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RED-75-354 1 (1975-04-30)

handle is hein.gao/gaobaaate0001 and id is 1 raw text is: 


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                      COM  'TROLLZ   G n A. OF -1 -- UN1TD STATES ____ '-' __... .



    B-16763.7                                           APR c0 191    0I       2



    The Roaorable Richard S. ScKe   r                                    LM095012
United States Senate                        BEST DOCUMENT AVAILABLE

i   Dear Senator Schweiker:

        By letter of October 31, 1974, you asked that we obtain information
    from 'Kr. Ernest James, presidezt, 110 ?ark Corporation, Scranton, Pennsyl-
    vania, which might indicate 10roprieties in the handling of applications  7 -1
    for assistance under section 235 of the ational Eousig Act7, as amended
    (12 U.S.C. 1715z-l) by the Daratent of Eousing and Urban Development.
    Also you asked that we investigae his eagations. Xr. James' allega-
    tions referred to rltif.ily housing projects for low- and moderate-income
    families with mortgages to be 0'=0re' by the Department.

        We reviewed (1) procedures fol!oned in processing applications for
    section 236 projects, (2) perriv: 4--or-ation in the Department's
    Philadelphia area office relatin to a~plications for mortgage insurance.
    under section 236, and (3) files-='_z=-e by Yr. ia-es, his attorney,
    and the consultant for the pr-o-ja-.

         Our review did not disclose any __.roper action by the Department in
    considering the application for --rtgga_ insurance for the United House
    project sub-)itted by the cornporaticn. !so, we found no improprieties con-
    cerning t~he allegations made by E=. J-es  The areas of M.r. James' concern
    and our co-ents on these matters are presented below.

    AVAILABILITY OF W-,_NG
    FOR SECTION 236 PROJECTS

         Xr. Jazes told us that the Da===sz- allowed the State to make grants
    to the sponsors of two section 236 husing projects for planning purposes
    when only one could be finaly ap:-.r   by the Department for section 236
    funding. However, our review showed that the Depar-teat had enough funds
    to approve both projects.

    TYPE OF SPONSORS -IGIBLE FOR
    UNDER-<TvG SECTION 236 PROEC .S

         The Department approvad a setic- 236 housing project sponsored by a
    religious organization, -hich, acor-'g to Mr. James, is not allowed under
    its regulations. The Departm-z's rej-lations do not exclude a religious
    organization from eligibility as sazzsors of section 236 projects.


RED-75-354

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