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Crime, Fraud, Waste, and Abuse
February 12, 2026
  • Office of Housing
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We audited the U.S. Department of Housing and Urban Development’s (HUD) Office of Single Family Housing’s efforts to increase the supply of affordable housing.  Our audit objective was to determine whether HUD met its intended outcome to increase the supply of affordable housing to owner-occupants, governmental entities, and HUD-approved non-profits by expanding the exclusive listing periods for its Real Estate Owned (REO) properties and Claims Without Conveyance of Title (CWCOT) program.

HUD’s efforts to increase the supply of affordable housing to owner-occupants, HUD-approved non-profits, and government entities by expanding the exclusive listing periods in its REO and CWCOT properties had a minimal impact on the supply of affordable housing.  To help increase the supply of affordable housing, HUD expanded the exclusive listing period for the Real Estate Owned (REO) program from 15 days to 30 days and created an exclusive listing period of 30 days for the sale of CWCOT post-foreclosure properties.  Based on preliminary HUD sales data between January 2020 and April 2024, the REO program’s policy expansion of the exclusive listing period from 15 to 30 days (Mortgagee Letter 2022-01) resulted in at least a 14 percent increase in the proportion of exclusive listing owner-occupants to total sales.  Before issuing Mortgagee Letter 2022-08, which created the exclusive listing period for the CWCOT program, HUD did not have an exclusive listing period for the CWCOT program.  Therefore, HUD had no data to compare the possible effects of the exclusive listing period.  However, based on our review and analysis, 115 investors were able to purchase homes during the restricted exclusive listing period, contrary to the guidance in mortgagee letter.  

HUD performed an analysis of REO sales during fiscal years 2023 and 2024 which found its efforts to increase the supply of affordable housing had mixed results.  HUD determined that the increased exclusive listing periods had a limited impact on REO and CWCOT sales.  As a result, HUD rescinded the mortgagee letters that expanded the exclusive listing periods for both programs.  Because of these changes, we were unable to fully address the audit objective.  The memorandum contains no recommendations.