THF Vistas Holdings, LLCNon-Profit

Finding reference number: 2024-001 Assistance Listing (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA N0. 14.155 (Project identification number 115-11319, 2020) Auditor non-compliance code: Z – Other Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding Sample size population: The sample size 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: N/A Statement of condition 2024-001: For the year ended December 31, 2024, the Company did not submit the Data Collection Form (SF-SAC) to the Federal Audit Clearinghouse in the time period required by Uniform Guidance Section 2 CFR 200.512. Criteria: Pursuant to Uniform Guidance Section 2 CFR 200.512, the Company is required to submit the Data Collection Form to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report or 9 months after the end of the audit period. Effect: The Company is not in compliance with Uniform Guidance Section 2 CFR 200.512. Cause: The Company did not submit the Data Collection Form within the required time period due to oversight. Recommendation: The Company should submit the Data Collection Form to the Federal Audit Clearinghouse within the required time period. Management's response: Management concurs with the finding and agrees with the auditor's recommendation. The Data Collection Form was submitted to the Federal Audit Clearinghouse on May 10, 2024 and management will submit the Data Collection Form timely going forward.

Condition: During the year ended December 31, 2021, the Organization transferred $40,000 out of the security deposit cash account to the Organization?s operating cash account to use for expenses related to the February 2021 winter storm. Criteria: In accordance with the HUD Regulatory agreement, the Project is required to deposit any funds collected as security deposits in a separate, interest-bearing bank account and the amount in this account shall at all times equal or exceed the amount of the tenant security deposit liability account. The use of tenant security deposit cash for the Project's operations is prohibited unless the tenant has forfeited the deposit. Effect: The amount of the tenant security deposit liability account exceeded the amount in the security deposit cash account. Cause: Management did not fully implement its monitoring of disbursements to ensure no withdrawals from the security deposit cash account took place unless it was from a tenant?s forfeited security deposit. Recommendation: Management should transfer $40,000 from the Organization?s operating cash account to Organization?s security deposit cash account. Additionally, management more closely monitor all disbursements from the security deposit cash account to ensure the amount in this account at all times equals or exceeds the amount of the tenant security deposit liability account with no withdrawals for operating purposes. Client Response: Management agrees with the finding item 2021-1. We will more closely monitor all disbursements from the security deposit cash account to ensure the amount in this account at all times equals or exceeds the amount of the tenant security deposit liability account with no withdrawals for operating purposes. Transfers have been done to cover the shortfall.

Condition: During the year ended December 31, 2021, the Organization paid THF Housing Management Corporation (THFHMC), an affiliate of THFHOC, at total of $17,308 for legal, compliance and resident service fees that were not included as special additional fees in the HUD endorsed management agreement. Criteria: In accordance with the HUD Regulatory agreement, Project funds shall be withdrawn for reasonable operating expenses of the Project or for distribution of surplus cash or as a reimbursement of certain advances. Effect: The $17,308 for legal, compliance and resident service fees do not meet HUD criteria for reasonable operating expense of the Project. Cause: Management did not fully implement its monitoring of disbursements for THFHMC fees to ensure they were allowable under the current HUD endorsed management agreement prior to payment. Recommendation: THFHMC should transfer $17,308 to the Organization?s operating cash account. Management more closely monitor all fee disbursements to ensure they are allowable under the current HUD endorsed management agreement prior to paying. Client Response: Management agrees with the finding item 2021-2. We will more closely monitor all fee disbursements to ensure they are allowable under the current HUD endorsed management agreement prior to paying. THF will transfer $17,308 to the Vistas operating account.