Title: NOTE 2 - MORTGAGES PAYABLE - FEDERAL FUNDS
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Milford Housing Development Corporation and Affiliates, under programs of the federal government for the year ended December 31, 2024.
The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) 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 Corporation, it is not intended to and does not present the Corporation’s financial position, changes in net assets, or cash flows.
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.
De Minimis Rate Used: N
Rate Explanation: Management did not elect to use the 15% de minimis indirect cost rate as allowed under the Uniform Guidance.
USDA - RD: Long-term debt instruments were provided by RD pursuant to its Rural Housing Program under Section 515 of the National Housing Act of 1949 for Academy Apartments, Acorn Acres, Alicia Arms, Carlton Court, ECL Annex, Edenton Manor, Fairhaven Manor I, Fair Winds, Greenwood Acres, Harbour Towne, Maple Hill, Marshall Manor, Park Royal, Ridgely Meadows, 2nd Fairhaven, West Street Elderly, and West Street Manor Annex. The debt instruments are secured by mortgages on the real estate, interests in personal property, and assignments of income to be derived from the Projects. The mortgages each have a term of 50 years.
As noted, the mortgage balances presented above reflect the outstanding principal balances as of December 31, 2024. For purposes of the Schedule of Expenditures of Federal Awards (SEFA), the loans under the Section 515 Rural Rental Housing Program are reported at their balances at the beginning of the year, which totaled $14,409,989.
This treatment aligns with the Uniform Guidance, which requires federal loan programs with continuing compliance requirements to be reported at their balances as of the beginning of the year. Although the loan proceeds were originally expended in prior years in connection with the construction or rehabilitation of these properties, the loans remain subject to these compliance requirements throughout their full terms.
In addition, USDA-RD provided interest credit subsidies during the year that reduced required debt service payments by $880,097. These subsidies effectively lower the interest rate charged on the loans, in some cases to as low as 1%, and are also reported on the SEFA as federal expenditures.
DSHA - HOME: Long-term debt instruments were provided by DSHA pursuant to the HOME program for Acorn Acres, East Atlantic, ECL Annex, Harbour Towne, Lingo Creek, Long Neck, Luther Gardens, Marshall Manor, Milton Landing, and West Street Manor Annex. The debt instruments are secured by mortgages on the real estate, interests in personal property, and assignments of income to be derived from the Projects. The mortgages each have a term of 30 years. No repayments on the debt instruments are required unless there is available cash flow, as defined in the DSHA Regulatory Agreements. Information on the debt instruments as of December 31, 2024, is as follows. The Balance Due amounts presented agree with the balances due at the beginning of the year, as the loans are deferred and no surplus cash payments were required during the year.
Title: NOTE 3 - RENTAL ASSISTANCE - FEDERAL FUNDS:
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Milford Housing Development Corporation and Affiliates, under programs of the federal government for the year ended December 31, 2024.
The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) 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 Corporation, it is not intended to and does not present the Corporation’s financial position, changes in net assets, or cash flows.
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.
De Minimis Rate Used: N
Rate Explanation: Management did not elect to use the 15% de minimis indirect cost rate as allowed under the Uniform Guidance.
Rental assistance is provided to eligible tenants under housing assistance payment contracts administered by RD and HUD. These contracts require tenants to contribute a portion of the rent based on their income, and the difference between the tenant payment and the full contract rent is subsidized by RD or HUD. In 2024, the Projects earned a total of $2,203,204 under RD’s Rural Rental Assistance Program and $643,115 under HUD’s Section 8 Project-Based Rental Assistance Program.
Title: NOTE 4 - OTHER GRANT AWARDS - FEDERAL FUNDS:
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Milford Housing Development Corporation and Affiliates, under programs of the federal government for the year ended December 31, 2024.
The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) 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 Corporation, it is not intended to and does not present the Corporation’s financial position, changes in net assets, or cash flows.
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.
De Minimis Rate Used: N
Rate Explanation: Management did not elect to use the 15% de minimis indirect cost rate as allowed under the Uniform Guidance.
Milford Housing Development Corporation (MHDC) expended $367,500 from RD under the Self-Help Housing Technical Assistance Program. This program provides funding to nonprofit organizations that assist low-income families in constructing their own homes through mutual self-help methods. The funds were used by MHDC to provide administrative and technical support for operating and overseeing self-help housing activities.
MHDC also expended $45,833 from HUD under the Community Housing Development Organization (CHDO) program. This program, administered as part of the HOME Investment Partnerships Program, supports qualified nonprofit developers in producing affordable housing. The funds were used to assist with pre-development and construction costs related to affordable housing projects for low-income individuals and families.
In addition, MHDC expended $51,992 from HUD under the Community Development Block Grant (CDBG) program. The CDBG program provides flexible funding to support a broad range of community development initiatives.
Title: NOTE 5 - AMERICAN RESCUE PLAN ACT (ARPA) FUNDING:
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Milford Housing Development Corporation and Affiliates, under programs of the federal government for the year ended December 31, 2024.
The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) 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 Corporation, it is not intended to and does not present the Corporation’s financial position, changes in net assets, or cash flows.
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.
De Minimis Rate Used: N
Rate Explanation: Management did not elect to use the 15% de minimis indirect cost rate as allowed under the Uniform Guidance.
The American Rescue Plan Act (ARPA), enacted in 2021, was designed to provide economic relief in response to the COVID-19 pandemic. Administered by the U.S. Department of the Treasury, the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program supports eligible state, local, and nonprofit entities in addressing public health and economic impacts stemming from the pandemic. To date, MHDC has received total ARPA funding of $8,650,000. During the year ended December 31, 2024, MHDC expended $7,472,654 of these funds. The remaining unspent balance of $1,177,346 is reported as a component of deferred revenue as of year-end.
Included in the total ARPA funding received was an $8,000,000 award passed through the State of Delaware from the SLFRF program. This award was provided for the primary purpose of supporting rent stabilization through the preservation and redevelopment of 410 at-risk affordable housing units in Sussex County. Consistent with ARPA eligibility guidelines, the funds were used to mitigate housing insecurity by sustaining long-term affordability, improving physical conditions, and maintaining the operational viability of MHDC’s beach portfolio. These activities addressed the negative economic impacts of the COVID-19 pandemic on vulnerable households and aligned with the public purpose outlined in the state grant agreement.