Housing:

The Housing Assistance Council's Use of Appropriated Funds

GAO-11-189R: Published: Dec 6, 2010. Publicly Released: Dec 6, 2010.

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The Food, Conservation, and Energy Act of 2008 authorized appropriations of $10 million annually for the Housing Assistance Council (HAC) from fiscal years 2009 through 2011. Established in 1971, HAC is a nonprofit rural housing organization that aims to improve housing conditions for low-income rural residents, especially in high-need areas such as Indian country and Appalachia and among groups such as farmworkers. As part of its mission, HAC also offers technical assistance in developing affordable rural housing and capacity building to a variety of groups involved in rural housing. HAC signs agreements each year with the Department of Housing and Urban Development (HUD) detailing how it will use its appropriations. The 2008 act required GAO to report on HAC's use of appropriated funds over the last 7 years, from 2003 to 2009--a period when HAC received more than $20 million in appropriations. To respond to this mandate, our work had four objectives: to (1) describe HAC programs and activities, (2) identify the sources of HAC's funding and its use of the funds it receives, (3) discuss the results of HAC's programs and activities, and (4) determine what is known about HAC's effectiveness in assisting rural communities.

HAC has three primary programs that it uses to meet its goals of serving low-income rural areas: loan funds, technical assistance and training, and research and information. HAC has several types of loan funds. The Rural Housing Loan Fund helps rural organizations finance activities that are key to developing new housing but are often difficult to fund, such as surveying and appraising properties. The Preservation Revolving Loan Fund works to preserve affordable rental housing in rural areas before it is sold and becomes unaffordable to low-income renters. After receiving funds through a HUD competition, HAC awards loans to rural housing developers that are acquiring and preparing sites and developing infrastructure for affordable housing projects. The developers in turn use the funds to leverage other financing, and potential homebuyers put "sweat equity" into their new homes. HAC also has a Green Building/Healthy Home Initiative that works across these programs to promote the use of "green" building technologies and that helps the rural housing that is developed meet certain Self-Help Ownership Opportunity Program (SHOP) program requirements. HAC used the funding it received in 2003 to 2009--$86.4 million, 94 percent of it from federal agencies--for its three programs and attracted additional funding from private sources and local governments. Although the bulk of HAC's funds go to its loan programs, most of its appropriated funding supported the technical assistance and training and research and information programs. HAC receives annual independent audits, and from 2003 to 2009 received unqualified opinions on its financial statements. The independent auditors found one instance of noncompliance in 2008. HAC auditors found that HAC conducted very few site visits and instead reviewed quarterly status reports and held periodic telephone conversations. In 2009, HAC's auditors reported the issue as resolved and stated that HAC had conducted adequate site visits. The funded programs and activities appear to have helped create affordable housing and expand homeownership in low-income rural areas and increased the capacity of local rural development groups. For example, according to HAC, the SHOP program created more than 2,700 new homeowners from 2003 to 2009 and helped local organizations leverage additional funds at a ratio of 11 to 1 during the time period. Also, since 2004, HAC green loans and grants, primarily through the SHOP program, have helped to develop more than 3,100 units of energy-efficient housing. HAC has also provided one-on-one technical assistance, held numerous regional training workshops, and provided capacity-building grants, as well as conducting research and advising HUD. We recommend that the Executive Director of the Housing Assistance Council (1) Take steps to develop techniques that would more reliably measure its performance by working to increase response rates to its surveys and designing the surveys to track stakeholders by category. For example, HAC should ensure that only loan product users respond to questions about the use of loan products. (2) Consider ways to better track long-term outcomes of its activities--for example, adding requirements to its program guidelines to track SHOP recipients and adding questions to its customer surveys that would provide information on long-term outcomes. In commenting on a draft of this report, HAC's Executive Director said that HAC recognized the need to measure its performance more reliably and added that HAC had set up a task force to investigate how to better measure outcomes. He also said that HAC would incorporate GAO's recommendation on making its stakeholder surveys generalizable and reliable and examine ways to incorporate requirements in its program guidelines for tracking recipients of HAC services and loans in order to obtain information on long-term outcomes.

Recommendations for Executive Action

  1. Status: Open

    Comments: In process

    Recommendation: The Executive Director of the Housing Assistance Council should take steps to develop techniques that would more reliably measure its performance by working to increase response rates to its surveys and designing the surveys to track stakeholders by category. For example, HAC should ensure that only loan product users respond to questions about the use of loan products.

    Agency Affected: Housing Assistance Council

  2. Status: Open

    Comments: In process

    Recommendation: The Executive Director of the Housing Assistance Council should consider ways to better track long-term outcomes of its activities--for example, adding requirements to its program guidelines to track SHOP recipients and adding questions to its customer surveys that would provide information on long-term outcomes.

    Agency Affected: Housing Assistance Council

 

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