Civil Litigations Concerning the Section 236 Housing Program

OGC-77-9: Published: Dec 23, 1976. Publicly Released: Dec 23, 1976.

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Several civil litigations concerning the section 236 Housing Program are traced. In July 1976, GAO notified Congress of its intention to institute a civil action to require release of the budget authority for making operating subsidy payments under section 236 of the National Housing Act. A revision in Public Law 94-378 authorized HUD to disperse the budget authority involved in this rescission to other housing programs. In a class action suit, on behalf of all section 236 project tenants, the district court ordered HUD to make operating subsidy payments. Most recently the U.S. Supreme Court ordered a stay on the district court's order, and the U.S. Court of Appeals enjoined HUD from allocating the moneys in the section 236 reserve account to fund programs other than the operating subsidy program.

GAO concluded that there no longer exists an impoundment of the section 236 reserve funds. The budget authority is being withheld pursuant to court orders and not as a result of executive branch action. For this reason, GAO did not file suit in this case.