United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office Resources, Community, and Economic Development Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1997-08-20 monographic deposited born digital 50 p. GA 1.13:RCED-97-195 https://www.govinfo.gov/app/details/GAOREPORTS-RCED-97-195 P0b002ee18038912b f:rc97195 DGPO 2010-08-12 2011-03-24 GAOREPORTS-RCED-97-195 machine generated eng fdlp REPORT GAOREPORTS-RCED-97-195 RCED-97-195 Community development programs Government guaranteed loans Economic development Federal aid for housing Intergovernmental relations Block grants Grant monitoring Community Development Block Grant Economic Development Loan Fund HUD Section 108 Loan Program Economic Development Initiative Grant Letter Report RCED Pursuant to a congressional request, GAO examined how changes to the Department of Housing and Urban Development's (HUD) Economic Development Loan Fund has affected the program, focusing on: (1) the extent to which communities are using the loan fund; (2) factors affecting communities' willingness to use the fund; (3) the types of projects being financed with loan proceeds; and (4) HUD's procedures for overseeing the program.<p/>GAO noted that: (1) from the loan program's inception through fiscal year (FY) 1996, HUD made 930 loan commitments totaling $4.4 billion; (2) about 38 percent of the Community Development Block Grant (CDBG) entitlement communities have received one or more loan commitments; 16 states, on behalf of their nonentitlement communities, have also received loans; (3) although communities' and states' use of the loan program has fluctuated--generally, 50 or fewer loans were approved each year--program activity increased sharply in FY 1994 through 1996, when the Department approved about 400 loans and nearly 60 percent of the dollars loaned since the program's inception; (4) according to HUD and associations representing community development officials, the key factor responsible for communities' and states' increased willingness to use the loan program has been the availability of Economic Development Initiative (EDI) grants to loan recipients; (5) in 1994, when the Department provided $19 million in grants, loan activity doubled--88 loans compared with 43 the previous year; in 1995, when the Department awarded $350 million in grants, the number of loans jumped to 218; however, in 1996, when no EDI grants were awarded, the number of loans dropped to 89; (6) the officials attributed any unwillingness to use the loan program to communities' concerns over collateral requirements and their reluctance to pledge future CDBGs as collateral for loans; (7) communities and states reported to HUD that they have used about 73 percent of their loans to finance economic development activities; (8) other eligible CDBG activities for which loans were reported to be used included acquisition of real property, housing rehabilitation, and public property rehabilitation; (9) the Department requires an annual review of grantees to determine, among other things, whether the activities funded by CDBGs are being carried out in a timely manner and in accordance with Department-approved plans; and (10) however, according to officials in 5 of the 30 field offices responsible for the loans in GAO's sample, they did not routinely include the loans in their annual reviews because they: (a) did not believe they had guidance on how to monitor the program; (b) did not believe they had a responsibility to monitor the loans; (c) had other priorities; or (d) lacked loan-specific information. https://www.govinfo.gov/content/pkg/GAOREPORTS-RCED-97-195/html/GAOREPORTS-RCED-97-195.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-RCED-97-195/pdf/GAOREPORTS-RCED-97-195.pdf GAO/RCED-97-195 https://www.govinfo.gov/app/details/GAOREPORTS-RCED-97-195 Letter Report GAO/RCED-97-195; Housing and Urban Development: Use and Oversight of the Economic Development Loan Fund; Community development programs Government guaranteed loans Economic development Federal aid for housing Intergovernmental relations Block grants Grant monitoring Community Development Block Grant Economic Development Loan Fund HUD Section 108 Loan Program Economic Development Initiative Grant