An unresolved audit revealing Wilmington improperly spent nearly $450,000 in federal grants has not prevented Delaware’s largest city from receiving over $4 million in unencumbered federal funding for affordable housing.
Last year, the U.S. Department of Housing and Urban Development audit found three federally funded projects completed in 2020 through the city’s HOME Investments Partnership Program had issues that could force the city to pay back some of the $446,120 provided for the housing projects.
City officials said they’d seek a reduction in future grants for Wilmington’s HOME program to cover any money that would need to be paid back if issues with the affordable housing program’s execution were left unaddressed, but HUD officials last August said Wilmington never made the request.
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“HUD has received no formal request from the city of Wilmington for a reduction in future HOME funds,” a HUD spokesman wrote in an email on Aug. 8. “The initial amount of HOME funding to be repaid is approximately $446,120. However, this amount could be reduced if the city can provide sufficient evidence to refute any portion of the findings requiring repayment.”
Federal housing officials now say HUD is in discussions with Wilmington on a resolution to the 2021 remote monitoring review, and the $718,522 in HOME funds the city is slated to receive doesn’t reflect that outcome yet.
“The recently published fiscal year 2023 HOME allocation for the city of Wilmington does not reflect the potential outcome of these ongoing discussions,” a HUD spokesperson said in an email.
This year’s HOME funds allocation represents the most Wilmington has received since 2016 when $744,080 was budgeted for the program.
Money for affordable housing
The HOME program is one of several federal housing programs through which communities across the country receive funding to help buy, build, or rehabilitate affordable housing for rent or homeownership.
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The funding is part of $15.8 million to assist statewide with Delaware’s housing needs and includes about $2.2 million in community development block grants and about $1.1 million for housing projects in Wilmington for homeless individuals and people with AIDS. The programs are funded annually by the federal government, which then provides grants to communities.
Unresolved audit findings
HUD conducted a monitoring review on Wilmington’s HOME affordable housing program in 2021.
The agency found city officials did not ensure projects were purchased by low-income homeowners; lacked adequate recordkeeping; and failed to follow federal requirements and city policies and procedures when providing the grant funds.
The city’s Department of Real Estate and Housing, which oversees the program’s implementation, blamed the errors on staff who were unaware of the policies and procedures of the program and pledged that training, changes to its policies and procedures, and additional oversight would prevent the issues the federal housing agency found when reviewing three recently completed projects.
HUD determined the city would have to pay back the misappropriated funds if Wilmington didn’t provide proof that all issues were mitigated. In turn, the city could pay the money upfront or request that future grant funding be withheld to cover the payback costs.
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