2466-GP GP Regulatory Agreement

Office of Hospital Facilities Transactional Forms for FHA Programs 242, 241, 223(f), 223(a)(7)

HUD-2466GP-OHF Regulatory Agreement

Hospital Facilities projects pursuant to FHA Programs 242, 241, 223(f), 223(a)(7)

OMB: 2502-0602

Document [pdf]
Download: pdf | pdf
OMB No. 2502-xxxx (Exp. xx/xx/xxxx)

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

REGULATORY AGREEMENT
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
FEDERAL HOUSING ADMINISTRATION
SECTION 242 NONPROFIT HOSPITALS
Project No.
Mortgagee
Amount of [Mortgage] [Deed of Trust] Note $
[Mortgage] [Deed of Trust] Recorded: State:

Date: as of
County:

Date:

This Agreement entered into as of the ____ day of _________________, between
_____________________________________,
__________________________________,
whose address is _____________________________________________, hereinafter called
Mortgagor, and the undersigned Secretary of Housing and Urban Development (hereinafter
referred to as Secretary).
In consideration of the endorsement for insurance by the Secretary of the above
described Note or in consideration of the consent of the Secretary to the transfer of the
mortgaged property, and in order to comply with the requirements of the National Housing Act
and the Regulations adopted by the Secretary pursuant thereto, the Mortgagor agrees for itself,
its successors and assigns, and any owner of the mortgaged property, that in connection with
the mortgaged property and the project operated thereon and so long as the Contract of
Mortgage Insurance continues in effect, and during such further period of time as the Secretary
and his successors shall be the holder or reinsurer of the Mortgage:
(1)
It shall promptly make all payments due under the Note and Mortgage, and shall
hold the Secretary harmless under his Contract of Mortgage Insurance.
(2) * (a) It will establish or continue to maintain a reserve fund for replacements by
the allocation to such reserve fund in a separate account with the Mortgagee
______________________ or in a safe and responsible depository designated by the
Mortgagee, concurrently with the beginning of payments toward amortization of the principal
of the Mortgage insured or held by the Secretary of an amount equal to $______________ per
month unless a different date or amount is approved in writing by the Secretary. Such fund,
whether in the form of a cash deposit or invested in obligations of, or fully guaranteed as to
principal by, the United States of America shall at all times be under the control of the
Mortgagee. Disbursements from such fund, whether for the purpose of effecting replacement
of structural elements, and mechanical equipment of the project or for any other purpose, may
be made only after receiving the consent in writing of the Secretary. In the event of a default
*

This section is not applicable to §242 nonprofit hospitals and should be deleted.

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

in the terms of the Mortgage, pursuant to which the loan has been accelerated, the Secretary
may apply or authorize the application of the balance in such fund to the amount due on the
mortgage debt as accelerated.
(b)
Where Mortgagor is acquiring a project already subject to an insured
mortgage, the reserve fund for replacements to be established will be equal to the amount due
to be in such fund under existing agreements or charter provisions at the time Mortgagor
acquires such project, and payment hereunder shall begin with the first payment due on the
mortgage after acquisition, unless some other method of establishing and maintaining the fund
is approved in writing by the Secretary.
(3)
The real property covered by the Mortgage and this agreement is described in
Exhibit “A” attached hereto.
(4)

It shall not without the prior written approval of the Secretary:

(a)
Transfer, dispose of or encumber any of the mortgaged property. Any
such transfer shall be only to a person or persons or corporation satisfactory to and approved by
the Secretary, who shall, by legal and valid instrument in writing, to be recorded or filed in the
same recording office in which conveyances of the property covered by the Mortgage are
required to be filed or recorded, duly assume all obligations under this agreement and under the
insured Note and Mortgage;
(b)
Assign, transfer, dispose of, or encumber any personal property of the
project, including revenues from any source rents, and shall not disburse or pay out any funds
except for usual operating expenses and necessary repairs;
(c)
Remodel, reconstruct, or demolish any part of the mortgaged property or
subtract from any real or personal property of the project;
(d)
Pay any compensation or make any distribution of income or other assets
to any of its officers, directors or stockholders;
(e)

Enter into any contract or contracts for supervisory or managerial

services;
(f)
Use, or permit the use of, the mortgaged property for any purpose other
than the operation of a (nonprofit group practice facility) nonprofit hospital. *
(5) ** The Mortgagor agrees to deposit in a residual receipts fund any residual receipts
realized from the operation of the mortgaged property. No distribution from such fund shall be
made without the prior written approval of the Secretary. No distribution from such fund,

*
**

Delete inapplicable phrase.
This section is not applicable to §242 nonprofit hospitals and should be deleted.
Page 2

Regulatory Agreement
Project No. ___________

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

which the party receiving such distribution is not entitled to retain hereunder, shall be held in
trust separate and apart from any other funds.
(6)
It shall maintain the mortgaged premises, accommodations, and the grounds and
equipment appurtenant thereto, in good and substantial repair and condition. PROVIDED
THAT, in the event all or any of the buildings covered by the Mortgage shall be destroyed or
damaged by fire or other casualty, the money derived from any insurance on the property shall
be applied in accordance with the terms of the insured Mortgage.
(7)
Mortgagor shall not file any petition in bankruptcy, or for a receiver, or in
insolvency, or for reorganization or composition, or make any assignment for the benefit of
creditors or to a trustee for creditors; or permit an adjudication in bankruptcy, the taking
possession of the mortgaged property or any part thereof by a receiver, or the seizure and sale
of the mortgaged property or any part thereof under judicial process or pursuant to any power
of sale and fail to have such adverse actions set aside within 45 days.
(8)
It shall immediately satisfy or release any mechanic’s lien, attachment,
judgment, lien, or any other lien which attaches to the mortgaged property or any personal
property used in the operation of the project, except as permitted under the Security Agreement
of even date between Mortgagor and Mortgagee, and shall dismiss or have dismissed or vacated
any receivership or petition in bankruptcy or assignment for benefit of creditors, creditors bill
or insolvency proceedings involving the project or the mortgaged property.
(9)
(a)
If the Mortgagor has any business or activity other than the project and
operation of the mortgaged property, it shall maintain all income and other funds of the project
segregated from any other funds of the Mortgagor and segregated from any funds of any other
corporation or person. Income and other funds of the project shall be expended only for the
purposes of the project and in connection with the mortgaged property.
(b)
Mortgagor shall provide for the management of the project in a manner
satisfactory to the Secretary. Any management contract entered into by the Mortgagor
involving the project shall contain a provision that it shall be subject to termination without
penalty and with or without cause, upon written request by the Secretary addressed to the
Mortgagor and the management agent. Upon receipt of such request the Mortgagor shall
immediately terminate the contract within a period of not more than thirty (30) days and shall
make arrangements satisfactory to the Secretary for continuing proper management of the
project.
(c)
It shall make no payment for services, supplies, or materials unless such
services are actually rendered for the project or such supplies or materials are delivered to the
project and are reasonably necessary for its operation. Payments for such services, supplies, or
materials shall not exceed the amount ordinarily paid for such services, supplies, or materials in
the area where the services are rendered or the supplies or materials furnished.
(d)
The mortgaged property, equipment, building plans, office apparatus,
devices, books, contracts, records, documents, and other papers relating thereto shall be subject
Page 3
Regulatory Agreement
Project No. ___________

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

to examination and inspection at any reasonable time by the Secretary or his duly authorized
agents; the Mortgagor shall keep copies of all written contracts or other instruments which
affect the mortgaged property, all or any of which may be subject to inspection and
examination by the Secretary or his duly authorized agents.
(e)
The books and accounts of the operations of the mortgaged property and
of the project shall be kept in accordance with the requirements of the Secretary.
(f)
Within 60 days following the end of each fiscal year the Secretary shall
be furnished with a complete annual financial report based upon an examination of the books
and records of Mortgagor prepared in accordance with the requirements of the Secretary,
certified to and by an officer of the Mortgagor and, when required by the Secretary, prepared
and certified by a Certified Public Accountant, or other person acceptable to the Secretary.
(g)
At the request of the Secretary, his agents, employees, or attorneys, the
Mortgagor shall give specific answers to questions upon which information is desired from
time to time relative to the income, assets, liabilities, contracts, operation, and condition of the
property and the status of the insured Mortgage and any other information with respect to the
Mortgagor or the mortgaged property and of the project which may be requested.
(h)
All 1 receipts of the project shall be deposited in the name of the project
in a bank, whose deposits are insured by F.D.I.C. 2 Such funds shall be withdrawn only in
accordance with the provisions of this agreement for expenses of the project. Funds of the
project shall be immediately deposited in the project bank account and failing to do so in
violation of this Agreement such funds shall be deemed to be held in trust. Property of the
project received in violation of this Agreement shall be immediately delivered to the project
and failing to do so, such property shall be deemed to be held in trust.
(i)
Mortgagor or its lessee shall at all times, if required by the laws of the
jurisdiction, maintain in full force and effect a license to operate the project from the state
and/or other licensing authority. Mortgagor shall not lease all or part of the project except on
terms approved by the Secretary.
(10) 3 The Mortgagor shall make its project and services, if any, available to eligible
occupants at charges approved in writing by the Secretary. Such charges shall be subject to
annual review by the Secretary. If the Secretary determines in his review that some adjustment
(either upward or downward) of charges is required, the Mortgagor shall immediately comply
with such requirements.
(11) 4 (a)
The Mortgagor shall be required to suitably equip the project for group
practice operations: Mortgagor agrees to perform all obligations of any chattel mortgage,
1

Except as may otherwise be required by the Secretary, all
the United States or an agency or instrumentality thereof.
3
This section is not applicable to §242 nonprofit hospitals and should be deleted.
4
This section is not applicable to §242 nonprofit hospitals and should be deleted.
2

Page 4
Regulatory Agreement
Project No. ___________

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

conditional sale, lease or lease-purchase agreement, or other type of financing arrangement
designed to acquire equipment for the project. Any plan for the acquisition of equipment (other
than outright purchase) must be approved in writing by the mortgagee and the Secretary and
shall contain provision extending to the mortgagee, its successors or assigns, the option to
assume such financing (or leasing) obligation of the Mortgagor upon default; further, such
financing (or leasing) arrangement shall require the vendor-lessor to furnish written notice of
default to the mortgagee and the Secretary before exercising any of its rights or remedies.
(b)
The Mortgagor shall execute and record a chattel mortgage in favor of
the mortgagee covering the Mortgagor’s interest in all equipment used for the group operation
except for such equipment as the Secretary may exempt from such coverage. Said chattel
mortgage shall provide that a default in the terms of the Note and Mortgage upon the realty
shall also constitute a default thereunder.
(12) Mortgagor will comply with the provisions of any Federal, State or local law
prohibiting discrimination in housing on the grounds of race, color, creed, or national origin,
including Title VI of the Civil Rights Act of 1964 (P.L. 88-352, 42 U.S.C. 2000d-1), Title VIII
of the Civil Rights Act of 1968 (P.L. 90-284, 42 U.S.C. 3601), and Executive Order 11063 (27
F.R. 11527), and all requirements imposed by or pursuant to the regulations of the Department
of Housing and Urban Development (24 CFR) issued pursuant to Title VI, Title VIII, or
Executive Order 11063.
(13) Upon a violation of any of the above provisions of this Agreement by
Mortgagor, the Secretary may give written notice, thereof, to Mortgagor, by registered or
certified mail, addressed to the address stated in this Agreement, or such other addresses as
may subsequently, upon appropriate written notice thereof to the Secretary, be designated by
the Mortgagor as its legal business address. If such violation is not corrected to the satisfaction
of the Secretary within 30 days after the date of such notice is mailed or within such further
time as the Secretary determines is necessary to correct the violation, without further notice the
Secretary may declare a default under this Agreement effective on the date of such declaration
and upon such default the Secretary may:
(1)
(a)
If the Secretary holds the Note – declare the whole of said
indebtedness immediately due and payable and then proceed with the foreclosure of the
Mortgage.
(b)
If said Note is not held by the Secretary – notify the holder of the
Note of such default and request holder to declare a default under the Note and Mortgage, and
the holder after receiving such notice and request, but not otherwise, at its option, may declare
the whole indebtedness due, and thereupon proceed with foreclosure of the Mortgage, or assign
the Note and Mortgage to the Secretary as provided in the Regulations;
(2)
Collect all rents and charges in connection with the operation of the
project and use such collections to pay the Mortgagor’s obligations under this Agreement and
under the Note and Mortgage, and the necessary expenses of preserving the property and
operating the project.
Page 5
Regulatory Agreement
Project No. ___________

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

(3)
Take possession of the project, bring any action necessary to enforce any
rights of the Mortgagor growing out of the project operation, and operate the project in
accordance with the terms of this Agreement until such time as the Secretary in his discretion
determines that the Mortgagor is again in a position to operate the project in accordance with
the terms of this Agreement and in compliance with the requirements of the Note and
Mortgage.
(4)
Apply to any court, State or Federal, for specific performance of this
Agreement, for any injunction against any violation of the Agreement, for the appointment of a
receiver to take over and operate the property in accordance with the terms of the Agreement,
or for such other relief as may be appropriate, since the injury to the Secretary arising from a
default under any of the terms of this agreement would be irreparable and the amount of
damage would be difficult to ascertain.
(14) As security for the payment due under this Agreement to the Reserve Fund for
Replacements, and ** To secure the Secretary because of his liability under the endorsement of
the Note for insurance, and as security for the obligations under this Agreement, the Mortgagor
respectively assigns, pledges and mortgages to the Secretary its rights to the income and
charges of whatever sort which it may receive or be entitled to receive from the operation of
the mortgaged property, subject, however, to any assignment of rents or project income in the
Mortgage referred to herein. Until a default is declared under this Agreement, however,
permission is granted to Mortgagor to collect and retain under the provisions of this Agreement
such profits, income, and charges, but upon default this permission is terminated.
(15)

As used in this Agreement the term:

(a)
“Mortgage” includes “Deed of Trust”, “Chattel Mortgage”, and any other
security for the Note identified herein, and endorsed for insurance or held by the Secretary;
(b)
“Mortgagee” refers to the holder of the mortgage identified herein, its
successors and assigns;
(c)
“Mortgaged Property” includes all property, real, personal, or mixed,
covered by the mortgage or mortgages securing the note endorsed for insurance or held by the
Secretary;
(d)
“Project” includes the mortgaged property and all its other assets of
whatsoever nature or wheresoever situate, used in or owned by the business conducted on said
property;
(e)
“Distribution” means any withdrawal or taking of cash or other assets of
the project other than for mortgage payments or for payment of reasonable expenses incident to
its construction operation and maintenance;
**

Delete this portion of the first sentence of this section where project is §242 nonprofit hospital.
Page 6

Regulatory Agreement
Project No. ___________

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

(f)
“Default” means a default declared by the Secretary when a violation of
this Agreement is not corrected to his satisfaction within the time allowed by this Agreement or
such further time as may be allowed by the Secretary after written notice;
(g)

“Residual Receipts” means any cash remaining after:
(1)

the payment of:

(i)
All sums due or currently required to be paid under the
terms of any mortgage or note insured or held by the Secretary of Housing and Urban
Development;
(ii)

All amounts required to be deposited in the reserve fund

for replacements;
(iii)
All obligations of the project other than the mortgage
insured or held by the Secretary unless funds for payment are set aside or deferment of payment
has been approved by the Secretary; and
(2)

The segregation of:

(i)
An amount equal to the aggregate of all special funds
required to be maintained by the project;
(ii)

All tenant security deposits held;

(h)
“Group practice facility” means an establishment designed for operation
primarily by a medical or dental group which provides preventive, diagnostic, and treatment
service to ambulatory patients under professional supervision of persons licensed to practice
dentistry, medicine, or optometry;
(i)

“Hospital” means a facility --

(1)
Which provides community service for inpatient medical care of
the sick or injured, including obstetrical care;
(2)
Where not more than 50 percent of the total patient days during
any year are customarily assignable to the categories of chronic convalescent and rest, drug and
alcoholic, epileptic, mentally deficient, mental, nervous and mental, and tuberculosis; and
(3)
Which is owned and operated by one or more nonprofit
corporations or associations no part of the net earnings of which inures, or may lawfully inure
to the benefit of any private shareholder or individual.

Page 7
Regulatory Agreement
Project No. ___________

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

(16) The Secretary shall not be liable for any of his acts hereunder except for flagrant
misfeasance.
(17) This instrument shall bind, and the benefits shall inure to, the respective parties
hereto, their legal representatives, executors, administrators, successors in office or interest,
and assigns, and all owners of the mortgaged property, so long as the contract of mortgage
insurance continues in effect, and during such further time as the Secretary shall be the owner
or reinsurer of the Mortgage.
(18) The invalidity of any clause, part or provision of this Agreement shall not affect
the validity of the remaining portions thereof.
(19) Mortgagor warrants that it has not, and will not, execute any other agreement
with provisions contradictory of, or in opposition to, the provisions hereof, and that, in any
event, the requirements of this Agreement are paramount and controlling as to the rights and
obligations set forth and supersede any other requirements in conflict therewith.
SEE RIDER I ATTACHED HERETO AND MADE A PART HEREOF FOR
CONTINUATION OF PARAGRAPHS.
[DOCUMENT EXECUTION OCCURS ON THE FOLLOWING PAGES]

Page 8
Regulatory Agreement
Project No. ___________

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

IN WITNESS WHEREOF, the parties hereto have set their hands as of the date written
above.
MORTGAGOR:
___________________________

By:
Name:
Title:

ACKNOWLEDGMENT
STATE OF

_____________)
) SS:
COUNTY OF _____________ )
[Insert state required notary panel]

Page S-1
Regulatory Agreement
Project No. ___________

HUD FORM NO. 2466GP­OHF
(rev. xx/xx)

SECRETARY:
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
Acting by and through the
FEDERAL HOUSING COMMISSIONER

By:
Authorized Agent
ACKNOWLEDGMENT
STATE OF ______________)
) ss:
COUNTY OF ___________)
I, _______________________ a Notary Public in and for the State of __________, do
certify that on the ___ day of ________, 200_, before me personally appeared
_______________________________ to me personally known and the person who executed the
foregoing Regulatory Agreement bearing even date herewith, by virtue of the authority vested
in him, and acknowledged that he executed the aforesaid instrument for and on behalf of the
Secretary of Housing and Urban Development acting by and through the Federal Housing
Commissioner for the purpose therein expressed.
Subscribed and sworn to before me at _____________________, _________________,
the date aforesaid.

Notary Public

Prepared by:
Roderick D. Owens, Esq.
Krooth & Altman LLP
1850 M Street, N.W., Suite 400
Washington, D.C. 20036

Page S-2
Regulatory Agreement
Project No. ___________


File Typeapplication/pdf
File TitleMicrosoft Word - Regulatory Agr (2466-GP) (242 non profit) v1
Authorcindy shears
File Modified2011-12-23
File Created2011-04-29

© 2024 OMB.report | Privacy Policy