91708 Agreement for Payment of Real Property Taxes by Sponsor

Multifamily Project Applications and Construction Prior to Initial Endorsement

HUD-91708

Multifamily Project Applications and Construction Prior to Initial Endorsement

OMB: 2502-0029

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AGREEMENT FOR PROPERTY
TAXES BY SPONSOR

U.S. Department Of Housing And Urban
Development
Office of Housing
Federal Housing Commissioner

OMB Approval No. 2502-0029
(Expires 07/31/2014)

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. This is part of the basic application
package f or insured m ortgages for co nstruction o f r ental housing p rojects w ith tax aba tements ap proved by loc al j urisdictions. The in formation i s re quired t o
obtain benefits. An agency may not collect this information, and you are not required to complete this form, unless it has a currently valid OMB control number.

This AGREEMENT, made this ____________________________ day of ______________. , 20 _____, by and between
_______________________________________________________________________, hereinafter referred to as “Sponsor”, and
_______________________________________________________________________, hereinafter referred to as “Mortgagor” , and
_______________________________________________________________________, hereinafter referred to as “Mortgagee”
(which designations shall include the respective successors and assigns and successors in interest of the parties hereto),
WITNESSETH:
WHEREAS, THE mortgagee desires to lend to the Mortgagor, a corporation formed for the purpose of constructing and
operating a facility known as ___________________________________ and identified as Project No. ______________ and
hereinafter referred to as “Project”, the sum of $____________________, to be evidenced by a note in said amount and secured by a
mortgage dated _____________________ ; and
WHEREAS, the said note is to be endorsed for mortgage insurance pursuant to Section ____________ of the National
Housing Act by the Secretary of Housing and Urban Development acting by and through the Federal Housing Commissioner,
hereinafter referred to as “FHA”; and
WHEREAS, the Mortgagor and/or Sponsor claim that the project has received or will receive abatement or exemption from
real estate taxes; and
WHEREAS, the Mortgagee is unwilling to lend the aforesaid mortgage amount to the Mortgagor and the FHA is unwilling to
insure the mortgage unless the parties execute this agreement assuring the payment of taxes in the event the Project does not obtain or
loses its abatement or exemption from real estate from real estates taxes in the future.
NOW therefore, in order to induce the Federal Housing Commissioner to endorse the above described note for mortgage
insurance, the parties agree as follows:
1.

In the event the Project does not obtain or loses its abatement or exemption from real estate taxes in the future:
a) Sponsor shall, upon the demand of the Mortgagee or the FHA, pay real estate taxes as they become due.
b) Mortgagor shall not pay real estate taxes without the prior written approval of the FHA.
c) Sponsor shall reimburse the Mortgage with an amount equal to the amount of any payment by the Mortgagor
for payment of real estate taxes made in violation of this agreement.

2.

If the Sponsor fails to pay real estate taxes as they become due, then, upon demand of the Mortgagee or the FHA,
Sponsor shall pay to the Mortgagee the lump sum of $______________________________________ to be used in the
manner specified in paragraph 4 hereof. (The amount of the lump sum payment shall be determined by the Director and
shall be sufficient to reduce the mortgage to an amount which would permit the mortgage to be carried by the Mortgagor
on a tax paying basis.)

3.

If the Sponsor fails to perform in accordance with paragraphs 1 and 2 hereof, and the Mortgagee assigns the mortgage to
FHA or acquires title to the Project and delivers title to the FHA, all in accordance with applicable FHA regulations, this
agreement shall be assigned by the Mortgagee to the FHA, and the FHA, as the holder of the defaulted mortgage or as
the owner of the Project, as the case may be, shall have the right to make demand upon the Sponsor for performance
hereunder and to pursue to judgment and collection any failure to honor such demand. Such right of the FHA shall
survive any actions, including foreclosure, which may have been taken by the Mortgagee, its successors and assigns, or
by the FHA.

_________________________________________________________________________________________________________________________
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4.

If the Mortgagee is paid the lump sum specified in paragraph 2 hereof prior to the assignment of the mortgage to FHA or
prior to the Mortgagee’s acquisition of title to the Project, the Mortgagee shall use the sum received (a) to pay any real
property taxes which are due and payable and (b) to apply the balance as a prepayment on the mortgage without penalty.
The Mortgagee agrees that, upon prepayment, it will recast the mortgage and the Sponsor’s obligation hereunder shall be
terminated.

5.

The Sponsor reserves the right hereunder to pay at any time the lump sum specified in paragraph 2 hereof to the
Mortgagee and thereby terminate all of its obligations under this agreement.

6.

The Sponsor hereby grants to the Mortgagee full power, in its uncontrolled discretion and without notice, to deal in any
manner with the mortgage and note secured thereby, including but not limited to the following:
a)

To modify or otherwise change any terms of the note and mortgage, to grant any extension or renewal thereof
and any other indulgence with respect thereto, and to effect any release, compromise or settlement with respect
thereof: and

b) To enter any agreement of forbearance with respect to the note and mortgage and to change the terms of any
such agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this instrument.
ATTEST:

ATTEST:

ATTEST:

(Sponsor)
Secretary

(Seal)

By:

President
(Sponsor)

Secretary

(Seal)

By:

President
(Sponsor)

Secretary

(Seal)

By:

President

ATTORNEY’S OPINION
Federal Housing Administration
Washington, DC

Date:
Re:

(Project Number)
(Project Name)
(Project Location)

_________________________________________________________________________________________________________________________
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Gentlemen:
I am the attorney for the Sponsor named in the foregoing Agreement. I have reviewed the Agreement, the corporate
charter, bylaws, authorizing resolutions and other related documents of the Sponsor. Based on such review, it is my opinion
that the Sponsor is a valid existing entity: that it has the authority to enter in the Agreement; that the Agreement has been
legally executed by the persons authorized to execute the same: and that the Agreement is a legally binding instrument.

Attorney for Sponsor

Federal Housing Administration
Washington, DC

Date:
Re:

(Project Number)
(Project Name)
(Project Location)

Gentlemen:
I am the attorney for the Mortgagor named in the foregoing Agreement. I have reviewed the Agreement, the
corporate chatter, bylaws, authorizing resolutions and related documents of the Mortgagor. Based on such review, it is my
opinion that the Mortgagor is a valid, existing entity; that it has authorized to enter into the agreement: has been legally
executed by the persons authorized to execute the same; and that the Agreement is a legally binding instrument.

Attorney for Mortgagor

_________________________________________________________________________________________________________________________
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