Housing Assistance Council Studies Section 502 Direct Loan Obligations

摘要

In a study of the Section 502 direct loan program, the Housing Assistance Council (HAC) attributed a decline in program obligations for very-low-income households in recent years to a drop in loan applications, stagnant family incomes, and a greater use of grant funds from other sources that helps borrowers but lowers total funds obligated for the program. By statute, at least 40 percent of funds appropriated for the Section 502 direct loan program each year must be set aside and made available to assist families with incomes below 50 percent of area median income (AMI). However, loan obligations failed to meet this target in fiscal 2010, when only 33.6 percent of the program funds ($340.8 million) went to very-low-income borrowers. By comparison, these families received 54.0 percent of the fiscal 2004 funds ($728.4 million).