Priority Open Recommendations | Office of Inspector General, Department of Housing and Urban Development

Recommendations are designated as “priority” because, if implemented, they will have the most significant impact on increasing efficiency in HUD programs, reducing fraud and wasteful spending, and assisting HUD with addressing its top management challenges. Closing priority recommendations would help the Department tackle longstanding challenges with managing fraud risk and improper payments, mitigating counterparty risks, promoting health and safety in HUD-assisted housing, improving IT modernization and cybersecurity, and increasing effectiveness in procurement.

HUD OIG tracks these recommendations on our Recommendation Dashboard and reports publicly on HUD’s progress in addressing them and what further action is needed.

See the recommendations below.

Memos to the Secretary

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2018-LA-0007 | September 26, 2018

HUD Paid an Estimated $413 Million for Unnecessary Preforeclosure Claim Interest and Other Costs Due to Lender Servicing Delays

Housing

Status
Open

Closed

2018-LA-0007-001-A
$413,513,975
Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Priority
Priority
We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Implement a change to regulations at 24 CFR Part 203 to require curtailment of preforeclosure interest and other costs that are caused by lender servicing delays, resulting in $413,513,975 in funds to be put to better use. This should include updating or seeking statutory authority to update HUD’s regulations as necessary and coordinating with HUD’s Office of Finance and Budget, well before any changes go through departmental clearance, to ensure that planned curtailment requirements can be consistently enforced through the claims process.
Status
FHA reported that the audit recommendation cannot be closed without the publication of the FHA Maximum Claim Rule. The proposed changes have been on HUD’s regulatory agenda since Spring 2020 but, as of January 2026, the Office of Single Family Housing is awaiting a determination from senior management on proceeding with the FHA Maximum Claim Rule.
Analysis
To fully address this recommendation, HUD must provide evidence that it has published and adopted the rule.
Implementation of this rule should result in HUD putting $413 million to better use.

2018-KC-0001 | March 25, 2018

FHA Insured $1.9 Billion in Loans to Borrowers Barred by Federal Requirements

Housing

Status
Open

Closed

2018-KC-0001-001-A
$1,905,340,944
Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Priority
Priority
We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Develop a method for using the Do Not Pay portal during the underwriting process to identify delinquent child support and delinquent Federal debt to prevent future FHA loans to ineligible borrowers to put $1.9 billion to better use.
Status
The Office of Housing started the integration between the Treasury’s Do Not Pay portal and HUD’s Computerized Homes Underwriting Reporting System (CHUMS). The system interface implementation was on track, but due to the Federal Government Shutdown, HUD was unable to meet its implementation target date of December 31, 2025. As of January 2026, HUD is working on the policy and establishing a new target date.
Analysis
To fully address this recommendation, HUD must provide evidence that it has implemented applicant screening against the Do Not Pay portal to identify delinquent child support and delinquent federal debt to prevent future FHA loans from going to ineligible borrowers.
Implementation of this rule should result in HUD putting $1.9 billion to better use.

2017-KC-0001 | October 13, 2016

FHA Paid Claims for an Estimated 239,000 Properties That Servicers Did Not Foreclose Upon or Convey on Time

Housing

Status
Open

Closed

2017-KC-0001-001-A
$2,238,721,464
Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Priority
Priority
We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Issue a change to regulations at 24 CFR Part 203, which would avoid unnecessary costs to the FHA insurance fund, allowing an estimated $2.23 billion to be put to better use. These changes include (1) a maximum period for filing insurance claims and (2) disallowance of expenses incurred beyond established timeframes.
Status
The Federal Housing Administration (FHA) reported that the recommendation cannot be closed out without the publication of the FHA Maximum Claim Rule. The proposed changes have been on HUD’s regulatory agenda since Spring 2020 but, as of January 2026, the Office of Single Family Housing is awaiting a determination from senior management on proceeding with the FHA Maximum Claim Rule.
Analysis
To fully address this recommendation, HUD must publish the FHA Maximum Claim Rule. Implementation of this rule should result in HUD putting $2.23 billion to better use.