The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Federal Housing Administration (FHA)-insured loans from calendar year 2016.  Our audit objective was to determine whether FHA insured loans to borrowers with delinquent Federal debt or who were subject to Federal administrative offset for delinquent child support. FHA insured an estimated 9,507 loans worth $1.9 billion, which were not eligible…

We audited the U.S. Department of Housing and Urban Development’s (HUD) multifamily program based on the results of our audit of Village North Apartments, Salt Lake City, UT (HUD Office of Inspector General (OIG) audit report 2017-DE-1001).  During that audit, we found indications that tenants were able to move into units and become heads of household without being put on the established waiting list.  Our objective was to determine…

We audited the U.S. Department of Housing and Urban Development’s (HUD) process for ensuring that nonpayment orders adequately prevented the payment of claims on Federal Housing Administration (FHA) loans.  The audit was initiated in response to an Office of Inspector General preaudit analysis of HUD data, which determined that nonpayment orders may not always prevent claims from being paid.  Our audit objective was to determine…

This audit report was reissued on February 13, 2018 to correct the Combined Statement of Budgetary Resources for the period ended September 30, 2017 on page 44.  The Budget Authority and Outlays, Net section is now included. This audit report was previously reissued on November 27, 2017 to correct an error in a number reported for deobligations on page 16 from $206.9 million to $71.9 million.  The sentence was changed from “Of the $…

We audited general and application controls over selected Federal Housing Administration (FHA) information systems and the credit reform estimation and reestimation process as part of the internal control assessments required for the fiscal year 2017 financial statement audit under the Chief Financial Officer’s Act of 1990.  Our objective was to review the controls for compliance with U.S. Department of Housing and Urban Development (HUD)…

The U.S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) reviewed concerns from a complaint within HUD regarding the physical condition of HUD-insured residential care facilities (RCF).  This review is part of an ongoing effort of the Office of Inspector General (OIG).  At least 10 RCFs had received a score below 31 out of a possible 100 on their most recent Real Estate Assessment Center (…

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of grants funded through its resident home-ownership program under the Low-Income Housing Preservation and Resident Homeownership Act of 1990, based on the results we reported for HUD’s program grants for Carmen-Marine Apartments (2015-CH-1010) and West Park Place Condominium (2016-CH-1009) and the preliminary results of our audit of HUD’s program grant for…

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of safe water requirements for Federal Housing Administration (FHA)-insured loans nationwide.  We conducted the audit based on news reports that identified lead contamination in public water systems across the country and also because of an audit in which we found that HUD did not have adequate controls to ensure that FHA-insured properties located in Flint,…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s rulemaking process for its single family note sales program.  This is the second in a series of audits on the note sales program.  The previous audit, 2017-KC-0006, reported that HUD did not conduct rulemaking or develop formal procedures for its single-family note sales program.  This audit examines a different aspect of the…

Very low REAC scores are not prevalent across ORCF’s portfolio.  The majority of RCFs that received a REAC score scored at least 80 on their last inspection, and more than three quarters scored at least 60.  Despite the small percentage of RCFs that scored below 31, we noticed an overall decline in REAC inspection scores across ORCF’s portfolio from 2000 to 2016. REAC has adopted an inspection process that applies uniformly to all…

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of servicers’ use of loss mitigation programs.  The audit was initiated in response to an Office of Inspector General preaudit analysis of HUD data, which determined that servicers may not always evaluate borrowers with delinquent mortgages for loss mitigation.  Our audit objective was to determine whether HUD had adequate controls to ensure that…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s rulemaking process for its single family note sales program. We initiated the audit due to the large amount of Federal Housing Administration claims paid on note sales and because our office has never audited the single-family note sales program.  Also, there are public concerns over the creation and administration of the note sales…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the Office of Multifamily Housing Programs due to a previous audit of a cooperative housing property, which charged more for its Section 8 units than for its non-Section 8 units.  Our objective was to determine whether owners of cooperative housing properties charged more for their Section 8 units than for their non-Section 8 units. We found…

The U.S. Department of Housing Urban Development (HUD), Office of Inspector General audited HUD to determine whether it ensured that lenders properly processed voluntary terminations of insurance coverage on single-family Federal Housing Administration (FHA) loans and disclosed all implications of the terminations to the borrowers.  We initiated this audit because of our concern that borrowers might not be aware of the rights they give up…

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of Federal Housing Administration (FHA)-insured loans originated with borrower-financed downpayment assistance.  The audit was initiated based on the results from three HUD, Office of Inspector General (OIG) audits, which determined that lenders allowed FHA borrowers to finance their own downpayments through an increase in their mortgage interest rate as part…

In accordance with the Chief Financial Officers Act of 1990, as amended, we are required to annually audit the consolidated financial statements of the U.S. Department of Housing and Urban Development (HUD). HUD reissued its fiscal year 2016 and 2015 (Restated) consolidated financial statements due to pervasive material errors that were identified by us. Our objective was to express an opinion on the fairness of HUD’s consolidated…

We reviewed the general and application controls over the Federal Housing Administration’s (FHA) Single Family Premiums Collection Subsystem – Periodic (SFPCS-P) and Single Family Acquired Asset Management System (SAMS) as part of the internal control assessments required for the fiscal year 2016 financial statement audit under the Chief Financial Officer’s Act of 1990.  Our objective was to review the general and application controls over…

We audited the U.S. Department of Housing and Urban Development (HUD), Federal Housing Administration’s (FHA) process for making changes to its programs, policies, and operations based on an Office of Inspector General (OIG) preaudit analysis that noted potential violations of departmental clearance requirements for three documents.  Our audit objective was to determine whether HUD followed the proper requirements and procedures when…

(Reissued on 7/7/17) This report was reissued on July 7, 2017, to correct Appendix A. This reissued report now correctly shows the monetary benefit associated with each recommendation. This report presents the results of our audit of FHA’s fiscal years 2016 and 2015 (restated) financial statements, including our report on FHA’s internal control and test of compliance with selected provisions of laws and regulations applicable to FHA.  In…

We audited the U.S. Department of Housing and Urban Development (HUD), Office of Multifamily Housing Programs’ implementation of use agreement restrictions for affordable set-aside units because it was included in our audit plan based on a prior audit, which determined that a multifamily project owner did not comply with project use agreement restrictions.  The objective of the audit was to determine whether HUD ensured compliance with use…