Title: OPERATING ASSISTANCE FOR TROUBLED MULTIFAMILY HOUSING PROJECTS
PROGRAM (Federal Assistance Listing No. 14.164)
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agency’s (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Development’s (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the Schedule to the reader.
(a) Expenditures
Expenditures for the loan program are based on the total outstanding loan balances at June 30, 2024, inclusive of accrued interest (Note 2). All other expenditures are recognized when paid.
(b) Indirect Costs
MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
De Minimis Rate Used: Y
Rate Explanation: MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
During the year ended June 30, 2024, MassHousing administered one Flexible Subsidy Loan under HUD’s Operating Assistance for Troubled Multifamily Housing Projects program (Federal Assistance Listing No. 14.164). This loan was issued to a project owner through MassHousing in a previous fiscal year for the purpose of restoring or maintaining the project’s physical and financial soundness, to assist in the management
of the project, and to maintain the low to moderate income character of the project. Repayment terms of the loan are contingent upon the cash flow of the project, and the loan bears interest at 1%. The loan outstanding and included on the Schedule, inclusive of accrued interest, at June 30, 2024, totaled $379,349. Interest income earned and accrued on the loan during the year then ended totaled $2,500.
Title: HOUSING ASSISTANCE PAYMENTS PROGRAM FOR LOW INCOME FAMILIES
(Federal Assistance Listing No. 14.195)
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agency’s (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Development’s (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the Schedule to the reader.
(a) Expenditures
Expenditures for the loan program are based on the total outstanding loan balances at June 30, 2024, inclusive of accrued interest (Note 2). All other expenditures are recognized when paid.
(b) Indirect Costs
MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
De Minimis Rate Used: Y
Rate Explanation: MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
MassHousing receives fee income in consideration for serving as HUD’s contract administrator with respect to the Performance-Based Contract Administration (“PBCA”) project-based Section 8 subsidy program in the Commonwealth under the Housing Assistance Payments Program for Low Income Families (Federal Assistance Listing No. 14.195). Starting in 2011, HUD sought to achieve cost savings in the PBCA program and initiated the first of several processes for re-bidding PBCA administration in multiple states. Each such process has been withdrawn or overturned following legal challenges.
On February 1, 2022, MassHousing executed a tenth amendment to the Annual Contributions Contract (“ACC”) as PBCA administrator to HUD. This amendment extended the term of the ACC from February 1, 2022, to January 31, 2023 with the option by HUD to further extend the contract for up to four additional and successive extension terms of six calendar months each, subject to the availability of sufficient appropriations. This amendment made certain changes to the scope of work to be performed and compensation to be received, which in MassHousing’s assessment, will not significantly affect its operations or financial position.
On December 20, 2022, HUD gave notice of its election to extend the tenth amendment of the ACC, subject to the availability of sufficient appropriations, for the first extension term, which began on February 1, 2023 and ended on July 31, 2023. On May 12, 2023, HUD gave notice of its election to extend the tenth amendment of the ACC, subject to the availability of sufficient appropriations, for the second extension term, which began on August 1, 2023 and ended on January 31, 2024.
On December 19, 2023, HUD gave notice of its election to extend the tenth amendment of the ACC, subject to the availability of sufficient appropriations, for the third extension term, which began on February 1, 2024 and ended on July 31, 2024. On June 7, 2024, HUD gave notice of its election to extend the tenth amendment of the ACC, subject to the availability of sufficient appropriations, for the fourth extension term,
which began on August 1, 2024 and will end on January 31, 2025.
Title: CAPITAL MAGNET FUND (Federal Assistance Listing No. 21.011)
The
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agency’s (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Development’s (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the Schedule to the reader.
(a) Expenditures
Expenditures for the loan program are based on the total outstanding loan balances at June 30, 2024, inclusive of accrued interest (Note 2). All other expenditures are recognized when paid.
(b) Indirect Costs
MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
De Minimis Rate Used: Y
Rate Explanation: MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
The U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund (the Capital Magnet Fund or CMF) (Federal Assistance Listing No. 21.011) offers competitively awarded grants to finance affordable housing solutions and community revitalization efforts that benefit low-income people and communities nationwide. These awards can be used to finance affordable housing activities, as well as related economic development activities and community service facilities and to pay direct administrative expenses. As of June 30, 2024, MassHousing has been awarded the following amounts:
Award Effective Date Amount
CMF FY19 4/7/2020 $ 2,250,000
CMF FY20 4/26/2021 5,800,000
CMF FY21 10/14/2022 12,000,000
CMF FY23 12/15/2023 12,000,000
Total $ 32,050,000
MassHousing is using the funds to provide gap-filler financing for rental housing ($29.8 million) and to provide down payment assistance loans to income-eligible first-time homebuyers ($2.3 million).
Title: HOMEOWNER ASSISTANCE FUND (Federal Assistance Listing No. 21.026)
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agency’s (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Development’s (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the Schedule to the reader.
(a) Expenditures
Expenditures for the loan program are based on the total outstanding loan balances at June 30, 2024, inclusive of accrued interest (Note 2). All other expenditures are recognized when paid.
(b) Indirect Costs
MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
De Minimis Rate Used: Y
Rate Explanation: MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
Effective November 17, 2021, the Commonwealth of Massachusetts (the Commonwealth) provided a subaward of $47.0 million to MassHousing, in its capacity as a “Contractor”, to provide administration and project management for the distribution of federal financial assistance received by the Commonwealth through the Homeowner Assistance Fund (HAF) authorized under Section 3206 of the American Rescue Plan Act
of 2021, H.R. 1319 (the “ARPA”) and administered by the U.S. Department of Treasury (“Treasury”). The contract was amended on June 22, 2022 and the subaward was reduced by $7.0 million to $40.0 million. The contract was further amended on May 31, 2023 and the subaward was reduced by $13.0 million to $27.0 million. On August 4, 2023, the HAF contract was amended and the subaward was increased by $2.8 million
to $29.8 million. The contract was further amended on December 18, 2023 and the subaward was reduced by $8.1 million to $21.7 million. HAF was created to prevent mortgage delinquencies, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship after January 21, 2020. Funds from HAF may be used for assistance with mortgage payments, homeowner’s insurance, utility payments, and other specified purposes. The law prioritizes funds for homeowners who have experienced the greatest hardships, leveraging local and national income indicators to maximize the impact. Effective November 17, 2021, the Commonwealth also provided a subaward of $3.0 million to MassHousing to establish and manage a statewide marketing, outreach and public information campaign to encourage homeowners experiencing hardships due to the Covid-19 pandemic to take advantage of financial assistance under the Massachusetts HAF Program (the “Statewide HAF Program”). The contract was amended on May 31, 2023 and the subaward was reduced by $1.0 million to $2.0 million. As of June 30, 2024, MassHousing has disbursed all of the funds available in the HAF Program.
Title: SUBSEQUENT EVENTS
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agency’s (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Development’s (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the Schedule to the reader.
(a) Expenditures
Expenditures for the loan program are based on the total outstanding loan balances at June 30, 2024, inclusive of accrued interest (Note 2). All other expenditures are recognized when paid.
(b) Indirect Costs
MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
De Minimis Rate Used: Y
Rate Explanation: MassHousing does not charge indirect costs to the following federal financial assistance programs: Housing Assistance Payments Program for Low Income Families - Section 8 PBCA (Federal Assistance Listing No. 14.195), Operating Assistance for Troubled Multifamily Housing Projects (Federal Assistance Listing No. 14.164) and Capital Magnet Fund (Federal Assistance Listing No. 21.011). MassHousing does charge indirect costs on the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) and elected to use the 10-percent de minimus indirect cost rate identified in §200.414 of the Uniform Guidance.
MassHousing has performed an evaluation of subsequent events through October 16, 2024, which is the date the Schedule was available to be issued. No material subsequent events have occurred since June 30, 2024 that required recognition or disclosure in the Schedule and accompanying notes.