Form HUD 92466 HUD 92466 Regulatory Agreement Multifamily Housing Projects

Regulatory Agreement
Multifamily Housing Projects
Instructions to Closing Attorney

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

Exempt from OMB approval requirements under
5 CFR 1320.3(h). ,QVWUXFWLRQV

Under Sections 207, 220, 221(d)(4), 231 and 232, Except Nonprofits
1.

Form of Mortgagor
a. Corporate Mortgagor - any form of Corporate Charter may be
used which:
(1) contains nothing inconsistent with the Regulatory Agreement,
(2) gives the corporation powers necessary to operate the project
and execute the note and mortgage, and
(3) specifically authorizes the execution of the regulatory
Agreement.

representative capacity should also be set out in his individual
capacity in Paragraph 17. For example: a party may be designated,
“Mr. Jones, as trustee of Sara Jones Trust,” be listed in paragraph
17 as “Mr. Jones, individually,” and sign the Agreement as “Mr.
Jones, trustee of the Sara Jones Trust.” This would make the Sara
Jones Trust responsible for carrying out the provisions of the
Regulatory Agreement, but Mr. Jones would be responsible individually only for his own acts.
4.

In all cases involving the issuance of a commitment to insure there
shall be added to the mortgage a provision substantially as follows:
“The Regulatory Agreement of even date herewith entered into
between the Mortgagors (Grantors) herein and the Secretary of
Housing and Urban Development which is being recorded simultaneously herewith, is incorporated in and made a part of this
mortgage (deed of trust). Upon default under the Regulatory Agreement and upon request by the Secretary, the Mortgagee, at its
option, may declare this mortgage (deed of trust) in default and may
declare the whole of the indebtedness secured hereby to be due and
payable.”
If the mortgage is already on record, it should be modified to
incorporate the Regulatory Agreement. Ordinarily this may be done
by a separate Modification Agreement executed by the mortgagor
and mortgagee.

5.

The Regulatory Agreement shall be executed by the Mortgagor and
Secretary and recorded at the expense of the Mortgagor prior to
endorsement for insurance, prior to consent to a conveyance in
existing insured mortgage cases, or prior to the conveyance to a
purchaser in sales cases.

6.

Since the requirements for execution vary from state to state, space
is left at the end of the printed form for proper execution. Generally,
acknowledgment by each party will be required and the form of
acknowledgment used in the mortgage or deed of trust would be
acceptable.

7.

If the mortgage is insured pursuant to Section 232, Par. 4 of the
Regulatory Agreement shall be stricken and the deletion appropriately approved by the parties.

8.

The Agreement is to be executed in the name of the Secretary by the
Field Office Manager.

9.

A legal description of the property shall be attached.

Suggested charter provisions to accomplish the above purposes
are attached.
b. Partnership Mortgagor - Unless all general partners execute the
Regulatory Agreement, a copy of the partnership agreement
should be furnished and should be furnished and should be
examined to determine that it contains nothing inconsistent with
the Regulatory Agreement. It should further contain a provision
substantially as follows:
“The partnership is authorized to execute a note and mortgage in order to secure a loan to be insured by the Secretary of
Housing and Urban Development and to execute a Regulatory
Agreement and other documents required by the Secretary in
connection with such loan. Any incoming general partner shall
as a condition of receiving an interest in the partnership agree to
be bound by the note, mortgage, and Regulatory Agreement and
other documents required in connection with the FHA insured
loan to the same extent and on the same terms as the other
general partners. Upon any dissolution, no title or right to
possession and control of the project, and no right to collect the
rents therefrom shall pass to any person who is not bound by the
Regulatory Agreement in a manner satisfactory to the Secretary.
c. Trust - any Trust Agreement before it is finally accepted generally should:
(1) Give the trustee the powers necessary to execute the note and
mortgage;
(2) specifically authorize the execution of the Regulatory Agreement;
(3) contain nothing inconsistent with the Regulatory Agreement;
(4) prohibit the transfer of beneficial interest prior to completion
of the project without the prior written consent of the Secretary and prohibit the transfer of such interest subsequent to
completion of the project unless the new beneficiary assumes
and agrees to be bound by the Regulatory Agreement; and
(5) require that the Secretary be advised ten (10) days prior to
any proposed transfers of beneficial interests.
2.

3.

The Section of the National Housing Act under which the mortgage
was originally endorsed for insurance or the fact that the mortgage
originally was a Secretary-held purchase money mortgage shall be
set out in the heading of the Agreement under the item “mortgage.”
The names of all mortgagors including all beneficiaries of any trust
shall be set out in the first unnumbered paragraph of the Agreement
in the place for listing the names of the parties. Where any such
person is signing the Agreement as trustee or in some other representative capacity, this fact shall be clearly set out both in this first
paragraph and in an identical manner at the end of the Agreement
where such person signs. The name of the person signing in a

Replaces FHA-2466 which may be used until supply exhausted

10. Whenever this Agreement is executed by a person not liable for the
payment of the note and mortgage, such person shall be listed in
Paragraph 17. If all persons executing this Agreement are so liable,
the word “none” should be inserted in Paragraph 17 or Paragraph 17
should be stricken in its entirety.
11. In the event the project is to be insured under section 232, and the
owner is to lease the project, the lessee shall execute FHA Form No.
2466-nhl.
12. The dollar amount to be inserted in the first paragraph of 2(a) is 1/
12 the annual Reserve for Replacements recited in the commitment.

Page 1 of 6

form HUD-92466 (11/2002)
ref Handbook 4571.1

Corporate Charter Provisions
Article

Purposes

The purpose for which the corporation is formed and the business to be
carried on and the objectives to be effected by it are:
Section 1. (a) To create a private corporation to construct or to acquire a
housing project or projects, and to operate the same; (b) to enable the
financing of the construction of such rental housing with the assistance of
mortgage insurance under the National Housing Act; (c) to enter into,
perform, and carry out contracts of any kind necessary to, or in connection
with, or incidental to, the accomplishment of the purposes of the corporation, including, expressly, any contract or contracts with the Secretary of
Housing and Urban Development which may be desirable or necessary to
comply with the requirements of the National Housing Act, as amended, and
the Regulations of the Secretary thereunder, relating to the regulation or
restriction of mortgagors as to rents, sales, charges, capital structure, rate of
return and methods of operation; (d) to any acquire any property, real or
personal, in fee or under lease, or any rights therein or appurtenant thereto,
necessary for the construction and operation of such project; and (e) to
borrow money, and to issue evidence of indebtedness, and to secure the
same by mortgage, deed of trust, pledge, or other lien, in furtherance of any
or all of the objects of its business in connection with said project.
Article

Powers

Section 1. The corporation shall have the power to do and perform all things
whatsoever set out in Section 1 of Article _______________ Purposes
above, and necessary or incidental to the accomplishments of said purposes.
Section 2. The corporation, specifically and particularly, shall have the
power and authority to enter into a Regulatory Agreement setting out the
requirements of the Secretary of Housing and Urban Development.

Replaces FHA-2466 which may be used until supply exhausted

Page 2 of 6

form HUD-92466 (11/2002)
ref Handbook 4571.1

Regulatory Agreement for
Multifamily Housing Projects

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

Under Sections 207, 220, 221(d)(4), 231 and 232, Except Nonprofits
Project Number

Mortgagee

Amount of Mortgage Note

Date

Mortgage Recorded

State

County

Book

Page

Date

Originally endorsed for insurance under Section

This Agreement entered into this _______________________________________________________ day of _________________ , 20 _______ between
_______________________________________________________________________________________________________________

whose ad-

dress is ____________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________
their successors, heirs, and assigns (jointly and severally, hereinafter referred to as Owners) and the undersigned Secretary of Housing and Urban Development
and his successors (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 or the sale and conveyance of the
mortgaged property by the Secretary, and in order to comply with the
requirements of the National Housing Act, as amended, and the Regulations
adopted by the Secretary pursuant thereto, Owners agree for themselves,
their successors, heirs and assigns, 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 shall be the owner, holder or reinsurer of the mortgage,
or during any time the Secretary is obligated to insure a mortgage on the
mortgage property:
1.

Owners, except as limited by paragraph 17 hereof, assume and agree
to make promptly all payments due under the note and mortgage.

2.

(a) Owners shall 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 towards 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.

(b) Where Owners are 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 Owners
acquire such project, and payments 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.

(This paragraph 4 is not applicable to cases insured under Section 232.)
4.

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 that the owner is unable to make a mortgage note
payment on the due date and that payment cannot be made prior
to the due day of the next such installment or when the mortgagee
has agreed to forgo making an election to assign the mortgage to
the Secretary based on a monetary default, or to withdraw an
election already made, the Secretary is authorized to instruct the
mortgagee to withdraw funds from the reserve fund for replacements to be applied to the mortgage payment in order to prevent
or cure the default. In addition, in the event of a default 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.
Replaces FHA-2466 which may be used until supply exhausted

Real property covered by the mortgage and this agreement is described
in Schedule A attached hereto.

Page 3 of 6

(a) Owners shall make dwelling accommodation and services of the
project available to occupants at charges not exceeding those
established in accordance with a rental schedule approved in
writing by the Secretary, for any project subject to regulation of
rent by the Secretary. Accommodations shall not be rented for a
period of less than thirty (30) days, or, unless the mortgage is
insured under Section 231, for more than three years. Commercial
facilities shall be rented for such use and upon such terms as
approved by the Secretary. Subleasing of dwelling accommodations, except for subleases of single dwelling accommodations by
the tenant thereof, shall be prohibited without prior written
approval of Owners and the Secretary and any lease shall so
provide. Upon discovery of any unapproved sublease, Owners
shall immediately demand cancellation and notify the Secretary
thereof.
(b) Upon prior written approval by the Secretary, Owners may charge
to and receive from any tenant such amounts as from time to time
may be mutually agreed upon between the tenant and the Owners
for any facilities and/or services which may be furnished by the
Owners or others to such tenant upon his request, in addition to the
facilities and services included in the approved rental schedule.
Approval of charges for facilities and services is not required for
any project not subject to regulation of rent by the Secretary.
(c) For any project subject to regulation of rent by the Secretary, the
Secretary will at any time entertain a written request for a rent
increase properly supported by substantiating evidence and
within a reasonable time shall:

form HUD-92466 (11/2002)
ref Handbook 4571.1

(i)

Approve a rental schedule that is necessary to compensate
for any net increase, occurring since the last approved rental
schedule, in taxes (other than income taxes) and operating
and maintenance cost over which Owners have no effective
control or;

(3) Any distribution of any funds of the project, which the party
receiving such funds is not entitled to retain hereunder, shall
be held in trust separate and apart from any other funds; and
(4) There shall have been compliance with all outstanding
notices of requirements for proper maintenance of the
project.

(ii) Deny the increase stating the reasons therefor.
5.

(a) If the mortgage is originally a Secretary-held purchase money
mortgage, or is originally endorsed for insurance under any
Section other than Sections 231 or 232 and is not designed
primarily for occupancy by elderly persons, Owners shall not in
selecting tenants discriminate against any person or persons by
reason of the fact that there are children in the family.

(f) Engage, except for natural persons, in any other business or
activity, including the operation of any other rental project, or
incur any liability or obligation not in connection with the project.
(g) Require, as a condition of the occupancy or leasing of any unit in
the project, any consideration or deposit other than the prepayment of the first month's rent plus a security deposit in an amount
not in excess of one month's rent to guarantee the performance of
the covenants of the lease. Any funds collected as security
deposits shall be kept separate and apart from all other funds of the
project in a trust account the amount of which shall at all times
equal or exceed the aggregate of all outstanding obligations under
said account.

(b) If the mortgage is originally endorsed for insurance under Section
221, Owners shall in selecting tenants give to displaced persons
or families an absolute preference or priority of occupancy which
shall be accomplished as follows:
(1) For a period of sixty (60) days from the date of original
offering, unless a shorter period of time is approved in
writing by the Secretary, all units shall be held for such
preferred applicants, after which time any remaining
unrented units may be rented to non-preferred applicants;
(2) Thereafter, and on a continuing basis, such preferred applicants shall be given preference over nonpreferred applicants
in their placement on a waiting list to be maintained by the
Owners; and

(h) Permit the use of the dwelling accommodations or nursing facilities of the project for any purpose except the use which was
originally intended, or permit commercial use greater than that
originally approved by the Secretary.
7.

Owners shall maintain the mortgaged premises, accommodations and
the grounds and equipment appurtenant thereto, in good repair and
condition. 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 mortgage.

8.

Owners 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 or 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 forty-five (45) days.

9.

(a) Any management contract entered into by Owners or any of them
involving the project shall contain a provision that, in the event of
default hereunder, it shall be subject to termination without
penalty upon written request by the Secretary. Upon such request
Owners shall immediately arrange to 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.

(3) Through such further provisions agreed to in writing by the
parties.
(c) Without the prior written approval of the Secretary not more than
25% of the number of units in a project insured under Section 231
shall be occupied by persons other than elderly persons.
(d) All advertising or efforts to rent a project insured under Section
231 shall reflect a bona fide effort of the Owners to obtain
occupancy by elderly persons.
6.

Owners shall not without the prior written approval of the Secretary:
(a) Convey, transfer, or encumber any of the mortgaged property, or
permit the conveyance, transfer or encumbrance of such property.
(b) Assign, transfer, dispose of, or encumber any personal property
of the project, including rents, or pay out any funds except from
surplus cash, except for reasonable operating expenses and necessary repairs.
(c) Convey, assign, or transfer any beneficial interest in any trust
holding title to the property, or the interest of any general partner
in a partnership owning the property, or any right to manage or
receive the rents and profits from the mortgaged property.
(d) Remodel, add to, reconstruct, or demolish any part of the mortgaged property or subtract from any real or personal property of
the project.
(e) Make, or receive and retain, any distribution of assets or any
income of any kind of the project except surplus cash and except
on the following conditions:
(1) All distributions shall be made only as of and after the end of
a semiannual or annual fiscal period, and only as permitted
by the law of the applicable jurisdiction;

(b) Payment for 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.
(c) The mortgaged property, equipment, buildings, plans, offices,
apparatus, devices, books, contracts, records, documents, and
other papers relating thereto shall at all times be maintained in
reasonable condition for proper audit and subject to examination
and inspection at any reasonable time by the Secretary or his duly
authorized agents. Owners 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.

(2) No distribution shall be made from borrowed funds, prior to
the completion of the project or when there is any default
under this Agreement or under the note or mortgage;
Replaces FHA-2466 which may be used until supply exhausted

Page 4 of 6

form HUD-92466 (11/2002)
ref Handbook 4571.1

(d) 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.
(e) Within sixty (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, prepared and certified to by an officer or responsible
Owner and, when required by the Secretary, prepared and certified by a Certified Public Accountant, or other person acceptable
to the Secretary.
(f) At request of the Secretary, his agents, employees, or attorneys,
the Owners shall furnish monthly occupancy reports and shall
give specific answers to questions upon which information is
desired from time to time relative to income, assets, liabilities,
contracts, operation, and condition of the property ad the status of
the insured mortgage.

100, 107 and 110, and Subparts I and M of Part 200).
11. Upon a violation of any of the above provisions of this Agreement by
Owners, the Secretary may give written notice thereof, to Owners, by
registered or certified mail, addressed to the addresses stated in this
Agreement, or such other addresses as may subsequently, upon appropriate written notice thereof to the Secretary, be designated by the
Owners as their legal business address. If such violation is not
corrected to the satisfaction of the Secretary within thirty (30) days
after the date 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 of default and upon such
default the Secretary may:
(a) (i)

(ii) 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 not and mortgage, and 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;

(g) All rents and other receipts of the project shall be deposited in the
name of the project in a financial institution, whose deposits are
insured by an agency of the Federal Government. Such funds shall
be withdrawn only in accordance with the provisions of this
Agreement for expenses of the project or for distributions of
surplus cash as permitted by paragraph 6(e) above. Any Owner
receiving funds of the project other than by such distribution of
surplus cash shall immediately deposit such funds in the project
bank account and failing so to do in violation of this Agreement
shall hold such funds in trust. Any Owner receiving property of
the project in violation of this Agreement shall hold such funds in
trust. At such time as the Owners shall have lost control and/or
possession of the project, all funds held in trust shall be delivered
to the mortgagee to the extent that the mortgage indebtedness has
not been satisfied.

(b) Collect all rents and charges in connection with the operation of
the project and use such collections to pay the Owners' obligations
under this Agreement and under the note and mortgage and the
necessary expenses of preserving the property and operating the
project.
(c) Take possession of the project, bring any action necessary to
enforce any rights of the Owners 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 Owners are 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.

(h) If the mortgage is insured under Section 232:
(1) The Owners or lessees shall at all times maintain in full force
and effect from the state or other licensing authority such
license as may be required to operate the project as a nursing
home and shall not lease all or part of the project except on
terms approved by the Secretary.

(d) Apply to any court, State or Federal, for specific performance of
this Agreement, for an injunction against any violation of the
Agreement, for the appointment of a receiver to take over and
operate the project 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.

(2) The Owners shall suitably equip the project for nursing
home operations.
(3) The Owners shall execute a Security Agreement and Financing Statement (or other form of chattel lien) upon all items of
equipment, except as the Secretary may exempt, which are
not incorporated as security for the insured mortgage. The
Security Agreement and Financing Statement shall constitute a first lien upon such equipment and shall run in favor
of the mortgagee as additional security for the insured
mortgage.
(i)

If the mortgage is insured under Section 231, Owners or
lessees shall at all times maintain in full force and effect
from the state or other licensing authority such license
as may be required to operate the project as housing for
the elderly.

10. Owners will comply with the provisions of any Federal, State, or local
law prohibiting discrimination in housing on the grounds of race,
color, religion or creed, sex, or national origin, including Title VIII of
the Civil Rights Act of 1968 (Public Law 90-284; 82 Stat. 73), as
amended, Executive Order 11063, and all requirements imposed by or
pursuant to the regulations of the Department of Housing and Urban
Development implementing these authorities (including 24 CFR Parts
Replaces FHA-2466 which may be used until supply exhausted

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;

12. 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 other obligations under this Agreement, the Owners
respectively assign, pledge and mortgage to the Secretary their rights
to the rents, profits, income and charges of whatsoever sort which they
may receive or be entitled to receive from the operation of the
mortgaged property, subject, however, to any assignment of rents in
the insured mortgage referred to herein. Until a default is declared
under this Agreement, however, permission is granted to Owners to
collect and retain under the provisions of this Agreement such rents,
profits, income, and charges, but upon default this permission is
terminated as to all rents due or collected thereafter.

Page 5 of 6

form HUD-92466 (11/2002)
ref Handbook 4571.1

13. As used in this Agreement the term:

(h) “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;

(a) “Mortgage” includes “Deed of Trust”, “Chattel Mortgage”, “Security Instrument”, and any other security for the note identified
herein, and endorsed for insurance or held by the Secretary;

(i)

(b) “Mortgagee” refers to the holder of the mortgage identified
herein, its successors and assigns;
(j)

(c) “Owners” refers to the persons named in the first paragraph hereof
and designated as Owners, their successors, heirs and assigns;
(d) “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;
(e) “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 mortgaged property, which business is providing housing and other activities as are incidental
thereto;
(f) “Surplus Cash” 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;

(ii) All amounts required to be deposited in the reserve fund
for replacements;
(iii) All obligations of the project other than the insured
mortgage unless funds for payment are set aside or
deferment of payment has been approved by the Secretary; and

“Displaced persons or families” shall mean a family or families,
or a person, displaced from an urban renewal area, or as the result
of government action, or as a result of a major disaster as
determined by the President pursuant to the Disaster Relief Act of
1970.

(k) “Elderly person” means any person, married or single, who is
sixty-two years of age or over.
14. This instrument shall bind, and the benefits shall inure to, the respective Owners, their heirs, legal representatives, executors, administrators, successors in office or interest, and assigns, and to the Secretary
and his successors so long as the contract of mortgage insurance
continues in effect, and during such further time as the Secretary shall
be the owner, holder, or reinsurer of the mortgage, or obligated to
reinsure the mortgage.
15. Owners warrant that they have 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.
16. The invalidity of any clause, part or provisions of this Agreement shall
not affect the validity or the remaining portions thereof.
17. The following Owners:

(2) the segregation of:
(i)

“Section” refers to a Section of the National Housing Act, as
amended.

Do not assume personal liability for payments due under the note and
mortgage, or for the payments to the reserve for replacements, or for
matters not under their control, provided that said Owners shall remain
liable under this Agreement only with respect to the matters hereinafter
stated; namely:

An amount equal to the aggregate of all special funds
required to be maintained by the project; and

(ii) All tenant security deposits held.
(g) “Distribution” means any withdrawal or taking of cash or any
assets of the project, including the segregation of cash or assets for
subsequent withdrawal within the limitations of Paragraph 6(e)
hereof, and excluding payment for reasonable expenses incident
to the operation and maintenance of the project.

(a) for funds or property of the project coming into their hands which,
by the provisions hereof, they are not entitled to retain; and
(b) for their own acts and deeds or acts and deeds of others which they
have authorized in violation of the provisions hereof.
(To be executed with formalities for recording a deed to real estate.)

Replaces FHA-2466 which may be used until supply exhausted

Page 6 of 6

form HUD-92466 (11/2002)
ref Handbook 4571.1