INSIDER's Pop Quiz!

Q: HUD won’t approve withdrawals from the residual receipts account for making mortgage payments when a mortgage default has occurred or is about to occur. True or false?

A: False. The Handbook lists two permissible uses for residual receipts that apply to all sites. HUD should approve withdrawals from the residual receipts account for:

• Reducing operating expense deficits when cash shortfalls occur; and
• Making mortgage payments when a mortgage default has occurred or is about to occur.

The Handbook also lists several other uses for residual receipts that apply only to sites whose contract with HUD was signed before 1979.

For more on this topic, see “How to Request Releases from Site's Residual Receipts Account,” available to subscribers here.