Threats to Home Ownership

Lexington Housing Authority questioned about missing $2.7 million

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Written by Christopher Cox

From The Lexington Dispatch

A report from the United States Housing and Urban Development Office claims the Lexington Housing Authority cannot account for more than $2.7 million spent from a federally funded rental assistance program.

On Aug. 21, the U.S. HUD Office of the Inspector General released the results of an audit of the Lexington Housing Authority’s Rental Assistance Demonstration program. The audit was conducted at the request of the Lexington Housing Authority Board of Commissioners and the North Carolina State Office of Public Housing.

The audit states that the Lexington Housing Authority did not follow HUD requirements in the execution of the Rental Assistance Demonstration program and could not provide adequate supporting documentation for the funds in question.

The report recommended the Director of the Greensboro Office of Public and Indian Housing require Lexington Housing Authority to either provide the required documentation or repay the amount from non-federal funds.

Attempts to reach representatives of the Lexington Housing Authority for comment were unsuccessful.

In 2013, Lexington Housing Authority received $27 million dollars from the U.S. Department of Housing and Urban Development through the RAD initiative to renovate 268 public housing units in Lexington and to convert the properties into Section 8 rental assistance properties.

Upon acceptance into the program, Lexington Housing Authority used its nonprofit organization, Haven Redevelopment Group, to convert the public housing to RAD properties.

After conversion, Haven Redevelopment became private owners of the properties in a limited partnership with Peter Behringer.

The audit report states that during and after the RAD conversion, the former LHA executive director and staff did not properly certify tenants, did not maintain auditable financial records, did not complete audits in a timely manner and did not establish a waiting list for residents.

Terrance Gerald was hired as the executive director for Lexington Housing Authority in 2011 and left under undisclosed circumstances in 2016. He is currently the chief executive officer of Haven Redevelopment Group, which owns the former public housing properties in Lexington.

Investigators determined that the administrative staff did not certify new tenants or former authority residents and did not have monthly housing assistance payment registers.

“Without the registers, the authority could not identify the tenants, support the monthly payments and adequately calculate the housing assistance payment,” the report states. “As a result, the more than $2 million in housing assistance payments paid from January 1, 2015, through December 31, 2016, was insufficiently supported, along with the associated administrative fees earned for the tenants.”

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About the author

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Christopher Cox

Christopher G. Cox has over 20 years of experience in the real estate and finance industries. He has understands the complexities and diversity of the real estate market, and he has a passion of helping people realize the American Dream.