HUD recently released Notice H 2013-23 to revise the financial reporting requirements for small multifamily housing projects. This Notice, which comes as a part of the White House’s Rental Policy Working Group’s (RPWG) changes to auditing standards and requirements, would relieve owners of small multifamily projects of submitting audited financial statements. This Notice would apply to any project owned by a non-Federal entity that receives less than $500,000 in combined federal financing assistance, including grants, loans, loan guarantees, property (included donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance. According to the Notice, owners will now be permitted to submit owner-certified financial statements.
HUD estimates that once implemented, this directive could save owners of small projects between $2,000 and $10,000 per year in annual financial reporting costs. The cost savings realized from this policy will free up dollars to be used for additional maintenance, operating costs, or owner distributions. In addition, HUD believes that reducing the financial and administrative burden associated with filing audited financial statements will also encourage owners to renew rather than opt-out of existing Section 8 Housing Assistance Payments (HAP) contracts. Notice H 2013-23 will be effective for any project with a fiscal year end on or after December 31, 2013.
Click here to read Notice H 2013-23.
