Housing Programs:

Information on HUD's Decision To Close Its Springfield, Illinois, Office

RCED-87-47BR: Published: Nov 10, 1986. Publicly Released: Dec 10, 1986.

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In response to a congressional request, GAO reviewed the Department of Housing and Urban Development's (HUD) decision to close its field office in Springfield, Illinois, specifically: (1) the basis on which HUD decided which offices to close; (2) the accuracy and completeness of the information HUD used in making its decision; and (3) the closing's impact on borrowers obtaining HUD-insured loans.

GAO found that: (1) HUD determined which offices to close based on the number of applications each office received, the average distance that lenders would have to travel to the next closest office, whether the office had any excess employees, and management recommendations; (2) HUD overestimated the potential benefits of closing the Springfield office due to an inadequate estimate of salary savings and travel costs; (3) loan processing time would increase from 30 days to over 120 days because the next closest office gave priority to loans made under the direct endorsement program, which the Springfield office did not use extensively; and (4) lenders who previously used the Springfield office stated that as a result of the increased processing time, they would either decrease their use of HUD-insured loans or discontinue issuing them altogether.

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