Construction Problems at the HUD-Insured Naugatuck Apartments Housing Project

The Department of Housing and Urban Development's (HUD) multifamily housing project in Naugatuck, Connecticut, was begun in 1971. During the early stages of construction, the excavation and construction contractors began having problems with the project. The excavation contractor alleged that test boring results showing the subsoil conditions were false. The construction contractor discovered that the architectural plans did not follow actual land contours for the site. In 1973, the Borough of Naugatuck informed HUD that changes had to be made in the project or it would not meet local building codes. These changes were never made; the sponsor defaulted on its mortgage loan, and the mortgagee assigned the mortgage to HUD. HUD referred the mortgage for foreclosure. Two recent audit reports dealing with the adequacy of the HUD review of architect's plans showed that similar problems with the adequacy of the HUD review of architect's plans showed that similar problems occurred on other HUD-insured multifamily projects. These problems could have been avoided if the HUD design representative properly reviewed the architect's plans and all changes to the original plans. The Secretary of HUD should take steps to ascertain whether the problems and deficiencies discussed are isolated instances or are indicative of nationwide problems in program monitoring and field inspections requiring aggressive corrective action.