Small Projects Can Submit Owner-Certified Financials to FASSUB

On August 8, 2013, HUD issued Notice H 2013-23, changing the annual financial statement (AFS) submission requirements for some small multifamily housing projects.

A “small multifamily housing project” is one where the owner must submit audited financial statements, but gets less than $500,000 in combined federal financial assistance.  That means that the total of all  grants, loans, loan guarantees, property – including donated surplus property – cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance received or administered is under $500,000.

If your property falls into this category, your owner will be allowed to submit an Owner-Certified financial statement. The Notice applies to Owners having a fiscal year end of December 31, 2013, and after.

Owners of these small projects will continue to submit financial statements to HUD electronically via FASSUB, in accordance with Generally Accepted Accounting Principles (GAAP), including a full set of notes to financial statements.  But these owner-certified submissions will not contain an auditor’s opinion or report.  During submission, owners will certify that they receive less than $500,000 in combined federal financial assistance, and the system will verify this with a crosscheck of HUD’s databases.

This change is expected to apply to about 2,174 financial submissions and to save owners of these small projects $2,000 – $10,000 per year in annual financial reporting costs. This will free up dollars that can be used for maintenance, operating costs or owner distributions, and encourage owners to renew their contracts, rather than opting out and reducing the number of affordable housing units.

If you have questions about these new submission requirements, contact the Office of Asset Management, Business Relationships and Special Initiatives Division at (202) 402-2629.  The full Notice can be found on HUD Clips.