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Document
Document

We audited the Federal Housing Administration (FHA), Office of Asset Sales’ U.S. Department of Housing and Urban Development (HUD)-Held Vacant Loan Sales (HVLS) program.  The audit objective was to assess the extent to which HUD achieved its mission objectives for a 2022 vacant loan sale.  We noted deficiencies in 52 of 53 HUD-approved applications within the reviewed vacant loan sale.  These deficiencies occurred in transactions for all seven purchasers that purchased loans in the sales.  HUD risks not achieving its mission objectives to promote sales first to mission-driven entities or to encourage mission outcomes by allowing purchasers that submitted deficient applications to purchase distressed FHA loans.

Recommendations

Key Details
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  Open
  Closed
Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

Sensitive
Sensitive

Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.

Priority
Priority

We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Housing

  •   2024-KC-0001-001-A

    Require the transaction specialist contractor to change its application review process to prevent incomplete applications from being considered during vacant loan sales and that recommendations to approve applications are supported by written analysis.

  •   2024-KC-0001-001-B

    Implement improved verification checks to prevent participation of restricted entities.

  •   2024-KC-0001-001-C

    Implement an improved process to review and update program controls before each sale to achieve its mission objectives.