Notes to SEFA
Title: Interest Credit/Subsidy
Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of
Otwell Ruritan Senior Housing, Inc. 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 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 $100,384 (48% of
total rental income) for the year ended December 31, 2023.
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.
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 December 31, 2023, the Organization recognized $67,494 of interest subsidy.
Title: Loan/Loan guarantee outstanding balances
Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of
Otwell Ruritan Senior Housing, Inc. 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 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 $100,384 (48% of
total rental income) for the year ended December 31, 2023.
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.
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 7.25%-7.50% (before interest credit). At
December 31, 2023, the remaining balance on the mortgages payable was $1,159,583.