Finding Text
Condition: The Corporation fell short on the replacement reserve and mortgage escrow monthly payments. Criteria: The Corporation is required to have 12 monthly payments funded into the replacement reserve and mortgage escrow account. For the replacement reserve account, 7 out of 12 payments were missed for a total of $20,416 and 7 out of 12 tax/insurance escrow payments were not made that totaled $36,400, for the year ended June 30, 2026. Payments are an ongoing obligation, unless waived by HUD. Cause: Poor cash flow from the Corporation does not always allow all bills to be paid in a timely manner. Effect: The Corporation is not in compliance with the provisions of the Regulatory agreement. Recommendation: In periods of high repair expenditures, prompt submission of replacement reserve reimbursement claims will help replenish operating funds. This will enhance the Corporation’s ability to meet its monthly replacement reserve and other obligations. Views of Responsible Officials and Planned Corrective Actions: Corrective action will be implemented immediately with more thorough oversight over monthly replacement reserve and escrow disbursements. The Corporation has also applied for a rent increase in July 2026 that has yet to be approved as of this report’s issuance date.