NAHP Financial Management & Reporting Standards 2

Question 1

Under HUD requirements, what is the standard deadline for submitting audited financial statements for a Section 8 project?

Accepted Answer

6 months after fiscal year end

Answer

HUD generally requires audited financial statements for Section 8 projects to be submitted within 6 months (180 days) after the project's fiscal year end.

Question 2

In affordable housing accounting, what does the term 'HAP contract' refer to in the context of revenue recognition?

Accepted Answer

Housing Assistance Payments contract funding rental subsidies

Answer

A Housing Assistance Payments (HAP) contract is the agreement between HUD and a property owner through which rental subsidies are paid on behalf of eligible tenants.

Question 3

Which financial ratio is most commonly used to assess a LIHTC property's ability to service its debt?

Accepted Answer

Debt coverage ratio (DCR)

Answer

The Debt Coverage Ratio (DCR), also called Debt Service Coverage Ratio (DSCR), measures net operating income relative to annual debt service and is the primary metric lenders use for affordable housing.

Question 4

A LIHTC property must maintain its affordable units for a minimum of how many years under the extended use period?

Accepted Answer

30 years

Answer

LIHTC properties are subject to a 30-year extended use period (15-year compliance period plus a 15-year extended use period) during which affordability restrictions must be maintained.

Question 5

What financial document summarizes a property's revenues, expenses, and net income over a reporting period?

Accepted Answer

Income statement (profit & loss)

Answer

The income statement (also called the profit and loss or P&L statement) reports revenues and expenses over a specific period, showing net income or loss.

(NAHP) National Affordable Housing Professional Practice Test

(NAHP) National Affordable Housing Professional Practice Test

NAHP Financial Management & Reporting Standards 2