4571.2

APPENDIX 1

SPONSOR\'S CONFLICT OF INTEREST RESOLUTION

TO: The Secretary of Housing and Urban Development

SUBJECT: Section 811 Program - Application for Fund Reservation

Sponsor:

Project Location:

WHEREAS, Section 811 of the National Affordable Housing Act

of 1990, as amended, authorizes the making of capital advances

for housing for persons with disabilities to private, nonprofit

corporations, no part of the net earnings of which inure to the

benefit of any member, founder, contributor or individual;

WHEREAS, HUD has implemented this statutory requirement by

promulgating a regulation providing that the Sponsor may not be

controlled by or under the direction of persons or firms seeking

to derive profit or gain therefrom. The regulation also

prohibits any officer or director of the Sponsor from having any

financial interest in any contract in connection with the

rendition of services, the provision of goods or supplies,

procurement of furnishings or equipment, construction of the

project, procurement of the site or any other matters whatsoever,

except with respect to management contracts entered into by the

Owner with the Sponsor or its nonprofit affiliate.

WHEREAS, HUD has determined that assurance of compliance

with this prohibition can best be obtained by requiring that all

officers and directors of the Sponsor certify that they do not

have and will not have during their term of office, any

prohibited financial interest.

WHEREAS, because of the time constraints imposed under the

application process and difficulties in meeting these deadlines

caused by such factors as large boards and unavailability of

officers and directors of the board, some prospective Sponsors

have been unable or experienced hardship in obtaining all of the

required certifications for submission with the applications for

fund reservation.

WHEREAS, HUD is willing to defer submission of the required

Sponsors\' Conflict of Interest and Disclosure Certifications

until the submission of the conditional commitment applications

by those Owners for which fund reservations were approved, if

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4571.2

APPENDIX 1

such certifications are provided by all officers and directors of

the Sponsor duly qualified and serving in these capacities from

the date of the Sponsor\'s fund reservation application to the

date on which the certifications are submitted.

NOW, THEREFORE, in order to induce HUD to forego requiring

submission of the Conflict of Interest and Disclosure

Certifications until after projects have been selected and fund

reservations granted, it is hereby resolved and agreed by the

Board of Directors of the Sponsor:

1\. That it will submit an Incumbency Certificate, in a form

prescribed by HUD, listing all officers and directors of the

Sponsor duly qualified and sitting as of the date of submission

of its application, together with the dates of commencement of

their respective terms of office and the length of such terms of

office. Additionally, it will provide an updated Incumbency

Certificate showing all changes in incumbency for submission with

the Owner\'s Conditional Commitment Application, initial closing

and final closing.

2\. That no officer or director of the Sponsor has or will

be permitted to have any prohibited interest which would prevent

him or her from signing the required Conflict of Interest and

Disclosure Certification.

3\. That the fund reservation will be subject to

cancellation by HUD if the officers or directors of either the

Sponsor or the Owner fail to submit Conflict of Interest and

Disclosure Certifications duly executed by each and all of their

respective officers and directors.

4\. That no HUD capital advance funds or project rental

assistance funds will be expended on account of any contract or

arrangement where a conflict of interest is determined to exist,

and the Sponsor shall be responsible for the payment of any and

all obligations involving its officers and directors.

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4571.2

APPENDIX 1

5\. That should any contract or arrangement entered into by

the Owner be determined by HUD to involve a conflict of interest,

involving either the Sponsor\'s or Owner\'s officers or directors,

the Sponsor will exercise its best efforts to cause the Owner to

promptly cancel or terminate such contract or arrangement at

HUD\'s request.

Adopted and approved by
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ of the

Sponsor on the \_\_\_\_\_\_\_\_\_\_\_\_ date of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,\_\_\_\_\_\_\_\_\_\_\_.

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