GAO's Current Work on the Department of Housing and Urban Development's Troubled Projects StrategyGao ID: 109677 June 19, 1979
In June 1977, the Department of Housing and Urban Development (HUD) established a departmental task force on multifamily property utilization to determine the causes underlying the increases in the number of projects experiencing default, assignment, and ultimately foreclosure. The task force recommended that a flexible subsidy mechanism to insure project financial stability be incorporated in legislation. The flexibility subsidy program provided authorization for operating subsidies for financially troubled multifamily subsidized projects to restore or maintain financial soundness, to assist in management improvement, and to maintain the low-to-moderate-income character of these projects. The amount of subsidy provided for these privately owned, HUD-subsidized projects is determined after a review by HUD of the management operations and annual operating budgets of the projects. A study of current initiatives to improve on-site management performance indicated that certain opportunities existed for improving the management of HUD subsidized housing projects.