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 1998-04-23 monographic deposited born digital 104 p. GA 1.13:RCED-98-117 https://www.govinfo.gov/app/details/GAOREPORTS-RCED-98-117 P0b002ee1803971be f:rc98117 DGPO 2010-08-12 2011-03-28 GAOREPORTS-RCED-98-117 machine generated eng fdlp REPORT GAOREPORTS-RCED-98-117 RCED-98-117 Mortgage programs Housing programs Mortgage loans Low income housing Program management Federal aid for housing Financial institutions Tax credit Management information systems Cost control Community Development Block Grant HUD Risk-Sharing Multifamily National System HUD Low Income Housing Tax Credit Program HUD 2020 Management Reform Plan General Insurance Fund Special Risk Insurance Fund Chapter Report RCED Pursuant to a legislative mandate, GAO reviewed the risk-sharing demonstration programs established under section 542 of the Housing and Community Development Act of 1992, focusing on: (1) how well the programs' goals are being met; (2) the benefits for participating financial institutions and the Department of Housing and Urban Development (HUD); and (3) opportunities for improving the programs and HUD's administration of them.<p/>GAO noted that: (1) the credit enhancement program, together with the reinsurance program, was established under the Housing and Community Development Act of 1992 to facilitate the financing of affordable multifamily housing and to make that financing available in a timely manner; (2) the credit enhancement program is meeting these goals; (3) as of September 1997, 32 participating state and local housing finance agencies had reserved about 84 percent of the risk-sharing units allocated to these agencies through March 1996; (4) most of the insured loans are financing properties that serve more low-income households than required, apparently because the credit enhancement is being used with other subsidies, particularly low-income housing tax credits; (5) while it is still too soon to evaluate the financial performance of the insured loans, the available financial indicators reflect sound underwriting standards; (6) activity in the reinsurance program has been so limited that the program remains largely untested; (7) only one institution--Fannie Mae--has participated extensively in the program, and one lender--Banc One Capital Funding Corporation--has originated over half of the loans that Fannie Mae has reinsured; (8) Banc One's activity has demonstrated that the risk-sharing reinsurance program can expand participation in mortgage lending, including lending for smaller properties in rural areas--an unmet capital need, according to HUD's studies; (9) participation in the demonstration programs has enabled HUD to facilitate the financing of affordable multifamily housing while limiting its loss exposure through risk sharing; (10) participation has also allowed HUD to increase the efficiency and reduce the costs of its operations through delegation, compared with the Federal Housing Administration's traditional multifamily program; (11) HUD has retained responsibility for monitoring its risk-sharing partners' performance, but its data system for monitoring the progress of credit enhancement projects is unreliable; (12) HUD is aware of the system's problems and plans to resolve them in the course of overhauling all of its information management systems; (13) HUD has also retained responsibility for overseeing its risk-sharing partners' compliance with the demonstration programs' requirements; however, GAO's review identified one default that was not reported to HUD headquarters for over a year; and (14) HUD recognizes that effective oversight is critical, particularly if one or both of the demonstration programs are made permanent and lenders' activity increases. https://www.govinfo.gov/content/pkg/GAOREPORTS-RCED-98-117/html/GAOREPORTS-RCED-98-117.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-RCED-98-117/pdf/GAOREPORTS-RCED-98-117.pdf GAO/RCED-98-117 https://www.govinfo.gov/app/details/GAOREPORTS-RCED-98-117 Chapter Report GAO/RCED-98-117; Housing Finance: FHA's Risk-Sharing Programs Offer Alternatives for Financing Affordable Multifamily Housing; Mortgage programs Housing programs Mortgage loans Low income housing Program management Federal aid for housing Financial institutions Tax credit Management information systems Cost control Community Development Block Grant HUD Risk-Sharing Multifamily National System HUD Low Income Housing Tax Credit Program HUD 2020 Management Reform Plan General Insurance Fund Special Risk Insurance Fund Public Law 102-550 S. Rept. 102-332