Notes to SEFA
Title: Loan/Loan guarantee outstanding balances
Accounting Policies: 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of Community Housing Initiative, Inc. and Subsidiary and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. RECOGNITION OF RENTAL REVENUE Residents in the facilities are billed a monthly rental charge. These charges are recognized as income when earned. Revenue is recorded for each month a housing unit is available for occupancy. Amounts attributable to employee housing units and vacancies are charged to the appropriate accounts in accordance with RD provisions. The Organization also receives rental assistance payments from RD, which are also recognized as income when earned. Rental income from the RD rental assistance contracts totaled $484,464 (53% of total rental income) for the year ended October 31, 2023.INTEREST CREDIT/SUBSIDY
The RD Section 515 Rural Rental Housing Program provides for an interest credit to reduce the annual
debt service payable on the mortgage loans from that which is payable at the stated rate to an amount
that equates to a 1% rate. Rental collections from tenants in excess of the basic rental charges
determined by RD are remitted to RD to effectively reduce the amount of the interest credit. During the
year ended October 31, 2023, the Corporation recognized $143,382 of interest subsidy.
De Minimis Rate Used: N
Rate Explanation: DE MINIMIS COST RATE The Organization does not utilize the 10% de minimis cost rate because the guidance under Part 200.414 Indirect Costs does not apply.
2. MORTGAGES PAYABLE The Organization has entered into mortgage loan agreements for loans for each individual project. Such funds were provided by RD pursuant to its Rural Housing Program under Section 515 of the National Housing Act of 1949. The terms of the loans are 50 years. The loans are secured by a mortgage on the Project, security interests in any personal property, and an assignment of any rents or income to be derived from the Project. Interest rates on the loans range from 9%-10% (before interest credit). At October 31, 2023, the remaining balance on the mortgages payable was $2,893,683.