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

Develop and implement controls to ensure that financial statements are submitted to HUD in a timely manner, including paying the correct amount of annual payments according to the terms of the mortgage.

Repay the project $8,597 from nonproject funds for the ineligible expenses it incurred for management fee and gas utility expenses that were identified by the audit and any additional management fee and gas utility expenses improperly paid outside of our review period.

Remove the $25,000 lien on the project property.

Provide documentation to show that the $39,920 paid to replace an air conditioning system was fair and reasonable or repay the project from nonproject funds any amount determined not to be fair and reasonable (excluding any amount repaid as a result of recommendation 1C).

Request approval from HUD for the $31,769 in project operating funds spent on building improvements or repay the project from nonproject funds for any amount not approved.

Request approval from HUD to lease the commercial space. If HUD approves the request, then execute a lease at fair market rent thereby increasing the project’s rent revenue by at least $36,858 per year.

Pay the project $282,578 from non-project funds for the fair value of the commercial rent not collected from the lessees.

Require any participating lender to reimburse borrowers that received an FHA loan with borrower-financed downpayment assistance for any fees that were determined to be unreasonable and unnecessary.

Review fees identified in this report that were charged as part of borrower-financed downpayment assistance programs and determine whether they are reasonable or necessary. HUD should immediately notify lenders to discontinue charging any fees that are determined to be unreasonable and unnecessary.