90173B-CA Part II of the Project Rental Assistance Contract

Part II of the Project
Rental Assistance Contract
Section 202 Supportive Housing for the Elderly
Section 811 Housing for Persons with Disabilities
See bottom of this form for Public Burden statement.
Type of Project

U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner

PRAC Contract No.

HUD Project No.

New Construction
Substantial Rehabilitation
Acquisition
2.1 Owner's Warranties, Amendments.

maintained, in an amount determined by HUD, out of the
amounts by which the Maximum Annual Contract Commitment
under section 1.1(c) exceeds the amount actually paid out under
the Contract each fiscal year. Payments will be made from the
account for project rental assistance payments when needed to
cover increases in Operating Expense Amounts or decreases in
tenant payments and for other costs specifically approved by the
Secretary.

(a) Legal Capacity. The Owner warrants that it has the legal right to
execute this Contract and to lease dwelling units covered by this
Contract.
(b) Completion of Work. The Owner warrants that the project as
described in section 1. 1 is in good and tenantable condition and
that the project has been completed in accordance with the terms
and conditions of the Capital Advance Agreement (Agreement)
or will be completed in accordance with the Special Conditions
for Acceptance (see attached exhibit, where applicable). The
Owner further warrants that it will remedy any defects or
omissions covered by this warranty if called to its attention
within 12 months of the effective date of this Contract. The
Owner agrees that the continuation of this Contract shall be
subject to the Owner meeting any Special Conditions for
Acceptance.

(2) Whenever a HUD-approved estimate of the required
annual payments for a fiscal year exceeds the maximum annual
commitment for that fiscal year plus the current balance in the
project account, HUD will, within a reasonable period of time,
take such additional steps as may be necessary to assure that
payments under the Contract will be adequate to cover increases
in Operating Expenses and decreases in tenant payments.
(3) Any amount remaining in the account after payment of
the last project rental assistance payment with respect to the
project shall be applied by HUD in accordance with law.

2.2 Families To Be Housed.
(a) Families To Be Housed. If a Section 811 project, the Contract
Units are to be leased by the Owner to eligible Disabled Persons
(Families) for occupancy by such Families solely as private
dwellings and as their principal place of residence. If a Section
202 project, the Contract Units are to be leased to eligible
elderly Persons or Households (Families) solely.

2.4 Project Rental Assistance Payments To Owners.
(a) Project Rental Assistance Payments on Behalf of Families.
(1) Project assistance payments shall be paid to the Owner
for units (or residential space in a group home under Section
811) under lease for occupancy by Families in accordance with
the Contract. The project rental assistance payment will cover
the difference between the Operating Expenses and tenant
payments as determined in accordance with the HUDestablished schedules and criteria.

(1) HUD hereby agrees to make project rental assistance
payments on behalf of Families for the Contract Units, to enable
the Families to lease Decent, Safe, and Sanitary housing
pursuant to Section 202 or Section 811.
(2) If there is a Utility Allowance and if the Allowance
exceeds the tenant payment, the Owner shall pay the Family the
amount of the excess. HUD will pay funds to the Owner in trust
solely for the purpose of making this payment.

(2) The amount of project rental assistance payment payable
on behalf of a Family and the amount of tenant payment shall be
subject to change by reason of changes in Family Income,
Family composition, extent of exceptional medical or other
unusual expenses or program rules in accordance with the HUDestablished schedules and criteria; or by reason of a change in
any applicable Utility Allowance approved or required by HUD.
Any such change shall be effective as of the date stated in a
notification of the change to the Family, which need not be at
the end of the Lease term.

2.3 Maximum Project Rental Assistance Commitment:
Project Account.

(a) Maximum Annual Contract Commitment. Notwithstanding any
other provisions of this Contract (other than paragraph (b)(2) of
this section) or any provisions of any other contract between
HUD and the Owner, HUD shall not be obligated to make and
shall not make any project rental assistance payments under this
Contract in excess of the amount identified in section 1. 1 (c).
However, this amount may be reduced commensurately with
any reduction in the number of Contract Units or in the
Operating Expense Amount or pursuant to any other provisions
of this Contract.
(b) Project Account.

OMB Approval No. 2502-xxxx
(exp. mm/dd/yyyy)

(b) Vacancies During Rent-up. If a Contract Unit (or residential
space in a group home under Section 811), is not leased as of the
effective date of the Contract, the Owner is entitled to assistance
payments in the amount of 50 percent of the Operating Expense
for the unit (or pro rata share of the Operating Expense for a
group home) for a vacancy period not exceeding 60 days from
the effective date of the Contract, provided that the Owner: (1)
commenced marketing and otherwise compiled with section
2.2(d) of the Agreement;

(1) A project account will be established and maintained by
HUD, as a specifically identified and segregated account for the
project. The account will be established and
Page 1 of 7

form HUD-90173-B-CA (11/22/2006)
ref Handbooks 4571.4 and 4571.5

(2) has taken and continues to take all feasible actions to fill the
vacancy, including, but not limited to, contacting applicants on
its waiting list, if any, requesting appropriate sources to refer
eligible applicants, and advertising the availability of the unit in
a manner specifically designed to reach eligible families; and (3)
has not rejected any eligible applicant except for good cause
acceptable to HUD.

The financial obligation of HUD is limited to making project
rental assistance payments on behalf of Families in accordance
with this Contract.
(f) Owner's Monthly Requests for Payments.
(1) The Owner shall submit monthly requests to HUD for
project rental assistance payments. Each request shall set forth;
(i) the name of each Family and the address and/ or number of
the unit (or residential space in a group home) leased by the
Family; (ii) the address and/or the number of each unit, if any,
not leased to Families for which the Owner is claiming
payments; (iii) the Operating Expense Amount as set forth in
Exhibit I for each unit for which the Owner is claiming
payments; (iv) the amount of tenant payment by the Family
leasing the unit (or, where applicable, the amount to be paid the
Family in accordance with section 2.2(a)(2); and (v) the total
amount of project rental assistance payments requested by the
Owner. (The total amount of project rental assistance payments
requested equal total HUD-approved operating expenses for the
project minus the tenant payments received from all units (see
(iv) above).)

(c) Vacancies After Rent-up. If an eligible family vacates an
assisted unit (or residential space in a group home) the Owner is
entitled to vacancy payments in the amount of 50 percent of the
Operating Expense (or pro rata share of the Operating Expense
in a group home) for the first 60 days of vacancy if the Owner:
(1) Certifies that it did not cause the vacancy by violating the
lease, the Contract, or any applicable law;
(2) Notified HUD of the vacancy or prospective vacancy and
the reasons for the vacancy immediately upon learning of the
vacancy or prospective vacancy;
(3) Has fulfilled and continues to:
(i) market the vacant units or spaces in accordance with the
HUD-approved Affirmative Fair Housing Marketing Plan
(AFHMP) and all fair housing and equal opportunity
requirements. The purpose of the plan and requirements is to
achieve a condition in which eligible families of similar income
levels in the same housing market have a like range of housing
choices available to them regardless of their race, color, creed,
religion, handicap, age, familial status, sex or national origin.

(2) Each of the Owner's monthly requests shall contain a
certification by it that to the best of its knowledge and belief (i)
the dwelling units are in Decent, Safe, and Sanitary condition,
(ii) all the other facts and data on which the request for funds is
based are true and correct, (iii) the amount requested has been
calculated in accordance with the provisions of the Contract and
is payable under the Contract, (iv) none of the amount claimed
has been previously claimed or paid under this Contract, and (v)
the Owner has not received and will not receive payments or
other consideration from the Family, HUD or any other public
or private source for the unit beyond that authorized in this
Contract and the lease.

(ii) Submits to HUD a list of leased and unleased assisted units
(or in the case of a group home, leased and unleased residential
spaces) with a justification for the unleased units or residential
spaces, in order to qualify for vacancy payments for the
unleased units or residential spaces.

(3) If the Owner has received an excessive payment, HUD,
in addition to any other rights to recovery, will deduct the
amount from any subsequent payment or payments.

(iii) Has taken and continues to take all feasible actions to fill
the vacancy; and
(iv) Has not rejected any eligible applicant except for good
cause acceptable to HUD.

(4) The Owner's monthly requests for project rental
assistance payments are subject to penalty under 18 U.S.C.
1001, which provides, among other things, that whoever
knowingly and willfully makes or uses a document or writing
containing any false, fictitious, or fraudulent statement or entry,
in any matter within the jurisdiction of any department or
agency of the United Stated shall be fined not more than
$10,000 or imprisoned for not more than five years, or both.

(4) For any vacancy resulting from an Owner's eviction of an
eligible family, certifies that it has complied with the provisions
at 24 CFR Part 247 which apply to all decisions by an Owner to
terminate the tenancy or modify the lease of a family residing in
a unit (or residential space in a group home).
(d) Prohibition of Double Compensation for Vacancies. The owner
is not entitled to payments for vacant units to the extent it
collects for the vacancy from other sources (tenant payment,
security deposits, reimbursements from HUD for unpaid
operating expense amount, other amounts collected from the
Family, and government payments under other programs). If the
Owner collects any of the Family's share of the tenant payment
for a vacancy period in an amount which, when added to the
vacancy payment, results in more than the Operating Expense
Amount, the excess must be reimbursed as HUD directs.

(e) HUD Not Obligated for Tenant Payments. HUD has not
assumed any obligation for the amount of tenant payment or the
satisfaction of any claim by the Owner against any Family other
than in accordance with section 2.3(b) of this Contract.

2.5 Maintenance, Operation And Inspection.
(a) Maintenance and Operation. The Owner agrees to maintain and
operate the Contract Units and related facilities to provide
decent, safe, and sanitary housing including the provision of all
the services, maintenance and utilities set forth in section 1.1(e).
If a Section 811 project, the Owner also agrees to comply with
the lead-based paint regulations at 24 CFR Part 3 5 and 24 CFR
Part 891. If HUD determines that the Owner is not meeting one
or more of these obligations, HUD shall have the right to take
action under section 2.24(a).
(b) Inspection. Prior to occupancy of any Contract Unit by a Family,
the Owner and the Family shall inspect the unit and

Page 2 of 7

form HUD-90173-B-CA (11/22/2006)
ref Handbooks 4571.4 and 4571.5

both shall certify, on forms prescribed or approved by HUD, that
they have inspected the unit and have determined it to be decent,
safe, and sanitary in accordance with the criteria provided in the
forms. The Owner shall keep copies of these reports on file for
at least three years.

(c) Replacement Reserve.
(1) The Owner shall establish and maintain a replacement
reserve in an interest-bearing account to aid in funding
extraordinary maintenance and repair and replacement of capital
items in accordance with applicable regulations.

(c) Units Not Decent, Safe and Sanitary. If HUD notifies the Owner
that it has failed to maintain a dwelling unit in decent, safe, and
sanitary condition and the Owner fails to take corrective action
within the time prescribed in the notice, HUD may exercise any
of it rights or remedies under the Contract, including reduction
or suspension of project rental assistance payments, even if the
Family continued to occupy the unit. If, however, the Family
wishes to be rehoused in another dwelling unit with assistance
and HUD does not have other funds for such purposes, HUD
may use the abated project rental assistance payments for the
purpose of rehousing the Family in another dwelling unit. If the
Family continues to occupy the unit, it will do so in accordance
with the terms of its lease, including the termination date and
amount of tenant payments.

(i) The Owner shall make monthly deposits to the replacement
reserve commencing on the effective date of the Contract. For
staged projects, the deposits shall commence on a pro rata basis
for units in each stage on the effective date of the Contract for
that stage.
(ii) The reserve must be built up to and maintained at a level
determined by HUD to be sufficient to meet projected
requirements. Should the reserve reach that level, the amount of
monthly deposit to the reserve may be reduced with HUD
approval.
(iii) Replacement reserve funds must be deposited with HUD or
a HUD-approved depository in an interest-bearing account. All
interest earnings must be added to the reserve.

(d) Notification of Abatement. Any reduction or suspension of
project rental assistance payments shall be effective as provided
in written notification to the Owner. The Owner shall promptly
notify the Family of any such abatement.
(e) Overcrowded and Under-occupied Units. Where the Owner
determines a unit is larger or smaller than appropriate for an
eligible family, the Owner agrees, if possible, to offer the family
an appropriate alternate unit as promptly as possible in
accordance with HUD regulations and requirements in effect at
the time of the determination.
2.6 Financial Requirements.
(a) Submission of Financial and Operating Statements.
The Owner must submit to HUD:
(1) Within 60 days after the end of each fiscal year of project
operations, financial statements for the project audited by an
Independent Public Accountant in the form required by HUD,
and
(2) Other statements as to project operation, financial
condition and occupancy as HUD may require to administer this
Contract and to monitor project operations.
(b) Use of Project Funds.

(1) The Owner shall maintain a project fund account in a
HUD-approved depository and shall deposit all tenant payments,
charges, income and revenues arising from project operation or
ownership in this account. Project funds must be used for the
operation of the project (including required insurance coverage),
to pay operating expenses, and to make required deposits to the
replacement reserve in accordance with paragraph (c) of this
section. To the extent HUD determines that project funds are
more than needed for these purposes, the surplus project funds
must be deposited with a HUD-approved depository in an
interest-bearing residual receipts account. Withdrawals from this
account will be made only with the approval of HUD and for
project purposes, including the reduction of project rental
assistance payments. Upon termination of the Contract, any
excess funds must be remitted to HUD.

(iv) Funds may be withdrawn from the reserve and used only in
accordance with HUD guidelines and with the approval of, or as
directed by, HUD.
(d) The Owner is not entitled to distributions of project funds.
2.7 Operating Expense Adjustments.
(a) Funding of Adjustments. Project rental assistance payments will
be increased commensurate with adjustments in operating
expenses under this section up to the maximum amount
authorized under section 2.3(a) of this Contract. HUD will
calculate operating expense adjustments based on the sum of the
costs for operating the project (as approved by HUD) with
adjustments for vacancies, the project's non-rental income, and
other factors that HUD deems appropriate. The calculation will
be made on the basis of the information provided by the Owner
on a form prescribed by HUD.
(b) Operating Expense Adjustments. Operating Expenses shall be
adjusted whenever HUD approves an increase in operating costs
as provided under the Regulatory Agreement.
(c) Incorporation of Operating Expense Adjustment. Any
adjustment in Operating Expenses shall be incorporated into
Exhibit I by a dated addendum to the exhibit establishing the
effective date of the adjustment.
(d) Adjustment of Operating Expense Based on Cost Certification.
The Owner shall complete the cost certification requirements
under 24 CFR part 891.
(e) Adjustment of Operating Expense Amounts Due to Tax
Exemption. The Operating Expense Amounts may be reduced to
reflect real property tax exemption or similar savings where the
initial operating expenses were approved on the assumption that
the project would not receive the benefit of the tax abatement or
similar savings. The Owner agrees to notify HUD in the event
the project begins to receive such an exemption or similar
savings so the Initial Operating Expense Amounts then in effect
may be reduced.

Page 3 of 7

form HUD-90173-B-CA (11/22/2006)
ref Handbooks 4571.4 and 4571.5

(iii) A Family's eligibility for project rental assistance payments
continues until its total Family contribution equals the total
housing expense for the unit it occupies (or a pro rata share of
the operating expense in a group home). The termination of
subsidy eligibility at this point will not affect the Family's other
rights under the lease nor preclude resumption of subsidy
payments as a result of later changes in income or other
circumstances during the term of this Contract.

2.8 Marketing And Leasing Of Units.
(a) Compliance with Equal Opportunity Requirements. Marketing
of units and selection of Families by the Owner shall be in
accordance with the Owner's HUD-approved Affirmative Fair
Housing Marketing Plan (if required), shown as an exhibit, and
with all regulations relating to fair housing advertising. Projects
shall be managed and operated without regard to race, color,
religion, creed, age, sex, handicap, familial status or national
origin, except housing provided under Section 202 must be
limited to households where at least one person is 62 years of
age or older.
(b) Security Deposits. The Owner agrees to comply with applicable
HUD regulations (24 CFR Part 891) and other requirements, as
revised from time to time, regarding security deposits and to
comply with all State and local law.
(c) Eligibility, Selection and Admission of Families.
(1) The Owner shall be responsible for determination of
eligibility of applicants, selection of families from among those
determined to be eligible, computation of the amount of project
assistance payments on behalf of each selected Family and of
total Family contributions and record-keeping in accordance
with applicable HUD regulations and requirements.
(2) The Owner shall not charge any applicant or assisted
Family any amount in excess of the total Family contribution
except as authorized by HUD.
(3) The Owner must accept applications for admission to the
project in the form prescribed by HUD. Applicant families
applying for assisted units (or residential spaces in a group
home) must complete a certification of eligibility as part of the
application for admission. Both the Owner and the applicant
family must sign the application for admission. On request, the
Owner must forward to HUD copies of these applications for
admission.
(4) The Lease entered into between the Owner and each
selected Family shall be on the form of Lease approved by HUD
and must contain all of the required provisions and none of the
prohibited provisions specified in HUD issuances. The term of
the lease may not be less than one year.

(6) The Owner will maintain as confidential all information
relating to applicants and assisted Families, the disclosure of
which would constitute an unwarranted invasion of personal
privacy.
(d) Redetermination of Operating Expense after Adjustment in
Utility Allowances. In the event that the Owner is notified of a
HUD determination approving or requiring an adjustment in the
Utility Allowance applicable to any of the Contract Units, the
Owner shall promptly make a corresponding adjustment in the
amount of tenant payment to be paid by the affected Families
and the amount of project rental assistance payments.
(e) Processing of Applications and Complaints. The Owner shall
process applications for admission, notifications to applicants,
and complaints by applicants in accordance with applicable
HUD regulations and requirements and shall maintain records
and furnish such copies or other information as may be required
by HUD.
(f) Reviews; Incorrect Payments. In making project rental assistance
payments to Owners, HUD will review the Owner's
determinations under this section. If, as a result of this review or
other reviews, audits or information received by HUD at any
time, it is determined that the Owner has received improper or
excessive assistance payments, HUD shall have the right to
deduct the amount of such overpayments from any amounts
otherwise due the Owner, or otherwise effect recovery.
2.9 Termination of Tenancy or Project Rental Assistance by the
Owner.
The Owner agrees not to terminate any tenancy of or assistance
on behalf of an assisted Family except in accordance with all
HUD regulations and other requirements in effect at the time of
the termination, and any State and local law. Terminations of
tenancy are subject to 24 CFR Part 247.

(5)
(i) The Owner shall make a reexamination of Family income,
composition, and the extent of medical or other unusual
expenses incurred by the Family at least every 12 months and
appropriate redeterminations shall be made by the Owner of the
amount of Family contribution and the amount of project rental
assistance payments, all in accordance with applicable HUD
regulations and requirements.
(ii) If a Family reports a change in income or other
circumstances that would result in a decrease of total Family
contribution between regularly scheduled reexaminations, the
Owner, upon receipt of verification of the change, must
promptly make appropriate adjustments in the total Family
contribution. The Owner may require in its lease that Families
report increases in income or other changes between scheduled
reexaminations.

2.10 Nondiscrimination.
The Owner shall comply with:
(a) The requirements of the Fair Housing Act (42 U.S.C. 3601-19)
and its implementing regulations at 24 CFR Part 100; Executive
Order No 11063 (Equal Opportunity in Housing) and
implementing regulations at 24 CFR Part 107; and Title VI of
the
Civil
Rights
Act
of
1964
(42
U.S.C.
2000d)(Nondiscrimination in Federally Assisted Programs.) and
implementing regulations at 24 CFR Part 1;
(b) The prohibitions against discrimination on the basis of age under
the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and
implementing regulations at 24 CFR Part 146, and the
prohibitions against discrimination against otherwise

Page 4 of 7

form HUD-90173-B-CA (11/22/2006
ref Handbooks 4571.4 and 4571.5

(c)

(d)

(e)
(f)

(g)
(h)

qualified individuals with handicaps under section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing
regulations at 24 CFR Part 8.
The requirements of Executive Order No. 11246 (Equal
Employment Opportunity) and the regulations issued under the
Order at 41 CFR Chapter 60;
The requirements of section 3 of the Housing and Urban
Development Act of 1968 (12 U.S.C. 1701u) (Employment
Opportunities for Lower Income Persons in Connection with
Assisted Projects) and the implementing regulations at 24 CFR
Part 135;
The requirements of Executive Order Nos. 11625, 12432, and
12138 (Minority and Women's Business Enterprises);
The affirmative fair housing marketing requirements of 24 CFR
Part 200, Subpart M and the implementing regulations at 24
CFR Part 108;
The fair housing advertising and poster guidelines, 24 CFR Parts
109 and I 10; and
The civil rights and Equal Opportunity reporting requirements at
24 CFR Part 885.940(f).

(b) Promptly to notify HUD of the receipt of any communication
from the EPA indicating that a facility to be utilized for this
Contract is under consideration to be listed on the EPA List of
Violating Facilities;
(c) To comply with all the requirements of section 114 of the Air
Act and section 308 of the Water Act relating to inspection,
monitoring, entry, reports, and information, as well as all other
requirements specified in section 114 of the Air Act and
section 308 of the Water Act, and all regulations and guidelines
issued thereunder; and
(d) To include or cause to be included the provisions of this
Contract in every nonexempt subcontract and take such action
as HUD may direct as a means of enforcing such provisions.
2.15 Displacement and Relocation Assistance.
The Owner agrees to comply with the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970
(42 U.S.C. 4601) as amended by the Uniform Relocation
Assistance Amendments of 1987, Title IV of the Surface
Transportation and Uniform Relocation Assistance Act of 1987
(Pub. L. 100-17, approved April 2,1987) (URA) and
government-wide implementing regulations at 49 CFR Part 24
which set forth relocation assistance requirements that apply to
the displacement of any person (family, individual, business,
nonprofit organization or farm) as a direct result of acquisition,
rehabilitation or demolition for a project assisted under this
part.

2.11 Cooperation in Equal Opportunity Reviews.
The Owner agrees to cooperate with HUD in conducting
monitoring and compliance reviews and complaint
investigations pursuant to or permitted by all applicable civil
rights statutes and regulations, Executive Orders, and civil rights
related program requirements.
2.12 National Environmental Policy Act.

2.16 Lead-Based Paint.

The Owner agrees to comply with all applicable requirements
under the National Environmental Policy Act (NEPA) of 1969
(42 U.S.C. 4321 et seq.) and HUD regulation 24 CFR Part 50
including the related environmental laws, Executive Orders and
HUD standards in 24 CFR 50.4

The Owner agrees to comply with requirements of the LeadBased Paint Poisoning Prevention Act (42 U.S.C. 48214846)
and implementing regulation at 24 CFR Part 35 to the extent
they are applicable to housing under the Contract.
2.17 Lobbying.

2.13 Flood Disaster Protection Act.
If the Project is located in an area that has been identified by the
Director of the Federal Emergency Management Agency as an
area having special flood hazards and if the sale of flood
insurance has been made available under the National Flood
Insurance Act of 1968, the Owner agrees that it will obtain
coverage of the Project, during its anticipated economic or
useful life, by flood insurance in an amount at least equal to its
development or project cost (less estimated land cost) or to the
maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance
Act of 1968, whichever is less.
2.14 Clean Air Act and Federal Water Pollution Control Act.
In compliance with 'regulations issued by the Environmental
Protection Agency (EPA), 40 CFR, Part 15, pursuant to the
Clean Air Act, as amended ("Air Act"), 42 U.S.C. 7401, et seq.,
the Federal Water Pollution Control Act, as amended ("Water
Act"), 33 U.S.C. 1251, et seq., and Executive Order 1173, the
Owner agrees:

The Owner agrees to comply with the prohibitions against
lobbying the Executive or Legislative Branches of the Federal
Government contained in Pub. L. 101-121 (31 USC 1352) and
implementing regulations at 24 CFR Part 87.
2.18 Reports and Access to Premises and Records.
(a) The Owner shall furnish any information and reports pertinent
to this Contract as reasonably may be required from time to
time by HUD.
(b) The Owner shall permit HUD or its duly authorized
representatives to have access to the premises and, for the
purpose of audit and examination, to have access to any books,
documents, papers and records of the Owner that are pertinent
to compliance with this Contract, including the verification of
information pertinent to project rental assistance payments.
2.19 Disputes.

(a) Not to utilize any facility in the performance of this Contract or
any nonexempt subcontractor which is listed on the EPA List of
Violating Facilities pursuant to Part 15 of the regulations for the
duration of time that the facility remains on the list.
Page 5 of 7

Any dispute concerning a question of fact arising under this
Contract which cannot be resolved by agreement between the
HUD Field Office and the Owner may be submitted by the
Owner to the HUD Secretary or a designee. Both parties shall
proceed diligently with the performance of this Contract and in
accordance with the Field Office's decision, pending resolution
of the appeal.
form HUD-90173-B-CA (11/22/2006)
ref Handbooks 4571.4 and 4571.5

2.20 Conflicts of Interest.
Officers, directors, stockholders and authorized representatives
of the Owner may not have any financial interest in any contract
in connection with the rendition of services, the provision of
goods or supplies, project management, procurement of
furnishings or equipment, construction of the project,
procurement of the site, or other matters related to development
and operation of the project.
2.21 Interest of Member of or Delegate to Congress.
No member of or delegate to the Congress of the United States
of America or resident commissioner shall be admitted to any
share or part of this Contract or to any benefits which may arise
from it.
2.22 Assignment, Sale or Foreclosure.
(a) The Owner agrees that it has not made and will not make any
sale, assignment, or conveyance or transfer in any fashion, of
this Contract, the Agreement, or the project or any part of them
or any of its Interest in them, without the prior written consent
of HUD.
(b) The Owner agrees to notify HUD promptly of any proposed
action covered by paragraph (a) of this section and further
agrees to request HUD's prior written consent.
(c) Except where otherwise approved by HUD, this Contract and
the Agreement shall continue in effect and project rental
assistance payments will continue in accordance with the terms
of this Contract in the event:
(1) of assignment, sale or other disposition of the project,
this Contract or the Agreement,
(2) of foreclosure, including foreclosure by HUD.
(3) of assignments of the mortgage or deed in lieu of
foreclosure,
(4) HUD takes over possession, operation or ownership,
(5) of transfer to another nonprofit owner.
2.23 Defaults by Owner.
(a) Rights of HUD If Owner Defaults under Contract.

(2) HUD Determination of Default. Upon a determination by
HUD that a default has occurred, HUD shall notify the Owner
of(i) The nature of the default,
(ii) The actions required to be taken and the remedies to be
applied on account of the default (including actions by the
Owner to cure the default), and
(iii) The time within which the Owner shall respond with a
showing that all the required actions have been taken.
If the Owner fails to respond or take action to the satisfaction of
HUD, HUD shall have the right to take corrective action to
achieve compliance in accordance with paragraph (3) of this
section or to terminate this Contract, in whole or in part, or to
take other corrective action to achieve compliance in its
discretion.
(3) Corrective Actions. Pursuant to paragraph (a)(2) of this
section HUD, in its discretion may take the following corrective
actions:
(i) Take possession of the project, bring any action necessary to
enforce any rights of the Owner growing out of the project
operation, and operate the project in accordance with the terms
of this Contract until such time as HUD determines that the
Owner is again in a position to operate the project in accordance
with this Contract. If HUD takes possession, project rental
assistance payments shall continue in accordance with this
Contract.
(ii) Collect all tenant payments and charges in connection with
the operation of the project and use these funds to pay the
necessary expenses of preserving the property and operating the
project and to pay the Owner's obligations under the note and
mortgage or other capital advance documents.
(iii) Apply to any court, State or Federal, for specific
performance of this Contract, for an injunction against any
violation of the Contract, for the appointment of a receiver to
take over and operate the project in accordance with the
Contract, or for such other relief as may be appropriate. These
remedies are appropriate since the injury to HUD arising from a
default under any of the terms of this Contract could be
irreparable and the amount of damage would be difficult to
ascertain.
(iv) Reduce or suspend project rental assistance payments.

(1) Events of Default. A default by the Owner under this
Contract shall result if(i) The Owner has violated or failed to comply with any
provision of, or obligation under, this Contract or of any Lease,
including failure to correct any deficiencies identified by HUD
in connection with any annual or other inspection; or
(ii) The Owner has asserted or demonstrated an intention not to
perform some or all of its obligations under this Contract or
under any Lease; or
(iii)The Owner has violated or failed to comply with the
regulations for the Section 202 or Section 811 program, with the
HUD mortgage, or with the regulatory agreement; or the Owner
has filed any false statement or misrepresentation with HUD in
connection with the capital advance.

Page 6 of 7

(v) Transfer to another nonprofit owner.
(vi) Recover any overpayments.
(b) Remedies Not Exclusive and Non-Waiver of Remedies.
The availability of any remedy under this Contract, shall not
preclude the exercise of any other remedy under this Contract or
under any provisions of law, nor shall any action taken in the
exercise of any remedy be considered a waiver of any other
rights or remedies. Failure to exercise any right or remedy shall
not constitute a waiver of the right to exercise that or any other
right or remedy at any time.

form HUD-90173-B-CA (11/22/2006)
ref Handbooks 4571.4 and 4571.5

Amendment to the Project Rental Assistance Contract:
Amendment No.

PRAC Contract No.

HUD Project No.

This Contract, entered into by and between the United States Of America acting through the Department of Housing and Urban
Development ("Government") and
("Owner")
Witness:
In consideration of the mutual benefit to each of the aforesaid parties, the Project Rental Assistance Payments Contract executed by
the Owner on
, and by the Government on
shall be and the same is hereby amended as follows:

Except as herein amended, the said Contract remains in full force and effect.
In Witness Whereof, the parties hereto have executed this Contract in five original counterparts.

United States of America
Secretary of Housing and Urban Development

Owner

By

By
Name

Name

Official Title

Official Title

Date

Date

Public reporting burden for this collection of information is estimated to average 30 minutes per response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. HUD may not collect this information,
and you are not required to complete this form, unless it displays a currently valid OMB control number.
This information collection is necessary to ensure that viable projects are developed. It is important to obtain information from applicants to assist HUD in determining
if nonprofit organizations initially funded continue to have the financial and administrative capacity needed to develop a project and that the project design meets the
needs of the residents. The Department will use this information to determine if the project meets statutory requirements with respect to the development and operation
of the project, as well as ensuring the continued marketability of the projects. This information is required in order to obtain benefits. This information is considered
non-sensitive and no assurance of confidentiality is provided.

Amendment
Page 7 of 7

form HUD-90173-B-CA (11/22/2006)
ref Handbooks 4571.4 and 4571.5