Hud-9634 Sample Use Agreement

Appendix 15-1

Sample Use Agreement

Mark-up-to-Market Where a For-Profit Owner is

Transferring the Property to a Non-Profit Owner

or

Budget-Based Rent Increase for

Capital Repairs for a Nonprofit Owner

____________________

This Agreement entered into this _____ day of ________,

2000 by and between ______________________________ (herein

called “Housing Owner") and the Secretary of Housing and

Urban Development, acting by and through the Assistant

Secretary for Housing-Federal Housing Commissioner (herein

called “HUD"),

Witnesseth:

WHEREAS, pursuant to section 24 of the Multifamily

Assisted Housing Reform and Affordability Act of 1997,

(P.L.105-65, 111 Stat. 1384) HUD is authorized in

connection with the expiration of section 8 project-based

Housing Assistance Payments contracts to renew such

contracts with owners of eligible projects upon such terms

and conditions as HUD considers appropriate; and,

WHEREAS, HUD may approve rent levels at budget-based

rents, not to exceed comparable market rents for the area,

and has determined to approve such budget-based rents as may

be necessary to restore or maintain the financial

soundness of certain eligible projects, to assist in

improvement of the management, and to maintain the low-to-

moderate-income character of the eligible projects; and,

WHEREAS, HUD has determined that renewals providing for

increased section 8 budget-based comparable market rents may

be made available to eligible housing owners only if said

eligible housing owners have agreed to maintain the project

as affordable for low-income families and the housing owners

agree to accept future section 8 project-based contract

renewals for twenty (20) years in accordance with this Use

Agreement and the section 8 Housing Assistance Payments

contract for the project, subject to the availability of

appropriations; and

WHEREAS, the Housing Owner and HUD, or a section 8

Contract Administrator under an Annual Contributions

Contract with HUD, have entered into a section 8 Housing

Assistance Payments Contract for ________________________________ (project name or contract number) pursuant to said authority under section 524, and the parties intend said contract to be incorporated herein and made a part hereof.

NOW THEREFORE, in consideration of the mutual promises

set forth herein and in the said section 8 Housing

Assistance Payments Contract, the parties hereto agree as

follows:

1. The Housing Owner, for itself, its successors and

assigns, covenants with HUD that the Housing Owner will

continue to operate the project in accordance with the

requirements of section 8 of the U.S. Housing Act of 1937

(42 USC 1437f), as amended, all applicable Federal

regulations, the section 8 Housing Assistance Payments

Contract and applicable HUD requirements for twenty (20)

years from the date of this Use Agreement.

2. Subject to the availability of appropriations and so

long as Housing Owner is in compliance with all HUD

requirements, including but not limited to this Use

Agreement, HUD shall provide the Housing Owner and the Housing Owner shall accept annual renewals of the section 8 Housing Assistance Payments contract in accordance with its terms.

3. In the event of a breach or a threatened breach of

any of the above covenants and agreements by the Housing

Owner, HUD and/or any tenant of the project receiving the

benefits of the section 8 Housing Assistance Payments

Contract as a third-party beneficiary shall be entitled to

institute legal action to enforce performance and observance of such covenants and agreements and to enjoin any acts which are violative of such covenants and agreements.

4. The Housing Owner shall not (a) impede the reasonable efforts of tenants to organize as detailed in 24 CFR Part 245, or (b) unreasonably withhold the use of any community room or other available space appropriate for meetings which is part of the mortgaged property when requested by: (1) a resident tenant organization in connection with the representational purposes of the organization; or (ii) tenants seeking to organize or to consider collectively any matter pertaining to the operation of the mortgaged property.

5. The Housing Owner, for itself, its successors and

assigns, hereby agrees and acknowledges that this Use

Agreement shall be recorded in the appropriate land records and that HUD and any successors and assigns and/or any third-party beneficiary may file suit against the Housing Owner or any of its successors or assigns for an order of the court demanding specific performance of any of these covenants and agreements, enjoining any acts which are violative of such covenants and agreements, for an award of whatever damages can be proven and/or for such other relief as may be appropriate.

Should any of the above covenants be held invalid in

whole or in part, it shall not affect or invalidate the

balance of such covenant or any other covenants.

In witness whereof, the parties hereto have hereunto

caused these presents to be executed on their behalf and

their seals affixed the day and year written below.

WITNESS

___________________________________________________________ (Housing Owner)

BY

___________________________________ ________________________

Secretary of Housing and

Urban Development Acting

by and through the

Assistant Secretary

for Housing - Federal

Housing Commissioner

BY

___________________________________ ________________________

(Authorized Agent)

ACKNOWLEDGEMENT BY OWNER BEFORE NOTARY PUBLIC

(Complete according to requirements of state of execution.)

ACKNOWLEDGEMENT BY COMMISSIONER:)

STATE OF ) SS:

CITY AND COUNTY OF )

ON this _______________ day of _______________________,

20___, before me ______________________________, a Notary

Public in and for the City and County of ________________,

_____________________, appeared _________________________ to

me personally known and known to me to be the duly

Authorized Agent of ________________________________, and

the person who executed the aforesaid instrument bearing the

date of __________________, 20___, and acknowledged that he

executed the aforesaid instrument for and on behalf of

_______________________________ for the purposes herein.

_________________________________

(NOTARY PUBLIC)

My Commission Expires:

ACKNOWLEDGEMENT BY COMMISSIONER:)

STATE OF ) SS:

CITY AND COUNTY OF )

ON this __________________ day of ________________,

20___, before me ___________________________, a Notary

Public in and for the City and County of ____________,

________________, appeared ______________________________ to

me personally known and known to me to be the duly

Authorized Agent of the Secretary of Housing and Urban

Development acting by and through the Assistant Secretary

for Housing - Federal Housing Commissioner, and the person

who executed the aforesaid instrument bearing the date of

_________________, 20___, and acknowledged that he executed

the aforesaid instrument for and on behalf of the said

Secretary of Housing and Urban Development for the purposes

herein.

_______________________________________

(NOTARY PUBLIC)

My Commission Expires:

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