Waste and Abuse in the Hardest Hit Fund in Nevada

Treasury’s Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (the “Hardest Hit Fund” or “HHF”) program provides Troubled Asset Relief Program (“TARP”) dollars to homeowners in 19 states to prevent foreclosures. This includes homeowners in Nevada. HHF is largely targeted at unemployment and underwater homes. Rather than Treasury giving these rescue funds directly to homeowners, Treasury entered into a contract with each state’s housing finance agency to make decisions on which homeowners are admitted into the program and be the conduit for these funds from Treasury to homeowners. Treasury contracted with Nevada’s housing finance agency, the Nevada Housing Division (“NHD”), who outsourced HHF to what was its component entity at the time, the Nevada Affordable Housing Assistance Corporation (“NAHAC”). At the time, NHD officials comprised a majority of the Executive Committee of NAHAC’s board. Given that NHD is the agency responsible under Treasury’s contract, SIGTARP refers to both as the “state agency.” Treasury will pay only those expenses of the state agency necessary to provide the HHF services. In 2015, SIGTARP reported that homeowners in Nevada were not receiving HHF funds. This led SIGTARP to open a forensic audit of spending of Hardest Hit Fund dollars in Nevada.