Purpose

To determine whether Affordable Home Ownership Development Program (Program) grant managers are awarding grant monies to existing and prospective homeowners in compliance with Program criteria. Our audit covers the period February 2012 through October 2013, and focuses on grants awarded to eight metropolitan area-based development projects.

Background

The Program, which is administered by the New York State Affordable Housing Corporation (Corporation), was established to promote homeownership for low- and moderate-income individuals and families and to stimulate the development, stabilization, and preservation of New York communities. Individual grants of up to $40,000 per dwelling can be provided to eligible existing and/or prospective homeowners (Program recipients). Grant monies may be used for new construction, home improvements, or acquisition and repair projects. The grant monies are disbursed to Program recipients via their municipalities or community-based notfor- profit organizations (grant managers) that contract with the Corporation and are responsible for determining a recipient’s eligibility. The annual income and liquid assets of recipients must be below the limits stipulated in the contracts between the Corporation and the various grant managers. These limits vary among grant managers based on several factors, including the value of the property in question and family size of the Program beneficiary. In recent years, the State Legislature has appropriated $25 million annually for this Program.

Key Findings

Most of the 69 Program recipients we reviewed met the Program’s prescribed income and liquid asset eligibility criteria. However, two Program recipients were not eligible for their grants, which totaled $67,000. The liquid assets of the two recipients exceeded the limits prescribed for Program eligibility. One of the recipients exceeded the asset limit by $31,855. We also questioned an award of $28,000 to another Program recipient because it was unclear if the recipient exceeded the established annual income limit.

Key Recommendations

• Provide training to grant managers on assessing applicant eligibility, particularly related to liquid asset and annual income limits.
• Continue to periodically review grant managers’ award files to verify applicants’ compliance with Program eligibility requirements.
• Clarify requirements for determinations of applicants’ annual incomes, including reasonable estimates of variable income such as bonuses.

Other Related Audit/Report of Interest

New York State Affordable Housing Corporation: Homebuyer Selection and Approval (2008-S-100)