"Even when HUD learns of a bungled deal, federal law does not give the agency the ability to compel local authorities to repay. HUD can only ask agencies to voluntarily return money by replenishing their federal accounts from local funds, essentially moving their own money around."
Unfortunately HUD gets blamed for deals gone wrong and poor oversight when the agency itself isn't allowed full regulatory oversight of the deals and is basically required to give money to inexperienced agencies. It seems we are so concerned about government oversight and intervention that it is hard for the government to do its job.
"Federal law mandates that housing agencies give 15 percent of their funding to community-based nonprofit groups, which are often undercapitalized and lack experience."
"Even when HUD learns of a bungled deal, federal law does not give the agency the ability to compel local authorities to repay. HUD can only ask agencies to voluntarily return money by replenishing their federal accounts from local funds, essentially moving their own money around. "
