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.

Initiate appropriate administrative actions and debarments against parties, including the former grants manager and contractors, who contributed to the mismanagement of program funds.

We recommend that HUD’s Office of General Counsel, Office of Program Enforcement, acknowledge that $30,000 in the settlement agreement represents an amount due HUD.

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.

Acknowledge that $40,000 in the attached settlement represents an amount due HUD.

Evaluate the apparent conflict-of-interest situation in this report and pursue administrative sanctions if warranted.

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 the Treasury’s Do Not Pay portal and HUD’s Computerized Homes Underwriting Reporting System (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 July 2025, the CHUMS Memorandum of Understanding (MOU) and Interconnection Security Agreement (ISA) with DNP is fully signed. However, the System of Records Notice (SORN) is under review with OMB.  HUD's Office of Privacy is in the process of reaching out to OMB to request comments or permission to publish. The anticipated completion date of the CHUMS interface with DNP is December 31, 2025.

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 from 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.

Acknowledge that the attached settlement agreement for $4,000 represents an amount due HUD from MetLife.

Enforce the indemnification agreement in the attached settlement agreement to prevent an estimated $95,769 loss to HUD. This represents an amount due HUD from MetLife for indemnifying and holding HUD harmless for any and all losses HUD incurs or has incurred in connection with FHA loan number 137-4740973.

Acknowledge that the attached settlement agreement for $1,500 represents an amount due HUD from the borrower’s son.

Ensure that HUD completes the debarment process and appropriately notifies the independent public accountant of the debarment decision.