HUD Discovers 200K Ineligible Tenants—Biden Housing Programs Waste Billions

Federal housing officials have uncovered one of the largest payment control failures in the history of the government’s rental assistance system: billions of dollars in questionable aid, including rent checks sent to tens of thousands of dead tenants, flowing out over a single fiscal year.

Payment Errors Exposed

In its Fiscal Year 2025 Agency Financial Report, released in December 2025, the Department of Housing and Urban Development (HUD) disclosed that advanced data analytics had revealed about $5.8 billion in potentially improper rental assistance payments during fiscal year 2024. The review showed that more than 30,000 deceased individuals across all 50 states were still listed as recipients, representing roughly 11 percent of all rental assistance distributed that year.

The findings marked the first time in eight years that HUD could produce an estimate of improper payments. From 2016 through 2023, the agency lacked the systems needed to measure error rates in its largest housing programs, even as it continued to send out tens of billions of dollars annually.

By the Numbers: Scale and Scope of the Breakdown

The audit found that between October 2023 and September 2024, HUD disbursed nearly $50 billion through federal rental assistance without adequate verification safeguards. Over that same period, cross-checking Treasury Department death records with HUD’s payment files revealed that rent assistance continued going to between 29,715 and 30,054 deceased tenants.

Beyond these cases, auditors identified more than 200,000 tenants whose eligibility appeared questionable under federal rules. Approximately 9,472 non-citizens received assistance despite restrictions on eligibility. More than 165,000 households were paid amounts that exceeded local income thresholds that define who is considered low income in a given area.

Two programs accounted for most of the questionable spending. The Tenant-Based Rental Assistance program, which aids more than 4 million households, paid out $33 billion in 2024; roughly $1.5 billion of that total was linked to eligibility concerns. In Project-Based Rental Assistance, about $4.3 billion of its $16 billion budget—more than a quarter of program spending—raised red flags for auditors.

Looking back further, HUD calculated that from 2016 to 2024, about $315 billion in rental assistance flowed through its two largest programs while the department lacked compliant systems to estimate or prevent improper payments. The last complete estimate, in 2016, had found $1.7 billion in errors, but the agency did not have updated figures until the 2025 review.

How a Data Disconnect Fueled the Crisis

The audit traced much of the breakdown to a key administrative decision in 2019. That year, HUD allowed its data-sharing agreement with the U.S. Treasury’s Do Not Pay system to lapse. Losing that connection meant HUD no longer had routine access to the Social Security Administration’s Death Master File, the main federal database used to confirm whether beneficiaries are still alive.

Without that safeguard, rent checks continued going out for five years to tenants who had died, while HUD and local housing authorities lacked the automated tools other agencies use to screen for death, income, and citizenship status. The problem spread nationwide: while the highest concentrations of suspected improper payments were in New York, California, and Washington, D.C., deceased recipients were identified in every state.

HUD’s own auditors concluded that the agency had not been given sufficient tools, technology, or ready access to evidence needed to verify whether local housing authorities were enforcing eligibility rules. Public Housing Authorities, which stand between HUD and tenants, often operated without real-time database access to confirm income, immigration status, or continued occupancy before sending payments.

These failures also put HUD out of step with federal law. The Payment Integrity Information Act of 2019 requires agencies to estimate improper payments for high-risk programs, file corrective action plans, and keep error rates below 10 percent. HUD’s inability to produce estimates for eight consecutive years, while administering some of the government’s largest assistance efforts, amounted to prolonged non-compliance with that statute.

Technology, Politics, and a Changing Oversight Landscape

The 2025 audit was the first time HUD’s Office of the Chief Financial Officer used large-scale data analytics to analyze every rental assistance payment made in a year, matching HUD records against Treasury databases. This automated review surfaced patterns that manual checks and traditional audits had missed, revealing how gaps in verification systems could persist for years.

In responding to the findings, HUD Secretary Scott Turner placed responsibility on the prior administration, stating that “a massive abuse of taxpayer dollars not only occurred under President Biden’s watch, but was effectively incentivized by his administration’s failure to implement strong financial controls resulting in billions worth of potential improper payments.” His statement signaled a shift toward stricter enforcement and tighter financial controls.

The findings arrived amid a broader national debate over emergency spending and fraud prevention. During the COVID-19 era, multiple agencies struggled to balance rapid aid delivery with verification requirements, including the Small Business Administration and the Labor Department. HUD’s experience has become part of a wider pattern in which vulnerabilities in eligibility systems were exposed by the scale and speed of pandemic-era benefits.

The audit has also intersected with arguments over immigration and housing policy. Turner has connected the payment failures to broader debates over citizenship and eligibility, emphasizing new data-sharing agreements with the Department of Homeland Security and immigration enforcement agencies to confirm status and prioritize assistance to eligible residents. These moves have spurred discussion about how far housing programs should go in aligning with immigration enforcement strategies.

Reforms Underway and What Comes Next

In response, HUD is putting new verification systems in place that check eligibility before money is disbursed rather than years later. The department is restoring and expanding real-time database cross-referencing, including renewed connections to Treasury and new agreements with Homeland Security to verify citizenship and other criteria. The goal is to screen applications more thoroughly while still providing timely help to those facing housing instability.

Public Housing Authorities across the country now face closer scrutiny. HUD plans to contact local agencies and private partners to establish how far improper payments extended beyond the initial data sample. Funding could be paused or revoked for entities found to be out of compliance, and cases involving evidence of deliberate fraud may be referred for criminal investigation. At the same time, authorities that have followed the rules may need to adjust to new requirements and oversight systems implemented across the board.

Congressional oversight committees and the Government Accountability Office are using the HUD case as a starting point for a broader look at payment integrity in federal assistance, exploring additional safeguards and potential legislative changes. State and local governments that administer federal housing funds may face heightened reporting duties and stronger accountability measures.

The episode has pushed federal housing officials and lawmakers to confront how to balance speed and accuracy in benefit delivery. As agencies invest in more sophisticated verification technology and artificial intelligence tools, HUD’s experience is emerging as a cautionary case study—and as a driver of reforms intended to protect both vulnerable renters and the taxpayers who fund these programs.