> 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:
 | All projects owned by non-profit mortgagors |
| All Section 236 and 221 (d) (3) projects owned by limited distribution (LD) mortgagors |
| 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 |
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:
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Residual Receipts Definition per MHDC’s Regulatory Agreement |
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Frequently Asked Questions (FAQ’s) about Budgets (Updated 10/17/07) |
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