Information on and Barriers to Assistance Programs Providing Foreclosed Property

RCED-93-182: Published: Sep 30, 1993. Publicly Released: Nov 2, 1993.

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Pursuant to a congressional request, GAO reviewed federal programs that make federally-held real estate properties available to nonprofit homelessness assistance organizations, focusing on: (1) the number of properties federal agencies have provided and the geographic distribution of the properties; (2) the agencies' program publicity and promotion; and (3) nonprofit homelessness assistance organizations' obstacles to acquiring property.

GAO found that: (1) each agency has procedures for selecting eligible properties for sale or lease to nonprofit organizations, but they limit the availability of properties because of their need to meet competing objectives; (2) the Department of Housing and Urban Development's (HUD) program has accounted for more than 90 percent of the properties sold or leased and 80 percent of the properties in inventory; (3) four agencies have made changes to their programs to make more properties available; (4) about 95 percent of the homelessness assistance organizations have not participated in any of the programs primarily due to the lack of information on the programs, available properties, and knowledge of acquisition procedures; (5) the agencies and the homelessness coordinating council have initiated the organizations' suggested improvements for the outreach programs; (6) federal agencies need to intensify their outreach efforts to interested organizations; (7) significant barriers to organizations obtaining federal properties include acquisition, rehabilitation, operating costs, and financing difficulties; and (8) homelessness assistance organizations have a great need for multifamily properties, but few properties are available because HUD does not currently include such properties in its program.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Legislators have not expressed an interest in and do not have any plans to pursue this issue.

    Matter: If Congress wants to increase the use of federal foreclosed property by the homeless, it should consider providing nonprofit homelessness assistance organizations with additional assistance in financing acquisition, rehabilitation, and operating costs. Options for providing such assistance include direct payments via expansion of existing McKinney Act grants or rent subsidy programs (such as Section 8), greater flexibility in the timing of grants under these programs, more low-cost financing or short-term loans, or the four agencies absorbing costs now borne by the homelessness assistance organizations.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HUD proposed legislation seeking authority to use up to 10 percent of its inventory of foreclosed multifamily properties for certain nontraditional purposes, including overnight shelters for the homeless. Congress amended HUD's proposal and enacted a modified policy in the HUD Reform Act of 1994. Under this policy, 10 percent of the units sold are eligible for homelessness assistance uses (other than as overnight shelters). The legislation also made eligible a number of smaller projects developed under Section 312 community development programs.

    Recommendation: To help meet their needs for multifamily property, the Secretary of Housing and Urban Development should establish a policy that specifies appropriate circumstances and conditions under which HUD-owned multifamily property can be made available to nonprofit homelessness assistance organizations.

    Agency Affected: Department of Housing and Urban Development

  2. Status: Closed - Implemented

    Comments: The Interagency Council on the Homeless developed several task forces on federal foreclosed/surplus property, personal property, and Title 5. As a result of the task forces' efforts, an informational brochure on how to purchase or lease federally acquired foreclosed properties by homeless service providers was developed. The informational brochure was distributed to all of the parties on the Council's mailing list as well as to state homeless coordinators. Given the current resources of the Council, no action will be taken to provide specialized technical assistance or providing organizations with up-to-date information on what properties are available in their area.

    Recommendation: The Executive Director, Interagency Council on the Homeless, as head of the organization responsible for overseeing and coordinating executive branch homelessness assistance activities, should initiate and coordinate a joint effort with appropriate representatives of the Farmers Home Administration, HUD, the Resolution Trust Corporation, the Department of Veterans Affairs, and advocacy groups representing nonprofit homelessness assistance organizations at the national, state, and local levels to develop an outreach strategy that more effectively disseminates essential information on the property disposition programs available to nonprofit organizations that assist the homeless. In doing so, priority should be given to ways of achieving much wider knowledge of basic procedures for obtaining properties, such as by providing specialized technical assistance for first-time participants and information about the VA program to a wider spectrum of homelessness assistance organizations, not just veterans organizations. Special attention also should be given to finding better ways of providing organizations with up-to-date information on what properties are available in their area.

    Agency Affected: United States Interagency Council on Homelessness


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