Notes to SEFA
Title: Sub-Recipients
Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) presents the
activity of all federal awards programs of Lutheran Housing Development Fund Corporation of
Pawling, Project No. 012-EE-100 (the Company) under programs of the federal government for
the year ended December 31, 2023. Federal awards received directly from federal agencies,
as well as federal awards passed through other government agencies, are included in the
schedule.
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 the Company, it is not intended
to and does not present the financial position, change in net assets, or cash flows of the
Company. The accompanying schedule is presented using the accrual basis of accounting and is
presented in accordance with accounting principles generally accepted in the United States
used by the Company to report to the federal government. Such expenditures are recognized
following the cost principles contained in the Uniform Guidance, wherein certain types of
expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate
Of the federal expenditures presented in the schedule, the Company provided no federal
awards to sub-recipients.
Title: Capital Advance
Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) presents the
activity of all federal awards programs of Lutheran Housing Development Fund Corporation of
Pawling, Project No. 012-EE-100 (the Company) under programs of the federal government for
the year ended December 31, 2023. Federal awards received directly from federal agencies,
as well as federal awards passed through other government agencies, are included in the
schedule.
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 the Company, it is not intended
to and does not present the financial position, change in net assets, or cash flows of the
Company. The accompanying schedule is presented using the accrual basis of accounting and is
presented in accordance with accounting principles generally accepted in the United States
used by the Company to report to the federal government. Such expenditures are recognized
following the cost principles contained in the Uniform Guidance, wherein certain types of
expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate
In September 1996, the Company executed a capital advance building agreement with HUD
for $7,117,302. As of December 31, 2023, the Company had drawn down $7,074,175. The
Company recognized the capital advance into revenue ratably over the life of the forty-year
advance agreement until a change in accounting principle discontinued the recognition and left
a capital advance liability of $3,139,166. The capital advance shall bear no interest and is not
required to be repaid as long as the property’s apartments remain available to eligible very
low-income households in accordance with Section 202 for a period of forty-years. If, during
the term of the forty-year advance agreement, the property’s apartments are not available to
eligible very low-income households, the entire capital advance of $7,074,175 is due and
payable to HUD. The capital advance is secured by a mortgage on the Company’s land,
building, and equipment.