We recommend that the Office of Multifamily Housing Programs establish and implement policies to ensure effective contract administration, including providing funding approvals for project-based contract administrators in a timely manner.

We recommend that the Office of Multifamily Housing Programs develop contingency policies and procedures to ensure that the properties it subsidizes receive adequate and verifiable continuous monitoring.

Update and implement the internal procedures for processing housing conversion actions to require documentation, including but not limited to expired contracts or financial documentation from HUD’s Line of Credit Control System, to show when the last payment was made for the contract to support the proposed housing conversion actions before allotment of tenant protection funds.

Update and implement internal procedures to require verification that tenant protection funds were not previously allotted for the same type of housing conversion action.

For the remaining retroactive RAD conversion not completed, to take steps, including but not limited to maintaining adequate approval documentation to ensure that it enforces its requirement that the tenant protection assistance is provided to tenants before the submission of the RAD application.

For the remaining retroactive RAD conversion not completed, to take steps including but not limited to training staff responsible for reviewing and approving RAD applications to ensure that it enforces its requirement that the tenant protection assistance is provided to tenants before the submission of the RAD application.

Develop and implement policy and procedures for the incremental obligation process used for project-based Section 8 funds, including documentation for determining the incremental amounts and controls to review the amounts for accuracy.

Update HUD’s loss mitigation policies, to include deadlines for the servicers to file the FHA-HAMP nonincentivized partial claims, and consider imposing sanctions for noncompliance with these deadline requirements.

Update HUD’s loss mitigation policies, to include deadlines for the servicers to report the new terms of the FHA-HAMP nonincentivized loan modifications, and consider imposing sanctions for noncompliance with these deadline requirements.

Ensure that the HECM cash flow model assumptions capture all valid assignments or provide an analysis showing that the model results are not biased due to the exclusion of valid HECM assignments.

Document and implement policies and procedures to ensure that data observations for key assumptions that are inconsistent with FHA’s understanding of program operations are researched and further analyzed and that all results are concurrently documented and included in the model documentation.

Update the posting models to ensure that refunds relating to payments made in prior years are properly recorded in accordance with OMB Circular A-11.

Correct the programming error in the HERMIT system to ensure that the correct insurance-in-force balances are reported on the note disclosures.

Develop policies and procedures to ensure that the line items in the required note disclosures are understood, properly calculated, and properly disclosed in the financial statements in accordance with OMB Circular A-136.

Support that healthy homes assessment and data collection services were cost reasonable or reimburse its Program $361,850 from non-Federal funds.

Support that landlords gave preference in renting eight vacant units to families with children under 6 years of age or reimburse its Program $112,917 from non-Federal funds for the lead-based paint hazard control activities completed at these assisted units.

Support that lead-based paint hazard control activities were necessary at 19 assisted units or reimburse its Program $70,266 from non-Federal funds for the unsupported lead-based paint hazard control activities completed at these assisted units

Coordinate with HUD’s Office of Lead Hazard Control and Healthy Homes to determine whether $51,930 in healthy homes supplemental funds used for four units in excess of $5,000 per unit was for eligible activities. If the activities are deemed ineligible, the Department should reimburse its Program the appropriate amount from non-Federal funds.

Support that one household residing in an assisted unit was income eligible or reimburse its Program $19,500 from non-Federal funds for the lead-based paint hazard control activities completed in the assisted unit.

Implement adequate procedures and controls to ensure that (1) documentation is maintained to support that contracted services are cost reasonable, (2) landlords give preference in renting assisted vacant units to families with children under 6 years of age, (3) lead inspection documentation properly supports lead-based paint hazard control activities, (4) HUD approval is obtained when more than $5,000 per unit in healthy homes supplemental funds is budgeted to assist units, and (5) its staff is fully knowledgeable of the Program requirements.