Federal officials are investigating whether housing providers in Colorado improperly funneled taxpayer dollars to nearly 3,000 ineligible recipients, including deceased tenants.
According to the New York Post, an internal audit by the Department of Housing and Urban Development (HUD) found that 221 individuals who had passed away were still receiving benefits, while another 87 were deemed ineligible for other reasons.
An additional 2,519 recipients will undergo further verification to determine eligibility.
“From deceased tenants to individuals receiving HUD housing benefits who were never supposed to, the Department has questions for HUD-supported housing providers in Colorado, and we expect prompt answers and enforcement action,” a HUD spokesperson told The Post.
The suspected irregularities span most of Colorado’s 59 public housing agencies (PHAs) but were particularly concentrated in the Denver Housing Authority, a source said.
HUD officials are expected to require these agencies to verify all beneficiaries, remove ineligible recipients, and reimburse federal funds misallocated in the process.
Colorado’s PHAs manage roughly 38,000 leased units, including both public housing and housing choice vouchers, with federal support totaling around $440 million. Typically, tenants are required to contribute approximately 30% of their income toward housing costs to qualify for assistance.
HUD has warned that agencies failing to comply with verification and repayment mandates could face additional sanctions. The move underscores federal concerns about systemic vulnerabilities in public housing programs that allow fraud or mismanagement to occur.
The Colorado investigation arrives amid broader federal scrutiny of housing programs nationwide.
Earlier this week, HUD announced plans to send investigators to Minneapolis and St. Paul, Minnesota, to examine local housing programs. The Minneapolis Public Housing Authority spends roughly $108 million annually, while St. Paul allocates $46 million.
These inquiries follow the massive $1 billion Feeding Our Future fraud case in Minnesota and recent Immigration and Customs Enforcement operations in the Twin Cities, highlighting the ongoing challenges HUD faces in safeguarding taxpayer-funded programs from misuse.
As the Colorado probe unfolds, officials are expected to demand accountability and tighter oversight to prevent further misuse of federal housing funds.
