Develop and implement policies and procedures to identify prohibited restrictions on conveyance to ensure that it does not originate FHA loans with prohibited restrictive covenants.

Provide training to its employees regarding HUD’s requirements related to prohibited restrictions on conveyance.

Provide documentation to show that payroll costs totaling $2,019,496 and any payroll costs incurred outside our audit period, including fiscal year 2017, were reasonable and necessary expenses for the operation of the project or repay the project from nonproject funds for any amount that it cannot support.

Provide documentation to show that other direct costs totaling $56,021 and any direct costs incurred outside our audit period, including fiscal year 2017, were reasonable and necessary expenses for the operation of the project or repay the project from nonproject funds for any amount that it cannot support.

Develop and implement controls to ensure that the project complies with the regulatory agreement and applicable HUD requirements.

Pursue civil money penalties and administrative sanctions, as appropriate, against the owner and its parent company and their principals for their part in the violations cited in this report.

Provide training and technical assistance to the owner and its management agent to ensure compliance with the terms of its regulatory agreement and applicable HUD requirements.

Submit a project owner’s or management agent’s certification for identity-of-interest agents, a management entity profile, a management plan, and other required documentation for review and approval.

Request retroactive approval of the fees paid to the identity-of-interest entity totaling $402,975 and any fees incurred outside our audit period, including fiscal year 2017, when submitting the project owner’s or management agent’s certification for identity-of-interest agents in response to recommendation 2A. If the request is not approved retroactively, the owner should repay the project from nonproject funds for the amount that was not approved.

Evaluate the owner’s capability to effectively manage the project and consider whether independent professional management services are needed.

Determine legal sufficiency and if legally sufficient, pursue civil and administrative remedies, civil money penalties, or both against SecurityNational, its principals, or both for incorrectly certifying to the eligibility for FHA mortgage insurance or that due diligence was exercised during the origination of FHA loans.

Work with HUD to nullify the restrictions on conveyance that violate HUD policy or indemnify HUD. This action will protect HUD against future losses of $381,823 for the seven loans.

Repay HUD $26,472 for partial claims paid on one FHA loan that contained prohibited restrictive covenants.

Develop and implement policies and procedures to identify prohibited restrictions on conveyance to ensure that it does not originate FHA loans with prohibited restrictive covenants.

Provide training to its employees regarding HUD’s requirements related to prohibited restrictions on conveyance.

Develop and implement controls over owner contributions and owner distributions to ensure compliance with its regulatory agreement and HUD regulations.

Complete HUD-approved training regarding owner contributions and distributions.

Repay its project’s operating account for the ineligible $15,000 disbursement from non-project funds.

Perform an analysis of all security deposits and ensure that the security deposit account is fully funded.

Implement controls to ensure existing procedures are followed to maintain the project’s security deposit funds separately from all other accounts by depositing and disbursing all security deposit funds directly into and from the security deposit account.