We audited Bank2’s origination of Section 184 Loan Guarantees for Indian Housing program loans. We selected Bank2’s Section 184 program because (1) an internal audit report and corrective action verification determined that the U.S. Department of Housing and Urban Development (HUD) lacked proper oversight of the program and lenders did not underwrite loans in accordance with HUD requirements 2) Bank2 is one of the largest Section 184 lenders, and (3) reviews of Section 184 lenders were aligned with the goals of our annual audit plan. Our audit objective was to determine whether Bank2 originated Section 184 Loan Guarantees for Indian Housing Loans in accordance with HUD’s processing guidelines.
Bank2 originated all 14 loans reviewed in accordance with Section 184 Loan Guarantees for Indian Housing program processing guidelines. Specifically it ensured that borrowers met income, debt, and credit requirements; property values were supported; and the borrower and properties were eligible for the program. Because the 14 loans reviewed met the processing guidelines, there was not an increased risk to HUD’s Loan guarantee Fund.
This report contains no recommendations.