Multifamily Housing

The Department of Housing and Urban Development's (HUD) inventory of foreclosed multifamily properties has swollen in the past four years. HUD acquired this inventory mostly through foreclosures on properties that had loans insured by its Federal Housing Administration. To help Congress evaluate the impact of new legislation intended to improve HUD's ability to dispose of this inventory, GAO collected information on HUD-owned multifamily properties in Dallas, Texas, and Kansas City, Missouri. A total of 19 properties were included in GAO's analysis. This fact sheet discusses (1) the size and vacancy rates of the properties, the number of units receiving project-based Section 8 assistance, and the distribution of the units by the number of bedrooms; (2) HUD's estimates of the money needed to rehabilitate the properties; and (3) the current tenants' income levels and percentage of income spent on rent.

GAO found that: (1) subsidized properties ranged from 85 to 620 units with an overall vacancy rate of 39 percent, while unsubsidized properties ranged from 51 to 394 units with an overall vacancy rate of 55 percent; (2) HUD reported that poor physical conditions of the units, ongoing renovation, and rental market conditions affected vacancy rates; (3) most units in the subsidized properties received Section 8 rent subsidies, while only a small number of units in unsubsidized properties received rent subsidies; (4) preliminary estimates for rehabilitating subsidized properties ranged from $2,400 to $27,100 per unit, while estimates for unsubsidized properties ranged from $1,100 to $10,800 per unit; (5) most tenants in subsidized properties had incomes of 20 percent or less of the area's median income, while the incomes of tenants in unsubsidized properties ranged between 21 and 50 percent of the area's median income; and (6) most tenants in both subsidized and unsubsidized properties paid 30 percent or less of their income for rent.