Update policies and procedures to include methods that will be used when applications exceed underwriter capacity, align intake and screening processes, and explain when timeframes will be enforced, including in PLUS.

Issue an industry wide letter to reinforce how intake, screening, and enforcement of timeframes will be handled.

Update relevant policies and procedures for appraiser roster management so that they align with each other and with regulations and reflect HUD practice. At a minimum, the policies and procedures should clearly cover appraiser roster status, license expiration, disciplinary actions, removals, data accuracy, and documentation.

Maintain historical data for each appraiser record, including history on expiration dates, when appraisers are moved on or off the appraiser roster and when they are and are not allowed to be assigned to conduct appraisals.

Improve quality assurance processes by adding steps to verify that the appraiser roster is accurate and reliable over time through testing of its logic-based system controls and data fields.

Develop and implement written policies and procedures regarding the designation of legal representation for applicants.

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 July 11, 2025, the Office of Multifamily Housing requested the closure of this recommendation because it did not receive the requested funding from Congress for system enhancements, and it believes there is no prospect of future funding. Further, its alternative action of using the FHA Resource Center to track and monitor customer calls did not work. Developing a comprehensive process for intaking, monitoring, and tracking health and safety complaints would require a system enhancement or creation of a new system, and HUD has repeatedly attempted to obtain funding from Congress to no avail. OIG is in the process of collaborating with HUD on finding a potential corrective action to resolve 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 July 14, 2025, HUD is seeking 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. 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.

Establish and implement a process to ensure that The Office of Multifamily Housing Programs’ policies, procedures, and supervisory controls are effective. This process should include addressing postdisaster damage assessments, properly updating iREMS, and executing loan forbearances. This process should also integrate with other HUD program offices as appropriate to improve consistency with HUD’s overall disaster response and to ensure the effectiveness of disaster controls.

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

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 including, but not limited to one of the options OIG provided, which were (1) lenders obtaining the borrowers' consent to obtain their tax records directly from the IRS or (2) borrowers accessing their own tax information and submitting it to the lenders.

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

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 including, but not limited to one of the options OIG provided, which were (1) lenders obtaining the borrowers' consent to obtain their tax records directly from the IRS or (2) borrowers accessing their own tax information and submitting it to the lenders.

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

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

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 including, but not limited to one of the options OIG provided, which were (1) lenders obtaining the borrowers' consent to obtain their tax records directly from the IRS or (2) borrowers accessing their own tax information and submitting it to the lenders.

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

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 including, but not limited to one of the options OIG provided, which were (1) lenders obtaining the borrowers' consent to obtain their tax records directly from the IRS or (2) borrowers accessing their own tax information and submitting it to the lenders.

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

Reimburse HUD $30,037 from nonproject funds for the overpayment of housing assistance and utility allowances due to incorrect calculations.

Support or reimburse HUD $159,938 from nonproject funds for the unsupported payments of housing assistance cited in the finding.

Pursue collection from the applicable household or reimburse HUD $26,915 from nonproject funds for the overpayment of housing assistance due to unreported income.

Implement adequate quality control procedures to ensure that housing assistance payments are appropriately calculated and supported. These procedures and controls should ensure that $54,257 in program funds is appropriately used for future payments.

Ensure that the management agent’s staff is properly trained and familiar with HUD’s and the project’s requirements regarding housing assistance payments calculations.

Design controls to protect the insurance fund from improper partial claims that did not reinstate the loans to put $27.1 million to better use.

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.

Status

FHA reported that the audit recommendation cannot be closed 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 provide evidence that it has published and adopted the rule.

Implementation of this rule should result in HUD putting $413 million to better use.

Coordinate with the Deputy Assistant Secretary for Finance and Budget to board 350 manually paid partial claims that were not boarded into SMART, resulting in funds to be put to better use in the amount of $2,297,706.

Obtain the missing mortgage documents for 33 loans and the missing note documents for 40 loans, totaling $644,767 in partial claim notes, and require any unrecorded mortgage documents to be recorded at the appropriate county’s office to ensure that HUD’s interests are protected. For any missing documents that cannot be obtained, the Deputy Assistant Secretary should require the lender to reimburse HUD for the partial claim note.