DRAFT FOR ATTORNEY REVIEW — NOT FINAL

Section 1

Citation
Section 1
Parent Document
United States v. Southland Management Corp., 326 F.3d 669 (2002)
Effective Date
2002-05-22
Original Source
https://www.courtlistener.com/opinion/27565/united-states-v-southland-managem... ↗

Other Sections in This Document (1123)

Full Text

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HUD was aware that this project was deteriorating for several years preceding its foreclosure. The types of problems emphasized by the government as creating substandard living conditions were not hidden defects. Photographs of the property taken by the mortgagee inspectors are in the record, and HUD reviewed those inspection reports. The yearly inspection reports also show that repairs were being made regularly, and HUD knew this, as it also knew that its subsidies were insufficient to allay the deterioration. The record reflects at most the give and take between the owners and HUD over the priority of various repairs, but it does not cast doubt on the owners’ investment of every penny of subsidy in the project. As the district court noted, HUD’s policy of *684approving continued subsidy payments notwithstanding the project’s declining condition was based not on its ignorance of the true condition but upon the imperative to provide housing for the tenants while HUD supervised the use of the limited funds it allocated to the project.