Housing Assistance: Listing of Programs, Activities, and Tax Expenditures and Related Information (GAO-12-555SP, August 2012) an E-supplement to GAO-12-554

Background

This e-supplement provides an inventory of spending programs, tax expenditures, and other activities (collectively, "activities") that federal agencies and entities use to support rental housing, homeownership, or both. For each activity, this inventory includes the following information: (1) the implementing or administering agencies or entities; (2) a brief description of the activity; (3) the primary purpose of the activity, which we judgmentally determined after reviewing its title, mission, objective, or goal; (4) type of housing supported (for example, homeownership, rental housing, or both); (5) the type of assistance provided; and (6) the obligations or revenue loss estimates for the activity in fiscal year (FY) 2010. This inventory is the basis for information presented in the full report, Housing Assistance: Opportunities Exist to Increase Collaboration and Consider Consolidation, GAO-12-554 (Washington, D.C.: August 16, 2012).

The inventory of federal programs, tax expenditures, and other activities can be accessed from the Table of Contents link below. It is available in its entirety for download as a comma-separated values (.csv) file.

To compile the inventory of federal support for housing in FY2010, we collected information from the Catalog of Federal Domestic Assistance, the FY2012 President's Budget, program documentation from the Departments of Housing and Urban Development (HUD), Agriculture (USDA), and Veteran's Affairs (VA), and studies by the Congressional Research Service, Congressional Budget Office (CBO), and other housing groups. We collected descriptive information about each program, including (1) the administering or implementing agencies or entities; (2) type of assistance provided; (3) eligibility of recipients in terms of geographic or income restrictions; and (4) other relevant nonfederal entities involved in administering, distributing, or delivering federal assistance, if any.

We compared the programs among the sources described above to create an inventory of federal support for housing. We excluded certain programs that can support housing, but were covered in other recent GAO reports, such as housing counseling and homeless housing programs. Additionally, we excluded Federal Trade Commission and Department of Justice enforcement efforts related to certain consumer protections. In some cases, names of programs were inconsistent among the various sources we reviewed. As a result, our usage either conformed with program names as cited in past GAO reports or with agency documents.

To identify housing tax expenditures, we reviewed lists of tax expenditures and estimates of revenue losses compiled annually by the U.S. Department of the Treasury (Treasury) and the Joint Committee on Taxation (JCT). Both Treasury and JCT list tax expenditures by budget function. We compiled a preliminary list of tax expenditures for FY2010 listed under the housing subfunction of the commerce and housing budget function, and added other housing related provisions listed under other budget functions. Our universe included expired tax expenditures listed by either Treasury or JCT that had estimated revenue losses in FY2010. While the tax expenditure lists were generally similar, Treasury and JCT's method for reporting specific tax expenditures differed slightly. We compared our list with similar lists of housing tax expenditures. Our final list of 15 housing tax expenditures were reviewed by officials from Treasury and the Internal Revenue Service (IRS).

To identify regulatory requirements, we included financial regulators (among their responsibilities, they help ensure that regulated institutions comply with consumer financial protections) and regulators of government-sponsored enterprises, and focused on those regulations affecting participants in the housing market, including lenders, consumers, and others involved in homeownership and rental housing. For example, we included the Farm Credit Administration because Farm Credit System associations are authorized to engage in rural housing lending under the agency's regulations. We also include as an administering entity the Federal Financial Institutions Examination Council, which is an interagency body that prescribes uniform principles, standards, and report forms for the federal examination of financial institutions and makes recommendations to promote uniformity in the supervisions of financial institutions. We relied on our recent reports related to federal mortgage lending laws. See appendix I of GAO-12-554 for a fuller description of our methodology for identifying programs, tax expenditures, and regulatory requirements.

To summarize federal support for homeownership and rental housing, we reviewed descriptive information about each activity. To characterize the primary purpose for each, we identified 11 categories that illustrate the primary public policy goals associated with each activity, and used the best available information to make a determination. In selecting the categories, we focused on the title, mission, objective, or goal of each activity and made a judgmental determination about common groupings for the activities. We also shared the categories and related descriptions with the responsible agencies. The 11 purposes that we identified are listed below:

• Assistance for buying, selling, or financing a home - assistance to individuals who are purchasing or refinancing a home or a preferential tax treatment on the sale of a home. Also, certain assistance to homeowners who are having difficulty making their mortgage payments.

• Assistance for homeowners - assistance to current homeowners to improve or change their properties, or tax expenditures that allow homeowners to deduct costs associated with homeownership.

• Increasing the availability of mortgage loans - actions taken to provide additional liquidity in the housing market, allowing private and government lenders to make additional mortgage loans.

• Assistance for financing rental housing - financial assistance for the production or preservation of rental housing.

• Assistance for rental property owners - financial assistance to owners of rental properties for units rented to low-income tenants, or tax expenditures that reduce the after-tax costs associated with owning and maintaining rental property.

• Rental assistance for tenants - payments on behalf of tenants to reduce their rent payments.

• Operation/management of rental housing - financial assistance to current owners of rental housing for the operation or management of rental housing.

• Regulatory requirement - regulations affecting participants in the housing market, including lenders, consumers, and others who buy, sell, or rent housing.

• Supports housing and other activities - activities that support any of the above activities under rental housing and homeownership. Also, activities in other areas in which the federal government is involved that have indirect effects on housing.

• Regulator of government-sponsored enterprises - government agencies that provide oversight and supervision of government-sponsored enterprises.

• Emergency assistance to housing market or current homeowners - actions taken to stabilize the housing market or provide financial assistance to homeowners to make their mortgages more affordable, or to provide temporary assistance through the tax code for homeowners.

We used a two-step process to independently assign each activity a primary purpose based on the descriptions listed above. Because many of the activities we reviewed have multiple purposes, we further characterized the type of housing assistance for each activity as related to (1) homeownership, (2) rental housing, or (3) homeownership and rental housing ("both"). First, an initial determination was made about the primary purpose and type of housing supported for each activity. Second, each determination was independently reviewed to verify the category assignments. When needed, the activity and category in question were discussed. For the tax expenditures, we also compared our selections with how others (including the Congressional Research Service, CBO, and JCT) had described the purpose or activity for housing-related tax expenditures. Finally, we shared the relevant portions of the inventory with the responsible agencies and incorporated their comments as appropriate.

We also identified the type of assistance associated with each activity in our inventory. In some cases, the agencies provided program dollars to an entity such as a nonprofit or local government that administered the funds to serve the primary targeted recipient. For the purposes of this report, we use "type of assistance" as it relates to the primary targeted recipient. Generally, the programs in our inventory provided the following types of assistance:

• Grant - to any other governmental or nongovernmental entity, or individual

• Direct payment - to property owner, homeowner, or tenant

• Direct loan - from government agency direct to borrower

• Guaranteed loan - through approved private lenders

• Insured loan - through approved private lenders

• Block grant - to other nonfederal governmental entities that have flexibility on use of funds

• Regulation

• Tax exclusions, exemptions, or deductions

• Tax credits

• Deferrals of tax

The inventory also contains budgetary information for each activity we identified for FY2010. To determine the budgetary obligations for spending programs, we reviewed the President's FY2012 Budget and agencies' budget justifications, which contained the actual obligations for FY2010. For the tax expenditures, we used the revenue losses for FY2010 as estimated by Treasury except in cases in which only JCT reported a tax expenditure. Some of the activities in our inventory incurred no obligations in FY2010 for a number of reasons, including that the activity was not part of the federal budget or was inactive in that year. We determined the data and information collected related to each activity and FY2010 budgetary information to be sufficiently reliable for the purposes of this e-supplement. We confirmed information found in the President's FY2012 Budget, agencies' budget justifications, and agency documentation with agency officials.

We conducted this performance audit from July 2011 through August 2012 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Contents

Table of Contents

(250649)

Copyright

This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.