HUD 93305-M-H Agreement and Certification

Agreement and
Certification

For use in Insurance of Advances Cases

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

OMB Control No. 2502-
(Exp. )

Public reporting burden for this collection of information is es timated to average 6 hours per resp onse, including t he time fo r review ing instructions,
searching existing data sources, gathering and m aintaining the data needed, and completing and re viewing the collection of info rmation. Applicants are
required to complete this form to provide HUD with the necessary data to determine a hospital’s eligibility for FHA insurance. HUD will use the information to determine that the applicant meets the re quirements and eligibility criteria; u nderwriting standards; and ad equacy of s tate/or local cer tifications,
approval, or waivers. This collection of informatio n is aut horized by Section 242, Sections 223(a)(7), 223(e), 223(f), and 241(a) of 12 U.S.C. 17 15z-7.
This collection is required to obtain benefits.
Privacy Act Noti ce. The United States Department of Housing an d Urban D evelopment, Federal Housing Administration, is authorize d to solicit the information requested in this form by virtue of Title 12, United States Code, Section 1701 et seq., and regulations promulgated thereunder at Title 12, Code
of Federal Regul ations. While no assurance of co nfidentiality is pledged to respon dents, HUD gen erally discloses t his data only in response to a Freedom of Information request. This agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless th at
collection displays a valid OMB control number.

This Agreement made this _______day of ________________, by and between the________________________________________,
_______________________________*(hereinafter called Mortgagor), and
,_________________________________________________________________________________________ a *(hereinafter called
Mortgagee), and the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner (hereinafter called Commissioner); Whereas, Mortgagor has applied to Mortgagee for a mortgage loan for the purpose of erecting a hospital
project to be located at
____________________________________________________________________________________________________________
and identified as HUD Project No. __________________________; and the Mortgagee has applied to the Commissioner for insurance
of said mortgage loan under Section _________________________ of the National Housing Act; and
Whereas, the Commissioner has issued a commitment to insure said mortgage loan in the amount of $________________________ ,
subject to reduction of said amount as provided in the National Housing Act and the Regulations promulgated pursuant thereto; and
Whereas, under the provisions of the National Housing Act and the Regulations promulgated pursuant thereto, this agreement is required; Now therefore this agreement witnesseth:
1.

That in consideration of the agreement by the Mortgagee to
make, and of the Commissioner to insure, said loan, Mortgagor agrees to submit to the Commissioner prior to the receipt of the final advance under the mortgage, and within
the period fixed in the building loan agreement for completion of the project or any extension of such period approved
in writing by the Commissioner, a fully completed and executed Mortgagor's Certificate of Actual Cost and, if required, a fully completed and executed Contractor's Certificate of Actual Cost on forms prescribed by the Commissioner and/or the HUD form for Contractor's, Subcontractor's and Mortgagor's Certifications. The Mortgagor understands and agrees that each of the certificates of cost shall
be supported by the certificate of an independent public accountant in form acceptable to the Commissioner.

2.

The Mortgagor and Mortgagee agree that the total advances
of mortgage monies shall not exceed the amount permitted
by the National Housing Act and the Regulations promulgated pursuant thereto.

3.

The Mortgagor agrees that if it receives from the Mortgagee
monies in excess of that permitted under the National Housing Act and the Regulations promulgated pursuant thereto,
it will pay upon demand forthwith to the Mortgagee any
such excess for application to the reduction of the then outstanding principal balance of the mortgage. Mortgagee
agrees that upon its receipt of such excess the contract of
mortgage insurance is reduced by the amount of such excess.
The Mortgagor further agrees that if the Commissioner,
for cost certification purposes, accepts estimates for any
items, the Mortgagor will, at final endorsement, establish a

cash escrow to pay all the “to be paid in cash items” identified in its Certification of Actual Cost and debts to third
parties who made the original disbursement for an item
listed as paid on the Mortgagor’s Certification of Actual
Cost, unless documentation, satisfactory to the Commissioner, is submitted evidencing that these amounts were
paid by the Mortgagor after the submission of its Certification of Actual Cost. The Mortgagor understands that the
items covered by this cash escrow must be paid within 45
days of the date of final endorsement, except for those items
in dispute or involved in litigation. If the Mortgagor’s actual
cost was less than the estimates accepted for cost certification purposes and the Commissioner determines that this
difference plus the net amount (total receipts less expenses
of perfecting claims) of settlement of claims against bonding companies would have required a reduction of the insured mortgage, the Mortgagor understands that prepayment
of the mortgage in an amount equal to the scheduled
monthly principal payments, to the extent possible, is required and any remaining balance shall be deposited to the
Reserve Fund for Replacements.
4.

Mortgagor certifies that the financial interests or family relationships which exist between Mortgagor or any of its officers, directors, stockholders with the Architect and with
the General Contractor, subcontractors, suppliers, or equipment lessors are: (Please complete page three stating the
name, title, interest, and relationship.) (If none, so state).

5.

Mortgagor agrees to notify the Commissioner, in writing, of
any changes in relationship subsequent to the execution of
this agreement which results in an identity of interest of the
Mortgagor with the General Contractor or any subcontrac-

*Insert type of mortgagor, e.g., “Individual,” “Partnership,” “(State) Corporation.”
_________________________________________________________________________________________________________________________
Previous editions are obsolete.
Page 1 of 3
form HUD-93305-M-H (8/1/2007)
ref Handbook 4470.1

tor, supplier, or equipment lessor within 10 working days
from the date the change occurred, in which case the Mortgagor's certification of actual cost will be accompanied by
the Contractor's certification of actual cost in form prescribed by the Commissioner and, if required by the Commissioner, certification of actual cost by such subcontractor,
supplier, or equipment lessor. It is agreed that the absence
of such notice may be treated by the Commissioner as a representation that no change in relationship has occurred
which creates any such identity of interest.
6.

Mortgagor agrees to maintain and keep adequate records of
all costs referred to in (1) above, and to make such records
available for examination by the Commissioner upon request.

7.

Mortgagor agrees that, where this agreement and certification reveals any identity of interest between the Mortgagor
and the General Contractor, the Mortgagor will include in
the contract for the performance of the construction of the
project a provision requiring the General Contractor, upon
completion of the project, to submit to Mortgagor for delivery to the Commissioner its certificate of all actual costs of
labor and materials and necessary services as required by
paragraph (1) hereof. Mortgagor further agrees to include in
the construction contract the requirement that the Contractor
shall maintain adequate records of all such costs, and make
such records, documents, contracts and accounts available
for review upon request by the Federal Housing Commissioner.

8.

Mortgagor agrees that it will require in the general contract
and in all agreements with subcontractors (which term for
the purposes of this paragraph shall also include material
suppliers and equipment lessors) a provision that if there is,
or comes into being, any identity of interest between the
Mortgagor and any Subcontractor, or (in those cases where
the General Contractor is required to certify his actual costs)
between the General Contractor and any Subcontractor, then
(a) such Subcontractor will agree to submit to the Commissioner (unless specifically waived in writing by the Commissioner) a certificate of the actual cost of providing the
material and/or services after deduction of all kickbacks, rebates, adjustments, discounts, or any other arrangements in
the nature thereof, and (b) such Subcontractor will join in
the execution and submission of the HUD form for Contractor's, Subcontractor's and Mortgagor's Certifications. The
Subcontractor's certificates of actual cost will be supported
by the certification of an independent Certified Public Accountant in a form acceptable to the Commissioner. For pur-

poses of determining actual cost, no profit or general overhead may be included in the subcontract unless the Commissioner has in advance granted approval in writing of the
subcontract and has approved a specific dollar amount or a
specific percentage for profit and/or general overhead.
9.

Mortgagor agrees that if there comes into being any identity
of interest between the Mortgagor and the Architect or between the General Contractor and the Architect, the identity
of interest Architect will immediately be relieved of inspection duties and the maximum identity of interest Architect's
fees allowable for cost certification purposes will be $
_____________________________ for design services
only. No fees will be allowed to the identity of interest Architect for supervision. (HUD 92013 Sect C-2)

10. For those cases which do not include a Builder’s and Sponsor’s Profit and Risk Allowance, the Mortgagor and General
Contractor agree that the construction contract will be on a
cost plus fee basis with a maximum upset price if there is
any identity of interest between the General Contractor, or
under any other circumstances where the Commissioner requires the use of such a contract, and that for the purpose of
determining the actual cost of physical improvements on the
mortgaged property, the allowance for the Contractor’s fee
shall not exceed $ ____________________ and the general
overhead
expense
shall
not
exceed
$
______________________; provided, however, that in the
event more than 50 percent of the actual cost of construction
is subcontracted with any one contractor or subcontractor,
or more than 75 percent with three or less contractors or
subcontractors, the Contractor’s fee provided for herein
shall not be allowed as an actual cost.
11. The Mortgagor and General Contractor agree that for the
purpose of paragraphs 10.(c) and 11: (i) the terms contractor
and subcontractor include material suppliers and equipment
lessors, and (ii) any two or more contractors or subcontractors having an identity of interest or common ownership
shall be considered as one contractor or subcontractor. It is
understood that the 50-75 percent rule is not applicable to
manufacturers of industrialized housing, trade items performed by persons on the general contractor’s payroll, mobile home park program, supplemental loan program, or rehabilitation programs other than gut rehabilitation.
12. The foregoing agreements and certifications by the Mortgagor, Mortgagee, and General Contractor are made and delivered for the purpose of influencing an official action of
the Federal Housing Commissioner and are to be relied
upon by the Commissioner as true.

In Witness Whereof the parties hereto have duly executed this agreement the day and year first above written.
Identity of Interest
(from paragraph four -- must be completed on each individual entity)

Name
Title
Address
_________________________________________________________________________________________________________________________
Previous editions are obsolete.
Page 2 of 3
form HUD-93305-M-H (8/1/2007)
ref Handbook 4470.1

Relationship to Mortgagor
Interest (financial, in-kind service, etc.)
Specify
Attach separate sheets if necessary.
Attest:

(Mortgagor)
By
(General Contractor)
By
(Mortgagee)
By

Secretary of Housing and Urban Development
Acting by and Through the
Federal Housing Commissioner

By (Authorized Agent

_________________________________________________________________________________________________________________________
Previous editions are obsolete.
Page 3 of 3
form HUD-93305-M-H (8/1/2007)
ref Handbook 4470.1