Title: Note 3 - Flexible Subsidy Loans
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agencys (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Developments (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.(a)Cash and Cash EquivalentsMassHousing considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.(b)Cash Receipts/RevenueRevenue is recognized when funds are received from federal government sources. Interest income is recognized when it is credited to accounts by banking institutions.(c)Cash Disbursements/ExpendituresExpenditures for the loan program are based on the total outstanding loan balances at June 30, 2022, inclusive of accrued interest (Note 3). All other expenditures are recognized when paid.(d)Indirect CostsMassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: MassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
During the year ended June 30, 2022, MassHousing administered one Flexible Subsidy Loan under HUDs Operating Assistance for Troubled Multifamily Housing Projects program (Federal Assistance Listing No. 14.164). This loan was issued to a project owner through MassHousing in a previous fiscal year for the purpose of restoring or maintaining the projects physical and financial soundness, to assist in the management of the project, and to maintain the low to moderate income character of the project. Repayment terms of the loan are contingent upon the cash flow of the project, and the loan bears interest at 1%. The loan outstanding and included on the Schedule, inclusive of accrued interest, at June 30, 2022 totaled $374,349. Interest income earned and accrued on outstanding loans during the year then ended totaled $2,500.
Title: Note 2 - Interest Income
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agencys (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Developments (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.(a)Cash and Cash EquivalentsMassHousing considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.(b)Cash Receipts/RevenueRevenue is recognized when funds are received from federal government sources. Interest income is recognized when it is credited to accounts by banking institutions.(c)Cash Disbursements/ExpendituresExpenditures for the loan program are based on the total outstanding loan balances at June 30, 2022, inclusive of accrued interest (Note 3). All other expenditures are recognized when paid.(d)Indirect CostsMassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: MassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
Included in cash receipts under the Housing Assistance Payments Program for Low Income Families (Federal Assistance Listing No. 14.195) is $2,780 of interest income earned on federal funds held on deposit for the year ended June 30, 2022.Included in cash receipts under the Capital Magnet Fund (Federal Assistance Listing No. 21.011) is $9,024 of interest income earned on federal funds held on deposit for the year ended June 30, 2022.Included in cash receipts under the Homeowner Assistance Fund (Federal Assistance Listing No. 21.026) is $90 of interest income earned on federal funds held on deposit for the year ended June 30, 2022.
Title: Note 4 - Contract Administration
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agencys (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Developments (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.(a)Cash and Cash EquivalentsMassHousing considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.(b)Cash Receipts/RevenueRevenue is recognized when funds are received from federal government sources. Interest income is recognized when it is credited to accounts by banking institutions.(c)Cash Disbursements/ExpendituresExpenditures for the loan program are based on the total outstanding loan balances at June 30, 2022, inclusive of accrued interest (Note 3). All other expenditures are recognized when paid.(d)Indirect CostsMassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: MassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
MassHousing receives fee income in consideration for serving as HUDs contract administrator with respect to project-based Section 8 subsidy programs in the Commonwealth, including both the Traditional Contract Assistance (TCA) and the Performance-Based Contract Administration (PBCA) programs. Starting in 2011, HUD sought to achieve cost savings in the PBCA program and initiated the first of several processes for re-bidding PBCA administration in multiple states. Each such process has been withdrawn or overturned following legal challenges. On November 3, 2020, HUD elected the option to extend the contract for up to two additional and successive extension terms of six calendar months each, subject to the availability of sufficient appropriations. The Annual Contributions Contract (ACC) was extended from January 31, 2021 to January 31, 2022.On February 1, 2022, MassHousing executed a tenth amendment to the ACC as PBCA administrator to HUD. This amendment extended the term of the ACC from February 1, 2022 to January 31, 2023 with the option by HUD to further extend the contract for up to four additional and successive extension terms of six calendar months each, subject to the availability of sufficient appropriations. This amendment made certain changes to the scope of work to be performed and compensation to be received, which in MassHousings assessment will not significantly affect its operations or financial position. During the year ended June 30, 2022, MassHousing earned approximately $24.4 million and $202 thousand in fees for contract administration services under the PBCA and TCA contracts, respectively.
Title: Note 5 - Capital Magnet Fund
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agencys (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Developments (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.(a)Cash and Cash EquivalentsMassHousing considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.(b)Cash Receipts/RevenueRevenue is recognized when funds are received from federal government sources. Interest income is recognized when it is credited to accounts by banking institutions.(c)Cash Disbursements/ExpendituresExpenditures for the loan program are based on the total outstanding loan balances at June 30, 2022, inclusive of accrued interest (Note 3). All other expenditures are recognized when paid.(d)Indirect CostsMassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: MassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
Effective April 27, 2020, MassHousing was awarded $2.25 million from the U.S. Department of the Treasurys Community Development Financial Institutions (CDFI) Fund (the Capital Magnet Fund) and effective April 26, 2021, MassHousing was awarded an additional $5.80 million. The CDFI Fund offers competitively awarded grants to finance affordable housing solutions and community revitalization efforts that benefit low-income people and communities nationwide. These awards can be used to finance affordable housing activities, as well as related economic development activities and community service facilities and to pay direct administrative expenses. MassHousing will use the funds to provide gap-filler financing for rental housing and to provide down payment assistance loans to income-eligible first-time homebuyers.
Title: Note 6 - Homeowner Assistance Fund
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agencys (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Developments (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.(a)Cash and Cash EquivalentsMassHousing considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.(b)Cash Receipts/RevenueRevenue is recognized when funds are received from federal government sources. Interest income is recognized when it is credited to accounts by banking institutions.(c)Cash Disbursements/ExpendituresExpenditures for the loan program are based on the total outstanding loan balances at June 30, 2022, inclusive of accrued interest (Note 3). All other expenditures are recognized when paid.(d)Indirect CostsMassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: MassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
Effective November 17, 2021, the Commonwealth of Massachusetts (the Commonwealth) provided a subaward of $47.0 million to MassHousing, in its capacity as a Contractor, to provide administration and project management for the distribution of federal financial assistance received by the Commonwealth through the Homeowner Assistance Fund (the Federal HAF Program) authorized under Section 3206 of the American Rescue Plan Act of 2021, H.R. 1319 (the ARPA) and administered by the U.S. Department of Treasury (Treasury). The Federal HAF Program was setup to prevent mortgage delinquencies, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship after January 21, 2020. Funds from the HAF may be used for assistance with mortgage payments, homeowners insurance, utility payments, and other specified purposes. The law prioritizes funds for homeowners who have experienced the greatest hardships, leveraging local and national income indicators to maximize the impact.Effective November 17, 2021, the Commonwealth also provided a subaward of $3.0 million to MassHousing to establish and manage a statewide marketing, outreach, and public information campaign to encourage homeowners experiencing hardships due to the Covid-19 pandemic to take advantage of financial assistance under the Massachusetts HAF Program (the Statewide HAF Program).During the year ended June 30, 2022, MassHousing received $306.0 thousand for reimbursement of administrative expenses from the funds.
Title: Note 7 - Subsequent Events
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the accounts of the Massachusetts Housing Finance Agencys (MassHousing) federal award programs, except for U.S. Department of Housing and Urban Developments (HUD) Financial Adjustment Factor (FAF) program, which is subject to a separate triennial audit. The Schedule has been prepared on the modified cash basis, a basis of accounting allowable by the U.S. Office of Management and Budget and HUD, as it pertains to the federal award programs. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.(a)Cash and Cash EquivalentsMassHousing considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.(b)Cash Receipts/RevenueRevenue is recognized when funds are received from federal government sources. Interest income is recognized when it is credited to accounts by banking institutions.(c)Cash Disbursements/ExpendituresExpenditures for the loan program are based on the total outstanding loan balances at June 30, 2022, inclusive of accrued interest (Note 3). All other expenditures are recognized when paid.(d)Indirect CostsMassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: MassHousing does not charge indirect costs to the federal financial assistance programs and, as such, did not elect to use the 10-percent de minimus indirect cost rate identified in ?200.414 of the Uniform Guidance.
MassHousing has performed an evaluation of subsequent events throughNovember 14, 2022, which is the date the Schedule was available to be issued. No material subsequent events have occurred since June 30, 2022 that required recognition or disclosure in the Schedule and accompanying notes.