Determine the appropriate timeframe for when initial MORs should be completed for all properties that convert under RAD and issue updated guidance that includes a system to track the timeliness of initial MORs.

Status

HUD has not provided a draft plan for corrective action yet.

Analysis

Failure to determine the timing of the initial MORs could delay HUD's performance of the MORs, which may result in property owners' untimely corrective actions, and thus potentially impact the health and safety of families.

The implementation of this recommendation has the potential to directly impact the health and safety of families.

Complete the initial MORs for RAD properties that have not had an initial MOR.

Status

HUD has not provided a draft plan for corrective action yet.

Analysis

Completing initial MORs would assist HUD in holding property owners accountable for maintaining the conditions of their properties and sufficient reserve for replacement accounts balances, which could impact property owners' ability to make needed capital repairs.

The recommended corrective action has the potential to directly impact the health and safety of families.

Develop and implement a plan to determine how to implement the risk-based approach to review the RAD properties that have not had subsequent MORs in more than 3 years and to require periodic MORs going forward.

Status

HUD has not provided a draft plan for corrective action yet.

Analysis

Developing a plan to implement the risk-based approach would establish the criteria for identifying properties that are at a higher risk of noncompliance.

The recommended corrective action would help HUD to monitor property owners' compliance with its requirements and thus, potentially protect families from living in unsafe units.

Determine an appropriate timeframe in which non-FHA-insured PBRA properties converted under RAD should be initially inspected, work with REAC to ensure that inspections are ordered and completed within that timeframe, and update HUD’s publicly available and internal guidance to ensure consistent messaging in accordance with HUD’s determination.

Status

HUD has not provided a draft plan for corrective action yet.

Analysis

Determining the appropriate timeframe for initial inspections would result in the timely identification and correction of life-threatening and non-life-threatening deficiencies.

The recommended corrective action has the potential to directly impact the health and safety of families.

Develop and implement adequate procedures and controls to ensure that (1) staff issues notices of violation and default within 15 calendar days of the inspection report release date and (2) the Office of Multifamily Asset Management and Portfolio Oversight is made aware when notices are not issued within 15 calendar days after the inspection report release date and takes action as appropriate to ensure that future notices are issued in a timely manner.

Status

HUD has implemented a process of sending notifications to the field offices' centralized inboxes when a failed inspection has been released with instructions to issue a Notice of Default or Notice of Violation within 15 days. The field office logs this task into the Asset Management Processing System (AMPS) and assigns it to an Account Executive. Field office management tracks the progress of the task in AMPS. HUD is building a reporting tool to see if the task has been properly entered into iREMS and addresses the field office instances where it has not. The construction of this tool has been delayed due to limited staff resources. As of January 2025, the reporting tool was undergoing review and testing prior to implementation. The final action target date was November 29, 2024.

Analysis

Implementing procedures and controls for the timely issuing of notices would ensure that property owners are held accountable for correcting life-threatening deficiencies in a timely manner thus reducing the risk of families living in units that are unsafe for longer periods.

The implementation of this recommendation has the potential to directly impact the health and safety of families.

Include language in future notices of violation and default clearly stating that owners are required to inspect all units (including vacant units), common areas, grounds, building systems, and sites as part of the owner survey and require owners to include sufficient detail in the surveys to show (1) when the survey was conducted and (2) that the survey was a complete survey of the project.

Status

HUD will update the Notice of Default and Notice of Violation in conjunction with updates related to NSPIRE. These updates have been delayed by limited staff resources and pending policy clarifications and system changes for NSPIRE.

The final action target was November 29, 2024.

Analysis

The inclusion of language in the notices would ensure that property owners are aware of their responsibilities to inspect all units, common areas, grounds, building systems, and sites and perform repairs of identified deficiencies to protect families from living in units that are not decent, safe, and sanitary.

The implementation of this recommendation has the potential to directly impact the health and safety of families.

Develop and implement a nationwide inspection review protocol, which includes but is not limited to (1) whether field office staff should mark verification of PHA corrections of life-threatening deficiencies in PASS or any future tracking systems, (2) acceptable documentation for offsite verifications, and (3) whether field office staff should discuss or verify corrections of non-life-threatening deficiencies.

Corrective Action Taken

HUD's Office of Field Operations (OFO) created a protocol describing how it would perform quality control reviews of field office oversight of PHAs’ corrections of life-threatening deficiencies. The implementation of this recommendation resulted in HUD creating a protocol that established consistency in the way HUD field office staff monitored public housing agencies’ corrections of life-threatening deficiencies.

Develop and implement training for field offices that addresses reviewing or following up with PHAs about the correction of life-threatening and non-life-threatening deficiencies and how (1) to review physical inspection reports to effectively ensure that PHAs correct physical deficiencies, (2) PHAs should address or correct each type of deficiency observed in the REAC physical inspection report, and (3) to use PASS or any future tracking system.

Corrective Action Taken

HUD developed and provided training to the field offices on their roles and responsibilities for following up with PHAs on the correction of life-threatening and non-life-threatening deficiencies observed during REAC inspections, the NSPIRE system and standards, protocols, and timelines for deficiency correction and verification. Implementation of the recommendation will help HUD to ensure that field office staff are clear on their roles and responsibilities to communicate with PHAs on how deficiencies should be addressed and verify that PHAs’ inspection deficiencies have been corrected.

Implement a system to track field office inspection review activities and create a repository for the support documentation collected to verify the correction of life-threatening deficiencies.

Corrective Action Taken

HUD’s Office of Field Operations (OFO) had created a quality assurance tracker as well as a life-threatening deficiency tracker, which contained data specific to the inspections selected by OFO HQs, for quality assurance reviews. The documentation (photographs, work orders, etc.) of the life-threatening deficiency correction was maintained in HUD’s NSPIRE Salesforce system.

Implementation of the recommendation resulted in HUD creating a system to track HUD field offices’ verifications of PHAs’ corrections of life-threatening deficiencies.

Develop and implement a nationwide protocol for field offices, describing how PHA self-inspections should be reviewed, based on REAC's determination of the number and frequency of PHA self-inspections.

Status

HUD closed this recommendation in August 2024, an action which HUD OIG disagrees with. HUD provided guidance for field office staff to send to PHAs with NSPIRE inspections that scored below 60 points. However, HUD did not provide a protocol detailing how it would receive and review PHAs’ self-inspections for compliance with HUD requirements. Therefore, HUD has not fully addressed the gap in controls identified in the audit that hinders HUD’s oversight over PHA self-inspections.

Analysis

To fully resolve this recommendation, HUD needs to provide a policy or procedure that provides guidance to the field offices on how public housing self-inspections should be reviewed for compliance with its requirements.

Implementation of this recommendation will result in public housing units that are decent, safe, and sanitary because it mandates oversight to ensure PHAs are addressing identified deficiencies.

Implement adequate policies, procedures, and controls to ensure that public housing properties will be inspected within required timeframes.

Status

NSPIRE regulations clarified and modified the timing for which inspections should occur. The date for inspection of each public housing property must then be programmed into HUD's system to ensure that inspections occur within the required timeframes. The Real Estate Assessment Center (REAC) continues to work with its management and system support contractors on the list of public housing properties to inspect and the date the inspections should be completed under the new NSPIRE regulations. REAC is in the process of adjusting the list based on information relating to small, rural public housing. As of November 2024, the NSPIRE regulations on inspection timing are completed. However, REAC is not able to make the required modifications in the NSPIRE system to enforce the regulatory guidelines. REAC previously indicated that new IT funding is needed to make the system modifications but had not provided information about whether additional funding has been allocated. The final action target date was revised from May 31, 2024, to September 30, 2025.

Analysis

To fully address this recommendation, HUD must provide evidence demonstrating that it has implemented control activities that ensure public housing properties are inspected within the required timeframes.

Implementation of this recommendation will result in HUD accurately tracking the dates on which public housing properties should be inspected and that they are timely completed. Due to the uncertainty of when software changes to NSPIRE can take place to enforce the timing of inspections, REAC cannot enforce the requirements of inspection timing.

PIH in coordination with other HUD offices as necessary, research and address potential causes of the variance in the number of EBLL cases among States on the EBLL tracker and identify solutions that are within HUD's control.

Status

As of November 13, 2024, the PIH Office of Field Operations (OFO) had completed its outreach data collection and identified 9 public housing authorities that had not completed the required EBLL reporting actions and that OFO informed the field office directors overseeing the appropriate PHAs that they had until November 6, 2024, to upload the proper information to the trackers. As of January 29, 2025, OFO field office directors and their staff were still updating and inputting EBLL cases and relevant documentation into the EBLL tracker due to delays in responses from PHAs. The estimated completion date is February 28, 2025.

Analysis

To fully address this recommendation, OFO must provide evidence that it coordinated with other HUD offices and identified the causes of the variances in the number of EBLL cases among states on the EBLL tracker. OFO must also demonstrate that it fully remedied the causes of the variances. Alternatively, OFO must provide an explanation sufficient to support a claim that it could not identify the causes of the variances or develop and implement solutions for problems it identified in its research.

Implementation of this recommendation will result in improved HUD data of EBLL cases of children living in public housing across the country. Accurate reporting of EBLL cases to HUD is essential so that HUD can ensure PHAs take effective environmental interventions that help prevent additional lead exposure.

Requires the REAC in coordination with OFO to determine the number of developments and associated units that contain lead-based paint and lead-based paint hazards.

Status

In May 2023, HUD published a final rule establishing a new approach to defining and assessing housing quality: The National Standards for the Physical Inspection of Real Estate. Public Housing regulations were amended, and Public Housing program participants were required to comply with this final rule and use the NSPIRE standards starting July 1, 2023. The Real Estate Assessment Center and Office of Field Operations will collaborate with the Office of Lead Hazard Control and Healthy Homes, the Office of Policy Development and Research, and a statistician to evaluate data collected under the NSPIRE inspection program to estimate the number of public housing developments and associated units that contain lead-based paint and lead-based paint hazards. As of November 2024, PIH reported that inspections have had a slow start due to procurement delays. Additionally, the NSPIRE system did not get the requested functionality to collect lead inspections. The final action target date is March 31, 2025.

Analysis

To address this recommendation, HUD will need to provide evidence that it collected and evaluated data under NSPIRE and estimated the number of public housing developments and associated units that contain lead-based paint and lead-based paint hazards.

Implementation of this recommendation will assist HUD in working with PHAs to address the public housing units that contain lead-based paint and lead-based paint hazards and help HUD’s oversight of units in need of hazard reduction.

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.

Corrective Action Taken

In November 2022, FHA published the Acceptance of Private Flood Insurance for FHA-Insured Mortgages final rule (Docket No. FR-6084-F-02) in the Federal Register and issued Mortgagee Letter 2022-18, Acceptance of Private Flood Insurance for FHA-Insured Mortgages (ML 2022-18). These policy changes not only strengthened Single Family’s Mortgagee requirements regarding flood insurance, but they also introduced the ability for borrowers and Mortgagees to purchase private flood insurance. In January 2023, the sections in ML 2022-18 that pertain to HUD’s forward mortgage programs were superseded by the FHA Single Family Housing Policy Handbook (Handbook 4000.1), adding a requirement that the Mortgagee review all FHA-insured properties annually to determine if the property is located within a Special Flood Hazard Area (SFHA). For properties located within a SFHA, the Mortgagee must ensure flood insurance is in force for the life of the mortgage and that the property has sufficient flood insurance coverage. To ensure compliance with the policy requirements, the Mortgagee must include updated flood insurance information for properties where flood insurance is required in the Servicing and Claims File. In addition, Handbook 4000.1 includes flood insurance servicing policy updates. HUD submitted a revised management decision reflecting this action on June 22, 2023.

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

Corrective Action Taken

HUD established and implemented a plan for the unused and unfunded vouchers, aiming to mitigate or prevent additional vouchers from becoming unused and unfunded. PIH's plan included the following, among other actions:

• Determining the scope of HUD's statutory and regulatory authority to offset and reallocate vouchers.
• Issuing Office of Public and Indian Housing Notice 2020-29, titled Guidance for Running an Optimized Housing Choice Voucher Program.
• Continuing the work of HUD's landlord taskforce, engaging in listening sessions with major PHA industry groups, and conducting outreach to increase landlord participation in the HCV Program.
• Developing research by HUD's Office of Policy Development and Research on the best methods for adjusting fair market rents and addressing specific challenges in local communities to increase utilization in the HCV Program.

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

Status

In October 2023, the Office of Multifamily Housing reported that it had sought funding for system enhancements to coordinate tenant complaints. HUD is transitioning the Multifamily Clearinghouse responsibilities to the Federal Housing Administration (FHA) Resource Center. The FHA Resource Center has a system that will allow tracking and monitoring of customer calls. As of November 2024, the Office of Multifamily Housing requested the closure of this recommendation because it did not receive the requested funding for system enhancements, and its alternative action of using the FHA Resource Center to track and monitor customer calls did not work. As of January 2025, the Office of Multifamily plans to propose a revised management decision to HUD OIG with alternative actions to address the recommendation.

Analysis

To fully address this recommendation, HUD needs to develop a comprehensive process to ensure that complaints received by HUD are resolved in a timely manner.

Implementation of this recommendation will result in a timelier resolution of complaints submitted by those living in multifamily member housing units.

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

Status

In October 2023, HUD stated that it will develop policies and procedures for Multifamily properties for the intake, monitoring, and tracking of health and safety complaints it receives. The Office of Multifamily Housing has not yet updated its policies and procedures. With no comprehensive, automated, real-time system in place, there was no direction to give the field staff, Multifamily Clearinghouse, or the Performance Based Contract Administrators other than what they were already doing. 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. As of November 2024, the Office of Multifamily Housing requested the closure of this recommendation because it did not receive the requested funding for system enhancements, and its alternative action of using the FHA Resource Center to track and monitor customer calls did not work. As of January 2025, the Office of Multifamily plans to submit a revised management decision to HUD OIG with alternative actions to address the recommendation.

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.

Develop and implement an action plan that includes sufficient policies, procedures, and controls that address households living in multifamily housing units having a sufficient supply of safe drinking water […]

Status

In April 2022, HUD created draft standard operating procedures to address lead in the water of its multifamily housing units. On May 11, 2023, HUD published its National Standards for the Physical Inspection of Real Estate (NSPIRE) regulations that addressed lead in the water. Further, on June 30, 2023, HUD published its Implementation of National Standards for the Physical Inspection of Real Estate Administrative Procedures, which requires property owners and agents to provide information about water supply providers and water safety alerts, if applicable, prior to the commencement of a Real Estate Assessment Center (REAC) inspection. As a result, the Office of Multifamily Housing is revising its procedures and consulting with the Office of Lead Hazard Control and Healthy Homes (OLHCHH). As of February 2025, the OIG was waiting for additional information from the Office of Multifamily Housing demonstrating whether it has addressed the recommendation.

Analysis

To fully address this recommendation, the Office of Multifamily Housing must provide evidence of an action plan that includes its procedures that address households living in multifamily units to ensure that they 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 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.

Status

The Office of Single Family Housing will need additional tax information to complete the planned action. In July 2024, Single Family Housing proposed closing the recommendation with no action because the primary action discussed would require Congressional authorization, and another option discussed would place an undue burden on borrowers and lenders and was not practical. OIG disagreed with the request. Single Family maintains that without an automated solution from the Internal Revenue Service (IRS), it is not practical for individual borrowers and/or lenders to manually check tax status with the IRS. However, OIG’s position is that action is required since delinquent tax debtors are ineligible for FHA loans under existing FHA and Office of Management and Budget (OMB) guidelines.

Analysis

To fully address this recommendation, HUD will need to provide evidence that it established a method of borrower consent to verify the existence of delinquent federal taxes.

Implementation of this rule should result in HUD putting $6.1 billion to better use.