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Highlights

GAO evaluated the provisions of the National Housing Act of 1934, which authorized the Department of Housing and Urban Development (HUD) to accept long-term, low-interest debentures instead of cash as payment for mortgage insurance premiums. GAO focused its review on: (1) the impact of redemption of debentures before they reach maturity as payment for mortgage insurance premiums; and (2) helping HUD improve program management and Congress decide whether amendments to the act, with respect to the debentures, are warranted.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
Congress should amend the National Housing Act to provide the Secretary, HUD, with the authority to redeem debentures prior to maturity at less than face value in order to adjust for variations between debenture interest rates and Treasury borrowing rates.
Closed - Not Implemented
Congress has had nearly 2 years to act on this recommendation and has not. Congressional action at this time would probably require a fresh analysis from GAO, something GAO can consider in conjunction with the GAO annual work planning process.
Congress should amend the National Housing Act to provide the Secretary, HUD, with the authority to reject debentures as payment of mortgage insurance premiums if debenture owners choose not to accept less than face value, or if the Secretary otherwise deems it appropriate.
Closed - Not Implemented
Congress has had nearly 2 years to act on this recommendation and has not. Congressional action at this time would probably require a fresh analysis from GAO, something GAO can consider in conjunction with the GAO annual work planning process.

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