Missouri Housing Development Commission - PowerPoint PPT Presentation

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Missouri Housing Development Commission

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... list applies to all properties that have at least an MHDC mortgage. ... insurance account ... responsibility to keep this current. Help Bubbles ... – PowerPoint PPT presentation

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Title: Missouri Housing Development Commission


1
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Asset Management Compliance Accounting
  • Presented by
  • Deb Giffin Director, Asset Management
  • Scott Hanak Supervisor, Asset Management
  • August 28, 2007 315 430

3
Asset Management
  • Industry Definition
  • A systematic process of effectively monitoring
    the physical, fiscal, and regulatory operations
    of affordable housing by using sound business
    practice and economic rationale to measure
    performance.
  • Reality
  • Everything After Closing!!

4
Meet the Staff
MHDC STL 4625 Lindell, Suite 300 St. Louis, MO
63108 314-877-1350
5
Responsibilities
  • Budgets
  • Annual Financial Statements
  • Rent Increases
  • Occupancy
  • Replacement Reserves
  • Operating Reserves
  • Insurance Claims
  • Surplus Cash
  • Owners Equity
  • Management Fees
  • IRP Administration
  • RAP Administration

Note Above list applies to all properties that
have at least an MHDC mortgage. Rules for Tax
Credit Only properties may be different.
6
Upcoming Due Dates
  • Budgets due - November 15, 2007
  • Rent Increases due November 15, 2007
  • AFS due March 31, 2008
  • Monthly Occupancy due -15th of every month

7
2008 Policy Changes!
  • Rent Increase will be required to be submitted at
    budget time or by December 31st - No more
    February 1st to April 30th window
  • Rent increases for all elderly properties will be
    capped at the Social Security COLA adjustment .
    (2007 COLA 3) - Effective on all 2008 rent
    increase requests
  • www.ssa.gov/cola/automatic-cola.htm
  • R4R requests will be required to be submitted
    through on-line AMRS system Effective January
    1, 2008

8
Management Fees
  • 3 increase for 1st time increases
  • 2 increase thereafter up to 40
  • of Collected Revenue requests are converted to
    per unit for reasonableness test
  • Submit Request 30 days prior to expiration - Form
    2004-A Management Certification

9
Review Process
  • Look at DCR before and after increase
  • Most Recent Inspection Rating
  • Open 8823s
  • Current Occupancy
  • Non-Compliance Issues!!

10
Something to Think About
  • MHDC is considering adjustments to the
    management fee cap. Any suggestions?

11
Insurance Claims
  • Notify MHDC immediately (24 hrs if at all
    possible)
  • Submit Insurance Checklist
  • Need copy of Insurance Claim
  • Schedule an MHDC inspection
  • Claim check must be deposited with MHDC
  • Applies only to MHDC mortgage properties!

12
Insurance Claim Checks
  • Must name MHDC as an additional loss payee
  • Check needs to be endorsed prior to submission to
    MHDC
  • Held in a separate insurance account
  • Owner/contractor is reimbursed upon completion of
    work and MHDC inspection
  • Partial releases are allowed still subject to
    MHDC inspections

13
Accounting Treatment
  • Remaining balances are transferred to R4R
  • No Netting of Expenses
  • Consult CPA for appropriate GAAP accounting
  • Financial Statement Disclosure required!
  • May be subjected to an insurance investigation if
    procedures are not followed!

14
Non-Compliance
  • Failure to submit AFS and Budgets by due date
  • Failure to respond to AFS Budget findings
  • Failure to respond to open inspection items
  • Failure to report occupancy totals for 3
    consecutive months

15
While in Non-Compliance
  • In violation of the Regulatory Agreement!
  • Placed on a minimum 90 day review period
  • MHDC will not process
  • Replacement reserve withdrawals
  • Rent increases
  • Surplus cash disbursements
  • Operating reserve requests

16
Websites to Remember
  • www.mhdc.com
  • Asset Management Section
  • Download all forms, handbooks, and policies
  • Extensive FAQ Sections
  • amrs.mhdc.com
  • Asset Management Reporting System
  • Need User Name and Password

17
AMRS(Asset Management Reporting System)
amrs.mhdc.com
18
Modules
19
New Features
  • New look and feel to Main Menu
  • Archived Reports capability
  • Ability to review submission status
  • Extension request button still needs MHDC
    approval
  • Replacement Reserve Request Module

20
Main Menu
21
Archived Reports
22
Submission Status
23
Replacement Reserve Module
  • New look Same Process
  • Quicker turnaround times
  • Improved tracking capability
  • No more paper
  • Use the Budget/AFS password

24
Replacement Reserve Module
25
Replacement Reserve Module
26
Replacement Reserve Module
27
Replacement Reserve Module
28
Replacement Reserve Module
29
Replacement Reserve Module
30
AMRS(Asset Management Reporting System)Helpful
Tips
31
Logging In
32
Logging In
If you do not see this question Your pop-up
blocker needs to be turned off for this site only
33
Updating Contact Info
It is the propertys responsibility to keep this
current
34
Help Bubbles
Over 100 help bubbles containing definitions and
tips
35
Top 5 Budgeting Errors
  • Poor or unreasonable explanations
  • Gross potential rents are incorrect
  • Budgeting large R4R in operations
  • Non-operating items are included in operating
    budget
  • Applying an across the board increase for every
    line item

36
Unreasonable Explanations
Above examples were taken from the 2007 budget
submission period
37
Good Explanations
  • Explain the specific event(s) that changed
  • Explain the full change in amount
  • Pertain to the right year
  • Are consistent

38
Example
  • Budget Scenario Budget projects 10,000 for
    Insurance. Insurance was 3,000 in the previous
    year.
  • Explanation
  • Insurance quote shows a 4,000 increase for the
    upcoming year. Additionally, due to the recent
    floods in the surrounding area management has
    decided to purchase additional coverage which is
    estimated to be 3,000 more.

39
Gross Potential Rent
GPR should not be netted, and should be based
upon the Regulatory Agreement, Land Use
Restriction Agreement, HUD Rent Schedule or
MHDCs Schedule II.
40
Budget Menu
If the submission bar is not 100 your submission
is not complete!
41
Top 5 AFS Errors
  • Not using the required Chart of Accounts
  • Audit Report does not match Submission Entry
  • Gross Potential Rent calculation
  • Non-operating items are included in operating
    expenses Surplus cash note interest is not an
    operating expense
  • Overpaid Management Fees

42
Non-Operating Expenses
43
Calculating Management Fees
44
The AFS Header
All questions can be answered from the contents
of the financial statement when qualified staff
input information
45
Surplus Cash Distributions
  • Question is only asked if Surplus Cash Exists
  • Selecting OK will take you to the request form
  • Selecting Cancel submits your AFS, but no
    distribution request is submitted
  • Still can request a distribution a later date if
    cancel is selected

46
Surplus Cash Request
47
Top 5 Rent Increase Errors
  • Not charging current rents!
  • Didnt provide 3 comparables - for each BR size
  • Incomplete rent rolls were uploaded
  • Not Implementing rents at effective date
  • Poor Budgeting

48
3 Comparables
49
The Rent Increase Request
  • Rent Increase will be required to be submitted at
    budget time or by December 31st (No more February
    1st to April 30th window)
  • Question is asked at the end of the budget
    submission
  • Can still request an increase by December 31st if
    request is not entered at budget submission

50
Implementing Rent Increases
  • Notify tenants of a proposed rent increase at the
    time of the request
  • MHDC authorizes adding language to the lease that
    allows for a rent increase at any point during
    the year with a 30 day notice maximum of 1
    increase per year

51
Top 5 Occupancy Errors
  • Not Submitting
  • Not providing explanations if occupancy is below
    85
  • Reporting the number of occupied units instead of
    vacant units
  • Did not answer the waiting list question
  • Reporting on incorrect bedroom sizes

Failure to report occupancy timely places the
property in Non-Compliance
52
Occupancy
53
Under 85
3 consecutive months below 85 (after
stabilization) places the property on the
Commission Watch List.
54
Questions
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