HUD Secretary Scott Turner suspended funding for the Virgin Island Housing Finance Authority on Monday, July 21 following an investigation into the VIHFA’s spending of a $1.9 billion CDBG-DR award. The territory was awarded the CDBG-DR funding after Hurricanes Irma and Maria struck the islands in 2017.
HUD’s investigation found that the VIHFA completed only two of 95 planned single-family rental rehabilitation projects and zero of 329 single and multifamily housing projects, and that it had spent only 2% of its electrical grid recovery funding. Approximately $1.3 billion of the original award remains unspent. The investigation further alleges that VIHFA has “repeatedly made false certifications claiming an effective compliance program and may have submitted additional false certifications to obtain further funding” and notes that the Authority’s former COO was convicted of fraud, money laundering, and criminal conflict of interest in conjunction with the CDBG-DR funds he oversaw.
