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Frequently Asked Questions
 

Q:  New My property has multiple agency financing.  How do I know which agency (MHDC, HUD, or Rural Development) must approve my request? (10/24/07)
 

A:  The grid below explains which agency is responsible for processing the property’s residual receipt request.
 

Funding Type

MHDC

HUD

RD

MHDC Fund Balance

X

 

 

Sec 8 HAP (HUD Insured) w/ MHDC mortgage

 

X

 

MHDC Risk Share including Sec 8 HAP

X

 

 

FHA Insured

 

X

 

Rural Development loan subordinate to MHDC

X

 

 

MHDC loan subordinate to Rural Development

 

 

X

 

Q:  New How do I know if my property is required to establish a residual receipt account? (10/24/07)
 

A:  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

Q:  New How do I submit my residual receipts request? (10/24/07)
 

A:  Residual Receipt requests must be submitted in writing to the MHDC – St. Louis Office.  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.

 

Q:  New What are some acceptable purposes to utilize the funds in my Residual Receipt Account? (10/24/07)

 

A:  Acceptable purposes include:

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 for Replacement;

Making enhancements to the property or providing additional project amenities;

Making payments on approved Residual Receipts Notes; or paying unpaid earned distributions in years that have insufficient surplus cash available.

Q:  New What is a Joint Residual Receipt Account? (10/24/07)

 

A:  Prior to 2004, some properties were allowed to deposit their residual receipt earnings into a joint account held by MHDC and the property at the property’s bank of choice.  In order to access the funds, the property needed both MHDC’s approval and check signature.  Since 2004, all residual receipt accounts were required to be held by MHDC.

 

Q:  New How do I know if I am required to make a residual receipt deposit? (10/24/07)

 

A:  The easiest way to go to the Computation of Distributions to Owners and Required Deposit to Residual Receipts form and see if there is an amount on Line 13 – Deposit due to Residual Receipt account.  Normally, this occurs when the amount available for surplus cash – Line 12 exceeds the unpaid earned distribution – Line 11.  The Computation of Distributions to Owners and Required Deposit to Residual Receipts form is only required for MHDC’s mortgage/Home properties.

 

Q:  New When does my residual receipt deposit need to be made by? (10/24/07)
 

A:  Residual Receipt deposits need to be sent to the MHDC – St. Louis office no later than 90 days after the project’s fiscal year-end.
 

Q:  New What are some reasons for why my residual receipts request may be denied/delayed? (10/24/07)

 

A:  A request may be denied/delayed for but not limited to the following reasons:

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

Q:  New Can MHDC pay the vendor directly? (10/24/07)
 

A:  Yes – The property must indicate on the Residual Receipt request that MHDC is to pay the vendor directly.  The property must make sure the name, address, and phone number for the company providing the work is clearly provided.  Please do not assume this information can be found on the invoice.
 

Q: New Does MHDC require lien waivers to be submitted for funds paid directly to vendors? (10/24/07)
 

A: Yes – Lien waivers are required, but MHDC has eliminated the lien waiver form that was required to be sent back to MHDC.  Now, MHDC’s Loan Servicing Department stamps a lien waiver on the back of the vendor’s check, and the vendor must fill out the lien waiver prior to deposit.
 

Q:  New When can I expect my request to be processed? (10/24/07)
 

A:  Residual Receipt requests are to be processed within 20 days from the date MHDC receives the property’s request. This turn around time should be communicated to your vendor.  MHDC processes requests in the order they are received. Turn around times should be considered in determining how long the property holds the request before submitting it to MHDC.
 

Q:  New What does “Non-Compliance Status” mean? (10/24/07)

A: Non-Compliance Status is a term used by MHDC when a project fails to submit any information as prescribed under the Regulatory Agreement or respond to any MHDC inquiry within the allotted time frame. Lack of response to MHDC’s request is a direct violation of the Regulatory Agreement. MHDC will not process any future requests (replacement reserve withdrawal, rent increases, surplus cash, etc.) from a project until the non-compliance issue is resolved. Once the non-compliance issue is resolved, the project is put on a 90 day waiting list before their request can be processed.