Recalculate the project’s annual surplus cash balances for 2013, 2014, and 2015 after resolution of recommendations 1A, 1C, 1D, and 1F to determine whether the project should make additional payment to HUD from surplus cash toward its mortgage beyond the $13,740 that it paid during the audit.
2017-PH-1002 | Marzo 24, 2017
The Owner of Laurentian Hall Apartments, Pittsburgh, PA, Did Not Always Manage Its HUD-Mortgaged Project in Accordance With HUD Requirements
Housing
- Status2017-PH-1002-001-IOpenClosed$13,740Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
- Status2017-PH-1002-001-JOpenClosed
Provide training and technical assistance to the owner and its management agent to ensure compliance with the terms of its mortgage and other applicable HUD requirements.
2017-KC-1002 | Marzo 02, 2017
New Horizons, Kansas City, MO, Received Improper Section 8 Housing Assistance Payments
Housing
- Status2017-KC-1002-001-AOpenClosed$144,556Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Require New Horizons to repay HUD from project funds if available (otherwise, from nonproject funds) $144,556 in housing assistance payments for tenants who were not eligible for assistance or not living in units.
- Status2017-KC-1002-001-BOpenClosed$726,399Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Require New Horizons to provide support for the $726,399 in housing assistance payments based on missing or incomplete tenant files or repay the assistance from project funds if available (otherwise, from nonproject funds) to HUD.
- Status2017-KC-1002-001-COpenClosed$16,687Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Require New Horizons to support that $16,687 in tenant rents was collected and deposited as required or repay the project from nonproject funds.
- Status2017-KC-1002-001-DOpenClosed
Require New Horizons to obtain independent management.
- Status2017-KC-1002-001-EOpenClosed
Require New Horizons to conduct a review to determine who currently lives in the units and verify their eligibility.
- Status2017-KC-1002-001-FOpenClosed
Monitor New Horizons to ensure that it properly maintains tenant files, completes required annual recertifications, and supports disability exemptions in accordance with HUD requirements.
2017-LA-0003 | Marzo 02, 2017
HUD Failed To Adequately Oversee FHA-Insured Loans With Borrower-Financed Downpayment Assistance
Housing
- Status2017-LA-0003-001-AOpenClosed
Reconsider HUD’s position on questioned borrower-financed downpayment assistance programs, including an analysis of the financial impact to FHA borrowers, risk to the FHA program, and whether current statute prohibits borrower-financed downpayment assistance programs as they are currently structured.
- Status2017-LA-0003-001-BOpenClosed
Develop and implement policies and procedures to strengthen HUD’s comprehensive loan-level, postendorsement, and lender reviews by evaluating loans containing downpayment assistance (for example, interest rates, fees, borrower certifications, lender reviews, impact to borrower, related agreements, etc.). Policies and procedures should include evaluating the structure of downpayment assistance programs, including whether the programs’ structure and funding mechanisms comply with all HUD requirements and guidelines.
- Status2017-LA-0003-001-COpenClosed
Develop specific requirements and guidance for lenders to review HFA downpayment assistance programs (for example, interest rates, fees, borrower certifications, lender reviews, impact to borrower, related agreements, etc.). Requirements and guidance should include evaluating the structure of downpayment assistance programs, including whether the programs’ structure and funding mechanisms comply with all HUD requirements and guidelines.
- Status2017-LA-0003-001-DOpenClosed
Require lenders to obtain a borrower certification that details their participation in an HFA downpayment assistance program, including relevant details of the specific program (for example, impact on interest rate, mortgage payments, fees, equity, acknowledgement of other less costly loan products, etc.).
- Status2017-LA-0003-001-EOpenClosed
Ensure that lenders enter accurate and missing downpayment assistance gift data into FHA Connection when identified by HUD.
- Status2017-LA-0003-001-FOpenClosed
Implement new data fields where lenders would be required to enter specific downpayment assistance information (for example, name of the source, name of assistance program, name of government entity or HFA, etc.) to allow for auditability and for HUD to generate reports and perform risk assessments.
- Status2017-LA-0003-001-GOpenClosed
Review fees identified in this report that were charged as part of borrower-financed downpayment assistance programs and determine whether they are reasonable or necessary. HUD should immediately notify lenders to discontinue charging any fees that are determined to be unreasonable and unnecessary.
- Status2017-LA-0003-001-HOpenClosed
Require any participating lender to reimburse borrowers that received an FHA loan with borrower-financed downpayment assistance for any fees that were determined to be unreasonable and unnecessary.
2017-AT-1003 | Marzo 01, 2017
The Puerto Rico Department of Housing, San Juan, PR, Did Not Properly Administer Its Multifamily Special Escrow Funds
Housing
- Status2017-AT-1003-001-AOpenClosed$7,984,429Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Submit a plan showing how it will use the $7,984,429 in unspent escrow funds to meet program objectives and increase the supply of low- and moderate-income housing for the residents of Puerto Rico, including a schedule HUD can track to ensure the expenditure.
- Status2017-AT-1003-001-BOpenClosed$2,432,271Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Submit supporting documentation so HUD can reevaluate the feasibility of the three activities and determine the eligibility of the $2,432,271 in escrow funds already disbursed. If HUD determines that an activity has been canceled or is not feasible, the Department must reimburse the escrow account from non-Federal funds.
- Status2017-AT-1003-001-COpenClosed
Submit a plan showing how it will proceed regarding the Yabucoa, Juncos, and Barceloneta housing projects, including a schedule that HUD can track to ensure their completion.
- Status2017-AT-1003-001-DOpenClosed$2,176,733Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Submit supporting documentation showing the reasonableness and allowability of $2,176,733 disbursed or reimburse its escrow account from non-Federal funds.