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Social Services: Housing Assistance

Examining the benefits and costs of housing programs and tax expenditures that address the same or similar populations or areas, and potentially consolidating them, could help mitigate overlap and fragmentation and decrease costs.

Action:

To optimize the federal role in rural housing, the Congress may wish to consider requiring the Department of Agriculture (USDA) and the Department of Housing and Urban Development (HUD) to examine the benefits and costs of merging those programs that serve similar markets and provide similar products. As a first step, the Congress could consider requiring USDA and HUD to explore merging their single-family insured lending programs and multifamily portfolio management programs, taking advantage of the best practices of each and ensuring that targeted populations are not adversely affected.

Progress:

No legislative action identified.  In the 113th Congress, the House Committee on Financial Services approved a bill entitled the Protecting American Taxpayers and Homeowners Act (PATH Act) which, among other things, aimed to coordinate federal housing policy among HUD’s Federal Housing Administration (FHA) and USDA’s Rural Housing Service (RHS), and required the two agencies to synchronize their technology and risk management within similar programs, as GAO recommended in September 2000. Specifically, Section 216 of the act required RHS to utilize FHA’s financial underwriting and operations systems for making, insuring or guaranteeing the insurance products within RHS’s housing programs. However, this legislation was not enacted.  

HUD, USDA, and the Department of the Treasury (Treasury) have continued their efforts to improve operations and better coordinate and align certain requirements among the agencies’ multifamily and single-family housing programs. For example, the agencies have implemented a pilot in 31 states to test the feasibility of conducting a single physical inspection that would satisfy agencies’ inspection requirements. As GAO reported in March 2015, RHS also entered into a shared service agreement with the Department of Veterans Affairs (VA) to manage real estate-owned preservation and disposition of single-family properties acquired through RHS’s direct loan program. Additionally, OMB has participated in interagency discussions regarding federal housing assistance, credit budgeting, and management of HUD, VA, and USDA housing programs. Nonetheless, the agencies have not yet reported on the specific opportunities for consolidating similar single-family and multifamily housing programs, including those that would require statutory changes and help inform Congress’s decision-making process. As of October 2015, the agencies were focused on sharing best practices but were limiting their consideration of potential consolidation to administrative changes within individual agencies, rather than statutory changes in or across agencies. According to OMB, the administration has explored options for making housing assistance more effective across all agencies that provide it, and continually reviews a wide variety of programs for potential consolidation. However, it has no specific schedule for reporting on housing program consolidation. Statutory changes such as program consolidation could help mitigate overlap and fragmentation and decrease costs.

Action:

To help mitigate overlap and fragmentation and decrease costs, the Director of the Office of Management and Budget (OMB), in consultation with the Secretary of the Treasury should develop and implement a framework for conducting performance reviews of tax expenditures. This includes (1) outlining leadership responsibilities and coordination among agencies with related responsibilities; (2) setting a review schedule; (3) identifying review methods and ways to address the lack of credible tax expenditure information; and (4) identifying resources needed for tax expenditure reviews.

Progress:

GAO is not assessing this action as part of this area as it is already reflected inaction 2 in Area 17, Tax Expenditures, from GAO’s March 2011 report. GAO will continue to monitor OMB’s efforts to develop and implement a framework for conducting performance reviews of tax expenditures and report on its progress in addressing our suggested action in the Tax Expenditures area.

Action:

To help mitigate overlap and fragmentation and decrease costs, the Director of the Office of Management and Budget (OMB), in consultation with the Secretary of the Treasury should require that tax expenditures be included in executive branch budget and performance review processes.

Progress:

GAO is not assessing this action as part of this area as it is already reflected inaction 4 in Area 17, Tax Expenditures, from GAO’s March 2011 report. GAO will continue to monitor OMB’s efforts to develop and implement a framework for conducting performance reviews of tax expenditures and report on its progress in addressing our suggested action in the Tax Expenditures area.

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    • Mathew J. Scire
    • Director, Financial Markets and Community Investment
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    • (202) 512-8678
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    • James R. McTigue, Jr.
    • Director, Strategic Issues
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