Housing Programs

In response to a congressional request, GAO reviewed the Department of Housing and Urban Development's (HUD) decision to close its Bangor, Maine, field office to determine: (1) how HUD decided which offices to close; (2) whether the HUD cost-benefit analysis was accurate and complete; (3) what impact the closing had on lenders and borrowers obtaining HUD-insured loans; and (4) whether the Manchester, New Hampshire, office was able to handle the increased work load from the Bangor and Burlington, Vermont, offices.

GAO found that: (1) HUD had no written procedures for determining which offices to close; (2) in making its decision, HUD considered the number of applications its offices received in fiscal years 1984 and 1985, the average distance that lenders would have to travel to the nearest alternate office, whether the office had an excess of employees, and the recommendations of the respective HUD regional managers and program officials; (3) the HUD cost-benefit analysis understated the potential cost of closing the Bangor office by as much $18,000 and overstated the benefits by over $9,000; (4) according to Manchester officials, its staffing level was not sufficient to provide adequate service to Maine lenders and borrowers; and (5) according to lenders, the application processing time at the Bangor office ranged from 35 to 60 days, while the processing time at the Manchester office ranged from 75 to 120 days.