HUD is more vulnerable to fraud after staff cuts

Also raising eyebrows are the reported results of a staff questionnaire, which was distributed ahead of a Government Accountability Office (GAO) audit requested by a cadre of Democratic senators. Responses from two HUD divisions were reportedly shared with Bloomberg, highlighting other potential issues not mentioned in the aforementioned counsel report.

Namely, they’re related to departures of staff from the department’s regional and field offices. If staff in these offices are cut and if offices are closed — which has been part of previously reported plans that HUD has denied — the losses could “greatly delay” or “potentially disrupt” core office functions including loan underwriting, mortgage insurance claims processing and the closing of multifamily housing sales, according to the report.

It appears that these potential closures have yet to materialize. Some of the potentially impacted staff members including lawyers “are being asked to relocate in order to cover key functions,” the report stated, based on comments with two staffers who are “familiar with the discussions.”

Trump administration officials have also reportedly asked some employees to voluntarily relocate by this week and to fully move before the end of 2025. But they were also reportedly told that relocation costs would not be covered and that only “lateral career moves” — not promotions — would be approved.

Those who volunteered to relocate “could be deemed essential and safe from being terminated in future rounds of cuts,” according to Bloomberg.

When reached by the outlet, HUD neither confirmed nor denied details of the internal communications. But a spokesperson did say that nearly all staff departures have been voluntary, and that the restructuring being pursued is routine.

“With about 2,300 employees voluntarily taking the opportunity to find a new path, it only makes sense the department would have a plan in place to ensure that mission critical functions and the highest quality service to rural, tribal and urban communities remain uninterrupted,” the spokesperson told Bloomberg.

HUD Secretary Scott Turner said in his Senate confirmation hearing in January that he would not seek to expand HUD’s budget and would instead aim to “maximize” the budget already appropriated by Congress.

Following the release of a White House budget proposal in which roughly 20% of all non-defense cuts were tied to HUD, Turner lauded the plan as one that “rightfully provides states and localities greater flexibility while thoughtfully consolidating, streamlining, and simplifying existing programs to serve the American people at the highest standard.”

Multiple impositions of staff cuts have been challenged and delayed in the courts, but much of that relief is temporary in lieu of wider deliberations.

Turner has consistently lauded the work of the U.S. DOGE Service, the government cost-cutting effort inside the White House initially led by billionaire Elon Musk.

HUD was an early adopter of a DOGE task force embedded within the department, and the entities have collaborated on projects including those related to immigration status.