U.S. flag

An official website of the United States government Here’s how you know

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Hotline

Report Fraud, Waste and Abuse
September 30, 2014
  • Housing
2014-KC-0801
2014-KC-0801.pdf

The U.S. Department of Housing and Urban Development – Office of Inspector General audited HUD’s Federal Housing Administrations single family mortgage seven-loan limit.  We initiated this review based on issues identified in an audit of the Wyoming Housing Opportunities Association in memorandum 2013-DE-1801.  Our objective was to determine the impact of investor loan properties on the FHA fund. 

We found multiple instances of investors deferring maintenance on their investment property. Since there is no policy for periodic evaluation of property conditions or appraisals in the case of refinancing, this might put undue risk on the FHA insurance fund.

We recommend that the FHA Commissioner-Assistant Secretary, Office of Housing perform a study of the risks involved with deteriorating property conditions related to investor loans and evaluate whether changes are needed, such as requiring appraisals on refinanced investor loans and making changes to the insurance requirements for investor loans.