02 Dec 2024 Understanding HUD Reporting for Multi-Family Properties
Authored by H. Brent Stratton, CPA
Are you a property owner with a HUD-insured multi-family loan? Understanding the reporting requirements and deadlines set by the Department of Housing and Urban Development (HUD) is essential for compliance and maintaining your eligibility for funding. This guide outlines the key reporting obligations for multi-family properties to help you stay on track and avoid costly penalties.
Key HUD Reporting Deadlines for Multi-Family Properties
- HUD REAC Submission: The Real Estate Assessment Center (REAC) submission is due 90 days after the fiscal year end. HUD may extend these deadlines during certain periods, so it’s important to stay updated on any changes.
- Annual Financial Statement (AFS): If the AFS is not submitted by the 10th day of the month following the due date, HUD will issue a notification. Property owners then have a 30-day grace period to submit the AFS. Failure to submit within the grace period may lead to a referral to the Departmental Enforcement Center (DEC).
Important Considerations for HUD/LIHTC Services
- HUD REAC Inspections: The REAC conducts physical inspections and scores properties based on various safety, maintenance, and compliance factors.
- Annual Financial Statement (AFS) Requirements: The AFS provides HUD with crucial information about the property’s financial health and performance. Accurately and timely submissions of the AFS is vital to maintain compliance.
- Grace Periods and Compliance: HUD allows a 10-day grace period for REAC submissions and a 30-day grace period for AFS submissions beyond the original due dates. Utilize these grace periods wisely to ensure compliance and avoid penalties.
Consequences of Missing HUD Reporting Deadlines
Failing to meet HUD reporting deadlines can lead to severe consequences, such as:
- FASS Score Deductions: Late submissions can negatively impact a property’s Financial Assessment Subsystem (FASS) score, which is critical for funding and program eligibility.
- Financial Penalties: HUD may impose financial penalties on property owners who consistently fail to meet reporting deadlines.
- Program Restrictions and Funding Reductions: Continued non-compliance may result in restrictions on program participation or even a reduction in funding.
Strategies to Ensure Compliance with HUD Reporting Requirements:
To avoid these consequences and maintain good standing with HUD, property owners should:
- Develop a Robust Reporting System: Implement a reliable process to track HUD reporting deadlines and ensure all submissions are made on time.
- Allocate Sufficient Resources: Ensure your team has the necessary training, tools, and time to manage HUD reporting requirements accurately.
- Seek Professional Assistance: If you need help meeting HUD deadlines or understanding reporting requirements, consider reaching out to a professional accounting firm with expertise in HUD/LIHTC services.
At Haynie & Company, we specialize in guiding property owners through the complexities of HUD reporting. Contact us today for assistance or to submit an RFP, or to schedule a free consultation.