Elderly Housing: Federal Housing Programs That Offer Assistance for the Elderly
Published: 2005-02-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: According to the 2003 American Housing Survey sponsored by the U.S. Department of Housing and Urban Development (HUD), nearly one-third of elderly households--those whose head was age 62 or older--were experiencing housing affordability problems. Further, a congressional commission reported in 2002 that investment in affordable housing is decreasing, although the elderly population is expected to increase. A number of federal housing programs provide assistance, including rent subsidies, mortgage insurance, and loans and grants for the purchase or repair of homes, to low-income renters and homeowners. These programs are administered primarily by HUD or the U.S. Department of Agriculture (USDA). GAO was asked to determine the extent to which federal housing programs provide benefits to elderly households, summarize information on the programs' effectiveness in assisting the elderly and supportive services, and determine how HUD and USDA avoid overlap and duplication in their programs.
section_title: What GAO Found
paragraphs: A total of 23 federal housing programs target or have special features for the elderly. Specifically, one HUD and one USDA program target the elderly exclusively, while three HUD programs target the elderly and disabled. The remaining 18 programs serve a variety of household types but have special features for elderly households, such as income adjustments that reduce their rents. The 13 programs for which data were available provide about 943,000 housing units designated for occupancy by the elderly. However, many programs also serve the elderly in undesignated units. Available occupancy data show that the elderly occupied at least 1.3 million units under rental assistance, public, and multifamily housing programs as of spring 2004. Information on the effectiveness of housing programs that assist the elderly is limited. HUD has an overall goal related to elderly housing, but not all individual programs that assist the elderly are explicitly linked to this goal. USDA does not have specific goals related to elderly housing. Most of the 23 housing assistance programs we reviewed are not designed to provide supportive services for the elderly. Four programs require the owners of program properties to ensure that services such as meals or transportation are available to their residents. In addition, HUD administers four programs--for example, the Service Coordinator Program--that can be used in conjunction with various housing programs to help the elderly obtain supportive services. Supportive services are also available to elderly residents of subsidized housing through partnerships between individual properties and local organizations. To avoid overlap and duplication in the development of rural housing for the elderly, HUD and USDA have established policies and procedures that require field offices from both agencies to notify their counterparts of applications to build new housing and consider each other's input on local market conditions. GAO visits to selected HUD field offices and state USDA offices revealed that staff were not consistently following these policies and procedures but were analyzing markets to ensure the need for proposed housing. Overall, however, funding and geographic constraints limit the potential for overlap and duplication in the construction of rural housing for the elderly.

section_title: Letter
paragraphs: According to the 2003 American Housing Survey sponsored by the U.S.  Department of Housing and Urban Development (HUD), nearly one-third of  elderly households—generally those whose head is aged 62 or older—were  experiencing housing affordability problems. Whether homeowners or  renters, these households were spending more than 30 percent of their  incomes on housing. Further, according to a Congressionally-established  bipartisan commission, decreased investment in affordable housing and a  burgeoning elderly population that is projected to grow from about 12  percent of the population in 2002 to 20 percent by 2030 are likely to  increase the number of elderly who must spend large portions of their  incomes on housing.
Housing affordability is an even greater problem for low-income elderly  households—those with incomes of less than 80 percent of area median  income. The 2003 American Housing Survey estimated that 66 percent of  low-income elderly renters spent more than 30 percent of their income on  housing. Like these renters, low-income elderly homeowners also have  affordability problems. While approximately 80 percent of the elderly own  their homes, about two-thirds of these households are considered low  income. In 2003, about 40 percent of these low-income homeowners were  spending more than 30 percent of their income on housing.
Since the 1930s, a number of federal housing programs have provided  assistance to low-income renters and homeowners, including rent  subsidies, mortgage insurance, and loans and grants for the purchase or  repair of homes. These programs are administered primarily by HUD or the  U.S. Department of Agriculture (USDA). However, these programs do not  reach all needy households, and waiting lists for many types of subsidized  housing, including housing for the elderly, are often long.
You requested that we review federal housing assistance programs that can  benefit the elderly. This report discusses (1) the extent to which federal  housing assistance programs provide benefits to elderly households and  what is known about the effectiveness of these programs in assisting the  elderly, (2) the types of supportive services that these programs provide for  the elderly, and (3) how HUD and USDA avoid overlap and duplication in  programs that offer similar types of housing assistance to the elderly. As  requested, we also obtained information on the status of HUD’s efforts to  implement GAO’s earlier recommendations to improve the timeliness and  oversight of the Section 202 Supportive Housing for the Elderly (Section  202) program, which subsidizes the development of rental housing and  provides rental assistance for elderly households with very low incomes.  This information is included in Appendix II.
To address these objectives, we consulted with HUD and USDA officials to  identify housing assistance programs that benefit the elderly. We reviewed  laws and regulations to categorize the programs as either targeted  exclusively to the elderly, targeted at the elderly and disabled, or not  targeted but with special features for the elderly. We included housing  assistance programs that (1) subsidize mortgage interest rates, rent, or  housing repair or rehabilitation; (2) provide mortgage insurance, loan  guarantees, or direct loans for single-family or multifamily housing; or (3)  support the construction, rehabilitation, or purchase of multifamily  housing or assisted living facilities. Appendix III summarizes each of the  programs we include, and Appendix IV describes other housing-related  programs that can benefit the elderly but do not fit our three categories.
We also analyzed data from HUD and USDA databases to determine the  number of units designated for or occupied by the elderly in federally  subsidized or insured housing. We reviewed studies and reports by federal  agencies, including the HUD and USDA Offices of Inspector General;  research institutions; and others for information on the effectiveness of  these programs. These reports included the HUD and USDA fiscal year  2003 Performance and Accountability Reports. We obtained information  about supportive services from program descriptions and agency officials.  We also reviewed agreements, policies, and procedures HUD and USDA  have established to coordinate the development of subsidized housing in  rural areas and visited selected HUD and USDA field offices to determine  whether and how they coordinated with one another. Finally, we  interviewed HUD officials and reviewed related documentation to obtain  information on the status of GAO’s earlier recommendations for the  Section 202 program. Appendix I provides more detailed information on  our scope and methodology.
We conducted our work in Baltimore, Maryland; Greensboro and Raleigh,  North Carolina; Columbus, Ohio; Oklahoma City and Stillwater, Oklahoma,  and Washington, D.C., between December 2003 and December 2004, in  accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: The federal government has helped provide affordable housing to low- income households since the 1930s. Since then, a number of federal  housing programs have subsidized the construction of housing for the poor,  provided rental assistance to tenants in existing privately owned housing,  and insured mortgages for both single- and multifamily properties. Today,  HUD administers the majority of federal housing assistance programs in  urban areas, and USDA’s Rural Housing Service (RHS) implements housing  programs in rural areas.
In general, both HUD and USDA programs target families at lower income  levels. HUD programs target families with incomes that are: extremely low  (no more than 30 percent of an area’s median), very low (no more than 50  percent of an area’s median), and low (no more than 80 percent of an area’s  median). USDA programs also target families with incomes that are very  low and low. In addition, some USDA programs target families with  moderate incomes (no more than 115 percent of an area’s median).
HUD and USDA provide many types of housing assistance programs,  including single-family programs, multifamily programs, rental assistance  programs, and public housing. Housing developments can be assisted by  multiple programs. For example, a loan or mortgage on a multifamily  property may be insured through a HUD or USDA program, and the  property may have tenants that receive rental assistance from these  agencies. Federal housing assistance can generally be categorized as  follows:  Single-family programs that provide mortgage insurance, loan  guarantees, or direct loans for homeowners and grants or loans for  home repairs or modifications;  Multifamily programs that provide loans, subsidies, mortgage insurance  or loan guarantees, or a combination of these to support the  development and rehabilitation of rental properties, including:   Production programs that provide federal funds to construct or  substantially rehabilitate units for households with extremely low to  moderate incomes; and   Mortgage insurance/loan guarantee programs that provide incentives  for lenders to finance rental housing by reducing risk;   Rental assistance programs, which can be used for multifamily and  some single-family housing and generally pay property owners the  difference between 30 percent of a household’s adjusted income and its  rent, including:   Tenant-based rental assistance that provides vouchers for eligible  tenants to rent privately owned apartments or single-family homes  and that tenants can use in new residences if they move; and   Project-based rental assistance that is attached to specific properties  and is available to tenants only when they are living in units at these  properties; and   Public housing, which is provided through HUD and offers units for  eligible tenants in properties administered by public housing authorities.
The RHS implements all of the USDA programs we reviewed. Two offices  administer the HUD programs covered in this report:  The Office of Housing, which administers multifamily subsidy and  mortgage insurance programs, multifamily production programs, and a  variety of single-family programs; and   The Office of Public and Indian Housing, which administers the Public  Housing, Housing Choice Voucher, and Section 8 Moderate  Rehabilitation Programs.
HUD has specific goals for increasing housing opportunities for the elderly.  As outlined in its fiscal year 2004 Annual Performance Plan, these goals  include (1) increasing the availability of affordable housing for the elderly,  (2) increasing the number of assisted-living units, (3) increasing the  number of elderly households living in privately owned, federally assisted  multifamily housing served by a service coordinator, and (4) increasing  elderly families’ satisfaction with their Section 202 units.
USDA does not have specific goals related to the elderly in its fiscal year  2004 Annual Performance Plan. However, USDA does have the broad  objective of improving the quality of life of rural families by financing,  among other things, quality housing. To reach this objective, USDA has  established two housing-related goals: (1) to increase financial assistance  to rural households to buy a home, and (2) to increase the number of  minority homeowners.
section_title: Many Housing Programs Offer Assistance for the Elderly, but Information on Their Effectiveness Is Limited
paragraphs: We identified a total of 23 federal housing programs that are targeted at or  have special features for the elderly: 2 that are intended for the elderly only,  3 that are targeted to the elderly and disabled, and another 18 that have  special features, such as properties designated for elderly occupants and  income adjustments that lower elderly households’ rental payments. Some  or all units in many multifamily and public housing properties are  designated for the elderly. Data on the number of elderly served are not  available for each program; however, analysis of available data shows that  the elderly occupied at least 1.3 million units provided through several of  these programs. Limited information is available about the effectiveness of  most housing programs in assisting elderly households.
subsections: section_title: A Variety of Programs Target the Elderly or Have Special Features for Them
paragraphs: HUD and USDA offer 23 housing programs that either target or have special  features for the elderly. Two programs—HUD’s multifamily Section 202  program and USDA’s single-family Section 504 Rural Housing Repair and  Rehabilitation Grants program—are currently intended for elderly  beneficiaries only. Three multifamily programs target the elderly and the  disabled: HUD’s ALCP and two mortgage insurance programs (Section 231  and Section 232). Although not targeted to the elderly, another 18 programs  have special features for them. For example, public housing and some  multifamily programs allow properties to be wholly or partially designated  for occupancy by the elderly. Also, rental assistance programs and USDA  single-family programs make adjustments to elderly households’ incomes  when determining program eligibility or calculating benefits. These  programs are briefly described in Figure 1, and in more detail in Appendix  III. Although most of the 23 programs are intended for households with  low, very low, or extremely low incomes, 7 of the multifamily insurance  programs may provide benefits for households of all income levels (that is,  there are no income restrictions or limits).
Among these 23 programs, 13 have approximately 943,000 units designated  for the elderly, based on available data (fig. 2). Some public and multifamily  housing programs may designate properties wholly or partially for the  elderly, but the number of units set aside varies across programs. As figure  2 shows, the Section 202 and Section 231 programs have designated most  of their units for the elderly (84 percent and 90 percent, respectively),  consistent with these programs’ targeting of the elderly or the elderly and  disabled. The Section 202 program designates the most units for the  elderly—about 268,000 units.
HUD, USDA, and other agencies also administer other housing programs  for which the elderly are eligible, but which do not have special features for  the elderly. For example, under the Low-Income Housing Tax Credit  program, the largest active multifamily housing production program, states  receive annual allocations of tax credits and distribute them at their  discretion. In their guidelines for the distribution of tax credits, some states  have established preferences for properties intended for the elderly, but the  federal government does not require such preferences. Similarly, HUD’s  single-family mortgage insurance program does not have features that  apply only to elderly borrowers. HUD's Home Equity Conversion Mortgage  program, which targets only elderly homeowners, did not meet our  definition of housing assistance for this review. This program allows elderly  homeowners to borrow against the equity in their homes and defer  repayment for as long as they occupy their homes, but the money can be  used for any purpose, not just housing. Appendix I explains our  methodology for determining which programs to include, and Appendix IV  provides brief descriptions of some programs that were excluded from this  review.
section_title: The Elderly Occupied At Least 1.3 Million Units Provided under Federal Housing Programs, but Complete Data on Elderly Occupancy Are Lacking
paragraphs: Elderly households occupied at least 1.3 million units provided through  HUD and USDA rental assistance, public, and multifamily housing  programs for which data on occupancy were available between April and  June 2004 (fig. 3). The household counts by program do not match the unit  counts presented in figure 2 and Appendix III, because some units may  have been vacant or current data on tenants may have been incomplete.  The data include households in units designated for the elderly as well as  other elderly households receiving assistance through the programs.  Overall, elderly households comprised approximately 30 percent of the  households participating in programs for which data were available.
In addition to the elderly households in public and multifamily housing  programs, at least 69,650 elderly households received loans or grants  through 4 USDA single-family programs from October 1995 through April  2004, the time period for which we were able to obtain data (fig. 4).  Specifically, USDA’s Section 504 grants program, which provides home  repair grants to elderly homeowners, made at least 40,697 grants to elderly  recipients during that period. Also, the Section 502 Rural Housing Loans  (Direct), Section 502 Direct Housing Natural Disaster Loans, and Section  504 Rural Housing Repair and Rehabilitation Loans programs, which offer  loans for home purchase or repair, had at least 28,953 elderly borrowers.  USDA generally did not have data on the age of borrowers in its Section 502  guaranteed loan program, which had more than 167,500 active loans as of  April 2004.
section_title: Limited Information Is Available About the Effectiveness of Housing Programs in Assisting the Elderly
paragraphs: Program effectiveness can be assessed in a number of ways—for example,  by evaluating the extent to which programs reach or serve intended  beneficiaries or examining the efficiency with which they serve those that  they do reach. In evaluation research, “effectiveness” is often defined in  terms of the achievement of program goals or outcomes. While HUD and  USDA have not established specific goals for each housing program that  offers assistance for the elderly in their annual Performance and  Accountability Reports, these reports contain limited information on some  programs’ performance—that is, the extent to which a program met  specific goals and objectives or contributed to the attainment of larger  overarching goals. The Office of Management and Budget (OMB), has used  its standardized Program Assessment Rating Tool (PART) to assess five of  the programs, finding that three had not demonstrated results, one was  ineffective, and one was moderately effective.
While we also identified academic studies of some programs we reviewed,  they generally did not evaluate the effectiveness of a program in terms of  the extent to which it reached its goals. For example, some academic  studies analyzed the impact of the public housing and housing choice  voucher programs upon property values. However, affecting property  values is not a goal of these programs. Finally, we also identified  information on how effectively some of the housing programs are  implemented.
subsections: section_title: Information on the Effectiveness of Programs Targeted to the Elderly
paragraphs: Of the two programs that are targeted to the elderly, only HUD’s Section  202 program is included in the agencies’ fiscal year 2003 Performance and  Accountability Reports. HUD addresses this program under its overall goal  of improving housing options for the elderly. According to HUD’s  Performance and Accountability Report, HUD exceeded its goal of  approving 250 Section 202 and Section 811 projects to start construction  during fiscal year 2003, approving 334 projects. While HUD exceeded this  goal, the number of projects approved for construction is a limited measure  of the effectiveness of the Section 202 program. USDA’s fiscal year 2003  Performance and Accountability Report did not address the effectiveness  of the Section 504 program.
OMB rated the Section 202 program in its fiscal year 2004 PART  assessment. PART is designed to assess the effectiveness of federal  programs through a series of diagnostic questions intended to provide a  consistent approach to rating federal programs. Drawing on available  performance and evaluation information, the questionnaire attempts to  determine the strengths and weaknesses of federal programs with a  particular focus on individual program results. According to this  assessment, the results of the Section 202 program had not been  demonstrated, and:  The program lacked evidence showing the overall level of impact that  the program had on poor elderly individuals;  HUD had not established quantifiable long-term performance goals with  outcomes for this program, so progress could not be measured;  The program had produced about 6,000 units per year, yet there is a  need for over a million units for the elderly.
We also have reported specifically on how effectively the Section 202  program has been managed. Our 2003 report on the Section 202 program  outlined several factors that prevented efficient and effective  implementation. Appendix II contains an update on HUD’s efforts to  improve these deficiencies.
section_title: Information on the Effectiveness of Programs Targeted to the Elderly and Disabled
paragraphs: HUD’s fiscal year 2003 Performance and Accountability Report also  provides information on two of the three HUD programs targeted to the  elderly and disabled—the Assisted Living Conversion Program and the  Section 232 mortgage insurance program. According to this report, HUD:  Met its goal for increasing the number of assisted living units for the  elderly by adding 2,618 units or beds to the estimated 18,000 already in  place in 325 properties insured by the Section 232 mortgage insurance  program;  Exceeded its goal of converting 10 properties through the ALCP by  converting 13 properties, adding an additional 407 assisted living units.
section_title: Information on the Effectiveness of Programs That Have Special Features for the Elderly
paragraphs: While performance and accountability information does not directly  address the extent to which programs that have special features for the  elderly—such as HUD’s public housing, project-based rental assistance,  and housing choice voucher programs—are effective in assisting the  elderly, it does provide additional context. For example, HUD’s fiscal year  2003 Performance and Accountability Report has an indicator to track the  share of units receiving assistance through these programs that are  occupied by the elderly, but HUD has not established goals for this  indicator because housing providers have discretion regarding admissions  policies.
USDA’s Office of Inspector General (OIG) has reported on how effectively  USDA’s multifamily housing programs are implemented. For example:  In 2004, the OIG reported that USDA’s Rural Housing Service missed by  three projects its target of having no more than 140 multifamily housing  projects with accounts more than 180 days past due. According to the  report, this indicator is a measure of how effectively and efficiently the  multifamily housing loan portfolio is being managed.
Also in 2004, the OIG reported that RHS had not implemented all of the  policy changes that it had agreed to implement to better monitor the  owners of Section 515 developments. As a result, according to the OIG,  rural rental housing funds remained vulnerable to theft and abuse.
In addition, we identified two studies that provided information related to  the effectiveness of housing choice vouchers in assisting the elderly and  the effectiveness of the Section 502 Rural Housing Loans (Direct) Program  in helping the elderly become homeowners and obtain better quality  housing:  A 2001 study on the Housing Choice Voucher Program showed that the  elderly had less success finding and leasing a unit than other household  types, possibly because elderly renters may have difficulty looking at  multiple units.
A 1999 study of USDA’s Section 502 Rural Housing Loans (Direct)  Program, which provides loans to very-low and low-income rural  residents for the purchase or repair of single-family homes, reported the  results of a 1998 survey and found that of respondents with at least one  elderly person on the mortgage, 30 percent were first-time homebuyers,  and almost 90 percent reported that their current home was of better  quality than their previous home.
Finally, OMB’s fiscal year 2004 PART assessments included information  about the effectiveness of 4 of the 18 programs that provide special  features for the elderly—the Housing Choice Voucher Program, project- based rental assistance, and the Sections 515 and 521 programs (table 1).
While Performance and Accountability Reports can be helpful in assessing  program effectiveness, their usefulness is limited. For example, USDA’s  fiscal year 2003 report provides little useful information on the  effectiveness of USDA’s housing programs in assisting the elderly because  of the lack of specific goals and objectives related to improving housing  options for the elderly. Similarly, HUD’s fiscal year 2003 report identifies  such goals for only 3 of the 23 programs we reviewed. Further, HUD’s goals  are not necessarily specific; for example, although information was  available on HUD’s Section 232 program, targeted goals were not  established for this program, such as increasing the number of assisted- living units through Section 232 insurance by a specific percentage.  Without such specific criteria, HUD management and outside evaluators  lack the essential information needed to assess this aspect of the program’s  effectiveness.
In addition, GAO has previously reported that the usefulness of PART  assessments is limited, for the following reasons:  Many PART questions contained subjective terms that were open to  interpretation. We noted that such subjective terminology could  influence program ratings by permitting OMB staff’s views about a  program’s purpose to affect assessments.
OMB assigned overall program ratings and individual section scores.
Overall ratings encourage a determination of the effectiveness of a  program even when performance data are unavailable, the quality of  those data is uneven, or they convey a mixed message on performance.
OMB inconsistently defined appropriate measures—outcomes versus  outputs—for programs.
Most other studies we identified on various aspects of the programs we  reviewed did not evaluate either the programs’ overall effectiveness, or  their specific effect on the elderly. We also found some academic studies  that provided information related to effectiveness but that were based on a  prohibitively small sample of elderly program participants or did not use  reasonably current data.
The overall lack of information on the effectiveness of the programs we  reviewed in assisting the elderly may be due to the fact that, as GAO has  previously reported, many agencies lack the capacity to undertake program  evaluations to assess a federal program’s contributions to results. Agencies’  capability to gather and use performance information has posed a  persistent challenge.
Finally, we did not evaluate the extent to which the programs we reviewed  addressed the needs of eligible elderly households because (1) complete  data on the number of elderly households occupying units provided by  federal housing programs were not available, and (2) eligibility criteria for  each program varied, making it difficult to establish the number of eligible  elderly households.
section_title: Most Federal Housing Assistance Programs Are Not Required To Provide Supportive Services for the Elderly
paragraphs: Generally, HUD and USDA’s housing assistance programs are not required  to provide supportive services to the elderly. Of the 23 housing assistance  programs that we reviewed, 4 required the owners of properties developed  under the programs to ensure that supportive services were available. HUD  has programs that link the elderly to or provide them with supportive  services. Two of these programs, the Service Coordinator and the Resident  Opportunities and Self Sufficiency (ROSS) programs, link residents with  appropriate supportive services that are available in the community. In  addition, the Congregate Housing Services Program funds meals and other  needed services in public and multifamily housing properties, and the  Neighborhood Networks program provides resources for establishing  computer centers at such sites. Owners of public and multifamily housing  may also provide supportive services by establishing partnerships with  public and private organizations in the community.
subsections: section_title: Four Housing Assistance Programs Require That Supportive Services Be Made Available to Elderly Residents
paragraphs: HUD’s Section 202 program, the ALCP, and Section 232 Mortgage  Insurance, and USDA’s Section 515 Congregate Housing Program, which is  a sub-program of the Section 515 program (see Appendix III) require  property owners to make supportive services available to their residents.
Generally, HUD and USDA do not provide funding for these services. The  property owners typically obtain other funds to provide supportive services  or must ensure that appropriate services are available in the community  (see table 2).
section_title: HUD Has Other Programs that Assist the Elderly in Obtaining Supportive Services
paragraphs: While USDA does not generally provide funding for supportive services for  residents of federally assisted housing, HUD has two programs that link  residents of public and multifamily properties developed under HUD  programs to supportive services, and two that provide supportive services.  None of these four programs is just for the elderly, but they either can be  used in properties designated for the elderly or have funding specifically  for the elderly. The Service Coordinator Program, for example, provides  funding for managers of multifamily properties designated for the elderly  and disabled to hire coordinators to assist residents in obtaining supportive  services from community agencies. These services, which may include  personal assistance, transportation, counseling, meal delivery, and  healthcare, are intended to help the elderly live independently and to  prevent premature and inappropriate institutionalization. Service  coordinators can be funded through competitive grant funds, residual  receipts (excess income from a property), or rent increases. According to  HUD’s fiscal year 2003 Performance and Accountability Report, service  coordinators were serving more than 111,000 units in elderly properties.
Similarly, HUD’s ROSS grant program links residents with appropriate  services. This program differs from the Service Coordinator Program in  that it is designed specifically for public housing residents. The ROSS  program has five funding categories, including the Resident Service  Delivery Models for the Elderly and Persons with Disabilities (Resident  Services) and the Elderly/Disabled Service Coordinator Program. Resident  Services funds can be used to hire a project coordinator; assess residents’  needs for supportive services and link residents to federal, state, and local  assistance programs; provide wellness programs; and coordinate and set  up meal and transportation services. The Elderly/Disabled Service  Coordinator Program has not provided new grants since 1995 but still  services existing grants.
The Congregate Housing Services Program provides grants for the delivery  of meals and nonmedical supportive services to elderly and disabled  residents of public and multifamily housing, including USDA’s Section 515  housing. While HUD provides up to 40 percent of the cost of supportive  services, grantees must pay at least 50 percent of the costs, and program  participants pay fees to cover at least 10 percent. Like the  Elderly/Disabled Services Coordinator Program under ROSS, the  Congregate Housing Services Program has provided no new grants since  1995, but Congress has provided funds to extend expiring grants on an  annual basis.
In addition, the Neighborhood Networks program encourages property  owners, managers, and residents of HUD-insured and -assisted housing to  develop computer centers. Although computer accessibility is not a  traditional supportive service for the elderly, a senior HUD official told us  that having computers available enhances elderly residents’ quality of life.  HUD does not fund each center's planned costs, but encourages property  owners to seek cash grants, in-kind support, and donations from sources  such as state and local governments, educational institutions, private  foundations, and corporations.
section_title: Private Partnerships and Federal Health Care Programs May Provide Some Supportive Services
paragraphs: Elderly residents of public and federally subsidized multifamily housing  can also receive supportive services through partnerships between  property owners and local organizations and through programs provided  by the Department of Health and Human Services (HHS). For example,  property owners can establish relationships with local nonprofit  organizations, including churches, to ensure that residents have access to  the services that they need. At their discretion, property owners may  establish relationships that give the elderly access to meals, transportation,  and housekeeping and personal care services. In site visits to HUD and  USDA multifamily properties, we found several examples of such  partnerships:  In Greensboro, North Carolina, Dolan Manor, a Section 202 housing  development, has established a relationship with a volunteer group from  a local church. The volunteer group provides a variety of services for the  residents, such as transportation.
In Plain City, Ohio, residents of Pleasant Valley Garden, a Section 515  property, receive meals five times a week in the community’s senior  center (a $2 donation is suggested). A local hospital donates the food  and a nursing home facility prepares it. Volunteers, including residents,  serve the meals. The senior center uses the funds collected from the  lunch for its activities. In addition, local grocery stores donate bread  products to the senior center daily. The United Way provides most of the  funding for the senior center.
In Guthrie, Oklahoma, Guthrie Properties, a Section 515 property, has  established a relationship with the local Area Agency on Aging. The  agency assists residents of Guthrie Properties in obtaining a variety of  services, including meals and transportation to a senior center.
Some elderly residents of public and federally subsidized housing may also  obtain health-related services through programs run by HHS. For example,  HHS’s Public Housing Primary Care Program provides public housing  residents with access to affordable comprehensive primary and preventive  health care through clinics that are located either within public housing  properties or in immediately accessible locations. The program awards  grants to public and nonprofit private entities to establish the clinics. The  organizations must work with public housing authorities to obtain the  physical space for the clinics and to establish relationships with residents.  Currently, there are 35 grantees, 3 of which are in rural areas. According to  a program administrator, although clinics are not specifically geared  toward elderly-designated public housing, they can be established at such  properties.
Elderly residents of federally subsidized housing may also be eligible for  the Medicaid Home and Community-Based Services (HCBS) Waiver  Program, which is administered by HHS’s Centers for Medicare and  Medicaid Services. Through this waiver program, individuals eligible for  Medicaid can receive needed health care without having to live in an  institutional setting. HUD has identified the use of these waivers as an  innovative model for assisting the frail elderly in public housing.
In addition, eligible elderly residents of federally subsidized housing may  also receive health care through the Program of All-Inclusive Care for the  Elderly (PACE), which is also administered by the Centers for Medicare  and Medicaid Services. Like the HCBS waiver program, this program  enables eligible elderly individuals to obtain needed services without  having to live in an institutional setting. The program integrates Medicare  and Medicaid financing to provide comprehensive, coordinated care to  older adults eligible for nursing homes. Figure 5 provides information on  the housing assistance programs that can use federally funded supportive  services programs that assist the elderly.
section_title: HUD and USDA Have Policies in Place to Avoid Duplicating Programs
paragraphs: Although the potential for duplication exists, HUD and USDA have  established policies and procedures to guide the development of  multifamily housing for the elderly in rural areas. A 1991 agreement  between the agencies and subsequent guidance to HUD and USDA field  offices established a framework for coordinating efforts to provide housing  assistance to low-income rural households. As noted, HUD develops rental  housing for the elderly in rural areas through its Section 202 program, and  USDA can develop such housing through its Section 515 program. In  addition to obtaining one another’s input on proposed developments, HUD  field office and state USDA office staffs assess the markets in areas where a  new development is proposed. Site visits to HUD and USDA field offices in  three states revealed that while staff did not consistently follow  coordination procedures, each office did analyze market conditions in the  proposed locations. In addition, the potential for unnecessary overlap and  duplication between these programs has been limited by funding levels and  the geographic areas in which HUD and USDA develop new housing.
subsections: section_title: Policies are in Place to Guide the Coordination of Rural Housing Development
paragraphs: Policies and procedures designed to coordinate HUD and USDA efforts to  develop rental housing in rural areas have been in place since the early  1990s. In 1991 HUD and USDA signed a Memorandum of Understanding  and agreed to maintain an on-going working relationship to address issues  related to providing housing assistance to rural areas in a cooperative, cost  effective, and nonduplicative manner. As a result of this agreement, HUD  and USDA issued guidance, in 1991 and 1992 respectively, specifying how  the agencies should coordinate. Specifically, the guidance outlined  coordination procedures that each agency should follow when reviewing  applications for funds to develop rental units. For HUD, this policy applied  to several programs, including the Section 202 program. For USDA, this  policy applied specifically to the Section 515 program, which can be used  to develop properties for families or the elderly. Among the programs we  included, HUD’s Section 202 program and USDA’s Section 515 program are  the only two that actively produce rental units for the elderly in rural  areas.
While neither the original agreement between HUD and USDA nor the  resulting guidance has been updated since the early 1990s, the Section 515  program instructions and the Section 202 program’s annual Notice of  Funding Availability, which announces the availability of funding as well as  program requirements, describe current procedures. According to the  Section 515 program instructions, the purpose of the coordination effort is  to (1) foster better communication, (2) obtain additional documentation to  determine market feasibility, (3) prevent overdevelopment of subsidized  housing, and (4) prevent adverse effects on proposed or existing units that  provide similar types of rental housing. The program instructions also state  that state USDA offices will forward basic loan information on Section 515  loan applications that are selected for further processing to the applicable  HUD field office. HUD field office staff will identify any pending,  authorized, or existing units in the market area and provide comments,  positive or negative, on the proposed market area to USDA within 2 weeks.  When HUD staff have concerns about market feasibility or the impact of a  proposed project on existing or authorized HUD units, they also provide  documentation to support their concerns. HUD has established a similar  process for notifying USDA of proposed developments. HUD’s fiscal year  2004 Notice of Funding Availability for the Section 202 program requires  HUD to seek USDA’s input on Section 202 applications, giving USDA the  opportunity to respond if it has concerns about the demand for additional  assisted housing or possible harm to existing housing in the same market  area.
In addition to seeking input from one another on the markets in which new  rural rental housing is proposed, both HUD and USDA assess market  conditions when they evaluate applications for Section 202 and Section 515  funds. For example, HUD’s guidance instructs HUD’s economists to  evaluate the markets in which all Section 202 applications propose  development to determine if sufficient demand for the units exists and to  assure that any new units will not have a long-term adverse impact on  existing assisted housing for the elderly. If this analysis shows that  sufficient demand for the units proposed in an application does not exist,  then the application cannot be funded. Similarly, according to USDA  officials, USDA state office staffs analyze market data to determine need  and demand for the units proposed in Section 515 applications.  Applications are not approved if:  another rural rental housing loan has already been selected for further  processing in the same market;   a previously authorized USDA, HUD, Low-Income Housing Tax Credit,  or similar type of project in the same market area has not been  completed, has not reached its projected occupancy level, or is  experiencing high vacancies; or   the need in the market area is for additional rental assistance and not for  additional housing units.
We visited HUD field offices and USDA state offices in North Carolina,  Ohio, and Oklahoma to determine whether and how these offices were  following these policies and procedures. We chose these states because  they had the largest numbers of approved Section 202 grants in rural areas  and Section 515 loan awards in fiscal years 2002 and 2003 (see Appendix I).  Our observations from the site visits are not necessarily representative of  all field offices.
Overall, the HUD and USDA field offices in the three states we visited did  not consistently follow the policies and procedures designed to facilitate  coordination in fiscal years 2002 or 2003. For example, while local USDA  officials in North Carolina and Oklahoma obtained input from HUD on  Section 515 loan applications in fiscal years 2002 and 2003, USDA officials  in Ohio did not. According to a senior official from USDA’s Ohio state  office, the agency did not seek HUD’s input on the sites funded in fiscal  years 2002 or 2003 because USDA determined that market demand existed  for the units. Moreover, this official stated that they had sought HUD’s input  on Ohio’s list of “designated places”—cities, towns, and communities for  which USDA could approve new Section 515 development. Based on  input from HUD and USDA field offices, USDA state offices can remove  places from the list if a market for additional rental housing does not exist.
Since HUD officials had not raised concerns about the two places on Ohio’s  list for which Section 515 housing was proposed in fiscal years 2002 and  2003 and funds were ultimately allocated, USDA officials did not think that  it was necessary to request their input again.
Only one of the HUD offices visited sought USDA’s input on Section 202  grant applications in fiscal year 2002, and none sought USDA’s input in  fiscal year 2003. According to HUD officials in the field offices we visited,  HUD offices did not seek input for various reasons. For example, in North  Carolina and Oklahoma there were staffing changes. In Ohio, funds were  awarded to a site that had been funded in fiscal year 2002. Since contact  was made with USDA officials in fiscal year 2002 regarding this site, HUD  officials did not see a need to contact them again in fiscal year 2003.
Although coordination between the HUD and USDA offices we visited was  inconsistent in fiscal years 2002 and 2003, we found that these offices  based their funding decisions on market analyses. For example, HUD  economists evaluated the markets in which all Section 202 applications  proposed development. If the economists determined that a sufficient  market for development did not exist, the application was not funded.  Similarly, in each state USDA office we visited, officials explained that if  they determined that the market for Section 515 development was  insufficient in a place where development was proposed, they would not  fund the application. Possibly as a result of these market analyses, we did  not identify any examples of HUD and USDA providing unnecessarily  duplicative housing assistance for the elderly.
section_title: The Potential for Unnecessary Overlap and Duplication between Section 515 and Section 202 Developments Is Limited
paragraphs: Several factors limit the potential for unnecessarily duplicative Section 202  and Section 515 housing for the elderly in rural areas: funding constraints,  geographic restrictions, and, in some areas, demand for additional rental  units. First, the way that Section 202 funding is allocated and the amount of  Section 515 funding limit the number of units these programs produce in  rural areas. HUD generally allocates only a portion of Section 202 funds to  nonmetropolitan areas, which are more likely than metropolitan areas to  be considered rural and thus eligible for USDA funds. In fiscal years 2002  through 2004, for example, HUD set aside enough funds for each of its local  offices to fund a minimum of five units in nonmetropolitan areas and  allocated 15 percent of all funds appropriated for the Section 202 program  to these areas. And although the Section 515 program provides funding  exclusively in rural areas, funding for this program has fallen sharply since  its peak in 1979. During the peak funding years, the program produced  more than 20,000 new units annually. Since 2000, fewer than 2,000 new  units have been produced annually. Also, not all new Section 515 units are  for the elderly, further reducing the potential for overdevelopment of  elderly housing in rural areas.
Second, geographic restrictions on areas where Section 515 funds can be  used limit the extent to which the Section 515 and Section 202 programs  can overlap. Section 202 properties can be developed anywhere in the  United States. In contrast, not only must Section 515 properties be in rural  areas, but also new development can occur only in designated places. State  USDA offices develop lists of places with a need for multifamily rental  housing, and invite Section 515 applications for these places. According to  the USDA officials we interviewed, this list can be refined through input  from HUD and USDA field offices. As a result, new Section 515 properties  could potentially be developed and overlap with new Section 202  development only in a small number of areas.
Finally, officials at the HUD field offices and state USDA offices we visited  told us that oversaturating a market with both HUD and USDA units for the  elderly was not a concern for several reasons, including a high demand for  such units. In some cases, they said, existing elderly properties had waiting  lists, and new properties generally rented quickly. According to other  officials, given the limited number of elderly units that could be  constructed with available funding, overlap and duplication between HUD  and USDA housing for the elderly was not a concern.
section_title: Agency Comments
paragraphs: We provided a draft of this report to USDA and HUD for their review and  comment. USDA had no comments on the report. HUD provided comments  in a letter from the Assistant Secretary for Housing – Federal Housing  Commissioner (see Appendix V).
The letter stated that the report does not give HUD’s programs full credit  for their contributions in assisting the elderly. HUD’s specific comments in  this regard, and our responses, are as follows:  HUD commented that the report should include more detail on  partnership arrangements and overall supportive services provided to  the elderly. We believe that the report covers these issues at a level of  detail appropriate to our objective. The report includes information on  the four federal housing assistance programs that require that  supportive services be made available to elderly residents, and four  programs that can be used to either link residents to supportive services  or provide services directly. In addition, it includes examples of private  partnerships and health care programs to convey a broader sense of the  supportive services that can be available to the elderly.
HUD noted that the draft did not include data on units designated for a  mixed population of the elderly and disabled. We initially determined  that the 6,004 units that fall into this category were not significant  enough to merit inclusion. However, in response to HUD’s comment, we  have included this data as a note to Figure 2.
HUD stated that the report fails to give Home Equity Conversion  Mortgages (HECM) sufficient credit. As detailed in the Objectives,  Scope, and Methodology (see Appendix I), this report focuses upon  programs that met our definition of housing assistance. While the HECM  program did not meet this definition, both the body of the report and  Appendix IV acknowledge HECM as a program that assists elderly  families.
HUD agreed that GAO used the appropriate definition of elderly  households, but stated that the report should acknowledge that other  households may have members aged 62 or older (that are not the head,  co-head, or spouse). While we did not initially provide data on such  households because they are not, by definition, elderly households, we  did add a note to Figure 3 to acknowledge that housing assistance  programs can also benefit this group.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days from the  report date. At that time, we will send copies to the Secretaries of  Agriculture and Housing and Urban Development. We will make copies  available to others upon request. This report will also be available at no  charge on GAO’s Web site at http://www.gao.gov.
Please call me at (202) 512-8678 if you or your staff have any questions  about this report. Key contributors to this report are listed in Appendix VI.
section_title: Objectives, Scope, and Methodology
paragraphs: To determine the extent to which federal housing assistance programs  provide benefits to elderly households, we first identified the relevant  programs through a literature search, review of the Catalog of Federal  Domestic Assistance, and consultation with Department of Housing and  Urban Development (HUD) and Department of Agriculture (USDA)  officials. As used in this report, housing assistance programs are those  that:  subsidize mortgage interest rates, rent, or housing repair or   provide mortgage insurance, loan guarantees, or direct loans for single- family or multifamily housing; and  support the construction, rehabilitation, or purchase of multifamily  housing or assisted living facilities.
We excluded programs that are administered by government-sponsored  enterprises such as Fannie Mae, Freddie Mac, and Federal Home Loan  Banks; are used exclusively to fund nursing homes or supportive housing  for the homeless; are not used exclusively to provide housing assistance; or  lack special features that apply to the elderly.
We then reviewed laws and regulations to determine which housing  assistance programs were (1) targeted to the elderly as the only  beneficiaries, (2) targeted to the elderly and disabled only, and (3) were not  targeted to the elderly but had special features for them. Appendix III  describes the programs we included, and Appendix IV describes some  programs we excluded, even though they can benefit elderly households.  For each of the programs we included, we interviewed agency officials and  reviewed laws, regulations, handbooks, and other documentation to  describe the programs and how they benefit the elderly.
We used various HUD and USDA databases to analyze the extent to which  the programs within our scope either designated units for the elderly or  were occupied by elderly households. Specifically:  To determine the number of units under HUD’s multifamily programs,  we used data from HUD’s Multifamily Portfolio Reporting Database as  of April 1, 2004. HUD provided corrected unit counts for 32 properties in  August 2004. Unit counts were not available for 42 percent of the  Section 207 Manufactured Home Parks properties, 57 percent of Section  232 properties, and 23 percent of Section 542(b) and (c) properties, so  we could not produce a reliable count of the total number of units for  these programs. For the other HUD multifamily programs, fewer than 2  percent of the properties were missing unit counts (except that 4.5  percent of Section 207/223(f) properties were missing unit counts), so  we considered the data sufficient for our purposes. We combined these  data with the results of HUD’s Multifamily Housing Inventory Survey,  conducted between June 2002 and January 2003, to determine the  number of multifamily units designated for the elderly under each  program.
To determine the number of elderly households living in properties  under HUD’s multifamily programs, we used data from HUD’s Tenant  Rental Assistance Certification System as of May 25, 2004. However, we  were only able to determine the number of households receiving  project-based rental assistance. Not all units under HUD’s multifamily  program receive project-based rental assistance, and occupancy data on  these unassisted units were not available. As a result, the numbers that  we report for these programs do not reflect the total number of elderly  households in these programs but only the number of elderly  households receiving project-based rental assistance.
To determine the number of elderly households living in public housing  or receiving rental assistance through the Housing Choice Voucher or  Section 8 Moderate Rehabilitation programs, we used data from HUD’s  Public and Indian Housing Information Center as of June 3, 2004. We  excluded outdated data (29 percent of the records) by including in our  analysis only households whose records had been updated within the  last 15 months. To determine the number of public housing units  designated for the elderly, we used a July 14, 2004, Designated Housing  Plan Status Report—a spreadsheet that HUD uses to track public  housing authorities that have requested or been approved to formally  designate units for the elderly.
For USDA’s Section 515 program, we used data from USDA’s Multi- Family Integrated System as of April 30, 2004, and July 13, 2004, to  determine the number of units, units designated for the elderly, and  units occupied by elderly households (including households receiving  Section 521 rental assistance).
To determine the number of Section 538 units, we used (1) a report from  USDA’s Guaranteed Loan System as of June 3, 2004, covering Section  538 properties guaranteed beginning in fiscal year 2000 and (2) a June  16, 2004, report listing data on Section 538 properties guaranteed  through fiscal year 1999 but not maintained in USDA’s central data  systems. Data on the occupants of Section 538 properties were not  available.
For USDA’s Section 502 and 504 single-family programs, we used data  from USDA’s Dedicated Loan Origination and Servicing System and  Guaranteed Loan System as of April 30, 2004, to determine the total  number of loans and grants and the number of borrowers or grantees  who were elderly at the time they applied for a loan or grant. However,  the Guaranteed Loan System only had the primary or secondary  borrower age for about 2 percent of the Section 502 Guaranteed Loans, a  percentage that was insufficient for our purposes.
In order to assess the reliability of the program data described above, we  reviewed related documentation and interviewed agency officials and  contractors who worked with these databases. In addition, we performed  internal checks to determine the extent to which the data fields were  populated and the reasonableness of the values contained in the data fields.  During our internal checks, for household counts based on the age of  household members, we identified 0.01 percent of cases where the age  appeared to be erroneous due to unreasonably high values. We concluded  that the data we used were reliable for purposes of this report.
To provide information on the effectiveness of the programs within our  scope in assisting the elderly, we reviewed studies and reports by federal  agencies, research institutions, and the HUD and USDA Offices of  Inspector General. We reviewed the methodologies used in relevant studies  to ensure that the results reported were reasonable. We excluded studies  that did not focus on the effectiveness of a program in assisting the elderly,  were more than 15 years old, or were not focused upon the goals of the  program. We also reviewed the Office of Management and Budget’s  Program Assessment Rating Tool assessments for programs within our  scope. In addition, we used HUD and USDA fiscal year 2003 Performance  and Accountability Reports to determine if program goals or performance  measures specific to the elderly had been established for these programs.  For those programs with such goals, we provided information on whether  the goal was reached. For those programs that did not have these goals, we  summarized available information related to the effectiveness of the  programs in assisting the elderly.
To describe the types of supportive services that federal housing assistance  programs provide for the elderly, we first reviewed laws and regulations to  determine which of the programs within our scope were required to ensure  that supportive services were available. Next, we identified supportive  services programs that could be used with various housing assistance  programs, whether or not the housing assistance program required such  services. For example, while public housing authorities that manage public  housing are not required to provide supportive services, housing  authorities may implement such services voluntarily. We identified  supportive services programs by reviewing literature and descriptions of  housing assistance programs and interviewing administrators of the  housing assistance programs within our scope, as well as representatives  of advocacy organizations and professional associations interested in  elderly housing issues and supportive services. We obtained descriptions of  these supportive services programs by interviewing officials from HUD,  USDA, and the Department of Health and Human Services. We also  reviewed program descriptions, notices of funding availability, and other  documentation to develop descriptions of these supportive service  programs.
To determine how HUD and USDA avoid overlap and duplication in  programs that offer similar types of housing assistance to the elderly, we  first determined which programs were actively producing new units in the  same areas. We found that both HUD and USDA were actively producing  new multifamily rental units in rural areas through the Section 202 and  Section 515 programs, respectively. While Section 202 units can be  constructed in metropolitan areas, Section 515 units cannot. As a result, we  focused our analysis upon rural areas. We reviewed agreements, policies,  and procedures established by HUD and USDA to coordinate the  development of subsidized housing in rural areas and interviewed HUD and  USDA officials responsible for administering these programs. We also  visited HUD and USDA field offices in Greensboro and Raleigh, North  Carolina; Columbus, Ohio; and Oklahoma City and Stillwater, Oklahoma to  determine whether and how the policies and procedures for coordinating  were being followed. We identified these states as having received, when  both programs are considered together, the most Section 202 grants in rural  areas and the most Section 515 new construction loans made in fiscal years  2002 and 2003.
To determine the status of HUD’s efforts to improve administration of the  Section 202 program (Appendix II), we interviewed HUD officials and  reviewed related documentation to identify steps HUD had taken to  implement the recommendations we made in our 2003 report on the  Section 202 program. We also obtained a HUD report on the number of  delayed Section 202 properties as of November 10, 2004, and compared this  report with data we presented in our 2003 report.
We conducted our work primarily in Baltimore, Maryland; Greensboro and  Raleigh, North Carolina; Columbus, Ohio; Oklahoma City and Stillwater,  Oklahoma, and Washington, D.C., between December 2003 and December  2004, in accordance with generally accepted government auditing  standards.
section_title: Status of HUD’s Efforts to Improve Administration of the Section 202 Program
paragraphs: Our May 2003 report to the Senate Special Committee on Aging noted the  significance of the Department of Housing and Urban Development’s  (HUD) Section 202 Supportive Housing for the Elderly (Section 202)  Program, which subsidizes the development of rental housing and provides  rental assistance for elderly households with very low incomes. Among  other things, the report found that many Section 202 properties  encountered delays before beginning construction, and we made several  recommendations to improve the program’s timeliness and oversight.  Specifically, we recommended that HUD:  Evaluate the effectiveness of the current methods for calculating the  capital advances that project sponsors receive and 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;  Provide regular training to ensure that all field office staff are  knowledgeable of and held accountable for following current  processing procedures required to approve projects to begin  construction;  Update the Section 202 program handbook to reflect current processing   Improve the accuracy and completeness of information that field staff  enter in the program’s database system and expand the system’s  capabilities to track key project processing stages.
At the time we completed our work, HUD had made some progress but had  not fully implemented these four recommendations. First, in our 2003  report, we found that construction of Section 202 properties was  sometimes delayed, in part because HUD awarded inadequate capital  advance amounts. As a result, sponsors had to put off construction while  they sought additional funding. We recommended that HUD evaluate the  effectiveness of its methods for calculating capital advances and make any  changes necessary to cover the development costs of Section 202 projects.  HUD commissioned a study to examine how the development cost limits  used to calculate capital advance amounts compared with indicators of  local construction costs and to recommend any needed changes in limits  for high-cost areas. A HUD official said that the agency received the results  of the study in the fall of 2004, but had not determined whether to make any  changes in its methods for calculating capital advances.
In addition, HUD had not implemented the two recommendations related  to training field staff and updating the Section 202 program handbook. We  concluded in our 2003 report that providing adequate formal training for  field office staff responsible for reviewing Section 202 properties before  approving them to begin construction and issuing an updated program  handbook could reduce delays in approving projects for construction by  ensuring that staff were accountable for applying and interpreting HUD  policies and procedures consistently. HUD agreed with these  recommendations. According to senior agency officials, HUD’s goal at the  time we completed our work was to provide formal training to field staff in  fiscal year 2005 in the technical implementation of the agency’s new rules  for using Low-Income Housing Tax Credits or other mixed financing to help  fund Section 202 properties. These officials also said that HUD’s goal was  to update its program handbooks in fiscal year 2005 to reflect these new  rules and other updates to policies and procedures.
Although HUD had not fully implemented our recommendations for  improving the timeliness of the Section 202 program, the number of  delayed Section 202 properties had declined. In our 2003 report, we found  that construction on 169 properties that had received Section 202 capital  advance awards had been delayed as of the end of fiscal year 2002. By  November 2004, all but 18 of these properties had been approved for  construction, according to our analysis of a report prepared by HUD. These  18 properties had been awarded capital advances in fiscal years 1998  through 2000. An additional 108 projects funded in fiscal years 2001 and  2002 had been delayed, for a total of 126 delayed projects as of November  10, 2004. Senior HUD officials said that management staff in headquarters  were monitoring the progress of these delayed projects by meeting  quarterly with field office managers to discuss steps that could be taken to  help the projects proceed to construction.
Finally, HUD had identified needed enhancements to its program database  but had not implemented the improvements, as we suggested. To improve  HUD’s oversight of the Section 202 program, we recommended that HUD  improve the accuracy and completeness of information entered into its  program database and expand the system’s capabilities to track key stages  of the development process. Senior HUD officials said that the agency had  hired a new contractor in the summer of 2004 to work on the program  database and had developed a list of needed enhancements that would  address our recommendation. The list included improving the system’s  ability to track properties’ progress, correcting data errors, and automating  reports. However, the officials did not have a timeline for when they  expected the enhancements to be complete.
section_title: Summaries of Federal Housing Programs That Serve the Elderly
paragraphs: This appendix presents information on 23 federal programs we identified  that provide housing assistance to the elderly. The programs, which are  administered by the departments of Agriculture (USDA) and Housing and  Urban Development (HUD), are organized alphabetically by agency into  three categories. The first category includes programs that are targeted to  the elderly, the second programs that are targeted to the elderly and  disabled, and the third programs that are not targeted to the elderly or  disabled but have special features for the elderly. This appendix includes  active programs as well as programs that no longer actively produce or  subsidize new units yet still fund existing units.
In general, both HUD and USDA programs target families at lower income  levels. HUD programs target families with incomes that are: extremely low  (no more than 30 percent of an area’s median), very low (no more than 50  percent of an area’s median), and low (no more than 80 percent of an area’s  median). USDA programs also target families with incomes that are very  low and low. In addition, some USDA programs target families with  moderate incomes (no more than 115 percent of an area’s median).
According to HUD and USDA officials, the terms “family” and “household”  are generally used interchangeably. HUD’s definition of family specifically  includes elderly families, which are families whose head, spouse, or sole  member is a person who is at least 62 years of age. It may include two or  more persons who are at least 62 years of age living together or one or  more persons who are at least 62 years of age living with one or more live- in aides. In general, USDA’s definition of an elderly household also includes  the disabled—that is, the head, spouse, or sole member is at least 62 years  old or is a disabled person of any age. However, for the Section 504 grants  and Section 538 programs, nonelderly disabled households are not  included in the definition of elderly.
Project-based rental assistance provides subsidies for tenants in specific  properties so that the subsidy is not portable if a tenant moves. Tenant- based rental assistance provides vouchers for eligible tenants to rent single  or multifamily units. Through both project-based and tenant-based forms of  rental assistance, the renter generally pays 30 percent of adjusted income  towards rent.
Service coordinators are individuals that can generally be hired to work in  public or other federally subsidized multifamily housing to assist residents  in obtaining supportive services.
For each program, we identify the federal agency responsible for  administering the program, the type of assistance provided, and the type of  housing. We also provide brief descriptions of (1) the program’s purpose  and objectives; (2) how the program is administered; (3) eligibility  requirements; (4) special features for the elderly; (5) supportive services  provided; and (6) available data on the extent to which the program targets  or serves the elderly.
We obtained the information for the summaries from the Catalog of Federal  Domestic Assistance, program fact sheets, program handbooks, various  HUD and USDA databases, and agency officials.
section_title: Additional Housing Programs
paragraphs: This appendix describes some additional housing programs that can  benefit the elderly but that either did not meet our definition of housing  assistance or were not considered by agency officials to be “key” in  assisting the elderly. The appendix does not include all of the housing  assistance programs that serve the elderly.
A variety of federal agencies are responsible for these programs, including  the departments of Agriculture (USDA), Health and Human Services  (HHS), Housing and Urban Development (HUD), and Veterans Affairs (VA).  The programs are organized in alphabetical order according to their  administering agency.
subsections: section_title: Department of Agriculture
subsections: section_title: Community Facilities Direct Loan, Guaranteed Loan, and Grant Programs
paragraphs: These programs provide a direct loan, guaranteed loan, or project grant  assistance to construct, enlarge, extend, or otherwise improve community  facilities, such as medical clinics, schools, fire and rescue stations, and  child care centers for public use in rural areas. These programs finance a  range of service centers for the elderly, including nursing homes, boarding  care, assisted care facilities, adult day care, and intergenerational care  facilities.
To be eligible, applicants must be entities such as city, county, and state  agencies; private nonprofit corporations; or federally recognized tribal  governments. Priority is given to projects that will enhance public safety or  provide health care facilities.
section_title: Section 514/516 Farm Labor Housing Loans and Grants
paragraphs: This program provides loans or project grants to provide decent, safe, and  sanitary low-rent housing for domestic farm laborers. Loans are available  to farmers, family farm partnerships, family farm corporations, or  associations of farmers. Loans and grants are available to states, public or  private nonprofit organizations, federally recognized Indian Tribes, and  nonprofit corporations of farm workers. Grants are available to eligible  applicants only when there is a pressing need and when such facilities  cannot be obtained without grant assistance. Loans are usually for 33 years  at 1 percent interest, and grants may cover up to 90 percent of development  costs.
section_title: Section 533 Rural Housing Preservation Grants
paragraphs: This program provides grants to sponsoring organizations for the repair or  rehabilitation of housing for very low- and low-income rural residents. To  be eligible, an applicant must be a state or political subdivision, public  nonprofit corporation, Indian tribal corporation authorized to receive and  administer housing preservation grants, private nonprofit corporation, or a  consortium of such entities. Organizations may use less than 20 percent of  the Housing Preservation Grant funds for program administration  purposes, such as to hire personnel and pay necessary and reasonable  administrative expenses. Eighty percent or more of the funds must be used  for loans, grants, or other assistance on individual homes, homeowners,  rental properties, or cooperatives to pay any part of the cost for repair or  rehabilitation of structures.
section_title: Department of Health and Human Services
subsections: section_title: Low-Income Home Energy Assistance Program
paragraphs: This federally funded program helps low-income households meet their  home heating and cooling needs. The program provides funding to states,  federally- or state- recognized Indian tribes and tribal organizations, and  insular areas, such as Puerto Rico and Guam, in the form of block grants  for home energy assistance, energy crisis intervention or assistance, and  low-cost residential weatherization and other energy-related home repair.  The program targets (1) households with a high energy burden (those  households with the lowest incomes and highest home energy costs), and  (2) vulnerable households, including those with frail older individuals,  individuals with disabilities, and very young children.
section_title: Department of Housing and Urban Development
subsections: section_title: Community Development Block Grant Program
paragraphs: According to the Congressional Research Service, this program is the  largest source of federal financial assistance for state and local  governments’ community development and neighborhood revitalization  activities. The program’s objective is to develop viable urban communities  by providing housing and expanding economic opportunities, principally  for individuals with low to moderate incomes. For example, Community  Development Block Grant funds have been used to rehabilitate affordable  senior housing, construct senior centers, and provide services such as  congregate meals and transportation.
section_title: Home Equity Conversion Mortgages
paragraphs: This program enables elderly homeowners to withdraw some of the equity  in their home in the form of monthly payments for life or a fixed term, or in  a lump sum, or through a line of credit. This reverse mortgage program  allows families to stay in their home while using some of its equity. The  total income that an owner can receive through the program is the  maximum claim amount, which is calculated with a formula including the  age of the owner, the interest rate, and the value of the home. The borrower  remains the owner of the home and may sell it and move at any time,  keeping the sales proceeds that exceed the mortgage balance. No  repayment is required until the borrower moves, sells, or dies.
section_title: HOME Investment Partnerships Program
paragraphs: This program is a federal formula block grant to state and local  governments designed to create affordable housing for low-income  households. The program provides funds to states and localities to build,  buy, and rehabilitate affordable housing for rent or homeownership. Also,  funds can be used to provide direct rental assistance to low-income people.  For rental housing, at least 90 percent of HOME funds must benefit low-  and very low-income families at 60 percent of the area median income; the  remaining ten percent must benefit families below 80 percent of the area  median income. Assistance to homeowners and homebuyers must go to  families below 80 percent of the area median. HOME gives grantees the  flexibility to use a variety of mechanisms to fund housing projects that  meet local priorities, and is routinely combined with other public and  private financing for affordable housing such as Housing Choice Vouchers  and the Low-Income Housing Tax Credit.
section_title: Housing Counseling Assistance Program
paragraphs: This program provides counseling to consumers on seeking, financing,  maintaining, renting, or owning a home. The Housing Counseling  Assistance Program enables individuals wanting to rent or own housing— whether through a HUD program, a Veterans Affairs program, other  Federal programs, a State or local program, or the regular private market— to get the counseling needed to make their rent or mortgage payments and  to be a responsible tenant or owner in other ways. The counseling is  provided by HUD-approved housing counseling agencies.
There are three strategic goals for the program: (1) to improve the quality  of renter and homeowner education, (2) to develop a reliable stream of  funding and resources for counseling agencies, and (3) to enhance  coordination among local housing providers.
section_title: Section 203(b) Mortgage Insurance
paragraphs: This program promotes homeownership among families with low to  moderate incomes by providing mortgage insurance for the purchase or  refinancing of a principal residence. This program provides mortgage  insurance to protect lenders, such as mortgage companies, banks and  savings and loan associations, against the risk of default on loans to  qualified buyers. Insured loans may be used to purchase new or existing  one- to four- family homes, as well as to refinance debt. The insurance  allows homebuyers to finance up to 97 percent of the home’s cost through  their mortgage.
section_title: Section 203(k) Rehabilitation Mortgage Insurance
paragraphs: This program enables homebuyers and homeowners to finance the  purchase (or refinancing) of a house that is at least a year old and the cost  of its rehabilitation through a single mortgage. The cost of rehabilitation  must be at least $5000, but the total value of the property must still fall  within the mortgage limit for the area.
section_title: Section 220 Mortgage Insurance (Urban Renewal Mortgage Insurance)
paragraphs: This program provides federal insurance for mortgage loans on multifamily  rental projects located in urban renewal areas and areas where local  governments have undertaken designated revitalization activities. The  purpose of Section 220 is to encourage the development of quality rental  housing in urban areas targeted for overall revitalization, and to insure  lenders against loss on mortgage defaults. The maximum amount of the  mortgage loan may not exceed 90 percent of the estimated replacement  cost for new construction or 90 percent of the estimated cost of the repair  and the estimated value of the property before the repair for substantial  rehabilitation.
section_title: Section 234(c) Mortgage Insurance–Purchase of Units in Condominiums
paragraphs: This program insures loans for terms of up to 30 years for the purchase of a  unit in a condominium building. The building must contain at least four  dwelling units and can be detached or semidetached, a rowhouse or   walk-up, or an elevator structure. The insurance covers loans made by  lending institutions such as mortgage companies, banks, and savings and  loan associations.
section_title: Section 811 Supportive Housing for Persons with Disabilities
paragraphs: This program is designed to allow very low-income adults with disabilities  to live independently in the community by funding the development of  rental housing with appropriate supportive services. HUD provides  interest-free capital advances to nonprofit sponsors to help finance the  development of supportive housing. The advance does not have to be  repaid as long as the housing remains available for very low-income  persons with disabilities for at least 40 years. The program also provides  project rental assistance, which covers the difference between the  operating costs of the development as approved by HUD and the tenants’  contribution toward rent (usually 30 percent of adjusted income). Each  project must have a supportive services plan. The services offered may  vary with the target population but could include case management,  training in independent living skills, and assistance in obtaining  employment.
section_title: Title I (Property Improvement Loan Insurance for Improving All Existing Structures and Building of New Nonresidential Structures)
paragraphs: This program facilitates the financing of improvements to homes and other  existing structures and the building of new nonresidential structures. The  maximum loan amount is $25,000 for improving a single family home or for  improving or building a nonresidential structure. For improving a  multifamily structure, the maximum loan amount is $12,000 per family unit,  not to exceed a total of $60,000 for the structure. HUD insures private  lenders against losses of up to 90 percent of any single loan.
section_title: Department of Veterans Affairs
subsections: section_title: VA Homeless Providers Grant and Per Diem Program
paragraphs: This program provides funding to community agencies providing services  to homeless veterans. The program’s purpose is to help homeless veterans  achieve residential stability, increase their skill levels and income, and  obtain greater self-determination by promoting the development of housing  with supportive services. Only programs with supportive housing or  service centers are eligible for the two levels of funding: grants and per  diem.
section_title: VA Home Loans
paragraphs: This program helps veterans, certain service personnel, and certain  unmarried surviving spouses of veterans obtain credit for the purchase,  construction, or improvement of homes on more liberal terms than are  generally available to nonveterans. Lenders, such as mortgage companies,  savings and loan associations, or banks, make the loans and VA provides  the guarantee. The amount guaranteed varies with the amount of the loan  and previous use of the program. With the current maximum guarantee, a  veteran who has not previously used the benefit may be able to obtain a  loan up to $240,000, depending on the borrower’s income level and the  appraised value of the property.
section_title: Federal Home Loan Banks
subsections: section_title: Affordable Housing Program
paragraphs: This program subsidizes the purchase, construction, rehabilitation, or  refinancing of (1) owner-occupied housing for very low- to moderate- income households, and (2) rental housing in which very-low-income  households can afford and will occupy at least 20 percent of the units. The  Federal Home Loan Banks offer both grants and loans with below-cost  interest rates.
section_title: Community Investment Program
paragraphs: This program provides a favorably priced source of wholesale funds for any  member involved in lending for community and economic development.  The funds can be used for development of commercial projects,  infrastructure improvements, or business that creates jobs. The funds are  available to finance home purchases by families whose income does not  exceed moderate-income levels, for purchase or rehabilitation of housing  for occupancy by families whose income does not exceed moderate-  income levels, or for commercial and economic development activities that  benefit low- and moderate-income families or neighborhoods.
section_title: Internal Revenue Service (IRS)
subsections: section_title: Low-Income Housing Tax Credit
paragraphs: This tax credit program, which IRS and the states administer jointly, is the  principal federal program designed to support the development and  rehabilitation of housing for low-income households. Under this program,  states are authorized to allocate federal tax credits as an incentive to the  private sector to develop low-income rental housing. In their guidelines for  the distribution of tax credits, some states have established preferences for  properties intended for the elderly, but such a preference is not a federal  requirement. Annually, IRS allocates tax credits to each state. For 2005, the  credit is equal to $1.85 per state resident. Investors that provided financing  may take the tax credits annually for 10 years to offset federal taxes. At a  minimum, the owner must agree to make (1) 20 percent of the property  units affordable to households with incomes at or below 50 percent of the  area median income or (2) 40 percent of the units affordable to households  with incomes at or below 60 percent of the area median.
section_title: Comments from the Department of Housing and Urban Development
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to those named above, Emily Chalmers, Natasha Ewing, Alison  Martin, John McGrail, Marc Molino, Lisa Moore, John Mingus, and Julianne  Stephens made key contributions to this report.