| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #7333 | Closed | public | Multifamily | Les Sparks |
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I have a HUD client that has a property with two phases, treated as two stand alone projects with their own insured loans that required each phase to have a separate audit for 12.31.16. The owners refinanced both loans under HUD and consolidated the phases under one entity where we will perform a stub period audit for the combined entity as well as the stub period audit on each phase up to the consolidated refinance. The refinance happened after June 30, 2017 so I am wondering if I only have to prepare the Surplus cash at 6.30 or do I need to prepare the 6.30 and the last day of the period(which is before 12.31.17) for the audit of the two phases. If a period end Surplus is required, can the owners take a distribution from the period of refinance to end of year based on the period end Surplus Calc? |
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From Les Sparks: Tthis is a little complicated, but here is what I think happened. Calculate surplus cash at June 30, 2017 for each stand alone project. There would not be another calculation of surplus cash until a combined December calculation. However, proceeds from the refinance may not be required to go through surplus cash. In most instances, proceeds as a result of a refi are considered entity funds and can be distributed without a calculation of surplus cash. The devil is in the details of the loan agreement. |