Audit 379348

Assistance Listing (Federal award identification number and year): Operating Assistance for Troubled Multifamily Housing Projects, Assistance Listing No. 14.164 (Section 201 loan identification number 109-SH-005, year 1991) Auditor non-compliance code: Q – Failure to make mortgage payments Finding resolution status: Unresolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Statistically valid sample: Not applicable. Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: Not applicable Questioned costs: Not applicable Statement of condition #2025-001: The Corporation's Flexible Subsidy Loan was due in full upon maturity of the Corporation's Section 202 mortgage loan, which occurred March 1, 2017. As of June 30, 2025, the Flexible Subsidy Loan has not been repaid, and the Corporation is in technical default on the Flexible Subsidy Loan. Criteria: Pursuant to the terms of the Section 201 Flexible Subsidy Loan agreement, the Flexible Subsidy Loan is due in full upon maturity of the Section 202 mortgage loan. Effect: The Corporation is not in compliance with the Flexible Subsidy Loan agreement. Cause: The Flexible Subsidy Loan was not repaid in full upon maturity. Management has submitted a request for deferment of the Flexible Subsidy Loan. Management is awaiting HUD approval of the deferment request. Recommendation: Management should continue communicating with HUD in order to obtain approval for the deferment request for the Section 201 Flexible Subsidy Loan. Management's response: Agree. Management has submitted a request for deferment of the Flexible Subsidy Loan. Management is awaiting HUD approval of the deferment request.

Assistance Listing (Federal award identification number and year): Operating Assistance for Troubled Multifamily Housing Projects, Assistance Listing No. 14.164 (Section 201 loan identification number 109-SH-005, year 1991) Auditor non-compliance code: N - Reserve for Replacements Deposits Finding resolution status: Resolved Universe population size: 12 monthly deposits to the reserve for replacements account. Sample size information: 12 monthly deposits to the reserve for replacements account. Statistically valid sample: Not applicable. Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: Not applicable Questioned costs: $1,205 Statement of condition #2025-002: The Corporation did not make the total required reserve for replacement deposits during the year ended June 30, 2025, which resulted in the reserve for replacements account being underfunded by $1,205 as of June 30, 2025. Criteria: Pursuant to the Section 202 Regulatory Agreement and communications from HUD, the Corporation is required to make monthly deposits into a separate reserve for replacements account in the amounts specified by HUD. Effect: The Corporation is not in compliance with the Section 202 Regulatory Agreement and communications from HUD. The reserve for replacements account is underfunded by $1,205. Cause: The Corporation was required to make monthly reserve for replacement deposits of $1,360. The Corporation did not make the full monthly deposit of $1,360 for one month during the year. Recommendation: The management agent should transfer $1,205 from the operating account in order to bring the reserve for replacements account current. Completion date: August 26, 2025 Management response: Management agrees with the recommendation. Management transferred $1,205 from the operating account in order to bring the reserve for replacements account current on August 26, 2025. No further action is required.