**U.S. Department Of Housing And Urban Development**

**Office of Housing**

**PROJECT-BASED ASSISTANCE**

**HOUSING ASSISTANCE PAYMENTS CONTRACT**

**For Previous Mod Rehab Projects**

**Preparation of HAP Contract**

**Instructions on preparation of the HAP Contract are attached at the
end of the HAP Contract text. Reference numbers in the text of section 1
of the contract refer to notes at the end of the contract text.**

PROJECT-BASED ASSISTANCE

HOUSING ASSISTANCE PAYMENT CONTRACT

TABLE OF CONTENTS

**HAP CONTRACT**

PART 1

1\. Contract Information [3](#contract-information)

**a. Project [3](#project)**

**b. Contents of contract [3](#contents-of-contract)**

**c. Contract exhibits [3](#contract-exhibits)**

**d. Effective date and term of HAP Contract
[3](#effective-date-and-term-of-hap-contract)**

**i. Effective date [3](#effective-date)**

**ii. Length of term [3](#length-of-term)**

**e. Parties to HAP Contract [3](#parties-to-hap-contract)**

2\. DEFINITIONS [3](#definitions)

3\. PURPOSE [3](#purpose)

4\. OCCUPANCY AND PAYMENT [3](#occupancy-and-payment)

**a. Payment for occupied units [3](#payment-for-occupied-units)**

**b. Occupancy by eligible families
[3](#occupancy-by-eligible-families)**

**c. Vacancy payment [3](#vacancy-payment)**

**d. Compensation for Damages, Unpaid Rent and Other Amounts Due Under
the Lease
[3](#compensation-for-damages-unpaid-rent-and-other-amounts-due-under-the-lease)**

5\. HOUSING ASSISTANCE PAYMENTS [3](#housing-assistance-payments)

**a. HUD rent requirements [3](#hud-rent-requirements)**

**b. CA payment to Owner [3](#ca-payment-to-owner)**

6\. CONTRACT RENT [3](#contract-rent)

**a. Initial Contract Rents [3](#initial-contract-rents)**

**b. Contract Rent Adjustments [3](#contract-rent-adjustments)**

**c. Owner compliance with HAP Contract
[3](#owner-compliance-with-hap-contract)**

7\. OWNER RESPONSIBILITY [3](#owner-responsibility)

8\. OWNER CERTIFICATION [3](#owner-certification)

9\. CONDITION OF UNITS [3](#condition-of-units)

**a. Owner maintenance and operation
[3](#owner-maintenance-and-operation)**

**b. CA inspection [3](#ca-inspection)**

**c. Violation of PCS [3](#violation-of-pcs)**

**d. Maintenance and replacement \-- Owner\'s standard practice
[3](#maintenance-and-replacement----owners-standard-practice)**

10\. LEASING CONTRACT UNITS [3](#leasing-contract-units)

11\. TENANCY [3](#tenancy)

**a. Lease [3](#lease)**

**b. Termination of tenancy [3](#termination-of-tenancy)**

**c. Family payment [3](#family-payment)**

**d. Other Owner charges [3](#other-owner-charges)**

**e. Security deposit [3](#security-deposit)**

12\. RESERVE FOR REPLACEMENTS [3](#reserve-for-replacements)

13\. OVERCROWDED AND UNDEROCCUPIED UNITS
[3](#overcrowded-and-underoccupied-units)

14\. PROHIBITION OF DISCRIMINATION [3](#prohibition-of-discrimination)

15\. REDUCTION OF CONTRACT UNITS [3](#reduction-of-contract-units)

16\. OWNER DEFAULT AND CA REMEDIES [3](#owner-default-and-ca-remedies)

**a. Owner default [3](#owner-default)**

**b. CA remedies [3](#ca-remedies)**

**c. CA remedy is not waived [3](#ca-remedy-is-not-waived)**

17\. OWNER DUTY TO PROVIDE INFORMATION AND ACCESS REQUIRED BY HUD OR CA
[3](#owner-duty-to-provide-information-and-access-required-by-hud-or-ca)

**a. Required information [3](#required-information)**

**b. CA and HUD access to Project [3](#ca-and-hud-access-to-project)**

18\. CA AND OWNER RELATION TO THIRD PARTIES
[3](#ca-and-owner-relation-to-third-parties)

**a. Injury because of Owner action or failure to act
[3](#injury-because-of-owner-action-or-failure-to-act)**

**b. Legal relationship [3](#legal-relationship)**

**c. Exclusion of third party claims
[3](#exclusion-of-third-party-claims)**

**d. Owner's claims against HUD [3](#owners-claims-against-hud)**

19\. CONFLICT OF INTEREST [3](#conflict-of-interest)

**a. Prohibited interest [3](#prohibited-interest)**

**b. Definitions [3](#definitions-1)**

**c. Disclosure [3](#disclosure)**

**d. HUD waiver [3](#hud-waiver)**

**e. Interest of member of Congress
[3](#interest-of-member-of-congress)**

20\. EXCLUSION FROM FEDERAL PROGRAMS
[3](#exclusion-from-federal-programs)

**a. Federal requirements [3](#federal-requirements)**

**b. Disclosure [3](#disclosure-1)**

21\. TRANSFER OF THE CONTRACT, PROPERTY, AND OWNERSHIP ENTITY
[3](#transfer-of-the-contract-property-and-ownership-entity)

**a. When consent is required [3](#when-consent-is-required)**

**b. Transferee assumption of HAP Contract
[3](#transferee-assumption-of-hap-contract)**

**c. Effect of consent to transfer [3](#effect-of-consent-to-transfer)**

**d. When transfer is prohibited [3](#when-transfer-is-prohibited)**

22\. OWNER DISCLOSURE OF OTHER GOVERNMENT ASSISTANCE
[3](#owner-disclosure-of-other-government-assistance)

23\. OWNER LOBBYING CERTIFICATIONS [3](#owner-lobbying-certifications)

24\. NOTICES AND OWNER CERTIFICATIONS
[3](#notices-and-owner-certifications)

25\. HUD REQUIREMENTS [3](#hud-requirements)

26\. STATUTORY CHANGES DURING TERM [3](#statutory-changes-during-term)

27\. PHA DEFAULT [3](#pha-default)

28\. ENTIRE AGREEMENT [3](#entire-agreement)

HAP Contract Number:

**U.S. Department Of Housing and Urban Development**

**Office of Housing**

**PROJECT-BASED SECTION 8**

HOUSING ASSISTANCE PAYMENTS

RENEWAL CONTRACT

PART 1

# **Contract Information**[^1]

## **Project**

**Section 8 Project Number**

**FHA Project Number (if applicable)**

######### Project Name: 

**Project Description**[^2]

## **Contents of contract**

This is a housing assistance payments renewal contract (hereinafter "HAP
Contract") between HUD and the Owner. The HAP Contract consists of Part
1, Part 2 and the contract exhibits listed in paragraph c.

## **Contract exhibits**

The HAP Contract includes the following exhibits:

**Exhibit A Description of contract units**

This exhibit specifies the NUMBER OF contract UNITS BY Unit size (number
of bedrooms), applicable initial contract rents, AND (IF THE HAP
CONTRACT IS A STAGED CONTRACT) THE EFFECTIVE DATE OF EACH STAGE. [^3]

**Exhibit B Services, maintenance and utilities to be provided by the
owner**

**Additional exhibits:**[^4]

## **Effective date and term of HAP Contract**

### **Effective date**

1)  If the HAP Contract is not a staged contract, the effective date for
    all contract units is:
    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

2)  If the HAP Contract is a staged contract, the effective date for
    each stage is set forth on [Exhibit A]{.underline} attached hereto.

### **Length of term**

1)  The term of the HAP Contract for all contract units shall end on
    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

2)  Subject to the availability of sufficient appropriations to make
    housing assistance payments for any year in accordance with the HAP
    Contract, as determined by HUD, the HAP Contract shall run for a
    period of years, beginning on the first day of the term. Section 8
    housing assistance payments to the Owner during the HAP Contract
    term shall only be made from budget authority appropriated by the
    Congress, and available for this purpose.

3)  Owner hereby acknowledges and agrees that it will accept any offer
    of renewal of the HAP Contract if the offer is in accordance with
    the terms and conditions specified in the Restructuring Commitment.
    Section 8 housing assistance payments to the Owner during the HAP
    Contract term shall only be made from budget authority appropriated
    by the Congress, and available for this purpose.

## **Parties to HAP Contract**

**Name of Contract Administrator:**

**Address of Contract Administrator:**

**Name of Owner:**

**Address of Owner**

**EXECUTION OF HAP CONTRACT**

**CONTRACT ADMINISTRATOR\
(CA)**

By:

Signature of authorized representative

Name and official title (Print)

Date

**Owner**

**Name of Owner** (Print)

[.]{.underline}

By

Signature of authorized representative

Name and title (Print)

Date

**U.S. Department Of Housing and Urban Development**

**Office of Housing**

**PROJECT-BASED ASSISTANCE**

HOUSING ASSISTANCE PAYMENTS

RENEWAL CONTRACT

PART 2

# **DEFINITIONS**

**CA**. Contract administrator. The agency that has entered into the HAP
Contract with the Owner. The agency is HUD or a public housing agency as
defined in the United States Housing Act of 1937 (42
U.S.C. 1437a(b)(6)).

**Contract rent**. The total monthly rent payable to the Owner for a
contract unit, including the tenant rent. Contract rent includes payment
for any housing services, maintenance and utilities to be provided by
the Owner in accordance with the HAP Contract.

**Contract units**. The housing units covered by this HAP Contract. The
contract units are described in Exhibit A by unit size (number of
bedrooms) and applicable initial contract rents.

**Family**. The persons selected by the Owner in accordance with HUD
Requirements to reside in a contract unit with Section 8 assistance.

**HAP Contract**. This housing assistance payments contract between the
CA and the Owner. The contract consists of Part 1, Part 2, and the
contract exhibits (listed in paragraph 1.c of the HAP Contract).

**HUD**. U.S. Department of Housing and Urban Development.

**HUD requirements**. HUD regulations and other requirements, including
changes in HUD regulations and other requirements during the term of the
HAP Contract.

**MAHRA.** The Multifamily Assisted Housing Reform and Affordability Act
of 1997 (Title V of Public Law No.105‑65, October 27, 1997, 111 Stat.
1384ff), as amended by section 531 of the Departments of Veterans
Affairs and Housing and Urban Development, and Independent Agencies
Appropriations Act, 2000 (Public Law No. 106-74, October 20, 1999,113
Stat. 1109ff).

**OCAF.** An operating cost adjustment factor established by HUD.

**PHA.** A public housing agency (as defined and qualified in accordance
with the United States Housing Act of 1937. 42 U.S.C. 1437 et seq.).

**Physical condition standards (PCS)**. The HUD minimum physical
condition standards for dwelling units occupied by families receiving
Section 8 project-based assistance.

**Principal or interested party**. This term includes a management agent
and other persons or entities participating in project management, and
the officers and principal members, shareholders, investors, and other
parties having a substantial interest in the HAP Contract, or in any
proceeds or benefits arising from the HAP Contract.

**Project.** The housing designated in paragraph 1.a of the HAP
Contract.

**Restructuring Commitment.** That certain Restructuring Commitment,
entered into between the Owner and HUD, as part of the Mark-to-Market
Process, setting forth the terms of the restructuring for the Project
involving a section 8 housing assistance payments contract renewal with
debt restructuring, and which incorporates a Restructuring Plan
containing the information required by the Regulations at 24 CFR
401.404.

**Section 8.** Section 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f).

**Tenant rent**. The portion of the contract rent payable by the family,
as determined by the Owner in accordance with HUD requirements. The CA
is not responsible for paying any part of the tenant rent, except with
respect to vacancy and similar payments made under Section 4.c.

# **PURPOSE**

a\. The HAP Contract is entered pursuant to section 8 of the United
States Housing Act of 1937 (42 U.S.C. 1437f), section 515(a) of the
MAHRA, and pursuant to the terms of the Restructuring Commitment.

b\. Previously, the CA and the Owner had entered into a housing
assistance payments contract (\"expiring contract\") to make Section 8
housing assistance payments to the Owner for eligible families living in
the Project. The term of the expiring contract will expire or terminate
prior to the beginning of the term of this HAP Contract.

c\. The purpose of the HAP Contract is to provide housing assistance
payments on behalf of eligible families who lease and occupy contract
units that comply with the HUD PCS. Housing assistance payments shall
only be paid to the Owner for contract units occupied by eligible
families who lease contract units from the Owner in accordance with
statutory requirements, and with all HUD regulations and other HUD
requirements.

d\. The HAP Contract is entered into pursuant to the terms of the
Restructuring Commitment setting forth the terms of the restructuring
for the Project involving a section 8 housing assistance payments
contract renewal with debt restructuring.

e\. The CA must make housing assistance payments to the Owner in
accordance with the HAP Contract for contract units leased and occupied
by eligible families during the HAP Contract term.

# **OCCUPANCY AND PAYMENT** 

## **Payment for occupied units**

During the term of the HAP Contract, the CA shall make housing
assistance payments to the Owner for the months during which a contract
unit is leased to and occupied by an eligible family as determined in
accordance with HUD requirements. If an assisted family moves out of a
contract unit, the Owner may keep the housing assistance payment for the
month when the family moves out.

## **Occupancy by eligible families**

During the contract term, the Owner shall lease all of the contract
units to eligible families. Eligibility shall be determined in
accordance with HUD requirements.

## **Vacancy payment**

1)  The Owner shall receive housing assistance payments for so much of
    the month in which the family moves out of a contract unit as the
    contract unit remains vacant.

2)  If the unit remains vacant, the Owner may receive a housing
    assistance payment in the amount of 80 percent of the contract rent
    for a vacancy period not to exceed an additional month after the
    month when the family moves out. However, if the Owner collects any
    of the tenant rent for this month, the payment for the vacancy
    period must be reduced to an amount which, when added to the
    family's payments, does not exceed 80 percent of the contract rent.

3)  The Owner shall not receive any vacancy payment under this paragraph
    iii, unless the Owner:

    a.  Immediately upon learning of the vacancy, has notified the CA of
        the vacancy, or prospective vacancy, and the reason for the
        vacancy,

    b.  Takes all feasible actions to fill the vacancy, including
        contacting applicants on the Owner's waiting list, conducting
        appropriate outreach for eligible families, and advertising the
        availability of the unit;

    c.  Has not rejected any eligible applicant, except for good cause
        acceptable to the CA; and

    d.  Did not cause the vacancy by violating the lease, the HAP
        Contract, or any applicable law.

## **Compensation for Damages, Unpaid Rent and Other Amounts Due Under the Lease**

If a family vacates a contract unit and owes rent, other amounts due
under the lease, or has left damages in excess of normal wear and tear,
the Owner may request reimbursement from HUD for such items so long as
the Owner: (1) has collected a security deposit in an amount permitted
by HUD; and (2) has completed the move-in and move out inspections
required by HUD. The amount of reimbursement will be calculated in
accordance with HUD regulations and administrative procedures.

# **HOUSING ASSISTANCE PAYMENTS**

## **HUD rent requirements**

Notwithstanding any other provisions of the HAP Contract, the contract
rent may in no event exceed the amount authorized in accordance with HUD
requirements.

## **CA payment to Owner**

1)  Each month the CA must make a housing assistance payment to the
    Owner for a unit under lease to and occupied by an eligible family
    in accordance with the HAP Contract.

2)  The monthly housing assistance payment to the Owner for a contract
    unit is equal to the amount by which the contract rent exceeds the
    tenant rent.

3)  Payment of the tenant rent is the responsibility of the family. The
    CA is not responsible for paying any part of the tenant rent, or for
    paying any other claim by the Owner against a family, except with
    respect to vacancy and similar payments made under Section 4.c. The
    CA is only responsible for making housing assistance payments to the
    Owner on behalf of a family in accordance with the HAP Contract.

4)  The Owner will be paid the housing assistance payment under the HAP
    Contract on or about the first day of the month for which payment is
    due, unless the Owner and the CA agree on a later date.

5)  The Owner will notify the CA promptly of any change of circumstances
    that would affect the amount of the monthly housing assistance
    payment, and will return any payment that does not conform to the
    changed circumstances.

# **CONTRACT RENT**

## **Initial Contract Rents**

At the beginning of the HAP Contract term, and until contract rents for
units in the Project are adjusted in accordance with section 6b, the
contract rent for each bedroom size (number of bedrooms) shall be the
initial contract rent amount listed in **[Exhibit A]{.underline}**,
which is attached to and, by this reference, is hereby made a part of
the HAP Contract.

## **Contract Rent Adjustments**

1)  OCAF \--

> During the term of the HAP Contract the Contract Administrator shall
> annually, on the anniversary date of the HAP Contract, adjust the
> amounts of the monthly contract rents in accordance with HUD
> requirements by using an OCAF.

2)  Procedure for Rent Adjustments During HAP Contract Term

> a\) To adjust contract rents during the term of the HAP Contract, the
> Contract Administrator shall give the Owner notice with a revised
> Exhibit A that specifies the adjusted contract rent amounts.
>
> b\) The revised Exhibit A shall specify the adjusted contract rent
> amount for each bedroom size as determined by the Contract
> Administrator in accordance with this section. The adjustment notice
> by the Contract Administrator to the Owner shall specify when the
> adjustment of contract rent is effective.
>
> c\) Notice of rent adjustment by the Contract Administrator to the
> Owner shall automatically constitute an amendment of the HAP Contract.

3\) Should the Project anytime during the term of the Renewal Contract
receive other government assistance, including but not limited to any
loan, grant, credit, tax benefit, or any other form of direct or
indirect assistance such as tax credits under Federal, State or local
law, the Owner shall provide HUD with written notice, no more than 30
days following receipt of notification from the governmental authority
issuing the assistance that such assistance has been or will be awarded.
The written notice will identify the type and amount of the assistance
awarded, the government entity providing such assistance, and the date
of the award. HUD will review the underwriting projections resulting
from the receipt of other government assistance, and if HUD determines
that Project operating expenses, debt service, and/or required
replacement reserve contributions will decrease as a result of the
Project's receipt of other government assistance, HUD may adjust the
contract rents downward to the greatest of the following:

> a\) Actual market rents as noted above, adjusted upwards using the
> appropriate OCAF adjustment factor, compounded annually from the
> origination date of the renewal contract, per HUD guidelines;

b\) Revised exception rent after applying the other government
assistance, which is determined to decrease operating expenses, debt
service, and/or required replacement reserve contribution; and

c\) Market rents that reflect improvements to the Project (as improved
rents) resulting from the application of the additional government
assistance, not to exceed the contract rent then in effect. The owner
must submit to HUD a rent comparability study (RCS) prepared (at the
owner's expense) in accordance with HUD requirements. HUD will have sole
discretion to review and adjust the rents provided in the RCS to
eliminate upward adjustments attributable to improvements that exceed
the M2M Program's non-luxury standard. The rent comparability study must
be submitted to HUD along with the notification of the award of the
other governmental assistance.

If the additional government assistance is provided in conjunction with
a transaction requiring prior HUD approval, such as, an
assumption/subordination of Mark-to-Market debt, a TPA, or the approval
of a new FHA insured first mortgage, the owner must notify the HUD
official approving that transaction of the requirements of this Section.
No additional notification of HUD or the Section 8 Contract
Administrator staff will be required.

If new secured debt and/or tax credit equity is involved, the owner
shall submit pro-forma estimates of the operating expenses, debt
service, and replacement reserves that will be required after the
application of the additional government assistance. These estimates
will be reviewed by HUD in its process of determining a possible
contract rent adjustment.

4)  Notice of rent adjustment by the Contract Administrator to the Owner
    shall automatically constitute an amendment of the Renewal Contract.

5\) No Other Adjustments

> Except for contract rent adjustments in accordance with this section,
> there shall not be any other adjustments of the contract rents during
> the term of the HAP Contract. Special adjustments shall not be
> granted.

## **Owner compliance with HAP Contract**

The CA shall not approve, and the Owner shall not receive, any increase
of contract rent for any contract unit which does not comply with the
PCS, and/or where the Owner has not complied with the terms of the
assisted lease.

# **OWNER RESPONSIBILITY**

a\. The Owner is responsible for:

> 1\) Performing all management and rental functions for the contract
> units.
>
> 2\) Selecting tenants.
>
> 3\) Determining tenant eligibility.
>
> 4\) Performing an initial examination, interim examinations, and
> annual reexaminations of family income.
>
> 5\) Calculating amount of the tenant rent and the housing assistance
> payment in accordance with the HAP Contract and HUD requirements.
>
> 6\) Entering a lease with each assisted tenant.
>
> 7\) Enforcing tenant obligations under the lease.
>
> 8\) Paying for utilities and housing services (unless paid by the
> tenant in accordance with the HAP Contract).
>
> 9\) Collecting from the tenant:

a.  Any security deposit.

b.  The tenant rent.

c.  Any charge for unit damage by the family.

    10\) Paying the family any applicable utility reimbursement for
    tenant-paid utilities (where the amount of the utility allowance
    exceeds the amount of the tenant rent).

    11\) Submitting monthly requests for payment in the form and manner
    required by HUD and the CA.

    12\) Abiding by all terms and conditions of the Restructuring
    Commitment.

b\. The Owner shall perform all Owner responsibilities in accordance
with HUD requirements.

# **OWNER CERTIFICATION**

The Owner certifies that at all times during the term of the HAP
Contract:

1)  All contract units are in good and tenantable condition. The Owner
    will maintain the Project and all contract units in accordance with
    the PCS.

2)  The Owner is providing all the services, maintenance and utilities
    as agreed to under the HAP Contract and the leases with assisted
    families.

3)  Each contract unit for which the Owner is receiving housing
    assistance payments is leased to an eligible family, and the lease
    is in accordance with the HAP Contract and HUD requirements.

4)  To the best of the Owner\'s knowledge, the contract unit is leased
    to and occupied by an eligible Family and is used solely for
    residence by the Family and as the Family's principal place of
    residence.

5)  The Owner (including a principal or other interested party) is not
    the parent, child, grandparent, grandchild, sister, or brother of
    any member of a family residing in a contract unit.

6)  The amount of the housing assistance payment is the correct amount
    due under the HAP Contract.

7)  Except for the housing assistance payment and the tenant rent as
    provided under the HAP Contract, the Owner has not received and will
    not receive any payments or other consideration (from the family,
    the CA, HUD, or any other public or private source) for rental of
    the contract unit.

8)  The family does not own, or have any interest in the contract unit.
    If the Owner is a cooperative, the family may be a member of the
    cooperative.

9)  Owner has complied and will comply with all Owner's obligations
    under the Restructuring Commitment.

# **CONDITION OF UNITS**

## **Owner maintenance and operation**

1)  The Owner must maintain and operate the contract units and Project
    to provide decent, safe and sanitary housing in accordance with the
    PCS, including timely performance of ordinary and extraordinary
    maintenance.

2)  The Owner must provide all the services, maintenance and utilities
    set forth in Exhibit B, and in the lease with each assisted family.

## **CA inspection**

The CA may inspect the contract units and the Project annually, and any
time the CA deems necessary to assure that the contract units and
Project are in accordance with the PCS, and that the Owner is providing
the maintenance, utilities, and other services in accordance with the
leases and the HAP Contract. The CA shall give the Owner reasonable
notice of any and all such inspections.

## **Violation of PCS**

1)  If the CA determines that a contract unit is not in accordance with
    the PCS, the CA may exercise any of its remedies under the HAP
    Contract. Such remedies include termination, and suspension or
    reduction of housing assistance payments. The CA may exercise any
    such contractual remedy respecting a contract unit even if the
    family continues to occupy the unit.

2)  The CA shall not make any housing assistance payment for a dwelling
    unit that fails to meet the PCS, unless the Owner corrects the
    defect within the period specified by the CA and the CA verifies the
    correction. If a defect is life threatening, the Owner must correct
    the defect within no more than 24 hours. For other defects, the
    Owner must correct the defect within no more than 30 calendar days
    (or any CA-approved extension).

## **Maintenance and replacement \-- Owner\'s standard practice**

Maintenance and replacement (including redecoration) must be in
accordance with the standard practice for the building concerned as
established by the Owner.

#  **LEASING CONTRACT UNITS**

a.  During the term of the HAP Contract, the Owner must lease all
    contract units to eligible families.

b.  The Owner must determine family eligibility in accordance with HUD
    requirements.

c.  The contract unit leased to each family must be appropriate for the
    size of the family as determined in accordance with HUD
    requirements.

d.  The Owner is responsible for screening and selecting tenants.

# **TENANCY**

## **Lease**

The lease between the Owner and each assisted family must be in
accordance with HUD requirements. The lease must include word-for-word
all provisions required by HUD.

## **Termination of tenancy**

The Owner may only terminate a tenancy in accordance with the lease and
HUD requirements.

## **Family payment**

1)  The portion of the contract rent payable by the family will be
    determined by the Owner in accordance with HUD requirements. The
    amount of the tenant rent is subject to change during the term of
    the HAP Contract.

2)  The amount of the tenant rent as determined by the Owner in
    accordance with HUD requirements is the maximum amount the Owner may
    charge the family for rent of a contract unit, including all housing
    services, maintenance and utilities to be provided by the Owner in
    accordance with the HAP Contract and the lease.

3)  The Owner may not demand or accept any rent payment from the tenant
    in excess of the tenant rent. The Owner must immediately return any
    excess rent payment to the tenant.

4)  The family is not responsible for payment of the portion of the
    contract rent covered by the housing assistance payment under the
    HAP Contract. The Owner may not terminate the tenancy of an assisted
    family for nonpayment of the housing assistance payment where such
    nonpayment is the result of failure by the Owner to fulfill its
    obligations under the HAP Contract.

## **Other Owner charges**

The Owner may not charge the tenant or family members extra amounts for
items set forth in Exhibit B.

## **Security deposit**

1)  The Owner may collect a security deposit from the family.

2)  The Owner must comply with HUD and CA requirements, which may change
    from time to time, regarding security deposits from a tenant.

3)  When the family moves out of the contract unit, the Owner, subject
    to State and local law, may use the security deposit, including any
    interest on the deposit, in accordance with the lease, as
    reimbursement for any unpaid tenant rent, damages to the unit or
    other amounts which the family owes under the lease. The Owner must
    give the family a written list of all items charged against the
    security deposit and the amount of each item. After deducting the
    amount used as reimbursement to the Owner, the Owner must promptly
    refund the full amount of the balance to the family.

4)  If the security deposit is not sufficient to cover amounts the
    family owes under the lease, the Owner may seek to collect the
    balance from the tenant.

#  **RESERVE FOR REPLACEMENTS**

Intentionally deleted.

# **OVERCROWDED AND UNDEROCCUPIED UNITS**

If a contract unit is not decent, safe and sanitary because of an
increase in the family size which causes the unit to be overcrowded, or
a contract unit is larger than appropriate for the size of the family in
occupancy, the Owner must offer the family a suitable unit as soon as
one becomes vacant and ready for occupancy, and the Owner must require
the family to move.

# **PROHIBITION OF DISCRIMINATION**

a\. The Owner may not refuse to lease contract units to, or otherwise
discriminate against any person or family in leasing of a contract unit,
because of race, color, creed, religion, sex, national origin,
disability or familial status (i.e., because the family includes
children).

b\. The Owner must comply with all applicable Federal requirements,
including but not limited to the following: The Fair Housing Act (42
U.S.C. 3610 - 3619) and implementing regulations at 24 CFR parts 100, et
seq.; Executive Orders 11063, 12259, and 12892 (Equal Opportunity in
Housing) and implementing regulations at 24 CFR part 107; title VI of
the Civil Rights Act of 1964 (42 U.S.C. 2000d - 2000d-4) (prohibition of
discrimination in Federally‑assisted programs) and implementing
regulations at 24 CFR part 1; the Age Discrimination Act of 1975 (42
U.S.C. 6101 - 6107) and implementing regulations at 24 CFR part 146;
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)
(prohibition of discrimination because of disability) and implementing
regulations at 24 CFR part 8; title II of the Americans with
Disabilities Act (42 U.S.C. 12101, et seq.) (prohibition of employment
discrimination because of disability) and the fair housing advertising
poster guidelines at 24 CFR part 110.

c\. The CA and the Owner must cooperate with HUD in the conducting of
compliance reviews and complaint investigations pursuant to all
applicable civil rights statutes, Executive Orders, and all related
rules and regulations.

# **REDUCTION OF CONTRACT UNITS**

If the Owner fails for a continuous period of six months to have at
least 90 percent of the assisted units leased or available for leasing
to eligible families, the contract administrator may, on thirty calendar
days notice to the Owner, reduce the number of contract units to not
less than the number of units actually under lease to eligible families
at the day of such notice, plus 10 percent (rounded up).

# **OWNER DEFAULT AND CA REMEDIES**

## **Owner default**

Any of the following is a default by the Owner under the HAP Contract:

1)  The Owner has failed to comply with any obligation under the HAP
    Contract, including the Owner\'s obligations to maintain all
    contract units in accordance with the PCS.

2)  The Owner has violated any obligation under any other housing
    assistance payments contract under Section 8 of the United States
    Housing Act of 1937 (42 U.S.C. 1437f).

3)  The Owner has committed any fraud or made any false statement to the
    CA or HUD in connection with the HAP Contract.

4)  The Owner has committed fraud, bribery or any other corrupt or
    criminal act in connection with any Federal housing assistance
    program.

5)  If the property where the contract units are located is subject to a
    lien or security interest securing a HUD loan or a mortgage insured
    by HUD:

    a.  The Owner has failed to comply with the regulations for the
        applicable mortgage insurance or loan program, with the mortgage
        or mortgage note, or with the regulatory agreement, or

    b.  The Owner has committed fraud, bribery or any other corrupt or
        criminal act in connection with the HUD loan or HUD-insured
        mortgage.

6)  If the Owner has engaged in any drug-related criminal activity or
    any violent criminal activity.

7)  The Owner has violated any obligation under the Restructuring
    Commitment.

## **CA remedies**

1)  If the CA determines that a breach has occurred, the CA may exercise
    any of its rights or remedies under the HAP Contract.

2)  The CA must notify the Owner in writing of such determination. The
    notice by the CA to the Owner may require the Owner to take
    corrective action (as verified by the CA) by a time prescribed in
    the notice.

3)  The CA\'s rights and remedies under the HAP Contract include
    recovery of overpayments, termination or reduction of housing
    assistance payments, and termination of the HAP Contract.

## **CA remedy is not waived**

The CA\'s exercise or non-exercise of any remedy for Owner breach of the
HAP Contract is not a waiver of the right to exercise that remedy or any
other right or remedy at any time.

# **OWNER DUTY TO PROVIDE INFORMATION AND ACCESS REQUIRED BY HUD OR CA**

## **Required information**

The Owner must prepare and furnish any information pertinent to the HAP
Contract as may reasonably be required from time to time by the CA or
HUD. The Owner shall furnish such information in the form and manner
required by the CA or HUD.

## **CA and HUD access to Project**

The Owner must permit the CA or HUD or any of their authorized
representatives to have access to the Project during normal business
hours, and, for the purpose of audit and examination, to have access to
any books, documents, papers and records of the Owner to the extent
necessary to determine compliance with the HAP Contract, including the
verification of information pertinent to the housing assistance payments
or the HAP Contract.

# **CA AND OWNER RELATION TO THIRD PARTIES**

## **Injury because of Owner action or failure to act**

The CA has no responsibility for or liability to any person injured as a
result of the Owner\'s action or failure to act in connection with the
implementation of the HAP Contract, or as a result of any other action
or failure to act by the Owner.

## **Legal relationship**

The Owner is not the agent of the CA. The HAP Contract does not create
or affect any relationship between the CA and any lender to the Owner or
any suppliers, employees, contractors or subcontractors used by the
Owner in connection with the implementation of the HAP Contract.

## **Exclusion of third party claims**

Nothing in the HAP Contract shall be construed as creating any right of
a family or other third party (other than HUD) to enforce any provision
of the HAP Contract, or to assert any claim against HUD, the CA or the
Owner under the HAP Contract.

##  **Owner's claims against HUD**

If the contract administrator is a PHA acting as contract administrator
pursuant to an annual contributions contract ("ACC") between the PHA and
HUD, the contract administrator is not the agent of HUD and the HAP
Contract does not create any relationship between HUD and any suppliers,
employees, contractors or subcontractors used by the contract
administrator to carry out functions or responsibilities in connection
with contract administration under the ACC.

# **CONFLICT OF INTEREST**

## **Prohibited interest**

1)  No covered individual or entity may have any direct or indirect
    interest in the HAP Contract.

2)  Direct or indirect interest includes the interest of an immediate
    family member.

## **Definitions**

1)  "Immediate family member" means the spouse, parent, child,
    grandparent, grandchild, sister, or brother of any covered
    individual.

2)  "Covered individual or entity" means an individual or entity that is
    a member of any of the following classes:

    a.  A member, officer or director of the CA, or other CA official
        with administrative functions or responsibility concerning
        contract administration under the Annual Contributions Contract
        ("ACC") between HUD and the CA.

    b.  If the CA is an instrumentality of a governmental body:

        i.  A member, officer or director of such governmental body.

        ii. A member, officer or director of any entity that holds a
            direct or indirect interest in the instrumentality entity.

    c.  An employee of the CA.

    d.  A CA contractor, subcontractor or agent with administrative
        functions or responsibility concerning contract administration
        under the ACC, or a principal or other interested party of such
        contractor, subcontractor or agent.

    e.  An individual who has administrative functions or responsibility
        concerning contract administration under the ACC, including an
        employee of a CA contractor, subcontractor or agent.

    f.  A public official, member of a governing body, or State or local
        legislator, who exercises functions or responsibilities
        concerning contract administration under the ACC.

## **Disclosure**

1)  A individual or entity with a prohibited interested under section 19
    must disclose his, her or its interest or prospective interest in
    the HAP Contract, or any other contract, subcontract or other
    arrangement in connection with contract administration under the ACC
    to the CA and HUD.

2)  The Owner certifies that it has fully disclosed to the CA and HUD
    any interest that would be a violation of the conflict of interest
    requirements (paragraph 19 of the HAP Contract), and that it will
    fully and promptly update such disclosures.

## **HUD waiver**

1)  HUD may waive the conflict of interest requirements for good cause.

2)  Any covered individual or entity for whom a waiver is granted may
    not execute any contract administration functions or responsibility
    concerning a HAP Contract under which such individual is or may be
    assisted, or with respect to a HAP Contract in which such individual
    or entity is a party or has any interest.

## **Interest of member of Congress**

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 the
HAP Contract or to any benefits which may arise from it.

# **EXCLUSION FROM FEDERAL PROGRAMS**

## **Federal requirements**

The Owner must comply with and is subject to requirements of 24 CFR Part
24, concerning debarment, suspension, and limited denial of
participation.

## **Disclosure**

The Owner certifies that:

1)  The Owner has disclosed to the CA the identity of the Owner and any
    principal or interested party.

2)  Neither the Owner nor any principal or interested party is listed on
    the U.S. General Services Administration list of parties excluded
    from Federal procurement and nonprocurement programs; and none of
    such parties are debarred, suspended or subject to a limited denial
    of participation under 24 CFR part 24.

# **TRANSFER OF THE CONTRACT, PROPERTY, AND OWNERSHIP ENTITY**

## **When consent is required**

1)  The Owner agrees that the HAP Contract shall not be transferred
    without the advance written consent of the CA in accordance with HUD
    requirements.

2)  The Owner agrees that the Project may not be transferred without the
    advance written consent of HUD.

3)  The Owner agrees that no beneficial rights in the Owner itself shall
    be sold, transferred or conveyed without the advance written consent
    of HUD.

4)  "Transfer" or "transferred" includes:

    a.  Any sale or assignment or other transfer of ownership, in any
        form, of the HAP Contract or the property;

    b.  The transfer of any right to receive housing assistance payments
        that may be payable pursuant to the HAP Contract;

    c.  The creation of a security interest in the HAP Contract or the
        property;

    d.  Foreclosure or other execution on a security interest; or

    e.  A creditor's lien, or transfer in bankruptcy.

5)  If the Owner is a corporation, partnership, limited liability
    company, trust or joint venture, the Owner is not required to obtain
    advance consent of HUD pursuant to Section 21.a.3) for conveyance,
    assignment or transfer of less then a substantial interest in such
    Owner. For purposes of this section, the term "substantial interest"
    means (i) the interest of any general partner, or any limited
    partner or any non-managing member having a 25 percent or more
    interest in the Owner; and (ii) any ownership interest of any
    stockholder having a 10 percent or greater interest in the Owner.
    Further, HUD consent is not required for the transfer of any
    non-managing member interest in any limited partners of the Owner or
    any interest either as a member or a manager in any limited
    liability company which is a non-managing member of a limited
    partner of the Owner.

## **Transferee assumption of HAP Contract**

No transferee (including the holder of a security interest, the security
holder's transferee or successor in interest, or the transferee upon
exercise of a security interest) shall have any right to receive any
payment of housing assistance payments pursuant to the HAP Contract, or
to exercise any rights or remedies under the HAP Contract, unless the CA
has consented in advance, in writing to such transfer, and the
transferee has agreed in writing, in a form acceptable to the CA in
accordance with HUD requirements, to assume the obligations of the Owner
under the HAP Contract, and to comply with all the terms of the HAP
Contract.

## **Effect of consent to transfer**

1)  The creation or transfer of any security interest in the HAP
    Contract is limited to amounts payable under the HAP Contract in
    accordance with the terms of the HAP Contract.

2)  The CA's consent to transfer of the HAP Contract does not change the
    terms of the HAP Contract in any way, and does not change the rights
    or obligations of the CA or the Owner under the HAP Contract.

3)  The CA's consent to transfer of the HAP Contract to any transferee
    does not constitute consent to any further transfers of the HAP
    Contract, including further transfers to any successors or assigns
    of an approved transferee.

## **When transfer is prohibited**

The CA will not consent to the transfer if any transferee, or any
principal or interested party is debarred, suspended or subject to a
limited denial of participation under 24 CFR part 24, or is listed on
the U.S. General Services Administration list of parties excluded from
Federal procurement or nonprocurement programs.

# **OWNER DISCLOSURE OF OTHER GOVERNMENT ASSISTANCE**

The Owner must disclose to the CA in accordance with HUD requirements
information regarding any related assistance from the Federal
Government, a State, or a unit of general local government, or any
agency or instrumentality thereof that is made available or is expected
to be made available with respect to the contract units. Such related
assistance includes, but is not limited to, any loan, grant, guarantee,
insurance, payment, rebate, subsidy, credit, tax benefit, or any other
form of direct or indirect assistance.

# **OWNER LOBBYING CERTIFICATIONS**

a\. The Owner certifies, to the best of Owner\'s knowledge and belief,
that:

> 1\) No Federally appropriated funds have been paid or will be paid, by
> or on behalf of the Owner, to any person for influencing or attempting
> to influence an officer or employee of any agency, a Member of
> Congress, an officer or employee of Congress, or an employee of a
> Member of Congress in connection with the awarding of the HAP
> Contract, or the extension, continuation, renewal, amendment, or
> modification of the HAP Contract.
>
> 2\) Owner has complied and will comply with all applicable federal
> lobbying reporting standards.

b\. This certification by the Owner is a prerequisite for making or
entering into this transaction imposed by 31 U.S.C. 1352.

# **NOTICES AND OWNER CERTIFICATIONS**

a\. Any notice by the Contract Administrator or the Owner to the other
party pursuant to the HAP Contract shall be given in writing.

b\. A party shall give notice at the other party's address specified in
section 1 of the HAP Contract, or at such other address as the other
party has designated by a contract notice. A party gives a notice to the
other party by taking steps reasonably required to deliver the notice in
ordinary course of business. A party receives notice when the notice is
duly delivered at the party's designated address.

c\. Any certification or warranty by the Owner pursuant to the HAP
Contract shall be deemed a material representation of fact upon which
reliance was placed when this transaction was made or entered into.

# **HUD REQUIREMENTS**

The HAP Contract shall be construed and administered in accordance with
all statutory requirements, the Restructuring Commitment, and with all
HUD regulations and other requirements, including changes in HUD
regulations and other requirements during the term of the HAP Contract.
However, any changes in HUD requirements that are inconsistent with the
provisions of the HAP Contract, including the provisions of section 6
(contract rent), shall not be applicable.

# **STATUTORY CHANGES DURING TERM**

If any statutory change during the term of the HAP Contract is
inconsistent with section 6 of the HAP Contract, and if HUD determines,
and so notifies the CA and the Owner, that the CA is unable to carry out
the provisions of section 6 because of such statutory change, then the
CA or the Owner may terminate the HAP Contract upon notice to the other
party.

# **PHA DEFAULT**

a\. This section of the HAP Contract applies if the CA is a PHA acting
as Contract Administrator pursuant to an annual contributions contract
("ACC") between the PHA and HUD. This includes a case where HUD has
assigned the HAP Contract to a PHA Contract Administrator, for the
purpose of PHA administration of the HAP Contract.

b\. If HUD determines that the PHA has committed a material and
substantial breach of the PHA's obligation, as CA, to make housing
assistance payments to the Owner in accordance with the provisions of
the HAP Contract, and that the Owner is not in default of its
obligations under the HAP Contract, HUD shall take any action HUD
determines necessary for the continuation of housing assistance payments
to the Owner in accordance with the HAP Contract.

# **ENTIRE AGREEMENT**

The HAP Contract, including the exhibits, is the entire agreement
between the CA and the Owner. No changes in the HAP Contract may be made
except in writing signed by both the Owner and the CA

**EXHIBIT A**

**IDENTIFICATION OF UNITS BY SIZE,**

**APPLICABLE CONTRACT RENTS, AND**

**EFFECTIVE DATE OF EACH STAGE**

**Number Number Contract**

**of Contract Units of Bedrooms Rent**

**Exhibit B**

**Services, maintenance and utilities to be provided by the owner**

instructions

**PREPARATION OF HAP CONTRACT.**

The HAP Contract consists of Part 1, Part 2, and the contract exhibits.
The exhibits are listed in paragraph 1.b of Part 1.

Part 1 contains section 1 of the HAP Contract.

Part 2 contains sections 2 to 25 of the HAP Contract.

Part 1 includes fill-in items, and a list of the contract exhibits. Fill
out part 1 to prepare the HAP Contract for execution.

The form of HAP Contract must be used word-for-word, and may not be
modified.

**CONTRACT EXECUTION**

Part 1 is signed by the CA and by the Owner of the housing.

**ENDNOTES**

[^1]: Enter all contract information.

[^2]: Enter a description of the housing that will be covered by the HAP
    Contract. The description must clearly identify the Project by
    providing the Project's name, street address, city, county, state
    and zip code, block and lot number (if known), and any other
    information necessary to clearly designate the covered Project.

    If necessary, attach an exhibit with a site plan, legal description
    or other descriptive information. Enter a reference to the attached
    exhibit.

[^3]: If required by the CA, the HAP Contract may include additional
    information describing the physical condition, location and plans of
    the contract units.

[^4]: List any additional exhibits.