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Document
Document

We audited the Puerto Rico Housing Finance Authority’s (PRHFA) Homebuyer Assistance Program (HBA), which provides eligible applicants with closing costs and downpayment assistance for the purchase of a primary residence.  The U.S. Department of Housing and Urban Development (HUD) provided its grantee, the Puerto Rico Department of Housing (PRDOH), $495 million in Community Development Block Grant Disaster Recovery funds for HBA Our objective was to determine whether PRHFA was on track for delivering the expected program outcomes and the impact the program had on home ownership rates in Puerto Rico after Hurricanes Irma and Maria. 

We found that HBA program participants were mostly satisfied with the program and stated that it had a significant impact on their lives by helping them obtain a safe and stable home for themselves and their families.  The program was on track to deliver the expected outcomes as defined in the subrecipient agreement, including, but not limited to, the number of program applications received, reviewed, and approved per month and monthly funds disbursed to assist participants obtaining housing.  However, PRDOH, which is responsible for monitoring the progress of the program, did not have current and reliable data to measure the program’s effect on home ownership rates in Puerto Rico.  In addition, PRHFA inappropriately allowed participating lending institutions to calculate financial assistance award amounts.  Further, PRHFA did not have clear and consistent guidelines to determine household income and final HBA financial assistance awards.  As a result, PRHFA cannot ensure that it distributed disaster recovery funds equitably among eligible program participants. 

We recommend that the Director of the Office of Disaster Recovery work with PRDOH and PRHFA to (1) update its action plan and program guidelines to reflect the current method(s) being used by the agency to measure the impact of the HBA program, (2) develop and implement clear and consistent guidance and procedures that establish a verifiable method for determining financial awards and  provide necessary training to participating lending institutions, and (3) provide training and guidance to participating lending institutions related to the updated guidelines and procedures for determining the financial award granted to HBA participants to ensure that program funds are distributed in an equitable manner.   

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.

Community Planning and Development

  •   2024-FW-1003-001-A

    Work with PRDOH to determine whether its current method of measuring how many applicants purchased their home through the program is the best way to measure the HBA program’s impact.

  •   2024-FW-1003-001-B

    Based on the results of recommendation 1A, update the HBA guidelines and the Puerto Rico disaster recovery action plan.

  •   2024-FW-1003-002-A

    Instruct PRDOH and PRHFA to develop and implement clear and consistent guidelines and procedures that establish a verifiable methodology for determining the amount of financial awards granted to eligible HBA participants.

  •   2024-FW-1003-002-B

    Include, as part of the revised procedures, a requirement to document within each case in SSP a detailed (1) calculation of the household income and (2) the analysis and computations conducted by the PRHFA underwriter for determining the amount of the financial assistance award.

  •   2024-FW-1003-002-C

    Instruct PRDOH and PRHFA to provide training and guidance to participating lending institutions related to the updated guidelines and procedures for determining the financial award granted to HBA participants to ensure that program funds are distributed in an equitable manner.