Funding housing allowances for homeowners under Sec. 235

by Mack Ott

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Explores the feasibility of providing homeowners' housing allowances in the Housing Assistance Supply Experiment (HASE) through an existing program of mortgage subsidies for low-income homeowners, Sec. 235 of the National Housing Act. Compares the legal limits of subsidy for homeowners under Sec. 235 with the HASE allowance entitlement under the formula proposed by RAND to determine what circumstances lead to HASE allowances in excess of the amount normally permitted by Sec. 235. Conclusions are that, generally, Sec. 235 is a feasible resource for funding homeowners' allowances for households in the middle and upper portions of the range of incomes eligible for housing allowances under the RAND forumla, but that it is not feasible for households with very low incomes relative to household size. The study also discusses other problems entailed in the adaptation of Sec. 235 to the needs of the Supply Experiment.

This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

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