Develop a control to detect loans that did not maintain the required flood insurance to put $1.5 billion to better use by avoiding potential future costs to the FHA insurance fund from inadequately insured properties.

Update its policies and procedures for tracking expenditures related to slow-spending grantees, including steps for assisting the grantees to expedite spending (including the grantee’s steps or actions to address slow spending), identifying the reasons for the delays with the grant, and documenting the outcome of its efforts.

Establish and implement a plan for the unused and unfunded vouchers to mitigate or prevent additional vouchers from becoming unused and unfunded […]

Develop a comprehensive process to ensure that complaints received by HUD’s Multifamily Housing Clearinghouse are resolved in a timely manner.

Corrective Action Taken

The  Federal Housing Administration (FHA) Resource Center fields complaint calls and directs them to the appropriate party. When a FHA Resource Center complaint is referred to the Multifamily Regional Office, it is entered into the Asset Management Processing System (AMPS), the workload tracking system for HUD’s Multifamily Programs, within one day of receipt and tracked to completion with a goal of resolution within 21 days of receipt.  If a complaint is categorized as health and safety, it is prioritized for expeditious response by the assigned Account Executive.  Multifamily Field and Regional management track responses, to ensure resolution.  This includes having the Account Executives, at times, call the resident to confirm the issue has been resolved.  Based upon process as described HUD OIG concurred with the closure of this priority recommendation.

Develop agencywide policies and procedures for the intake, monitoring, and tracking of health and safety complaints.

Status

The Office of Multifamily Housing has not yet updated its policies and procedures for the intake, monitoring, and tracking of health and safety complaints.  HUD was in the process of developing an automated monitoring system in the FHA resource center to allow tracking of individual calls and the call’s subject, such as health and safety.  HUD missed the final action target date of December 31, 2022, and a new completion goal was set for February 2025.  In July 2025, HUD sought closure for this recommendation due to unavailability of funds.  HUD stated that its issuance of policies and procedures for a comprehensive process was contingent on the development of a tracking system for the complaint process, for which it has repeatedly requested funding from Congress to no avail. As of January 2026, OIG is in the process of collaborating with HUD on finding a potential corrective action to resolve outstanding concerns.

Analysis

To fully address this recommendation, HUD must provide evidence that it has developed and implemented policies and procedures for the Multifamily properties for the intake, monitoring, and tracking of health and safety complaints it receives when using the FHA’s automated monitoring system.

Implementation of this recommendation will result in HUD having a more efficient process for taking in, monitoring, and tracking health and safety complaints and aid HUD in more efficiently addressing those complaints.

Require lenders to obtain the borrowers’ consent to verify the existence of delinquent Federal taxes with the IRS during loan origination and deny any applicant with delinquent Federal tax debt and no payment plan or a noncompliant payment plan or an applicant refusing to provide consent from receiving FHA insurance to put at least $6.1 billion to better use by avoiding potential future costs to the FHA insurance fund.

Status

As of January 2026, the Office of Multifamily has developed standard operating procedures for its field office staff and plans to issue additional guidance to HUD staff and multifamily property owners on addressing lead in the water for multifamily properties.  Although the final action target date has passed, the guidance is undergoing HUD's internal review clearance process.  HUD did not provide an estimated date for issuance of the guidance to close the recommendation.

Analysis

To fully address this recommendation, the Office of Multifamily Housing must provide evidence of an action plan or policy that includes procedures to ensure households living in multifamily units have a sufficient supply of safe drinking water.

Implementation of this recommendation will enable HUD to have sufficient oversight and control activities in place to ensure households living in multifamily housing have a sufficient supply of safe drinking water.

Ensure that its staff appropriately determines exemptions from the Lead Safe Housing Rule and documents support of the determinations.

Ensure that its staff determines whether a child under 6 years of age resides in an exempted development. If a child is determined to reside in an exempted development take appropriate actions in accordance with its internal policies

Corrective Action Taken

The Office of Field Operations (OFO) updated the Lead-Based Paint Response Tracker’s Standard Protocol and Roles and Responsibilities to identify the roles and responsibilities of HUD’s headquarters and field office level staff in ensuring PHAs’ compliance with the Lead Safe Housing Rule (LSHR). The protocol provides that the OFO field office staff work directly with PHAs to resolve issues of noncompliance with the LSHR and other Lead-based paint (LBP) guidance by responding to or escalating questions/issues to the headquarters team, directing PHAs to available training and resources on HUD.gov or HUD Exchange, and working with PHAs to obtain sufficient documentation to close an LBP case in the LBP tracker promptly. In regards to a child under 6 years of age residing in an exempted development, staff from the field offices must upload supporting documentation determining whether a pregnant lady or child six years old or younger lives in the development, collect missing information, if applicable, coordinate with OFO team to close cases in the LBP response tracker, indicate in the LBP response tracker if the PHA has provided the documents or if the property is exempt and upload supporting documents.

Require lenders to obtain the borrowers’ consent to verify the existence of delinquent Federal taxes with the IRS during loan origination and deny any applicant with delinquent Federal tax debt and no payment plan or a noncompliant payment plan or an applicant refusing to provide consent from receiving FHA insurance to put at least $6.1 billion to better use by avoiding potential future costs to the FHA insurance fund.

Implement a change to regulations at 24 CFR Part 203 to require curtailment of preforeclosure interest and other costs that are caused by lender servicing delays, resulting in $413,513,975 in funds to be put to better use. This should include updating or seeking statutory authority to update HUD’s regulations as necessary and coordinating with HUD’s Office of Finance and Budget, well before any changes go through departmental clearance, to ensure that planned curtailment requirements can be consistently enforced through the claims process.

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.

Issue a change to regulations at 24 CFR Part 203, which would avoid unnecessary costs to the FHA insurance fund, allowing an estimated $2.23 billion to be put to better use. These changes include (1) a maximum period for filing insurance claims and (2) disallowance of expenses incurred beyond established timeframes.

Update selection rules for CAIVRS to provide for complete reporting of all ineligible borrowers to put $9.5 million to better use.