Investments in Affordable Housing Possible With Government Assistance
HRD-92-55: Published: Jun 12, 1992. Publicly Released: Jun 12, 1992.
Pursuant to a congressional request, GAO reviewed how pension funds are used to help finance affordable housing for low-and moderate-income families, focusing on: (1) the features and common elements of 15 affordable housing arrangements financed by pension funds; and (2) the expected rates of return on such housing investments.
GAO found that: (1) the nature and extent of pension fund involvement in financing affordable housing varied widely among the investments reviewed; (2) many pension funds funneled their housing investment assets primarily into fixed-rate securities; (3) most investments had some type of government assistance, which pension fund managers recognized as important to the success of affordable housing ventures and the protection of their fiduciary interests; (4) many pension fund investments were set up by intermediaries that identified affordable housing investment opportunities and arranged financing; and (5) information on rates of return was limited for most of the 15 pension funds reviewed, but 5 funds received rates of return similar to other investments of comparable risk.