Purpose

To determine whether Low-Income Housing Trust Fund Program (Program) funds are being awarded and disbursed in an efficient manner to help meet the State's critical low-income housing needs. The audit covers the period April 1, 2008 through December 11, 2013.

Background

The Housing Trust Fund Corporation's (Corporation) mission is to create decent affordable housing for persons of low income by providing loans and grants for the rehabilitation of existing housing or the construction of new housing. One way the Corporation accomplishes this mission is through the Program. Each year since 1985, the Program was appropriated between $25 million and $39 million to be used in conjunction with other State, Federal, or private financing for low-income housing projects. Generally, the Program provides up to $125,000 per unit, or a total of up to $2.4 million per project. The Corporation receives staff and administrative support from the Division of Housing and Community Renewal (Division) to administer these activities.

Key Findings

• A significant number of projects are being delayed at least six months, for about 4,400 low-income housing units, due to: questionable award decisions; lax monitoring or enforcement of expectations; and delays in key approvals or other Division actions.
• The Program does not consistently adhere to its own policies regarding the project award process. During our audit period, the Program awarded funding to six projects that staff review had deemed "infeasible," and 13 others were deemed "feasible but not recommended." The Program does not adequately document management decisions to award funding to projects that have scored lower than others based on criteria such as community impact/revitalization, financial leveraging, and project readiness. The lack of both compliance with policies and transparency regarding awards challenges the integrity of the Program.

Key Recommendations

• Adhere more closely to the policies and procedures in place for awarding low-income housing projects.
• Document the reasons for any management decisions to fund projects that do not adhere to the established criteria at the time of the funding award.
• Develop a more formalized monitoring system that produces routine internal management reports, to monitor all aspects of the program - including the pre-construction phase - to ensure low-income housing units are produced more timely.

Other Related Audits/Reports of Interest

Division of Housing and Community Renewal: Housing Preference for Disabled Veterans (2010-S-42)
Housing Affordability in New York State (March 2014)