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Date Issued

Housing

  •  
    Status
      Open
      Closed
    2017-BO-1003-001-C
    $353,420
    Questioned 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.

    Closed on December 13, 2018

    Support or decrease the payables to its management agent for the amounts related to ineligible employee services charges before January 1, 2014, which we estimated to be $353,420.

  •  
    Status
      Open
      Closed
    2017-BO-1003-001-D
    Closed on March 22, 2018

    Develop and implement controls over payments to include; ensuring that its management agreement clearly identifies services that are be provided by the management agent and paid for as part of the management fee, and the project is not charged for services that are part of the management fee.

Housing

  •  
    Status
      Open
      Closed
    2017-KC-1001-001-A
    $17,414
    Questioned 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.

    Provide support showing that $17,414 in management fees charged to the projects using a budgeted amount represented actual amounts or repay the difference to each affected project.

  •  
    Status
      Open
      Closed
    2017-KC-1001-001-B
    $447,345
    Questioned 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.

    Provide documentation to support that it paid itself $447,345 for eligible purposes or reimburse the appropriate projects for the balance.

  •  
    Status
      Open
      Closed
    2017-KC-1001-001-D

    Verify all management fees charged to the projects from 2013 through 2015 were appropriate.

  •  
    Status
      Open
      Closed
    2017-KC-1001-002-A
    $231,091
    Questioned 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 Majestic Management to reimburse the appropriate projects their portion of $231,091 for work not completed or overbilled.

  •  
    Status
      Open
      Closed
    2017-KC-1001-002-B
    $462,281
    Questioned 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 Majestic Management to provide support that $462,281 paid for procurements was reasonable or reimburse the appropriate projects for the balance.

  •  
    Status
      Open
      Closed
    2017-KC-1001-003-A
    $11,184
    Questioned 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.

    Reimburse the appropriate projects their portion of $11,184 that it charged for ineligible items.

  •  
    Status
      Open
      Closed
    2017-KC-1001-003-B
    $48,891
    Questioned 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.

    Provide documentation to support that $48,891 was spent for eligible purposes or reimburse the appropriate projects for the balance.

Housing

  •  
    Status
      Open
      Closed
    2017-KC-0001-001-A
    $2,238,721,464
    Funds 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.

    Priority
    Priority

    We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

    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.


    Status

    The Federal Housing Administration (FHA) reported that the recommendation cannot be closed out without the publication of the FHA Maximum Claim Rule. The proposed changes have been on HUD’s regulatory agenda since Spring 2020 but, as of July 2025, the Office of Single Family Housing does not have an estimated publication date.


    Analysis

    To fully address this recommendation, HUD must publish the FHA Maximum Claim Rule. Implementation of this rule should result in HUD putting $2.23 billion to better use.

Housing

  •  
    Status
      Open
      Closed
    2015-LA-1009-001-E
    $72,210
    Questioned 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.

    Reimburse FHA borrowers $25,700 for fees that were not customary or reasonable and $46,510 in discount fees that did not represent their intended purpose.

Housing

  •  
    Status
      Open
      Closed
    2015-LA-1010-001-E
    $13,726
    Questioned 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.

    Reimburse $13,726 to FHA borrowers for the fees that were not customary or reasonable.

Housing

  •  
    Status
      Open
      Closed
    2015-AT-0002-001-A

    Comply with its Management Agent Handbook requirements that stipulate HUD must perform management reviews of the management agent’s central office activities as well as regular onsite reviews of functions carried out at the projects. These central office reviews should be performed at least once every 18 months.

Housing

  •  
    Status
      Open
      Closed
    2015-CH-0001-001-A
    $792,837
    Questioned 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.

    We recommend that HUD’s Deputy Assistant Secretary for Single Family Housing require the lenders to support that the repairs to the properties associated with the 32 loans without evidence of permits complied with local code or reimburse HUD $792,837 for the escrow repair funds.

  •  
    Status
      Open
      Closed
    2015-CH-0001-001-B
    $305,395
    Questioned 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.

    We recommend that HUD’s Deputy Assistant Secretary for Single Family Housing require the lenders to support that the repairs to the properties associated with the six loans were not structural repairs or indemnify HUD for the four active loans with a total estimated loss of $222,073 and reimburse HUD for the actual loss of $83,322 incurred on the sale of two properties associated with FHA case numbers 052-4308836 and 034-8239100.

  •  
    Status
      Open
      Closed
    2015-CH-0001-001-C
    $83,715
    Questioned 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.

    We recommend that HUD’s Deputy Assistant Secretary for Single Family Housing require the lenders to support that the borrower for FHA case number 451-1165810 was not reimbursed for the cost of labor or indemnify the loan with an estimated loss amount of $83,715, based on the loss severity rate of 50 percent of the unpaid principal balance of $167,429 as of January 29, 2015.

  •  
    Status
      Open
      Closed
    2015-CH-0001-001-D
    $39,367
    Questioned 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.

    Support that the repair conditions and comments indicated in the direct endorsement underwriter form, form HUD-54114, were satisfied for FHA case number 501-8198149. If the repair conditions and comments were not properly addressed, the lenders should indemnify the loan with an estimated loss amount of $39,367, based on the loss severity rate of 50 percent of the unpaid principal balance of $78,733 as of January 29, 2015.

Housing

  •  
    Status
      Open
      Closed
    2015-LA-1005-001-E
    $383,212
    Questioned 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.

    Reimburse FHA borrowers $376,102 for the unallowable, misrepresented discount fees and $7,110 for fees that were not customary or reasonable.

Housing

  •  
    Status
      Open
      Closed
    2014-KC-0002-001-B
    $9,501,619
    Funds 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.

    Priority
    Priority

    We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

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


    Status

    In 2020, HUD suspended reporting delinquencies and defaults to the Credit Alert Verification Reporting System (CAIVRS) because these debts are owed to the lender and are not delinquent federal debt. A debt is not delinquent until payment is overdue to HUD for a deficiency judgment against the borrower in connection with an FHA claim. Rather than add the missing borrowers to CAIVRS, the Office of Single Family Housing directed HUD’s National Servicing Center to cease including borrower creditworthiness information in CAIVRS and to solely use the system to report deficiency judgments until the delinquent debt is resolved. HUD provided the Interface Control Document showing what data is sent to CAIVRS related to deficiency judgments.

    As of July 2025, OIG is seeking clarification on HUD's implementation and closure of the recommendation because it is not clear whether all deficiency judgments are now being reported in CAIVRS until resolved. HUD OIG disagrees with the closure of this recommendation until HUD provides evidence that the system updates have been implemented and that they provide complete reporting of all ineligible borrowers.


    Analysis

    To fully address this recommendation, HUD must provide evidence that all deficiency judgments are reported in CAIVRS until resolved.

    Implementation of this recommendation should result in HUD putting $9.5 million to better use.

Housing

  •  
    Status
      Open
      Closed
    2014-NY-0001-001-B

    We recommend that the Director, Office of Multifamily Asset Management, require that each Hub or field office review its refinanced Section 202/223(f) projects for debt service savings amounts, utilizing data provided from this audit for possible additional debt service savings. Where legally possible each Hub or field office should identify, account for by project, and use these amounts for current and future opportunities benefiting tenants or to fund reductions in housing assistance payments.