Audit 354161

Finding reference number: 2024-001 Assistance Listing (Federal award identification number and year): Mortgage Insurance – Rental Housing, Assistance Listing No. 14.134, 122-11398 and 2004 Auditor non-compliance code: N – Reserve for Replacement Deposits Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $3,468 Statement of condition 2024-001: During the year ended December 31, 2024, the Corporation did not make the required deposits to the reserve for replacements. Criteria: Pursuant to the HUD regulatory agreement, the Corporation is required to make deposits to the reserve for replacements in the amount of $34,056 per year. Effect: The Corporation is not in compliance with the HUD regulatory agreement and the reserve for replacements is underfunded by $3,468 at December 31, 2024. Cause: The Corporation did not increase the monthly deposit according to the HUD approved 9250 requiring the increase in reserve for replacement deposits. Recommendation: Management should make a deposit to the reserve for replacements for $3,468 for the delinquent deposits. In future periods, management should fund the reserve for replacements on an annual basis as required by the HUD regulatory agreement. Management's response: Management concurs with the finding and agrees with the auditor's recommendation. Management made a deposit of $3,468 on March 11, 2025 for the delinquent deposits.

Finding reference number: 2024-001 Assistance Listing (Federal award identification number and year): Mortgage Insurance – Rental Housing, Assistance Listing No. 14.134, 122-11398 and 2004 Auditor non-compliance code: N – Reserve for Replacement Deposits Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $3,468 Statement of condition 2024-001: During the year ended December 31, 2024, the Corporation did not make the required deposits to the reserve for replacements. Criteria: Pursuant to the HUD regulatory agreement, the Corporation is required to make deposits to the reserve for replacements in the amount of $34,056 per year. Effect: The Corporation is not in compliance with the HUD regulatory agreement and the reserve for replacements is underfunded by $3,468 at December 31, 2024. Cause: The Corporation did not increase the monthly deposit according to the HUD approved 9250 requiring the increase in reserve for replacement deposits. Recommendation: Management should make a deposit to the reserve for replacements for $3,468 for the delinquent deposits. In future periods, management should fund the reserve for replacements on an annual basis as required by the HUD regulatory agreement. Management's response: Management concurs with the finding and agrees with the auditor's recommendation. Management made a deposit of $3,468 on March 11, 2025 for the delinquent deposits.