Finding Text
2023-002 – Real Estate Assessment Center (REAC) Inspection Report
Department of Housing and Urban Development
Assistance Listing Number 14.126 – Mortgage Insurance – Cooperative Projects
Material Weakness and Noncompliance
Category of Finding – Special Tests and Provisions
Criteria - HUD regulations specify the mortgaged property must be maintained in decent, safe, sanitary condition and good repair, in accordance with the program obligations.
Condition - In April 2023, HUD performed a REAC inspection at the Cooperative, which resulted in a score of 54c.
Cause - The Cooperative did not maintain the mortgaged property in accordance with the HUD regulations.
Effect - The Cooperative is not fulfilling the contractual obligations to HUD and members may not be receiving the quality of housing to which they are entitled.
Recommendation - We recommend that the Cooperative implement a corrective action plan as required in the inspection report and provide HUD with a response to findings.
Auditee’s comment - The Cooperative took corrective action as required in the inspection report and provided HUD with a response noting the corrections.
Status - Resolved
Auditor’s non-compliance code - Z – Other