Pursuant to a congressional request, GAO reviewed the financial status of the Department of Housing and Urban Development's (HUD) multifamily insured and assigned loan portfolios, focusing on the: (1) number of current and delinquent loans; (2) ratio of loan delinquencies to the unpaid principal balances; and (3) actions that HUD has taken to resolve the delinquencies.

GAO found that: (1) about 97 percent of HUD multifamily insurance loans are current, while about 3 percent are either delinquent or have defaulted; (2) the precise number of delinquent loans is unknown because the reporting of delinquencies is voluntary, but lenders must notify HUD of loans that have defaulted; (3) HUD increased its loss reserves to $11.9 billion as of September 30, 1992; (4) as of July 1993, the HUD-held loan portfolio consisted of 2,432 loans, of which 1,152 were current and 1,280 were delinquent; (5) although slightly more than one-half of all HUD-held loans are delinquent, they account for 80 percent of the portfolio's total unpaid principal balance; (6) about 53 percent of the 1,280 delinquent HUD-held loans have delinquencies that are equal to or less than 20 percent of their unpaid principal balances; (7) loans are more likely to be brought current when the ratios of delinquency to unpaid principal are higher than 20 percent; (8) only about 6 percent of the 1,280 delinquent HUD-held loans were under a formal workout plan as of July 1993; and (9) HUD officials have taken steps to improve the management and oversight of insurance-in-force and HUD-held loan portfolios.