US TREASURY CUTS NEVADA’S HARDEST HIT FUND

Feb 2, 2018
Press Release

February 2, 2018

Washington, D.C. – Today Rep. Dina Titus released the following statement after the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced that the Department of the Treasury would revoke $6.7 million from the Nevada Hardest Hit Fund, which is administered by the Nevada Affordable Housing Assistance Corporation and overseen by Nevada officials. The decision follows years of mismanagement, poor reporting, and wasteful spending by NAHAC in the aftermath of the Great Recession. The corporation was expected to help more than 10,000 people during the lifetime of the Hardest Hit Fund. Last year it only assisted 167 people. If NAHAC fails to meet its targets this year, the Treasury Department will revoke more money from Nevada. The Treasury Department is scheduled to stop distributing money to states from the Troubled Asset Relief Program’s Hardest Hit Fund by January 2021.

“With this news, I am concerned that the State and NAHAC are giving the Trump Administration a reason to pull even more housing assistance funds out of Nevada. For years, I opposed the creation of the Nevada Affordable Housing Assistance Corporation and warned that its behavior would jeopardize future federal assistance to underwater borrowers in need. I preferred a system that would buy down the principals on mortgages, make investments in the community, and face real oversight from the State. NAHAC ultimately squandered federal funds on parties, gift cards, and luxury items while failing to expeditiously distribute funds to Nevadans who desperately needed them. Now the State has fewer federal dollars to benefit Nevadans, and NAHAC has been labeled one of the worst participants in the Hardest Hit Fund program. Underwater homeowners cannot afford any more screw ups and improprieties from NAHAC. On multiple occasions, I have raised red flags with SIGTARP and State officials and demanded accountability from a program that has increased its spending while helping fewer people.

“SIGTARP has conducted one NAHAC audit, which uncovered more than $8 million in careless spending, and is in the midst of leading another assessment that came at my request. What the data have already told us is that NAHAC is hanging the most vulnerable in our community out to dry. NAHAC, which was created in 2010, has estimated that it would help 10,725 households. In reality, NAHAC has assisted fewer than 6,000 people. Last year, NAHAC ended with more than $80 million at its disposal but was only able to assist 167 people in Nevada.

“That’s not just embarrassing. It is disgraceful and a disservice to the good people of our State.  The Attorney General should be investigating this, and the State needs to restructure the program yet again to provide greater oversight.  My office will continue to work closely with SIGTARP and fight to ensure the State reforms NAHAC and works with federal officials to assist Nevadans.”

BACKGROUND FROM THE US TREASURY

On March 25, 2016, Rep. Dina Titus sent a letter to President Obama, along with 10 other members of Congress, expressing concerns that HHF dollars were not being distributed effectively in their states.

In September 2016, SIGTARP issued an audit report finding that the Nevada Affordable Housing Assistance Corporation (NAHAC), the contractor the Nevada state agency chose to run its HHF program, wasted $8.2 million. SIGTARP found that NAHAC deliberately attempted to use the TARP program as a cash cow for every expense imaginable, while NAHAC all but stopped admitting new homeowners.

In recent months, Treasury reported to SIGTARP that Nevada did not meet its 2017 HHF utilization threshold and therefore will have its HHF allocation reduced by $6.7 million, which will be allocated to other participating HHF states. Only Nevada had funds cut. 

Nevada had a 94% drop in the number of homeowners helped each quarter from the first quarter of 2013 (1,015 homeowners) to the third quarter of 2017 (65 homeowners). Since 2011, some 5,584 Nevadans have been helped. Other states have helped thousands more.

The NAHAC board consists of five voting members, according to NAHAC’s bylaws. Three current board members are state employees. NAHAC’s powers are exercised by or at the discretion of the board.

The board’s powers include:

  • To ensure that program funds are spent in a manner to maximize returns on investment.
  • Overall program oversight.
  • To monitor, manage, and control cash flow.
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