• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Report: HUD Insured Stimulus Loans to Tax Delinquents

    President Obama’s stimulus package subsidized home loans for individuals who already owed the federal government millions in back taxes, according to a new report by federal watchdogs.

    The report, released Wednesday by the Government Accountability Office, found that the Federal Housing Administration, a division of the Department of Housing and Urban Development, had insured $1.44 billion worth of home loans through the stimulus for 6,327 borrowers who collectively owed $77.6 million in federal tax debts.

    More than half of those borrowers also claimed a total of $27.4 million in stimulus-backed First Time Home-Buyer tax credits.

    Federal law prohibits FHA mortgage insurance for delinquent taxpayers unless they have arranged a payment plan with the IRS, but GAO found that FHA did not have adequate controls in place to enforce those prohibitions in its disbursement of stimulus-backed mortgage insurance.

    The oversight exposed taxpayers to greater financial risk, GAO found, since “serious delinquency and foreclosure rates among Recovery Act borrowers with unpaid federal taxes were at least twice as high as the rates for other borrowers.”

    In a response to the GAO report, HUD “acknowledged that current policies and procedures may fail to identify all potential borrowers with delinquent tax debt” and pledged to work with the IRS to remedy the problem.

    Posted in Scribe [slideshow_deploy]

    One Response to Report: HUD Insured Stimulus Loans to Tax Delinquents

    1. Grace says:

      I own a condo payed for owe 2k on taxes I want to rent it out but i cant because i also owe 350.00 on association fees. the assocation took my parking place. i bought this condo to fix it and rent it out I need help.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×