We audited the risk to the U.S. Department of Housing and Urban Development’s (HUD) General Insurance-Special Risk Insurance (GI-SRI) Fund based on our ongoing effort regarding HUD-insured Section 232 mortgages. Our objective was to determine whether HUD used financial and credit history variables for its cash flow model used to estimate and reestimate the credit subsidy for the cohorts of mortgages within the Section 232 program.
We recommend that HUD continue testing the financial and credit history variables, including default data, and include the appropriate variables for the cash flow model used to estimate and reestimate the credit subsidy for the cohorts of mortgages within the Section 232 program.
Recommendations
Housing
- Status2020-CH-0002-001-AOpenClosedClosed on March 17, 2020
Continue testing the financial and credit history variables, including default data, and include the appropriate reliable and sufficient variables for the cash flow model used to estimate and reestimate the credit subsidy for the cohorts of mortgages within the Section 232 program.