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Section 3
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  Asset Management > Program Compliance Accounting

 

> Owner Distributions/Surplus Cash/Residual Receipts

 

 

The requirement for a Residual Receipts Account is established by a Regulatory Agreement or a project –based subsidy contract such as Section 8 Housing Assistance Payments.  The Residual Receipts account is a holding account for the amount of any net earnings in any one fiscal year that are not allowed to be distributed.  Residual Receipts funds may be used for a variety of acceptable purposes subject to MHDC’s approval.   Any excess of surplus cash over the unpaid earned distributions must be deposited by the project into an MHDC approved account within the time period specified by the Regulatory Agreement, but no later than 90 days after the project’s fiscal year-end.
 

The following types of properties are required to establish a residual receipt account:
 

bulletAll projects owned by non-profit mortgagors
bulletAll Section 236 and 221 (d) (3) projects owned by limited distribution (LD) mortgagors
bulletAll Section 8 New Construction/ Substantial Rehabilitation projects subject to the 1979/80 revised Section 8 regulations
bulletMHDC Fund Balance/Home properties when annual surplus cash exceeds the total amount available for distribution in any given year
 

General Rule:  If distributions of cash to the owners are limited or not permitted, the project probably must maintain a Residual Receipts Account.
 

 Management Resources:
 

bullet

Residual Receipts Procedures

bullet

Residual Receipts Definition  per  MHDC’s Regulatory Agreement

bullet

Frequently Asked Questions (FAQ’s) about Budgets (Updated 10/17/07)

 

 

 


 

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