90165-CA Instructions for the Preparation of Mortgage Deed of Tru

Capital Advance Program
Instructions for the Preparation of

Mortgage, Deed of Trust,
or Security Deed

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

OMB Approval No. 2502-0470
(exp. 01/31/2006)

Under Section 202 of the Housing Act of 1959 or Section 811 of the National Affordable Housing Act
Public reporting burden for this collection of information is estimated to average 6 hours 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.
Use the current FHA corporate mortgage, deed of trust, or security deed form applicable to the jurisdiction in which the mortgage premises are located to prepare
the Section 202 or Section 811 mortgage, deed of trust or security deed.
Appropriate modifications will be needed to show that the Secretary of Housing and Urban Development is making a capital advance rather than insuring a loan and
to delete all references to mortgage insurance. A sample form is shown below and on the following pages showing these changes and others (note especially
paragraphs 10, 19 and 20) pertinent to the special features of the Section 202 or Section 811 program.
Sample Mortgage Form:

This Indenture, made this _____________________ day of _________________, 20 ____, between _________________________________
___________________________________________________________________________________________________________________________
organized and existing under the laws of ________________________________________________________________________ , a corporation
and the United States of America acting by and through the Secretary of Housing and Urban Development, hereinafter referred to as Mortgagee.
Witnesseth: That whereas the Mortgagor is justly indebted to the Mortgagee in the principal (capital advance amount) sum of
__________________________________________________________ Dollars ($ ______________________ ), evidenced by its note of even date
herewith, said principal being payable provided in said note with a final maturity of ____________________ , which note is identified as being
secured hereby by a certificate thereon. Said note and all of its terms are incorporated herein by reference and this conveyance shall secure any
and all extensions thereof, however evidenced.
Now, Therefore, the said Mortgagor, for the better securing of the payment of the said principal sum of money and the performance of the covenants
and agreements herein contained, does by these presents Convey, Mortgage, and Warrant unto the Mortgagee, successors or assigns, the
following-described real estate situate, lying, and being in the___________________________________________________________________
____________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________
, in the County of _______________________________ , and the State of _____________________________ , to wit:

Together with all and singular the tenements, hereditaments and appurtenances thereunto belonging, and the rents, issues, and profits thereof;
and all apparatus and fixtures of every kind in, or that may be placed in,
any building now or hereafter standing on said land, and also all the
estate, right, title, and interest of the said Mortgagor in and to said
premises; including but not limited to all gas and electric fixtures; all
radiators, heaters, furnaces, heating equipment, steam and hot-water
boilers, stoves and ranges; all elevators and motors; all bathtubs, sinks,
water closets, basins, pipes, faucets, and other plumbing fixtures; all
mantels and cabinets; all refrigerating plants and refrigerators, whether
mechanical or otherwise; all cooking apparatus; all furniture, shades,
awnings, blinds, and other furnishings; all of which apparatus, fixtures,
and equipment, whether affixed to the realty or not, shall be considered
real estate for the purposes hereof; and including all furnishings now or
hereafter attached to or used in and about the building or buildings now
erected or hereafter to be erected on the lands herein described which are
necessary to the complete and comfortable use and occupancy of such
building or buildings for the purposes for which they were or are to be
erected, and all renewals or replacements thereof or articles in substitution therefor; together with all building materials and equipment now or
hereafter delivered to said premises and intended to be installed therein;

Previous versions obsolete

To Have And To Hold the above-described premises, with the appurtenances and fixtures, unto the said Mortgagee, successors and assigns,
forever, for the purposes and uses herein set forth.
And Said Mortgagor covenants and agrees:
1. That it will pay the Mortgage Note at the times and in the manner
provided therein;
2. That it will not permit or suffer the use of any of the property for any
purpose other than the use for which the same was intended at the
time this Mortgage was executed;
3. That the Regulatory Agreement, executed by the Mortgagor and the
Secretary of Housing and Urban Development, which is being
recorded simultaneously herewith, is incorporated in and made a
part of this Mortgage. Upon default under the Regulatory Agreement, the Mortgagee, at his/her option, may declare the whole
indebtedness secured to be due and payable;
4. That all rents, profits and income from the property covered by this
Mortgage are hereby assigned to the Mortgagee for the purpose of

Page 1 of 4

form HUD-90165-CA (11/22/2006)
ref Handbooks 4571.4 & 4571.5

additional indebtedness, secured by this Mortgage, to be paid out
of the proceeds of the sale of the mortgaged premises, if not
otherwise paid by the Mortgagor, and shall bear interest at the rate
to be specified by the Mortgagee from the date of advance until
paid, and shall be due and payable on demand;

discharging the debt hereby secured. Permission is hereby given to
Mortgagor so long as no default exists hereunder, to collect such
rents, profits and income for use in accordance with the provisions
of the Regulatory Agreement;
5. That upon default hereunder Mortgagee shall be entitled to the
appointment of a receiver by any court having jurisdiction, without
notice, to take possession and protect the property described herein
and operate same and collect the rents, profits and income therefrom;
6. That at the option of the Mortgagor the principal balance secured
hereby may be adjusted on terms acceptable to the Mortgagee if
partial prepayment results from an award in condemnation in accordance with provisions of paragraph 8 herein, or from an insurance
payment made in accordance with provisions of paragraph 7 herein,
where there is a resulting loss of project income;
7. That the Mortgagor will keep the improvements now existing or
hereafter erected on the mortgaged property insured against loss by
fire and such other hazards, casualties, and contingencies, as may be
stipulated by the Mortgagee, and all such insurance shall be evidenced by standard Fire and Extended Coverage Insurance policy or
policies, in amounts not less than necessary to comply with the
applicable Coinsurance Clause percentage, but in no event shall the
amounts of coverage be less than eighty per centrum (80%) of the
insurable values or not less than the principal sum of the Mortgage,
whichever is the lesser, and in default thereof the Mortgagee shall
have the right to effect insurance. Such policies shall be endorsed
with standard Mortgagee Clause with loss payable to the Mortgagee,
as interest may appear, and shall be deposited with the Mortgagee;
That if the premises covered hereby, or any part thereof shall be
damaged by fire or other hazard against which insurance is held as
hereinabove provided, the amounts paid by any insurance company,
to the extent of the principal sum remaining, shall be paid to the
Mortgagee, and, at his/her option, may be applied to the debt or
released for the repairing or rebuilding of the premises;
8. That all awards of damages in connection with any condemnation for
public use or injury to any of said property are hereby assigned and
shall be paid to Mortgagee, and Mortgagee is hereby authorized, in
the name of Mortgagor, to execute and deliver valid acquittance
thereof and to appeal from any such award;
9. That it is lawfully seized and possessed of said real estate in fee
simple and has good right to convey same;
10. To keep said premises in good repair, and not to do, or permit to be
done, upon said premises, anything that may impair the value
thereof, or of the security intended to be effected by virtue of this
instrument; that it will not make any structural alterations to the
building without the written consent of the Mortgagee; to pay to the
Mortgagee, or deposit in an escrow account acceptable to the
Mortgagee, as hereinafter provided, until the final maturity date, a
sum sufficient to pay all taxes and special assessments that heretofore or hereafter may be lawfully levied, assessed or imposed by any
taxing body upon the said land, or upon the Mortgagor or Mortgagee
on account of the ownership thereof to the extent that provision has
not been made by the Mortgagor for the payment of such taxes and
special assessments as hereinafter provided in subparagraph 17;

12. It is expressly provided, however (all other provisions of this
Mortgage to the contrary notwithstanding), that the Mortgagee
shall not be required nor shall he/she have the right to pay,
discharge, or remove any tax, assessment, or tax lien upon or
against the premises described herein or any part thereof or the
improvements situated thereon, so long as the Mortgagor shall, in
good faith, contest the same or the validity thereof by appropriate
legal proceedings brought in a court of competent jurisdiction,
which shall operate to prevent the collection of the tax, assessments,
or lien so contested and the sale or forfeiture of the said premises or
any part thereof to satisfy the same, but in the event of a tax contest,
the Mortgagor shall deposit with the Mortgagee an amount estimated
by the Mortgagee sufficient to satisfy all taxes, penalties, interest, and
costs which may reasonably accrue during such contest;
13. That it will not voluntarily create or permit to be created against the
property subject to this Mortgage any lien or liens inferior or
superior to the lien of this Mortgage and further that it will keep
and maintain the same free from the claim of all persons supplying
labor or materials which will enter into the construction of any all
buildings now being erected or to be erected on said premises;
14. That the improvements about to be made upon the premises above
described and all plans and specifications comply with all municipal ordinances and regulations made or promulgated by lawful
authority, and that the same will upon completion comply with all
such municipal ordinances and regulations and with the flues of
applicable fire rating or inspection organization, bureau, association, or office. In the event the Mortgagor shall at any time fail to
comply with such rules, regulations, and ordinances which are now
or may hereafter become applicable to the premises above described, after due notice and demand by the Mortgagee, thereupon
the principal sum and all arrears of interest and other charges
provided for herein, shall at the option of the Mortgagee become
due and payable;
15. The Mortgagor covenants and agrees that so long as this Mortgage
and the said note secured hereby are outstanding, it will not execute
or file for record any instrument which imposes a restriction upon
the sale or occupancy of the mortgaged property on the basis of
race, color, national origin, sex, familial status, handicap, age, or
creed, unless permitted by the Housing Act of 1959 or the National
Affordable Housing Act and the HUD regulations promulgated
thereunder.
16. That the funds to be advanced herein are to be used in the
construction of certain improvements on the lands herein described, in accordance with a Capital Advance Agreement between
the Mortgagor and

11. In case of the refusal or neglect of the Mortgagor to make such
payments, or to satisfy any prior lien or encumbrances, or to keep
said premises in good repair, the Mortgagee may pay such taxes,
assessments, and insurance premiums, when due, and may make
such repairs to the property herein mortgaged as in the Mortgagee's
discretion he/she may deem necessary for the proper preservation
thereof, and any moneys so paid or expended shall become so much
Previous versions obsolete

Page 2 of 4

Mortgagee dated _________________________ , 20 _______ ,
which Capital Advance Agreement (except such part or parts
thereof as may be inconsistent therewith) is incorporated herein by
reference to the same extent and effect as if fully set forth and made
a part of this Mortgage; and if the construction of the improvements to be made pursuant to said Capital Advance Agreement
shall not be carried on with reasonable diligence, or shall be
discontinued at any time for any reason other than strikes or lockouts, the Mortgagee, after due notice to the Mortgagor or any
subsequent owner, is hereby invested with full and complete
authority to enter upon said premises, employ watchmen to protect
form HUD-90165-CA (11/22/2006)
ref Handbooks 4571.4 & 4571.5

such improvements from depredation or injury and to preserve and
protect the personal property therein, and to continue any and all
outstanding contracts for the erection and completion of said
buildings, to make and enter into any contracts and obligations
wherever necessary, either in his/her own name or in the name of the
Mortgagor, and to pay and discharge all debts, obligations, and
liabilities incurred thereby. All such sums so advanced by the
Mortgagee (exclusive of portions of the principal of the indebtedness secured thereby) shall be additionally secured by this Mortgage and shall be due and payable on demand with interest at the
rate to be specified by the Mortgagee. The principal sum and other
charges provided for herein shall, at the option of the Mortgagee or
holder of this Mortgage and the note securing the same, become due
and payable on the failure of the Mortgagor to keep and perform any
of the covenants, conditions, and agreements of said Capital Advance Agreement. This covenant shall be terminated upon completion of the improvements to the satisfaction of the Mortgagee and
the making of the final payment as provided in said Capital Advance
Agreement;
17. The Mortgagor, will pay to the Mortgagee as required, until the
final maturity date, a sum equal to the ground rents, if any, and the
taxes and special assessments next due on the premises covered by
the Mortgage, plus the premiums that will next become due and
payable on policies of fire and other property insurance covering
the premises covered hereby, plus water rates, taxes, and assessments next due on the premises covered hereby (all as estimated by
the Mortgagee) less all sums already paid therefor divided by the
number of months to elapse before one (1) month prior to the date
when such ground rents, premiums, water rates, taxes and special
assessments shall become due.
18. Any excess funds accumulated under the preceding paragraph
remaining after payment of the items therein mentioned shall be
credited to subsequent payments of the same nature required thereunder; but if any such item shall exceed the estimate therefor the
Mortgagor shall without demand forthwith make good the deficiency. Failure to do so before the due date of such item shall be a
default hereunder. If the property is sold under foreclosure or is
otherwise acquired by the Mortgagee after default, any remaining
balance of the accumulations under the preceding paragraph shall
be credited to the principal of the Mortgage as of the date of
commencement of foreclosure proceedings or as of the date the
property is otherwise acquired; and
19. That the Mortgagee shall have the right to inspect the mortgaged
premises at any reasonable time.
20. That so long as the Mortgage and Note secured hereby are outstanding, it will not (a) rent dwelling accommodations in the mortgaged
premises in excess of the rates approved by the Mortgagee or for
periods of less than one month; (b) rent the premises as an entirety;
(c) rent the premises or any part thereof to any persons for the
purpose of subleasing; (d) rent the premises or permit its use for
hotel or transient purposes; (e) require of any tenant as a condition
of occupancy life-lease contracts, fees or other payments over and
above those for rents, utilities, and collateral services.

22. And In Case Of Foreclosure of this Mortgage by said Mortgagee
in any court of law or equity, a reasonable sum shall be allowed for
the solicitor's fees of the complainant, not to exceed in any case five
percentum (5%) of the amount of the principal indebtedness found
to be due, and the stenographer's fees of the complainant in such
proceeding, and costs of minutes of foreclosure, master's fees, and
all other costs of suit, and also for all outlays of documentary
evidence and the cost of a complete abstract of title for the purpose
of such foreclosure; and in case of any other suit, or legal proceeding, instituted by the Mortgagee to enforce the provisions of this
Mortgage or in case of any suit or legal proceeding wherein the
Mortgagee shall be made a party thereto by reason of this Mortgage,
its costs and expenses, and the reasonable fees and charges of the
attorneys or solicitors of the Mortgagee, so made parties, for
services in such suit or proceedings, shall be further lien and charge
upon said premises under this Mortgage, and all such expenses shall
become so much additional indebtedness secured hereby and be
allowed in any decree foreclosing this Mortgage;
23. And There Shall Be Included in any decree foreclosing this
Mortgage and be paid out of the proceeds of any sale made in
pursuance of any such decree: (1) All the costs of such suit or suits,
advertising, sale, and conveyance, including attorney's, solicitors',
and stenographers' fees, outlays for documentary evidence and cost
of said abstract and examination of title; (2) All the moneys
advanced by the Mortgagee, if any, for any purpose authorized in
the mortgage, with interest on such advances at the rate specified by
the Mortgagee, from the time such advances are made; (3) All the
accrued interest remaining unpaid on the indebtedness hereby
secured; (4) All the said principal sum. The over-plus of the
proceeds of sale, if any, shall then be paid as the court may direct;
24. A Reconveyance of said premises shall be made by the Mortgagee
to the Mortgagor on full payment of the indebtedness aforesaid, the
performance of the covenants and agreements herein made the
Mortgagor, and the payment of the sums owed under the terms of the
said note.
25. It Is Expressly Agreed that no extension of the time for payment
of the debt hereby secured given by the Mortgagee to any successor
in interest of the Mortgagor shall operate to release, in any manner,
the original liability of the Mortgagor;
26. The Mortgagor hereby waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Mortgage on its
own behalf and on behalf of each and every person except decree or
judgment creditors of the Mortgagor acquiring any interest in or
title to the premises subsequent to the date of this Mortgage;
27. The Covenants Herein Contained shall bind, and the benefits and
advantages shall inure to, the successors and assigns of the respective parties hereto. Wherever used, the singular number shall be
plural, the plural the singular, and the use of any gender shall be
applicable to all genders.

21. In The Event of default in making any payment provided for herein
or in the note secured hereby for a period of thirty (30) days after
the due date thereof, or in case of a breach of any other covenant
herein stipulated, then the whole of said principal sum shall, at the
election of the Mortgagee, without notice, become immediately due
and payable, in which event the Mortgagee shall have the right
immediately to foreclose this Mortgage;

Previous versions obsolete

Page 3 of 4

form HUD-90165-CA (11/22/2006)
ref Handbooks 4571.4 & 4571.5

In Witness Whereof, the Mortgagor has caused its corporate seal to be hereunto affixed and these presents to be signed by its
_______________________________________________and attested by its __________________________________________________ on the
day and year first above written, pursuant to authority given by resolution duly passed by _____________________________________________
of said corporation.
[Corporate Seal]

By

Attest

State of

)

County of

)
)
)

I, ___________________________________________________________ , a Notary Public, in and for said County, in the State aforesaid, do
hereby certify that __________________________________________ and _________________________________ , personally known to me to
be

the

same

persons

whose

names

are

respecitvely

as

President

and

Secretary

of

_________________________

__________________________________________________ , subscribed to the foregoing instrument, appeared before me in person and severally
acknowledged that they, being thereunto duly authorized, signed, sealed with corporate seal, and delivered the said instrument as the free and
voluntary act of said corporation and as their own free and voluntary act, for the uses and purposes therein set forth.
Given under my hand and notarial seal, this __________________________ day of ____________________ , 20 _______ .

[Seal]
_____________________________________________________

My commission expires _________________________________

Notary Public

Previous versions obsolete

Page 4 of 4

form HUD-90165-CA (11/22/2006)
ref Handbooks 4571.4 & 4571.5