Homelessness: Information on and Barriers to Assistance Programs
Providing Foreclosed Property (Chapter Report, 09/30/93,
GAO/RCED-93-182).

The Department of Housing and Urban Development (HUD), the Department of
Veterans Affairs, the Farmers Home Administration, and the Resolution
Trust Corporation have all developed procedures for choosing properties
from their inventories for sale or lease to nonprofit groups that assist
the homeless.  Through fiscal year 1992, the four agencies had sold
about 560 single family properties and leased nearly 2,000 to homeless
groups on terms more favorable than offered to the general public.  HUD
accounted for more than 90 percent of this activity.  At the time of
these transactions, the four agencies had nationwide inventories of
about 41,000 other single family properties available for purchase and
4,000 available for lease.  Homeless groups see a great need for, and
are interested in acquiring, federal foreclosed properties, but only
about five percent of those in GAO's national survey had done so. GAO
found lack of information to be the main barrier for organizations that
had not participated in the agencies' programs. Organizations face
additional barriers once they obtain enough information and decide to
participate.  Those participating in HUD's program overwhelmingly cited
the costs they were expected to pay and difficulty in getting funding
from federal and other sources as the main roadblocks to their acquiring
more property. Although these groups find multifamily housing useful,
they have obtained almost none from the four programs.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-93-182
     TITLE:  Homelessness: Information on and Barriers to Assistance 
             Programs Providing Foreclosed Property
      DATE:  09/30/93
   SUBJECT:  Surplus federal property
             Property disposal
             Real estate sales
             Housing programs
             Low income housing
             Public assistance programs
             Foreclosures
             Non-profit organizations
             Information disclosure
             Homelessness
IDENTIFIER:  Colorado
             Florida
             Texas
             California
             Georgia
             Virginia
             HUD Single Family Property Disposition Homeless Initiative
             VA Shelter for Homeless Veterans Through Acquired Property 
             Sales Program
             FmHA Homes for the Homeless Program
             RTC Affordable Housing Disposition Program
             HUD Supportive Housing Demonstration Program
             Delaware
             Hawaii
             Maine
             South Dakota
             Vermont
             Wyoming
             Michigan
             Mississippi
             Oklahoma
             Louisiana
             Alabama
             HUD Section 8 Housing Assistance Program
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on Governmental Affairs, U.S. 
Senate

September 1993

HOMELESSNESS - INFORMATION ON AND
BARRIERS TO ASSISTANCE PROGRAMS
PROVIDING FORECLOSED PROPERTY

GAO/RCED-93-182

Homelessness


Abbreviations
=============================================================== ABBREV

  FHA - Federal Housing Administration
  FIRREA - Financial Institutions Reform, Recovery, and Enforcement
     Act
  FmHA - Farmers Home Administration
  GAO - General Accounting Office
  HUD - Department of Housing and Urban Development
  IAC - Interagency Council on the Homeless
  IRS - Internal Revenue Service
  RTC - Resolution Trust Corporation
  VA - Department of Veterans Affairs

Letter
=============================================================== LETTER


B-253699

Letter Date Goes Here

The Honorable John Glenn
Chairman, Committee on
 Governmental Affairs
United States Senate

Dear Mr.  Chairman: 

This report responds to your request that we review programs that
make federally held real estate properties available to nonprofit
organizations that assist the homeless.  The report discusses
programs administered by the Department of Housing and Urban
Development (HUD), the Department of Veterans Affairs, the Farmers
Home Administration, and the Resolution Trust Corporation.  The
report (1) identifies options by which the Congress could help reduce
nonprofit organizations' financial barriers to acquiring such
property, (2) recommends that the agencies better disseminate key
information about the programs and available properties, and (3)
recommends that the Secretary of HUD decide whether to make
multifamily properties available. 

As arranged with your office, unless you publicly announce its
contents earlier, we will make no further distribution of this report
until 30 days after the date of this letter.  At that time, we will
send copies of the report to the heads of affected agencies and to
other interested parties.  We will make copies available to others
upon request. 

This work was performed under the direction of Judy A. 
England-Joseph, Director, Housing and Community Development Issues,
who can be reached on (202) 512-7631 if you or your staff have any
questions.  Major contributors to this report are listed in appendix
IV. 

Sincerely yours,

J.  Dexter Peach
Assistant Comptroller General


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

Each year, the Department of Housing and Urban Development (HUD), the
Department of Veterans Affairs (VA), the Farmers Home Administration
(FmHA), and the Resolution Trust Corporation (RTC) dispose of
thousands of real estate properties acquired through mortgage
foreclosures or takeovers of failed savings and loan institutions. 
The Chairman, Senate Committee on Governmental Affairs, asked GAO to
review programs through which the four agencies make such properties
available to nonprofit organizations that assist the homeless.  As
agreed with the Chairman's office, GAO determined (1) the procedures
each agency follows, the number of properties the agencies have
provided, and the number and geographic distribution of the
properties in their inventories; (2) how well the agencies publicize
and promote their programs (outreach); and (3) any obstacles to
acquiring property that nonprofit homelessness assistance
organizations have encountered. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

HUD and VA insure private lenders against losses on home mortgages to
low-income households and veterans, while FmHA makes home mortgage
loans directly to qualified, low-income rural Americans.  HUD also
administers programs for insuring financial institutions against
losses on mortgages to developers who construct or rehabilitate
multifamily rental housing projects (those having more than four
dwelling units).  When a borrower does not make scheduled mortgage
payments, the lender may acquire the property through a legal process
known as foreclosure.  When this occurs, these federal agencies
usually pay the mortgage, get title to the property, and then become
responsible for disposing of it.  Similarly, RTC manages and disposes
of real estate and other assets taken over from failed federally
insured savings and loan institutions.  In disposing of its
properties, each agency has as an objective to minimize its financial
loss by obtaining the fastest and largest return possible.  However,
each agency also has programs through which nonprofit organizations
assisting the homeless can purchase certain properties at reduced
prices or lease properties at nominal fees.  The FmHA, HUD, and VA
programs are specifically designed to assist the homeless.  RTC's
program is designed to assist the larger population of very low to
moderate income people, of which the homeless are a part. 

To identify any obstacles to participation in the programs that
nonprofit organizations may have encountered and to assess the
effectiveness of the agencies' outreach efforts, GAO conducted two
random sample surveys of nonprofit homelessness assistance
organizations during the last half of 1992.  One survey represents
about 6,600 organizations throughout the United States that were
interested in providing shelter and other services to the homeless
but had not participated in any of the four programs.  The other
survey represents 328 of the 427 organizations that had participated
in HUD's homelessness assistance disposition program (the only
program with significant participation). 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

Each agency has developed procedures for selecting eligible
properties from its inventory for sale or lease to nonprofit
organizations on terms more favorable than offered to the general
public.  The types of properties and costs the agencies expect
nonprofits to incur reflect an attempt to balance assisting the
homeless with minimizing the agencies' financial losses.  Through
fiscal year 1992, the agencies had sold about 560 single family
properties (defined by HUD and RTC as those with four or fewer
dwelling units) and leased almost 2,000 to homelessness assistance
organizations.  More than 90 percent of this activity occurred
through HUD's program.  While inventories change constantly, at that
time there were about 41,000 other single family properties available
for purchase and 4,000 available for lease, about 80 percent of which
were in HUD's program.  Although about three-fourths of the
properties available for sale were located in 14 states, there were
some properties in every state. 

Homelessness assistance organizations see a great need for, and are
interested in acquiring, federal foreclosed properties, but only
about 5 percent of those in GAO's national survey had done so.  GAO
found lack of information to be the major barrier for organizations
that had not participated in the agencies' programs.  Many of the
nonparticipant organizations were totally unaware of the programs,
and those that were aware cited lack of information about procedures
and about the specific properties available locally as their major
barriers--evidence that the agencies' outreach had not been
effective.  The organizations rated the agencies' outreach efforts as
less than satisfactory, but when asked how these efforts could be
improved, the organizations for the most part suggested actions
already called for in the agencies' outreach policies--an indication
that outreach efforts at the local level may need to be intensified
or better targeted to interested organizations. 

Organizations face additional barriers once they obtain sufficient
information and decide to participate.  Those that had participated
in HUD's program overwhelmingly cited the costs they were expected to
pay and the difficulty they had experienced in getting funding
assistance from federal and nonfederal sources as their major
barriers to acquiring additional property.  Although these
organizations find multifamily properties useful, they have obtained
almost none through the four programs.  With better targeted
outreach, RTC could be a more useful source of multifamily properties
to organizations assisting the homeless.  HUD is the only other
agency holding significant numbers of multifamily properties, but HUD
does not include these properties in its program for the homeless. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      PROGRAM PROCEDURES LIMIT
      INVENTORY AVAILABLE TO
      ORGANIZATIONS
-------------------------------------------------------- Chapter 0:4.1

At the time GAO surveyed homelessness assistance organizations, the
four agencies limited, in some way, the number and/or quality of
properties eligible for their programs.  For example, HUD both sold
and leased property, but each year leased no more than 10 percent of
the inventory in any of its 10 regions.  VA was not authorized to
lease and offered for sale only "hard to sell" properties that the
general public had not purchased after 6 months.  Each agency also
offered program participants various price discounts or other
advantages over the general public.  For example, HUD and FmHA
charged no more than $1 per year for leased property and sold
property at 10-percent discounts, while VA discounted 50 percent. 
FmHA and RTC provided purchasers favorable financing, but HUD and VA
did not.  HUD accounted for more than 90 percent of the properties
leased and sold and nearly 80 percent of those available for purchase
through the programs.  About 31 percent of the properties available
for purchase were in Colorado, Florida, and Texas; another 19 percent
were in California, Georgia, and Virginia. 


      MORE EFFECTIVE OUTREACH IS
      NEEDED TO REDUCE
      INFORMATIONAL BARRIERS
-------------------------------------------------------- Chapter 0:4.2

About 95 percent of the homelessness assistance organizations had
never participated in any of the four programs even though a majority
said properties were needed in their area and that they were
interested in acquiring properties.  About 65 percent of the
nonparticipant organizations identified lack of information about
what properties were available in their service area and lack of
staff knowledgable about acquisition procedures as barriers to their
participation.  A large portion of the organizations were not even
aware of the agencies' programs, and at least two-thirds of the
organizations that were aware of any program rated the agency's
outreach as less than satisfactory.  The specific actions these
organizations suggested to improve outreach (such as advertising in
newspapers, mailing out information, and providing toll free
telephone information) were for the most part already called for in
the agencies' outreach policies or were activities undertaken by the
federal coordination entity known as the Interagency Council on the
Homeless (IAC). 


      OTHER BARRIERS FACE
      ORGANIZATIONS ONCE
      INFORMATION IS OBTAINED
-------------------------------------------------------- Chapter 0:4.3

Nonprofit organizations that had participated in HUD's program
obviously had overcome informational barriers, but they cited other
barriers that made acquiring more property difficult.  (Because of
the low level of activity, GAO did not specifically survey
participants in the other agencies' programs.) The costs of
purchasing, rehabilitating, and continuing operations were seen as
barriers by 44 to 61 percent of the participant organizations. 
Purchase prices averaged $34,877, while rehabilitation costs averaged
$18,825 for purchasers and $4,249 for leasers.  Annual mortgage
payments averaged about $5,650 for purchasers, and average costs for
most other operating expense items were higher for purchased property
than for leased. 

The low chance of getting federal funds to help pay their costs was
another significant barrier, cited by 68 percent of the HUD program
participants.  Only 22 percent of all participating organizations had
used one or more of the seven other available HUD programs to help
defray their foreclosed property costs.  About one-half said that
funds from the HUD programs, when available, were not accessible in a
timely manner--an indication that the application and processing
time, or the funding cycles, for the other programs did not fit the
organizations' needs.  A similar barrier, "too little funding
assistance from nonfederal sources," was a barrier for 68 percent of
the organizations. 


      PROGRAMS HAVE NOT BEEN A
      USEFUL SOURCE OF MULTIFAMILY
      PROPERTY
-------------------------------------------------------- Chapter 0:4.4

Both participant and nonparticipant organizations indicated an unmet
need for multifamily property.  Only 1 percent of participants in
HUD's program (which has been limited to single family property) had
actually obtained multifamily property from any of the four programs
even though 22 percent said that this would be their single most
useful type of property.  Multifamily property would be useful to 47
percent of the approximately 6,600 nonparticipant organizations
represented by our national survey and most useful to about 20
percent. 

Only RTC and VA have made multifamily property eligible for inclusion
in their programs for the homeless thus far.  As of November 1992,
RTC said it had sold 161 multifamily properties to public agencies
and nonprofit organizations but, because its program is designed to
serve the larger population of very low to moderate income people,
had not tracked how many went to homelessness assistance
organizations.  In September 1992, VA had about 8,500 properties in
its inventory but believed none were multifamily.  HUD is the only
other agency holding a substantial number of multifamily properties: 
187 residential properties (as of January 1993) with more than 31,500
living units (most of which are usually occupied) and an unknown
number of vacant properties, such as nursing homes and mobile home
parks.  HUD has not included these properties in its program to
assist the homeless, although HUD program staff have proposed ways of
doing so. 


   MATTERS FOR CONGRESSIONAL
   CONSIDERATION
---------------------------------------------------------- Chapter 0:5

If the Congress wants to use federal foreclosed property more
extensively to assist the homeless, it will likely have to provide
more federal financial assistance to nonprofit homelessness
assistance organizations to help offset their acquisition,
rehabilitation, and operating costs.  Deciding whether and to what
extent to provide this additional assistance is a difficult policy
and budgetary decision that the Congress should make on the basis of
the balance it desires among the goals of assisting the homeless,
minimizing the government's insurance losses through the sale of
properties, and accommodating other demands for the limited supply of
federal dollars. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:6

GAO recommends that the Executive Director of the IAC, as head of the
organization responsible for overseeing and coordinating executive
branch homelessness assistance activities, initiate and coordinate a
joint effort with appropriate representatives of FmHA, HUD, RTC, VA,
and advocacy groups to develop an outreach strategy that more
effectively disseminates essential information on the property
disposition programs.  To help meet nonprofit homelessness assistance
organizations' needs, GAO recommends the Secretary of HUD establish a
policy that specifies appropriate circumstances and conditions under
which HUD-owned multifamily property can be made available to the
organizations. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:7

GAO discussed its findings and conclusions with the officials in
charge of managing the four agencies' programs.  FmHA, HUD, and RTC
officials agreed with GAO's findings and conclusions.  VA officials,
however, believed organizations had been provided ample information
about VA's program and properties through outreach by VA and IAC. 
GAO represented VA officials' position in chapter 3 but believes its
survey of assistance organizations shows that outreach has been
ineffective.  As requested, GAO did not obtain written agency
comments on a draft of this report. 


INTRODUCTION
============================================================ Chapter 1

Although homelessness is not new, it evolved during the 1980s into a
more complex problem affecting a wider segment of the population. 
Once mostly transient adult males concentrated in the core of
decaying cities, the homeless now are found in suburban and rural
areas and include women, families with children, the mentally ill,
and individuals who are employed but not earning enough to pay for
housing. 

No one knows with certainty how many homeless people there are in the
United States.  Estimates made during the 1980s vary substantially,
but to our knowledge are the best available.  For example, the
Department of Housing and Urban Development (HUD) reported that on
any given night during December 1983 and January 1984 between 250,000
and 350,000 persons were homeless.\1 Several years later, the Urban
Institute estimated that about 600,000 individuals were homeless on
any night in 1987.\2 More recently, the 1990 census gathered
information on the number and characteristics of selected components
of the homeless population but, by design, did not provide a complete
count of the nation's homeless population. 

Funded by a variety of government and private sources, services
directly assisting the homeless are typically provided at the local
level by some combination of local government agencies, nonprofit
organizations, and religious groups.  Some organizations provide only
limited emergency services, such as a meal or a bed for the night. 
Others provide longer-term housing and/or supportive services to help
homeless people overcome social problems, such as substance abuse or
mental illness, that often prevent them from living independently. 


--------------------
\1 U.S.  Department of Housing and Urban Development, A Report to the
Secretary on Homeless and Emergency Shelters, Washington, D.C.: 
Office of Policy Development and Research (1984). 

\2 Martha R.  Burt and Barbara S.  Cohen, America's Homeless: 
Numbers, Characteristics, and Programs That Serve Them, Washington,
D.C.:  The Urban Institute (1989). 


   FEDERAL RESPONSE TO
   HOMELESSNESS
---------------------------------------------------------- Chapter 1:1

The primary federal response to homelessness has been the Stewart B. 
McKinney Homeless Assistance Act, first enacted in 1987 (P.L. 
100-77) and later reauthorized in 1988 (P.L.  100-628), 1990 (P.L. 
101-625 and P.L.  101-645), and 1992 (P.L.  102-550). 

Although there have been some changes in specific programs over its
existence, the McKinney Act, through funds to state and local
governments and nonprofit organizations, has provided the homeless
with emergency food and shelter, transitional and permanent housing,
primary health care services, mental health care, alcohol and drug
abuse treatment, education, and job training.  The act also created
the Interagency Council on the Homeless to coordinate federal
homelessness assistance programs and authorized federal agencies to
turn over unneeded real and personal property to assist the homeless. 

During fiscal year 1992, there were 19 McKinney Act direct assistance
programs administered by six federal departments and agencies.\3
Through fiscal year 1992, the Congress authorized about $4.5 billion
and appropriated about $3.2 billion in total for McKinney Act
activities.  About $778 million of this amount was appropriated for
fiscal year 1992. 


--------------------
\3 The Departments of Housing and Urban Development, Health and Human
Services, Labor, Education, and Veterans Affairs and the Federal
Emergency Management Agency. 


      FEDERALLY HELD PROPERTY IS
      AN ADDITIONAL SOURCE OF
      ASSISTANCE
-------------------------------------------------------- Chapter 1:1.1

To supplement the McKinney Act programs in a time of budget
constraints, the Congress and federal agencies have turned to using
other assets already in the government's possession as a means of
providing additional assistance to the homeless.  Homes and other
real estate acquired through mortgage foreclosures or the takeover of
failed savings and loan institutions are one category of federally
held assets that has been used in this manner. 

Four federal agencies are involved in the disposition of such
property:  HUD, the Department of Veterans Affairs (VA), the
Department of Agriculture's Farmers Home Administration (FmHA), and
the Resolution Trust Corporation (RTC).  Together these agencies hold
and dispose of thousands of properties each year. 

One objective of each agency in disposing of properties is to
minimize its financial losses by obtaining the fastest and largest
return possible.  By selling foreclosed properties, agencies attempt
to recoup the costs they incur in paying claims associated with
failed mortgages or financial institutions that they insure or
otherwise guarantee. 

As directed by legislation or internal agreements, each agency also
has programs or procedures under which nonprofit organizations
providing assistance to the homeless can purchase certain properties
at reduced prices, or in some cases temporarily lease properties for
a nominal fee.  Putting properties in these programs in some
instances can reduce the financial return the agencies might
otherwise obtain.  This has been a particular concern for VA program
officials because the agency's loan guarantee program has been
operating at a loss since 1981, and VA must annually obtain
appropriations to cover its deficits.  On the other hand, leasing
property through the programs can financially benefit the government
in some instances, particularly when sales markets are slow.  Lessees
may pay certain costs (renovations, property taxes, etc.) that the
government would otherwise have to pay.  Also, having property
occupied rather than vacant can reduce costs associated with
vandalism. 


      HOW THE FEDERAL AGENCIES
      ACQUIRE PROPERTY
-------------------------------------------------------- Chapter 1:1.2

HUD insures private lenders against losses on mortgages for single
family homes made to low- and moderate-income households.  (Single
family homes are defined as those having up to four dwelling units.)
HUD also administers several programs through which it insures
financial institutions against losses on mortgages to developers and
builders who construct or rehabilitate multifamily rental housing
projects (those having more than four dwelling units).  In some
cases, HUD also subsidizes the rents for eligible low-income
households living in insured multifamily projects through Section 8
and other rent assistance programs. 

VA guarantees to repay private lenders part of the mortgage loan if
qualifying military veteran home buyers do not repay their loans in
full.  Property consisting of up to eight dwelling units is eligible
for VA mortgage insurance.  FmHA makes mortgage loans for single and
multifamily properties directly to qualified, low-income rural
Americans. 

When a borrower does not repay a mortgage loan as agreed, the lender
may acquire the property through a legal process known as foreclosure
(or occasionally through other means, such as a borrower's voluntary
conveyance of title).  For government-insured or guaranteed
mortgages, the private lender forecloses and files a claim with the
federal agency for its losses (unpaid mortgage balance and interest,
along with the costs of foreclosure and other expenses).  After the
government agency pays the claim, the lender usually transfers title
to the government.\4 HUD can also take legal action to acquire
ownership of insured multifamily property.  In the case of FmHA
direct loans, FmHA itself forecloses or accepts title through
voluntary conveyance.  Regardless of the process used, the government
agency becomes responsible for managing and disposing of the property
once it acquires title. 

RTC acquires property under somewhat different circumstances than the
three federal mortgage agencies, but its responsibility for managing
and selling the property is basically the same.  Created in 1989 by
the Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) (P.L.  101-73), RTC manages and sells the assets of failed,
federally insured savings and loan institutions.  RTC acquires some
properties among the assets of failed institutions and others through
foreclosure or similar means after it takes over an institution. 


--------------------
\4 VA does not always acquire title to a foreclosed property.  In
some cases, VA pays the lender the guarantee amount and leaves title
to the property with the lender if doing so results in a lower loss
to VA. 


      AUTHORITIES FOR AGENCIES'
      PROGRAMS TO ASSIST THE
      HOMELESS
-------------------------------------------------------- Chapter 1:1.3

Each of the four agencies involved in property disposition has
programs or procedures under which state and/or local government
agencies and nonprofit organizations can obtain properties for use in
assisting the homeless.\5 FmHA, HUD, and VA have programs designed
specifically to assist the homeless.  RTC's program is designed to
assist the larger population of very low to moderate income persons,
of which the homeless are a part. 

HUD established its program, known as the Single Family Property
Disposition Homeless Initiative, in 1983 under the Secretary's broad
legislative authority to dispose of single family properties.  As the
name implies, the program does not include multifamily properties,
and HUD has no similar program for multifamily properties.  Under
this program, HUD may sell or lease foreclosed single family
properties to nonprofit organizations (or state and local
governments) for the purpose of providing temporary shelter and
supportive services to homeless persons to help them move toward
independent living. 

The VA program, known as Shelter for Homeless Veterans Through
Acquired Property Sales, was authorized by section 9 of the Veterans'
Home Loan Program Improvements and Property Rehabilitation Act of
1987 (P.L.  100-198) and first implemented in March 1988.  Through
this program, VA is authorized to sell foreclosed properties
(consisting of up to eight dwelling units) to nonprofit organizations
(or to state and local governments) assisting homeless veterans. 

FmHA's Homes for the Homeless Program was created in 1984 by a
memorandum of understanding between FmHA and the Department of Health
and Human Services (HHS).  Under the program, FmHA properties not
otherwise targeted for immediate disposition may be sold or leased to
nonprofit (or public) organizations to provide transitional housing
for the homeless.  The 1984 agreement envisioned that HHS would act
as liaison between FmHA and recipient organizations, but in practice
FmHA field staff have dealt with the organizations directly. 

RTC's Affordable Housing Disposition Program was required by the 1989
legislation that established RTC--FIRREA.  Under this program, RTC
gives nonprofit organizations, public agencies, and qualified
families first opportunity to purchase "affordable" (relatively
low-priced) single and multifamily properties.  The properties are to
be used to provide home ownership and rental housing opportunities
for very low to moderate income families (including, but not limited
to, homeless families). 


--------------------
\5 This report addresses only nonprofit organizations' use of
federally held foreclosed properties to assist the homeless.  Public
housing agencies' use of RTC properties to house low-income persons
is addressed in our report entitled Acquiring Public Housing from RTC
(GAO/RCED-93-46R, Mar.  17, 1993). 


   NONPROFIT ORGANIZATIONS THAT
   SERVE THE HOMELESS
---------------------------------------------------------- Chapter 1:2

While state and local government agencies often play an important
role in assisting the homeless, nonprofit organizations typically
deliver a major part of direct assistance services.  While some
organizations provide only meals or food, many provide shelter on an
emergency or longer-term basis.  Still others may provide supportive
services, often in conjunction with shelter, to help the homeless
overcome social problems, such as substance abuse or mental illness,
that prevent them from living independently. 

The vast majority of the nonprofit organizations we surveyed that had
not participated in any of the four property disposition programs
provide shelter.  About 80 percent reported that they provide some
type of housing for the homeless--either emergency shelter,
transitional housing, or long-term housing.  The remainder of these
organizations did not provide shelter but assisted homeless persons
by providing prepared meals or groceries or by providing supportive
services such as substance abuse counseling and treatment, mental
health counseling, and job and life skills training.  About 74
percent of the organizations providing shelter also provided food
and/or supportive services. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:3

The Chairman of the Senate Committee on Governmental Affairs asked us
to review the programs under which FmHA, HUD, RTC, and VA make
available federally held foreclosed properties to assist the
homeless.  As agreed with the Chairman's office, we determined (1)
the procedures each agency follows, the number of properties agencies
have provided, and the number and geographic distribution of
properties in their inventories; (2) how well the agencies publicize
and promote their programs (outreach); and (3) any obstacles to
acquiring property that nonprofit homelessness assistance
organizations have encountered. 

To accomplish objectives 1 and 2, we conducted detailed audit work at
the agencies' headquarters offices in Washington, D.C., and at
offices responsible for Phoenix, Arizona; Los Angeles, California;
and Chicago, Illinois.  We selected these cities because of their
relatively high level of foreclosed properties and to achieve
coverage of diverse geographic locations and local agency offices. 
At the agency offices visited, we obtained opinions on the
homelessness assistance property programs from appropriate agency
program management officials.  We also obtained and reviewed
pertinent laws, agency regulations, other internal guidance,
statistical reports, and program files.  We did not, however, attempt
to verify the accuracy of the agencies' statistical data.  At the
field offices responsible for Chicago, Los Angeles, and Phoenix, we
also reviewed the agencies' files on local nonprofit organizations
participating in the foreclosed property programs, and we visited up
to five participating organizations in each city to discuss their
experiences with the agencies' programs.  For objective 2, we also
relied on data generated by random sample surveys of nonprofit
homelessness assistance organizations, as described in the following
section. 

To accomplish objective 3 (identifying any obstacles that nonprofit
organizations may have encountered) and to assess the effectiveness
of the agencies' outreach efforts, we conducted two random sample
surveys of nonprofit homelessness assistance organizations.  One
survey represents about 6,900 nonprofit homelessness assistance
organizations in the United States with an interest in providing
shelter and other services to the homeless.  We identified these
organizations by combining the two most comprehensive lists of direct
service providers we could find.  One list was comprised of the
organizations that obtained grants during fiscal year 1991 from the
Federal Emergency Management Agency (FEMA) to provide emergency
shelter and other services for the homeless.  The other list was
obtained from the Hope Foundation, a Texas-based nonprofit
organization that maintains a nationwide address bank of
organizations providing shelter to the homeless.  The Hope Foundation
updates its address bank twice annually using information provided by
800 advisors located throughout the country.  To the best of our
knowledge, we compiled the most inclusive list of nonprofit
homelessness assistance organizations available to date.  We mailed
questionnaires to a randomly selected sample of this population on
August 21, 1992, and collected information through December 1, 1992. 

Our other sample survey represents 328 of the 427 nonprofit
organizations that had participated in HUD's homelessness assistance
disposition program.  We relied on HUD to identify these
organizations for us.  We asked HUD to include in this population all
organizations that purchased property under the HUD program during
the period January 1989 to April 1992 and those that were leasing
property from HUD as of April 1992.  We mailed out questionnaires to
a random sample of this population on June 24, 1992, and collected
data through November 1, 1992.  Because information provided by
agency officials indicated that a very small number of homelessness
assistance organizations had participated in the FmHA, RTC, and VA
programs, we did not send a specially designed questionnaire to known
participants in these programs.  (Additional information on our
methodology for identifying both survey populations and selecting the
samples is presented in app.  I.)

Because we used samples (called probability samples) of 600 and 290
to develop our estimates, each estimate has a measurable precision or
sampling error, which may be expressed as a plus/minus figure.  A
sampling error indicates how closely we can reproduce from a sample
the results we would obtain if we were to take a complete count of
the universe using the same measurement methods.  By adding the
sampling error to and subtracting it from the estimate, we can
develop upper and lower bounds for each estimate.  This range is
called a confidence interval.  Sampling errors and confidence
intervals are stated at a certain confidence level--in this case, 95
percent.  For example, a confidence interval, at the 95-percent
confidence level, means that in 95 out of 100 instances, the sampling
procedure we used would produce a confidence interval containing the
universe value we are estimating.  (Sampling errors associated with
our statistical estimates are shown in app.  II.)

We also reviewed reports addressing the agencies' programs prepared
by their respective Offices of the Inspector General and relevant
past GAO reports.  Our audit work was performed between November 1991
and April 1993 in accordance with generally accepted government
auditing standards.  As requested, we did not obtain written agency
comments on a draft of this report.  However, we discussed our
findings and potential conclusions with agency officials in charge of
managing the property disposition programs in each agency and
incorporated their comments into our final report where appropriate. 


-------------------------------------------------------- Chapter 1:3.1

Chapter 2 of this report discusses the four agencies' procedures for
making properties available to homelessness assistance organizations
and also provides information on the number of properties sold and
leased to the organizations and the geographic distribution of
available properties in inventory.  (More detailed information on the
geographic distribution of properties is presented in app.  III.)
Chapter 3 focuses on major informational obstacles faced by the
assistance organizations that have not yet participated in the
programs, and it assesses the agencies' outreach efforts.  Chapter 4
discusses other barriers homelessness assistance organizations face
after overcoming informational barriers. 


PROCEDURES AND RESULTS OF PROGRAMS
PROVIDING FORECLOSED PROPERTY TO
HOMELESSNESS ASSISTANCE
ORGANIZATIONS
============================================================ Chapter 2

FmHA, HUD, RTC, and VA make properties available for homelessness
assistance within the context of other competing
objectives--protecting the government's financial interests and
assisting other target populations they were established to serve. 
The agencies have developed various procedures for determining the
number or type of properties made available and the price charged
that officials believe strike an appropriate balance between
assisting the homeless and accomplishing their other objectives. 
Virtually all of the properties sold or leased through fiscal year
1992 were single family properties.  Together the agencies had sold
559 single family properties to homelessness assistance organizations
as of September 30, 1992, all but 54 of which were sold by HUD. 
Almost 2,000 single family properties were under lease to assistance
organizations at that time, all but 20 of which were HUD properties. 

While the number of properties in inventory changes frequently, as of
September 30, 1992, there were about 41,300 other single family
properties available for purchase and about 4,100 available for lease
through the four agencies' programs.  These properties were
concentrated in relatively few states.  About 73 percent were in the
14 states that had 1,000 or more properties each.  However, in every
state there were at least a few properties available. 


   PROGRAM PROCEDURES
---------------------------------------------------------- Chapter 2:1

Each of the four agencies has developed its own program and
procedures under which nonprofit homelessness assistance
organizations may obtain property.  The procedures in effect for each
agency at the time we surveyed homelessness assistance organizations
(June to Dec.  1992) are summarized in table 2.1.  Each agency placed
some limits on the number and/or quality of properties eligible for
the programs.  Further changes to the procedures had been made, or
were in the process of being made, as of June 1993.  These changes
and their likely effects are discussed later in this chapter. 



                                    Table 2.1
                     
                      Key Features of Programs in Effect at
                       the Time of Our Survey of Nonprofit
                      Homelessness Assistance Organizations

Program
features        HUD               VA              FmHA            RTC
--------------  ----------------  --------------  --------------  --------------
Methods of      Sale and lease    Sale only       Sale and lease  Sale and
conveyance                                                        donation

Discounts to    10% off of        50% off of      10% off of      Accepts best
sales prices    appraised value.  listed          listed          offer among
                                  price.          price.          qualified
                                                                  purchasers.

Financing       None.             None.           30-year         Market rate
terms offered                                     mortgage        mortgages: 30-
                                                  for entire      year term for
                                                  purchase        single family
                                                  price at the    property; 15-
                                                  prevailing      year term for
                                                  rate            multifamily
                                                  for FmHA's      property.
                                                  rural housing   (Below market
                                                  loan            rate available
                                                  program.        but is
                                                                  penalized in
                                                                  determining
                                                                  cash value of
                                                                  purchase
                                                                  offer.) Down
                                                                  payment of 3%
                                                                  of purchase
                                                                  price required
                                                                  for nonprofit
                                                                  organizations
                                                                  for single
                                                                  family
                                                                  property; 5%
                                                                  for
                                                                  multifamily
                                                                  property.

Lease rate      $1 per year for   Not             Usually $1 for  Not
                up                Applicable.     term            applicable.
                to 5 years.                       of lease (up
                                                  to 10
                                                  years).

Types of        Single family\a   Single\a and    Single          Single\a and
property        only.             multifamily.\b  family\a        multifamily.\b
eligible                                          only.\

Limits on       10% of total      "Hard to sell"  Properties not  Properties
numbers of      properties        properties,     meeting         valued below
properties      in inventory at   defined         quality         established
offered         start of          as those        standards for   amounts, which
                fiscal year in    unsold to       FmHA home loan  vary depending
                each              the general     program.        on the number
                HUD region.       public          Applied to      of housing
                Applies to        after 6         leased          units in a
                leased property   months.         property only.  property.
                only.

Eligible        Any nonprofit     Any nonprofit   Nonprofit       Households
organizations   organization or   organization    organizations   with adjusted
                government        or state or     or public       incomes below
                entity.           local           bodies that     115% of area
                                  government      provide         median (for
                                  agency that     transitional    single family
                                  assists         housing for     property).
                                  homeless. The   the homeless    Nonprofit
                                  organization    in rural        organizations
                                  or agency must  areas.          and public
                                  agree                           agencies that
                                  to use the                      agree to rent
                                  property                        or resell
                                  principally to                  single family
                                  assist                          property to
                                  veterans.                       households
                                                                  with adjusted
                                                                  incomes below
                                                                  80% of area
                                                                  median or that
                                                                  agree to make
                                                                  at least 35%
                                                                  of the units
                                                                  in multifamily
                                                                  property
                                                                  available to
                                                                  such families.

Organizations   None.             Certain         None.           On multifamily
given                             organizations                   property and
preference                        that provide                    bulk sales of
                                  assistance to                   single family
                                  veterans, such                  property,
                                  as                              organizations
                                  the American                    that dedicate
                                  National Red                    the most units
                                  Cross                           for low-
                                  and the                         income
                                  American                        families.
                                  Legion.

Official goal   None.             None.           5% of single    None.
for amount of                                     family
property                                          property not
to be provided                                    meeting
via program                                       standards for
                                                  home loan
                                                  program.

Agency screens  Yes.              Yes.            Yes.            Yes.
applicant
organizations
before
providing
property?

Agency          Yes.              Not             At the          Not
monitors                          applicable.     discretion of   applicable.
organizations                                     responsible
that lease                                        FmHA county
property?                                         office.
--------------------------------------------------------------------------------
\a Single family properties are defined as those with one dwelling
unit by FmHA, one to three units by VA, and one to four units by HUD
and RTC. 

\b Multifamily properties are defined as those with two or more
dwelling units by FmHA, four to eight units by VA, and five or more
units by HUD and RTC. 


      HUD PROGRAM PROCEDURES
-------------------------------------------------------- Chapter 2:1.1

HUD both sells and leases property through its program.  HUD offers
single family property (defined as four or fewer dwelling units) but
not multifamily property (those with more than four dwelling units). 
Property is sold at a 10-percent discount (at 90 percent of appraised
value) and is leased for $1 per year for periods of up to 5 years. 
HUD does not provide financing assistance to purchasing
organizations. 

HUD limits the number of properties it leases but not the number it
sells.  Each year HUD determines the maximum number of properties
that can be under lease within each of its 10 regional offices by
calculating 10 percent of each regional office's inventory at the
beginning of the fiscal year.  While some HUD officials we spoke with
characterized the 10 percent as a target or goal for the number of
properties each region strives to provide through the program, HUD
has not officially established this percentage as a program goal. 

Any nonprofit organization or government entity is eligible to
participate in HUD's program, but it must first be approved by HUD. 
To be approved, such an organization must have nonprofit status under
section 501(c)3 of the Internal Revenue Service (IRS) code and
possess what HUD judges to be sufficient managerial and financial
capacity.  Once approved for HUD's program, nonprofit organizations
were at the time of our surveys offered the exclusive right to lease
or purchase any available single family property for a period of 10
days before it was put on the market to the general public. 

HUD is required to monitor each organization leasing property (but
not necessarily each property) at least annually.  HUD must actually
visit organizations suspected of having problems but may monitor
other organizations via telephone calls and information the
organizations submit.  In a site visit, HUD staff must review the
lessee's files to ensure that the organization understands and is
meeting the program requirements and to verify information that HUD
has in its files.  The HUD staff must also interview residents during
a site visit.  Through its monitoring, HUD should verify that
appropriate supportive services are being provided, that operating
costs are reasonable and documented, that rents are within the levels
allowed, and that the leasing organization is not allowing ineligible
people to live in the properties.  Through discussions with officials
and review of files, we found the field offices we visited were
generally complying with these monitoring requirements. 

HUD officials said that careful screening and monitoring of
organizations is needed to avoid the type of program abuses that
occurred in the early stages of its leasing program.  For example, in
1990 the news media disclosed that a Texas nonprofit organization was
using some of the 97 homes it was leasing from HUD as residences for
nonhomeless tenants and relatives of organization officials.  In
1990, HUD's Los Angeles field office also discovered instances of
organizations' noncompliance with basic requirements of the leasing
program.  These included organizations leaving leased property
vacant, housing ineligible tenants, not paying property taxes, and
not keeping required records.  HUD headquarters officials responsible
for the leasing program acknowledged that inappropriate use of leased
property was once a rather widespread problem.  However, headquarters
and field officials believe that the problem has been largely
corrected through better HUD screening and monitoring of
organizations applying for and leasing property. 


      VA PROGRAM PROCEDURES
-------------------------------------------------------- Chapter 2:1.2

At the time of our surveys, VA sold but did not lease property
through its program.  Both single and multifamily property comprised
of up to 8 dwelling units were eligible for sale through VA's
program.  However, VA officials could not recall having a multifamily
property in the agency's disposal inventory.  VA began by selling
property at up to a 32-percent discount off the listed price, but in
1990 increased the discount to 50 percent.  (As discussed later in
this chapter, VA changed its discount policy again in September 1992,
about the time organizations were completing our general population
survey.) VA did not offer purchasing organizations mortgage financing
at the time of our survey, but procedures for doing so were in the
final stages of approval within the agency as of July 1993. 

VA did not set numerical limits for its program but, consistent with
the authorizing legislation, limited the program to properties that
VA had little chance of selling at a price sufficient to reduce the
liability of the Department or the veteran who defaulted on the loan. 
(Under the VA home loan program, the veteran may be indebted to VA if
the property sells for less than the veteran's indebtedness.)
Originally VA defined these so-called "hard to sell" properties as
those that did not sell to the general public within 1 year.  In
February 1990, VA reduced the criterion to properties unsold after 6
months because of a decline in the number of properties unsold after
1 year.  As with the discount, this criterion remained in effect
until September 1992, near the end of our survey period.  Like HUD,
VA has no officially established goal for the number of properties it
would like to provide through its program. 

Any nonprofit homelessness assistance organization that meets certain
criteria is eligible to participate in VA's program, but preference
is given to certain organizations approved by the Secretary, such as
the American Legion.  To be eligible for VA's program, an
organization must either provide VA with evidence that it has been
approved as an applicant for HUD's Supportive Housing Demonstration
Program\1 or evidence of adherence to the following criteria:  (1) it
has been approved as a nonprofit organization by the IRS; (2) it has
a voluntary board of directors; (3) its net earnings do not benefit
any member, founder, contributor, or individual; (4) it has an
ability to provide assistance to the homeless and is currently
providing such assistance; and (5) it follows certain required
accounting standards.  An organization purchasing property through
VA's program must also agree to use it principally to assist veterans
for a period of at least 3 years. 

Although VA offices had to maintain a record of sales, VA policy at
the time of our survey did not specifically require monitoring or
follow up of properties sold through the homeless assistance program. 
However, according to a VA official in Chicago, VA headquarters
verbally instructed field offices to periodically monitor whether a
home was still being used for homeless veterans.  VA subsequently
developed monitoring procedures for leased properties in March 1993
in connection with a test leasing program.  (This and other changes
to VA's program are discussed later in this chapter.) VA plans by the
end of August 1993 to require field offices to monitor or follow up
on sold property at least annually for 3 years to ensure it is being
used principally for veterans. 


--------------------
\1 The Supportive Housing Demonstration Program makes funds available
to state and local governments and nonprofit organizations through
two components:  (1) transitional housing to facilitate the movement
of the homeless to independent living and (2) permanent housing for
handicapped homeless persons. 


      FMHA PROGRAM PROCEDURES
-------------------------------------------------------- Chapter 2:1.3

FmHA both sells and leases property through its program.  The agency
offers single family, but not multifamily, property.  Property is
sold at a discount of 10 percent off the listed price and leased for
the minimum amount required for legality of the lease (usually $1),
which covers the entire lease period.  The lease period can be as
long as 10 years.  FmHA offered organizations that purchased property
financing at its prevailing rate for the entire purchase price. 

Like VA, FmHA does not place numerical limits on its program but does
limit the type of property included in it.  FmHA includes only so
called nonprogram properties.  These are the properties that do not
meet the quality standards required for property in its loan program
for low-income housing.  FmHA, however, has officially established a
goal of providing homelessness assistance organizations with 5
percent of its nonprogram property. 

Any nonprofit organization or public body that provides transitional
housing to the homeless in rural areas is eligible to participate in
the FmHA program.  However, FmHA requires that there be a documented
need in the community for the proposed use of leased property. 
Organizations either purchasing or leasing a property must
demonstrate their ability to pay proposed housing costs and agree not
to discriminate in employment and housing assistance. 

FmHA has no formal monitoring procedures, relying instead on the
organizations that fund the nonprofit organizations and on
discretionary monitoring by the local FmHA county supervisor. 
Occasionally, a county with a property leased or sold under this
program might be included in a broader FmHA review or assessment, and
the property would be examined as part of this review.  FmHA
officials also rely on local residents in rural communities to notify
them of problems, such as lack of upkeep or use of the property other
than for the homeless. 


      RTC PROGRAM PROCEDURES
-------------------------------------------------------- Chapter 2:1.4

Unlike the other agencies, RTC's program is not specifically designed
to assist the homeless, although nonprofit homelessness assistance
organizations are eligible to participate.  Consistent with its
legislative mandate, RTC's program is designed to provide home
ownership and rental opportunities to lower- and moderate-income
families (which includes the homeless). 

RTC sells, but does not lease, property through its program.  The
agency also donates (conveys) property with little or no value
(generally those valued at $5,000 or less).  Both single and
multifamily properties are offered. 

Households not exceeding the federally established criteria for
"moderate" income, as well as public agencies or nonprofit
organizations providing housing to "lower-income" and
"very-low-income" families, are eligible to purchase single family
property through RTC's program.  Organizations may purchase
multifamily property if they agree to set aside at least 35 percent
of the dwelling units as affordable rental housing for "lower-income"
and "very-low-income" tenants.  "Very-low-income" households are
defined as those having incomes not exceeding 50 percent of median
area income, adjusted for family size; "lower-income" as those not
exceeding 80 percent; and "moderate income" as those not exceeding
115 percent.  In the Chicago area, for example, a family of four
could earn up to $55,600 annually and be eligible to purchase a home
under the program.  RTC estimated that as of November 1992, the
average home buyer in its affordable housing program had an annual
income slightly under $23,000. 

RTC property is normally sold to the first qualified offerer
submitting an acceptable price.  RTC requires no minimum price on
single family properties sold under this program, but attempts to
obtain net realizable market value on multifamily properties.  On
sales of individual multifamily property and bulk sales of single
family property, RTC gives preference to purchasers that agree to
reserve the largest number of affordable units for lower-income and
very-low-income families for the longest period of time. 

RTC offers market rate financing to purchasers of both single and
multifamily properties.  The agency also will provide below market
financing on multifamily property but takes into account the value of
the financing discount when determining the net cash value of the bid
on a property.  When using RTC financing on single family properties,
lower-income families, nonprofit organizations, and public agencies
must make a minimum down payment of 3 percent of the purchase price. 
For moderate-income families, the minimum down payment is 5 percent
of the purchase price.  On multifamily properties, nonprofit
organizations and public agencies must pay a minimum down payment of
5 percent. 

RTC does not set numerical limits but places only its lower- priced
properties in the program.  Through the Financial Institutions
Reform, Recovery, and Enforcement Act, the Congress established
values that properties of various sizes cannot exceed.  The maximum
values for single family properties range from $67,500 for property
with one dwelling unit to $107,000 for property with four dwelling
units.  Maximum allowable values for multifamily property range from
$29,500 each for efficiency dwelling units to $58,352 each for units
with four or more bedrooms.  Because these maximum values apply
nationwide, the number or quality of properties offered in areas with
exceptionally high real estate prices may be limited. 

Before allowing a household to purchase a single family property, RTC
requires it to certify that its income complies with program
eligibility requirements and that it intends to occupy the property
as a principal residence for at least 12 months.  The buyer must also
submit a recent pay stub, most recent federal income tax return, and
other information documenting assets.  Public agencies and nonprofit
organizations purchasing single family property must certify that
they will make the property available for occupancy by and affordable
to qualified households, or that they will resell the property to a
qualified household.  Public agencies and nonprofit organizations
purchasing multifamily property under the program must make a written
commitment that they are eligible for the program and will comply
with the lower-income occupancy requirements. 

RTC offices must establish monitoring systems to ensure that an
appropriate number of sales are independently reviewed within 120
days of closing.  This review is to verify income information and
owner occupancy. 


   NUMBER OF PROPERTIES OBTAINED
   BY AND AVAILABLE TO
   HOMELESSNESS ASSISTANCE
   ORGANIZATIONS AT THE TIME OF
   OUR SURVEYS
---------------------------------------------------------- Chapter 2:2

As noted previously, chapters 3 and 4 of this report discuss the
barriers faced by nonprofit homelessness assistance organizations in
acquiring property under the programs.  To put our survey results in
perspective, we are presenting data on the number of single family
properties the four agencies made available through their programs at
the approximate time of our surveys and the number of these
properties the homelessness assistance organizations had leased and
purchased as of that time.  (Only a handful of multifamily properties
had been made available to, or acquired by, nonprofit homelessness
assistance organizations through the programs at that time.  This
information is discussed further in ch.  4.)

As shown in table 2.2, the vast majority of property used by
homelessness assistance organizations as of September 30, 1992, was
leased or purchased through the HUD program.  At that time, there
were over 41,000 properties available for sale through the programs
and almost 4,100 available for lease, again mostly through the HUD
program. 



                          Table 2.2
           
               Federal Foreclosed Single Family
            Property Obtained by and Available to
              Nonprofit Homelessness Assistance
           Organizations as of September 30, 1992\a


                                        Propertie  Propertie
                                                s          s
                                 Total  available  available
                                agency   for sale  for lease
          Purchase     Under  properti         in         in
Agency           d     lease        es    program    program
--------  --------  --------  --------  ---------  ---------
HUD            505     1,977    32,590     32,590      3,259
VA              11        \b     8,459      4,049         \b
FmHA           8\c        20     4,676        817        817
RTC           35\d        \b    10,416      3,846         \b
Total          559     1,997    56,141     41,302      4,076
------------------------------------------------------------
\a Data reflects the agencies' slightly different definitions of
single family property.  HUD and RTC define as 1-4 dwelling units; VA
as 1-3 dwelling units, and FmHA as one dwelling unit. 

\b Agency did not lease property at this time. 

\c FmHA did not track the number of sales under its program.  This
reflects an estimate by FmHA program officials. 

\d RTC reported that as of June 1992 it had sold 400 single family
properties, 23 multifamily properties and donated 702 properties to
nonprofit organizations and public agencies under its Affordable
Housing Disposition Program.  RTC, however, did not track how many of
these went to homelessness assistance organizations.  This is our
estimate based on the number of properties reported purchased from
RTC in response to our questionnaire. 


   GEOGRAPHIC DISTRIBUTION OF
   PROPERTIES
---------------------------------------------------------- Chapter 2:3

Single family properties available through the four agencies'
programs as of September 30, 1992, were located in every state, but
about 73 percent of those available for sale at a discount were
located in 14 states with 1,000 or more properties each.  (See fig. 
2.1.) The total number of such properties per state ranged from 6,925
in Texas to 2 each in Hawaii and Delaware.  Six states (Delaware,
Hawaii, Maine, South Dakota, Vermont, and Wyoming) had fewer than 10
available properties each.  (See app.  III for data on each state.)

   Figure 2.1:  Geographic
   Distribution Properties
   Available for Sale at a
   Discount at the End of Fiscal
   Year 1992

   (See figure in printed
   edition.)

   Source:  Inventory Data
   Supplied by FmHA, HUD, RTC, and
   VA.

   (See figure in printed
   edition.)

When viewed separately, property in each of the four programs was
concentrated in relatively few, but not always the same, states. 
More than one-third of HUD's properties were located in four states
(California, Colorado, Florida, and Texas).  About 30 percent of VA's
property was in Texas and Virginia, with about another 30 percent in
Arizona, Colorado, Florida, and Georgia.  About 30 percent of FmHA
property was located in Michigan, Mississippi, Oklahoma, and Texas. 
Half of RTC's single-family properties were located in Florida,
Louisiana, and Texas, with another 17 percent in Alabama, Georgia,
and Oklahoma.  (See app.  III for data on each state.)

There were some homelessness assistance organizations in almost every
state that said they were interested in obtaining federal foreclosed
property in response to our national survey.  However, we were unable
to confidently estimate the total number of such organizations in
each state because some states had few respondents. 


   CHANGES TO THE PROGRAMS SINCE
   OUR SURVEYS
---------------------------------------------------------- Chapter 2:4

There have been several changes to the programs since the time of our
surveys.  In September 1992, VA implemented an administrative change
that more than doubled the number of properties available for
purchase through its program (from 4,049 to 8,459 properties).  At
that time, VA began making all property in inventory available for
sale, rather than just property that had not sold to the general
public after 6 months.  However, lesser price discounts are given on
property newly placed on the market.  Whereas VA previously gave a
50-percent discount on property in the program, the agency now gives
variable discounts.  Discounts start at 5 percent of listed price for
property on the market for 1 month or less and increase in monthly
increments to a maximum of 50 percent after the property has been on
the market for more than 3 months. 

In February 1993, RTC implemented an administrative policy change
authorized by its oversight board that is designed to make it easier
for eligible program participants to purchase properties in high-cost
areas, such as California, Massachusetts, and New Jersey, where there
are few properties valued low enough to qualify for the RTC program. 
The change allows RTC to provide qualified participants a greater
amount of financing so that they can purchase other RTC properties
priced too high to be included in the program.  For example,
qualified purchasers now can get up to $151,725 in financing from RTC
to purchase a detached single family home, whereas they previously
could get a maximum of $67,500. 

There also were several changes to FmHA, HUD, and VA programs
directed or authorized by legislation enacted in 1992. 
Implementation of some of these changes began in March 1993, but
others may not be fully implemented for several years. 

FmHA's change was directed by the Housing and Community Development
Act of 1992 (P.L.  102-550), which among other things, eliminated
FmHA's practice of leasing only those properties unsuited to its loan
program for low-income families (the so-called nonprogram
properties).  As a result, all single family properties not sold
through FmHA's loan program after a period of 195 days will also be
made available for leasing.  In April 1993, FmHA authorized
implementation of the new policy in nine states, which have more than
half of FmHA's inventory.  FmHA officials planned to implement the
change nationwide by September 1993. 

Similarly, the Homeless Veterans Comprehensive Service Programs Act
of 1992 (P.L.102-590) authorized VA to establish a leasing component
to its program.  In March 1993, VA began a 3-year test of the leasing
concept using 50 properties nationwide.  The properties were selected
based on input from regional offices, the availability and
suitability of properties in inventory, and the adequacy of VA staff
to monitor the property and activities of the leasing organization. 

While the legislative changes in the VA and FmHA programs should
eventually work to the advantage of homelessness assistance
organizations seeking property by providing additional leasing
opportunities, a legislative change to HUD's program took away an
advantage the organizations previously enjoyed.  The Housing and
Community Development Act of 1992 eliminated the 10-day period in
which HUD-approved nonprofit organizations had an exclusive right to
purchase or lease single family property before it was offered for
sale to the general public.  This practice had given the
organizations the advantage of first choice on new properties added
to HUD's inventory.  The act essentially reversed the advantage by
requiring HUD to offer properties for sale to the general public for
30 days before making them available for lease to homelessness
assistance organizations.  However, the act also authorized HUD
discretion to waive this change in procedure in locations where there
would not be an adequate supply of housing remaining for homelessness
assistance.  HUD issued proposed rules for implementing this change
for public comment on August 11, 1993.  Comments are due by October
12, 1993. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 2:5

FmHA, HUD, RTC, and VA make properties available for homelessness
assistance within the context of other competing objectives related
to their primary missions.  The agencies have developed various
procedures in response to legislative or administrative objectives
for determining what properties are made available and the price
charged so as to strike what they believe is an appropriate balance
between the competing objectives of assisting the homeless, assisting
other target populations, and minimizing the financial losses
incurred in guaranteeing mortgages or insuring savings and loan
institutions. 

During the time of our survey, the number of properties put into the
FmHA, RTC, and VA sales programs was small in comparison to that in
HUD's program.  Unlike HUD, the other three agencies offered
homelessness assistance organizations few, if any, opportunities to
lease property.  VA and FmHA programs for homelessness assistance
tended to include the agencies' less desirable properties, while RTC
made available only its less expensive properties. 

Administrative changes to VA procedures since our survey have made
several thousand more, and probably higher-quality, properties
available for sale to homelessness assistance organizations. 
Administrative changes by RTC have made it easier for organizations
in high-cost areas to purchase property by increasing the amount of
financing RTC can provide.  Other legislative changes to the VA and
FmHA programs should substantially increase leasing opportunities,
but these changes have yet to be fully implemented. 

FmHA plans to have changes to its leasing program fully implemented
by September 1993, which should make several thousand more properties
available.  VA, however, will be testing a leasing program on a very
limited basis for several more years and thus will be leasing only 50
of its thousands of properties in the immediate future.  We believe
both agencies should be able to benefit from HUD's experiences when
formulating procedures for screening and monitoring lessees.  By
doing so they likely will lessen the chances of program abuses that
occurred during the early stages of the HUD program. 

A 1992 legislative change to HUD's program, however, may work against
homelessness assistance organizations seeking federal foreclosed
property.  The change eliminates the preference homelessness
assistance organizations now have to lease or purchase property
before it is offered for sale to the general public.  Public comments
on HUD's implementing regulations are due October 12, 1993. 

The extent to which any of these changes will translate into
additional or fewer properties in the hands of homelessness
assistance organizations remains to be seen.  Experience to date has
shown that many properties in the agencies' programs were not leased
or purchased by homelessness assistance organizations.  Barriers such
organizations have experienced in acquiring and using available
properties are the topics of chapters 3 and 4. 


LACK OF INFORMATION IS THE INITIAL
BARRIER FOR ORGANIZATIONS THAT
HAVE NOT YET OBTAINED PROPERTY
============================================================ Chapter 3

Our national survey found that most nonprofit organizations assisting
the homeless see a great need for federally held properties and are
interested in acquiring them.  However, these organizations face
barriers that make it difficult for them to do so.  The barriers are
quite different for organizations that have not yet participated in
the disposition agencies' programs for homeless and low-income people
and those organizations that have. 

This chapter discusses the initial barrier for organizations that
have not participated in the programs:  lack of information about the
programs and about the specific properties that are available in
their local areas.  Although each agency has outreach guidelines for
its field offices to disseminate such information, the level of
activity undertaken at the offices we visited varied substantially. 
Most organizations that were aware of an agency's program believed
the agency was doing a less than satisfactory job of making
information known about the program and should do more. 

In contrast, organizations that had already participated in HUD's
program identified other barriers, such as costs associated with
participation and the poor quality of the inventory, that made it
difficult for them to obtain additional properties.  These are
discussed in chapter 4. 


   ASSISTANCE ORGANIZATIONS SEE A
   GREAT NEED FOR AND HAVE A GREAT
   INTEREST IN FEDERAL PROPERTY
---------------------------------------------------------- Chapter 3:1

As discussed in chapter 1, our national survey represents a general
population of about 6,900 nonprofit organizations nationwide with an
interest in providing housing or other services to the homeless.  We
found that about 95 percent (+/-2 percent) of these organizations
(about 6,600) had not participated in any of the four federal
property disposition programs for homeless or low-income persons. 
The vast majority of these nonparticipant organizations were
providing shelter to the homeless at the time of our survey and said
that more properties were needed in their service area to house or
otherwise assist the homeless.  About 69 percent of the organizations
said that this need was "large" or "very large," while about 21
percent of the organizations characterized the need in their service
area as "medium." About 70 percent of the organizations saying the
need was large or very large said they were interested in acquiring
federal foreclosed properties at the time of our survey. 


   LACK OF INFORMATION IS THE
   INITIAL BARRIER TO PROGRAM
   PARTICIPATION
---------------------------------------------------------- Chapter 3:2

Most of the approximately 6,600 nonparticipant organizations
represented by our survey were either unaware of the four agencies'
programs or cited lack of certain key information as their biggest
barriers to program participation.  Even those organizations aware of
a program often did not know about the favorable terms under which
they could lease or purchase property. 

Our questionnaire to the general population of homelessness
assistance organizations asked respondents to indicate whether or not
13 specific items had been a barrier to their acquisition of federal
foreclosed property.  Organizations were also asked to select the one
item they considered to be the single most important barrier. 


      LIST OF POSSIBLE BARRIERS TO
      ACQUIRING FEDERAL FORECLOSED
      PROPERTY INCLUDED IN OUR
      QUESTIONNAIRES
-------------------------------------------------------- Chapter 3:2.1

1.  Not enough information about what properties are available in
your service area. 

2.  Too few available foreclosed properties in your service area. 

3.  Foreclosed property in your service area is in poor condition. 

4.  Types of foreclosed property in your service area do not meet
your needs. 

5.  Neighborhood opposition to homelessness assistance facilities
in your service area. 

6.  High cost of buying foreclosed property. 

7.  High cost of rehabilitating foreclosed property. 

8.  High cost of monthly maintenance, insurance, and utilities. 

9.  Low chance of getting federal funds to help pay the costs of
purchasing and/or operating foreclosed properties. 

10.  Federal funds, when available, are not accessible in timely
manner. 

11.  Too little funding assistance from nonfederal sources. 

12.  Not enough personnel in your organization to manage
foreclosed property once it is purchased or leased. 

13.  No one in your organization who is sufficiently knowledgeable
about foreclosed property acquisition procedures. 

Organizations that had never participated in the agencies' programs
cited two barriers more frequently than any others.  These were (1)
"not enough information about what properties are available" (about
68 percent of the nonparticipants) and (2) "no one in the
organization sufficiently knowledgeable about the procedures for
acquiring the federal foreclosed property" (about 64 percent of the
nonparticipants).  These same two barriers were also selected as the
single most important barrier by a total of 35 percent of
nonparticipant organizations. 

Nonparticipant organizations' lack of knowledge about the properties
available in their area was reflected in the high incidence of "don't
know" responses to questions dealing with this topic.  More than
one-half of the nonparticipants answered don't know when asked
whether there were any federal foreclosed properties in their service
area.  There also was a high incidence of don't know responses to
items in our list of potential barriers that dealt with individual
properties.  More than 70 percent responded don't know to the
potential barriers of (1) foreclosed property in their area being in
poor condition and (2) the property not being the type that meets
their needs.  Similarly, about 63 percent responded don't know to the
possible barrier of too few properties available in the local service
area. 

A general lack of awareness about the programs and how they work was
evident in the nonparticipants' responses to other survey questions. 
As shown in table 3.1, the vast majority of nonparticipants were not
even aware of the FmHA, RTC, and VA programs. 



                          Table 3.1
           
           Nonparticipant Organizations' Awareness
                of the Four Agencies' Property
                     Disposition Programs

                    (Numbers in Percent\a)

Level of
awareness               HUD         VA       FmHA        RTC
----------------  ---------  ---------  ---------  ---------
Not aware                46         84         79         68
Only vaguely             33          8         12         17
 aware
Somewhat                 16          3          3          8
 familiar
Very familiar             1         \b         \b          2
------------------------------------------------------------
\a Percents do not total 100 because some applicable organizations
did not answer this question. 

\b The number of respondents was too small to get reliable estimates. 

Between 45 and 80 percent of the organizations that were aware of the
programs did not know about one or more of the preferential terms
that the agencies offered to nonprofit organizations.  Knowledge of
preferential terms available under HUD's program was a little better
than that for the other agencies.  (See table 3.2.)



                          Table 3.2
           
             Knowledge of Agencies' Preferential
           Terms Among Nonparticipant Organizations
               That Were Aware of the Programs

                    (Numbers in Percent\a)

                                        How many
                                         did not    How many
Preferential terms\b                        know        knew
------------------------------------  ----------  ----------
HUD sells property at 10% less than           61          39
 appraised value
HUD leases property for $1 a year             45          54
VA sells property at 50% of the               79          21
 listed price after it's on the
 market for 6 months
FmHA provides financing to                    71          29
 organizations purchasing property
FmHA leases properties for $1 per             75          25
 year for periods up to 10 years
RTC gives nonprofits exclusive right          61          39
 to purchase qualified properties
 for a period of 90 days
RTC has a financing program to help           80          20
 pay the costs of purchasing
 property
------------------------------------------------------------
\a Percents do not total 100 for some questions because some
applicable organizations did not answer these questions. 

\b Reflects terms in effect when we mailed out our survey near the
end of August 1992. 


   AGENCY OUTREACH EFFORTS COULD
   BE IMPROVED
---------------------------------------------------------- Chapter 3:3

Each of the four agencies have established policies specifying
actions that field offices should take to inform eligible
organizations about their programs and properties, but the level of
outreach attained by the agencies varies considerably.  The programs
are also publicized by the Interagency Council on the Homeless, an
independent group within the executive branch established by the
McKinney Act to carry out various activities related to federal
homelessness assistance, including overseeing federal homelessness
programs, coordinating the delivery of funds and services to those in
need, and publishing information on available federal resources. 

The general lack of knowledge about the programs and available
properties our survey found among organizations that had never
participated (about 6,600) indicates that all of the agencies could
do a better job of disseminating basic information organizations need
to make informed decisions about participation.  This view was
reinforced by those organizations that were aware of the programs. 
Two-thirds or more of these organizations rated the agencies'
outreach efforts as less than satisfactory, and an overwhelming
majority supported the need for improvement. 


      HUD'S OUTREACH EFFORTS
-------------------------------------------------------- Chapter 3:3.1

HUD had more extensive or better targeted outreach than the other
agencies.  HUD program guidance directs the staffs in field offices
with available single family properties to develop contact lists of
nonprofit homelessness assistance organizations; assess the
organizations' demand for property; and provide workshops, speeches,
and articles to promote the program.  HUD also operates a nationwide
toll-free number through which nonprofit organizations can obtain
information regarding the program. 

Outreach at the HUD offices we reviewed in Chicago, Los Angeles, and
Phoenix consisted primarily of providing information through
technical assistance workshops, conferences, and other meetings with
the nonprofit community; mailing out information on properties
available in their area; and answering telephone inquiries.  For
example, the HUD official responsible for homelessness assistance
programs in Chicago said that their primary outreach effort has been
to routinely mention the program at monthly HUD-sponsored training
sessions on homelessness assistance programs and at other public
meetings they attend.  In addition, the Chicago office mails a weekly
list of available properties to eligible assistance organizations in
Illinois that either already lease HUD properties or that have
indicated their interest in the program within the past year. 

HUD's Los Angeles office sends out notices to organizations approved
to participate in the program whenever a nearby property becomes
available.  Officials also discuss the program at their annual
Transitional Housing Workshop, and they distribute program
information at other conferences they attend that deal with
homelessness or housing.  Los Angeles officials also indicated that a
primary method of outreach is answering telephone inquiries about the
program from nonprofit organizations. 

HUD's Phoenix field office engages in similar outreach activities but
also attends monthly meetings of the Phoenix Homeless Coalition,
which consists of nonprofit and government organizations concerned
with homelessness issues.  However, Phoenix officials were in the
process of reducing their outreach efforts at the time of our visit
(June 1992) because their property inventory had declined and they
had reached their 10-percent limit for properties that could be
leased through the program. 


      FMHA AND VA PROGRAM OUTREACH
-------------------------------------------------------- Chapter 3:3.2

While both agencies have issued outreach guidance to their field
offices, FmHA and VA have used a more reactive approach to providing
information on their programs than HUD.  For example, FmHA
headquarters officials said that FmHA does not actively recruit
organizations that may be interested in its program.  Rather,
homelessness assistance organizations must initiate contact with FmHA
to obtain information on or assistance with its homelessness program. 
According to VA's Assistant Director for Property Management,
outreach to homelessness assistance organizations in connection with
the property disposition program is encouraged, but has a lower
priority than outreach to individual veterans in connection with VA's
direct service programs.  The actual priority assigned to property
disposition outreach is left up to VA field offices.  The Assistant
Director and other headquarters officials involved with the VA
program believe that homelessness assistance organizations have been
provided ample information about VA's program and properties through
VA's outreach efforts and publicity by the Interagency Council on the
Homeless.  They believe the low level of participation in VA's
program means organizations are not interested in VA's properties,
mainly because of the costs involved. 

FmHA's guidance to the field on outreach instructs state, district,
and county offices with inventories of single family "non-program"
property (i.e., property not meeting the quality standards for its
home loan program for low-income rural families) to distribute a
prepared fact sheet on the homelessness program to organizations in
the community that might qualify.  The guidance also instructs FmHA
officials to publicize the program in local minority and general news
media, on FmHA county office bulletin boards, and verbally to
representatives of organizations that may be interested. 

Actual outreach activities were limited at the FmHA field offices we
visited.  The FmHA official responsible for the homelessness property
program in Illinois said outreach there had consisted primarily of an
estimated 10 to 12 presentations on the program that he had made
during the past 5 years.  He said that FmHA's outreach philosophy is
that properties are available if assistance organizations want them
and that FmHA will respond to inquiries that are made.  Outreach at
FmHA's Phoenix office has consisted of the FmHA Chief of Housing for
Arizona attending a Governor's conference on the homeless and two
state-sponsored open meetings on the homeless chaired by the State
Coordinator for the Homeless.  The Chief of Housing also said that
information about the FmHA program (but not about available
properties) is disseminated in the Interagency Council on the
Homeless Newsletter.  (Because it is not rural, no FmHA office covers
the Los Angeles area.)

The VA outreach guidance directs regional offices to designate a
contact person to handle questions from homelessness assistance
organizations; to develop a contact list of eligible purchasers; to
mail information to interested organizations; and to meet at least
once with local organizations to discuss general procedures and
requirements for the program.  The offices may conduct a separate
meeting with sales brokers, invite the brokers to attend the meeting
with nonprofit organizations, or both.  VA offices with jurisdiction
over more than one major real estate market area with substantial
numbers of eligible properties will conduct meetings for homelessness
assistance organizations in these areas.\1

As with FmHA, the VA offices we visited had taken limited actions in
response to the outreach directive.  Outreach activities at VA's Los
Angeles office have consisted of mailing updated circulares
describing its program to nonprofit veteran's organizations (but not
to other nonprofit organizations that might be providing assistance
to homeless veterans).  At VA's Phoenix office the Loan Guaranty
officer had attended several monthly homelessness coalition meetings
in 1989 but stopped attending the meetings because of nonprofit
organizations' lack of interest in the VA program.  In October 1992,
the VA Phoenix office invited nonprofit organizations that had been
approved to participate in the HUD program to a meeting to discuss VA
program changes.  A similar meeting will be held in the future to
discuss program changes that have occurred since that time.  Chicago
regional VA officials had discussed the program during quarterly
visits to service organizations, such as the Red Cross and the
Disabled American Veterans, and at regional homelessness conferences,
such as the biennial regional conference sponsored by the Interagency
Council on the Homeless.  In addition to these actions, the VA
Chicago and Los Angeles offices routinely include references to the
homelessness program in advertisements placed in major metropolitan
newspapers announcing other disposition property that VA has for
sale. 


--------------------
\1 VA established a national toll free telephone number in October
1992 (about the time organizations were answering our surveys) to
provide general assistance on all VA programs.  VA headquarters
officials said that interested organizations can get information on
property disposition program procedures and available properties by
calling this number. 


      RTC'S OUTREACH IS NOT
      SPECIFICALLY DESIGNED TO
      REACH THE HOMELESSNESS
      ASSISTANCE COMMUNITY
-------------------------------------------------------- Chapter 3:3.3

Consistent with its legislatively mandated target population,
outreach for RTC's Affordable Housing Disposition Program has been
directed at low- and moderate-income families and organizations that
provide them housing assistance, not specifically at nonprofit
organizations that assist the homeless.  As a result, RTC's outreach
program is not directly comparable to the other agencies' in terms of
reaching homelessness assistance organizations. 

Outreach for RTC single family property involves outside
clearinghouses and technical assistance advisor groups designated by
RTC.\2 RTC regulations encourage, but do not require, clearinghouses
to notify nonprofit organizations, including those serving the
homeless, of available properties and to publicize the availability
of these properties.  Outreach activities conducted by technical
assistance advisors have included marketing to nonprofit groups and
to women and minorities through workshops and follow-up assistance;
advertising in newspapers and on community radio stations that serve
low-income neighborhoods; conducting seminars to explain and
facilitate the RTC auction process; pre-screening families for
program eligibility; and guiding prospective buyers through the
purchase process and helping them obtain mortgage financing. 

RTC field office staff also typically perform outreach activities in
connection with single family property.  Such activities include
maintaining contacts with the nonprofit community; conducting
workshops; maintaining property lists; conducting property auctions;
and placing advertisements promoting the program in local newspapers. 

RTC's outreach procedures for multifamily properties were the same as
for single family property until May 1992, when RTC made multifamily
property a direct sales program.  Since that time RTC staff has been
directly responsible for outreach and marketing related to
multifamily properties. 

Under the direct sales program, RTC first markets multifamily
properties exclusively to public agencies and then to nonprofits
before offering the properties to other eligible buyers in the
program, such as individual low to moderate income families.  At the
RTC offices we visited, RTC staff prepared and mailed property lists
to potential buyers, met with nonprofit organizations to discuss
potential bulk sales, and participated in workshops on how to acquire
property.  The Phoenix Technical Assistance Advisor also worked
closely with representatives from HUD and local government to
structure financing for nonprofit organizations' purchases of RTC
multifamily property. 

Because the RTC office responsible for selling a property is
determined by the location of the failed financial institution rather
than by the location of the property, properties are often in
different cities than the office responsible for selling them.\3 As
with all RTC properties, information on these properties is provided
by the clearing house responsible for the area in which the property
is located. 


--------------------
\2 A clearinghouse may be a federal or state agency or any national
nonprofit organization that RTC determines has the capacity to give
potential buyers information about its residential properties.  RTC
is required to designate at least one clearinghouse in each state. 
Technical assistance advisors are public agencies or nonprofit
organizations designated by RTC to help guide applicants through the
process of purchasing RTC property and to disseminate program
information and conduct promotional activities. 

\3 Inefficiencies of this situation are discussed in our report
entitled Resolution Trust Corporation:  Asset Pooling and Marketing
Practices Add Millions to Contract Costs (GAO/GGD-93-2, Oct.  7,
1992). 


      OUTREACH CONDUCTED BY THE
      INTERAGENCY COUNCIL ON THE
      HOMELESS
-------------------------------------------------------- Chapter 3:3.4

In July 1991 the Interagency Council on the Homeless issued a special
edition of its Council Communique which was entirely dedicated to the
topic of obtaining federal property for use in assisting the
homeless.  This publication, mailed to all homelessness assistance
organizations on the Council's mailing list, included a description
of the HUD, VA, FmHA, and RTC foreclosed property programs.  The
descriptions outlined the key features of each program, such as
whether property could be leased or purchased, discounts given on
purchased property, and the nominal cost leases offered by HUD and
FmHA.  Also provided were the names and phone numbers of state or
regional officials in each agency that organizations could contact
for additional information on the programs or available properties. 
The four programs are also briefly described in the Council's
catalogue of federal programs to help homeless people, the latest
edition of which was published in March 1993. 

The HUD, RTC, and FmHA programs were also mentioned individually in
other Council publications during the period September 1991 to
February 1993.  The HUD and RTC programs were mentioned twice each in
separate editions of the Council's Program Alert, a publication that
includes information on funding opportunities, conferences, and other
news of interest to the homelessness assistance community.  An
article about the FmHA program appeared in January/February 1993
edition of the Council Communique. 

According to a Senior Advisor, the Council's only other publicity of
the foreclosed property programs has been to discuss them at
homelessness assistance workshops and conferences.  He said the
programs are routinely discussed at the five regional workshops that
the Council sponsors each year and are usually mentioned by Council
personnel in presentations on federal homelessness assistance
programs that they make at conferences or workshops sponsored by
other groups. 


      ORGANIZATIONS RATE AGENCIES'
      OUTREACH AS LESS THAN
      SATISFACTORY
-------------------------------------------------------- Chapter 3:3.5

As discussed earlier in this chapter, 68 percent or more of our
general survey population of nonparticipant homelessness assistance
organizations were not aware of the FmHA, RTC, or VA programs, and 46
percent were unaware of HUD's program.  We asked those with any
familiarity, however, to rate the agencies' outreach efforts.  As
shown in table 3.3, HUD was rated somewhat higher than the other
agencies, but the vast majority rated the agencies' efforts as less
than satisfactory. 



                          Table 3.3
           
           Ratings of Agency Outreach by Nonprofit
             Organizations Aware of the Property
                     Disposition Programs

                    (Numbers in Percent\a)

Ratings                 HUD         VA       FmHA        RTC
----------------  ---------  ---------  ---------  ---------
Satisfactory or          31         21         14         33
 better\b
Less than                69         79         85         66
 satisfactory\c
------------------------------------------------------------
\a Percents for some agencies do not total 100 because some
applicable organizations did not answer this question. 

\b Includes ratings of "Excellent," "Good," and "Satisfactory."

\c Includes ratings of "Fair" and "Poor."


      ORGANIZATIONS BELIEVE
      AGENCIES COULD DO BETTER
      OUTREACH
-------------------------------------------------------- Chapter 3:3.6

Our questionnaire to the general population of homelessness
assistance organizations asked those with awareness of a property
disposition program whether or not the administering agency should
take any of seven specific actions to increase the organization's
awareness of and participation in the program.  In most instances,
the seven actions were things already called for by the agencies'
outreach policies and/or were things the agency offices we visited
said they were doing.  As shown in table 3.4, an overwhelming
majority of organizations with awareness believed each of the four
agencies should do more in almost all of the seven items. 



                          Table 3.4
           
           Actions That Organizations With Program
            Awareness Believed the Agencies Should
            Take to Increase Program Awareness and
                        Participation

                     (Numbers in Percent)

Action agency should take        HUD      VA    FmHA     RTC
----------------------------  ------  ------  ------  ------
Advertise more in                 65      81      72      61
 newspapers, newsletters,
 and journals
Provide toll free telephone       77      85      81      73
 information service
Mail information on how to        95      99     100      94
 lease and purchase
 properties to homelessness
 assistance organizations
Make updated lists of             92      99      99      93
 properties more readily
 available
Provide individualized            91      92      94      89
 technical assistance to
 help organizations complete
 applications
For first-time participants,      94      91      93      88
 provide individualized
 technical assistance on
 acquiring properties,
 rehabilitating them, and
 keeping them running
Provide more workshops on         88      84      90      83
 how nonprofit organizations
 can lease or purchase
 property
------------------------------------------------------------

   CONCLUSIONS
---------------------------------------------------------- Chapter 3:4

Despite seeing a great need for, and having a great deal of interest
in obtaining, federally held properties, hardly any of the nation's
nonprofit organizations assisting the homeless have participated in
any of the four disposition agencies' programs designed to provide
them such property.  The main barrier has been that the organizations
lacked key information needed to make informed decisions about
participation:  knowing the programs exist, how they work, and what
specific properties were available locally. 

Each of the disposition agencies has guidelines calling for outreach
to the nonprofits to inform them of the programs and available
properties.  Similar program information is also sent to homelessness
assistance organizations by the federal Interagency Council on the
Homeless.  While the agencies varied somewhat in approach and the
importance placed on outreach, the nonprofit organizations' lack of
knowledge about the agencies' programs and the properties that are
available locally demonstrate that federal outreach efforts have not
been effectively getting key information out to a large portion of
those with an interest in the properties.  The organizations'
somewhat greater knowledge about the HUD program may be due in part
to the larger volume and wide geographic dispersion of HUD properties
discussed in chapter 2, but HUD's somewhat more extensive or better
targeted outreach has likely been a factor as well. 

The assistance organizations that were aware of the programs mostly
rated the agencies as less than satisfactory on making information
about the programs known, and they overwhelmingly supported the need
for improvements to increase awareness of, and participation in, the
programs.  The specific improvements the organizations endorsed are,
for the most part, things already called for in the agencies'
outreach guidelines, suggesting that implementation efforts at the
local level need to be intensified or better directed.  In this
regard, we noted that one of the VA offices we visited was sending
out information to veterans organizations, but not to other nonprofit
organizations that may be helping homeless veterans and thus eligible
to participate in VA's program.  Providing specialized technical
assistance for first-time program participants was one action that
agencies other than RTC generally have not taken to date but which
nonprofit organizations strongly endorsed. 

More effective outreach will become increasingly important for VA and
FmHA in the future as they implement the legislative program changes
discussed in chapter 2 and begin to offer more and better quality
property for lease through their programs.  The effect better
outreach would have on program participation is difficult to
quantify, but nonprofit organizations' somewhat higher level of
knowledge about the HUD program to date suggests a positive
correlation between the intensity of outreach and potential
participants possessing the knowledge needed to make informed
decisions.  While other factors undoubtedly were involved, HUD's more
proactive outreach likely is one reason for organizations' much
greater level of participation in HUD's program that was discussed in
chapter 2. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 3:5

The Executive Director of the Interagency Council on the Homeless, as
head of the organization responsible for overseeing and coordinating
executive branch homelessness assistance activities, should initiate
and coordinate a joint effort with appropriate representatives of
FmHA, HUD, RTC, VA and advocacy groups representing nonprofit
homelessness assistance organizations at the national, state, and
local levels to develop an outreach strategy that more effectively
disseminates essential information on the property disposition
programs available to nonprofit organizations that assist the
homeless.  In doing so, priority should be given to ways of achieving
much wider knowledge of basic procedures for obtaining properties,
such as by providing specialized technical assistance for first-time
participants and information about VA's program to a wider spectrum
of homelessness assistance organizations, not just veterans
organizations.  Special attention also should be given to finding
better ways of providing organizations with up-to-date information on
what properties are available in their area. 


ORGANIZATIONS FACE OTHER BARRIERS
ACQUIRING PROPERTY ONCE
INFORMATION IS OBTAINED
============================================================ Chapter 4

Homelessness assistance organizations face additional difficulties
once they obtain sufficient information and decide to participate in
a property disposition program.  Costs associated with participation,
and too little assistance from federal and nonfederal sources to pay
these costs, were overwhelmingly the most frequently cited and most
important categories of barriers to acquisition cited in our survey
of HUD program participants.  Given the importance of federal funding
assistance to organizations' operations, easing these financial
barriers would likely involve some additional federal assistance. 

Other less important but still significant barriers cited by
participants in the HUD program were too few properties available
locally, the poor condition of local properties, and organizations'
lack of sufficient personnel to manage property once acquired.  While
not identified specifically by the organizations as a barrier to
participation, our surveys also found an unmet need for larger,
multifamily properties (those with more than four dwelling units)
among program participants and nonparticipants alike. 


   COSTS BORNE BY PARTICIPANT
   NONPROFIT ORGANIZATIONS DIFFER
   AMONG PROGRAMS
---------------------------------------------------------- Chapter 4:1

Even when organizations are able to lease federal foreclosed property
for a nominal fee, they are responsible for paying various other
costs.  Depending on the leasing agency, these costs can include
rehabilitation, taxes, insurance, utilities, and other operating
expenses.  Organizations purchasing property usually face these same
costs in addition to the price they pay for the property. 

As discussed in chapter 2, HUD and FmHA were leasing properties
through their programs at the time of our surveys, but VA and RTC
were not.  Even though HUD and FmHA charged nonprofit homelessness
assistance organizations nominal lease fees (no more than $1 per
year), the organizations were expected to pay other costs associated
with the properties. 

HUD expected organizations leasing properties to pay for utilities,
physical repairs and maintenance, real estate taxes, and general
liability insurance.  Organizations leasing HUD properties built
before 1978 that were to be occupied by children under 7 years of age
also were expected to test for and remove any lead-based paint. 

Except for insulation, FmHA paid for any repairs needed to bring
leased property up to FmHA standards for decent, safe, and sanitary
housing.  Like HUD, FmHA expected the leasing organization to pay for
utilities, real estate taxes, and assessments.  FmHA, however,
required leasing organizations to purchase property insurance rather
than the general liability insurance required by HUD. 

All four agencies were selling property to homelessness assistance
organizations at the time of our surveys, but they had somewhat
different policies regarding the purchaser's responsibility for
repair costs.  HUD and FmHA considered any needed repairs to be the
responsibility of the purchasing organization, including testing for
and abating lead paint hazards.  VA and RTC, however, paid for some
repair costs. 

VA bore the cost of correcting defective paint and identifying any
lead paint hazards before offering properties for sale.  However, the
purchasing organization was expected to pay for abating the lead
paint hazards and for any other needed repairs.  RTC paid for repairs
costing up to 25 percent of a property's value (or $5,000, if
greater) and was authorized to exceed these limits in instances that
would further the goals of its program.  Of course, once an
organization acquired title to a property it became responsible for
paying all operating and maintenance costs, taxes, and insurance. 


   COVERING PROPERTY COSTS IS THE
   MAJOR DIFFICULTY FOR HUD
   PROGRAM PARTICIPANTS
---------------------------------------------------------- Chapter 4:2

Our survey of nonprofit homelessness assistance organizations that
had participated in the HUD program asked whether or not they
considered certain items to be barriers to the acquisition of federal
foreclosed property and to select the one item they considered to be
their single most important barrier.  These were essentially the same
potential barriers included in our survey to the general population
of homelessness assistance organizations (see ch.  2).  Organizations
that had participated in HUD's program indicated that their major
barriers to acquiring additional property related to difficulties in
paying the costs associated with the properties.\1

Three specific costs associated with foreclosed properties emerged as
significant barriers to the HUD program participants: 
rehabilitation, purchase price, and routine operating costs
(maintenance, insurance, and utilities).  Together, these three items
were identified as single most important barriers by about 32 percent
of the 328 organizations represented by our survey that had leased or
purchased property through HUD's program.  Individually, the three
items were considered to be barriers by between 44 and 61 percent of
these participant organizations.  (See table 4.1.)



                          Table 4.1
           
           Costs Viewed as Barriers by HUD Program
                         Participants

                     (Numbers in Percent)

                                               Organizations
                                                selecting as
Item cited as a barrier to    Organization       single most
acquiring                     s citing the         important
HUD foreclosed property            barrier           barrier
----------------------------  ------------  ----------------
High cost of rehabilitation             61                12
High cost of buying property            49                11
High cost of maintenance,               44                 9
 insurance,
 and utilities
------------------------------------------------------------
Our survey of HUD program participants asked organizations that had
leased property to report costs of rehabilitation and a number of
annual operating expense items.  We also asked organizations to
report how much rental income they received from tenants occupying
property that the organizations were leasing from HUD. 

As shown in table 4.2, the organizations' annual rental income
averaged about $2,450 compared with maximum average annual expenses
of about $5,700--a maximum average net loss of roughly $3,250 per
year that had to be financed from other sources.  (In some instances
tenants may have paid for utilities or maintenance, which would lower
the average net loss to the nonprofit organization.) On each
individual item there were some organizations that reported little or
no costs.  The number of such organizations is also shown in table
4.2. 



                          Table 4.2
           
             Average Costs and Offsetting Rental
           Income Reported by Organizations Leasing
                 Property Under HUD's Program

                                                   Estimated
                                                   number of
                                                  properties
                                                   reporting
                                     Estimated  little or no
                                       average         cost/
Element of cost                         cost\a      income\a
--------------------------------  ------------  ------------
Amount spent to rehabilitate            $4,249            53
 property

Annual operating expenses
------------------------------------------------------------
Liability insurance                       $356             4
Property taxes                            $692           135
Utilities                             $1,811\b            38
Maintenance                           $1,297\b            18
Managing property                       $1,555           144

Annual expenses vs. rental income
------------------------------------------------------------
Total annual expenses                   $5,711
Rental income organization              $2,454           175
 received
Maximum net loss                        $3,257
------------------------------------------------------------
\a Estimates for average cost are based only on data for those
properties that reported cost information for all items, even if the
reported cost for a particular item(s) were little or nothing.  We
also excluded amounts reported for one or two properties that were
vastly different from those reported for the other properties because
they would have unduly skewed the averages.  These estimates of
average cost represent an estimated 683 properties. 

\b These may include some amounts paid by the occupant rather than
the nonprofit organizations. 

Our survey also asked HUD program participants that had purchased
property to report purchase prices, rehabilitation costs, and various
annual operating expenses.  As shown in table 4.3, purchase prices
averaged almost $35,000 and rehabilitation about another $19,000. 
Annual mortgage payments averaged about $5,650, and average costs for
most other operating expense items were higher for purchased property
than for leased.  (We did not ask organizations how much, if any,
rental income they received on the purchased property.)



                          Table 4.3
           
           Average Costs Reported by Organizations
              Purchasing Property Through HUD's
                          Program\a

                       Estimated     Estimated     Estimated
                       number of   average for     number of
                      properties    properties    properties
                     reporting a   incurring a  reporting no
Element of cost             cost         cost\          cost
------------------  ------------  ------------  ------------
Purchase/rehabilitation costs
------------------------------------------------------------
Purchase price               118       $34,877             0
Rehabilitation                99       $19,105            12

Annual operating expenses
------------------------------------------------------------
Mortgage payment              35        $5,649            53
Insurance                    113          $936             0
Property taxes                78        $1,192            19
Utilities                    105        $1,549             7
Maintenance                  100        $1,436             0
------------------------------------------------------------
\a We computed average costs differently for purchased properties
than for leased properties (see table 4.2).  Because there was an
insufficient number of such properties, we did not compute these
averages using only properties that reported cost information for all
items, as we did with the leased properties.  Instead, to compute the
above estimated average costs for purchased properties, we summed the
costs reported by all properties for a given item and divided that
sum by the number of properties that reported a cost (other than $0)
for that particular item.  We also excluded amounts reported for one
or two properties that were vastly different from those reported for
the other properties because they would have unduly skewed the
average.  The total number of properties (those incurring a cost plus
those incurring little or no cost) differ for the individual cost
items because not all organizations responded to each item. 

The low chance of getting federal funds to help pay the costs of
purchasing and/or operating properties was one of two barriers most
frequently cited by HUD program participants, and it was by far the
single most important barrier for these organizations.  About 68
percent of the participating organizations cited this as a barrier to
acquiring additional property and about 23 percent identified it as
their single most important barrier. 

The organizations' difficulty in securing federal funds to help with
foreclosed property costs was reflected in responses to other survey
questions.  For example, 51 percent of the organizations said that it
was a barrier that federal funds, when available, were not accessible
in a timely manner--an indication that the time required to apply for
and obtain funds under other federal programs, or the funding cycles
for these programs, did not coincide with the organizations' needs. 
In this regard, our survey found that about 72 percent of the
organizations had participated in one or more of seven other federal
programs that could have provided funding for housing the homeless,\2
but only 30 percent of them (22 percent of all organizations
represented by our survey) had used these programs to help defray
their foreclosed property costs. 

Another closely related problem was cited as a barrier as frequently
as the "low chance of getting federal funding assistance," but it was
much less likely to be viewed as an organization's most significant
barrier.  About 68 percent of the participating organizations cited
"too little funding assistance from nonfederal sources" as a barrier
to additional acquisitions, but only 5 percent of the organizations
identified this as most important. 


--------------------
\1 Recall from chapter 1 that we did not specifically survey
organizations that had participated in the other three programs
because of the low number of participants in each. 

\2 The Supportive Housing Demonstration Program, Emergency Shelter
Grant Program, Supplemental Assistance for Facilities to Assist the
Homeless (SAFAH) Program (in 1993 SAFAH became part of the Supportive
Housing Demonstration Program), Shelter Plus Care Program, Section 8
for Single Room Occupancy Program, Section 8 Rental Assistance
Program, and Federal Surplus Property Program.  HUD administers or
helps administer each of these programs.  With the exception of the
Section 8 Rental Assistance Program, all are homelessness assistance
programs authorized under the Stewart B.  McKinney Homeless
Assistance Act (P.L.  100-77, as amended). 


      OTHER IMPORTANT BARRIERS
-------------------------------------------------------- Chapter 4:2.1

Nonprofit organizations cited three barriers to additional
acquisitions that were less important than costs but still
significant impediments:  the quantity and quality of available
properties and an insufficient number of personnel in the
organizations to manage properties (see table 4.4). 



                          Table 4.4
           
           Other Important Barriers for HUD Program
                         Participants

                     (Numbers in Percent)

                                                Organization
                                                 s selecting
                                    Organizati     as single
Item cited as a barrier to          ons citing          most
acquiring                                  the     important
HUD foreclosed property                barrier       barrier
----------------------------------  ----------  ------------
Property in the organization's              44             7
 service area is
 in poor condition or does not
 meet its needs.
Not enough personnel in the                 33             7
 organization to manage property
 once it is purchased or leased.
Too few properties available in             32            10
 the organization's service area.
------------------------------------------------------------
A few respondents provided narrative comments related to these
barriers.  Comments on the poor condition of properties centered on
the magnitude and high cost of needed repairs and cited vandalism and
the need to correct lead-based paint hazards as contributing factors. 
Comments on the usefulness of HUD's property included "properties
that are large enough (which are few) have very poor roofs, not
enough amps coming in to support 10 people's use of electricity,
sewer systems too aged to support 10 people." Comments on lack of
management resources included "we are severely underfunded and
understaffed" and "the available funding to acquire excess federal
real estate for homeless programs does not include money to pay
administrative costs for staff to do significant foreclosed property
acquisition and management."


   ORGANIZATIONS NEED MORE
   MULTIFAMILY PROPERTY
---------------------------------------------------------- Chapter 4:3

While almost all of the properties sold or leased at the time of our
surveys were single family dwellings, many organizations said that
they could use larger size (multifamily) properties.  Homelessness
assistance organizations typically use this type of property to
provide shelter and usually other supportive services in a group
setting to those that require a more controlled environment than can
be provided in smaller, often scattered, single family properties. 

Our surveys asked homelessness assistance organizations to indicate
whether or not various types of property would be useful to them for
housing or otherwise assisting the homeless and to indicate which
would be the single most useful type for them.  While organizations
that had participated in the HUD program indicated a great need for
properties with four or fewer dwelling units (the predominant type
made available thus far through the four agencies' programs), they
also indicated a substantial need for larger (multifamily) property. 
Our general population survey found a similar level of interest in
multifamily properties among organizations that had never
participated in any of the four programs.  (See table 4.5.)



                          Table 4.5
           
            Homelessness Assistance Organizations'
               Interest in Multifamily Property

                     (Numbers in Percent)

                                   Multifamily   Multifamily
                                      property      property
Program participation                   useful   most useful
--------------------------------  ------------  ------------
Organizations that had leased or            43            22
 purchased property from HUD
Organizations that had not                  47            20
 leased or purchased property
 under any of the four programs
------------------------------------------------------------
Our surveys also found that the four agencies' programs have not been
a useful source of multifamily property for nonprofit homelessness
assistance organizations.  Obviously, the programs were not a useful
source for the approximately 6,600 organizations represented by our
general population survey that had not obtained property through any
of the four programs.  However, the programs have been only a
slightly more useful source for the 328 organizations represented by
our survey of HUD program participants.  Only about 4 of these
organizations (1 percent) had leased or purchased a multifamily
property under any of the four programs. 

While the widespread lack of knowledge about the program procedures
and available properties discussed in chapter 3 likely was a factor,
the relatively small number of multifamily properties available
through the programs is an important reason they have not been a
particularly useful source.  Because of the way in which FmHA, RTC,
and VA track data, the exact number of multifamily properties
available to, or actually obtained by, nonprofit homelessness
assistance organizations is not known.  While the exact number is not
known, we know that very few multifamily properties had been made
available or acquired at the time of our survey. 

RTC has been the principal agency offering multifamily property
through its program.  As of June 1992 (about the time we began
sending out our surveys), RTC had sold a total of 23 multifamily
properties (defined by RTC as those with more than 4 dwelling units)
to public agencies and nonprofit organizations.  Such sales increased
shortly after our survey and by November 1992 had grown to a total of
161 properties (including those that were under sales contracts). 
However, because its program is not targeted specifically to
assisting the homeless, RTC did not track how many of these
properties went to nonprofit homelessness assistance organizations. 
As of November 1992, RTC had another 256 multifamily properties that
it was marketing exclusively to nonprofits and public agencies. 

VA is the only one of the three other agencies in which multifamily
property has been eligible for the homelessness assistance programs. 
VA defines multifamily properties as having four to eight dwelling
units, but does not track sales or available inventory by property
size.  However, VA headquarters officials said that they could not
recall ever having any multifamily properties in inventory. 

HUD is the only agency other than RTC holding appreciable numbers of
multifamily properties.  According to officials managing the
programs, HUD had 187 multifamily properties with a total of 31,537
living units in inventory as of January 1993, whereas FmHA had a
total of only 13 multifamily properties as of March 1993.  (HUD
defines multifamily as having more than four dwelling units, whereas
FmHA defines it as having more than one dwelling unit.) As of June
1993, neither agency had offered multifamily properties (or
individual units in them) through their disposition programs to
assist the homeless. 

HUD staff have developed proposals to make greater use of HUD-owned
multifamily properties to house the homeless.  Because most of HUD's
multifamily buildings are occupied, staff managing HUD's foreclosed
property disposition program to assist the homeless proposed leasing
individuals vacant units in the buildings to homelessness assistance
organizations.  The staff in charge of disposing of HUD's multifamily
property, however, proposed to continue the policy of negotiating
sales of entire multifamily buildings to nonprofit assistance
organizations at nominal prices under its general property
disposition authority. 

The multifamily staff also proposed to include other vacant HUD
properties (such as nursing homes, hospitals, and mobile home parks)
that were not previously offered under negotiated sales.  According
to the multifamily property officials, these latter types of
properties frequently need repairs, for which the purchaser would
have to pay. 

Under its general authority to dispose of multifamily property, HUD
may negotiate sales of HUD-owned properties to state or local
government or nonprofit entities that shelter the homeless.  However,
state and local government organizations are given the first right of
refusal before such properties are offered to nonprofit
organizations.  To be eligible for negotiated sale, a HUD-owned
multifamily property must be substantially vacant and not be needed
in the local area for continued use as rental housing for the elderly
or families.  HUD's multifamily property staff could not estimate how
many properties in HUD's inventory would meet these criteria. 
However, they said that the vast majority of HUD's multifamily
properties are usually substantially occupied.  A HUD headquarters
official estimated in April 1993 that no more than six multifamily
properties had been sold to nonprofit homelessness assistance
organizations through negotiated sales. 

Neither proposal to sell or lease additional multifamily property had
been acted on by top HUD management as of June 1993.  Because of the
transition to the new Administration, HUD program officials were
uncertain when the proposals would be considered or acted upon. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 4:4

Difficulty finding the financial resources necessary to acquire more
property in HUD's disposition program has been the major constraint
for nonprofit homelessness assistance organizations once they learned
how the program worked and what properties were available in their
local area.  Organizations considered the costs associated with both
leasing and purchasing property to be high and have found it
difficult to get the funds they need from either federal or
nonfederal sources. 

Organizations that have participated in the HUD program have not been
particularly successful in using federal funding assistance to help
defray foreclosed property costs, although they have used federal
assistance programs to a great extent for other purposes.  Only 22
percent of the participating organizations had used federal housing
assistance funds from Section 8 or various homelessness assistance
programs administered by HUD to help defray foreclosed property
costs, while about 72 percent had used funds from these programs
overall.  Too little funding available and difficulty accessing funds
from the programs in a timely manner were identified as the major
reasons. 

Homelessness assistance organizations' reliance on federal assistance
suggests that reducing financial barriers to acquiring federal
foreclosed property will in all likelihood require additional federal
financial help and add to the government's cost.  Two options for
providing this additional help suggested by our survey are expansion
of existing McKinney Act programs or Section 8 rent subsidies, and
providing greater flexibility in the timing of grants available
through the McKinney programs.  Other options include the four
agencies providing more low-cost financing or simply absorbing more
costs now borne by the homelessness assistance organizations. 
Deciding whether and to what extent to provide additional federal
assistance will require the agencies and the Congress to face the
difficult task of seeking the appropriate balance between assisting
the homeless, minimizing the government's insurance losses through
the sale of properties, and other demands for the limited supply of
federal dollars. 

HUD program participants identified other lesser, but still
important, barriers to acquiring more property over which federal
disposition agencies have little control.  These were too few
properties available locally, the poor condition of properties, and
some organization's lack of sufficient personnel to manage property
once it is obtained. 

The lack of multifamily property has been another constraint to
participation in the four agencies' programs.  Assistance
organizations that have participated in HUD's program, as well as the
much larger general population of those that have not participated in
any of the programs, find this type of property useful. 
Nevertheless, little multifamily property had reached these
organizations via the programs at the time of our surveys.  Although
RTC has sold about 140 more multifamily properties to nonprofit
organizations and public agencies since that time, the number
purchased by homelessness assistance organizations is unknown. 

With better targeted outreach RTC's program potentially could be a
more useful source of multifamily property for homelessness
assistance organizations.  RTC had several hundred of these
properties available as of November 1992, but as discussed in chapter
3, a majority of the assistance organizations did not know anything
about the RTC program.  Our recommendations for improved outreach in
chapter 3, if implemented, should make more homelessness assistance
organizations' aware of the multifamily properties that are available
through RTC. 

HUD is the only other agency holding a substantial number of
multifamily properties:  187 residential properties with more than
31,500 total dwelling units as of January 31, 1993.  While exact data
are not available, the vast majority of these properties are probably
already occupied, which HUD officials say makes them unsuitable for
sale in their entirety to homelessness assistance organizations.  The
staff managing HUD's property disposition program to assist the
homeless made a proposal that HUD lease individual vacant units
within these buildings to nonprofit homelessness assistance
organizations.  However, as of June 1993, HUD multifamily property
officials were not receptive to this idea, but they were willing to
negotiate sales of entire vacant multifamily residential buildings,
nursing homes, and mobile home parks to homelessness assistance
organizations for nominal prices.  As of that time, HUD's top
management had not acted on any proposals for making greater use of
the agency's multifamily properties to house the homeless. 


   MATTERS FOR CONGRESSIONAL
   CONSIDERATION
---------------------------------------------------------- Chapter 4:5

If the Congress wants to increase the use of federal foreclosed
property by the homeless, it should consider providing nonprofit
homelessness assistance organizations with additional assistance in
financing acquisition, rehabilitation, and operating costs.  Options
for providing such assistance include direct payments via expansion
of existing McKinney Act grants or rent subsidy programs (such as
Section 8), greater flexibility in the timing of grants under these
programs, more low-cost financing or short-term loans, or the four
agencies absorbing costs now borne by the homelessness assistance
organizations. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 4:6

To help meet their needs for multifamily property, we recommend that
the Secretary of HUD establish a policy that specifies appropriate
circumstances and conditions under which HUD-owned multifamily
property can be made available to nonprofit homelessness assistance
organizations. 


SAMPLE SELECTION METHODOLOGY
=========================================================== Appendix I


   NATIONAL SURVEY OF HOMELESSNESS
   ASSISTANCE ORGANIZATIONS
--------------------------------------------------------- Appendix I:1

To conduct a survey of nonprofit homelessness assistance
organizations nationwide, we identified four pertinent mailing lists
from the following sources:  the Federal Emergency Management Agency
(FEMA), the National Alliance to End Homelessness, the Hope
Foundation, and the Interagency Council on the Homeless (IAC).  We
evaluated the information provided by each source and found that the
National Alliance list was less inclusive than either the FEMA or
Hope lists and the IAC list contained numerous entries that were not
nonprofit homelessness assistance organizations.  We concluded that a
comprehensive nationwide listing could be obtained by combining the
FEMA and Hope Foundation lists.  The FEMA list contains information
on about 10,000 organizations that received funds from the Emergency
Food and Shelter National Board Program in fiscal year 1991.  This
program is designed to get funds quickly into the hands of food and
shelter providers to alleviate the most pressing needs of homeless
people.  According to a FEMA official, this list contains almost all
of the most active organizations in most communities.  We narrowed
the FEMA list to nonprofit organizations that used the funds to
provide shelter, food, and assistance with rent, mortgage, and
utilities.  (We excluded organizations that used the funds for
administration, rehabilitation, and supplies and equipment.) We were,
however, concerned that this list excluded (1) organizations that did
not receive FEMA funds for fiscal year 1991, (2) organizations that
provided homelessness assistance but with resources other than those
obtained from FEMA in fiscal year 1991, and (3) smaller or less
active organizations that were not on FEMA's list.  We believe that
the list owned and updated every 6 months by the Texas-based Hope
Foundation, a nonprofit organization, helped to correct these
shortcomings.  The Hope list provides information on over 8,000
organizations, of which over 85 percent are nonprofit.  The Hope
Foundation draws on the assistance of 800 advisors located throughout
the country to provide information on organizations that supply
direct services to the homeless. 

The FEMA and Hope lists were combined, and duplicates were deleted
using computer-based methods, leaving a combined list of 14,018
organizations.  We knew, however, that some duplicates remained that
could not be detected using computer-based methods.  We avoided the
time and expense of manually deleting these from the combined list by
selecting our sample and counting duplications in it. 

We drew a simple random sample (without replacement) of 600
organizations.  Then we counted the number of times each sampled
organization appeared in the combined list.  We found that 202 of the
600 sampled organizations appeared more than once (from 2 to 12
times) in the combined list.  We also found that five organizations
appeared twice in the sample.  Due to these duplications, some
organizations had a greater chance of being selected into our sample
than did other organizations.  We adjusted for these unequal
probabilities of selection in our analyses of the data using a
procedure suggested by Hansen, Hurwitz, and Madow\1 .  We estimate
that the number of unique nonprofit organizations in our combined
list is 11,360 (+/- 300). 

We did not obtain data from all of the 600 organizations of the
original sample.  As noted, five of these organizations appeared
twice in the sample.  In addition, 88 sampled respondents indicated
that they were either not a nonprofit organization (i.e., they were a
state or local governmental agency or a for-profit organization) or
did not assist homeless persons.  Of the remaining 507 organizations
(600 minus 88 minus 5), we developed a data set on the basis of 383
questionnaires.  We therefore estimate that 6,909 (+/- 481)
organizations would have provided a completed questionnaire had we
attempted to survey all unique, nonprofit organizations that assist
the homeless in our combined list.  The estimates based on the total
sample we provide in this report are for these 6,909 organizations. 


--------------------
\1 Morris H.  Hansen, William N.  Hurwitz, and William G.  Madow,
Sample Survey Methods and Theory (Volume I:  Methods and
Applications), New York, N.Y.:  John Wiley and Sons, Inc.  (1953). 


   SURVEY OF PARTICIPANTS IN HUD'S
   HOMELESSNESS ASSISTANCE
   DISPOSITION PROGRAM
--------------------------------------------------------- Appendix I:2

To survey participants in HUD's homelessness assistance disposition
program, we asked HUD officials to identify all of the nonprofit
organizations that had purchased one or more foreclosed properties
through the program during the period January 1989 to April 1992 and
those that were leasing property as of April 1992.  In response, HUD
provided a list of 427 participant organizations.  From this list we
drew a simple random sample of 290 organizations, of which 223 (about
80 percent) responded to our questionnaire.  Thus, the estimates
provided in this report based on the total sample of HUD participants
are for the 328 (+/- 9) organizations that would have responded had
we attempted to survey all of them. 


STATISTICAL ESTIMATES AND SAMPLING
ERRORS
========================================================== Appendix II



                          Table II.1
           
            Assistance to the Homeless Provided by
               Nonprofit Organizations (Ch. 1)

                     (Numbers in Percent)

                                                    Sampling
                                          Organiza  Error(+/
Type of Assistance                           tions        -)
----------------------------------------  --------  --------
Housing (emergency shelter,                     80         4
 transitional, or long-term)
Food and other supportive services in           74         5
 addition to shelter
------------------------------------------------------------


                          Table II.2
           
            Need for More Properties to Assist the
                 Homeless in Areas Served by
             Nonparticipant Organizations (Ch. 3)

                     (Numbers in percent)

                                  Organization      Sampling
Degree of need in area                       s   Error (+/-)
--------------------------------  ------------  ------------
Large or very large                         69             5
Medium                                      21             4
------------------------------------------------------------


                          Table II.3
           
            Nonparticipant Organizations' Interest
           in Acquiring Federal Foreclosed Property
                           (Ch. 3)

                     (Numbers in percent)

                                    Interested
                                  Organization      Sampling
Degree of need in area                       s   Error (+/-)
--------------------------------  ------------  ------------
Large or very large                         70             6
------------------------------------------------------------


                          Table II.4
           
           Barriers to Acquiring Federal Foreclosed
              Property Most Frequently Cited by
             Nonparticipant Organizations (Ch. 3)

                     (Numbers in percent)

                                               Organizations
                                                selecting as
                               Organizations     single most
                                  citing the       important
Item cited as a barrier              barrier         barrier
----------------------------  --------------  --------------
Not enough information about        68(+/-5)        25(+/-5)
 what properties are
 available
No one in the organization          64(+/-5)        10(+/-3)
 sufficiently knowledgeable
 about the procedures for
 acquiring federal
 foreclosed property
------------------------------------------------------------


                          Table II.5
           
             Questions and Potential Barriers to
            Acquiring Federal Foreclosed Property
            Having A High Percent of "Don't Know"
                Responses from Nonparticipant
                    Organizations (Ch. 3)

                     (Numbers in percent)

                                  Organization
Survey question or potential      s responding      Sampling
barrier                           "don't know"   Error (+/-)
--------------------------------  ------------  ------------
Are there federal foreclosed                53             5
 properties in your service
 area?
Foreclosed property in your                 73             5
 service is in poor condition
Types of foreclosed property in             71             5
 your service area do not meet
 your needs
Too few foreclosed properties               63             5
 are available in your service
 area
------------------------------------------------------------


                          Table II.6
           
           Nonparticipant Organizations' Awareness
                of the Four Agencies' Property
               Disposition Programs (Table 3.1)

                    (Numbers in percent\a)

Level of
awareness               HUD         VA       FmHA        RTC
----------------  ---------  ---------  ---------  ---------
Not aware          46(+/-5)   84(+/-4)   79(+/-4)   68(+/-5)
Only vaguely       33(+/-5)    8(+/-3)   12(+/-4)   17(+/-4)
 aware
Somewhat           16(+/-4)    3(+/-2)    3(+/-2)    8(+/-3)
 familiar
Very familiar       1(+/-1)         \b         \b    2(+/-1)
------------------------------------------------------------
\a Percents do not total 100 because some applicable organizations
did not answer this question. 

\b The number of respondents was too small to get reliable estimates. 



                          Table II.7
           
             Knowledge of Agencies' Preferential
           Terms Among Nonparticipant Organizations
            That Were Aware of the Programs (Table
                             3.2)

                    (Numbers in percent\a)

                                        How many
                                         did not    How many
Preferential terms\b                        know        knew
------------------------------------  ----------  ----------
HUD sells property at 10% less than     61(+/-7)    39(+/-7)
 appraised value
HUD leases property for $1 a year       45(+/-8)    54(+/-8)
VA sells property at 50% of the
 listed price after it's on the        79(+/-12)   21(+/-12)
 market for 6 months
FmHA provides financing to
 organizations purchasing property     71(+/-12)   29(+/-12)
FmHA leases properties for $1 per
 year for periods up to 10 years       75(+/-12)   25(+/-12)
RTC gives nonprofits exclusive right
 to purchase qualified properties      61(+/-10)   39(+/-10)
 for a period of 90 days
RTC has a financing program to help
 pay the costs of purchasing            80(+/-8)    20(+/-8)
 property
------------------------------------------------------------
\a Percents do not total 100 for some questions because some
applicable organizations did not answer these questions. 

\b Reflects terms in effect when we mailed out our survey near the
end of August 1992. 



                          Table II.8
           
           Ratings of Agency Outreach by Nonprofit
             Organizations Aware of the Property
               Disposition Programs (Table 3.3)

                    (Numbers in Percent\a)

Ratings                 HUD         VA       FmHA        RTC
----------------  ---------  ---------  ---------  ---------
Satisfactory or    31(+/-7)     21(+/-   14(+/-9)     33(+/-
 better\b                          13)                   10)
Less than          69(+/-7)     79(+/-   85(+/-9)     66(+/-
 satisfactory\c                    13)                   10)
------------------------------------------------------------
\a Percents for some agencies do not total 100 because some
applicable organizations did not answer this question. 

\b Includes ratings of "Excellent," "Good," and "Satisfactory."

\c Includes ratings of "Fair" and "Poor."



                          Table II.9
           
           Actions That Organizations With Program
            Awareness Believed the Agencies Should
            Take to Increase Program Awareness and
                  Participation (Table 3.4)

                     (Numbers in Percent)

Action agency should take        HUD      VA    FmHA     RTC
----------------------------  ------  ------  ------  ------
Advertise more in              65(+/   81(+/   72(+/   61(+/
 newspapers, newsletters,        -7)    -12)    -12)    -10)
 and journals
Provide toll free telephone    77(+/   85(+/   81(+/   73(+/
 information service             -6)    -12)    -10)     -9)
Mail information on how to     95(+/   99(+/  100(+/   94(+/
 lease and purchase              -3)     -3)     -0)     -5)
 properties to homelessness
 assistance organizations
Make updated lists of          92(+/   99(+/   99(+/   93(+/
 properties more readily         -4)     -3)     -2)     -5)
 available
Provide individualized         91(+/   92(+/   94(+/   89(+/
 technical assistance to         -4)     -9)     -6)     -7)
 help organizations complete
 applications
For first-time participants,   94(+/   91(+/   93(+/   88(+/
 provide individualized          -4)     -9)     -7)     -7)
 technical assistance on
 acquiring properties,
 rehabilitating them, and
 keeping them running
Provide more workshops on      88(+/   84(+/   90(+/   83(+/
 how nonprofit organizations     -5)    -12)     -8)     -8)
 can lease or purchase
 property
------------------------------------------------------------


                         Table II.10
           
           Costs Viewed as Barriers by HUD Program
                   Participants (Table 4.1)

                     (Numbers in Percent)

                                               Organizations
                                                selecting as
Item cited as a barrier to     Organizations     single most
acquiring HUD foreclosed          citing the       important
property                             barrier         barrier
----------------------------  --------------  --------------
High cost of rehabilitation         61(+/-4)        12(+/-3)
High cost of buying property        49(+/-4)        11(+/-2)
High cost of maintenance,           44(+/-4)         9(+/-2)
 insurance, and utilities
------------------------------------------------------------


                         Table II.11
           
             Average Costs and Offsetting Rental
           Income Reported by Organizations Leasing
           Property Under HUD's Program (Table 4.2)

                                                   Estimated
                                                   number of
                                                  properties
                                                   reporting
                                   Estimated    little or no
Element of cost               average cost\a   cost/income\a
----------------------------  --------------  --------------
Amount spent to rehabilitate      $4,249(+/-       53(+/-17)
 property                              $758)

Annual operating expenses
------------------------------------------------------------
Liability insurance             $356(+/-$44)         4(+/-3)
Property taxes                  $692(+/-$58)      135(+/-27)
Utilities                         $1,811(+/-       38(+/-16)
                                     $108)\b
Maintenance                       $1,297(+/-        18(+/-9)
                                     $146)\b
Managing property                 $1,555(+/-      144(+/-28)
                                       $223)

Annual expenses vs. rental income
------------------------------------------------------------
Total annual expenses             $5,711(+/-
                                       $366)
Rental income organization        $2,454(+/-      175(+/-31)
 received                              $356)
Maximum net loss                  $3,257(+/-
                                       $472)
------------------------------------------------------------
\a Estimates for average cost are based only on data for those
properties that reported cost information for all items, even if the
reported cost for a particular item(s) were little or nothing.  We
also excluded amounts reported for one or two properties that were
vastly different from those reported for the other properties because
they would have unduly skewed the averages.  These estimates of
average cost represent an estimated 683 properties (+/-53). 

\b These may include some amounts paid by the occupant rather than
the nonprofit organizations. 



                                   Table II.12
                     
                     Average Costs Reported by Organizations
                        Purchasing Property Through HUD's
                              Program (Table 4.3)\a

                            Estimated                                  Estimated
                               number                                     number
                        of properties         Estimated average    of properties
                          reporting a            for properties     reporting no
Element of cost                  cost         incurring a cost\           cost\\
--------------------  ---------------  ------------------------  ---------------
Purchase/rehabilitation costs
--------------------------------------------------------------------------------
Purchase price             118(+/-22)        $34,877(+/-$3,406)                0
Rehabilitation              99(+/-18)        $19,105(+/-$2,518)         12(+/-7)

Annual operating expenses
--------------------------------------------------------------------------------
Mortgage payment            35(+/-10)         $5,649(+/-$1,182)        53(+/-15)
Insurance                  113(+/-21)             $936(+/-$343)                0
Property taxes              78(+/-17)           $1,192(+/-$244)         19(+/-9)
Utilities                  105(+/-20)           $1,549(+/-$231)          7(+/-7)
Maintenance                100(+/-21)           $1,436(+/-$152)                0
--------------------------------------------------------------------------------
\a We computed average costs differently for purchased properties
than for leased properties (see table II.11).  Because there was an
insufficient number of such properties, we did not compute these
averages using only properties that reported cost information for all
items, as we did with the leased properties.  Instead, to compute the
above estimated average costs for purchased properties, we summed the
costs reported by all properties for a given item and divided that
sum by the number of properties that reported a cost (other than $0)
for that particular item.  We also excluded amounts reported for one
or two properties that were vastly different from those reported for
the other properties because they would have unduly skewed the
average.  The total number of properties (those incurring a cost plus
those incurring little or no cost) differ for the individual cost
items because not all organizations responded to each item. 



                         Table II.13
           
               Other Items Cited as Barriers to
             Acquiring Properties by HUD Program
              Participants (Ch. 4 and Table 4.4)

                     (Numbers in percent)

                                                Organization
                                                 s selecting
                                                   as single
Item cited as a barrier to        Organization          most
acquiring HUD-foreclosed          s citing the     important
property                               barrier       barrier
--------------------------------  ------------  ------------
Property in the organization's        44(+/-4)       7(+/-2)
 service area is in poor
 condition or does not meet its
 needs.
Not enough personnel in the           33(+/-4)       7(+/-2)
 organization to manage property
 once it is purchased or leased.
Too few properties available in       32(+/-4)      10(+/-2)
 the organization's service
 area.
Low chance of getting federal         68(+/-4)      23(+/-3)
 funds to help pay the costs of
 purchasing and/or operating
 foreclosed properties.
Federal funds, when available,        51(+/-4)       4(+/-1)
 are not accessible in a timely
 manner.
Too little funding assistance         68(+/-4)       5(+/-2)
 from nonfederal sources.
------------------------------------------------------------


                         Table II.14
           
                 Participation by HUD Program
             Participants in One Or More of Seven
             Other Federal Programs that Can Fund
              Housing for the Homeless\a (Ch. 4)

                     (Numbers in Percent)

                                                    Sampling
                                      Organizati   Error (+/
Participation                                ons          -)
------------------------------------  ----------  ----------
Had participated in one or more of            72           3
 the seven other programs.
Of organizations that had                     30           3
 participated in one or more of the
 seven other programs, those that
 had used them to defray foreclosed
 property costs.
------------------------------------------------------------
\a The Supportive Housing Demonstration Program, Emergency Shelter
Grant Program, Supplemental Assistance for Facilities to Assist the
Homeless (SAFAH) Program (in 1993 SAFAH became part of the Supportive
Housing Demonstration Program), Shelter Plus Care Program, Section 8
for Single Room Occupancy Program, Section 8 Rental Assistance
Program, and Federal Surplus Property Program.  HUD administers or
helps administer each of these programs.  With the exception of the
Section 8 Rental Assistance Program, all are homelessness assistance
programs authorized under the Stewart B.  McKinney Homeless
Assistance Act (P.L.  100-77, as amended). 



                         Table II.15
           
            Homelessness Assistance Organizations'
           Interest in Multifamily Property (Table
                             4.5)

                     (Numbers in Percent)

                                   Multifamily   Multifamily
                                      property      property
Program participation                   useful   most useful
--------------------------------  ------------  ------------
Organizations that had leased or      43(+/-4)      22(+/-3)
 purchased property from HUD
Organizations that had not            47(+/-5)      20(+/-4)
 leased or purchased property
 under any of the four programs
------------------------------------------------------------

GEOGRAPHIC DISTRIBUTION OF
PROPERTIES AVAILABLE FOR
DISCOUNTED SALE TO NONPROFIT
HOMELESSNESS ASSISTANCE
ORGANIZATIONS
========================================================= Appendix III


State            HUD        VA      FmHA       RTC     Total
----------  --------  --------  --------  --------  ========
Alaska            71         3         2         0        76
Ala.             357         0        13       183       553
Ark.             515         9        37        38       599
Ariz.          1,353       271        22       174     1,820
Calif.         1,724       192         1        20     1,937
Colo.          2,528       322         7        56     2,913
Conn.            357         0         6        35       398
D.C.             507       133         0         5       645
Del.               0         0         2         0         2
Fla.           2,528       171        24       325     3,048
Ga.            1,545       194        21       190     1,950
Hawaii             2         0         0         0         2
Iowa             114         5         3        26       148
Idaho             63         2         7         1        73
Ill.           1,644       163        22        28     1,857
Ind.             585        59        13         2       659
Kans.              0        89        17       150       256
Ky.              115        54         9         4       182
La.              992        77        32       368     1,469
Mass.            110         0         7        74       191
Md.              280        56         1        25       362
Maine              0         0         4         4         8
Mich.            788       101        57         1       947
Minn.          1,023        72        12        16     1,123
Mo.              865        61        17       104     1,047
Miss.            388        10        59        54       511
Mont.            108        15         0         1       124
N.C.             782        38        24        31       875
N. Dak.          126         0         7         6       139
Nebr.             99         3         2         7       111
N.H.             165       133         4        30       332
N.J.             233        63        15        41       352
N. Mex.          144        24         7        21       196
Nev.             242         0         0         5       247
N.Y.             610        44        42        24       720
Ohio           1,027       324        28        19     1,398
Okla.            947        20        79       282     1,328
Oreg.             37         0         4         6        47
Pa.              600        83        18        48       749
P.R.              77         0        10         0        87
R.I.              49         0         0        11        60
S.C.             784       111        25        31       951
S. Dak.            0         0         6         0         6
Tenn.          1,106        96         1        77     1,280
Tex.           5,030       612        59     1,224     6,925
Utah             311        14         5        14       344
Va.            1,380       386        45        69     1,880
V.I.               0         0         2         0         2
Vt.                0         0         4         0         4
Wash.            111        22         3         1       137
Wis.             134        11        17         1       163
W. Va.            34         6        14        11        65
Wyo.               0         0         1         3         4
============================================================
Total         32,590     4,049       817     3,846    41,302
------------------------------------------------------------

MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV


   RESOURCES, COMMUNITY, AND
   ECONOMIC DEVELOPMENT DIVISION
-------------------------------------------------------- Appendix IV:1

Marnie Shaul, Assistant Director
Woodliff Jenkins, Assignment Manager
Alice Feldesman, Supervisory Social Science Analyst
Jason Lee, Social Science Analyst


   LOS ANGELES REGIONAL OFFICE
-------------------------------------------------------- Appendix IV:2

James D.  Moses, Regional Management Representative
Sam Mattes, Evaluator-in-Charge
Marco Gomez, Site Senior
Gary Hammond, Evaluator
Mack Machen, Evaluator


   CHICAGO REGIONAL OFFICE
-------------------------------------------------------- Appendix IV:3

John Wanska, Regional Management Representative
Susan Swearingen, Site Senior
Daniel Lee, Evaluator
Lisa Denberry, Intern



RELATED GAO PRODUCTS
============================================================ Chapter 1

Acquiring Public Housing from RTC (GAO/RCED-93-46R, Mar.  17, 1993). 

Homelessness:  McKinney Act Programs and Funding Through Fiscal Year
1991 (GAO/RCED-93-39, Dec.  21, 1992). 

Resolution Trust Corporation:  Affordable Multifamily Housing Program
Has Improved but More Can Be Done (GAO/GGD-92-137, Sept.  29, 1992). 

Resolution Trust Corporation:  More Actions Needed to Improve
Single-Family Affordable Housing Program (GAO/GGD-92-136, Sept.  29,
1992). 

Homelessness:  Single Room Occupancy Program Achieves Goals, but HUD
Can Increase Impact (GAO/RCED-92-215, Aug.  27, 1992). 

Homelessness:  Transitional Housing Shows Initial Success but
Long-term Effects Unknown (GAO/RCED-91-200, Sept.  9, 1991). 

Homelessness:  Federal Personal Property Donations Provide Limited
Benefit to the Homeless (GAO/RCED-91-108, July 15, 1991). 

Homelessness:  Action Needed to Make Federal Surplus Property Program
More Effective (GAO/RCED-91-33, Oct.  9, 1990). 

Homelessness:  Too Early to Tell What Kinds of Prevention Assistance
Work Best (GAO/RCED-90-89, Apr.  24, 1990). 
