We conducted a national audit of whether public housing authorities overpaid voucher subsidies to multifamily property owners in specific types of subsidized properties. If a public housing authority pays a property owner a subsidized rent at one of these types of properties, the voucher rent should be set at the level of the rent payments to the subsidized multifamily properties, which generally is lower than the public housing authorities’ payment standard for vouchers. This national audit follows our audit of a subsidized multifamily property in Maine, in which we found that housing authorities caused the overpayments by inappropriately using the fair market rents instead of the lower rents subsidized under Section 236 of the Housing Act of 1959.

Public housing authorities generally did not overpay subsidies to subsidized multifamily properties. We compared addresses of 1.93 million housing choice vouchers with addresses of 17,684 multifamily properties with Federal loans. We identified 193 addresses for which a voucher payment was made to the owner of a subsidized multifamily property. We also found that 148 of these vouchers were reported correctly. The remaining 45 vouchers were incorrectly reported, and these errors will be addressed in separate memorandums to U.S. Department of Housing and Urban Development (HUD) field offices. For these 45 vouchers, we did not find that the vouchers had common property owners, common public housing authorities, or common management agents.

We recommend that HUD update the Housing Choice Voucher Guidebook 7420.10G to include a section on the relationship between properties with Federal loans and the public housing authorities’ rental payments to those properties’ owners.