By: Ariella Haviv

A newly released report from the U.S. Department of Housing and Urban Development has sent tremors through Washington and beyond, revealing what officials describe as one of the most troubling breakdowns of federal oversight in years: more than $5.8 billion in potentially unlawful rental assistance payments disbursed during fiscal year 2024 to people who, in many cases, should never have been eligible to receive them.

The findings, compiled by HUD’s internal oversight bodies and summarized in briefings to lawmakers, portray a system riddled with blind spots, outdated verification mechanisms and administrative inertia. While federal housing assistance programs are intended to provide a safety net for America’s most vulnerable households, the report suggests that the safety net has been stretched so carelessly that billions of taxpayer dollars may have slipped through it.

At the center of the controversy is the claim that roughly 200,000 individuals—about 11 percent of all recipients—were paid under circumstances that strongly indicate ineligibility. These are not merely clerical errors or rounding mistakes. Among the most shocking violations cited in the report are payments issued to 29,715 people who were already deceased, as well as to 9,472 individuals who were not U.S. citizens, despite program rules that restrict eligibility.

“These numbers are not just disturbing—they are indefensible,” HUD Secretary Scott Turner said in a statement accompanying the release. Turner placed responsibility squarely on what he called “years of weak oversight and lax controls,” arguing that the failures reflect systemic vulnerabilities that were allowed to fester under the previous administration.

HUD’s report details a staggering catalogue of irregularities. Beyond the deceased and ineligible recipients, the agency identified 165,393 tenants who were paid rental assistance exceeding the maximum limits allowed in their regions. These overpayments were especially concentrated in metropolitan areas such as New Orleans and other large urban markets, where local housing authorities are responsible for calculating and verifying subsidy levels.

In theory, federal rental programs rely on a layered verification system: tenant income is cross-checked, household composition is validated, and payment caps are enforced based on fair-market rent calculations. In practice, HUD auditors found that these mechanisms were inconsistently applied, poorly monitored and, in some jurisdictions, functionally absent.

One senior HUD official, speaking on background, described a “patchwork of antiquated databases, incompatible state systems and understaffed local agencies,” adding that in some cities, eligibility checks were not being updated for years at a time.

The result, according to the report, is a pipeline that allowed questionable claims to persist long after red flags should have been raised.

Perhaps the most haunting detail is the sheer number of deceased individuals who remained on the federal rental rolls. Nearly 30,000 “ghost tenants,” as internal documents label them, continued to receive payments months or even years after death.

HUD officials believe the explanation lies in a failure to systematically cross-reference rental assistance databases with federal death records. While the Social Security Administration maintains a comprehensive death master file, the report notes that many local housing authorities were not required—or simply failed—to regularly compare their tenant lists against it.

In several cases, payments were deposited into bank accounts that remained open after a tenant’s death, with no automated trigger to halt the disbursements. Whether those funds were quietly siphoned off by relatives, landlords or other intermediaries is a question that HUD investigators now say they intend to pursue.

The report also flagged nearly 10,000 cases in which rental assistance was paid to individuals who did not meet citizenship requirements. While federal housing programs allow certain categories of non-citizens to qualify, auditors concluded that a substantial share of these recipients did not fit any permissible classification.

Even more pervasive, however, was the pattern of overpayment. In high-cost cities, rental assistance is capped based on local fair-market rent data. Yet HUD’s audit found that in New Orleans and other urban centers, local agencies routinely approved subsidy levels well above statutory ceilings, sometimes by hundreds of dollars per household each month.

Over time, those excesses accumulated into hundreds of millions of dollars—money that was neither authorized nor properly documented.

HUD Secretary Turner was blunt in his assessment. He described the findings as evidence of “a failure of stewardship that betrays both taxpayers and the families who genuinely depend on these programs.”

Turner emphasized that the misuse was not confined to a handful of rogue agencies, but reflected a broader culture of complacency. “When controls are weak, when audits are ignored, and when accountability is optional, abuse is inevitable,” he said.

While the report stops short of formally attributing intent or criminal wrongdoing, Turner said the department will now move to open investigations into the most egregious cases, referring matters to the HUD Office of Inspector General and, where warranted, to federal prosecutors.

The release has already ignited a political storm. Lawmakers critical of the Biden administration have seized on the figures as evidence of managerial collapse, arguing that housing assistance was allowed to balloon without corresponding safeguards.

Democratic allies of the former administration, however, caution against drawing premature conclusions, noting that the HUD report characterizes the payments as “potentially unlawful” rather than definitively fraudulent. They argue that the figures reflect anomalies that must be investigated, not verdicts rendered.

Still, even among those urging restraint, there is little appetite to minimize the scale of the problem. A $5.8 billion discrepancy in a single fiscal year—particularly in programs designed to alleviate poverty—poses uncomfortable questions about the integrity of federal social spending.

HUD has pledged a multi-pronged response. In addition to investigating individual cases, the agency plans to overhaul verification procedures, including mandatory cross-checks with federal death and immigration databases, more frequent audits of local housing authorities, and the deployment of modernized digital systems to replace outdated record-keeping practices.

The department is also considering new penalties for agencies that fail to comply with oversight requirements, a move intended to end what Turner described as a “culture of consequence-free mismanagement.”

For the families who rely on rental assistance to keep a roof over their heads, the revelations are sobering. Every dollar lost to misuse is a dollar unavailable to those who legitimately need help. For taxpayers, the report is a reminder that compassion without accountability can devolve into costly dysfunction.

As investigators begin to trace where the money went and who ultimately benefited, one thing is already clear: the ghost tenants of America’s housing programs have exposed a vulnerability too large to ignore, and a reckoning—financial, administrative and political—now seems unavoidable.