Finding 34754 (2022-001)

2022-001 Delinquent Debt Payments Noncompliance Information: Underpayment of the Flex Subsidy Loan. Condition: The Organization has a HUD insured loan to which it is not making payments. The Organization owes $101,164 in delinquent payments and $27,331 in accrued interest for the current year. In total, the Organization owes $128,495 on its loan to HUD. Criteria: The Organization is required to make monthly payments on its loan from HUD. Effect: The Property is out of compliance with HUD rules and regulations for the Flex Sub Loan. Recommendations: We recommend that the Project negotiate with HUD to decrease the monthly payments and bring the loan current and implement procedures to ensure that future amounts due on the contingent mortgage are paid in a timely manner. Auditee Response: On June 1, 2020, the Organization reached out to HUD with a plan to resolve the delinquent payments. Suggestions were to either forgive the loan or to have the payments be made from surplus cash. The Organization has not received correspondence concerning these suggestions as of the date on this report.