Audit 34887

S3800-010 Finding reference number 2022-001 S3800-011 Title and CFDA number of federal program Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA # 14.155 S3800-015 Type of finding Federal Award Finding S3800-016 Finding resolution status In process S3800-017 Information on universe population size 12 payments on the mortgage loan payable S3800-018 Sample size information 12 payments on the mortgage loan payable S3800-019 Identification of repeat finding and finding reference number Repeat finding - 2021-001 S3800-020 Criteria In accordance with item 1 of the Regulatory Agreement, the Organization agrees to make promptly all payments due under the note and mortgage. S3800-030 Statement of condition The Organization is in default on the mortgage note held by HUD. S3800-032 Cause The EIFS synthetic stucco failed and allowed water to infiltrate the building. This water intrusion resulted in the residential units of the rental property being uninhabitable and as a result the Organization does not have cash flow available to make the required mortgage loan payments. S3800-033 Effect or potential effect The Organization is not in compliance with the Regulatory Agreement and is in default on the mortgage loan agreement. S3800-035 Auditor non-compliance code Q - Failure to make mortgage payments S3800-037 FHA/Contract number 062-11095 S3800-038 Questioned costs $ 1 ,807,928 S3800-040 Questioned costs $ 1 ,807,928 S3800-045 Reporting views of responsible officials Management agrees and is finalizing financing options and completing a purchase and rehabilitation of the rental property through the Section 8(bb) process and RAD for PRAC application. S3800-080 Recommendation Management should seek new financing in order to complete the necessary repairs and bring the mortgage loan payable current. S3800-090 Auditor's summary of the auditee's comments on the findings and recommendations. Management agrees and is finalizing financing options and completing a purchase and rehabilitation of the rental property through the Section 8(bb) process and RAD for PRAC application. S3800-130 Response Indicator Agree S3800-140 Anticipated Completion Date June 30, 2023 S3800-150 Response Management concurs

S3800-010 Finding reference number 2022-002 S3800-011 Title and CFDA number of federal program Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA # 14.155 S3800-015 Type of finding Federal Award Finding S3800-016 Finding resolution status In process S3800-017 Information on universe population size n/a S3800-018 Sample size information n/a S3800-019 Identification of repeat finding and finding reference number Repeat finding - 2021-002 S3800-020 Criteria In accordance with item 7 of the Regulatory Agreement, the Organization shall maintain the mortgaged premises, accommodations and the grounds and equipment appurtenant thereto, in good repair and conditions. S3800-030 Statement of condition The Organization received a score of 53b on a physical inspection performed by a representative of HUD on April 16, 2019 and has not completed necessary repairs as of June 30, 2021. S3800-032 Cause The EIFS synthetic stucco failed and allowed water to infiltrate the building. This water intrusion resulted in the residential units of the rental property being uninhabitable. S3800-033 Effect or potential effect The Organization is not in compliance with the Regulatory Agreement and HUD Handbook 4350.3 and will be unable to comply with required mortgage payments on the loan. S3800-035 Auditor non-compliance code I - Failure to Maintain Property/Open Physical Inspection S3800-037 FHA/Contract number 062-11095 S3800-038 Questioned costs n/a S3800-040 Questioned costs n/a S3800-045 Reporting views of responsible officials Management agrees and is finalizing financing options and completing a purchase and rehabilitation of the rental property through the Section 8(bb) process and RAD for PRAC application. S3800-080 Recommendation Management should seek new financing in order to complete the necessary repairs. S3800-090 Auditor's summary of the auditee's comments on the findings and recommendations. Management agrees and is finalizing financing options and completing a purchase and rehabilitation of the rental property through the Section 8(bb) process and RAD for PRAC application. S3800-130 Response Indicator Agree S3800-140 Anticipated Completion Date June 30, 2023 S3800-150 Response Management concurs

S3800-010 Finding reference number 2022-001 S3800-011 Title and CFDA number of federal program Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA # 14.155 S3800-015 Type of finding Federal Award Finding S3800-016 Finding resolution status In process S3800-017 Information on universe population size 12 payments on the mortgage loan payable S3800-018 Sample size information 12 payments on the mortgage loan payable S3800-019 Identification of repeat finding and finding reference number Repeat finding - 2021-001 S3800-020 Criteria In accordance with item 1 of the Regulatory Agreement, the Organization agrees to make promptly all payments due under the note and mortgage. S3800-030 Statement of condition The Organization is in default on the mortgage note held by HUD. S3800-032 Cause The EIFS synthetic stucco failed and allowed water to infiltrate the building. This water intrusion resulted in the residential units of the rental property being uninhabitable and as a result the Organization does not have cash flow available to make the required mortgage loan payments. S3800-033 Effect or potential effect The Organization is not in compliance with the Regulatory Agreement and is in default on the mortgage loan agreement. S3800-035 Auditor non-compliance code Q - Failure to make mortgage payments S3800-037 FHA/Contract number 062-11095 S3800-038 Questioned costs $ 1 ,807,928 S3800-040 Questioned costs $ 1 ,807,928 S3800-045 Reporting views of responsible officials Management agrees and is finalizing financing options and completing a purchase and rehabilitation of the rental property through the Section 8(bb) process and RAD for PRAC application. S3800-080 Recommendation Management should seek new financing in order to complete the necessary repairs and bring the mortgage loan payable current. S3800-090 Auditor's summary of the auditee's comments on the findings and recommendations. Management agrees and is finalizing financing options and completing a purchase and rehabilitation of the rental property through the Section 8(bb) process and RAD for PRAC application. S3800-130 Response Indicator Agree S3800-140 Anticipated Completion Date June 30, 2023 S3800-150 Response Management concurs

S3800-010 Finding reference number 2022-002 S3800-011 Title and CFDA number of federal program Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA # 14.155 S3800-015 Type of finding Federal Award Finding S3800-016 Finding resolution status In process S3800-017 Information on universe population size n/a S3800-018 Sample size information n/a S3800-019 Identification of repeat finding and finding reference number Repeat finding - 2021-002 S3800-020 Criteria In accordance with item 7 of the Regulatory Agreement, the Organization shall maintain the mortgaged premises, accommodations and the grounds and equipment appurtenant thereto, in good repair and conditions. S3800-030 Statement of condition The Organization received a score of 53b on a physical inspection performed by a representative of HUD on April 16, 2019 and has not completed necessary repairs as of June 30, 2021. S3800-032 Cause The EIFS synthetic stucco failed and allowed water to infiltrate the building. This water intrusion resulted in the residential units of the rental property being uninhabitable. S3800-033 Effect or potential effect The Organization is not in compliance with the Regulatory Agreement and HUD Handbook 4350.3 and will be unable to comply with required mortgage payments on the loan. S3800-035 Auditor non-compliance code I - Failure to Maintain Property/Open Physical Inspection S3800-037 FHA/Contract number 062-11095 S3800-038 Questioned costs n/a S3800-040 Questioned costs n/a S3800-045 Reporting views of responsible officials Management agrees and is finalizing financing options and completing a purchase and rehabilitation of the rental property through the Section 8(bb) process and RAD for PRAC application. S3800-080 Recommendation Management should seek new financing in order to complete the necessary repairs. S3800-090 Auditor's summary of the auditee's comments on the findings and recommendations. Management agrees and is finalizing financing options and completing a purchase and rehabilitation of the rental property through the Section 8(bb) process and RAD for PRAC application. S3800-130 Response Indicator Agree S3800-140 Anticipated Completion Date June 30, 2023 S3800-150 Response Management concurs