The Department of Housing and Urban Development is suspending federal funding to the Los Angeles Homeless Services Authority, alleging widespread mismanagement and fraud within the taxpayer-funded agency.
HUD, a member of the White House fraud task force led by Vice President JD Vance, said it is immediately halting LAHSA’s participation in federal programs while the department’s inspector general investigates possible wrongdoing by the agency and its leadership. The move was outlined in a letter sent to LAHSA Board Chair Wendy Greuel and CEO Gita O’Neill, according to Fox News.
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The agency has received nearly $1 billion in federal funding since 2021, according to HUD, in addition to support from city, county, and state governments.
“Suspending LAHSA’s participation in federal government programs is a necessary step in accomplishing that critical mission in Los Angeles,” HUD wrote in the letter. “LAHSA’s failures have been so severe and pervasive that Los Angeles County has withdrawn its funding for the agency, and the City of Los Angeles is considering doing so as well.”
The federal scrutiny follows the resignation of former LAHSA chief executive Va Lecia Adams Kellum, who stepped down last year after investigators found she directed $2.1 million in federal funds overseen by the agency to a nonprofit organization that employed her husband.
“HUD cannot ignore LAHSA’s wanton mismanagement of public funds,” the department wrote. “Turning over billions of dollars from American taxpayers to an organization under investigation and suspected of gross misuse of federal funding and ‘obvious fraud’ does nothing to reduce homelessness.”
Federal officials framed the funding freeze as part of a broader effort to increase oversight of homelessness spending.
“Los Angeles didn’t care about helping the homeless, but the Trump administration does,” Federal Trade Commission Chairman Andrew Ferguson, vice chairman of the White House Task Force to Eliminate Fraud, told Fox News. “It is unconscionable that Los Angeles has wasted billions of taxpayer dollars that was supposed to be used on housing our nation’s most vulnerable.”
HUD Secretary Scott Turner said the agency would prioritize accountability in future funding decisions.
“Year after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability. Meanwhile, homelessness skyrocketed,” Turner said. “Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”
More than 72,000 people are experiencing homelessness across Los Angeles County. Local officials have pointed to recent signs of improvement, with LAHSA reporting countywide homelessness declined for a second consecutive year in 2025.
HUD’s action comes as Los Angeles city and county leaders have distanced themselves from the agency. Earlier this year, the Los Angeles County Board of Supervisors pulled out of LAHSA following audits indicating a lack of transparency in the agency’s accounting.
“Today, HUD announced an action that could put thousands of formerly homeless people back on the street,” LAHSA spokesman Chris Yee told the Washington Examiner. “After initial review, this appears to be a blatant attempt to pull yet more resources from Los Angeles, a city they have targeted time and again, when it is clear that LAHSA has either corrected or is in the process of correcting nearly all of the issues raised.”
Yee also said the organization has begun reforming its internal controls, adding that it is “beginning to implement KPMG’s recommendations to modernize our financial systems and prevent similar findings from occurring again.”
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“If HUD’s Inspector General actually conducts a fair review of LAHSA’s current and future practices, they will clearly see how our systems now allow us to clearly track the work and investments that have resulted in LA outperforming the nation by reducing homelessness over the last two years,” Yee said.
HUD did not respond to a request for comment.
