House Financial Services chair calls for federal investigation into Little Rock Housing Authority

Citing a series of missteps made despite the oversight and U.S. Department of Housing and Urban Development (HUD) action plans, the chairman of the House of Representatives‘ Financial Services Committee is calling for a federal investigation into the housing authority of Little Rock, Arkansas.

Rep. French Hill (R) — who represents Arkansas’s second congressional district that contains most of Little Rock — called on HUD acting inspector general Stephen M. Begg to initiate an investigation stemming from historic issues that HUD has previously recognized at the public housing authority, and what Hill called his “continued disappointment with the troubled operations” of it.

In his letter, Hill said that the Metropolitan Housing Alliance (MHA) and its affiliate, the Central Arkansas Housing Corp. (CAHC), have been in “disarray” for the better part of 10 years.

“In 2023, MHA was designated by [HUD] as a Troubled Public Housing Agency, and last year its noncompliance with the terms of its Federal contracts was so dire that HUD began the process to declare it to be in substantial default,” Hill wrote.

“In fact, MHA and CAHC have failed or refused to provide any required audited financial statements since 2018, resulting in nearly $30 million in questionable or potentially disallowed expenses.”

Hill specifically cited the pending foreclosure against the Madison Heights apartment complex, which he said stems from “defaults on questionable loans connected to CAHC from 2019.”

Should the foreclosure proceed, Arkansas taxpayers may be “on the hook” for a bailout to the tune of $7.5 million for the MHA to avoid foreclosure, which would impact 240 HUD-subsidized affordable housing units.

“Simply put, that is unacceptable,” Hill wrote. “After years of broken promises, shameful mismanagement, and questionable expenditures — including multiple Corrective Action Plan findings by HUD and a Federal law enforcement raid — it is clear that MHA has lost both my and the public’s trust.”

Local media reported that the office of the CAHC was raided by the FBI in January 2024. But delays in the investigation led Hill to question then-HUD Secretary Marcia Fudge about why action did not occur more swiftly. In his letter, Hill expressed frustration in light of his consistent calls for action.

“I have sent several letters seeking to understand how this situation has been allowed to degrade so appallingly without any actionable response,” he wrote. “Something has to change as it is obvious that recovery is no longer a feasible option going forward.”

To that end, he is calling on the Office of the Inspector General (OIG) to “launch an investigation as to how MHA and CAHC were allowed to operate so irresponsibly for so long.”

HousingWire reached out to representatives of the HUD OIG, who declined to comment.