NAHP Financial Management & Reporting Standards 5

Question 1

What is the purpose of an 'escrow analysis' in affordable housing financial management?

Accepted Answer

To review escrow accounts for taxes and insurance to ensure adequate funding

Answer

An escrow analysis reviews the funds held in escrow for property taxes and insurance to ensure the account balance will be sufficient to pay these expenses when due.

Question 2

Under HUD's Uniform Financial Reporting Standards (UFRS), what chart of accounts format must HUD-assisted multifamily properties use?

Accepted Answer

HUD's prescribed Standard Chart of Accounts for Multifamily Housing Programs

Answer

HUD's Uniform Financial Reporting Standards require HUD-assisted properties to use HUD's prescribed Standard Chart of Accounts to ensure consistency and comparability across the portfolio.

Question 3

Which document outlines the specific financial reporting requirements, fee structures, and reserve obligations for an affordable housing project financed with tax-exempt bonds?

Accepted Answer

The Loan Agreement and Indenture

Answer

The Loan Agreement and related Trust Indenture for tax-exempt bond financing detail specific financial covenants, reporting requirements, reserve funding obligations, and fee structures the borrower must maintain.

Question 4

In the context of affordable housing, what does 'net operating income' (NOI) exclude?

Accepted Answer

Debt service (mortgage principal and interest)

Answer

Net Operating Income (NOI) is calculated before debt service; it equals effective gross income minus total operating expenses, but does not include mortgage payments.

Question 5

A housing authority's Section 8 Housing Choice Voucher program is financially reported under which accounting basis?

Accepted Answer

Modified accrual basis under GASB standards for governmental entities

Answer

Public housing authorities are governmental entities subject to GASB standards, which generally use the modified accrual basis for governmental funds and full accrual for enterprise funds.

(NAHP) National Affordable Housing Professional Practice Test

(NAHP) National Affordable Housing Professional Practice Test

NAHP Financial Management & Reporting Standards 5