Audit 343609

Title: NOTE A - GENERAL 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 Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) presents the activity of all federal award programs of the Rural Housing Development Corporation (the Organization) for the year ended September 30, 2024. All federal financial awards received directly from federal agencies as well as federal financial awards passed through from other government agencies are included on 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 Association, it is not intended and does not present the financial position, changes in net assets or cash flows of the Association.

Title: NOTE B - BASIS OF ACCOUNTING 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 Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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. Pass-through entity identifying numbers are presented where available. The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

Title: NOTE C - SUBRECIPIENTS OF FEDERAL AWARDS 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 Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization did not provide federal award funding to subrecipients during the year ended September 30, 2024.

Title: NOTE D - RELATIONSHIP TO THE FINANCIAL STATEMENTS 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 Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization reported federal expenditures of $600,000 in the Self-Help Homeownership Opportunity Program (14.247) during the year ended September 30, 2024. These funds are loans to the Organization and are reported as a note payable on the statement of financial position rather than as revenue on the statement of activities.