92450-CA-OHF Completion Assurance Agreement

Capital Advance Program
Completion Assurance Agreement
Under Section 202 of the Housing Act of 1959 or
Section 811 of the National Affordable Housing Act

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

OMB Approval No. 2502-xxxx
(exp.   xx/xx/xxxx)

Public reporting burden for this collection of information is estimated to average 1 hour 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.

This Agreement made this _________________________ day of ______________________________ , 20 _________ , by and between
____________________________________________________________________________________________________ party of the
first part, a _____________________________________________________________________________________________ having an
office at ___________________________________________________________________________ (hereinafter called the Contractor),
and ____________________________________________________________________________________________ having an office
at ________________________________________________________________________________________ party of the second part,
a ______________________________________________________________________________________ (hereinafter called the
Owner), and the United States of America, Secretary of Housing and Urban Development (hereinafter called “HUD”), party of the third part.
Witnesseth
Whereas the Contractor and the Owner have entered into a Construction Contract dated __________________________ , 20 _______ ,
providing for the construction of a housing project described in said Contract, said project being known as Project Number _____________
________________ , a copy of said Contract being on file with HUD and ____________________________________________________
____________________________________________________________________________________________________________
Whereas the construction of the said project is to be financed by a capital advance made to said Owner by HUD, which capital advance is
secured by a _______________________________________________ (hereinafter called the Mortgage).
Whereas HUD is unwilling to provide portions of the capital
advance unless the Contractor shall first furnish assurance to the
Owner and HUD for the performance of the obligations of the
Contractor under said Construction Contract including but not
limited to:
(a) the completion of said project in accordance with drawings and
specifications referred to in said Construction Contract;
(b) the completion of said project free and clear of any liens, claims
or encumbrances whatsoever, except for the lien of the HUD
mortgage;
(c) the payment of all mechanics and laborers employed in the
construction of the project at wages prevailing in the locality of
the project as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (if applicable);
(d) the satisfaction of any loss, damage, expense or claim which the
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Owner or HUD may suffer or sustain through the failure of the
Contractor to fulfill the provisions of (a), (b), or (c) above or
through the failure of the Contractor to fulfill all obligations
under said Construction Contract.
Now Therefore, in consideration of the mutual promises and
undertakings hereinafter contained, and for the purpose of inducing
HUD to make portions of the capital advance available during
construction, the partieshereto on behalf of themselves, their successors or assigns respectively, undertake and agree that:
(a) The Contractor has deposited with HUD, or if HUD so elects,
with a depository satisfactory to HUD, a Completion Assurance Fund (hereinafter called the Fund), in the amount of
$ ______________________________________ to secure or
indemnify the Owner or HUD, as the case may be, for any
expenses, loss, or damage suffered or sustained as the result of
any default by the Contractor in the performance of the Conform HUD-92450-CA­OHF (12/20/2005)
ref Handbooks 4571.4 & 4571.5

struction Contract; it being understood and agreed that said Fund
shall at all times be under the control of HUD or its assigns and
is deposited in the form of: (a) cash; or (b) securities of or fully
guaranteed as to principal by, the United States of America,
which securities shall be freely negotiable or assigned to HUD.

Contractor fails to make such corrections. The Contractor's
liability for such corrections is not limited by the amount of such
sum.
(3) To HUD the entire Fund or balance remaining therein
in the event of a default by the Contractor under the Construction
Contract, to be used by HUD to indemnify it and the Owner as the
case may be, for any loss, damage or expense whatsoever which
they may suffer by reason of the Contractor's failure to properly
perform said Construction Contract.
(4) This Agreement shall not alter or limit the obligations
and liabilities of the Contractor under the Construction Contract,
but shall be deemed to be merely additional security for the
performance by the Contractor of the obligations thereunder.
(5) It is understood and agreed that in the event the Fund
is held by a depository, that said depository is not charged with
any duty or responsibility to see to the performance of or
compliance with any agreements between any of the parties
hereto other than that of paying over said Fund as directed in
writing by HUD, nor to see to the application of said Fund after
making disbursement as so directed.
In Witness Whereof the parties have duly executed these presents the
day and year first above mentioned.

(Delete what is not applicable.)
(b) HUD shall maintain such Fund as a separate trust account to be
disbursed as follows:
(1) To the Contractor or party making such deposit during
the course of construction, as may be deemed necessary by HUD.
(2) To the Contractor or party making such deposit, the
balance of such fund so deposited remaining upon final capital
advance disbursement by HUD except that there shall be withheld from the payment of said balance an amount equal to 2 1/2%
of the total amount of the Construction Contract, which sum is to
be retained in such account for a period of fifteen months from
the date of substantial completion as defined in the Construction
Contract. Said sum shall be held as a fund to guarantee against
defects in construction due to faulty materials or workmanship or
damages to the mortgaged premises resulting from such defects,
which defects or damage become apparent within one year after
the date of the aforesaid substantial completion. Said sum may be
used for the correction of such defects or damage in the event the

Attest (Contractor)

By

Owner

By

United States of America
Secretary of Housing and Urban Development

By

Seals must be affixed. To be appropriately acknowledged if required by the laws of the State having jurisdiction.

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)

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form HUD-92450-CA­OHF (12/20/2005)
ref Handbooks 4571.4 & 4571.5