Audit 310828

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Corporation elected to not use the deminimis cost rate The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Exchange Sunshine Home Corporation under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Exchange Sunshine Home Corporation, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Exchange Sunshine Home Corporation.

Title: Federally Funded and Insured Mortgages Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Corporation elected to not use the deminimis cost rate The acquisition and construction of the Project was funded by capital advances from HUD under Section 202 of the National Housing Act of 1959. As a condition for the capital advances, the Corporation entered into the Regulatory Agreement with HUD, and executed a mortgage note payable to HUD in the amount of $1,945,400. The mortgage note bears no interest and repayment is not required so long as the Project provides housing for very low-income elderly or disabled persons in accordance with Section 202. The mortgage note matures on October 10, 2033 and is secured by a Deed of Trust. Provided that the housing has remained available for occupancy by eligible families until maturity and that the mortgage note has not otherwise become due by reason of default, the mortgage note shall be deemed paid and discharged at maturity on October 10, 2033. In the event of default, the entire principal balance plus interest at an annual rate of 7.75% shall be payable upon demand by HUD. In addition to the Section 202 loan, the Corporation receives funding from the Project Rental Assistance Program (PRAC). Total assistance received for PRAC for the year ended December 31, 2023 was $97,061.