Residual Receipts Recapture

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ID Status Date Public/Private Industry AHACPA Contact
#7373 Closed public Multifamily Les Sparks
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We are auditing a Section 811 properties with a PRAC. Management has no knowledge of the residual receipts recapture and in the prior years no funds were recaptured. The RR account has about “excess” funds(~$100,000). HUD has not requested that these funds be used to offset HAP payments.

Do all Section 811 properties have to adhere to the recapture of residual receipts funds rule?

Kathy Christensen

From Les Sparks:
All Section 202 and 811 projects with PRACs are subject to residual receipts recapture. However, HUD has been in dither about how to go about this. Many offices are now opting to go towards a reduction in PRAC payments as opposed to direct payment. Further, this is not being applied consistently around the country. The best advice I can give is to reserve against the the future recapture by some method that takes this asset off the books. At the very least a contingency note about the recapture is in order.

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