Federal officials have taken over the Little Rock, Arkansas, housing authority declaring that the agency is in substantial default for failing to meet the terms of a federally mandated recovery agreement.
The Department of Housing and Urban Development (HUD) announced that it is in full possession of the agency’s programs, operations, and assets and has dissolved its locally appointed governing board of commissioners. The housing authority operates as the Metropolitan Housing Authority (MHA).
“Federal housing programs come with clear obligations to residents,” said HUD secretary Scott Turner in a statement. “When those obligations are not met, specifically after formal recovery measures are put in place, HUD will make it right with a hands-on approach.”
HUD officials said their actions are based on the Little Rock agency’s “failure to satisfy material performance requirements established under its 2024 recovery agreement, including required occupancy benchmarks and mandated corrective actions for underperforming properties. Despite clear deadlines, MHA did not achieve the required 96% occupancy rate for its public housing program, reporting approximately 89% occupancy for calendar year 2025. The agency also failed to implement a required third-party management intervention for properties that did not meet performance standards.”
The housing authority was designated a “troubled performer” by HUD for fiscal 2022 under the Public Housing Assessment System, scoring 40 out of 100 points, with deficiency in the financial and management components. MHA retained the designation for fiscal 2023 and 2024.
According to federal officials, as of Feb. 1, the local agency did not meet the conditions of a recovery agreement that was executed in 2024.
HUD plans to maintain control of MHA until it determines that the housing authority has achieved sustained compliance and is ultimately capable of operating independently in accordance with federal standards.
An MHA official said he forwarded Affordable Housing Finance’s request for comments to HUD.
Read the determination of substantial default letter here and the letter of possession here.