HUD Reform Act:

Information on the Department's Response to the Act's Requirements

RCED-00-91: Published: Mar 27, 2000. Publicly Released: Mar 27, 2000.

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Stanley J. Czerwinski
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Pursuant to a legislative requirement, GAO reviewed the extent to which the Department of Housing and Urban Development (HUD) complied with the HUD Reform Act of 1989 in fiscal years 1997 and 1998, focusing on HUD's actions in response to: (1) title I of the Reform Act, which is the title principally concerned with addressing the ethics, management and Federal Housing Administration (FHA) issues raised during the late 1980s; and (2) four other titles in the act--II, III, VII, and VIII--that address other changes in HUD's management of federally assisted housing.

GAO noted that: (1) HUD has developed policies and regulations to comply with the Reform Act; (2) in response to the ethics, management, FHA reforms required by title I of the Reform Act, HUD has, among other things: (a) required the publication of a notice in the Federal Register of the availability of competitive grants, including the criteria for selection, announced its award decisions in the Federal Register, and maintained documents for public scrutiny on these decisions; (b) established ongoing program monitoring and evaluation activities of certain housing programs identified in the Reform Act within its Office of Policy Development and Research; and (c) issued regulations that impose civil money penalties on parties who submitted false information in the process of originating property improvement loans; (3) for the other Reform Act titles GAO examined, HUD has complied with title II's requirements to annually assess and report to Congress on the management and preservation of multifamily projects it holds; (4) HUD has also established a policy and a regulation to comply with title III's directive to extend the time a family is eligible to receive rental subsidies; (5) HUD has complied with title VII's requirement that it take possession of a foreclosed property financed under its Rehabilitation Loan Program, regardless of a borrower's right to redeem the property under state law; and (6) to comply with title VIII's requirement that rent subsidies are based on comparable private sector rents, HUD has provided instructions to public housing agencies on how to adjust rents to keep pace with comparable rents in the area and to conduct studies to determine rents that can be reasonably charged to low-income renters.

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