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Affordable Housing , Federal News

HUD Home Program Scrutinized in Post Investigation

18 May 2011

Connecticut reflects part, but a relatively small part, of a huge problem in unspent and potentially misused HUD Home funds across the country, according to a new investigation by the Washington Post.

The Post investigation, published Sunday, said 700 projects across the country had wasted or failed to spend more than $400 million in HOME funds over the last two decades, largely because of poor local oversight, grants to non-profit developers without the capacity to complete projects, and HUD's failure or inability to ensure that the money was spent honestly and effectively.

Of 89 Connecticut projects currently funded with $68 million by HUD, $6 million is tied up in delayed projects and another $6 million in funding has not been drawn down.  Overall, the Post investigation - entitled "Million-Dollar Wasteland" - found that:

  • Local housing agencies have doled out millions to troubled developers, including novice builders, fledgling nonprofits and groups accused of fraud or delivering shoddy work.
  • Checks were cut even when projects were still on the drawing boards, without land, financing or permits to move forward. In at least 55 cases, developers drew HUD money but left behind only barren lots.
  • Overall, nearly one in seven projects shows signs of significant delay. Time and again, housing agencies failed to cancel bad deals or alert HUD when projects foundered.

The story can be viewed here.