92466-CA Capital Advance Program Regulatory Agreement Housing for

Capital Advance Program
Regulatory Agreement
Housing for the Elderly or Persons with Disabilities
(Nonprofit) Section 202 of the Housing Act of 1959 or
Section 811 of the National Affordable Housing Act.

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

OMB Approval No. 2502-0470
(Expires 5/31/2010)

See final page for Public Burden statement.

This agreement entered into ------------------------------ day of--------------------------- 20______ , between --------------------------------------------------------------------------------------------------------------- whose address is -----------------------------------------------------------------------hereinafter called Mortgagor, and the undersigned Secretary of Housing and Urban development hereinafter called HUD.
In consideration of the making of the capital advance by HUD and
the disbursement of any part thereof, and in order to comply with
the requirements of the Housing Act of l959 or National Affordable Housing Act of l990 and the Regulations adopted by the
Secretary pursuant thereto, the Mortgagor agrees for itself, its
successors and assigns, and any owner of the mortgaged property,
that in connection with the mortgaged property and the project
operated thereon and so long as the capital advance is outstanding:
l. The Note and Mortgage bear no interest and repayment is not
required so long as the housing remains available for very lowincome elderly persons or very low-income persons with
disabilities (whichever is applicable).
2. Mortgagor will establish and maintain a special fund to be
known as the revenue fund account in a bank which is a
member of the Federal Deposit Insurance Corporation, Savings Association Insurance Fund, or the National Credit
Union Share Insurance Fund, into which will be deposited all
rentals, charges, income and revenue arising from the
operation or ownership of the project. The bank in which this
account is established shall provide collateral acceptable to
HUD to equal the maximum amount in the account at any one
time when such amount exceeds $l00,000. If the bank will not
provide appropriate collateral in such instances, the
Mortgagor will be required to establish accounts in two or
more banks so that the total amount on deposit at any time
does not exceed $l00,000 in any one bank. Expenditures shall
be made from the revenue fund account only in accordance
with the operating budget submitted to and approved by
HUD.
3. Not later than 30 days prior to the beginning of each fiscal
year, the Mortgagor shall submit an operating budget for that
fiscal year to HUD. The budget shall include all necessary
operating expenses, current maintenance charges, expenses of
reasonable upkeep and repairs, taxes and special assessment
levies, prorated amounts required for insurance and all other
expenses incident to the operation of the project; and shall
show the expected revenue to pay such expenses, including
reserve fund deposits. The expenses incurred and
disbursements shall not exceed the reasonable and necessary
amount thereof, and the Mortgagor will not expend any
amount or incur any obligations in excess of the amounts
approved in the annual operating budget except upon written
certification by the Mortgagor to HUD that such expenses
were unanticipated and are necessary and provided further,
that nothing in this section shall limit the amount which the
Mortgagor may expend from funds obtained
Page 1 of 5

from some other source than project revenues or other funds
required of the Mortgagor pursuant to this Agreement or the
Capital Advance Agreement.
4. As security for the Capital Advance for the required payments under this Agreement into the reserve fund for replacements, and for all other obligations of the Mortgagor
under this Agreement, the Mortgagor hereby assigns,
pledges and mortgages to HUD all its rights to the income
and charges of whatever sort which it may receive or be
entitled to receive from the operation of the mortgaged
property, subject, however, to any assignment of rents or
project income in the Mortgage referred to herein. Until a
default occurs under this Agreement, however, permission
is granted to Mortgagor to collect and retain under the
provisions of this Agreement such rents, income, operating
surplus and charges, but upon default this permission is
terminated, as to all rents, income, operating surplus and
charges due or collected thereafter.
5. (a) Mortgagor will establish and maintain a reserve fund for
replacements in a separate account in a bank which is
insured by the Federal Deposit Insurance Corporation,
Savings Association Insurance Fund, or the National
Credit Union Share Insurance Fund. Concurrently with
the effective commencement of rental assistance payments under the Project Rental Assistance Contract, the
Mortgagor will deposit an amount equal to $ per month
unless a different date or amount is approved in writing
by HUD.
Such fund, whether in the form of a cash deposit or
invested in obligations of, or fully guaranteed as to
principal by, the United States of America shall at all
times be subject to the control of HUD. Disbursements
from such fund, whether for the purpose of effecting
replacement of structural elements and mechanical
equipment of the project for any other purpose, may be
made only after the consent in writing of HUD. In the
event of a default in the terms of the mortgage, HUD
may demand the full or partial application of the balance
in such fund to be amount due on the mortgage debt.
(b) Mortgagor will deposit the minimum capital investment
with an escrow agent acceptable to HUD purusant to
Regulations.
(c) Within 60 days after the end of each fiscal year, any
residual receipts realized from the operation of the
mortgaged property shall be deposited in a separate
form HUD-92466-CA (12/20/2005)
ref. Handbook 4571.4 & 4571.5

residual receipts account. Residual receipts shall be
under the control of HUD and shall be disbursed only
at the discretion of HUD for such purpose as it may
determine to be necessary or appropriate.
6. The real property covered by the Mortgage and this Agreement
is described in Schedule A attached hereto.
7. Mortgagor shall not without the written approval of the
Secretary;
(a) Transfer, dispose of or encumber any of the mortgaged
property. Any such transfer shall be only to a person or
persons or corporation satisfactory to and approved by
HUD, who shall, by legal and valid instrument in writing,
to be recorded or filed in the same recording office in which
conveyances of the property covered by the Mortgage are
required to be filed or recorded, duly assume all obligations
under this Agreement and under the Note and Mortgage;
(b) Assign, transfer, dispose of, or encumber any personal
property, including rents or charges, and shall not disburse
or pay out any funds except as provided herein and in the
Capital Advance Agreement.
(c) Remodel, reconstruct, add to, or demolish any part of the
mortgaged property or subtract from any real or personal
property of the project;
(d) Pay any compensation or make any distribution of income
or other assets to any of its officers, directors or
stockholders;
(e) Enter into any contract or contracts for supervisory or
managerial services;
(f) Require as a condition of occupancy or leasing of any unit
or residential space in the project, any consideration or
deposit other than a security deposit in an amount equal
to one month’s total tenant payment or $50, whichever is
greater. The family is expected to pay the security deposit
from its own resources and other available public or
private resources. The Mortgagor may collect the security
deposit on an installment basis.
The security deposits must be placed in a segregated
interest-bearing account. A record shall be maintained of
the amount in this account that is attributable to each
family in residence in the project. Annually for all
families, and when computing the amount available for
disbursement, the Mortgagor shall allocate to the family’s
balance, the interest accrued on the balance during the
year. Unless prohibited by State or local law,
theMortgagor may deduct for the family, from the
accrued interest for the year, the administrative cost of
computing the allocation to the family’s balance. The
amount of the administrative cost adjustment shall not
exceed the accrued interest allocated to the family’s
balance for the year. The amount of the segregated,
interest-bearing account maintained by the Mortgagor
must at all times equal the total amount collected from the
families then in occupancy plus any accrued interest and
less allowable administrative cost adjustments.
Page 2 of 5

The Mortgagor must comply with any applicable State and
local laws concerning interest payments on security
deposits.
The Mortgagor, subject to State and local law, may use the
family’s security deposit balance as reimbursement for any
unpaid family contribution or other amount which the
family owes under the lease in accordance with the
Regulations.
(g) Permit the use of the dwelling accommodations of the
project for any purpose except the use which was originally
intended, or permit commercial use greater than that
originally approved by HUD.
(h) Amend its articles of incorporation or by-laws other than
as permited under the terms of the articles of incorporation
approved by HUD.
8. Mortgagor shall maintain the mortgaged premises, accommodations and the grounds and equipment appurtenant
thereto, in good and substantial repair and condition; provided that, in the event all or any of the buildings covered by
the Mortgage shall be destroyed or damaged by fire or other
casualty, the money derived from any insurance on the
property shall be applied in accordance with the terms of the
Mortgage.
9. Mortgagor shall not file any petition in bankruptcy or
insolvency, or for a receiver, or for reorganization or composition, or make any assignment for the benefit of creditors or
to a trustee for creditors; or permit an adjudication in
bankruptcy, or insolvency, the taking possession of the
mortgaged property or any part thereof by a receiver, or the
seizure and sale of the mortgaged property or any part thereof
under judicial process or purusant to any power of sale and fail
to have such adverse actions set aside within 45 days.
10. Mortgagor shall from funds other than project income immediately satisfy or release any mechanic’s lien, or any other
lien which attaches to the mortgaged property or any personal
prop-erty used in the operation of the project, and shall
dismiss or have dismissed or vacated any receivership, or
petition in bank-ruptcy or assignment for benefit of creditors,
creditors bill or insolvency proceeding involving the project
or the mortgaged property.
11. (a) If the Mortgagor has or comes to have any nonproject
funds, all income and other funds of the mortgaged
project shall be segregated from any such funds of the
Mortgagor and segregated from any funds of any other
corporations or persons. Income and other funds
pledged to the mortgaged project shall be expended
only for the purposes of the project.
(b) Mortgagor shall provide for the management of the project
satisfactory to HUD. Any management contract entered
into by the Mortgagor involving the project shall contain
a provision that it shall be subject to termination, without
penalty and with or without cause, upon written request by
HUD addressed to the Mortgagor and the management
agent. Upon receipt of such request the Mortgagor shall
immediately move to terminate
form HUD-92466-CA (12/20/2005)
ref. Handbook 4571.4 & 4571.5

the contract within a period of not more than 60 days and
shall make arrangements satisfactory to HUD for continuing proper management of the project.
(c) Neither Mortgagor nor its agents shall make any payments for services, supplies or materials unless such
services are actually rendered for the project or such
supplies or materials are delivered to the project and are
reasonably necessary for its operation. Payments for such
services or materials shall not exceed the amount
ordinarily paid for such services, supplies or materials in
the area where the services are rendered or the supplies
or materials furnished.
(d) The mortgaged property, equipment, buildings, plans,
offices, devices, books, apparatus, contracts, records,
documents, and all other papers relating thereto shall at
all times be maintained in reasonable condition for
proper audit and subject to examination and inspection
at any reasonable time by HUD and its duly authorized
agents. Mortgagor and its successors, assigns or its
agents shall retain copies of all written contracts or other
instruments which affect the mortgaged property, all or
any of which may be subject to inspection and
examination by HUD or its duly authorized agents.
(e) The books and accounts of the operations of the mortgaged
property and of the project shall be kept in accordance with
the requirements of HUD.
(f) Within 60 days following the end of each fiscal year
HUD shall be furnished with a complete annual financial report based upon an examination of the books and
records of Mortgagor prepared in accordance with the
requirements of HUD, certified to be an officer of the
Mortgagor and, when required by HUD, prepared and
certified by a Certified Public Accountant, or other
person accepted to HUD.
(g) At the request of HUD, its agents, employees, or attorneys,
the Mortgagor shall give specific answers to questions
upon which information is desired from time to time
relative to the income, assets, liabilities, contracts,
operation, and condition of the property and the status of
the Mortgage and any other information with respect to the
Mortgagor or the mortgaged property and of the project
which may be requested.
(h) All receipts of the project shall be deposited in the name
of the project in a bank, whose deposits are insured by
the FDIC, Savings Association Insurance Fund, or the
National Credit Union Share Insurance Fund. Such
funds shall be withdrawn only in accordance with the
provisions of this Agreement for expenses of the project.
Any person receiving funds of the project shall
immediately deposit such funds in the project bank
account and failing so to do in violation of this Agreement shall hold such funds in trust. Any person receiving property of the project in violation of this Agreement
shall immediately deliver such property to the project
and failing so to do shall hold such property in trust.
Page 3 of 5

(i) Mortgagor shall at all times, if required by the laws of the
jurisdiction, maintain in full force and effect a license to
operate the project from the State and/or other licening
authority. Mortgagor shall lease any portion of the project
only on terms approved by HUD.
(j) Mortgagor shall not collect from tenants or occupants or
prospective tenants or occupants of the project any
admission fee, founder’s fee, life-care fee, or similar
payment pursuant to any agreement, oral or written,
whereby the Mortgagor agrees to furnish accommodations
or services in the project to persons making such payments.
(k) No officer, director, trustee, member, stockholder nor
authorized representative of the Mortgagor except for
management by sponsor or non-profit affiliate, shall have
any financial interest in any contractural arrangement
entered into by the Mortgagor in connection with rendition
of services, the provision of goods or supplies,
management of the project, procurement of the site or other
matters whatsoever.
12. (a) If project is funded under Section 202 of the Housing Act
of l959, as amended, Mortgagor will limit public
occupancy of the project to elderly families and individuals as defined in Section 202 of the Housing Act of
l959, and applicable HUD Regulations. If project is
funded under Section 8ll of the National Affordable
Housing Act of l990, Mortgagor will limit public
occupancy of the project to persons with disabilities as
defined in Section 8ll of the National Affordable Housing Act of l990, and applicable HUD Regulations. The
criteria governing eligibility of tenants for admission to
Section 202 or Section 8ll units and the conditions of
continued occupancy shall be in accordance with the
Project Rental Assistance Contract.
(b) Except as provided in (d) below Mortgagor will make its
dwelling accommodations and services available to
eligible occupants at charges established in accordance
with a schedule to be approved in writing by HUD. Such
accommodations shall not be rented for a period less than
30 days. Commercial facilities, if any, shall be rented only
in accordance with a schedule of charges fixed by the
Mortgagor and approved in writing by HUD. Subleasing
of dwelling accommodations or commercial facilities
shall be permitted only upon the terms and conditions
approved by HUD in writing.
(c) Upon prior written approval by the Secretary, Mortgagor may charge to and receive from any tenant such
amounts as from time to time may be mutually agreed
upon between the tenant and the Mortgagor for any
facilities and/or services which may be furnished by the
Mortgagor or others to such tenant upon request, in
addition to the facilities and services included in the
approved Project Rental Assistance Contract.
(d) Nothing contained in this Agreement shall be construed to
relieve the Mortgagor of any obligations under the Project
Rental Assistance Contract.
form HUD-92466-CA (12/20/2005)
ref. Handbook 4571.4 & 4571.5

13. Mortgagor will comply with the provisions of any Federal,
State or local law prohibiting discrimination in housing based on
race, color, religion, national origin, sex (including sexual
orientation and gender identity), familial status, disability, and age
and must ensure compliance with Title VI of the Civil Rights Act
of 1964 (42 USC 2000d-1), the Fair Housing Act (42 USC 3601),
Section 504 of the Rehabilitation Act of 1973 (29 USC 794), Age
Discrimination Act of 1975 (42 USC 6101), the Americans with
Disabilities Act, the Violence Against Women Act, Executive
Orders 11063, 11246, 13985 and 14091, Section 3 of the Housing
and Urban Development Act of 1968, and the affirmative fair
housing marketing requirements at 24 CFR part 200, subpart M.1
14.No litigation seeking the recovery of a sum in excess of $5,000
nor any action for specific performance or other equitable relief
shall be instituted nor shall any claim for a sum in excess of $5,000
be settled or compromised by the Mortgagor unless prior written
consent thereto has been obtained from HUD. Such consent may
be subject to such terms and conditions as HUD may prescribe.
15. Upon a violation of any of the above provisions of this
Agreement by Mortgagor, HUD may give written notice, thereof,
to Mortgagor, by registered or certified mail, addressed to the
address stated in this Agreement, or such other address as may
subsequently, upon appropriate written notice thereof to HUD,
be designated by the Mortgagor as its legal business address. If
such violation is not corrected to the satisfaction of HUD within
30 days after the date such notice is mailed or within such
further time as HUD determines is necessary to correct the
violation, without further notice HUD may declare a Default
under this Agreement effective on the date of such declaration of
default and such default HUD may:
(a) Take possession of the project, bring any action necessary to enforce any rights of the Mortgagor growing out
of the project operation, and operate the project in
accordance with the terms of this Agreement until such
time as HUD in its discretion determines that the Mortgagor is again in a position to operate the project in
accordance with the terms of this Agreement and incompliance with the requirements of the Note and
Mortgage, or require Power of Attorney from Mortgagor
to effectuate transfer of the project to a HUD approved
nonprofit corporation.
(b) Collect all rents and charges in connection with the
operation of the project and use such collections to pay
the Mortgagor’s obligations under this Agreement and
under the Note and Mortgage, and the necessary expenses of preserving the property and operating the
project.
(c) Declare the whole of said indebtedness immediately due
and payable and then proceed with the foreclosure of the
mortgage.
(d) Apply to any court, State or Federal, for specific performance of this Agreement, for an injunction against any
violation of this Agreement, for the appointment of a
receiver to take over and operate the property in accordance
with the terms of this Agreement, or for such
Page 4 of 5

other relief as may be appropriate, since the injury to HUD
arising from a default under any of the terms of this
Agreement would be irreparable and the amount of damage
would be difficult to ascertain.
(e) Require the Mortgagor to transfer all of its right title and
interest in the project and to all project assets to a private
nonprofit corporation designated by HUD and, for this
prupose the Mortgagor hereby constitutes and appoints
HUD its true and lawful attorney-in-fact, with full power
of substitution in the premises, to transfer the project and
all project assets to the private nonprofit corporation
designated by HUD, if the Mortgagor fails or refuses to
make such a transfer as required by HUD.
16. (a) Mortgagor has executed the Project Rental Assistance
Contract. The terms of the Project Rental Assistance
Contract, when executed, shall be incorporated by reference into this Regulatory Agreement.
(b) A violation of the Project Rental Assistance Contract may
be construed to constitute a default hereunder in the sole
discretion of HUD.
(c) In the event said Project Rental Assistance Contract expires
or terminates before the expiration or termination of this
Agreement, the provisions of this paragraph and any other
reference to said Contract, and to assisted units contained
herein shall be self-cancelling and shall no longer be
effective as of the date of the expiration or termination of
the Project Rental Assistance Contract.
17. As used in this Agreement the term:
(a) “Default” means a default declared by HUD when a
violation of this Agreement is not corrected to its
satisfaction within the time allowed by this Agreement or
such further time as may be allowed by HUD after written
notice;
(b) “Distribution” means any withdrawal or taking of cash or
other assets of the project other than for payment of
reasonable expenses incident to its construction, operation
and maintenance;
(c) “Mortgage” includes “Deed of Trust”, “Chattel Mortgage“
Declaration of Covenants” and any other security for the
Note identified herein;
(d) “Mortgaged Property” includes property, real, personal, or
mixed, covered by the mortgage or mortgages securing the
note held by HUD;
(e) “Mortgagee” refers to the holder of the mortgage identified
herein, its successors and assigns;
(f) “Project” includes the mortgaged property and all its other
assets or whatsoever situate, used in or owned by the
business conducted on said mortgaged property;
(g) “Residual Receipts” means any cash remaining after; (l)
The Payment of;
(i) All amounts required to be deposited in the
reserve fund for replacements;
form HUD-92466-CA (12/20/2005)
ref. Handbook 4571.4 & 4571.5

20. The invalidity of any clause, part or provision of this Agreement
shall not affect the validity of the remaining portions thereof.

(ii) All obligations of the project other than the
mortgage held by HUD unless funds for payment
are set aside or deferment of payment has been
approved by HUD; and

21. Mortgagor warrants that it has not, and will not, execute any
other agreement with provisions contradictory of, or in
opposition to, the provisions hereto, and that, in any event, the
requirements of this Agreement are paramount and controlling as
to the rights and obligations set forth and supersede any other
requirements in conflict therewith.

(2) The segregation of;
(i) An amount equal to the aggregate of all special
funds required to be maintained by the project;
(ii) All tenant security deposits held.

22. Mortgagor does not assume personal liability for payments due
under the Note and mortgage or for payments to the reserve for
replacement fund. However, defaults or other failures to follow
program requirements may result in limited denial of participation
or debarment from HUD or other Federal programs.

(h) “Assisted Units” refer to units assisted pursuant to Project
Rental Assistance Contract.
(i)

“Assistance Contract” refers to a Project Rental
Assistance Contract between the Mortgagor and
HUD under Section 202 of the Housing Act of
l959 or between the Mortgagor and HUD under
Section 8ll(d)(2) of the National Affordable
Housing Act of l990.

23. Mortgagor shall make necessary auxiliary aids and services
available to ensure effective communication with individuals with
disabilities and shall make reasonable accommodations to ensure equal
access and participation by individuals with disabilities in compliance
with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and
its implementing regulations at 24 CFR Part 8, and Titles II and III of
the Americans with Disabilities Act (42 U.S.C. 12101 et seq.) and its
implementing regulations at 28 CFR Parts 35 and 36.

18. HUD shall not be liable for any of its actions hereunder except
for arbitrary and capricious conduct.
19. This instrument shall bind, and the benefits shall inure to,
the respective parties hereto, their legal representatives,
executors, administrators, successors in office or interest, and
assigns, and all owners of the mortgaged property, so long as
the Mortgage is outstanding.

24. Mortgagor shall make reasonable steps to provide meaningful
language access to persons with Limited English Proficiency (LEP) as
required by Title VI of the Civil Rights Act.

Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. HUD may not collect this
information, and you are not required to complete this form, unless it displays a currently valid OMB control number.
This information collection is necessary to ensure that viable projects are developed. It is important to obtain information from applicants to assist HUD in
determining if nonprofit organizations initially funded continue to have the financial and administrative capacity needed to develop a project and that the project
design meets the needs of the residents. The Department will use this information to determine if the project meets statutory requirements with respect to the
development and operation of the project, as well as ensuring the continued marketability of the projects. This information is required in order to obtain benefits.
This information is considered non-sensitive and no assurance of confidentiality is provided.

United States of America
Secretary of Housing and Urban Development (Signature)

Owner(Signature)

By (Name)

By (Name)

Official Title

Date

Official Title

Page 5 of 5

Date

form HUD-92466-CA (12/20/2005)
ref. Handbook 4571.4 & 4571.5