The U.S. Department of Housing and Urban Development (HUD) has issued an update to its compliance regulations that affects how residual receipts are handled for certain HUD-assisted housing programs. This change is particularly relevant for not-for-profit organizations that own or manage HUD-assisted properties.
Under the updated regulation, if the residual receipts balance exceeds $250 per unit as of the date of the last contract expiration and/or renewal, the excess funds must be remitted to HUD within 30 days. Previously, organizations may have been able to use these excess funds for operating expenses with HUD’s approval; however, this new requirement establishes a clear threshold and remittance obligation tied to the contract date.
This change will have implications for cash management, compliance monitoring, and financial reporting. Organizations should review their residual receipts balances in connection with recent or upcoming contract expirations or renewals to determine whether a remittance to HUD is required. Proper documentation and timely action will be important to demonstrate compliance with HUD requirements.
Want to learn more?
If you have any questions or are interested in learning more, our Bonadio HUD experts are here to help. Please do not hesitate to reach out to discuss how this regulatory change applies to your specific circumstances; including the programs involved, timing considerations, and any related audit or reporting impacts. We can help you interpret the guidance, assess compliance risk, and determine next steps.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
