New York state housing officials wrongly gave hundreds of thousands of federal tax dollars to New Yorkers repairing their second homes after Hurricane Sandy, according to a new report from the U.S. Department of Housing and Urban Development’s Office of Inspector General.
HUD’s Disaster Recovery Assistance program gave New York Rising Housing Recovery more than $1 billion to help victims rebuild their homes and their lives in the aftermath of the October 2012 hurricane. But, the state didn’t thoroughly vet applicants and gave federal funding to homeowners “for properties that were not their primary residence,” against federal policy, the IG said.
Meanwhile, New York housing officials didn’t do enough to make sure at least 50 percent of homeowners were low-income, as the recovery assistance program requires.
One homeowner received $350,000 for a second home, claiming it as a primary residence. Federal investigators found tax returns that said otherwise, and state officials agreed to recover the money from the homeowner. A husband and wife also claimed $317,000 in repair funds for one of their two homes, located in New York, the IG said.
State officials also told one homeowner who tried to return unused federal funding to keep the money because they didn’t know what to do with it. The New York housing office didn’t have a process in place to recover the funds.
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