Implementation of Revised Section 235 Homeownership Program
CED-78-16: Published: Nov 23, 1977. Publicly Released: Nov 23, 1977.
- Full Report:
An inquiry was conducted into the Department of Housing and Urban Development's (HUD) implementation of the revised section 235 homeownership program. Since its inception in January 1976, the program has helped only 9,459 homebuyers, and only $21.3 million of the total $264.1 million in contract authority has been reserved or obligated. The Department's initial goal was to spend the $264.1 million over a 2- and 3-year period to assist 250,000 to 300,000 homebuyers. There has been little activity in many major metropolitan areas although these areas have received relatively large portions of the program's allocated funds. Although many persons interviewed agreed that the concept of the program is good and that it fills a need for persons who want to be homeowners but cannot afford a home through conventional means, mortgagees were the only group which indicated some satisfaction with the current program requirements. The following actions to increase program participation should be considered: lowering the downpayment, increasing the interest subsidy, extending the life of the mortgage, making existing housing eligible under the program, relaxing the rigid 40 percent limitation on the number of section 235 homes in a subdivision, and increasing the mortgage limits.