At times situations arise where an owner is responsible for submitting financial statements for a reporting period of less than 12 months. Auditors refer to these partial year submissions as "stub" period financial statements. HUD may approve the deferment of a stub period financial statement to minimize the cost of preparing and submitting annual financial statements as part of a Transfer of Physical Assets (TPA), the assignment and assumption of a Housing Assistance Payment Contract (HAP), and/or when an owner refinances a mortgage with HUD insurance.
REAC has the authority to approve or deny requests to defer partial year submissions of the annual financial statements for a period of time less than or equal to 120 days.
All deferment requests must be submitted electronically by logging into the Financial Assessment Subsystem (FASSUB) through REAC. Select "waiver" from the main FASSUB menu. Once a request is submitted it will be approved or disapproved within 10 working days. You must log back into the FASSUB system to obtain HUD's decision on your request. To check the status click on "Administrative Request Status Box".
EXAMPLE 1 - Purchaser Request:
Reporting Periods involved: 10/13/2022 - 12/31/2022 and 01/01/2023 - 12/31/2023.
ABC Apartments is purchased on October 13th, 2022, with a Fiscal Year End of December 31st. The new owner (purchaser) can request a deferral (waiver) of the 12/31/2022 stub period by logging into the FASSUB system and clicking on "Waiver". Enter 12/31/2022 as the "Entity Fiscal Year End" date. After the request has been approved the new reporting period will be 10/13/2022 - 12/31/2023.
Sample Request: "We are requesting a waiver of the 10/13/2022 - 12/31/2022 reporting period. This stub period will be included with the 12/31/2023 year end financial statement and electronic submission."
EXAMPLE 2 - Seller Request:
Reporting Periods involved: 01/01/2022 - 12/31/2022 and 01/01/2023 - 01/23/2023
XYZ Apartments is purchased on January 23rd, 2023, with a Fiscal Year End of December 31st. The previous owner (seller) can request a deferral in order to report for the 01/01/2022 - 01/22/2023 period. Similar to Example 1, this is done by logging into the FASSUB system and clicking on "Waiver". Enter 12/31/2022 as the "Entity Fiscal Year End" date, requesting the 01/01/2022 - 12/31/2022 to be deferred to the next reporting period. After the request has been approved the new reporting period will be 01/01/2022 - 01/23/2023. When entering the submission for this period 12/31/2023 is entered as the fiscal year end.
Sample Request: "We are requesting a waiver of the 01/01/2022 - 12/31/2022 reporting period. This period will be included with the 12/31/2023 financial statement and electronic submission which will cover the period of 01/01/2022 - 01/22/2023."
References:
https://portal.hud.gov/hudportal/documents/huddoc?id=11-27hsgn.pdf
https://portal.hud.gov/hudportal/documents/huddoc?id=12-17hsgn.pdf