HUD Halts Virgin Islands Housing Authority Funding

The U.S. Department of Housing and Urban Development (HUD) suspended all additional funding to the Virgin Islands Housing Finance Authority (VIHFA) on Monday, citing widespread financial mismanagement, inadequate fraud controls, false certifications, and improper payments related to federally funded disaster recovery programs. HUD Secretary Scott Turner announced the suspension, which halts further disbursements while an investigation by HUD's Office of Inspector General proceeds.

The HUD investigation focuses on the VIHFA's administration of nearly $1.9 billion in Community Development Block Grant-Disaster Recovery (CDBG-DR) funding. In a July 20 suspension notice, HUD Deputy Secretary Andrew Hughes stated that the authority has spent less than one-third of these funds nearly a decade after receiving them, following Hurricanes Irma and Maria in 2017. HUD alleges that some funds were diverted to administrative kickbacks and fraudulent schemes instead of being used for disaster recovery efforts.

Secretary Turner stated that organizations with corruption and mismanagement will no longer be permitted to "squander billions" of taxpayer dollars. The suspension notice highlights that USVI citizens have not received the promised housing and electrical power nearly nine years after the hurricanes, due to VIHFA's "blatant mismanagement" of critical disaster funds. The authority received over $20,000 in federal disaster recovery funding per resident.