| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #12156 | Closed | public | Multifamily | _General Support |
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I have a client with an existing HUD mortgage on a multi-family property, December 31, 2019 year-end, for which I am preparing to perform the audit and have done so for five years. The difference this year is the client is refinancing the property with a new HUD mortgage that will close after the completion of the audit. Other than HUD requiring a copy of the audit report for 12-31-19 as part of the refinancing (which they would already have via REAC but the left hand, etc.), I am unaware of any other issues I should be considering…am I missing something? I am also curious as to how the REAC submission going forward would be handled by HUD – that is to say, will they require a new set up given it will technically be a new mortgage? I suspect so much. |
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An explanation of HUD audit requirements and corresponding electronic submission requirements can be found in the document titled “Submission and Review Requirements & REMS Critical Data Fields for Annual Financial Statements” “Refinance – Replacing an Old FHA Loan with a New FHA Loan – No Change in Ownership or Control” section VI. E. When a HUD-insured loan is replaced with a new HUD-insured loan with no changes in ownership, there is no break in financial reporting. The owner must file a full twelve-month AFS. REMS ownership information, including the “Date Owner Assumed Financial Responsibility (FASS)” (FASS date) remains unchanged. If the new loan is a new construction or substantial rehabilitation loan, then the FASS date is the day after cost certification cut-off. [Note from AHACPA: At the time of the FASSUB electronic submission, the FHA number may not be updated. This is not a cause for concern. Annual submissions are tracked in HUD’s system via Tax ID Number, not FHA number. Additionally, because the TIN is the same, there is no new setup required to access the submission.] |