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Chairman Bachus: “HUD Must Ensure Every Dollar Dedicated to Affordable Housing is Used Responsibly and Any Misused or Misappropriated Funds Are Promptly Repaid”

Washington, June 3, 2011 -

Financial Services Committee Chairman Spencer Bachus delivered the following statement today at a full committee hearing on HUD’s management of the Home Investment Partnerships Program:


“The HOME Investment Partnerships Program is the federal government’s largest housing construction program for the poor.  Administered by the Department of Housing and Urban Development, it is intended to make decent, affordable housing available to low-income Americans.  The Washington Post reports the program is dysfunctional and that hundreds of millions of taxpayer dollars have been squandered due to mismanagement, waste and fraud.  The purpose of today’s hearing is to provide HUD an opportunity to respond to these allegations and explain how taxpayers’ money is being protected.

“According to the Washington Post reports, HOME delivers billions of dollars to local housing agencies with few rules or safeguards in place and no reliable way to track how money is spent on various projects.  We will want to hear what HUD is doing to ensure program participants are being held accountable and whether new legislative authority is needed to strengthen HUD’s ability to manage the HOME Program.

“The HUD Office of Inspector General has likewise reported serious problems with HOME.  Over the past five years, Inspector General audits uncovered failures with HUD’s administration of HOME formula block grants and identified numerous other deficiencies in HUD’s management of the program.  The Committee will want to hear from HUD what changes have resulted from the Inspector General audits, particularly what, if anything, is being done to recover funds if a project is not completed or does not meet the program requirements.

“Unfortunately, the HOME program has been exploited by schemers and crooks.  Between 2004 and 2011, dozens have been convicted or indicted for criminal misuse of HOME funds, including elected officials, directors of housing authorities and non-profit organizations, developers, landlords and tenants. Our witnesses at today’s hearing will be asked to explain what is being done to prevent this kind of malfeasance as this program continues.

“These problems span multiple administrations and I have been encouraged in all my conversations with Secretary Donovan and others at HUD, including our witness today, that there is a determination at the agency to correct these problems.  Let me mention three steps that must be taken:  first, that the contracts require repayment for failed projects or misspent funds; second, that those who defraud the government are pursued vigorously; and third, that eligibility requirements for developers are substantially tightened. 

“HUD must ensure that every dollar dedicated to affordable housing is used responsibly and any misused or misappropriated funds are promptly repaid.  I look forward to hearing from the Assistant Secretary and the Assistant Inspector General about the steps the Department is taking to ensure the taxpayers are adequately protected from waste, fraud, and abuse.”

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