HUD suspends USVI housing authority from new disaster funds

The U.S. Department of Housing and Urban Development has suspended the U.S. Virgin Islands Housing Finance Authority from receiving any new federal disaster recovery funds, citing years of alleged mismanagement, corruption, and a criminal conviction within the agency. The suspension, announced on July 20, 2026, halts future grant awards while federal investigators examine the authority's handling of roughly $1.9 billion in post-hurricane funding, casting further uncertainty over the territory's long-delayed recovery.

HUD Secretary Scott Turner stated the action was effective immediately following a federal probe that uncovered what he described as widespread financial mismanagement, inadequate fraud controls, false certifications, and improper payments. In a letter to the authority, HUD stated the suspension was due to the agency being an "abysmal steward of taxpayer funds." The department said it coordinated the decision with the White House Task Force to Eliminate Fraud.

Federal officials noted that Congress allocated approximately $1.9 billion in Community Development Block Grant disaster recovery and mitigation funds following Hurricanes Irma and Maria in 2017. However, HUD...