Veterans Affairs Homeless Programs: Implementation of the	 
Transitional Housing Loan Guarantee Program (16-MAR-05, 	 
GAO-05-311R).							 
                                                                 
In 1998, Congress passed the Veterans Programs Enhancement Act,  
which authorized the Department of Veterans Affairs (VA) to	 
establish a new loan guarantee program for the construction or	 
rehabilitation of multifamily transitional housing projects	 
specifically designed to provide housing for homeless veterans.  
The program is intended to increase the amount of housing	 
available, as well as provide other services to encourage	 
addiction recovery and reestablish work and social relationships.
GAO was asked to examine why no multifamily housing projects are 
operational, given that the VA's loan guarantee program was	 
authorized 6 years ago. Specifically, GAO was asked to provide	 
information on (1) actions VA has taken to implement the	 
Transitional Housing Loan Guarantee Program and (2) issues that  
have affected program implementation.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-311R					        
    ACCNO:   A19616						        
  TITLE:     Veterans Affairs Homeless Programs: Implementation of the
Transitional Housing Loan Guarantee Program			 
     DATE:   03/16/2005 
  SUBJECT:   Government guaranteed loans			 
	     Housing construction				 
	     Housing programs					 
	     Housing repairs					 
	     Program evaluation 				 
	     Program management 				 
	     Urban development programs 			 
	     Veterans						 
	     Veterans benefits					 
	     Federal aid for housing				 
	     Federal aid programs				 
	     Schedule slippages 				 
	     VA Transitional Housing Loan Guarantee		 
	     Program						 
                                                                 

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GAO-05-311R

United States Government Accountability Office Washington, DC 20548

March 16, 2005

The Honorable Christopher H. Smith House of Representatives

Subject: 	Veterans Affairs Homeless Programs: Implementation of the
Transitional Housing Loan Guarantee Program

In 1998, Congress passed the Veterans Programs Enhancement Act, which
authorized the Department of Veterans Affairs (VA) to establish a new loan
guarantee program for the construction or rehabilitation of multifamily
transitional housing projects specifically designed to provide housing for
homeless veterans. The program is intended to increase the amount of
housing available, as well as provide other services to encourage
addiction recovery and reestablish work and social relationships. You
asked us to examine why no multifamily housing projects are operational,
given that the loan guarantee program was authorized over 6 years ago.

Specifically, you asked us to provide information on (1) actions VA has
taken to implement the Transitional Housing Loan Guarantee Program and (2)
issues that have affected program implementation.

To provide this information, we reviewed documentation for the
Transitional Housing Loan Guarantee Program; the Federal Credit Reform Act
of 1990 and other applicable criteria, such as Office of Management and
Budget (OMB) circulars and a Federal Accounting Standards Advisory Board
technical release; OMB's role in federal credit programs; and our past
reports on housing for homeless veterans and other federal credit
programs. We also interviewed the program development contractor and VA
and OMB officials to obtain their views on program development and any
issues that may have impacted implementation. Our work was performed from
September 2004 through March 2005 in accordance with generally accepted
government auditing standards.

In summary, we found that since enactment of the legislation authorizing
the loan program in 1998, VA has drafted regulations; designed the
program, including working with program contractors to develop the loan
terms and supporting infrastructure for processing and administering the
loans; and consulted with OMB and sponsors (potential loan recipients) to
conceive the initial housing projects. Program implementation has been
affected by the challenges associated with creating VA's first
transitional housing loan guarantee program for homeless veterans,
deciding on program financing and structure including whether VA or the
Department of Housing and Urban Development should manage the program,
replacing the initial program development contractor, and addressing
delays

associated with project-specific, local issues such as historical
preservation and obtaining land parcels. Enclosure I contains briefing
slides on our findings.

We provided a draft of this report to VA for comment. In its written
comments, VA concurred with the report's findings. VA also provided
technical comments, which we incorporated. (See encl. II for a copy of
VA's comments.)

We are sending copies of this report to the Chairman and Ranking Minority
Member,
House Committee on Veterans' Affairs; the Chairman and Ranking Minority
Member,
Senate Committee on Veterans' Affairs; and the Secretary of Veterans
Affairs. We will
also make copies available to others upon request. In addition, the report
will be
available at no charge on GAO's Web site at http://www.gao.gov. If you or
your staff
have any questions about this report, please contact me at (202) 512-7101
or Michael
T. Blair, Jr., Assistant Director, at (404) 679-1944. Aditi Shah Archer
and Michael
Tropauer made key contributions to this report.

Sincerely yours,

Cynthia A. Bascetta
Director, Health Care-Veterans'

Health and Benefits Issues

Enclosures - 2

                                    (290417)

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