TARGET EFFICIENCY OF STATE SINGLE FAMILY HOUSING PROGRAM (HOUSING FINANCE AGENCIES, MORTGAGE REVENUE BONDS, LOW- AND MODERATE-INCOME HOMEOWNERSHIP, INDEPENDENT AGENCIES)

The United States Congress allows state agencies to issue tax-exempt bonds to finance programs which subsidize the purchase of single family housing. Forty-nine states authorize a housing finance agency (HFA) to issue tax-exempt bonds, the proceeds of which are used to purchase below-marked-interest-rate mortgage loans for participating private sector leaders. Congress does not impose a household income limit on state single family programs. Forty-five state HFAs, however, do impose income limits. In 1983, the United States General Accounting Office (GAO) reported that single family housing programs financed by tax-exempt bonds typically assisted households which could assume mortgage loans without subsidies. The GAO report did not explain, however, what caused state HFAs to assist households with higher or lower incomes. This study was undertaken to estimate the effects of various political, organizational, market, and population elements of an HFA's environment on the degree to which low- and moderate-income households make up the population which participates in state single family housing programs. Data for this study were collected primarily through a survey of state HFA directors and supplemented by archival data sources, such as Census documents. Data analysis reveal that, overall, low- and moderate-income households constituted the majority of single family program participants. Three elements of an HFA's environment were found to affect the degree to which HFAs serve low- and moderate-income households: the income limit imposed on program participants, the working background of HFA single family program staff, and the percentage of seats on the HFA board of directors occupied by representatives of the leading industry. The existence of executive and legislative oversight institutions and state political, market, and population characteristics did not appear to affect HFA single family program performance.