93566-CA Capital Advance Program Agreement & Certification

Capital Advance Program
Agreement & Certification

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

For Section 202 of the Housing Act of 1959
or Section 811 of the National Affordable Housing Act

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

See bottom of form for Public Burden statement.

This Agreement made this _______________________ day of ___________________________ , 20_ ______ , by and between
__________________________________________________________________________________ (hereinafter called Owner),
and the Secretary of Housing and Urban Development (hereinafter called HUD).
Whereas, Owner has applied to HUD for a capital advance in the amount of $ ________________________________ or the purpose
of constructing, rehabilitating or purchasing with or without rehabilitation (projects without rehabilitation under Section 811 limited to
group homes and under Section 202 limited to structures purchased from the Resolution Trust Corporation) a housing project to be
located at _______________________________________________________________________________ and identified as Project
No. __________________________________________ pursuant to Section 202 of the Housing Act of 1959 or Section 811 of the
National Affordable Housing Act.
Whereas, the provisions of the applicable Act limit the amount of capital advance to the development cost of the project;
Now Therefore this Agreement Witnesseth:
(1) That in consideration of the agreement by HUD to make said
capital advance, the Owner agrees to submit to HUD prior to
final disbursement of the capital advance its Certificate of
Actual Cost, and, if required, the Contractor's Certificate of
Actual Cost, on forms prescribed by HUD, and/or
Contractor's Subcontractor's and Owner's Certifications.
Owner agrees that all Certificates of Actual Cost shall be
certified to by an independent Certified Public Accountant or
an independent Public Accountant in form acceptable to
HUD. The Owner further agrees that if HUD, for cost
certification purposes accepts estimates of cost for any items
the Owner will, upon determination of actual cost, submit in
a form satisfactory to HUD a certification of such actual
costs which shall be reduced by the net amount (total receipts
less expenses of perfecting claims) of settlement of claims
against bonding companies or others, and if the substitution
of such certified actual costs for the estimates of cost which
were used at final disbursement would have required a
reduction of the mortgage, the reduction so required shall be
made provided that the entire amount, or any part thereof
may, with the consent of HUD, be deposited in the Reserve
Fund for Replacements.
(2) Owner and HUD agree that, prior to final disbursement, the
mortgage note will be adjusted to comply with the provisions
of Section 202 of the Housing Act of l959 or Section 811 of
the National Affordable Housing Act and the applicable
regulations.
(3) Owner certifies that no financial interests or family relationships exist between Owner or any of its officers, directors, or
stockholders with the Architect or with the General Contractor, subcontractors, suppliers, or equipment lessors.
(4) Owner agrees to notify HUD, in writing prior to final disbursement, of any change in relationship subsequent to the
execution of this Agreement which results in an identity of
interest of the Owner with the General Contractor, or any
subcontractor, supplier, or equipment lessor, in which case

the Owner's certification of actual cost will be accompanied
by the Contractor's certification of actual cost in form prescribed by HUD and, if required by HUD, certification of
actual cost by such subcontractor, supplier, or equipment
lessor. It is agreed that the absence of such notice may be
treated by HUD as a representation that no change in relationship has occurred which creates any identity of interest.
(5) Owner agrees to maintain and keep adequate records of all
costs referred to in (1) above, and to make such records
available for examination by HUD upon request.
(6) Owner agrees to include in the construction contract a requirement that the Contractor shall maintain adequate
records of all actual costs of labor and materials and necessary services, and make such records, documents, contracts
and accounts available for review upon request by HUD.
(7) Owner agrees that it will require in the general contract and
in all agreements with subcontractors a provision that if there
is or comes into being any identity of interest between the
General Contractor and any Subcontractor, then (a) such
Subcontractor will agree to submit to HUD (unless specifically waived by HUD) 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 Owner's Certifications.
The Subcontractors' certificates of actual cost will be supported by the certifications of an independent Certified Public Accountant or an independent Public Accountant in form
acceptable to HUD. For purposes of determining actual cost,
no profit or general overhead may be included in the subcontract unless HUD has in advance approved in writing of the
subcontract and has approved a specific dollar amount or a
specific percentage for profit and/or general overhead.
(8) Owner agrees that if there comes into being any identity of
interest between the General Contractor and Architect, the

Page 1 of 2

form HUD-93566-CA (12/1/2006)
ref Handbooks 4571.4 and 4571.5

Architect will be relieved immediately of inspection duties
and the maximum Architect's fees allowable for cost certification purposes will be $ ________________________ for
design services only. No fee will be allowed to the identity
of interest Architect for supervision.
(9) Owner agrees that the construction contract will be on a
lump-sum fee basis (if competitively bid) or on a cost-plus
fee basis with a maximum upset price (if negotiated) and that
for the purpose of determining the actual cost of the 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 (3) or less contractors or
subcontractors, the Contractor's fee provided for herein shall
not be allowed as an actual cost. For the purpose of this
paragraph, it is further agreed that (a) the terms contractors or
subcontractors include material suppliers and equipment
lessors, and (b) any two or more contractors or subcontractors having an identity of interest or common ownership shall
be considered as one contractor or subcontractor.
(10)The foregoing agreements and certifications by the Owner
are made and delivered for the purpose of influencing an
official action of HUD and are to be relied upon as true and
correct.

In Witness Whereof, the parties hereto have duly executed this instrument the year first above written.

Attest:
_____________________________________________________________
(Secretary)

_________________________________________________________
(Owner)

By: ______________________________________________________

United States of America
Secretary of Housing and Urban Development
By: ______________________________________________________
(Authorized Agent)

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 projects meet 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.

Page 1 of 2

form HUD-93566-CA (12/1/2006)
ref Handbooks 4571.4 and 4571.5