Title: NOTE 2 - MORTGAGE NOTE PAYABLE - FEDERAL FUNDS:
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of DIMA IV, Inc., under programs of the federal government for the year ended March 31, 2025.
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 Project, it is not intended to and does not present the Project’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.
DIMA IV, Inc. executed obligations with the U.S. Department of Housing and Urban Development (HUD), totaling $1,145,100 at permanent closing. HUD requires annual audits performed in accordance with the cost principles contained in the Uniform Guidance since the capital advance amount exceeds the federal expenditure threshold of $750,000. This loan is subject to annual audit requirements under the Uniform Guidance because it has ongoing compliance requirements, even though loan proceeds were received and expended in prior years in connection with the Project's construction or rehabilitation.
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.
HUD awarded DIMA IV, Inc. a mortgage of $1,416,300 under Section 811 of the National Affordable Housing Act for acquisition and rehabilitation of the Project. A mortgage modification agreement was entered into on May 6, 1996, which modified the maximum mortgage commitment to $1,145,100. The mortgage is deemed a contingent liability since no interest or principal payments are payable or due. The mortgage note does not become due unless HUD operating and filing requirements, as defined under Section 811 of the National Affordable Housing Act, are not met, in which case the entire mortgage balance becomes due, including interest accrued at 6.625% per annum. DIMA IV, Inc. must continue to operate the project under HUD guidelines until May 6, 2036, before the note will be forgiven.
Although the capital advance is fully forgivable if certain compliance requirements are met, the Project accounts for this obligation as debt in the financial statements. Because repayment is not expected to occur if the requirements are satisfied, no interest is imputed on the noninterest-bearing advance. The liability will remain on the books until the conditions for forgiveness have been substantially met.
Title: NOTE 3 - RENTAL ASSISTANCE - FEDERAL FUNDS:
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of DIMA IV, Inc., under programs of the federal government for the year ended March 31, 2025.
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 Project, it is not intended to and does not present the Project’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.
DIMA IV, Inc. executed obligations with the U.S. Department of Housing and Urban Development (HUD), totaling $1,145,100 at permanent closing. HUD requires annual audits performed in accordance with the cost principles contained in the Uniform Guidance since the capital advance amount exceeds the federal expenditure threshold of $750,000. This loan is subject to annual audit requirements under the Uniform Guidance because it has ongoing compliance requirements, even though loan proceeds were received and expended in prior years in connection with the Project's construction or rehabilitation.
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 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 HUD. In 2025, the Project earned a total of $44,695 from HUD’s Section 8 Project-Based Rental Assistance Program.