Key Takeaways
- •Rep. Daniel Meuser (R, PA-9) highlighted $30 million in questionable transfers and systemic mismanagement at the Little Rock Housing Authority that led to FBI raids and board removals.
- •Nadine Jarmon (Executive Director, Little Rock Housing Authority) testified that she inherited four years of missing audits, $22 million in non-compliance findings, and a property facing imminent foreclosure.
- •Rep. J. Hill (R, AR-2) pressed Kerry Wright (Commissioner, Little Rock Housing Authority) on how previous leadership blocked access to financial records and attempted to illegally transfer federal voucher funds.
- •Rep. Daniel Meuser (R, PA-9) and other Republicans criticized the previous HUD administration for failing to intervene sooner, while witnesses called for stronger federal oversight and emergency funding.
- •The housing authority is working to close a private loan to prevent foreclosure on Madison Heights while struggling to manage a 6,500-person waiting list and "troubled" agency status.
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Hearing Analysis
Overview
The House Financial Services Subcommittee on Oversight and Investigations held a field hearing in Little Rock, Arkansas, on March 13, 2026, titled "Broken Promises: Failures of the Little Rock Housing Authority and the Impact on Residents." Chaired by Rep. Daniel Meuser (R, PA-9), the hearing investigated years of financial mismanagement, governance failures, and alleged fraud within the Metropolitan Housing Alliance (MHA), also known as the Little Rock Housing Authority. Rep. J. Hill (R, AR-2), Chairman of the full Financial Services Committee and a Little Rock native, emphasized that the hearing sought accountability for the "disastrous" degradation of local public housing, which left vulnerable residents at risk and resulted in nearly $30 million in questionable or disallowed expenses.
Key Testimony
The hearing focused heavily on the period between 2018 and 2024, during which the MHA failed to submit required financial audits and maintained a nebulous, poorly documented relationship with its nonprofit affiliate, the Central Arkansas Housing Corporation (CAHC). Witnesses described a "systemic breakdown" where MHA funds were allegedly diverted to CAHC to avoid oversight. Dr. Nadine Jarmon, Executive Director of the MHA, testified that upon her return to the agency in 2024, she found a $22 million non-compliance finding from the U.S. Department of Housing and Urban Development (HUD), four years of missing audits, and $600,000 in arrears to vendors. She noted that HUD had previously "swept" $3.7 million in reserves from the agency, further crippling its recovery.
Commissioner Kerry Wright (Commissioner, Little Rock Housing Commission) provided a scathing account of the "old guard" leadership. He testified that previous board members treated the agency as a personal business, using agency vehicles, stealing appliances for personal use, and even charging personal birthday parties to the MHA. Wright detailed how the previous board blocked access to QuickBooks and bank records, forcing the new leadership to call every bank in Little Rock to locate agency accounts. He specifically criticized the previous HUD administration under Secretary Marcia Fudge for making "empty promises" to intervene that never materialized.
Overview
A significant portion of the hearing addressed the Big Country Chateau apartment complex, a property that accepted MHA vouchers but fell into extreme disrepair. Ms. Amanda Wentz (Senior Assistant Attorney General, Office of the Arkansas Attorney General) detailed a lawsuit against Apex Equity Group and its owner, Aaron Puretz, who is currently in federal prison for mortgage fraud. Wentz described a "business model" where out-of-state developers create shell companies to exploit low-income housing, funneling rent and taxpayer dollars out of state while allowing properties to face utility shutoffs and over 1,000 code violations.
Key Testimony
The subcommittee explored the impact of these failures on the community. Ms. Joan Adcock (Director, Little Rock Board of Directors) highlighted that 30% to 40% of MHA units remain vacant due to a lack of repair funds, while the waiting list for housing has ballooned to 6,558 people. Adcock and Jarmon discussed the Madison Heights property, which was on the brink of foreclosure due to mismanagement of a balloon note. Jarmon testified that a recovery is underway involving a $4.6 million loan from Southern Bancorp and Enterprise Community Partners to stabilize the property and fund unit repairs.
Overview
Partisan dynamics were characterized by a unified Republican critique of the previous HUD administration's oversight failures. Rep. Mike Flood (R, NE-1) and Rep. Tim Moore (R, NC-14) questioned why HUD ignored red flags as early as 2015. Rep. Rosendale (R, MT-2) compared the situation to similar failures in Montana, suggesting a national pattern of poor stewardship. The committee discussed the "21st Century Act," a legislative proposal intended to increase reporting requirements for troubled public housing agencies (PHAs) and mandate that all PHA contracts be posted online for transparency.
The following organizations were identified and discussed: - Metropolitan Housing Alliance (MHA): The primary subject of the hearing, investigated for years of financial and governance failures. - U.S. Department of Housing and Urban Development (HUD): Criticized for failing to provide oversight during the previous administration but praised for current engagement under Secretary Scott Turner. - Central Arkansas Housing Corporation (CAHC): The MHA’s nonprofit affiliate, which was allegedly used by former leadership to hide funds and block financial transparency. - Little Rock Board of Directors: Mentioned regarding its role in appointing and eventually removing the troubled MHA board. - Office of the Arkansas Attorney General: Discussed in the context of its successful $11 million litigation against the fraudulent owners of Big Country Chateau. - Apex Equity Group: Identified as the New York-based firm that exploited the Big Country Chateau complex; its owner was prosecuted for mortgage fraud. - Federal Bureau of Investigation (FBI): Referenced for executing search warrants at MHA and CAHC offices during an ongoing investigation into corruption. - Southern Bancorp and Enterprise Community Partners: Praised as "local heroes" for providing the financing necessary to prevent the foreclosure of Madison Heights. - Federal Home Loan Mortgage Corporation (Freddie Mac): Mentioned regarding its litigation against Big Country Chateau for mortgage default. - Novogradac & Company LLP: The accounting firm hired to reconstruct years of missing MHA financial audits. - Arkansas Finance Development Authority (AFDA): Identified as having a role in overseeing the financial side of development contracts. - Itex Group and Gorman & Company: Private developers mentioned in the context of disputed contracts and developer fee disagreements with the former MHA board.
The hearing concluded with a call for continued federal oversight and potential criminal prosecutions. Chairman Meuser requested that witnesses provide follow-up responses by April 17, 2026, particularly regarding the status of the Madison Heights loan and any further evidence of criminal misconduct by former officials.
Transcript
The subcommittee will come to order. Without objection, the chair is authorized to declare recess of this committee at any time. This hearing is titled Broken Promises, Failures of the Little Rock Housing Authority and the Impact on its Residents. Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. I now recognize myself for four minutes for an opening statement. I want to start just by saying thank you. Everybody went through a lot of trouble to put this together. Appreciate the involvement and the seriousness that just in our earlier conversations I received on this very important issue that you all care about very much. I want to pay particular thanks to Chairman French Hill. Chairman Hill, of course, is our is the head of our is the chairman of our full committee, Financial Services Committee. He does a fantastic job. He loves our country and he, well, he loves Little Rock. So that's very much why we're here, so we want to thank him for holding this field hearing and for, Chairman, your leadership in conducting this serious oversight on issues that directly affect your constituents who rely on the all-important public housing. We are here today because the Metropolitan Housing Authority of Little Rock, MHA, experienced many years of quite frankly disastrous financial and governance failures that put federal housing funds and local residents at serious risk. In 2018, HUD identified that MHA failed to submit required financial statements for funds up to $30 million that were transferred between the housing authority and its nonprofit affiliate, the Central Arkansas Housing Corporation, in ways that were intentionally poorly documented and lacked justification. In 2023, HUD also found improper payments, unauthorized use of credit cards, and failures in basic financial controls that should have been caught long before they reached that point. The problems became severe enough that the FBI executed a search related to the housing authority and CAHC. As early as 2018, problems were identified. By 2021, Ms. Jarmon blew the whistle on the corruption. Those claims led to the investigations. HUD became involved, the Arkansas Attorney General became involved, Chairman Hill became involved. Nearly the entire MHA commission was fired and ultimately the FBI executed a search related to the housing authority and its nonprofit affiliate. So when a situation reaches that level, it should be treated as a top priority, but under the previous HUD secretary, it was decided it was not. Thankfully for you all here, Chairman Hill became chairman of the Financial Services Committee and Secretary Scott Turner took office at HUD. Now this matter is receiving the serious oversight and attention it requires. Our goal here today is to fully understand how these failures were allowed to continue for so long and to make sure the necessary fixes are put in place so the residents of Little Rock and all the residents in public housing and all those that strive so hard to serve the public housing and the residents can have confidence moving forward. That's why our first hearing on this topic was held in on February 10th and included letters to 32 public housing agencies that were troubled, demanding solutions and coordination with HUD. MHA was not included among those 32 agencies, reflecting that steps have been taken over the past year to stabilize the authority. New leadership has, of course, been put in place. The city has taken action and HUD has been actively engaged since early 2025 to restore proper oversight. I do want to note that HUD Secretary Scott Turner committed to this committee that the Trump administration is working with us to stop waste, fraud, and abuse in federally funded housing programs to make sure housing authorities follow the rules and follow the law. That commitment is important. We will continue to work closely with the department, but today's hearing is about accountability and looking forward. Probably more so looking forward, I would think. I understand that many people would like to move on as we all do after years of problems, but Chairman Hill and I do believe that and this committee that before that happens, the facts need to be clear, failures need to be understood so they don't happen again. We continue to look at what where responsibility should be found and held accountable and provide as much transparency and discipline the law and our constituents and residents deserve. I yield back. I now recognize the chairman of the full committee, Chairman Hill, for one minute for an opening statement.
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