The U.S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) released its Office of Audit and Evaluation Annual Work Plan for Fiscal Year (FY) 2026. The work plan identifies the audits, evaluations, and oversight projects HUD OIG plans to initiate or continue across HUD programs nationwide.
For Public Housing Agencies (PHAs), the section titled Ensuring the Availability of and Access to Affordable and Quality Housing provides insight into emerging compliance priorities and operational risks. Unlike the fraud and payment integrity audits discussed in our previous article, these projects focus on whether assisted housing remains financially sustainable, physically safe, properly administered, and accessible to eligible families.
Three major compliance and operational risk areas emerge repeatedly throughout the planned and ongoing audits and evaluations:
- Financial Stability and Program Administration
- Housing Quality and Inspection Oversight
- Eligibility Verification and Community Safety
The following tables outline the planned and ongoing audits and evaluations within this section that may carry significant legal, operational, and compliance implications for PHAs.
Planned Projects
| Project | Description |
| PHAs’ Financial Management Practices | Individual audits of PHAs’ financial management practices and oversight of financial conditions. |
| Unit Conditions Corrections Survey | Audit of HUD’s appropriate and timely utilization of the Unit Conditions Corrections Survey, a comprehensive inspection protocol designed to ensure that the physical conditions of HUD-assisted housing meet the necessary standards for health, safety, and quality of life for residents. |
| Troubled PHAs | Individual audits of troubled PHAs that are contract administrators for rental assistance demonstration project-based voucher projects. |
| Shortfall Funding Program | Individual audits of PHAs that received HCV shortfall funding to assess their management and use of program funding. |
| Lender Origination Practices | Individual audits of lenders’ origination practices to assess whether they followed FHA rules and regulations for assets, income, liabilities, and credit when originating and underwriting single-family FHA loans. |
| FHA Single-Family Early Payment Default Origination Monitoring | Audit of lenders’ origination practices to assess their quality controls and the controls’ impact on early payment defaults. |
| Lender Servicing | Audit of lenders’ servicing practices to assess whether they are using all available tools to assist borrowers with loss mitigation. |
| Assessment of Opportunities to Streamline FHA Processes | Audit of FHA processes and requirements to assess whether opportunities exist to reduce or eliminate burdensome or unnecessary barriers. |
| Nursing Homes Asset Sales Program | Audit of HUD’s Nursing Homes Asset Sales program to assess the extent to which it maximizes recoveries from the sales. |
| Cash-Out Refinances | Audit to assess whether properties experience negative impacts after borrowers participate in cash-out refinance transactions. |
| Duplicate Property Inspections | Evaluation to assess the extent to which HUD monitors, detects, and takes steps to prevent duplicate inspections of properties that are also inspected by the U.S. Department of Agriculture and the U.S. Department of Veterans Affairs. |
| Physical Inspections of Units | Individual evaluations and audits of units to assess compliance with HUD’s quality standards for housing. |
| Integrity of REAC Inspections | Audit of completed Real Estate Assessment Center (REAC) inspections to identify potential fraudulent activity or other issues that impact the quality of HUD-assisted housing. |
Ongoing Projects
| Project | Description |
| A California Public Housing Agency’s Crime Prevention and Tenant Eligibility Determination | Audit of a California PHA to (1) determine whether the Authority complied with HUD’s and its own requirements for verifying individuals’ eligibility for HUD-assisted housing based on criminal activity, citizenship, and immigration status; and (2) assess the Authority’s practices for preventing and addressing criminal activity. |
| A District of Columbia Public Housing Authority’s Crime Prevention and Tenant Eligibility Determination | Audit of a DC PHA to (1) determine whether the Authority complied with HUD’s and its own requirements for verifying individuals’ eligibility for HUD-assisted housing based on criminal activity, citizenship, and immigration status; and (2) assess the Authority’s practices for preventing and addressing criminal activity. |
| An Illinois Public Housing Agency’s Crime Prevention and Tenant Eligibility Determination | Audit of an Illinois PHA to (1) determine whether the Authority complied with HUD’s and its own requirements for verifying individuals’ eligibility for HUD-assisted housing based on criminal activity, citizenship, and immigration status; and (2) assess the PHA’s practices for preventing and addressing criminal activity. |
| Monitoring of EBLLs by Property Owners in HUD-Assisted MF Properties Receiving Section 8 PBRA | Evaluation of the monitoring of elevated blood lead levels (EBLL) by property owners in multifamily properties receiving Section 8 PBRA funding. |
| HUD’s Inventory Management System/PIH Information Center Fatal Errors – HCV Program | Audit to determine the extent and impact of the fatal errors in HUD’s Inventory Management System/PIH Information Center (IMS/PIC) on PHAs’ HCV programs. |
| Physical Condition of HCV Units at a Public Housing Agency in Louisiana | Audit to determine whether the physical conditions of a PHA’s HCV program units comply with HUD’s and the PHA’s requirements. |
| Audit of NSC Partial Claims Tracking and Collection | Audit of the National Servicing Center’s (NSC) partial claims tracking and collection to determine whether the NSC serviced all due and payable partial claims in accordance with HUD rules and regulations. |
| HUD’s Implementation of the Timing of Inspections Under NSPIRE | Audit to determine whether HUD has effectively implemented the requirements for the timing of property inspections under the National Standards for the Physical Inspection of Real Estate (NSPIRE). |
| Management of Lead-Based Paint in a New York Public Housing Agency | Review of a New York PHA to determine whether the PHA adequately managed lead-based paint and lead-based paint hazards in its public housing. |
| Assessment of PHAs’ Compliance with MTW Statutory Requirements | Audit of PHAs’ compliance with HUD’s Moving to Work (MTW) Demonstration program statutory requirements. |
Here’s a breakdown of each of the three major legal and compliance risk areas found in the planned and ongoing audits.
Financial Stability and Program Administration
Planned Projects
- PHAs’ Financial Management Practices
- Troubled PHAs
- Shortfall Funding Program
- Lender Origination Practices
- FHA Single-Family Early Payment Default Origination Monitoring
- Lender Servicing
- Assessment of Opportunities to Streamline FHA Processes
- Nursing Homes Asset Sales Program
- Cash-Out Refinances
Ongoing Projects
- HUD’s Inventory Management System/PIH Information Center Fatal Errors – HCV Program
- Audit of NSC Partial Claims Tracking and Collection
- Assessment of PHAs’ Compliance with MTW Statutory Requirements
- Financial Stability and Program Administration is one of the most
Underlying many of HUD OIG’s planned and ongoing reviews is a common concern: whether housing programs are being managed in a financially sustainable and operationally accountable manner. These projects evaluate whether PHAs and other HUD program participants maintain sound financial controls, effectively manage limited resources, and administer programs in accordance with HUD requirements. For PHAs, key risks include weak financial oversight, inadequate monitoring of troubled programs, improper use of shortfall funding, unresolved IMS/PIC fatal errors, and unsupported use of MTW flexibility. The inclusion of lender origination, servicing, early payment default, cash-out refinance, and nursing home asset sale audits also highlights HUD OIG’s broader focus on financial stability across the housing system, including the consistent application of program requirements, protection of assisted households, and stewardship of HUD-backed assets.
Recent HUD policy activity points in the same direction. In 2025, HUD implemented public housing cash management changes through PIH Notice 2025-20, with agencies expected to report related requirements on the SF-425 beginning with the 2026 reporting year. HUD also reset the HOTMA Sections 102 and 104 compliance deadline for most PHAs to January 1, 2027, meaning agencies must update income, asset, verification, and reporting workflows before implementation. HUD has also moved to reduce program barriers in other areas. On March 5, 2026, a federal court vacated the 2024 determination that would have required certain federally assisted and federally insured housing programs to comply with the 2021 International Energy Conservation Code (IECC) and ASHRAE 90.1-2019 standards. HUD and USDA then issued a formal notice rescinding that determination on May 1, 2026.
Housing Quality and Inspection Oversight
Planned Projects
- Unit Conditions Corrections Survey
- Duplicate Property Inspections
- Physical Inspections of Units
- Integrity of REAC Inspections
Ongoing Projects
- Monitoring of EBLLs by Property Owners in HUD-Assisted Multifamily Properties Receiving Section 8 PBRA
- Physical Condition of HCV Units at a Public Housing Agency in Louisiana
- HUD’s Implementation of the Timing of Inspections Under NSPIRE
- Management of Lead-Based Paint in a New York Public Housing Agency
Beyond compliance with inspection schedules, HUD OIG is increasingly evaluating whether inspection programs are producing meaningful housing quality outcomes. The FY 2026 audits assess the effectiveness of inspection systems, correction of identified deficiencies, and oversight of health and environmental hazards. For PHAs, these audits increase compliance risk around NSPIRE implementation, inspection scheduling and documentation, deficiency correction tracking, quality control reviews, contractor oversight, lead-based paint requirements, and the physical condition of assisted units. Audits involving REAC integrity, duplicate inspections, EBLL monitoring, and HCV housing conditions reinforce HUD OIG’s focus on both inspection accuracy and corrective action.
A number of recent federal developments point to the same priorities reflected throughout these reviews. In February 2026, the House Financial Services Committee launched an investigation into the quality and safety of public housing, citing concerns regarding inspection backlogs, delayed corrective actions, inconsistent oversight, and the effectiveness of HUD’s transition to NSPIRE. At the same time, HUD continued modifying NSPIRE implementation requirements, including extending the mandatory NSPIRE-V compliance deadline to February 1, 2027, to provide PHAs additional time to implement the new inspection framework effectively. HUD has also continued to fund lead hazard reduction and healthy homes grant programs, reinforcing the federal emphasis on resident health and safety in assisted housing. This direction of federal oversight increasingly prioritizes inspection quality, timely correction of deficiencies, resident health and safety protections, and ensuring inspection programs produce measurable improvements in housing conditions.
Eligibility Verification and Community Safety
Ongoing Projects
- A California Public Housing Agency’s Crime Prevention and Tenant Eligibility Determination
- A District of Columbia Public Housing Authority’s Crime Prevention and Tenant Eligibility Determination
- An Illinois Public Housing Agency’s Crime Prevention and Tenant Eligibility Determination
Eligibility Verification and Community Safety is a more narrowly targeted oversight area, but the audits underway suggest it may have significant implications for admissions, continued occupancy, and resident safety requirements nationwide. All three audits are examining whether PHAs properly verified eligibility related to criminal activity, citizenship, and immigration status while also evaluating agency practices for preventing and addressing criminal activity within assisted housing. For PHAs, these reviews increase compliance risk around criminal background screening procedures, citizenship and immigration verification, EIV-SAVE utilization, admissions processing, continued occupancy determinations, and documentation supporting eligibility decisions. The audits indicate HUD OIG is evaluating whether current HUD requirements provide sufficient controls to identify ineligible participants and whether PHAs are consistently applying eligibility and safety requirements throughout a household’s participation in HUD-assisted housing.
Several recent policy developments align directly with the issues being examined in these audits. These include HUD’s proposed mixed-status household rule, published February 20, 2026, for which the public comment period closed April 21, 2026 and a final rule remains pending; expanded citizenship and immigration verification timelines; the implementation of EIV-SAVE tenant matching reports; and HUD’s November 2025 letter reminding PHAs and owners of their authority and responsibility to conduct criminal screening, address threats to resident safety, and publicly post the HUD OIG Hotline for reporting fraud and criminal activity. On January 23, 2026, HUD further directed PHAs and owners to review the new EIV-SAVE Tenant Match Report and to verify and correct flagged tenants’ citizenship or immigration status within 30 days. Unlike the work plan and the audits, this directive carried an immediate compliance deadline. Interim results released by HUD OIG in May 2026 found significant differences among PHAs regarding criminal background checks, citizenship verification practices, and use of SAVE data. The review found that some PHAs do not conduct criminal background checks during reexaminations, that criminal screening practices vary widely based on available data sources and lookback periods, and that HUD lacks mechanisms to consistently monitor PHA use of SAVE verification tools. OIG identified several recommendations that HUD has not yet fully implemented:
- Update HUD’s regulations or clarify in a PIH notice that PHAs are required to perform criminal background checks during the reexamination process.
- Update HUD’s regulations to require third-party verification of U.S citizenship.
- Assess the feasibility of standardizing the data PHAs are using for criminal background checks to ensure PHAs are using complete data sets when conducting criminal background checks.
- Establish and implement procedures to monitor PHA use of SAVE data reports in EIV.
- Issue a Notice to PHAs explaining the new SAVE reports in EIV and the requirement for PHAs to use SAVE reports in EIV during the admission and reexamination process.
- Assess the feasibility of establishing a quality controls process at the Headquarters level to identify individuals classified as lifetime sex offenders and participating in housing assistance programs. For example, periodic data reconciliation between PIC and national registry data.
These findings signal a heightened federal focus on ensuring that housing assistance is reserved for eligible households and proactively protects resident safety.
Resources to Support Your Team
For PHAs that want to stay ahead of HUD’s compliance signals without monitoring every notice in real time, AMA Consulting Group’s Affordable Housing Policy Alerts deliver curated regulatory updates straight to your inbox.
See Where You Stand Today
For PHAs that want a clear picture of their compliance posture without committing to a full audit, AMA Consulting Group offers the C3 Rapid Risk Assessment, a fixed-fee, five-day diagnostic that surfaces where risk is concentrated in your program today.
Conclusion
To prepare for these audits, PHAs should evaluate inspection programs, strengthen quality control procedures, review eligibility verification practices, and ensure that documentation supporting admissions, continued occupancy, and resident health and safety requirements is complete and defensible. Agencies should pay particular attention to NSPIRE implementation, deficiency correction tracking, lead-based paint compliance, EIV-SAVE monitoring, criminal screening procedures, and citizenship and immigration verification processes. The common thread across these reviews is HUD’s increasing emphasis on accountability for both housing outcomes and program administration.