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

Crime, Fraud, Waste, and Abuse
June 12, 2026
  • Community Planning and Development
2026-LA-0003
View Full Report

We identified a significant increase in the amount of funds drawn by HOME Investment Partnerships Program (HOME) and HOME American Rescue Plan (ARP) grantees near the time of the January 2025, hold in Federal funds, which increased the risk that the funds may have been drawn prematurely, without support, or used improperly.  Therefore, our audit objective was to identify if HOME and HOME ARP draws made near the time of the hold in federal funds were in accordance with program requirements.     

 

Out of eight grantees selected for review, two (New York City and the City of Anaheim) violated program requirements when they prematurely drew HOME and HOME ARP funds near the time of the hold in federal funds and made improper payments.  New York City and its subrecipient, the New York City Housing Authority (NYCHA), could not adequately support how $81.9 million in HOME ARP funds were used for a tenant arrears program, of which, over $6 million was used for ineligible tenants that were over the allowable income limit.  Both grantees drew a combined total of over $87 million in HOME and HOME ARP funds in advance of their immediate needs, in violation of program requirements.  Further, the City of Anaheim admitted to drawing an additional $404,630 in HOME and HOME ARP funds prematurely.  Both grantees earned interest income while holding the funds from their premature draws that they did not report to HUD and had not remitted to the U.S. Treasury.  Each grantee had different reasons for why these issues occurred including over-reliance on NYCHA, delays transferring and applying the funds, and concerns the hold in funds would jeopardize ongoing housing development.  The funds used for the ineligible tenants could have been used for other eligible and supported program activities to reduce homelessness and increase housing stability.  In addition, the combined premature draws of over $87 million misled HUD about the need for the funds and the resulting accumulated interest must be remitted to the U.S. Treasury. 

 

We recommend that the Directors of HUD’s New York and Los Angeles Offices of Community Planning and Development, (1) require New York City to provide documentation to support its $81,913,050 draw of HOME ARP funds or repay its HOME Investment Trust Fund Treasury Account, (2) require both grantees to support the amount of interest earned while holding the funds and remit the funds to the U.S. Treasury, (3) review additional premature draws to determine eligibility, and (4) assess the adequacy of both grantees procedures and controls to ensure draws are made in accordance with program requirements.  We also recommend that HUD collaborate with its Office of Program Enforcement to consider potential administrative actions against both grantees for violating program requirements.