The Department of Housing and Urban Development runs a program that offers grants to eligible nonprofits to help develop housing units for low-income buyers. Buyers are expected to contribute "sweat equity" to the project by helping to build their own homes.
Our Q&A report and recommendation look at HUD's management of the program, specifically its use of data to make decisions. For example, market data shows that costs for some activities the grant can pay for have risen over time. But HUD has only changed the grant's per-unit spending limit twice. Using relevant data could help HUD determine if spending limits are keeping pace with costs.
What GAO Found
The Self-Help Homeownership Opportunity Program (SHOP) is a competitive federal program that awards funds to eligible nonprofit organizations to help develop affordable housing units for purchase by low-income families. The Department of Housing and Urban Development (HUD) administers the program and collects some data from SHOP grantees at the aggregate level. For example, HUD collects data from grantees annually and semiannually on the number of housing units grantees developed with the assistance of SHOP funds and how much they spent on land acquisition and infrastructure improvements across projects.
However, HUD has not used these program data or market data, such as changes to land costs, to inform key program decisions, including setting the limit on the amount of SHOP funds grantees can spend on each housing unit. According to HUD officials, they have begun working with the Office of Policy Development and Research to analyze SHOP data in order to make future programmatic decisions. By systematically analyzing program and market data, HUD could better position itself to make informed program decisions.
Why GAO Did This Study
The joint explanatory statement regarding the Consolidated Appropriations Act, 2022 provides for GAO to evaluate various aspects of SHOP. This report examines how HUD collects and uses data for SHOP, including to inform key program decisions.
GAO is recommending that HUD systematically analyze relevant project-level and market data to inform program decisions for SHOP, including any per-unit spending limit that HUD establishes. HUD neither agreed nor disagreed with our recommendation.
Recommendations for Executive Action
|Department of Housing and Urban Development
|The Secretary of HUD should ensure that the Director of the Office of Rural Housing and Economic Development systematically analyzes relevant market and project-level data to inform program decisions for SHOP, including any per-unit spending limit that HUD establishes. (Recommendation 1)