HUD Issues Memo to PRAC Owners to Remit Excess Residual Receipts

On June 19, 2015, HUD issued a memorandum that impacts owners of Section 202 and 811 PRAC properties maintaining residual receipt accounts. This guidance is effective for all PRAC contracts with a renewal date or expiration date of July 19, 2015 or later.

Pursuant to statutory language from the Consolidated and Further Continuing Appropriations Act, HUD is required to recapture residual receipt balances that are in excess of $250 per unit. These monies will be reallocated to continue funding HUD Service Coordinator programs, renewal of Senior Preservation Rental Assistance Contracts (SPRACs), or new Section 811 PRA awards.

The funds must be remitted to HUD upon “termination” of the PRACs. Termination is defined as expiration of the contract term, which for most PRACs falls on the annual contract anniversary date-even if that contract will be renewed. At the appropriate time, owners must prepare and submit Form HUD-9250 “Funds Authorization” to their assigned HUD Account Executive for the release of those residual receipts exceeding $250 per unit.

Residual Receipts proceeds in excess of the allotted $250 per unit amount must be sent to the Accounting Center one of two ways:

1.  Via check, made payable to the U.S. Department of Housing and Urban Development, and sent to HUD’s lockbox at:

 

Bank of America

PO Box 277303

 Atlanta, GA 303384-7303

 The check information must include the property’s project number and “PRAC ERR Termination”

or

2.  Via Wire Transfer, using the following wire instructions:

 

Bank Name: U.S. Treasury FRB New York

Bank Address: New York, NY

ABA Routing Number: 021030004

Beneficiary: D

Account Number: 86011101

Account Holder: U.S. Department of HUD (Ft Worth, TX)

Owners should continue with the required deposits to these accounts within 90 days after Fiscal Year End.