cost cert of additions to existing 221d4 loan project

ID Status Date Public/Private Industry AHACPA Contact
#14493 Closed public Multifamily Kathy Christensen
Customer Reply

we have a client who we audit since they opened in 2015 at which time we performed a cost cert., then audits submitted to REAC annually. now, the client obtained a “Under HUD’s section 241(a), the Company obtained a supplemental mortgage loan for $10,000,000 to expand its current project by 49 units”. we have 2 questions regarding the cost cert and the regular audit:
1. the final trip was on 12/28/2020 and the final trip report was signed on 1/4/2021. the client emailed HUD and got the following: “For final completion the MAP Guide cites the date the inspector signs the final inspection report but we have always used the date of the actual site visit”. should we request a written form approval to have the cut-off approved to be 12/28/2020 instead of 1/4/2021 or just let it be 12/28/2020?
2. how would the cost cert affect 2020 annual FS for the existing 221d4 loan audit? do we place the building in service as of 12/28/2020, the date it was approved by HUD to be occupied, and take the depreciation? any unpaid invoices as of 12/31/2020 included in the cost cert as soft costs incurred in 2021 would be payables as of 12/31/2020 and the cost cert of the additions number would be the total additions/placed in service as of 12/28/2020 and included in the AFS. Or do we exclude the expenses incurred after cut-off date for the AFS but included in the cost cert? or do we have a base for including these expenses as they are allowable to be included in the cost of the building? does the cost cert affect the AFS (other than a note on cost cert)?

Customer Reply

it’s worth noting that a new loan was obtained by a new LLC created and a new HUD project # was assigned. will this be a new section requiring an audit each year (mortgage is over $.5Mil)?

Les Sparks

Katy, this is going to be a little more of a conversation with HUD. DO you have the TIN and Project ID’s of the original and the new loan?  That will help us determine. Kind of unusual.

 

Les Sparks

AHACPA

(801) 547-0809

 

From: AHACPA Support <support@ahacpa.org>
Sent: Monday, January 18, 2021 5:03 PM
To: les@ahacpa.org
Subject: cost cert of additions to existing 221d4 loan project

Customer Reply

hello! thank you for your reply.

the existing project ID is 052-35715 and the new one is 052-10015
thank you!

Kathy Christensen

I recently had to restore our website from a backup and I lost some support questions and answers.  If you have additional questions related to your question please email Les Sparks directly (les@ahacpa.org).  I am sorry for the inconvenience! ~ Kathy Christensen

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