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Other Matters: The Massachusetts Housing Finance Agency Should Strengthen the Documentation of the Asset Management Review Process.

MassHousing's “Asset Management Review Policy” should clearly define the processes associated with conducting AMRs and MORs for the different types of properties in its rental property portfolio.

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Overview

During our review, we noted that the Massachusetts Housing Finance Agency’s (MassHousing’s) “Asset Management Review Policy” did not provide details regarding process variations for the different types of project in MassHousing’s rental property portfolio, such as projects subsidized by the United States Department of Housing and Urban Development (HUD).

Our testing indicated that although MassHousing is supposed to conduct asset management reviews (AMRs) annually, it did not do so for all financed multifamily rental housing projects. Instead, it uses a risk-based approach to prioritize and determine which projects receive an AMR annually, and it reviews group housing projects every three to five years.

Additionally, although MassHousing performs management and occupancy reviews (MORs), instead of AMRs, for HUD-subsidized projects, its “Asset Management Review Policy” does not explain when an MOR should be completed instead of an AMR. The policy states,

The Asset Management Review (AMR) is the primary means of monitoring property operations to determine whether management is providing decent, safe and sanitary housing, carrying out the objectives, policies and procedures of applicable federal, state and MassHousing requirements and regulations; and maintaining the financial viability of the asset. In assessing the property, the asset manager will analyze the financial and operating performance, determine compliance with established affordability restrictions, and evaluate the overall physical condition.

To ensure that employees have the required information to successfully monitor the operations of the management companies that operate MassHousing-financed properties, MassHousing’s “Asset Management Review Policy” should clearly define the processes associated with conducting AMRs and MORs for the different types of properties in its rental property portfolio.

Date published: December 20, 2021
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