We recommend that the Southwest Region Director of Multifamily Housing require the Louis Manor Apartments’ owner to properly house the five families discussed in the finding in the correct unit size when an appropriate sized unit is available and ensure that its other tenants are housed in the correct unit size.

We recommend that the Southwest Region Director of Multifamily Housing require the Louis Manor Apartments’ owner to perform inspections for the units that lacked inspection reports

We recommend that the Southwest Region Director of Multifamily Housing require the Louis Manor Apartments’ owner to implement appropriate controls to ensure that it performs annual inspections, as required.

We recommend that the Southwest Region Director of Multifamily Housing require the Louis Manor Apartments’ owner to implement appropriate controls to ensure that tenants are eligible, housing assistance subsidies are accurate, and tenant files contain all required documentation.

Develop and implement controls and procedures to ensure that HUD’s underwriters properly evaluate the creditworthiness of management agents when underwriting future loans.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to support that the subsidies for 77 tenants and units with income discrepancies, missing EIV reports, missing income verifications, missing annual certifications and missing signatures are supported and accurate or repay HUD $1,865,344 for those subsidies. Repayment must be from non-project funds.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to ensure tenants are housed in the correct unit size.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to ensure annual inspections are performed in a timely manner and in accordance with HUD requirements.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to ensure that its new property management agent is providing oversight to its onsite staff and that its recently implemented quality control program is working as designed and in accordance with HUD requirements.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to maintain tenant files in a manner that ensures they contain the correct records and all required documentation.

Provide supporting documentation for subsequent review to show that it properly calculated relocation rental assistance payments for the 10 tenants and if there is an overpayment, reimburse the applicable RAD relocation account from non-Federal funds.

Repay the project the $1,168,000 in ineligible distributions made to affiliated healthcare facilities during fiscal years 2015 and 2016.

Implement controls to ensure that project distributions are made from surplus cash and comply with the regulatory agreement and HUD requirements.

Develop and implement procedures to ensure that it maintains documentation to show that it selected participants from its waiting list in accordance with applicable requirements.

Develop and implement procedures to ensure that it maintains criminal background checks in separate, secure files.

Develop a method for using the Do Not Pay portal during the underwriting process to identify delinquent child support and delinquent Federal debt to prevent future FHA loans to ineligible borrowers to put $1.9 billion to better use.

Status

The Office of Housing has approved prioritization of funding for Integration between Do Not Pay portal and CHUMS. Funding was allocated to the CHUMS IT contractor on January 26, 2024, to integrate Treasury’s Do Not Pay system with CHUMS, and the IT development project was kicked off the week of February 5, 2024.

As of June 2024, the Office of Single Family Housing reported that it is working with OCIO and Treasury on the business needs for the project, and estimated that the project would be complete by September 30, 2024.

Analysis

To fully address this recommendation, HUD must provide evidence that it has implemented applicant screening against the Do Not Pay portal to identify delinquent child support and delinquent Federal debt to prevent future FHA loans going to ineligible borrowers.

Implementation of this rule should result in HUD putting $1.9 billion to better use.

Revise the single-family handbook to comply with regulations that prevent loans to borrowers with delinquent child support subject to Federal offset.

Schedule the timely renewal of data-sharing agreements to prevent data loss in CAIVRS or discontinue use of the system if implementation of 1A makes CAIVRS unnecessary.

Strengthen current written policies on occupancy requirements for subsidized multifamily housing programs to ensure that prospective tenants do not improperly bypass waiting lists.

Repay HUD for improperly filed partial claims and incentive fees totaling $1,053,688.