Finding Text
Finding No.: 2025-007 Identification of Federal Program: Federal Agency: U.S. Department of Housing and Urban Development (HUD) AL Program: 14.239 HOME Investment Partnerships (HOME) Program Federal Award No.: M17ST660202 Area: Eligibility Criteria or specific requirement (including statutory, regulatory or other citation): GHURA’s Renewal Affordable Homes Program Policy, Chapter 3, Part B states: Housing expenses to include principal, interest, taxes and insurance (PITI) cannot exceed thirty-three percent (33%) to qualify for a loan. Condition: For one (25% amounting to $112,500) of four mortgagees tested (amounting to $700,750) of $2,230,031 in total HOME subsidies, a deficiency was noted as follows: Item # Application No. HOME Subsidy Amount Questioned Cost 1 RAHM-U-0035 $112,500 $112,500 For item # 1, the participant was ineligible to participate as the participant’s housing expenses, including PITI, exceeded thirty-three percent (33%) of total income. Cause: There was lapse in adherence to established underwriting procedures, resulting in the approval of a participant whose PITI exceeded the allowable threshold. Effect or potential effect: GHURA is in noncompliance with the applicable requirement. Questioned costs: $112,500 Identification as a repeat finding: Not applicable. Finding No.: 2025-007, continued Recommendation: Responsible personnel should enforce monitoring controls over compliance with applicable maximum per-unit subsidy requirements. Specifically, supervisory personnel should be required to perform effective reviews of applicant files prior to approving HOME assistance to ensure that procedures are followed and calculations are accurate. Views of Responsible Officials: Management concurs with the finding. Refer to Management’s position as outlined in the Corrective Action Plan.