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
Farrell-Bell Senior Housing Apartments, Inc., HUD Project No. 073-EE119, 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 (Uniform Guidance).
Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in
the preparation of, the basic financial statements.
RECOGNITION OF RENTAL REVENUE
Residents in this facility 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 HUD provisions.
The Corporation also receives housing assistance payments from HUD which are also recognized as
income when earned. Rental income from the PRAC agreement (including special claims) totaled
$238,537, or 62% of net rental revenue, for the year ended December 31, 2023.
De Minimis Rate Used: N
Rate Explanation: DE MINIMIS COST RATE The Corporation does not utilize the 10% de minimis cost rate because the guidance under Part 200.414 Indirect Costs does not apply.
2. CAPITAL ADVANCE The Corporation has entered into a Capital Advance Program Mortgage Note (the Note) for a capital advance not to exceed $5,182,600. The note bears no interest, and repayment is not required as long as the housing project remains available for very low-income elderly persons, in accordance with Section 202 of the National Affordable Housing Act of 1990 and the Project Rental Assistance Contract and is operated in accordance with the regulatory agreement and HUD regulations. The Note is secured by the mortgage upon the land, building and equipment and other amounts held by the Corporation. At December 31, 2023, the balance of the Note was $4,635,400.