REPORT: HUD Cuts Have Left Agency Vulnerable To Fraud, Waste
Staffing cuts at the federal Department of Housing and Urban Development may have undercut the agency’s ability to perform crucial tasks, according to internal memos at the agency.
So many personnel have either taken voluntary resignation offers or been fired by the Department of Government Efficiency since Donald Trump began his second term that HUD may struggle to perform critical tasks, Bloomberg CityLab reported, citing a HUD Office of General Counsel report.
Some of the duties that may be endangered include closing apartment building sales, underwriting loans and assessing mortgage insurance claims.
The staff cuts amount to vulnerability for the agency, which could find its housing programs on the receiving end of “significantly increasing litigation risk and the risk of fraud, waste and abuse” with an insufficient number of lawyers and managers to oversee duties, Bloomberg reported.
Specific departments within the agency could be especially understaffed, the Washington Post reported. The number of employees at the Department of Community Planning and Development, which responds to hurricanes and wildfires, dropped from 936 in late January to just 560 by May.
HUD did not respond to Bisnow’s request for comment by press time. An agency spokesperson told Bloomberg that almost all staff departures had been voluntary and categorized recent events as routine restructuring.
Federal law requires HUD to maintain at least one regional field office in every state, but the reorganization plans announced in March by DOGE would have closed all field offices in 34 states and D.C., Bloomberg reported at the time.
The report’s findings came in response to a questionnaire distributed by HUD to its departments ahead of a Government Accountability Office audit requested by the Senate Committee on Banking, Housing and Urban Affairs in April.
The request was made following DOGE’s plans to cut 80% of the staff of HUD’s Office of Fair Housing and Equal Opportunity, which had spurred concerns from Democratic senators — including Elizabeth Warren and Raphael Warnock — that housing discrimination would go unchecked.
It is unclear what the future of the DOGE-initiated cuts will be following Trump and Elon Musk's public breakup on Thursday.
Acceptance levels for voluntary resignation offers were so high at some HUD offices that the agency is now seeking to reassign staff to different U.S. locations, the WaPo reported. Staff who offered to relocate by June 2 could be designated as essential and protected from future cuts, Bloomberg reported.
The vulnerability revelations follow Trump’s budget proposal last month, which targeted the agency for a 44% budget cut. Experts told Bisnow that the proposal “would have huge and devastating repercussions to housing providers across the country.”
