HUD's $7 Billion Housing Fix Skipped Its Own Checkups
Summary
HUD's Rental Assistance Demonstration program converts deteriorating public housing to long-term Section 8 contracts backed by $6.97 billion in construction spending across 706 properties nationwide since 2013. When HUD's own inspectors physically checked a sample of the converted units in 2023, 65% had deficiencies -- 63 of them life-threatening, including missing smoke detectors and exposed wiring. But checking wasn't the norm: HUD had not performed the legally required first inspection for half the properties its auditors reviewed, some overdue by nearly a decade, and only 2 of 40 sampled properties ever got the follow-up review HUD's own rules require.
A program built to stop the losses, running on unverified paperwork
RAD lets public housing agencies convert crumbling properties into long-term Section 8 contracts -- either Project-Based Rental Assistance (PBRA), which administers directly, or -insured Project-Based Vouchers (PBV), which add a lender to the oversight chain. Between September 2013 and March 2024, 706 properties completed that conversion nationwide⧉: 607 PBRA projects covering 73,919 units and 99 -insured PBV projects covering 16,291 units, together drawing $6.97 billion in hard construction costs. In exchange for that money, owners agree to two ongoing obligations: keep units in decent, safe, and sanitary condition, and fund a reserve account to pay for future repairs. HUD's Inspector General set out to check whether either promise was being kept⧉.
When HUD checked, it found trouble in two of every three units
Auditors picked 14 properties -- 2,661 units across 13 public housing agencies -- and physically walked 242 of those units⧉. Sixty-five percent, 158 units, had a problem: 63 were life-threatening -- missing or inoperable smoke detectors, missing or broken outlet plates, exposed electrical wires; 96 more were non-life-threatening health-and-safety issues, including a knife wedged into a doorframe for security and standing water in a basement⧉; the rest were the kind of deterioration -- rusted door frames, missing doorknobs, water-damaged walls -- that turns into a bigger problem if left alone. Eighty-five percent of the 14 properties also had deficiencies in common areas, hallways, and grounds. One 278-unit property had a single staff member responsible for all of its maintenance⧉.
View data as table
| Life-threatening | 63 | missing smoke detectors, exposed wiring, broken outlet plates |
|---|---|---|
| Non-life-threatening health & safety | 96 | a knife lodged in a doorframe for security, tripping hazards, standing water in a basement |
| Non-safety | 417 | rusted door frames, missing doorknobs, water-damaged walls |
The checkup itself often never happened
Physical inspections are only half of 's oversight; the other half is the Management and Occupancy Review (MOR), a required financial and operational checkup due within six months of a property's conversion and annually after that. Reviewing 40 sampled RAD properties, auditors found HUD had never performed the required initial MOR for 20 of them -- half⧉. As of March 31, 2024, those missing checkups were between 35 and 118 months overdue -- the longest gap pushing up on a full decade. Of the 20 properties that did get an initial MOR, 19 got it late -- 6 to 98 months after the contract took effect, averaging 51 months -- and only 1 arrived on time⧉. The follow-up requirement fared no better: of the 20 properties with an initial MOR, 18 never got the required second one during the audit period; the 2 that did waited nearly 5.5 to more than 6 years for it⧉.
View data as table
| Never performed | 20 | as of March 31, 2024 -- some overdue by up to 118 months |
|---|---|---|
| Performed late | 19 | 6 to 98 months after the required date; average 51 months late |
| Performed on time | 1 | just 1 of the 40 properties reviewed |
A senior advisor told auditors why: headquarters never designated RAD checkups as a field-staff priority, and has no system to even track whether its own regional staff completed them⧉. That's set against a decade of staffing cuts in the office responsible -- a net loss of 19 employees in 2017, 74 more in 2018, and in 2020 a COVID-driven exodus so severe had to hire new staff equal to 63% of what remained. Inspection timing for 's other conversion track, -insured properties, was no more consistent: only 4 of 11 were inspected within the required window⧉; one still hadn't been inspected four years after its due date. And for plain PBRA conversions, HUD's own guidance contradicts itself across three separate documents about when the first inspection should even happen⧉ -- auditors tested all three and found followed none of them consistently.
Repair money nobody could verify
The reserve accounts fared just as poorly. Owners are required to keep a funded reserve to pay for future capital repairs -- exactly the kind of maintenance backlog RAD exists to prevent. Auditors could not confirm the reported balance for 13 of the 14 properties they checked⧉; recalculating from bank and mortgage records, they found variances from about $1,200 to more than $1.3 million against what owners had reported. Eleven of those accounts came up short and two came up over-funded -- a $662,096 net shortfall on the properties auditors could actually check.
- physically inspected 242 of 2,661 units at 14 sampled RAD-converted properties and found deficiencies in 65% of them -- 63 life-threatening, per HUD OIG's Dec. 18, 2024 audit⧉.
- skipped the required initial Management and Occupancy Review for 20 of 40 sampled properties entirely -- overdue by as much as 118 months as of March 2024 -- and got 19 of the remaining 20 late, averaging 51 months. Only 2 of 40 properties ever received the required follow-up review.
- Reserve-for-replacement balances -- the accounts meant to fund future repairs -- couldn't be verified for 13 of 14 properties checked, and recalculation turned up a $662,096 net shortfall against what owners had reported.
- 's own staff say headquarters never made these checkups a field-staff priority and can't track whether they happen, against a decade of staffing losses in the office responsible. 's Office of Multifamily Housing Programs accepted all 12 of 's recommendations and committed to completing the missing reviews.
This piece draws entirely on HUD OIG Audit Report 2025-CH-0001⧉ (Dec. 18, 2024), fetched directly from hudoig.gov and read page-by-page; the site returns a 403 to automated fetch tools but serves the identical PDF to a plain HTTP request, confirmed against an existing Wayback Machine capture of the same URL. 's onsite sample of 14 properties and desk-review sample of 40 properties were both targeted, non-statistical samples chosen to surface risk -- not a random draw -- so the figures in this piece describe what auditors found in those specific properties, not a projected rate across all 706 RAD conversions nationwide; the report says as much directly. No property, city, or state is named in this piece because the report itself identifies sampled properties only by an internal ID number, not by name or location; no individual is named because every finding here is attributed to an office or role -- 's Office of Multifamily Housing Programs, a senior advisor, 's MACOD Branch Chief -- never a named person as a wrongdoer.
Sources(1) ▾
- U.S. Department of Housing and Urban Development, Office of Inspector General, HUD's Office of Multifamily Housing Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD (Audit Report 2025-CH-0001) (2024-12-18) — The full 42-page performance audit of 's oversight of the physical condition, reserve-for-replacement accounts, and initial-inspection timing of public housing converted to Project-Based Rental Assistance (PBRA) or -insured Project-Based Vouchers (PBV) under the Rental Assistance Demonstration (RAD) program. Fetched directly from hudoig.gov via curl with a browser user-agent (the site returns 403 to the standard fetch tool -- a known operational hazard; a plain HTTP GET succeeds and returns the identical PDF, confirmed against the Wayback Machine's existing capture of the same URL). Used for every figure in this piece: program-scale data (Table 1, printed p.2), the physical-condition findings (Results of Audit, printed pp.6-14), the reserve-account findings (printed pp.14-16), the MOR-timeliness findings (printed pp.16-19), the initial-inspection-timing findings (printed pp.21-24), the recommendations (printed pp.19-20, 25), and 's written response (Appendix A, printed pp.28-30). hudoig.gov · original document
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's Rental Assistance Demonstration (RAD) program exists to stop the bleeding: before it, estimated the country was losing 8,000 to 15,000 public housing units a year⧉ to demolition, buried under deferred maintenance the agency couldn't fund. RAD's fix is to convert that housing to long-term, project-based Section 8 contracts, which unlock private financing for repairs. It has drawn $6.97 billion in construction spending across 706 completed conversions⧉ since 2013. When HUD's own Inspector General physically checked a sample of the converted units⧉ in 2023, 65% of them had something wrong -- and separately, had skipped the legally required first checkup on half the properties its auditors reviewed, in some cases for nearly a decade.