HUD-2456 Escrow Deposit Agreement

Escrow Deposit Agreement

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

This agreement made this ____________________________ day of ____________________________________ , ___ ____ ____ ,
by and between (Mortgagor)_______________________________________________________________________________ (hereinafter called "Mortgagor") party of the first part, and (Depository) ______________________________________________ ,
(hereinafter called "Depository"),
Witnesseth:
Whereas, The above-named Mortgagor is now constructing a housing project in ________________________________________ ,
County of __________________________, State of _________________________, identified as (Name of Project)
____________________________________________________________________ , (HUD Project No. ________________) under
a certain Building Loan Agreement between the Mortgagor and (Mortgagee) _____________________________________, (hereinafter called "Mortgagee"), dated the _______________ day of ________________________, _________ , which Building Loan
Agreement is by reference incorporated herein and made part hereof; and
Whereas, the said Mortgagor has not at the present time completed certain improvements required by said Building Loan Agreement
as listed in the exhibit attached hereto, identified as "Exhibit A", but intends to complete said improvements; and
Whereas, in order to induce the Mortgagee to advance the entire amount of the loan provided for in said Building Loan Agreement and
in order to induce the Department of Housing and Urban Development to insure said loan in its entirety prior to completion of all said
improvements, the Mortgagor desires to provide security for the completion of said improvements;
Now, therefore, for and in consideration of the premises hereinabove set forth, the parties hereto agree as follows:
1.

The Mortgagor covenants and agrees:

(a) To complete the improvements enumerated in Exhibit A
on or before the _____________ day of _________________ ,
________ , the said work to be done and completed free and clear
of all liens and in accordance with the Drawings and Specifications referred to in said Building Loan Agreement. The Mortgagor further agrees to pay for all work and material necessary for
completion of said work.
(b) That all work performed pursuant to the provisions of
this agreement shall be subject to the Labor Standards Procedures
and Prevailing Wage Requirements accepted by the original
general contractor in executing the Contractor's Prevailing Wage
Certificate on the back of form HUD-92448, Contractor's Requisition Project Mortgages. The terms and provisions of said Certificate are hereby specifically accepted by the Mortgagor. Prior
to release of any funds provided for herein, Mortgagor shall
submit a Contractor's Prevailing Wage Certificate duly executed
by each and every contractor performing any of the work and
dated subsequent to completion of such work.
2. The Mortgagor herewith deposits with the Depository,
and the Depository acknowledges receipt thereof, the sum of
$ _______________________ , which said sum shall be held by
the Depository and disbursed as follows:

Previous editions are obsolete

(a) In the event the Mortgagor completes the construction of
said improvements in accordance with the Drawings and Specifications above referred to on or before the date agreed to in
Paragraph 1 above, and there is no default under the mortgage, the
Depository shall upon receipt of written approval of said work
from HUD return to the Mortgagor, without interest, the sum
herewith deposited.
(b) In the event the Mortgagor fails to complete the improvements on or before the date agreed to in Paragraph 1, or defaults
under the mortgage, the Depository, upon receiving written instructions from HUD so to do, shall pay to the Mortgagee the
unexpended balance of the sum herewith deposited to be applied
in the amount and manner specified by said Administration to the
obligations of the Mortgagor.
(c) In the event the Mortgagor fails to complete the said
improvements on or before the date agreed in Paragraph 1 above
in accordance with said Drawings and Specifications and fails to
produce to the Depository the written approval of said work by
HUD, or in the event the Depository receives from HUD on or
after said date notice that the said improvements have not been
completed in accordance with Drawings and Specifications, the
Mortgagee, subject to the approval of HUD, shall have the right
and/or option to proceed to complete said work in accordance
with the Drawings and Specifications and pay the cost thereof,
including all costs and charges of the Depository and Mortgagee
from the sum herewith deposited, and for this purpose the Mortgagor hereby irrevocably authorizes and empowers the Mort-

Page 1 of 2

form HUD-2456 (12/91)
ref. Handbook 4470.1

gagee to do and perform for it, the said Mortgagor and in its name,
place and site with full powers of substitution, all matters and
things which the said Mortgagee shall in its judgment deem
necessary and proper to be done to effectuate the completion of
the same improvements in accordance with the Drawings and
Specifications and to apply the moneys herewith deposited to the
payment of debts contracted or incurred for work done or for
materials furnished therefor, or either, in and about said work and
for all expenses, costs and charges in connection therewith, and
this warrant of attorney shall be the Mortgagee's full and sufficient authority and the orders given and signed by the Mortgagee
as attorney-in-fact for the Mortgagor shall be good and sufficient
vouchers for all payments made by virtue thereof. Further, in such
event the Mortgagor hereby irrevocably authorizes and empowers the Mortgagee to enter into and upon the said Project and take
charge thereof together with all materials and appliances thereunto belonging, and in the name of the Mortgagor, as its attorneyin-fact, to call upon and require the several contractors for work
to be done and for materials to be furnished in and about the
completion of said improvements to proceed to complete the said
improvements in accordance with the Drawings and Specifications or any changes, alterations, additions or modifications of
the same as may be deemed expedient or necessary by HUD and
to do whatsoever in the Mortgagee's judgment shall be necessary
to be done to secure the completion of the said improvements
according to the Drawings and Specifications and in accordance
with the instructions of HUD. In the event the work is completed
by the Mortgagee in accordance with provisions hereof and
written approval of said work is given by HUD, any unexpected
balance of the sum deposited with the Depository shall thereupon
be returned to the mortgagor without interest unless the mortgage
is in default. The Mortgagee shall in no event be responsible for
the completion of the said work beyond the expenditure of the
sum herewith deposited and if said sum is insufficient for such
purpose the Mortgagee shall be under no obligation to proceed
further with the work or to demand or obtain additional sums from
the Mortgagor. This warrant of attorney is granted with full power
of substitution and the Mortgagor hereby specifically agrees that
all powers granted to the Mortgagee hereunder may be assigned
by it to HUD.

3. It is the intention of the parties to this Agreement that the
Depository shall act solely at all times on instructions from HUD
with respect to the said sum deposited with it by the Mortgagor
and for so acting the Mortgagor hereby expressly releases and
relieves the said Depository of any and all liability or claims of
any nature. The said Depository shall have a prior lien on said
fund, however, for any and all cost or expenses incurred by it
(including court costs and reasonable attorney's fees) by reason of
acting as Depository of the said fund.
4. In the event the Mortgagee acts as Depository, the name
Depository wherever used herein shall be construed as referring
to said Mortgagee acting in the capacity of Depository.
5. This Agreement is entered into by the parties hereto for the
benefit of the holder of any mortgage on said project insured by
the Federal Housing Commissioner and for the benefit of the
Federal Housing Commissioner either of which shall have the
right to act as Depository and/or enforce the provisions hereof.
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 first above written.

Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802)
Attest

(Mortgagor)

By (President)

Attest
(Depository)

(President)

Previous editions are obsolete

Page 2 of 2

form HUD-2456 (12/91)
ref. Handbook 4470.1