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B-171630 1 (1974-05-31)

handle is hein.gao/gaobaafpw0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 MAY 3 1974 i B-171630 -- - The Honorable The Secretary of Housing and Urban Development LM096B6' Dear Mr. Secretary: In the fall of 1972, GAO, as part of its continuing review of HUD's subsidized housing programs, undertook a survey of the mo f _id to mortgagees for servicing subsidized mortgages insured under sections 235 and 236 QftheRatonal Hou5sA1tig t (the Home Ownership Assistance and Rental Assistance programs). We presented the results of our work and suggestions for corrective actions to the former Secretary in a letter dated November 2, 1972. BACKGROUND Section 235 of the National Housing Act, as amended (12 U.S.C. 1715z), which was added by section 101(a) of the Housing and Urban Development Act of 1968, authorizes HUD to help low- and moderate-income families become homeowners by providing mortgage insurance and subsi- dizing portions of the monthly payments due under the mortgages. Section 236, which was added to the National Housing Act (12 U.S.C. 1715z-1) by section 201 of the Housing and Urban Development Act of 1968, authorizes a rental assistance program under which multifamily rental housing units are provided to low- and moderate-income families. Under section 236 HUD is authorized to insure privately financed mortgage loans for constructing or rehabilitating multifamily housing projects and to pay, on behalf of the mortgagors, the mortgage insurance premiums and the interest on the mortgage loans in excess of 1 percent. Because HUD makes these payments--called interest reduction payments--a basic monthly rent for each housing unit is established at a rate lower than would apply if the project received no Federal assistance. The Housing and Urban Development Act of 1968 authorizes HUD to reimburse mortgagees for any additional expenses they incur in handling sections 235 and 236 mortgages. The handling fees under the section 235 program amounted to about $19 million in fiscal year 1973 and will amount to about $183 million over the life of the program. The handling fees under the section 236 program amounted to about $150,000 in fiscal year 1973 and will amount to about $1.5 million over the life of the program. 0 frT52I .tg D ,tji cLA M I RESOURCES AND ECONOM IC DEVELOPIAL: r DIVIsiON

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