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091948 1 (1980-08-21)

handle is hein.gao/gaobacwdy0001 and id is 1 raw text is: 






           - ~         UNITED STATES GENERAL ACCOUNTING OFFICE
                               WASHINGTON. D.C. 20548
                                                     IN SWPLY
                                                     Rwl TOs
    COMMUNITY AND ECONOMIC
    DEVELOPMENT DIVISION
                                                          Atk6 21 196

         The Honorable Lawrence  B. Simons
         Assistant Secretary  for Housing-
           Federal Housing  Commissioner
         Department of Housing  and
           Urban Development                                 091948

         Dear Mr. Simons:

              In our current  review 0o the co t-effectiveness of
         section 8 partially  assiste   rioj tsJwe have observed a
         problem that we  believe warrants your attention.  This is
         the practice of  some section 8 project owners who are leas-
         ing units, for which  section 8 assistance is available, to
         market rate tenants  rather then section 8 eligible house-
         holds.  The problem  affects both partially and fully assisted
         projects.  Although  leasing to such ineligible market rate
         households  is permissible under the section 8 regulations,
         we believe  the current policy and procedures relating to
         their inclusion  in assisted housing could be improved.  As
         you know the Department  of Housing and Urban Development
         recently  (1) lowered to 10 percent the percentage of assis-
         ted units  in any project which can be rented to households
         who are  ineligible for section 8, and (2) developed new
         sanctions for  dealing with project owners who fail to comply
         with the 10  percent limitation.  We agree with these changes
         but feel  that some additional measure. are needed.

              Since HUD  is currently making revisions to certain of
         the regulations  applicable to section 8 and rewriting the
         section  8 contract forms, we believe you should consider,

                 1)  further lowering the percentage limitation
                     on ineligible households to 5 percent,-with
                     no exception for partially assisted projects,

                 2)  issuing explicit enforcement guidelines for
                     use by HUD area offices in dealing with proj-
                     ect owners who exceed the limitation on
                     *ineligible households and

                 3)  making the new percentage limitation on
                     ineligibles applicable to completed projects
                     for which the earlier 20 percent limitation
                     is still in affect.

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              I>)c~CC?/

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