Residual Receipts Procedures
1. The following types of properties are required to establish a residual
• All projects owned by non-profit mortgagors
• All Section 236 and 221 (d) (3) projects owned by limited distribution
• All Section 8 New Construction/ Substantial Rehabilitation projects
subject to the 1979/80 revised Section 8 regulations
• MHDC Fund Balance/Home properties when annual surplus cash exceeds the
total amount available for distribution in any given year
2. Deposits are required when the amount of any net earnings in any one
fiscal year that are not allowed to be distributed. This usually occurs when
a project is owned by non-profit mortgagors, or a project’s surplus cash
exceeds the unpaid earned distributions for the project.
3. Any excess of surplus cash that exceeds the unpaid earned distribution
amount must be deposited by the project into an MHDC approved account no
later than 90 days after the project’s fiscal year-end.
4. Residual Receipt requests must be submitted in writing to the MHDC – St.
5. Requests may be submitted at any time through out the fiscal year. All
requests must state an amount and a reason on the request. Copies of
invoices, cancelled checks, and pictures are required when residual receipts
are use to cover expenses.
6. MHDC will first determine if there is any available surplus cash to cover
the requested amount before residual receipts are used.
7. MHDC reviews the reason to the residual receipt requests. Acceptable
• Reduction of operating deficits when cash flow deficits exist;
• Making mortgage payments when default is actual or imminent;
• Making repairs to the property for items not covered by the Reserve
• Making enhancements to the property or providing additional project
• Making payments on approved Residual Receipts Notes; or paying unpaid
earned distributions in years that have insufficient surplus cash
8. MHDC confirms there are no outstanding compliance items including:
• Delinquent debt service payments
• Delinquent escrow deposits
• Below a 24 month minimum of reserve for replacement balance
• Residual Receipt deposits have not been made timely
• Unsubmitted budget and/or financial statement
• Open Budget and/or Financial Statement questions
• Failure to submit monthly occupancy
• There is an open inspection
9. MHDC will send the project an approval or denial letter for the
release. If a release is approved, a memo is sent to the MHDC - Kansas City
office to release payment.
Note: If the property is set up as a Joint Residual Receipts Account
this means the property was allowed to deposit their residual receipt
earnings into a joint account held by MHDC and the property at the
property’s bank of choice. However, all releases from the residual receipts
account still requires MHDC’s approval and check signature. The MHDC St.
Louis office notifies MHDC’s Loan Servicing Department of the approved
request, and then MHDC’s Loan Servicing Department follows up with the
property to make arrangements for MHDC to sign the residual receipt check.