HUD has released the Unnumbered Letter (UL) entitled “Multi-Family Housing Financial Reporting Requirements for Fiscal Year 2017.” The Final Rule for the Multi-Family Housing (MFH) Sections 515/514 new financial reporting requirements was published in the Federal Register and became effective November 24, 2017.
The Final Rule updates Rural Development’s MFH financial reporting requirements to establish risk thresholds, align requirements with HUD, and reduce program operating costs to Rural Development and its borrowers. As a result of these changes, USDA believes small-portfolio borrowers will realize cost savings in property operating expenses and a consequent reduction in the amount of rent subsidy (Rental Assistance (RA) and HUD Section 8).
According to USDA, the Final Rule changes will not affect FY 2017 reporting requirements, except that the Agency is allowing for the elimination of the Agreed Upon Procedures (AUPs) if requested by the borrower. The reporting change will be OPTIONAL in FY 2018, as proposed budgets have already been submitted, but will be MANDATORY starting in FY 2019 (Oct.1, 2018). USDA-Rural Development will be issuing additional guidance for FY 2018 year-end reporting requirements, which will include revisions to HB-2-3560, Chapter 4.
To read the attached UL clarifying the Multi-Family Housing Financial Reporting Requirements for FY17 online, please click here. Please contact your local Servicing Office or State Office with questions.
Separately, USDA recently published two Administrative Notices to agency staff regarding RD compliance with lead-based paint rule and design/build and construction management proposals for 514/515 housing projects.