90172B-CA Part II of the Agreement to Enter into a Project Rental

Part II of the
Agreement to Enter into a
Project Rental Assistance Contract

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

OMB Approval No. 2502-0470
(Expires 8/31/2013)

For Use under Section 202 of the Housing Act of 1959 or
Section 811 of the National Affordable Housing Act
Type of Project

PRAC Contract No.

HUD Project No.

New Construction
Rehabilitation
Acquisition

2.1 Schedule of Completion.
(a) Timely Performance of Work. The Owner agrees to begin work
no later than the time indicated in section 1.1. The Owner shall
report to HUD the date work has commenced and shall
thereafter furnish HUD with periodic progress reports
(quarterly unless more frequent reporting is required by HUD).
In the event the work is not commenced, diligently continued,
or completed as required under this Agreement, HUD reserves
the right to rescind this Agreement or take other appropriate
action in accordance with section 2.13.
(b) Time for Completion. The project shall be completed in
accordance with section 2.3 no later than the end of the period
indicated in section 1.1, or in stages as provided for in Exhibit
B. Where the Agreement provides for completion in stages,
all references to project completion shall be considered to
refer to project completion or completion of any stage, as
appropriate.
(c) Delays. In the event there is a delay in the completion due to
strikes, lockouts, labor union disputes, fire, unusual delays in
transportation, unavoidable casualties, weather, acts of God, or
any other causes beyond the Owner's control, or by delay
authorized by HUD, the time for completion shall be extended
to the extent that HUD determines that completion is delayed
due to one or more of these causes.
2.2 Marketing.
(a) The Owner shall commence and diligently continue marketing
as soon as possible, but in any event no later than 90 days prior
to the anticipated date of availability for occupancy of the first
unit in the project. The Owner must notify HUD of the date of
commencement of marketing. Marketing and leasing must be
done in accordance with the HUD-approved Affirmative Fair
Housing Marketing Plan, all Fair Housing and Equal
Opportunity requirements, and the applicable provisions of
Exhibit A, the proposed Contract.
(b) At the time of Contract execution, the Owner must submit a list
of leased and unleased units, with justification for the unleased
units, to qualify for vacancy payments for the unleased units in
accordance with the Contract.

provided in the Contract for that stage shall be executed, and
additional Exhibits 1a, 1b, etc., covering the additional units,
shall become part of the Contract.
(a) Unleased Units at Time of Execution. At the time of execution
of the Contract, HUD shall examine the lists of dwelling units
leased and not leased, referred to in section 2.2(a) and (b), and
shall determine whether or not the Owner has met its
obligations under that section with respect to any unleased
units. HUD shall state in writing its determination with
respect to the unleased units and for which of those units it
will make housing assistance payments pursuant to the
Contract. The Owner shall indicate in writing concurrence or
nonconcurrence with this determination, reserving its right to
claim project assistance payments for the un-leased units
under the Contract, without prejudice by reason of signing the
Contract.
(b) Contract Rents. The Contract Rents by unit size (and in the case
of group homes residential spaces), amounts of project rental
assistance payments, and any other applicable terms and
conditions shall be as specified in the proposed Project Rental
Assistance Contract.
(c) No Changes in Contract. Each party has read or is presumed to
have read the proposed Contract. It is expressly agreed that
there shall be no change in the terms and conditions of the
Contract other than as provided in this Agreement.
2.4 Cooperation in Equal Opportunity Reviews:
(a) The Owner agrees to cooperate with HUD in conducting
monitoring and compliance reviews and complaint investigations pursuant to all applicable civil rights statutes and
regulations, Executive Orders, and civil rights related program
requirements.
(b) In carrying out the obligations under this Agreement, the Owner will

2.3 Execution of Project Rental Assistance Contract.
(d) Time of Execution. Upon acceptance of the project by HUD,
the Contract shall be executed first by the Owner and then by
HUD.
(e) Completion in Stages. If completion is in stages, the Contract
and the signature block for the first stage, shall be executed
upon completion of the first stage, and the number and types
of completed units and their Contract Rents shall be shown in
Exhibit 1 of the Contract. Thereafter, upon completion of each
successive stage, the signature block
Page 1 of 4

comply with:

(1) The requirements of the Fair Housing Act (42 U.S.C. 360119) and its implementing regulations at 24 CFR Part 100; Executive
Order No. 11063 (Equal Opportunity in Housing) and implementing
regulations at 24 CFR Part 107; and Title VI of the Civil Rights Act
of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted
Programs) and implementing regulations at 24 CFR Part 1; the
Violence Against Women Act (VAWA) requirements set forth in 24
CFR Part 5, subpart L, and Title II of the Americans with Disabilities
Act (ADA) 42 U.S.C. 12101 et seq .
(2) The prohibitions against discrimination on the basis of age
under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and
implementing regulations at 24 CFR Part 146, and the prohibitions
against discrimination against otherwise qualified individuals with
disabilities under section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794) and implementing regulations at 24 CFR Part 8.
form HUD-90172-B-CA (12/22/2005) ref.
Handbooks 4571.4 & 4571.5

(3) The requirements of Executive Order No. 11246 (Equal
Employment Opportunity) and the regulations issued under the
Order at 41 CFR Chapter 60;

(d) To include or cause to be included the provision of this section
in every nonexempt subcontract and take such action as HUD
may direct as a means of enforcing such provisions.

(4) The requirements of section 3 of the Housing and Urban
Development Act of 1968 (12 U.S.C. 1701u) (Employment
Opportunities for Lower Income Persons in Connection with
Assisted Projects) and the implementing regulations at 24 CFR
Part 135;
(5) The requirements of Executive Order Nos. 11625, 12432, and
12138 (Minority and Women's Business Enterprises);

2.8 Displacement and Relocation Assistance.
The Owner agrees to comply with the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970
(42 U.S.C. 4601) as amended by the Uniform Relocation
Assistance Amendments of 1987, Title IV of the Surface
Transportation and Uniform Relocation Assistance Act of 1987
(Pub.L. 100-17, approved April 2, 1987) (URA) and
government-wide implementing regulations at 49 CFR Part 24
which set forth relocation assistance requirements that apply to
the displacement of any person (family, individual, business,
nonprofit organization or farm) as a direct result of acquisition,
rehabilitation or demolition for a project assisted under this
part.

(6) The affirmative fair housing marketing requirements of 24
CFR Part 200, Subpart M and the implementing regulations at 24
CFR Part 108.
(7) The fair housing advertising and poster guidelines, 24 CFR
Part 110.
(8)
The civil rights and Equal Opportunity reporting
requirements at 24 CFR Part 885.940 (f).
2.5 National Environmental Policy.
The Owner agrees to comply with all applicable requirements
under the National Environmental Policy Act (NEPA) of 1969
(42 U.S.C. 4321 et seq.) and HUD regulations at 24 CFR Parts
50, including related environmental laws, Executive Orders
and HUD standards in 24 CFR 50.4
2.6 Flood Disaster Protection Act.
If the Project is located in an area that has been identified by
the Director of the Federal Emergency Management Agency
as an area having special flood hazards and if the sale of flood
insurance has been made available under the National Flood
Insurance Act of 1968, the Owner agrees that it will obtain
coverage of the Project, during its anticipated economic or
useful life, by flood insurance in an amount at least equal to its
development or project cost (less estimated land cost) or to the
maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance
Act of 1968, whichever is less.
2.7

Clean Air Act and Federal Water Pollution Control Act.
In compliance with regulations issued by the Environmental
Protection Agency ("EPA"), 40 CFR, Part 15, pursuant to the Clean
Air Act, as amended ("Air Act"), 42 U.S.C. 7401, et seq., the Federal
Water Pollution Control Act, as amended ("Water Act"), 33 U.S.C.
1251, et seq., and Executive Order 11738, the Owner agrees:

(a) Not to utilize any facility in the performance of this Agreement or any
nonexempt subcontractor which is listed on the EPA List of Violating
Facilities pursuant to Part 15 of the regulations for the duration of time
that the facility remains on the list.

(b) Promptly to notify HUD of the receipt of any communication from the
EPA indicating that a facility to be utilized for the Agreement is under
consideration to be listed on the EPA List of Violating Facility;

(c) To comply with all the requirements of section 114 of the Air Act and
section 308 of the Water Act relating to inspection, monitoring, entry,
reports, and information, as well as all other requirements specified in
section 114 of the Air Act and section 308 of the Water Act, and all
regulations and guidelines issued thereunder; and

2.9 Lead Based Paint.
The Owner agrees to comply with requirement of the LeadBased Paint Poisoning Prevention Act (42 U.S.C. 48214846)
and implementing regulations at 24 CFR Part 35 to the extent
they are applicable to housing under the Contract.
2.10 Lobbying.
The Owner agrees to comply with the prohibitions against
lobbying the Executive or Legislative Branches of the Federal Government contained in Pub. L. 101-121 (31 USC
1352) and implementing regulations at 24 CFR Part 87.
2.11 Labor Standards.
(a) For projects that are designed for dwelling use by 12 or more
families (other than projects acquired without rehabilitation),
not less than the wages prevailing in the locality, as
determined by the Secretary of Labor under the Davis-Bacon
Act (40 U.S.C. 276s-276a-5), must be paid to all laborers and
mechanics employed in the construction or rehabilitation of
the project. HUD may waive the Davis-Bacon requirements
if laborers or mechanics voluntarily donate their services
without full compensation (may be paid expenses, reasonable
benefits or a nominal fee) for the purpose of lowering the
costs of construction or rehabilitation; the laborers or
mechanics are not otherwise employed in the construction or
rehabilitation of projects that are assisted under this part and
designed for dwelling use by 12 or more families; and HUDdetermines that any amounts saved are fully credited to the
Borrower undertaking the construction or rehabilitation.
(b) Except where the Davis-Bacon requirements have been waived
under paragraph (a) of this section, contracts involving
employment of laborers and mechanics shall be subject to
provisions of the Contract Work Hours and Safety Standards
Act (40 U.S.C. 327-333).
(c) Owners contractors and subcontractors must comply with all
related rules, regulations, and requirements.
(d) For the purpose of this section (2.12), project is designed for
use by 12 or more families if it includes 12 or more units.
Section 2.12 does not apply to group homes.

Page 2 of 4

form HUD-90172-B-CA (12/22/2005) ref.
Handbooks 4571.4 & 4571.5

waiver of any other rights or remedies. Failure to exercise any right or
remedy shall not constitute a waiver of the right to exercise that or any
other right or remedy at any time.

2.12 Defaults by Owner.
(a) Rights of HUD If Owner Defaults under Agreement.
(1) Events of Default. A default by the Owner under this
Agreement shall result if:

2.13 Disputes.
Any dispute concerning a question of fact arising under this Agreement
which cannot be resolved by agreement between the HUD Field Office
and the Owner may be submitted by the Owner to the Secretary of
Housing and Urban Development or a designee. Both parties shall
proceed diligently with the performance of this Agreement and in
accordance with the decision of the Field Office, pending resolution of
the appeal.

(i) The Owner has violated or failed to comply with any provision
of, or obligation under, this Agreement; or

(ii) The Owner has asserted or demonstrated an intention not to
perform some or all of its obligations under this Agreement; or

(iii) If the Owner has violated or failed to comply with applicable
HUD regulations for the Section 202 or Section 811, or with the
regulatory agreement; or the Owner has filed any false statement or
misrepresentation with HUD in connection with the loan.

2.14 Conflict of Interest.
Officers, directors, stockholders, and authorized representatives of the
Owner may not have any financial interest in any contract in
connection with the rendition of services, the provision of goods or
supplies, project management, procurement of furnishings or
equipment, construction of the project, procurement of the site or other
matters related to the development or operation of the project.

(2) HUD Determination of Default. Upon a determination by HUD
that a default has occurred, HUD shall notify the Owner of:

(i) The nature of the default,
(ii) The action required to be taken and the remedies to be applied on
account of the default (including actions by the Owner to cure the
default),

2.15 Interest of Member of or Delegate to Congress.

(iii) The time within which the Owner shall respond with a showing

No member of or delegate to the Congress of the United States of
America or resident commissioner shall be admitted to any share or
part of this Agreement or to any benefits which may arise from it.

that all the required actions have been taken.
If the Owner fails to respond or take action to HUD's satisfaction,
HUD shall have the right to take corrective action to achieve
compliance, in accordance with paragraph
(3) of this section, or to terminate this Agreement, in whole or in part,
or to take other corrective action to achieve compliance, in its
discretion.
(3) Corrective Actions. Pursuant to paragraph (2) of this section,
HUD in its discretion may take the following corrective actions:

(i) Take possession of the project, bring any action necessary to enforce any rights of the Owner, complete the project in
accordance with the terms of this Agreement, execute the Contract on
behalf of the Owner, and operate the project in accordance with the
terms of the Contract until such time as HUD determines that the
Owner is again in a position to complete or operate the project, as
appropriate, in accordance with the Agreement or Contract.

2.16 Assignment, Sale or Foreclosure.

(a) The Owner agrees that it has not made and will not make any sale,
assignment, or conveyance or transfer in any fashion, of this
Agreement, the Contract, or the project or any part of them or any of
its interest in them, without the prior written consent of HUD.

(b) The Owner agrees that it will not change to a different contractor,
except with HUD's prior written consent.

(c) The Owner agrees that the approved contractor has not made and will
not make, except with HUD's prior written consent, any assignment or
transfer in any form of the contractor's contract to construct or
rehabilitate the project, or of any part of it, or any of the contractor's
interests in it.

(d) The Owner agrees to notify HUD promptly of any proposed action
covered by paragraph (a), (b), or (c) of this section, and further
agrees to request the prior written consent of HUD. For purposes of
this section, a sale, assignment, conveyance, or transfer includes but
is not limited to a transfer by the Owner, in whole or in part.

(ii) 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
complete the project in accordance with this Agreement and to
execute the Contract and operate the project in accordance with the
Contract, or for such other relief as may be appropriate. These
remedies are appropriate since the injury to HUD arising from a
default under any of the terms of this Agreement could be irreparable
and the amount of damage would be difficult to ascertain.

(e) The provisions of this section also shall apply to transfers of interest
by the contractor and by persons having interests in the contractor.

(f) Except where otherwise approved by HUD, this Agreement and the

(b) Remedies not Exclusive and Non-Waiver of Remedies. The
availability of any remedy under this Agreement shall not preclude the
exercise of any other remedy under this Agreement or under any
provision of law, nor shall any action taken in the exercise of any
remedy be considered a

Page 3 of 4

Contract shall continue in effect in the event:

(1) Of assignment, sale, or other disposition of the project or this
Agreement or the Contract,

(2) Of foreclosure, including foreclosure by HUD,
(3) Of assignment of the mortgage or deed in lieu of foreclosure, or
(4) HUD takes over possession, operation or ownership.

form HUD-90172-B-CA (12/22/2005) ref.
Handbooks 4571.4 & 4571.5

Public reporting burden for this collection of information is estimated to average 30 minutes per response, including the time for
reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing
the collection of information. HUD may not collect this information and you are not required to complete this form,
unless it displays a currently valid OMB control number.
This information collection is necessary to ensure that viable projects are developed. It is important to obtain information from
applicants to assist HUD in determining if nonprofit organizations initially funded continue to have the financial and administrative capacity needed to develop a project and that the project design meets the needs of the residents. The Department will use
this information to determine if the project meets statutory requirements with respect to the development and operation of the
project, as well as ensuring the continued marketability of the projects. This information is required in order to obtain benefits.
This information is considered non-sensitive and no assurance of confidentiality is provided.

Page 4 of 4

form HUD-90172-B-CA (12/22/2005) ref.
Handbooks 4571.4 & 4571.5