Based on a hotline complaint, we reviewed whether the Phoenix Apartments multifamily project located in Concord, California, used its project funds in accordance with HUD rules and regulations. We found that the project did not use project funds in accordance with the requirements of its regulatory agreement and applicable HUD rules and regulations. Specifically, during fiscal years 2004, 2005, and 2006, the project used $89,751 of its funds for unnecessary purposes and did not support the necessity and/or reasonableness of $118,220 spent for the project. We also found unsafe conditions, some of which the project’s management ignored for more than two years. We recommend that the Director of the San Francisco Multifamily Hub require the project’s owner, Phoenix Apartments, Inc., to (i) repay the project $89,751 from nonproject funds for the unnecessary expenditures and provide support for the reasonableness of the $118,220 paid for the unsupported services and goods or repay the project for the unsupported amount from nonproject funds; (ii) immediately obtain the services of a HUD-approved professional management agent to manage the project and implement policies and procedures for ensuring that project funds are spent only for reasonable and necessary purposes; and (iii) immediately procure repair services for all of the unsafe conditions and implement adequate policies and procedures for periodic inspection, reporting, repair, and follow-up of any wear and tear, or other conditions that may pose a hazard to the project’s residents or visitors.