HUD 90001 Delegated Processing Agreement

DELEGATED PROCESSING AGREEMENT
by and between

The Deputy Assistant Secretary for Multifamily Housing Programs
and
The Delegated Processing Agency

Public reporting burden for this collection of information is estimated to average 2 hours 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 information is required to obtain benefits. HUD may not collect
this information, and you are not required to complete this form unless it displays a currently valid OMB control number.
Section 2835(b) of the Housing and Economic Recovery Act of 2008 and The Frank Melville Supportive Housing Investment Act of 2010 (SHIA) directs the department to delegate
the review and processing of Section 202 Supportive Housing for the Elderly and certain Section 811 Supportive Housing for Persons with Disabilities projects to selected State or
local housing agencies. This information is necessary to assist HUD in determining an applicant's eligibility and capacity to underwrite grant applications. While no assurances of
confidentiality are pledged to respondents, HUD generally discloses this data only in response to a Freedom of Information Act request.

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ARTICLE 1.

DEFINITIONS

ARTICLE 2. APPOINTMENT OF THE DPA AND SCOPE OF SERVICES

ARTICLE 3. TERM OF AGREEMENT

ARTICLE 4. PROJECTS SUBJECT TO AGREEMENT

ARTICLE 5. THE DPA’S DUTIES
ARTICLE 6. THE DPA’S CONTRACTS WITH SUBCONTRACTORS

ARTICLE 7. DUTIES OF HUD
ARTICLE 8. COSTS ASSOCIATED WITH PERFORMANCE OF CONTRACT; REIMBURSEMENT
OF SPECIFIC SUBCONTRACTOR COSTS

ARTICLE 9. THE DPA COMPENSATION

ARTICLE 10. LEGAL REPRESENTATION

ARTICLE 11. REPRESENTATIONS, WARRANTIES AND COVENANTS

ARTICLE 12. CONFIDENTIAL INFORMATION

ARTICLE 13. BOOKS, RECORDS AND DPA OVERSIGHT
ARTICLE 14. TERMINATION OF AGREEMENT; PROCEDURESUPON TERMINATION OR EXPIRATION
OF AGREEMENT

ARTICLE 15. MISCELLANEOUS PROVISIONS

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EXHIBITS
Exhibit 1: Schedule of Projects
Exhibit 2: Operating Procedures Authorities and Guidance
Exhibit 3: Key Personnel of the DPA
Exhibit 4: Fees

ATTACHMENTS
Attachment 1: The DPA’s Full Review Procedure Attachment 2: The DPA-Furnished Computer
Equipment

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DELEGATED PROCESSING AGREEMENT
THIS DELEGATED PROCESSING AGREEMENT (the “Agreement”) dated and effective as of
______________ , (“Effective Date”) between the Deputy Assistant Secretary (“HUD”) for Multifamily
Housing Programs, and/or the HUD’s successor(s) and/or assignee(s) (collectively, the “HUD”) and
___________________________________________ , a(n) _______________
formed under the laws of ______________________________ with its principal place of business at
______________________________________ (“Delegated Processing Agency” or “DPA”).

PREAMBLE
WHEREAS Section 2835(b) of the Housing and Economic Recovery Act of 2008, approved July 30,
2008, directs the Department to delegate review and processing of certain Section 202 Supportive
Housing for the Elderly projects to selected State or local housing agencies and The Frank Melville
Supportive Housing Investment Act of 2010 (SHIA), Public Law 111 - 374 (January 4, 2011) amended
section 811 of the Cranston-Gonzalez National Affordable Housing Act of 1990. SHIA directs the
Department to delegate review and processing of certain Section 811 Supportive Housing for Persons
with Disabilities multifamily projects with supportive services (but not including any project that is a
group home or independent living facility) to selected State or local housing agencies;
,

WHEREAS the delegated processing procedure provides that HUD may provide qualified Delegated
Processing Agencies (“DPAs”) with the opportunity to perform certain responsibilities to assist in the
development of affordable housing projects that use additional funds besides the capital advance to
develop a project for supportive housing for the elderly under the Section 202 Program or supportive
housing for persons with disabilities under the Section 811 program (but not including any project that
is a group home or independent living facility)
,

WHEREAS HUD has developed guidance for the Section 202 and Section 811 Programs in the form of
the regulations, notices, handbooks, forms and other directives (as amended from time to time and
incorporated herein by reference, the “Authorities and Guidance ”);
,

NOW, THEREFORE in consideration of the mutual covenants and agreements set forth
below and for other good and valuable consideration, the sufficiency of which is acknowledged by the
parties hereto, the
HUD and the DPA agree as follows:
,

ARTICLE 1 -- DEFINITIONS
When used in the Agreement, the following terms and phrases shall have the meanings identified below:
Acceptance: The date the DPA signs a “Schedule of Projects” (Exhibit 1 to the Agreement) is the date
of Acceptance with respect to the Projects (defined below) listed therein.
Prohibited Relationships: The following are Prohibited Relationships.
(a)
A family relationship (person’s parents, grandparents, spouse, children, grandchildren, siblings
and children of siblings) between an officer of the DPA, its principal staff or contract employees
or subcontractors working on a particular application and an officer or partner of the Sponsor, the

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Owner, principals of the Owner, seller of the land or property, or a member of the development
team including but not limited to the general contractor, housing consultant etc.
(b)

An officer or Director of the DPA, its principal staff or contract employees or subcontractors
working on a particular application with any financial interest with any officer, Director or
partner of the Sponsor, the Owner, principals of the Owner, seller of the land or property, or
a member of the development team including but not limited to the general contractor,
housing consultant etc.

For purposes of this definition, the term “control” (and any derivative thereof) means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting stock, by contract or otherwise.
Agreement: This Delegated Processing Agreement and all attachments and exhibits which are
attached hereto and made a part hereof.
Anticipatory Breach: A determination in the judgment of the HUD that the DPA’s action inequivocally
indicates the DPA will not perform when performance is due.
Base Fee: The payments earned by the DPA for completion of Required Work (defined below),
as set forth in the Agreement.
Closing: Execution of all required documents necessary to implement the Firm Commitment and as
further described in the Authorities and Guidance.
Completion: The conclusion of the DPA’s work on a Project in accordance with the Authorities and
Guidance.
DPA Counsel: An individual counsel or law firm hired by the DPA to perform legal tasks pursuant
to the Agreement. Day: Business day
Due Diligence: The diligence reasonably expected from, and ordinarily exercised by, a person who seeks
to satisfy a legal requirement or to discharge an obligation. The DPA’s Due Diligence shall be completed
when the Owner accepts the firm commitment for the release of capital advance during construction and
proceeds to initial closing or accepts a firm commitment for the release of capital advance upon completion
of the project and proceeds to construction of the project.
Eligible Project or Project: The Section 202 Supportive Housing for the elderly or certain Section 811
Supportive Housing for Persons with disabilities that combines the capital advance with other additional
funds, excluding the Owner’s contribution, to develop the project.
Expiration: The end of the Term, including any Extension, if any, of the Agreement as a result of
the passage of time, but not including HUD’s Termination of the Agreement under Article 15.
Extension: As defined in Section 3.3.
Fees: As described in Articles 8, 9, 10, and 12, and Exhibit 4 (including, Base Fees, Incentive Fees
(defined below) and reimbursable payments, if any.)
HUD: The Secretary, Deputy Assistant of Secretary for Multifamily Housing Programs, and the local
Multifamily Program Center Director of the Department of Housing and Urban Development, and staff
acting in accordance with delegated authority when used in reference to provisions of Section 202

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Supportive Housing for the Elderly Program and the Section 811 Supportive Housing for Persons with
Disabilities Program,
HUD Counsel: HUD’s Office of General Counsel.
Incentive Fee: Fees that may be earned by the DPA upon compliance with the terms and conditions
for such Fees. Litigation Costs: As defined in Section 10.2.3.
Nonpublic Information: As defined in Section 12.1.1.
Operating Procedures Authorities and Guidance: The administrative procedures guidance, as
defined in the Preamble to the Agreement and as amended from time to time in accordance with
Section 5.10.3. The Authorities and Guidance is incorporated herein by reference, as contained in
Exhibit 2.
Other Parties: As defined in Section 6.3.1.
Penalty Fee: Deductions that may be charged against the DPA for failing to meet the delegated
processing 12- month timeframe.
Person: Any individual, corporation, association, partnership, business trust, limited liability company, joint
stock company, joint venture, trust, estate or other entity or organization of whatever nature. In the context
of the Section 202 and 811 ownership structure, such structure shall be consistent with the definition of
“private nonprofit organization” as defined in 42 U.S.C. § 8013(k)(6) and 12 U.S.C. § 1701q(k)(4), and its
implementing regulations, as may be amended from time to time.
Portfolio: All of the Projects subject to the Agreement found in exhibit 1 at any given time.
Records: Files, books, documents, papers, reports and records of all business activities and
operations conducted by the DPA, and all photocopies or reproductions thereof, relevant to each
delegated processing transaction attempted or completed under the Section 202 Delegated
Processing Program or to the DPA’s performance under the Agreement.
Required Work: As specified in the Agreement or the Authorities and Guidance, including but not limited
to Appendix V of the Authorities and Guidance.

Services: As defined in Article 2.
Subcontractor: A Person or entity with which the DPA contracts to carry out portions of the provisions
of the Agreement, including, but not limited to, appraisers and inspectors providing reports to fulfill Due
Diligence requirements.

Term:As defined in Sections 3.1 and 3.3. The initial term of the Agreement is three years.
Termination: The ending of the Agreement and any Extension hereof by the HUD or the DPA pursuant
to Article 13.

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ARTICLE 2 -- APPOINTMENT OF THE DPA AND SCOPE OF SERVICES
The HUD hereby retains the DPA as an independent contractor for the sole purpose of performing the
services, duties and obligations described in the Agreement, and the DPA hereby agrees to perform such
services, duties and obligations (collectively referred to as the “Services”) on the terms and conditions set
forth below in accordance with the Statute, Regulations, HUD Notices and Handbooks. The recitals are
incorporated herein and made a part of the Agreement.

ARTICLE 3 -- TERM OF AGREEMENT
3.1.

Initial Term. Subject to Article 13, the Agreement shall have a term that expires three years
after the effective date.

3.2.

Renewal. At the end of the Initial Term the Agreement shall be renewed for one year
periods. Unless the HUD or the DPA provides written notice to the other, not less than sixty
days prior to the end of the Initial Term, that it does not wish to renew the Agreement.
In the event HUD or the DPA elects not to renew the Agreement, the Agreement will expire on
the last day of the (i) Initial Term as it may have been extended from time to time, (ii) the
Renewal, or (iii) effective date of a Termination pursuant to Article 13.

3.3

Upon Expiration or Termination, the DPA’s work under the Agreement shall end immediately, and
the responsibility for all assigned Projects shall revert, without delay to HUD, except as or as may
be determined by mutual agreement of the parties and evidenced in writing.
Extension. The Initial Term, Renewal, and Extension may be extended by mutual agreement of
the parties, for such period as the parties shall agree upon (the “Extension”). The Extension of
the Agreement does not include the extension the timeline to complete assigned project(s).

ARTICLE 4 -- PROJECTS SUBJECT TO AGREEMENT
4.1.

Portfolio of Projects. The Projects subject to the Agreement will be identified on Exhibit 1,
which may be amended from time to time to reflect the addition or withdrawal of Projects to the
coverage of the Agreement as provided below.

4.2

Addition or Withdrawal of Projects. The addition or withdrawal of Projects described below
shall not be effective unless accompanied by an amendment to Exhibit 1, with written notice from
HUD to the DPA.

4.2.1 Addition of Projects. From time to time, HUD or Director may offer one or more
Projects under the Agreement and the DPA may accept or reject a project on a
case-by-case basis.
4.2.2 HUD’s Right to Withdraw Projects. HUD may withdraw one or more Projects from
the coverage of the Agreement upon occurrence of any of the following:
(a)

Reasons for Withdrawal
(i)
(ii)

the Director at any time finds that there is a conflict of interest between the
DPA and the Project,
the Project is involved in litigation,

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(iii)
(iv)
(v)
(vi)
(vii)

the Owner withdraws from the Section 202 Program or the
Fund Reservation is Terminated,
there are substantial deficiencies in processing by the DPA,
HUD’s convenience pursuant to Section 13.3,
other good cause affecting the ability or eligibility of a Project or Owner
to undergo delegated processing pursuant to the Agreement, and
any reason specified in Article 13.1.

(b)

Procedure for Withdrawal. HUD shall withdraw a Project by notifying the DPA, in
writing, of its decision to withdraw such Project and the reasons for withdrawal and the
withdrawal shall be effective immediately, unless HUD provides otherwise. The DPA
shall, within seven (7) Days following notice, unless sooner or otherwise specified by
HUD, transmit all Records relating to such Project to HUD, or to an entity or person
identified by HUD, and shall cooperate with HUD to effect an efficient and smooth
transition of responsibility with respect to such Project. Alternatively, at HUD’s
discretion, staff acting for HUD may, upon forty-eight (48) hours notice, enter upon the
DPA’s place of business during business hours to retrieve the Records.

(c)

Payment to the DPA Upon Withdrawal. The DPA will be compensated for
withdrawn Projects in accordance with Article 9.

ARTICLE 5 – THE DPA’S DUTIES
5.1. General Scope of Duties. The DPA shall perform the Required Work and such other
related tasks as agreed to by HUD and the DPA with respect to the Portfolio. The DPA may
subcontract its technical processing duties under the Agreement pursuant to Article 6 below
but may not delegate to any other entity the underwriting duties under the Agreement without
the prior written approval of HUD. Under all such circumstances, the DPA retains the
responsibility for the performance of its duties. The DPA’s duties are more fully described in
Operating Procedures Authorities and Guidance.

5.2. Engagement of Contractors by the DPA, and Prohibition Against Transactions
with Affiliates of the DPA.
5.2.1 The DPA may subcontract with, pursuant to Article 6, subcontractors in its sole name and
at its sole cost and expense to assist in or undertake activities as may be necessary
and appropriate under the Agreement.

5.2.2 Any duties under the Agreement required to be undertaken by third parties must be undertaken
pursuant to arms-length agreements with Persons that are not Affiliates of the DPA, except
with the prior written approval of HUD.

5.2.3 The DPA is responsible for the overall underwriting decision and the issuance of the firm
commitment. These functions cannot be contracted out by the DPA.

5.3. DPA Financings. The DPA or an Affiliate of the DPA may provide financing in connection with
a Project. If financing is provided, HUD may subject the Project to such additional review as
HUD deems necessary. The DPA shall provide such other information and documents as
requested by HUD regarding the DPA-proposed financing.

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5.4. Training Through Technical Assistance Briefings. The DPA and its
Subcontractors must attend such technical assistance briefings as required by HUD at no
cost to HUD.

5.5. DPA Standards of Performance. The DPA shall at all times act in good faith and in the
best interests of HUD and shall carry out its duties with all deliberate speed. The DPA shall use
its best efforts and exercise all due care and sound business judgment in performing its duties
under the Agreement and shall act to avoid conflicts of interest or the appearance of conflicts of
interest in the performance of its duties. The DPA shall at all times comply with all applicable
statutes, the regulations, notices and handbooks.

5.5.1 The DPA shall perform its duties and responsibilities within the following timelines. All activity
deadlines pertaining to a Project will be calculated from the date of Acceptance of the Project.
The DPA must complete issuance of a firm commitment within 12 months. Within these 12
months the following tasks must be completed after the date of Acceptance:
•
•
•
•

Planning Conference held within 30 days of Acceptance.
Accessibility requirements are met by the Owner.
Review of the Owner’s underwriting developed under the Authorities and Guidance.
Issuance of a firm commitment or rejection of the Owner’s firm commitment
application.

If the DPA chooses to act as construction administrator in addition to processing the firm
commitment, the project must meet initial closing or start construction in 18 months and
final closing within 6 months of project completion:
•
•
•
•
•
•

Initial Closing
Construction loan inspections
Processing of construction draws
Permission to Occupy
Cost certification
Final Closing

5.6. Preparation of a Firm Commitment. The DPA shall prepare and issue, a
firm commitment, which incorporates the rents and development costs
approved by HUD.
5.7. DPA Administrative Duties
5.7.1 The DPA’s Key Personnel. Exhibit 3 identifies certain employees and Subcontractors of
the DPA as important to the proper performance of the DPA’s duties under the Agreement
(“Key Personnel”). HUD relies on the
DPA’s representation as to Key Personnel in the award of the Agreement and Projects. The DPA
agrees to identify in Exhibit 3 a primary contact person, including telephone number and e-mail
address, who is responsible for day-to-day activities of the DPA under the Agreement. The DPA
also agrees to notify HUD of and obtain HUD’s written approval for any change in
Subcontractors listed in Exhibit 3, and will provide HUD with a summary of the qualifications of
any substituted Key Personnel. Substitution of Key Personnel with equally qualified personnel as
determined by HUD will result in approval of the change. DPA must ensure the Key Personnel
and, if applicable, the Subcontractors are experienced and/or qualified to perform the tasks
assigned or contracted out.

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5.7.2 The DPA has a continuing obligation to update Exhibit 3 with the names of Key Personnel
and Subcontractors so that it will be true and correct at all times.

5.7.3 Delivery of and Modification to the Authorities and Guidance. From time to time
HUD, at its sole discretion, may modify and make changes to the Authorities and Guidance. The
DPA shall be responsible for keeping current with the modifications to the Authorities and
Guidance. Updates to the Authorities and Guidance shall be made available by HUD to the DPA
either in hard-copy or in electronic forms, including posting on HUDCLIPS at
http://www.hud.gov/offices/adm/hudclips/ . The DPA will be notified by mail and electronically of
the availability of modifications to the Authorities and Guidance, and shall implement the changes
in the Authorities and Guidance upon receipt of such notice, unless otherwise specified by HUD. If
HUD imposes a change to the Authorities and Guidance which causes a substantial impact on the
DPA’s costs and expenses or time limits for performance of its restructuring duties, HUD will take
such change into account if the DPA requests a waiver in related fee limits or time limits.

5.8.

Advertising and Publicity. The DPA shall not issue or sponsor and it will require its
Subcontractors, if any, not to issue or sponsor, any advertising or publicity that states or
implies, either directly or indirectly, that HUD endorses, recommends or prefers the Services
of the DPA, and/or those of any Subcontractor. The DPA shall not use, and shall require that
its Subcontractors not use, the HUD or FHA logo in any fashion without HUD’s prior written
approval.

ARTICLE 6 – THE DPA’S CONTRACTS WITH SUBCONTRACTORS
6.1. Subcontractor Notification.
6.1.1 To the extent that there are in effect on the Effective Date of the Agreement, or thereafter,
contracts with subcontractors proposed to be used under the Agreement covering any of
the Services, the DPA shall inform HUD of the extent to which the DPA proposes to use
such subcontractors.

6.1.2 The DPA shall inform HUD of the Services being performed by the subcontractors.
6.1.3 The DPA has an ongoing obligation to inform HUD of any changes in the use of subcontractors
during the Term.

6.2. DPA’s Responsibility. Notwithstanding the DPA’s right to enter into subcontracts, the DPA
shall remain solely responsible and liable for the proper and timely performance of the services
and management and timely performance of its duties and the duties of its subcontractors in the
performance of the Agreement.

6.3. Contracts with Subcontractors. The DPA shall ensure that all subcontracts shall be
consistent with the terms of the Agreement and the DPA’s duties hereunder. Among other
provisions, each subcontract shall provide that:

6.3.1 Such subcontractor agrees to seek damages or other remedies solely against the DPA and not
against HUD, the Owner and their respective officers, directors or employees, for any claim
arising under the subcontract. (Collectively, HUD, the Owner or their respective officers, directors
or employees shall be referred to as “Other Parties.”) Upon request that may be made from time

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to time, the subcontractors will acknowledge that it has no claims against the Other Parties or
will waive any such claims it believes it may have against the Other Parties;

6.3.2 The subcontractors shall maintain its Records and agrees to make them available for
inspection by the DPA, HUD’s Inspector General, HUD, and any of their designees, and any
other Government agency upon reasonable notice by or on behalf of HUD or the DPA, such
inspection to be in a manner consistent with the requirements placed upon the DPA under
Article 13 and Article 14 of the Agreement;

6.3.3 The subcontractor shall treat non-public information in a manner consistent with the
requirements of Article 12 of the Agreement;

6.3.4 The subcontractor shall obtain such insurance coverage as may be reasonably directed by the
DPA;

6.3.5 The subcontractor may not assign its contract with the DPA without the DPA’s prior written
approval; and

6.3.6 The subcontractor shall meet the same conflict of interest standards as required of the DPA.
6.4. Supervision of Subcontractors. The DPA shall monitor and supervise diligently the
subcontractors’ performance of their duties under the subcontracts, including the
subcontractors’ supervision of their subcontracts, if any.

ARTICLE 7 -- DUTIES OF HUD
7.1.

Duties and Authority of HUD. HUD has the duty to administer the delegation of
underwriting for eligible Section 202 Supportive Housing for the Elderly and Section
811 Supportive Housing for Persons with Disabilities.

7.2. Provision of Project Files and Information to the DPA.
7.2.1 Project Files.
(a)

Delivery of Files. HUD shall endeavor to either give copies of the Project files to
the DPA or provide to the DPA access to available Project files and shall endeavor
to make such materials available to the DPA or its Subcontractor in the appropriate
Field Office location where the DPA may photocopy such files as needed. To the
extent feasible, HUD shall provide the files to the DPA electronically.

(b)

Custodial Relationship. In holding the Project files or copies thereof, the DPA
shall act as custodian for, and for the benefit of, HUD.

7.2.2 Information. HUD shall furnish the DPA with information determined by HUD to be required for
the orderly performance of the DPA’s duties under the Agreement, including information
regarding changes in HUD’s policies and procedures affecting any matter relevant to the DPA’s
performance of the Agreement, although nothing herein limits the DPA’s responsibility for

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keeping current with modifications to the regulation, notices, handbooks and other guidance in
accordance with Paragraph 5.7.3 of the Agreement.

7.3. Approval and Execution of Documents. HUD shall have the sole right and authority in each
Transaction to approve the proposed rents and development costs prior to the DPA issuing a
Firm Commitment. HUD has 15 Days to approve the proposed rents and development costs.
HUD may take more than 15 Days to approve the proposed rents and development costs where a
regulatory waiver is required, the excess time will not be included in the total amount of time it
takes the DPA to complete underwriting and issuance of a firm commitment when calculating the
satisfaction of the deadline requirements in Section 5.7.1 or for Incentive Fee purposes.
HUD, however, may elect not to approve the proposed rents and development
costs recommendations.
HUD shall inform the DPA of the reasons for not approving the proposed rent and development
cost recommendations. The DPA will either: (a) revise and resubmit to HUD the proposed rents
and development cost recommendations for approval; or (b) appeal the Director’s
recommendations or (c) consent to HUD’s withdrawal of the Project and receive compensation
based on HUD’s determination of the value of the services performed with regard to the Project. If
there is either a resubmission or an appeal the processing clock is stopped until there is
resolution. The additional days will not count towards the timeline requirements in Section 5.5.1 or
for Incentive Fee purposes.

7.4. Compensation of the DPA. HUD shall compensate the DPA for its Services under the
Agreement in accordance with the provisions of Articles 8 and 9 and Exhibit 4 of the
Agreement. HUD shall comply with the applicable provisions of the Prompt Payment Act, 31
U.S.C. 3901, et seq., as amended, when reimbursing the DPA.

ARTICLE 8 – THE DPA’S COMPENSATION
8.1.

General. In exchange for the Services rendered pursuant to the terms of the Agreement, the
Regulations and the Authorities and Guidance, the DPA will receive the applicable Base Fee
as set forth in Exhibit 4, and will be eligible to receive Incentive Fees for achieving the goals
established in Exhibit 4 or Penalty Fees for not meeting the goals established in Exhibit 4. All
Fees properly invoiced to the HUD for Multifamily Housing Programs shall be paid within 30
days of receipt of the invoice subject to a 10 percent holdback.

8.2. Base Fees. Base Fees will be paid to the DPA as shown in Exhibit 4.
8.3. Incentive and Penalty Fees. The DPA may earn fees in addition to the Base Fee
if the DPA accomplishes certain goals as described in Exhibit 4 or may have the Base
Fee reduced if the DPA fails to accomplish certain goals described in Exhibit 4.

8.4. Holdback. HUD shall withhold 10 percent of the Base Fee until:
•
•

For the issuance of a firm commitment for the release of capital advance proceeds
during construction until the project reached initial closing.
For the issuance of a firm commitment for the release of capital advance proceeds
upon project completion until the project starts construction.

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8.5. Payment Method. Unless otherwise determined by HUD, the DPA shall request and receive
payment through HUD’s Electronic Line of Credit Control System (eLOCCS). The State
Agency Tax ID #; a completed direct deposit sign-up form (including copies of voided
checks for new DPAs; and a copy of the Central Contractor Registration document
showing an active DUNS number are to be attached to this agreement. The forms referred
to in this section are available from HUD’s HUDClips website, under the forms section, available
at: http://www.hud.gov/offices/adm/hudclips/index.cfm. The LOCCS Security Office may be
reached at (202) 7080764 or toll free at (877) 705-7504 for assistance, including authorization
and access issues. The SF-1199A is also available at local banking institutions.
(a)

Direct Deposit. DPA is required to account for funds under this Agreement. If the
DPA is not currently signed up to receive payments via direct deposit from HUD,
then the DPA must submit a completed SF-1199A, Direct Deposit Sign-Up Form
and to:
US Dept of HUD
CFO Accounting Center
801 Cherry Street, Unit #45, Suite 2500
Fort Worth, TX 76102
Attention: Director, Reports and Control Division

8.6

(b)

Password. The DPA is responsible for changing and maintaining an eLOCCS
password as required.

(c)

Authorization. Each individual in the DPA’s organization who will be authorized to
access eLOCCS to perform query or draw down/request funds under this Agreement
must request access authorization from HUD by submitting a form HUD-27054,
eLOCCS Access Authorization. A new form HUD-27054 is not required for any
individual who currently has access to eLOCCS for prior year grant funds for the same
Grantee. If a User already has a valid form HUD-27054 for VRS it is not necessary to
submit another one for eLOCCS access. The completed forms (which must be
notarized) are sent to the HUD Program Center for review and verification. Following
review, the HUD Program Center will send the original forms to the LOCCS Security
Officer for assignment of a LOCCS User ID. The form HUD-27054 must be recertified
every 6 months by each LOCCS User’s Approving Official.

Payment to the DPA Upon Withdrawal. In the event HUD withdraws a Project due
to the DPA’s failure to perform in accordance with the Agreement, or in the event that the DPA
terminates the Agreement in accordance with Section 14.3.2, the DPA will be paid at the point
of withdrawal a prorated amount that HUD determines is equal to the value of the Services
performed by the DPA with respect to such Project based on the Fees set forth in Exhibit 4. In
the event HUD withdraws a Project for any reason other than for the reasons specified in
Section 14.1, HUD shall pay the DPA for its services an amount equal to the Base Fee in
Exhibit 4. Payment to the DPA will be withheld until all records pertaining to the subject Project
are returned to HUD.

ARTICLE 9 – LEGAL REPRESENTATION
9.1. DPA Counsel. The DPA may retain counsel or use staff counsel to advise the DPA regarding
its rights and obligations under the Agreement. The DPA shall bear its own expenses incurred
in connection with any such legal services. Legal fees incurred by the DPA and its
Subcontractors in carrying out its duties hereunder shall be the responsibility of the DPA and
shall not be reimbursed by HUD. A legal interpretation of the delegated processors statutory

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authority and the Section 202 Program or Section 811 Program Regulations published in
the Federal Register shall be made only by HUD Counsel after reasonable consideration
of the DPA’s position.

9.2. Notice of Claims; Control of Litigation and Claims.
9.2.1 Notice of Claims. The DPA shall promptly notify HUD in writing of any and all litigation
and claims which to their knowledge have been made or threatened against the Projects,
HUD, the DPA or any Subcontractor, or any officer, director, partner, employee or agent of
any of them in connection with the Agreement or otherwise in connection with the Section
202 Program or the Section 811 Program.

9.2.2 Control of Litigation and Claims.
(a)

HUD shall control all litigation and claims made against the Projects and HUD, in
connection with the performance of the Agreement or otherwise in connection with the
Section 202 Program or the Section 811 Program, provided that HUD shall consult
with the DPA to the extent that the defenses or claims it asserts in such litigation (or in
connection with such claims) affect or have a reasonable likelihood of affecting the
rights of the DPA, and the DPA shall cooperate with HUD to the extent necessary to
permit HUD to defend or prosecute such litigation. If the DPA believes that HUD
position in the litigation is directly adverse to its position, if included in the litigation or
claim, the DPA may pursue its own defense separate and apart from HUD. In this
event, the DPA shall be responsible for its legal expenses.

(b)

The DPA Counsel shall control all litigation or claims made or threatened solely against
the DPA or any officer, director, partner, employee or agent of the DPA, in connection
with the performance of the Agreement or otherwise in connection with the Section 202
Program or the Section 811 Program, provided that the DPA shall immediately provide
written notice of any such litigation or claims. If HUD, or the HUD’s legal
representative, determines that there is a federal interest, HUD, through the
Department of Justice, may elect to participate, in which case the matter shall be
handled in accordance with Section 10.2.2(a). In any event, the DPA shall consult
with HUD to the extent that the defenses or claims it asserts in such litigation (or in
connection with such claims) affect or have a reasonable likelihood of affecting the
rights of HUD, , shall cooperate with the DPA to the extent necessary to permit the
DPA to defend or prosecute such litigation.

(c)

Nothing in this section 10.2.2. shall prevent either the DPA or HUD from taking action
available to it under Federal or State law to implead or otherwise join HUD or the
DPA in the action brought against it.

9.2.3. Reimbursement of Legal Expenses.
Should the DPA, or any officer, director, partner, employee or agent thereof, become directly or
indirectly involved with litigation or a claim as the result of performing its duties under the authority
of the Agreement, whether as a joint or sole defendant, HUD may elect to reimburse the DPA for
any reasonable legal costs and expenses, including but not limited to, reasonable attorney’s fees
(including fees for DPA Counsel) the DPA incurs by participating in such litigation or claim
(“Litigation Costs”) provided that HUD determines that the Litigation Costs are reasonable and
appropriate for the litigation services rendered. HUD may reimburse the DPA for legal expenses
through regular billing pursuant to Section 8.2. If the DPA is required by the court to post a bond
pending appeal, HUD may reimburse the DPA for the cost of the bond.

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9.3

Notwithstanding anything to the contrary above, HUD shall not be obligated to pay Litigation
Costs and shall be entitled to reimbursement of any funds paid to the DPA for Litigation Costs
if HUD makes a determination that the DPA’s actions, which are the subject of the litigation or
claim, were not performed pursuant to the authority of the Agreement. Subject to the HUD’s
prior written approval, the DPA may be reimbursed for reasonable legal fees associated with
the settlement of threatened litigation or penalty assessments that HUD deem to be valid and
imminent.
Limitations. In connection with the Agreement, without the prior written consent of the
HUD Counsel, the DPA has no authority to do the following: (i) initiate litigation, (ii) make or
accept settlement offers or (iii) undertake an appeal from an adverse judgment.

ARTICLE 10 -- REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1. Representations and Warranties of HUD. HUD represents and warrants as follows:
10.1.1 The HUD has the power and authority required to execute, deliver and perform the Agreement.
10.1.2 The Agreement constitutes a legal, valid and binding agreement of HUD,
enforceable against HUD in accordance with its terms.

10.2. Representations, Warranties and Covenants of the DPA.
10.2.1 Representations and Warranties. The DPA represents and warrants as
follows, that as of the date hereof and through the period of this contract and its
extensions:
(a)

It has full power and authority to execute, deliver and perform the Agreement; it is an
entity duly
organized, validly existing and in good standing under the laws of the State or locality
of its formation and with full power and authority to execute, deliver and perform the
Agreement;

(b)

The Agreement constitutes a legal, valid and binding agreement of the DPA, enforceable
against the DPA in accordance with its terms, except as limited by bankruptcy,
insolvency, receivership and similar laws from time to time in effect;

(c)

The DPA possesses all necessary licenses, permits and approvals required to execute,
deliver and perform the Services and its duties under the Agreement and is qualified to
do business in all jurisdictions where such qualification is required for the DPA’s
performance of its duties under the Agreement;

(d)

To the best of the DPA’s knowledge, there is no litigation pending or threatened which
would adversely impede or prevent the DPA’s execution and performance of the
Agreement, or which poses a conflict of interest in which the DPA is taking an adverse
position in litigation, an administrative proceeding or other contested matter with HUD
or an Owner whose Project is covered by the Agreement;

(e)

The representations and warranties made in the documents submitted as part of the
DPA’s response to the Request for Qualifications, as may have been updated by the
DPA and approved by the HUD, are true and correct; and

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(f)

The computer hardware and software to be used by the DPA in performing under the
Agreement currently is compatible with the standards listed in Attachment 2 hereto.

10.2.2 DPA Covenants. The DPA covenants that it will comply with, and will cause each
Subcontractor to agree in its agreement or subcontract with the DPA to comply with, all
applicable Federal and State laws and regulations, including the Authorities and Guidance, in
performing its and their respective responsibilities under the Agreement and the subcontracts.

10.3. Opinion of Counsel. If deemed necessary in the sole discretion of HUD, the DPA shall
provide HUD with an opinion of counsel confirming the matters set forth in 11.2.1(a)-(g)
above.

10.4. Notifications to HUD. The DPA shall promptly provide the HUD with notice of any
anticipated development or event that would adversely and materially affect the DPA’s financial
condition or its ability to perform its obligations under the Agreement.

10.5. Conflicts. The DPA shall promptly notify the HUD of any conflicts between the Regulations,
the Agreement and the Authorities and Guidance.

ARTICLE 11 -- CONFIDENTIAL INFORMATION

11.1. Confidentiality of Nonpublic Information.
11.1.1 Definition of Nonpublic Information. For purposes of the Agreement, all information that
HUD
provides or causes to be provided to the DPA, or information that the DPA otherwise may
obtain, in connection with its duties under the Agreement shall be deemed to be nonpublic
(“Nonpublic Information”), Nonpublic Information also shall include but not limited to: (a)
any specifications, knowledge, strategies or technical data, processes, business
documents or information, marketing research and other data, customer or client lists or
sources of information which are owned, possessed or used exclusively by or for the
benefit of HUD; and (b) confidential information or materials obtained by the DPA from a
third party in connection with the DPA’s performance under the Agreement.

11.1.2 Duty to Maintain Confidentiality of Nonpublic Information. The DPA shall strictly
comply with the requirements of all applicable federal and state laws in dealing with all
Nonpublic Information it obtains in connection with its performance under the Agreement, The
DPA shall not disclose Nonpublic Information to any third-party, other than a Subcontractor,
nor shall they use or allow the use of any Nonpublic Information to further any private interest,
regardless of whether there is financial gain, other than as contemplated by the Agreement.
The DPA shall take appropriate measures in accordance with the requirements of federal and
state law to prevent its inadvertent or unintentional disclosure or its inappropriate use by the
DPA or its subcontractors, by its or their employees or Affiliates. The At all times such
information shall remain the sole property of the U.S. Department of Housing and Urban
Development.

11.2.

Notice of Orders Requiring Disclosure of Nonpublic Information. The DPA shall
immediately notify HUD and HUD or Secretary shall immediately notify the DPA in writing of
any subpoena or court order requiring disclosure of Nonpublic Information in accordance with

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State and Federal law. The DPA, at the HUD’s direction, shall appeal or challenge such
subpoena or court order before disclosure, and shall cooperate fully with the HUD in
challenging any subpoena or order requiring the disclosure of Nonpublic Information. The
DPA shall have no authority to disclose Nonpublic Information except in conformity with this
Article 12.

ARTICLE 12 -- BOOKS, RECORDS AND DPA OVERSIGHT
12.1. Recordkeeping and Reporting Requirements.
12.1.1. General.
(a) Maintenance of Substantiating Documentation. At all times during the Term of the
Agreement and for 3 years following Expiration or Termination, the DPA shall maintain a
complete and accurate set of Records The DPA shall require its Subcontractors to
maintain a complete and accurate set of files, books, documents, papers, reports and
records of all business activities and operations conducted by the Subcontractor, and all
photocopies or reproductions thereof, relevant to each restructure transaction attempted
or completed by the Subcontractor under the Program or to Subcontractor’s performance
of the requirements of the Agreement. The DPA shall maintain at its principal place of
business, or a convenient, secure location off-site, the final reports or other final work
product and Records prepared by the DPA and its Subcontractors. All Records stored offsite shall be available to HUD upon 48 hours notice to the DPA. All Records collected or
prepared by the DPA or Subcontractors, or related to a Project, or related to the DPA’s
performance under the Agreement shall be the property of HUD and shall not, in any
manner, be construed to be the property of the DPA.

(b) Production of Records to HUD. The DPA shall promptly forward such Records as HUD
shall require in writing, with reasonable costs to be reimbursable.

12.1.2 Generally Accepted Accounting Principles. The DPA shall maintain all accounts
and prepare the related financial statements and reports required under the Agreement in
accordance with generally accepted accounting principles applied on a consistent basis
and formatted in a manner acceptable to HUD.

12.1.3 Retention of Records. Retention and disposition of Records shall be governed by Section
13.4.3.

12.1.4 HUD’s Right to Examine Books and Records and to Audit.
(a)

Access to Books and Records. At all times during the Term of the Agreement and at
all
times during the three (3) year period following the Expiration or Termination of the
Agreement, HUD and his/her duly authorized agents, representatives, employees, or
other Government agency may, upon forty-eight (48) hours notice, enter upon the DPA’s
place of business and, during business hours, inspect, audit, and copy: (i) any Records
held by the DPA relevant to the DPA’s performance under the Agreement; and (ii) any
Records held by the Subcontractor relevant to the DPA’s performance under the
Agreement. The DPA shall not require unreasonable prior notice or otherwise limit the
access of HUD or its duly authorized agents, representatives or employees when they
seek to perform such examination of the Records held by the DPA or any
Subcontractors. The DPA shall also make available to HUD the appropriate staff for
purposes of conducting a Records review or for other reasonable purposes. The

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limitations in this Section 13.1.4(a) regarding access to inspect shall not apply to
HUD’s Inspector General or the General Accounting Office.

(b) Subcontracting and Books and Records Access. The DPA agrees to include in
subcontracts under the Agreement a clause to the effect that HUD or his/her duly
authorized agents, representatives or employees, or other Government agency may,
until three years after final payment under the subcontract, at such reasonable times
as HUD may determine, inspect, audit and copy any of Subcontractor’s Records
relevant to their performance related to the Agreement. Such clause shall provide that
Subcontractor may require up to 48 hours notice and will not otherwise limit the
access of HUD or his/her duly authorized agents, representatives or employees when
they seek to perform such examination of the Records of the Subcontractor.

(c) Period of Examination. The periods of access and examination in subsections (a) and
(b) above for Records relating to (1) litigation or settlement of claims arising from the
performance of the Agreement, or (2) costs and expenses of the Agreement shall
continue until such appeals, litigation, claims, or
exceptions are disposed.

12.1.5 Reports.
(a) Subject to 11.2.1(g) and 13.2.2, the DPA shall have computer software
and Internet access which is compatible with HUD’s and able to generate
the reports required by HUD.
(b) The DPA shall, in a timely manner, provide to HUD all information and
documentation requested by HUD from time to time.
(c) HUD may require the DPA to meet with, submit additional reports, and timely
respond to HUD so that HUD may determine the status of each assigned
asset.
(d) Within thirty (30) Days after the Termination or Expiration of the Agreement, the DPA
shall prepare and deliver to HUD a final report that sets forth, among other things, a
summary of the DPA’s experience under the Agreement and the DPA’s evaluation
and recommendations based on its participation in the Delegate Processing Program.

12.2. Computer Systems.
12.2.1 Systems and Services Provided by the DPA. The DPA shall provide and maintain in
good working order all computer equipment necessary to perform the duties required by the
Agreement. The DPA shall provide the hardware, software and Internet capability to
successfully electronically transmit information regarding the status of assigned projects and
relevant data for each project to HUD. To the extent that HUD’s requirements change, to the
extent reasonable HUD will cooperate with the DPA to provide sufficient time and support to
ensure that the DPA’s hardware, software and Internet capability are sufficiently compatible
to assure the successful transmission of restructuring data, and to remedy any technological
difficulties. In the event that, due to technical difficulties, it becomes temporarily impossible to
successfully electronically transmit restructuring data, the DPA may submit such data or
documents via overnight courier and shall submit such data electronically as soon as
practicable.

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12.2.2 Proprietary Interest and License in Software and Systems. HUD shall have (a)the
exclusive and absolute right, title and interest in and to all accounting and reporting systems and
software owned by HUD , or otherwise obtained or developed by HUD’s expense, and furnished
to the DPA for use in the performance of the DPA’s services under the Agreement, and (b) the
right during the Term and for a period of three years after the Expiration or Termination of the
Agreement, and without additional cost to HUD, to use, for Delegated Processing Program
purposes, solely on its own behalf, any and all accounting or reporting systems or software
owned by the DPA, or otherwise obtained or developed by the DPA at the DPA’s expense for
use in the performance of the DPA’s services under the Agreement, subject, however, to any
restrictions, limitations or prohibitions in the contracts between the DPA and the Subcontractors
which provide such systems or software. The DPA will provide and maintain, at its expense, a
computer system that is compatible to the computer system currently used by the Multifamily
Housing Programs. HUD will provide to the DPA staff, at his/her expense, any hardware or
software that is more advanced than or is in addition to the hardware or software required by
Attachment 2 hereto. The limitations relating to the three year period shall not apply to HUD’s
Inspector General.

ARTICLE 13-- TERMINATION OF AGREEMENT; PROCEDURES
UPON TERMINATION OR EXPIRATION OF AGREEMENT

13.1. Termination by HUD for Cause. A default shall exist under the Agreement and
HUD may terminate the Agreement for cause upon written notice to the DPA if HUD
determines that any of the following events of default have occurred:

13.1.1

The DPA has made a false claim for reimbursement of costs under the Agreement or has
made a statement to HUD that contains a false material fact or fails to disclose a material
fact necessary to make the statements made not misleading, whether or not the DPA has
made such a statement to HUD prior to the Effective Date or during the Term of the
Agreement;

13.1.2. A material adverse change has occurred in the financial condition of the DPA that affects or
13.1.3

is likely to adversely affect the DPA’s performance under the Agreement;
A material adverse change has occurred in the DPA’s ability or capacity to perform the
Agreement;

13.1.4
(a)

The DPA files a petition for bankruptcy, reorganization or arrangement under any Federal
or State statute, or makes an assignment for the benefit of creditors or takes advantage
of any insolvency statute or similar statute.

(b)

If a receiver or trustee is appointed for the property and assets of the DPA
and such receivership is not discharged within sixty (60) Days of such
appointment;

13.1.5 The DPA or a principal thereof becomes ineligible to contract with HUD under applicable laws and
regulations, or is the subject of any Federal or State debarment or suspension proceeding or
similar administrative sanction or is indicted or convicted of any criminal offense.

13.1.6 The DPA fails to perform any of its duties pursuant to and in accordance with Article 5 hereof or
any other term, condition or obligation pursuant to and in accordance with the Agreement or fails

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to comply with either the Section 202 or the Section 811 statutory or regulatory requirements, or
other HUD administrative requirements.

13.1.7 The DPA or those acting on its behalf (including Subcontractors), takes any action:
(i)
(ii)
(iii)

which is not within the scope of the DPA’s duties or authority under the Agreement;
which amends any document which is a part of the Agreement or incorporated in
the Agreement without HUD’s approval;
which fails to comply with HUD’s statutes and Regulations; or which would
constitute a violation of any Federal, State or local law which could adversely
impacts DPA’s ability to perform under the Agreement.

13.1.8 The DPA has committed an act or acts of negligence or willful misconduct in the performance of
its duties under the Agreement.

13.1.9 An Anticipatory Breach has occurred under the Agreement.
13.2. Payment Upon Termination for Cause. In the event of Termination due to an uncured
default, the DPA shall be paid an amount HUD determines is equal to the value of the
Services performed by the DPA, for each Project, as of the date of expiration of any cure
period in HUD’s notice of an event of default. Such amount shall be based on the Fees set
forth in Exhibit 4. Notwithstanding the previous sentence or any other provision of the
Agreement, HUD may, in such event, at HUD’s option, withhold any Fee accrued but not yet
paid. In no event shall the amount of any sum retained by HUD under this Article 13 limit the
amount that HUD may claim and recover against the DPA in connection with any claim HUD
may assert against the DPA for damages due under the Agreement.

13.3. Termination for Convenience.
13.3.1 Right of HUD to Terminate for Convenience. HUD may, at its discretion and at
anytime, terminate the Agreement regardless of whether the DPA is in default under the
Agreement if such Termination is in the best interests of the Federal government. In the event
HUD terminates the Agreement for convenience, HUD shall pay the DPA for its Services an
amount equal to the percentage of the Base Fee next due pursuant to the provisions of Article
9.
In the event the HUD wishes to terminate the Agreement for reasons of convenience, HUD
shall provide the DPA with twenty (20) Days advance written notice of the Termination. The
Termination will be effective at the end of the twenty (20) Day period.

13.3.2 Right of the DPA to Terminate for Convenience. The DPA may, at its option and at
any time in accordance with applicable law, terminate this Agreement regardless of whether
HUD is in default in the performance of any of its obligations under this Agreement if such
Termination is in the best interests of the DPA. In the event the DPA terminates this
Agreement for convenience, HUD shall pay the DPA for its Services, pursuant to the
provisions of Article 9.
In the event the DAS wishes to terminate the Agreement for reasons of convenience, the DAS
shall provide the DPA with twenty (20) Days advance written notice of the Termination. The
Termination will be effective at the end of the twenty (20) Day period.

13.4. Procedures for Termination.
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13.4.1 Notice for Termination for Cause. HUD shall notify the DPA in writing of a default of
the Agreement or Anticipatory Breach. HUD shall provide the DPA with ten (10) Days to
cure the default. If, at the end of the cure period, HUD determines that the violation has not
been cured, the Termination of the Agreement shall be effective immediately, without further
notice.

13.4.2 Books and Records. Upon the Expiration or upon receipt of notice of Termination of the
Agreement, the DPA, as directed by HUD, either will immediately deliver all Records to the
control of HUD or HUD’s authorized agent at HUD’s sole expense or will hold the Records for
up to a three (3) year period. During this period, the DPA shall continue to maintain Records
relevant to its performance under the Agreement at its principal place of business, or a
convenient, secure location offsite, which shall be accessible to HUD upon 48 hours’ notice to
the DPA. HUD shall have the right to enter upon the DPA’s place of business or off-site
location to take physical possession and control of the Records, and HUD may restrain any
breach of the provisions of this Section 14.4.3 by injunction. The DPA may, at its own
expense, make and maintain copies of the Records for its files for the period up to three (3)
years following Expiration or Termination of the Agreement, subject to the DPA’s obligation to
maintain the confidentiality of all Nonpublic Information in such materials in accordance with
Federal law, HUD regulations and State law. In all events, the DPA shall at the end of the
three (3) year period following Expiration or Termination of the Agreement deliver the Records
to HUD or HUD’s authorized agent at Director’s sole expense, unless it has previously done so
at HUD’s request. The DPA expressly waives all right to any statutory or possessory lien on
the Records. The DPA may request HUD to return to the DPA copies of any Records that
have been previously delivered to HUD under this section and have not been destroyed, for a
limited period of time, as necessary for the DPA to satisfy state law audit and other
governmental requirements. The DPA’s request shall identify the Records and the
governmental requirement for which the Records are sought.

13.4.4

Duty of Cooperation. Upon the Expiration or Termination of the Agreement, the DPA will
cooperate with HUD to affect an efficient, smooth, and timely transition of responsibility with
respect to the Projects.

13.5.

Effect of Termination. Upon the Termination of the Agreement for any reason, HUD’s
appointment of the DPA shall terminate, but the Termination of the Agreement shall not affect
any right, obligation or liability that has accrued under the Agreement. Upon Termination, HUD
shall take over all responsibility for underwriting of any Project under the Agreement as of the
date of Termination. The DPA is responsible for releasing all records to HUD upon
Termination in accordance with Section 13.1.

13.6.

Further Assurances. The DPA shall cooperate with HUD after Termination of the
Agreement to execute and deliver such documents as HUD may request to carry out the
terms and provisions of the Agreement, provided that such documents shall not increase the
DPA’s liabilities or diminish the DPA’s rights under the Agreement.

ARTICLE 14 -- MISCELLANEOUS PROVISIONS
14.1.

Assignment; Binding Effect. The DPA may not assign or transfer the Agreement or any
rights or benefits under the Agreement to any person or entity without the prior written approval
of HUD, which approval may be withheld or conditioned as HUD may determine. Any
assignment made without receiving prior written approval of HUD shall be void. All of the

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covenants, conditions and obligations contained in the Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of HUD and the DPA.

14.2.

Notices. All notices, requests, demands and other communications which are required or
permitted to be given under the Agreement shall, unless otherwise specified herein, be in
writing and sent by hand delivery, overnight courier, registered or certified mail, return receipt
requested, postage prepaid or facsimile (with the original sent within twenty-four (24) hours of
such facsimile by hand delivery, overnight courier or by registered or certified mail, return
receipt requested and postage prepaid):

14.2.1 If to HUD, to:
Deputy Assist Secretary for Multifamily Housing Programs
451 Seventh Street, S.W. Room 6106
Washington, D.C. 20410
Facsimile 202 708-2583

with a copy in the case of disputes or legal matters to:
Associate General Counsel for Assisted Housing and Community Development
U.S. Department of Housing and Urban Development
451 Seventh Street, S.W. Room 8158
Washington, D.C. 20410
Facsimile 202 401-2115

14.2.2 If to the DPA to:

Email address: ___________________________
All such notices, requests, demands and other communications shall be effective upon the
actual delivery thereof to the address identified pursuant to this Section (or the refusal thereof
by the addressee at the address identified pursuant to this Section). Either party may change its
address for purposes of this Section by sending to the other party to the Agreement written
notice of the new address. in the manner specified in this Section. Each party shall be
responsible for notifying the other of any change of address within five (5) business days of the
address change

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14.3. Nondiscrimination. The DPA agrees that during the performance of the Agreement:
14.3.1 The DPA shall not violate Federal or state laws that prohibit discrimination against any
employee or applicant for employment because of race, color, religion, sex, age, mental
or physical disability or national origin.

14.3.2 The DPA shall take affirmative action to comply with all Federal and state laws to ensure that
applicants are employed, and that employees are treated during employment, without regard
to their race, color, religion, sex, age, mental or physical disability or national origin. Such
action shall include, but not be limited to: (i) employment; (ii) upgrading; (iii) demotion; (iv)
transfer; (v) recruitment or recruitment advertising; (vi) layoff or Terminations; (vii) rates of pay
or other forms of compensation; and (viii) selection for training, including apprenticeship.

14.3.3 The DPA shall include the terms and conditions of Sections 15.3.1 and 15.3.2 in every
Subcontract so that these terms and conditions will be binding upon each Subcontractor.

14.4. Severability. If any provision of the Agreement shall be determined to be invalid or
unenforceable, the remaining provisions of the Agreement shall not be affected thereby, and
every provision of the Agreement shall remain in full force and effect and enforceable to the
fullest extent permitted by law.

14.5. Headings. The headings appearing in the Agreement are inserted only as a matter of
convenience and in no way define, limit, construe or describe the scope or intent of
any article or Section of the Agreement.

14.6 Waiver. Neither party’s waiver of the other’s breach of any term, covenant or condition
contained in the Agreement shall be deemed to be a waiver of any subsequent breach of the
same or any other term, covenant or condition in the Agreement.

14.7. HUD’s and the DPA’s Remedies Not Exclusive. The rights and remedies of
HUD and the DPA provided in the Agreement are cumulative and not exclusive and are
in addition to any other legal and administrative rights and remedies now or hereafter
provided by law.

14.8. Notice of Claims under the Agreement. HUD and the DPA each agree that it will
provide the other with written notice of any claim for legal relief or equitable relief it may
have against the other arising under or in connection with the Agreement, that it will refrain
from filing suit with respect to any such dispute for a period of sixty (60) Days following the
other’s receipt of such notice and that it will promptly meet with the other after providing
such notice in a good faith effort to resolve the dispute.

14.9. Counterparts. The Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

14.10. Governing Law. The Agreement shall be governed by and construed in
accordance with all applicable Federal laws and regulations.

14.11. Communications with the Media. Neither the DPA nor its employees shall
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communicate with, or provide information to, members of the press or other media regarding its
agreement with, or work for, HUD without HUD’s prior approval, which will not be unreasonably
withheld. HUD and the DPA will establish procedures to expedite compliance with this Section
15.12. Any requests from press or media personnel which are requests for the production of
documents shall be handled pursuant to Article 12. Nothing here shall preclude a the DPA from
attending and participating in a public meeting that is also being attended and/or reported on by
members of the press or other media.

14.12. Force Majeure. HUD and the DPA shall be excused for the period of any delay in the
performance of any obligations under the Agreement when prevented from performing
such obligations by cause or causes beyond their reasonable control, including, without
limitation, civil commotion, war, invasion, rebellion, hostilities, military or usurped power,
sabotage, pestilence, riots, fire or other casualty or acts of God.

14.13. Multiple Contracts or Engagements. If, at any time during the Term of the
Agreement, the DPA is performing services for HUD pursuant to another contract or
agreement, the DPA shall separately maintain Records and Operating Accounts for each such
agreement and shall otherwise segregate matters pertaining to its performance under
each such agreement.

14.14. Third Party Beneficiaries. The DPA and HUD agree that there are no parties hich are
third party beneficiaries to the Agreement.

14.15. Entire Agreement; Modification. The Agreement and the Exhibits and Attachments
hereto, which are hereby incorporated by reference, constitute the entire agreement between
the parties. If there is any inconsistency between the terms of the Agreement and any
attachments or exhibits hereto, the terms of the Agreement shall govern. There are no
promises or other agreements, oral or written, express or implied, between them other than as
set forth in the Agreement. No change or modification of, or waiver under, the Agreement shall
be valid unless it is in writing and signed by a duly authorized representative of the party
against which it is to be enforced.

IN WITNESS WHEREOF, each party has caused this instrument to be
signed on its behalf by its duly authorized agent.

The Deputy Assistant Secretary for Multifamily Housing Programs acting on behalf of
the Secretary of Housing and Urban Development

By: _______________________________________________________________
Date: ________________

Witness:
By: ______________________________________________________________
Title:__________________________________________________________ Date:

24

HUD 90001

The Delegated Processing Agency
Name: ____________________________________________________________
Address: __________________________________________________________
By: _______________________________________________________________
Date: ________________

Witness:
By:
Title:

Date:

Warning: U.S. Criminal Code, Section 1001, Title 18 U.S.C., “Whoever, in any matter the jurisdiction of any
department or agency of the United States knowingly and willfully makes any false writing or document
knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more
than $10,000 or imprisoned not more than five years, or both.”

25

HUD 90001

Exhibit 1
SCHEDULE OF PROJECTS
All Projects assigned from and after September 1, 2019. Hereafter, all Projects assigned to the DPA by
the local Regional Center Director will be identified using Appendix 1 of this Notice.

26

HUD 90001

Exhibit 2
Operating Procedures Authorities and Guidance
The Authorities and Guidance consists of program regulations, the applicable NOFA,
notices, handbooks, forms and other directives. The material is published online at
Housing Notices:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/notices/hsg
Code of Federal Regulations, 24 CFR Part 891:

http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR&searchP
ath=Title+24%2FChapter+Viii%2FPart+891&oldPath=Title+24%2FChapter+Viii&isColla
psed=true&selectedYearFrom=2012&ycord=

Housing Handbooks:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips
/handbooks/hsgh

27

HUD 90001

Exhibit 3
Key Personnel of the DPA

28
HUD 90001

Exhibit 4
Fees
The DPA may assess a reasonable fee which shall be paid out of the capital advance appropriated funds.
The maximum DPA fees HUD will reimburse will be computed on a percentage basis of the amount of
the original capital advance award.

1
2

New Construction or Substantial Rehabilitation
Agree to issue the firm commitment within 12 months of
the delegation
Sliding scale penalty for each month needed to
extend the fund reservation beyond 36 months.

3

Incentive Payment for reaching Initial Closing within
18 months

4

Construction administration

1

2

3

4

100 basis
points or 1%
8.3 basis
points or
.083% per
month
8.3 basis
points or
.083% per
month
50 basis
points or .5%

Acquisition of Existing Project with or without Repairs
Agree to issue the firm commitment within 12 months of
75 basis
the delegation
points or
.75%
Sliding scale penalty for each month needed in
8.3 basis
points or
the requested waiver under 24 CFR 891.165.
.083% per
month
Incentive Payment for reaching Initial Closing within 18
8.3 basis
months
points or
.083% per
month
If applicable:
• Inspections of critical and non-critical repairs
completed before initial/final closing; and
• Inspection of non-critical repairs after initial/final
closing

29

100 basis
points of the
cost of
repairs or
$30 per
dwelling
unit,
whichever is
greater

HUD 90001

Other fees paid to the DPA.
1)

The DPA cannot be paid twice for the same services. For example the DPA also underwrites a
construction loan in a mixed-finance transaction. Any underwriting fees charged the Owner
must be reduced by 50 percent.

2)

In the case of a mixed-finance transaction with additional non-assisted units, the DPA may
charge reasonable additional fees based on increased workload of the additional non-assisted
units. The amount of these fees is to be negotiated between the Owner and the DPA.

Note: These fees are not to be paid using HUD funds.
a.

The DPA is responsible for any reprocessing of the firm commitment before initial closing at no
additional charge to HUD.

b.

To assure compliance with this requirement HUD will withhold 10 percent of the
DPA’s Base Fee. The holdback will be released:

c.

•

For the issuance of a firm commitment for the release of capital advance proceeds during
construction, when the project reaches initial closing.

•

For the issuance of a firm commitment for the release of capital advance upon project
completion, when the project starts construction.

Failure to comply with this requirement will result in forfeiture of the holdback.

30

HUD 90001

ATTACHMENT 1: The DPA’s Full Review Procedure To be attached by the DPA

31

HUD 90001

32
32

HUD 90001
HUD(06/11)
90001