"Massive Abuse": HUD Audit Flags $5B In Improper Housing Assistance During Biden's Term

A new report from the US Department of Housing and Urban Development has found that more than $5 billion in federal rental assistance during fiscal year 2024 went to potentially ineligible recipients, including nearly 30,000 deceased individuals and thousands of non-citizens, according to MSN and the NY Post.

The audit, conducted by HUD’s Office of the Chief Financial Officer, reviewed nearly $50 billion in housing aid and identified $5.8 billion — about 11% — as “questionable.” More than 200,000 tenants were flagged, including 29,715 listed as deceased, 9,472 non-citizens, and 165,393 households receiving payments above local eligibility limits, particularly in large metro areas such as New Orleans. Officials said suspicious payments appeared nationwide, with heavy concentrations in New York, California and Washington, DC.

“A massive abuse of taxpayer dollars not only occurred under President Biden’s watch, but was effectively incentivized by his administration’s failure to implement strong financial controls resulting in billions worth of potential improper payments,” HUD Secretary Scott Turner said. “HUD will continue investigating the shocking results and will take appropriate action to hold bad actors accountable.”

The Post writes that the report faults federal directives that pushed funds out quickly “with minimal oversight,” while relying heavily on local housing authorities and contractors to verify eligibility. HUD said it is now reviewing funding for agencies involved and may suspend or revoke payments.

“HUD is implementing processes and procedures to revoke or pause funding as part of its efforts to hold bad actors accountable,” one official said. “Additionally, the Department could make criminal referrals and exercise other enforcement actions once it has confirmed fraud occurred.”

A HUD official also revealed that the department is implementing processes and procedures to revoke or pause funding as part of its accountability efforts. 

HUD disbursed just under $50 billion in federal rental assistance to non-federal entities (i.e., housing authorities, contract administrators, and landlords) during FY 2024, including more than $16 billion in Project-Based Rental Assistance (PBRA) and over $33 billion in Tenant-Based Rental Assistance (TBRA), serving more than four million households. This disbursement of funding design along with complex eligibility and program requirements, increased the risk of payment errors and highlights the necessity for more robust monitoring and verification tools for the rental assistance programs.

The directive from the Biden Administration to push funding out the door with minimal oversight and the design of HUD's rental assistance programs placed substantial trust and responsibility in these non-federal entities, such as housing authorities, contract administrators, and landlords, to accurately assess tenant eligibility for two of the most complex rental assistance programs. 

The report also accuses the Biden administration of not providing HUD “with effective tools, technology, or access to the evidence necessary to verify whether these entities were properly enforcing the intricate rules governing rental assistance.” 

The findings follow earlier warnings. A 2022 HUD Inspector General audit said the agency “needed significant improvement” in its antifraud systems and lacked clear procedures for reporting suspected fraud.

In February 2024, prosecutors charged 70 current and former New York City Housing Authority employees in what US Attorney Damian Williams called “the largest single-day bribery takedown in the history of the Justice Department,” involving millions in kickbacks and corrupt contracts. NYCHA, which receives billions in HUD funding annually, said: “NYCHA partners with law enforcement to root out the corruption that directly led to the 2024 arrests… Each of the 70 cases brought by DOI has led to a conviction.”

Former HUD Secretary Marcia Fudge and former Deputy Secretary Adrianne Todman did not respond to requests for comment.