In response to a request from Congresswoman Mary Jo Kilroy, the U.S. Department of Housing and Urban Development's Office of Inspector General conducted a review of the allegations that Columbus Properties Limited Partnership (Columbus Properties) did not renovate six apartment complexes in Ohio for which it obtained HUD-insured mortgages. Congresswoman Kilroy asked for a review based on local newspaper articles that alleged waste and abuse stemming from HUD’s Section 221(d)(4) program. The program insures mortgage loans for multifamily properties owned by profit-motivated entities. The newspaper articles alleged that Columbus Properties obtained Federal Housing Administration (FHA) mortgages totaling $26.6 million in 1997 to purchase and renovate the six apartment complexes but did not perform the renovations. Congresswoman Kilroy asked us to provide answers to five specific questions.
Our objectives were to determine whether HUD followed its standard operating procedures for monitoring the inspection of renovation activities designed to ensure compliance with the specifications and to address the questions outlined in the congressional request. We concluded that HUD followed its procedures to monitor the renovation of the six projects. We also addressed the congresswoman’s questions in the Results of Review section. Based on the results of our review, this report contains no recommendation.