Certain Multi-Family Projects under Section 202 of the National Housing Act have recently received notices from the U.S. Department of Housing and Urban Development (“HUD”) regarding required submissions of Monthly Accounting Reports. HUD regulates rent levels and the operations of these Section 202 Projects.
These Monthly Accounting Report submissions are required for HUD 202 Projects receiving these notices from HUD, beginning with July 2015 (due to HUD by August 10, 2015), and include the following forms:
1. HUD Form 93479 – Monthly Report for Establishing Net Income
2. HUD Form 93480 – Schedule of Disbursements
3. HUD Form 93481 – Schedule of Accounts Payable
These HUD Forms are used to monitor operating expenses and can be found at HUDClips:
Why have certain HUD 202 Projects received this notice?
The belief is HUD is identifying Projects with potential financial performance weaknesses and requiring these Projects to submit the aforementioned Monthly Accounting Reports in order to monitor operating expenses on a monthly basis.
HUD generates a performance rating for each Project during the annual internet submission of the audited financial statements of the Project. The performance rating measures the relative financial strength of a Project and potential risks to HUD. One of three “ratings” is assigned: green, yellow, or red, indicating that a property may be considered financially healthy, potentially troubled, or troubled. The overall performance ratings are an internal asset management tool used to identify potential financial performance weaknesses and HUD Project Managers are not authorized to release these performance ratings outside of HUD.
If your Project receives the notice from HUD to submit Monthly Accounting Reports, we recommend you comply with the request and submit the required Forms to HUD by the 10th day of each month for the preceding month.
If you have any questions, concerns, or would like additional information on the aforementioned, please contact your HW&Co;. Principal.