Management Resources

Budgets

MHDC requires projects over 12 units (excluding projects mostly covered by a HAP contract) to submit an annual budget to MHDC by November 15. MHDC believes budgeting is a critical part of the development’s financial success. Good budgeting requires a realistic, itemized operating income and expense projection. An inaccurate projection of operating income and expenses is a significant cause in the financial underperformance of some multifamily rental properties. MHDC will assess the reasonableness of all operating costs in evaluating the financial feasibility of various affordable housing properties.

Insurance

MHDC’s Asset Management Department is responsible for monitoring insurance requirements for participating HOME and/or MHDC Fund Balance Properties. From time to time properties may experience loss due to fire, flood, wind damage, etc. Listed below are procedures to follow when and insurance claim/loss occurs. Use the insurance checklist and notify MHDC within 24 hours of the incident.

Occupancy Submission

MHDC requires monthly occupancy reporting to help MHDC staff better understand development and market areas that are having occupancy difficulty. All properties involved in the MHDC Fund Balance, Low Income Housing Tax Credit, and HOME programs with 13 or more units must submit monthly occupancy statistics through MHDC’s Asset Management Reporting System (AMRS) by the 10th of each month.

Operating Reserves

In accordance with MHDC’s Operating Reserve Agreement, MHDC must approve all releases from the property’s Operating Reserve account which is maintained by MHDC.  Operating Reserve Agreements are required by MHDC to assist the property in meeting their operating expenses over the life of the loan. 

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.

Rent Increases

Rent increases must be approved by MHDC for all properties involved in the MHDC Fund Balance, Low Income Housing Tax Credit, Missouri Affordable Housing Assistance Program (AHAP), HOME, and National Housing Trust Fund (NHTF) programs and submitted online through the Asset Management Reporting System (AMRS). The rent increase submission window is October 1 – December 31. Properties requesting a January 1 effective date must submit the request by November 15. For properties requesting a February 1 effective date, requests must be submitted by December 15. Requests submitted outside of this window will not be processed.

All family designated properties submitting a rent increase have the option to request either and automatic 2% rent increase subject to compliance testing or a budget based rent increase which would allow for a rent increase up to a maximum of 7%. For developments electing Average-Income Set-Aside, the income and rent levels will be assigned from the beginning based on the market study submitted at the time of application. MHDC will input the income levels into AMRS so developments can track the range for every potential income and rent level.

Owners that wish to appeal a decision made my MHDC on a rent increase request must email their appeal to asset.mgmt@mhdc.com within 30 days from the date of the initial decision letter. Appeals will be processed within 30 days of the receipt of all necessary documentation.

Reserves for Replacements

MHDC maintains the reserve for replacement for projects funded by MHDC or HOME programs. MHDC also processes some reserve for replacement requests for some Section 8 projects that are a part of the MHDC/HUD risk share program. The Reserve Fund for Replacements was established to help ensure that the physical life of the buildings and structures would extend through the economic life of the project. It was not the original purpose of this Reserve Fund to provide for a complete, dollar for dollar, capability of replacing all the building structural components and equipment as these wear out, but rather to provide a readily available source of capital that will help defray these costs in the latter years of amortization of the mortgage note. All reserve for replacement requests must be submitted in the Asset Management Reporting System (AMRS). MHDC will not accept the Reserve for Replacement Mortgagor’s Certification in lieu of bids and invoices.

Utility Allowances

MHDC is responsible for collecting utility allowance information for projects involved in the MHDC Fund Balance, Low Income Housing Tax Credit, and HOME programs. 

Management Fees

The maximum management fee approved by MHDC for the 2022 fiscal year is $42 per occupied unit per month.