VILLA GREENTREE, INC. DBA YELLOWWOOD TERRACE 073-11817Non-Profit

Assistance Listing (Federal award identification number and year): Mortgage insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155 (Project identification number 073-11817 and 2015) Auditor non-compliance code: H- Unauthorized distribution of project assets Finding resolution status: Cleared. Universe population size: The universal population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $65,142 Statement of condition 2024-001: During the year ended July 31, 2024, the Property transferred funds in excess of the surplus cash calculated at July 31, 2023. Criteria: Paragraph 14(d) of the Regulatory Agreement states that distributions may be made up to the calculated surplus cash amount, as defined. Effect: The Corporation is not in compliance with the HUD requirements. At July 31, 2024, the Property's operating account is underfunded by $65,142. This amount has been considered in the computation of surplus cash, distributions and residual receipts at July 31, 2024. Cause: Management inadvertently transferred $65,142 more cash to the entity cash account during the year ended July 31, 2024 than what was allowed by HUD. Recommendation: Management should reimburse the Property's operating account in the amount of $65,142. Management's response: Agree. On October 18, 2024, management reimbursed the Property's operating account.

Finding reference number: 2020-001 CFDA title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA No. 14.155 (073- 11817 and 2015) Auditor non-compliance code: N ? Reserve for replacements deposits Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: No Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $342 Statement of Condition 2020-001 (CFDA No. 14.155): The Corporation did not make all of the required reserve for replacement deposits for the year ended July 31, 2020. Criteria: Pursuant to Section 10(b) of the Regulatory Agreement, the Property is required to make monthly deposits to the reserve for replacements fund as required by HUD. Effect: The Corporation is not in compliance with the Regulatory Agreement and the reserve for replacements is underfunded by $342 at July 31, 2020. Cause: The required deposits to the reserve for replacements for the year ended July 31, 2020, were $342 less than the deposits required by HUD. Recommendation: Management should transfer $342 from the operating cash account to the reserve for replacements fund. Completion date: August 14, 2020 Management Response: Agree. On August 14, 2020, management transferred $342 from the operating account to the reserve for replacements fund.

Finding reference number: 2019-001 CFDA title and number (Federal award identification number and year): Assisted Housing Stability and Energy and Green Retrofit Investments Program, CFDA 14.318 (Project identification number 073-11817 and 2012) Auditor non-compliance code: Z - Other Finding resolution status: In process Universe population size: The universe population is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Noncompliance information: See statement of condition 2019-001 for noncompliance information. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $172,838 Statement of Condition 2019-001 (CFDA 14.318): The continuing education requirement set forth in the Retrofit Agreement was not completed for the years ended July 31, 2013 through July 31, 2018. Criteria: The Retrofit Agreement requires four hours of continuing education on an annual basis for on-site staff on topics outlined in the Retrofit Agreement. Effect: The Corporation is not in compliance with the terms of the Retrofit Agreement. The Owner was not entitled to receive the incentive performance fee as outlined in the Retrofit Agreement for the years ended July 31, 2013 through July 31, 2018. Cause: The Owner was unaware of the annual continuing education requirements. Recommendation: On-site staff should completed training to satisfy the continuing education requirements outlined in the Retrofit Agreement. Management should ensure that this is completed on an annual basis. Management should work with HUD to determine a resolution to complete the continuing education requirements for the years ended July 31, 2013 through July 31, 2018 and to determine whether the incentive performance fee needs to be repaid by the Owner. Management's Response: Agree. On-site staff will complete training to satisfy the continuing education requirements outlined in the Retrofit Agreement. Management will ensure that this is completed on an annual basis. The continuing education requirement was completed for the year ended July 31, 2019. Management is currently working with HUD to determine a reasonable and practical solution to satisfy the education requirements for the years ended July 31, 2013 through July 31, 2018 and whether the incentive performance fee needs to be repaid by the Owner. A final determination has yet to be received from HUD.

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