The audit report for the Development Bank of American Samoa for Fiscal Year 2016 provides some information about the Section 1602 low income housing program.
A total of $30.7 million was received from the US Treasury for the program in 2006 and the full disbursement of the funds was completed by December 2011.
The funding was awarded to local property owners for the construction, acquisition or rehabilitation of low income rental units.
The property owners are required to hold the property as low income housing for at least 30 years and follow other program requirements.
DBAS monitors the compliance of the property owners and receives an annual fee of $40 per unit.
On February 4, 2016, the annual fee was increased to $50.
Non compliance by a property owner could result in the forfeiture of their grant which the property owner would owe to the US Treasury.
More than a dozen property owners who were awarded 1602 funding by DBAS ended up in the American Court being sued by the bank for a variety of reasons including failure to complete their housing units or not complying with program rules.
Two developers, Faamaoni John Utu and John Kruse, were charged by the federal government for fraud and they entered plea agreements.
The DBAS audit said that by December 31, 2016 there were 510 units completed or in the process of being completed. This also includes seven buyouts through the Section 1602 program.
