Audit 350691

Title: NOTE A - BASIS OF PRESENTATION 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 OMB Guidance for Federal Financial Assistance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance. De Minimis Rate Used: N Rate Explanation: PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance. The accompanying schedule of expenditures of federal awards includes the federal award activity of PONTOTOC TOWNHOMES LLC 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 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (OMB Guidance for Federal Financial Assistance). Because the Schedule presents only a selected portion of the operations of PONTOTOC TOWNHOMES LLC, it is not intended to and does not present the financial position, changes in net assets, or cash flows of PONTOTOC TOWNHOMES LLC.

Title: NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 OMB Guidance for Federal Financial Assistance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance. De Minimis Rate Used: N Rate Explanation: PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the OMB Guidance for Federal Financial Assistance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance.

Title: NOTE C — U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT INSURED MORTGAGE 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 OMB Guidance for Federal Financial Assistance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance. De Minimis Rate Used: N Rate Explanation: PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance. PONTOTOC TOWNHOMES LLC received an insured mortgage from the U.S. Department of Housing and Urban Development under Section 207 pursuant to Section 223(f) of the National Housing Act, as amended. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. PONTOTOC TOWNHOMES LLC received one additional loan during the year (see Note D). The balance of this insured mortgage outstanding at December 31, 2024 totaled $3,202,444.

Title: NOTE D — U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SUPPLEMENTAL NOTE 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 OMB Guidance for Federal Financial Assistance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance. De Minimis Rate Used: N Rate Explanation: PONTOTOC TOWNHOMES LLC has elected not to use the 10-percent de minimis indirect cost rate allowed under the OMB Guidance for Federal Financial Assistance. PONTOTOC TOWNHOMES LLC received a Supplemental Note from the U.S. Department of Housing and Urban Development under Section 241(a) of the National Housing Act, as amended. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. PONTOTOC TOWNHOMES LLC had one other HUD loan outstanding during the year (see Note C). The balance of this Supplemental Note outstanding at December 31, 2024 totaled $3,918,393.