Under the Inspector General Act of 1978, each federal agency’s Office of Inspector General is required to submit a semiannual report to Congress summarizing its oversight activities. These reports serve as a formal accounting of the office’s audit findings, investigative outcomes, and recommendations. The U.S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) recently released its latest report, covering the period from Oct. 1, 2024, through March 31, 2025. For owners and managers of HUD-assisted sites, the findings offer insight into where federal oversight is directing its attention and what management areas may require heightened attention.

The report highlights a continuing emphasis on enforcement. According to the report, between October 2024 and March 2025, OIG audits and investigations resulted in more than $61 million in recoveries, alongside 92 administrative sanctions, including suspensions for participants found in violation of HUD requirements. What makes this cycle notable is not just the volume of enforcement actions, but the scope of the underlying issues, which ranged from fraudulent rental assistance claims to race-based tenant harassment.

Health and Safety Issues

HUD is intensifying its focus on physical conditions and timely clearing of hazards, especially in cases involving lead-based paint. OIG audits and investigations indicate that while progress has been made, deficiencies in inspection processes and enforcement remain a concern. A December 2024 audit of HUD’s Office of Multifamily Housing found significant delays in issuing violation notices and inconsistent communication to owners regarding inspection responsibilities. The audit emphasized the need for HUD to strengthen its controls to ensure timely inspections and clearer guidance.

In one notable case, a December 2024 settlement involved more than 2,500 apartment units where owners failed to provide required lead disclosures and conducted renovation work without proper safety protocols. The resulting consent decree called for abatement and repair measures across the affected sites. Similarly, investigations in Montana revealed false claims of lead paint abatement in veteran housing, while HUD audit staff recommended improvements to the timing and documentation of lead-based paint visual assessments in public housing.

The OIG has urged HUD to tighten oversight and follow-up protocols. Owners should be prepared for closer review of inspection compliance, documentation of repairs, and more consistent follow-through on cited violations.

Fraud Investigations Highlight Compliance Risks

The semiannual report also highlights several enforcement cases involving fraud, false claims, and misuse of HUD program funds. In New York, a former Housing Choice Voucher Program landlord received a 17-year sentence after being convicted of falsifying rental assistance claims and engaging in racially discriminatory practices. This marked the first OIG criminal conviction under the Fair Housing Act for such conduct. And in Alabama, a property manager redirected rent checks from elderly tenants to personal accounts by manipulating payee lines on money orders and checks.

In another case, a former Chicago contractor orchestrated a reverse mortgage scheme targeting elderly homeowners, resulting in more than $6 million in losses and a 17-year prison sentence. These examples show the scope of HUD OIG’s investigative reach, which extends beyond policy compliance to criminal enforcement.

Reduction in Open Audits

The report notes that HUD resolved 135 open recommendations during the six-month period. As of March 31, 2025, 693 recommendations remained open, down from more than 1,700 in 2021. This trend indicates both HUD’s progress in implementing oversight recommendations and the likelihood that owners will face changing compliance expectations.

While this report is directed to Congress, it shows an increased emphasis on physical condition oversight and inspection compliance. Owners should pay special attention to environmental hazards, especially lead-based paint, as tenant health and safety remains a critical compliance area. In addition, the report indicates a continued federal focus on fraud prevention and detection. Owners may wish to evaluate their internal controls and reporting practices, particularly if they operate multiple sites or participate in complex subsidy programs.