Finding Numbers: 2025-001 and 2025-002 Program: USDA Rural Rental Housing Loans – ALN 10.415 Title: Noncompliance with Loan Agreement Corrective Action Plan: The Jackson County Development Corporation (JCDC) defaulted on the USDA Rural Development loan in 2017 due to insufficient operating cash flow generated by the Walker Hill Apartments. Since that time, the Housing Authority of Jackson County (JCHA) and JCDC have actively engaged in ongoing communication with USDA Rural Development to resolve the matter. During fiscal year 2025 and continuing into 2026, JCHA has taken the following actions to resolve the default: • In January 2025, JCHA requested an appraisal from USDA Rural Development; however, Rural Development indicated that an appraisal would not be conducted until an offer was received on the property. • JCHA coordinated with a licensed broker and posted the Walker Hill development for sale on April 15, 2025, for the balance owed on the USDA note. • Due to lack of offers, the listing price was reduced to $355,000. • Two residents relocated to public housing units, and the property currently has one remaining resident. • USDA Rural Development also indicated that they would post an additional listing on their portal to assist with marketing the property. • On August 8, 2025, JCHA received a cash offer for the property and forwarded the information to USDA Rural Development for review. • USDA Rural Development ordered an appraisal on August 11, 2025; the appraisal inspection was completed October 3, 2025. • The appraisal resulted in a value of approximately $250,000. USDA Rural Development indicated that a $75,000 offer could not be accepted based on the appraised value. • The property was subsequently listed at $285,000 to solicit additional interest. • As of March 25, 2026, a potential buyer has provided proof of funds and is pursuing financing. Upon receipt of a pre-approval letter, the offer will be formally submitted to USDA Rural Development for approval. It remains the intent of JCHA and JCDC to fully resolve this matter through completion of the USDA foreclosure and disposition process. JCHA will continue to cooperate with USDA Rural Development and provide documentation, property access, and administrative support necessary to facilitate resolution. Upon final disposition of the property, JCHA anticipates dissolving the JCDC entity, thereby eliminating any remaining obligations associated with the loan. Anticipated Completion Date: Resolution is dependent upon USDA Rural Development approval of a sale or completion of foreclosure proceedings. Management anticipates resolution during fiscal year ending June 30, 2026, subject to USDA Rural Development timelines. Responsible Party: Executive Director, Housing Authority of Jackson County JCDC Board of Commissioners Respectfully Submitted,