Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to enhance screening of loan guarantee applicants, the Secretary of Agriculture should direct the Undersecretary for Rural Development to complete steps to obtain access to Treasury's Do Not Pay portal and establish policies and procedures to deny loan guarantees to applicants who are subject to administrative offsets for delinquent child support payments.

Agency: Department of Agriculture
Status: Open

Comments: In August 2020, Rural Development said that implementing the recommendation would require a rule change and that it anticipated publishing a proposed rule by December 31, 2020.

Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen oversight of lenders and servicers, the Secretary of Agriculture should direct the Undersecretary for Rural Development to develop and publish in the Federal Register qualification requirements for the principal officers of lenders and servicers seeking initial or continued approval to participate in the guarantee program.

Agency: Department of Agriculture
Status: Open

Comments: In August 2020, Rural Development said it anticipated publishing a proposed rule to implement this recommendation by December 31, 2020.

Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen oversight of lenders and servicers, the Secretary of Agriculture should direct the Undersecretary for Rural Development to develop and publish in the Federal Register capital and financial requirements for guarantee program lenders that are not regulated by a federal financial institution regulatory agency.

Agency: Department of Agriculture
Status: Open

Comments: In August 2020, Rural Development said it anticipated publishing a proposed rule to implement this recommendation by December 31, 2020.

Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen risk assessment and reporting, the Secretary of Agriculture should direct the Undersecretary for Rural Development to improve performance measures comparing RHS and the Federal Housing Administration loan performance, potentially by making comparisons on a cohort basis and limiting comparisons to loans made in similar geographic areas.

Agency: Department of Agriculture
Status: Open

Comments: In August 2020, Rural Development said it was working with a contractor to establish more meaningful performance measures and estimated a completion date of December 31, 2020.

Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen risk assessment and reporting, the Secretary of Agriculture should direct the Undersecretary for Rural Development to develop risk thresholds for the guarantee program, potentially in the form of maximum portfolio- or loan-level loss tolerances.

Agency: Department of Agriculture
Status: Open

Comments: Rural Development hired a contractor to help establish risk thresholds for the guarantee program. The contractor's October 2016 report developed and recommended portfolio-level and loan-level risk thresholds (values that trigger consideration of policy adjustments) and also recommended that program officials conduct stress tests to validate that each recommended risk threshold was appropriate for the program's overall risk appetite. As of August 2020, Rural Development said it was continuing to work with the contractor to stress test the risk thresholds and estimated a completion date of December 31, 2020.

Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to more effectively fulfill the requirements for conducting program reviews described in OMB Circular A-129, the Secretary of Agriculture should direct the Undersecretary for Rural Development to develop procedures for selecting RD credit programs for review based on risk and establish a prioritized schedule for conducting the reviews.

Agency: Department of Agriculture
Status: Open

Comments: In August 2020, Rural Development said that its Chief Risk Officer was working with the agency on establishing procedures for selecting Rural Development credit programs for review based on risk, including a prioritized schedule. Rural Development estimated a completion date of June 30, 2021.

Recommendation: To strengthen accountability and transparency in FHA's management of the Fund, Congress may wish to consider clarifying (1) the definition of the Fund's capital ratio--specifically, whether the denominator of the ratio was intended to be the amortized insurance-in-force; (2) the definition of the phrase "established target subsidy rate" used in HERA; and (3) the nature and extent of information that FHA should be reporting on subsidy rates pursuant to HERA, recognizing that subsidy rates are generally only reestimated once a year under current budget processes.

Agency: Congress
Status: Open

Comments: As of October 2019, Congress had not acted on this matter for consideration.

Recommendation: To the extent that the CDBG program continues to be the primary vehicle used to provide post-disaster assistance for permanent housing, Congress may wish to consider providing more specific direction regarding the distribution of disaster-related CDBG assistance that states are to provide for homeowners and renters. If Congress wishes to change the proportion of assistance directed to homeowners and rental property owners in future recovery efforts, Congress could, for example, require states to demonstrate to HUD that they are adequately addressing the needs of both homeowners and renters with their CDBG allocation and other resources as a condition for receiving funds. Alternatively, Congress could direct HUD to develop a formula that accounts for the housing needs of both homeowners and renters. Such a formula could be used by states to determine the proportions of their disaster CDBG funds that should be used for housing, specifically rental housing. Further, the formula could also reflect the anticipated production levels of other programs that provide permanent housing assistance, such as the Low-Income Housing Tax Credit program.

Agency: Congress
Status: Open

Comments: Since 1993, Congress has appropriated Community Development Block-Disaster Recovery (CDBG-DR) funding in the wake of numerous presidentially-declared disasters, including, most recently, $2.431 billion in Public Law 116-20, the majority of which amount is for disasters that occurred in 2018 and 2019. Similar to previous CDBG-DR appropriations, the CDBG-DR appropriation in Public Law 116-20, enacted June 6, 2019, neither requires states to demonstrate to HUD that they adequately addressed the needs of both homeowners and renters nor, alternatively, directs HUD to develop a formula that accounts for the housing needs of both homeowners and renters. A bill introduced and reported out of committee in the 115th Congress, HR 4557, required HUD to disapprove a state action plan that detailed a grantee's use of funds if, among other reasons, the plan did not provide an equitable allocation of resources among homeowners, renters, and persons experiencing homelessness. A draft bill, whose provisions were essentially identical to HR 4557, was the focus of a hearing during the 116th Congress.