moderate

Impact 

(3) 

Significant 

Impact 

(4) 

Seldom if 

ever

(1) 

Sometimes 

(2)

Often 

(3)

Very often 

(4)

Always or 

almost 

always 

(5)

a. Staff lack Section 202 experience 4.8% 4.8% 47.6% 42.9% 19.1% 42.9% 14.3% 9.5% 14.3% 

b. Staff lack Section 202 training 4.8% 4.8% 38.1% 52.4% 14.3%% 47.6% 9.5% 19.1% 9.5% 

c. Section 202 workload (e.g., simultaneously 

reviewing new applications and paperwork 

for funded projects) (14.3% did not 

respond for part B)

4.8% 14.3% 33.3% 47.6% 4.8% 19.1% 33.3% 19.1% 9.5% 

d. FHA loan processing can be, at certain 

times, higher priority than Section 202 

project processing (14.3% did not respond 

for parts A/B)

0.0% 9.5% 14.3% 61.9% 0.0% 23.8% 23.8% 19.1% 19.1% 

e. Some staff unwilling to fully implement 

HUD Notice H 96-102 (4.8% did not 

respond for part A) 4.8% 14.3% 38.1% 38.1% 14.3% 38.1% 23.8% 4.8% 19.1% 

f. Insufficient project coordination (including 

turnover in project coordinator position) 4.8% 14.3% 42.9% 38.1% 23.8% 28.6% 19.1% 4.8% 23.8% 

g. Capital advance insufficient to fund projects 0.0% 0.0% 33.3% 66.7% 0.0% 9.5% 28.6% 33.3% 28.6% 

h. Award letters not mailed during fiscal year 

of appropriation 14.3% 52.4% 9.5% 23.8% 33.3% 47.6% 4.8% 0.0% 14.3% 

i. Availability of HUD amendment funds 

(after other funding sources exhausted) 

(4.8% did not respond for part A and 

19.1% for part B)

14.3% 0.0% 19.1% 61.9% 14.3% 14.3% 14.3% 14.3% 23.8% 

j. Time spent by HUD HQ considering waiver 

requests (extensions, amendment funds) 4.8% 4.8% 38.1% 52.4% 4.8% 52.4% 14.3% 23.8% 4.8% 

k. Other (Please specify) (71.4% did not 

respond for parts A/B) 0.0% 4.8% 0.0% 23.8% 0.0% 4.8% 0.0% 9.5% 14.3% 
Appendix VII

Survey of Section 202 Sponsors and 

Consultants

Page 68 GAO-03-512 Section 202 Elderly Housing

5

6. Based on your experience with all projects you have sponsored or consulted on that have received fund reservations since 1998:

Part A: For each factor related to State, Local, and/or Other requirements, select a single box that most commonly describes the factor’s impact on the 

overall processing time. 

Part B: Indicate the frequency of each factor’s influence on the timely processing of Section 202 projects by selecting a single box that most commonly 

describes the frequency of the factor’s impact on the overall processing time. (For example, the factor ‘Seldom if ever’ prevents timely processing, 

‘Sometimes’ prevents timely processing, etc.)

Factors Related to State, Local, or Other Requirements That May Negatively Influence Timely Processing of Section 202 Projects 

(N=21)

Factors Related to State, Local, or 

Other Requirements: 

A. Typical Impact of Factor on Processing Time 

(check one box for each factor) 

B. Frequency Of Factor Preventing Timely Processing 

(check one box for each factor) 

No 

Impact 

(1) 

Minor 

Impact 

(2) 

Moderate

Impact 

(3) 

Significant 

Impact 

(4) 

Seldom if 

ever

(1) 

Sometimes 

(2)

Often 

(3)

Very often 

(4)

Always or 

almost 

always 

(5)

a. Project is new construction 33.3% 38.1% 4.8% 23.8% 42.9% 33.3% 4.8% 9.5% 9.5% 

b. Project involves rehabilitation 

(14.3% did not respond in part A 

and 19.1% in part B) 38.1% 14.3% 33.3% 0.0% 33.3% 28.6% 14.3% 0.0% 4.8% 

c. Project site zoning approval (9.5% 

did not respond in part B) 19.1% 9.5% 19.1% 52.4% 14.3% 23.8% 14.3% 19.1% 19.1% 

d. Local permits (i.e., obtaining 

and/or cost of permits) 0.0% 14.3% 47.6% 38.1% 0.0% 38.1% 28.6% 23.8% 9.5% 

e. State and local historic 

preservation approval 23.8% 42.9% 14.3% 19.1% 52.4% 28.6% 4.8% 0.0% 14.3% 

f. Site contamination mitigation 

(4.8% did not respond in part A 

and 14.3% in part B) 33.3% 14.3% 4.8% 42.9% 42.9% 23.8% 9.5% 4.8% 4.8% 

g. Securing secondary financing (e.g., 

time needed to secure additional 

funding and obtain approval of 

financing documents) (4.8% did 

not respond in part A and 9.5% 

in part B)

19.1% 4.8% 23.8% 47.6% 9.5% 28.6% 9.5% 14.3% 28.6% 

h. Legal challenges (4.8% did not 

respond in part A and 14.3% in 

part B) 23.8% 14.3% 14.3% 42.9% 42.9% 23.8% 0.0% 9.5% 9.5% 

i. General local opposition to project 

(9.5% did not respond in part B) 14.3% 23.8% 9.5% 52.4% 14.3% 42.9% 14.3% 9.5% 9.5% 

j. Other (Please specify) (81.0% did 

not respond in parts A/B) 0.0% 0.0% 9.5% 9.5% 0.0% 0.0% 0.0% 9.5% 9.5% 
Appendix VII

Survey of Section 202 Sponsors and 

Consultants

Page 69 GAO-03-512 Section 202 Elderly Housing

6

7. What are the three most important factors (from those listed in the tables above) that can negatively impact 

timely processing of Section 202 projects? 

a)

b)

c)

8. Please identify up to three policy changes within HUD’s control that you believe would aid the timely 

processing of Section 202 projects from fund reservation to initial closing: 

a)

b)

c)

Thank you very much for your time. 
Page 70 GAO-03-512 Section 202 Elderly Housing

Appendix VIII

Comments from the Department of Housing 

and Urban Development ApenVdxiI
Appendix VIII

Comments from the Department of Housing 

and Urban Development

Page 71 GAO-03-512 Section 202 Elderly Housing
Appendix VIII

Comments from the Department of Housing 

and Urban Development

(250083) Page 72 GAO-03-512 Section 202 Elderly Housing
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