Implementation of SAS No. 134 and Related SASs

01/06/2022: We do NOT have the updated SAS 134 Engagement Letters, AUP Engagement Letters, Communications, etc. Please refer to https://ahacpa.org/announcements/sas-134 for additional information. When those become available we will send out an email blast. 

HUD loan extension fee

ID Status Date Public/Private Industry AHACPA Contact
#15379 Closed public Multifamily Les Sparks
Customer Reply

Hi Les,

I have a property that is being charged a loan extension fee from their lender for not closing on the HUD loan at the projected date. My question is if this fee is payable from project operations or not? Trying to determine if I need to include in 2101 or as a member advance payable from surplus cash.

Thanks in advance!

Les Sparks

Ashleigh, this is certainly a gray area. Are they moving from conventional to HUD or from HUD-to-HUD? If the first one, I am not concerned as we can argue that the extension fee was charged prior to the closing and it is handled in the proceeds. If it is the latter, and they paid the fee out of project funds before closing, it could be considered entity funds. It is typical for HUD to treat all of those costs as entity costs if occurred prior to closing. This is even true of the funds are reimbursed at closing.

 

Les Sparks
AHACPA | 459 N 300 W #10 | Kaysville, UT 84037 | Phone: 801-547-0809
Support Center  | Send a Secure File | AHACPA Newsletter | Twitter

 

From: AHACPA Support <[email protected]>
Sent: Monday, April 12, 2021 8:45 AM
To: [email protected]
Subject: HUD loan extension fee [NEW]

Customer Reply

Les,

This is a 221(d)(4) loan so it’s new all together, there was no mortgage prior. They should have closed/reached final endorsement in September 2020 but at final inspection HUD discovered radon emissions and they had to remediate that which took them beyond the target permanent closing of the loan. It doesn’t feel like entity expenses, but of course I couldn’t find anything specific.

Les Sparks

IN this case, I would just make sure it ended up in the loan costs and not charged to the project.

 

Les Sparks
AHACPA | 459 N 300 W #10 | Kaysville, UT 84037 | Phone: 801-547-0809
Support Center  | Send a Secure File | AHACPA Newsletter | Twitter

 

From: AHACPA Support <[email protected]>
Sent: Monday, April 12, 2021 12:19 PM
To: [email protected]
Subject: HUD loan extension fee [Client Reply]

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