HUD projects that receive less than $500,000 in total federal financial assistance annually no longer have to have full financial audits performed. HUD Notice 2013-23 eliminates the audit requirement for these projects regardless of existing regulatory provisions. Owners of such projects will be able to submit owner-certified financial statements.
HUD believes this will save owners of small properties from $2,000 to $10,000 annually. The savings will be used for additional maintenance, operating costs or owner distributions.
HUD estimates that more than 2,100 projects can benefit from this new rule (534 with FHA-insured mortgages and 1,640 with Section 8 contracts). The rule applies to owners with a fiscal year ending December 31, 2013, and thereafter.