HUD Homeownership Programs:

Data Limitations Constrain Assessment of the American Dream Downpayment Initiative

GAO-06-677: Published: Jun 30, 2006. Publicly Released: Jun 30, 2006.

Additional Materials:

Contact:

Mathew J. Scire
(202) 512-6878
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

While at an all-time high level, homeownership remains out of reach for many Americans, especially low-income families and minorities. In 2003, Pub. L. No. 108-186 created the American Dream Downpayment Initiative (ADDI) to help low-income, first-time homebuyers cover the up-front costs of buying a home (up to the greater of $10,000 or 6 percent of the purchase price) and authorized funding through fiscal year 2007. The Department of Housing and Urban Development (HUD) allocates ADDI funds to over 400 jurisdictions (e.g., states, cities, and counties). Pub. L. No. 108-86 directed GAO to perform a state-by-state analysis of ADDI's impact. This report discusses (1) HUD-reported information on ADDI expenditures and assisted households, and the limitations on the quality of these data and (2) the views of officials from selected jurisdictions on factors that affected their ability to use their funds and on the program's impact.

Based on data collected through its Integrated Disbursement and Information System (IDIS), HUD reported that through December 31, 2005, jurisdictions had spent $98.5 million of the $211 million appropriated for ADDI, helping more than 13,000 families nearly half of which were minorities become homeowners. At the state level, reported expenditures ranged from $0 to $10.3 million, and the number of projects (assisted households) ranged from 0 to 985. However, because of data limitations in IDIS and HUD's inconsistent guidance to jurisdictions on data entry, these figures include an unknown number of non-ADDI projects that provided down-payment assistance to first-time homebuyers. As a result, the expenditures and accomplishments attributable to ADDI are not known. HUD officials said that it was not feasible to create a control for ADDI in IDIS by the time the program began and that to do so now would be costly. Although most of the 40 jurisdictions GAO contacted have used some portion of their ADDI grants, officials from many jurisdictions said that the combination of high housing prices and the low incomes of eligible families made it challenging to spend their funds. In higher-cost areas, such as Los Angeles, California, jurisdictions must combine numerous subsidies with ADDI funds to bridge the gap between home prices and homebuyers' mortgages. However, in lower-cost areas, such as Grand Rapids, Michigan, ADDI alone is sufficient to make up the difference. Officials from the jurisdictions GAO contacted indicated that ADDI has not had a significant impact on local homeownership rates because the program has been modestly funded and is relatively new. In addition, some jurisdictions reported difficulties in serving populations that the program targeted for outreach, such as recipients of rental housing assistance.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To ensure that ADDI expenditures and accomplishments are accurately reported, if Congress authorizes ADDI beyond fiscal year 2007, the Secretary of HUD should develop and implement a discrete control in IDIS that distinguishes ADDI projects from non-ADDI HUD Home Investment Partnership Program projects, seeking funds to do so if necessary.

    Agency Affected: Department of Housing and Urban Development

    Status: Closed - Not Implemented

    Comments: The American Dream Downpayment Initiative (ADDI) was signed into law on December 16, 2003. The American Dream Downpayment Assistance Act authorized up to $200 million annually for fiscal years 2004 through 2007. Additionally, Congress provided $10 million for the ADDI program in fiscal year 2008, effectively reauthorizing the program for that year. However, Congress has not subsequently funded the program and the Administration has not requested additional resources for it. As a result, HUD does not intend to implement the recommendation.

    Recommendation: To ensure that ADDI expenditures and accomplishments are accurately reported, if Congress authorizes ADDI beyond fiscal year 2007, the Secretary of HUD should issue guidance to participating jurisdictions on how to use this control to enter consistent data on ADDI projects into IDIS.

    Agency Affected: Department of Housing and Urban Development

    Status: Closed - Not Implemented

    Comments: The American Dream Downpayment Initiative (ADDI) was signed into law on December 16, 2003. The American Dream Downpayment Assistance Act authorized up to $200 million annually for fiscal years 2004 through 2007. Additionally, Congress provided $10 million for the ADDI program in fiscal year 2008, effectively reauthorizing the program for that year. However, Congress has not subsequently funded the program and the Administration has not requested additional resources for it. As a result, HUD does not intend to implement the recommendation.

    Mar 31, 2014

    Mar 27, 2014

    Mar 18, 2014

    Feb 6, 2014

    Jan 30, 2014

    Jan 28, 2014

    Oct 22, 2013

    Aug 8, 2013

    Jul 31, 2013

    Looking for more? Browse all our products here