Finding Text
2022-2 Reserve for Replacement Increase not Deposited Condition: The property continued to deposit only $2,463 per month in the reserve for replacement account when a HUD mandated increase had been made to $2,520 each month starting 10/1/22. Criteria: HUD required the property to increase its deposits to Reserve for replacement on 10/1/22 from $2,463 to $2,520. Cause: It is uncertain as to why the increased deposits were not made. Effect: The reserve for replacement account is underfunded and not in compliance with the HUD mandated amount. Recommendation: I recommend the management increase its monthly reserve for replacement deposits to the appropriate amount and increase the account by the underfunded balance.