U.S. Department of Housing and Urban Development

Special Attention of: Notice H 96-102 (HUD)

All Directors of Housing; Issued: November 26, 1996

All State and Area Coordinators; Expires: November 30, 1997

All Multifamily Housing Directors;

All Production Branch Chiefs Cross References: 4571.2., 4571.3 REV-1,

4571.4, 4571.5

Subject: Redesigned Section 202 Supportive Housing for the Elderly

and Section 811 Supportive Housing for Persons with

Disabilities Programs - Firm Commitment Processing to Final

Closing

A. PURPOSE

The Department has designed new procedures pertaining to

processing activities after selection of Section 202 and Section 811

applications for fund reservations. Until the Section 202 Handbook

4571.5 and Section 811 Handbook 4571.4 are revised, this Notice sets

forth the revised instructions for processing Section 202 and Section

811 applications from the firm commitment application stage to final

closing.

B. APPLICABILITY

The attached instructions apply to all Section 202 and Section

811 proposals in which final plans and specifications or firm

commitment applications have not been submitted to the local HUD

Office. Section 202 and Section 811 applications that are in firm

commitment processing (including HUD review of the final plans and

specifications) shall proceed to initial closing and start of

construction based on handbook instructions in place before issuance

of this Notice.

Questions regarding this Notice may be directed to the New

Products Division, Office of Multifamily Housing Development, HMDN, at

FTS (202) 708-2556. Send copies of this Notice to all Section 202 and

Section 811 owners of projects that have not yet proceeded to initial

closing. Also, upon completion of the Fiscal Year 1996 Section

202/811 funding round, attach copies of the Notice to the Notification

of Selection Letters to all applicants selected for funding.

HMEED: Distribution: W-3-1, R-1,R-2,R-3-1(H)(RC),R-3-2,R-3-3,R-6,R-6-2,

R-7,R-7-2,R-8

TABLE OF CONTENTS

Section Page

I. HIGHLIGHTS OF MAJOR POLICY AND PROCESSING CHANGES 1-1

II\. EXTENSION/CANCELLATION OF SECTION 202 AND

SECTION 811 FUND RESERVATIONS 2-1

III\. ACTIVITIES PRIOR TO SUBMISSION OF REQUEST FOR

FIRM COMMITMENT PROCESSING 3-1

A. Project Planning Conference 3-1

B. Formation of Owner Corporation 3-5

C. Transfer of Fund Reservation from

Sponsor to Owner 3-6

D. Individual Conflict of Interest and

Disclosure Certifications 3-7

E. Housing Consultant 3-7

F. Land Appraisals 3-10

G. Construction Cost Analysis 3-11

H. Affirmative Fair Housing Marketing Plan 3-13

I. Sponsor\'s Acceptance of Notification of

Selection Letter 3-13

J. Site Changes 3-13

IV\. SUBMISSION OF APPLICATION FOR A FIRM COMMITMENT

FOR CAPITAL ADVANCE FINANCING 4-1

A. General 4-1

B. Description of Required Exhibits -

New Construction 4-1

C. Rehabilitation or Acquisition without

Rehabilitation 4-9

D. Receipt of Firm Commitment Applications 4-10

E. Eligibility for Technical Processing 4-10

F. Coordination of Technical and Program Reviews 4-11

G. Target Date for Issuance of Firm Commitment

for Capital Advance Financing 4-11

V. TECHNICAL REVIEW OF FIRM COMMITMENT APPLICATION 5-1

A. Office Counsel 5-1

B. Architectural and Engineering 5-1

C. Cost 5-3

D. Valuation 5-5

E. Mortgage Credit 5-8

F. Asset Management 5-10

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TABLE OF CONTENTS

Section Page

VI\. AWARD OF CONSTRUCTION CONTRACT 6-1

VII\. REQUESTS FOR INCREASES IN CAPITAL ADVANCE AND

PROJECT RENTAL ASSISTANCE CONTRACT FUNDS 7-1

A. Section 202/811 Projects Funded in FY 1995 7-1

B. Section 202/811 Projects Funded in FY 1996 7-1

VIII\. INITIAL CLOSING TO FINAL CLOSING 8-1

A. Initial Closing 8-1

B. Construction Period 8-1

C. Final Closing 8-2

ATTACHMENTS

ATTACHMENT A - LAND APPRAISAL CHECKLIST FOR GROUP HOMES UNDER THE
SECTION

811 CAPITAL ADVANCE PROGRAM

ATTACHMENT B - REQUIRED EXHIBITS FOR REQUEST FOR FIRM COMMITMENT FOR

CAPITAL ADVANCE FINANCING

ATTACHMENT C - DESIGN ARCHITECT\'S CERTIFICATION

ATTACHMENT D - OWNER CERTIFICATIONS - SECTION 202 PROGRAM

ATTACHMENT E - OWNER CERTIFICATIONS - SECTION 811 PROGRAM

ATTACHMENT F - LEGAL REQUIREMENTS FOR INITIAL CLOSING

ATTACHMENT G - LEGAL REQUIREMENTS FOR FINAL CLOSING

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SECTION 1. HIGHLIGHTS OF MAJOR POLICY AND PROCESSING CHANGES

The major processing changes made to implement the redesigned

Section 202 and Section 811 programs are described below:

A. One-Step Processing. The Notice revises paragraphs 1-2 of

Section 202 Handbook 4571.5 and Section 811 Handbook 4571.4 to

by-pass the conditional commitment application stage.

Accordingly, for all Section 202 and Section 811 projects, the

conditional commitment application will be combined with the firm

commitment application resulting in the submission and HUD review

of only the firm commitment application. The firm commitment

application is due within 180 days from the date of the

Notification of Selection Letter.

B. Project Planning Conference. The Notice stresses the importance

of conducting a comprehensive project planning conference and

includes a suggested agenda to be used at the conference.

C. Site Changes. State and Area Offices are no longer permitted to

approve a change in sites when more than 12 months have elapsed

after the fund reservation award. This applies to both Section

202 and Section 811 projects.

D. Extension/Cancellation of Fund Reservations. The policy

regarding the granting of Section 202 and Section 811 fund

reservations extensions has been amended. The duration of the

fund reservation is 18 months from the date of issuance of the

fund reservation. Beginning with projects funded in Fiscal Year

(FY) 1996, State and Area offices\' authority to approve an

extension of the fund reservation has been changed to permit

limited exceptions up to 24 months on a case-by-case basis.

E. Requests for Amendment Funds.. Beginning with Section 202/811

projects funded in FY 1996, the provisions for permitting

amendments to the fund reservation before initial closing has

been eliminated. Increases resulting from change order items

approved during construction may be approved, but will be funded

first out of the developer\'s fee, as discussed later in this

Notice. In cases where the developer\'s fee has been depleted for

approved change order

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items, HUD will consider a mortgage increase on a case-by-case

basis. Projects funded in FY 1995 and earlier may still be

approved for amendment funds before initial closing. Also,

beginning with projects funded in FY 1996, HUD will not consider

any increases in project rental assistance contracts (PRAC) until

after one full-year of project operation.

F. Elimination of 2 Percent Project Contingency Allowance,

Consultant Fees and Organizational Expenses. HUD will no longer

include a 2 percent project contingency allowance, consultant

fees and organization expenses in the estimated replacement cost

of a project. These items are replaced by and may be included in

a new Developer\'s Fee line item to be reported on Form HUD-92264.

G. Developer\'s Fee. In lieu of a 2 percent project contingency

allowance, and amounts for housing consultant services and

organizational expenses, HUD will include in the estimated

replacement cost of a project a developer\'s fee of 8 percent of

the total replacement cost of the project with a minimum of

\$30,000 and a maximum of \$400,000 (plus 2 percent of any

replacement cost amount over \$5,000,000).

H. Housing Consultant. As noted in Paragraphs F. and G. above, the

housing consultant\'s fee has been eliminated as a separate line

item and included in the developer\'s fee. HUD will not (1)

review and approve the housing consultant contracts, (2)

determine the maximum consultant\'s fee for inclusion in the

developer\'s fee, and (3) set the compensation limits.

Accordingly, sponsors/owners are no longer required to submit

Form HUD-92531-A-CA, Contract for Housing Consultant Services for

Nonprofit Projects under the Section 202 and Section 811

programs. The Notice eliminates the provisions for granting

incentive payments to the housing consultant. However, the

Notice includes a suggested schedule for making payments to the

consultant. Further, in accordance with Section 891-130 of the

amended Section 202/811 regulations (published March 22, 1996),

sponsor or its nonprofit affiliate may provide the consulting

services with in-house staff and pay for such services from the

developer\'s fee. Such an arrangement will not constitute a

conflict of interest if no more than two persons salaried by the

sponsor or management affiliate serve as nonvoting directors on

the owner\'s board of directors.

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I. Award of Construction Contract. Form HUD-92442-CA, Construction

Contract - Lump Sum, may be used for Section 202 and Section 811

projects regardless of the type of construction or rehabilitation

contract awarded. If, for any reason, an identity of interest is

found to exist between the sponsor/owner and general contractor,

the local office will take appropriate sanctions, including

requiring cost certification by the general contractor.

J. Architecture/Engineering Processing. HUD will review the final

plans and specifications only for the Fair Housing Accessibility

Guidelines and Section 504. The Notice requires the owner\'s

architect to certify that the project design complies with local

codes and ordinances,

accessibility, program and regulatory requirements using the

format in Attachment C of the Notice. The owner\'s architect also

is required to obtain professional liability insurance in a

minimum amount of \$50,000 (Section 811) or \$250,000 (Section 202)

for errors and omissions and to keep it in force through the

construction of the project and for a period of 3 years after

project completion. The Notice eliminates the use of Form HUD-51994,

Life Cycle Cost Analysis of Utility Combinations, if the

most efficient utility type for the area of the proposed project

has been previously determined and is proposed for use. The

proposed utility type will be identified at the project planning

conference.

K. Cost Processing. HUD will not provide an independent cost

estimate. HUD will perform a limited cost review of the

construction cost analysis submitted by the sponsor/owner at the

firm commitment stage of processing. Cost review of land

improvement trade items will be limited to the bottom line total

per square foot with certain exceptions. Cost review of

structure trade items will vary in detail based on the complexity

of the project. (See V.C. below). The owner is required to

provide a construction cost analysis which includes both a

structure and a land improvement estimate of the project in

accordance with instructions in L. and III.G. below. HUD\'s

review of the construction cost analysis and Form HUD-92328,

Contractor\'s and/or Mortgagor\'s Cost Breakdown will follow

instructions in V.C. below. HUD will not calculate the project\'s

cost not attributable to dwelling use (CNA). The professional

hired by the owner will calculate the CNA and include that

information in the construction cost analysis.

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L. Valuation Processing. The responsibility for conducting land

appraisals has been transferred from the HUD appraiser to a

certified general appraiser hired by the sponsor/owner. For

Section 811 group homes, the sponsor/owner has the option of

hiring an appraiser from the FHA Residential Appraiser Roster.

HUD staff will perform a \"desk\" review of land appraisals for all

Section 202 projects and Section 811 independent living

facilities, and a \"checklist\" review of Section 811 group homes.

See Attachment A of this Notice for the land appraisal checklist.

In addition to a land appraisal, the Notice also requires the

owner to contract for a construction cost analysis (see K.

above). The HUD appraiser will no longer make an operating

expense analysis or estimate \"soft\" costs (i.e., taxes and

insurance, etc.). The owner is responsible for providing the

project\'s operating expense and \"soft\" cost estimates.

1\. Form HUD-92274, Operating Expense Analysis Worksheet has

been eliminated.

2\. Form HUD-92013-E, Supplemental Application and Processing

Form-Housing for the Elderly/Disabled also has been

eliminated. Owners shall show any proposed services and the

funding for such services in the \"remarks\" section of Form

HUD-92013, Application for Multifamily Housing Project.

M. Mortgage Credit Processing. The Notice clarifies the
financial-documents

to be submitted by the owner with the firm commitment

application and requires the owner to submit a certified balance

sheet and a Request for Verification of Deposit (Form HUD-92004F)

instead of complete financial statements. Instructions for

completing Form HUD-92004F are included in the Notice. The

Notice also stresses the importance of the Mortgage Credit

Examiner\'s (MCE) review of these documents only for evidence that

the owner has been adequately capitalized by the sponsor. The

Notice revises the procedures for ordering credit reports to

require \"in-file\" credit reports only and expands the ordering of

credit reports to include the management firms and the resident

managers.

N. Processing during Construction. HUD will accept the contractor\'s

estimate of cost for change orders (Form HUD-92437, Request for

Construction Changes on Project Mortgages) as approved by the

project architect. All change orders will be funded from the 8

percent

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developer\'s fee or from the owner\'s sources outside of the

developer\'s fee. HUD will consider a mortgage increase on a

case-by-case basis if the developer\'s fee has been depleted for

approved change order items. HUD inspections during construction

are still to be done in accordance with HUD Handbook 4460.1 REV-2.

O. Asset Management Processing. As stated in E. above, beginning

with projects funded in FY 1996, HUD will not consider any PRAC

increases until after one full year of project operation. The

Notice requires Form HUD-9832, Management Entity Profile, one of

the documents used in determining the approvability of the

proposed management agent, to be submitted only on management

agents that are new to the applicable Field Office.

P. Certification Regarding Credit Availability from Private Sources.

Pursuant to OMB Circular A-129, Managing Federal Credit Programs,

the authorized officer of the owner must submit a certification

that it has been unable to obtain funds from private financial

sources upon terms and conditions equally as favorable as the

terms and the conditions available under Section 202 of the

Housing Act of 1959, as amended, and Section 811 of the National

Affordable Housing Act. This certification has been included in

a master certification which is attached to this Notice under

Attachments D and E. The certification must be submitted with the

firm commitment application.

Q. For Section 811 Projects Only, Certification Regarding Residents\'

Acceptance of Supportive Services. Section 811 owners must now

certify that they will not require residents to accept any

supportive services as a condition of occupancy. Although the

acceptance of services has never been a program requirement, it

has come to the Department\'s attention that, in many cases,

residents have been required to accept services in order to live

in housing for persons with disabilities developed under either

the old Section 202/8 program or the Section 811 program. This

certification has been included in a master certification which

is attached to this Notice under Attachment E.

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SECTION II. EXTENSION/CANCELLATION OF SECTION 202 AND

SECTION 811 FUND RESERVATIONS

Given the streamlined one-step Section 202/811 development

process as described herein, the empowerment of sponsors/owners as a

result of this new process, and the Department\'s goal of starting and

cancelling old pipeline projects, HUD must revise its project

development timeframe expectations.

Effective with the publication of this Notice, we are

implementing the following procedures for extending/cancelling Section

202/811 projects. Accordingly, Paragraphs 3-65 and 1-64 of Section

202 Handbooks 4571.3 REV-1 and 4571.5, respectively, and Paragraphs 3-63

and 1-64 of Section 811 Handbooks 4571.2 and 4571.4, respectively,

are modified as noted below to ensure the development of these

projects as soon as possible.

A. Projects Funded in FY 1995 and Earlier.

1\. All owners of FY 1995 and earlier pipeline projects shall

have control of an approvable site that is permissively

zoned with all required local use permits in place within

three months of the date of this Notice.

2\. If an owner of a FY 1995 or earlier project does not have

control of a permissively zoned site with all required local

use permits in place within three months of the date of this

Notice, HUD State/Area Offices shall issue a Notice of

Intent to Cancel the Fund Reservation in accordance with

this Notice.

3\. No fund reservation extensions will be granted beyond six

months of the date of site control or of this Notice,

whichever is later, unless there is good reason to expect

that initial closing can be achieved within the extension

period and one of the following can be demonstrated:

\(a\) Initial closing delays are directly attributable to

HUD; or

\(b\) Initial closing delays are directly attributable to

third party opposition; or

2-1

\(c\) Initial closing is delayed due to a disaster, as

declared by the President of the United States.

4\. Owners must bring the FY 1993 and earlier Section 202/811

pipeline projects to initial closings within six months of

the date of this Notice or the project will be cancelled.

B. Projects Funded in FY 1996.

1\. The duration of the fund reservation for Section 202/811

projects funded in FY 1996 is 18 months from the date of

issuance of the fund reservation. In accordance with

Section 891.165 of the Section 202/811 regulations, HUD

State and Area Offices may approve limited extensions up to

24 months on a case-by-case basis. Extensions may be

approved if there is a good reason to expect that initial

closing can be achieved within the extension period and one

of the following can be demonstrated:

\(a\) Initial closing delays are directly attributable to

HUD; or

\(b\) Initial closing delays are directly attributable to

third party opposition; or

\(c\) Initial closing is delayed due to a disaster, as

declared by the President of the United States.

2\. Section 811 Applications Approved with Sites Identified

Only. Sponsors/owners should be encouraged to submit a

formal request for site approval within 60 days following

the date of the fund reservation. If they fail to obtain

ownership or control of the site within one year after being

awarded the fund reservation, the fund reservation will be

cancelled and recaptured, as required by Section 811 of the

National Affordable Housing Act of 1990.

3\. Sponsor\'s/Owner\'s Responsibilities.

\(a\) Assemble a development team which can expeditiously

prepare the firm commitment application, meeting

program and technical requirements. (The sponsor is

responsible until the owner corporation is formed.)

2-2

\(b\) Provide HUD with assurance that the project will reach

initial closing and start of construction within the

term of the fund reservation, i.e., within the 18-month

period. However, given this new streamlined

processing, many projects should be able to reach

initial closing in 12 to 15 months. In order to

achieve timely initial closings, owners must:

• Attend the Project Planning Conference along with

all known development team members to discuss

their plans to develop the project and to develop,

with the HUD State/Area Office, a mutually

acceptable timetable for achieving initial closing

and construction start. The Project Planning

Conference should be held within 30-45 days after

issuance of the fund reservation award. A more

detailed discussion of the Project Planning

Conference is contained in Section III.A. of this

Notice.

• Assure that there is full communication between

development team members throughout the

development process.

• Raise immediately with the HUD State/Area Office

any significant problems.

• Be accountable at all times for action by the

development team members, including but not

limited to:

\-- Making sure the architect is aware of and

following the Department\'s design and cost

standards;

\-- Keeping the consultant to the agreed-upon

timetable and informing all development team

members of the timetable;

\-- Reviewing the results of the appraisal and

understanding the consequences to the total

cost of the project;

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\-- Reviewing the results of all environmental

reviews and understanding consequences of any

findings;

\-- Working with neighborhood residents to

alleviate their concerns about the project;

\-- Working with localities to eliminate

unanticipated requirements after the start of

construction; and

\-- Actively pursuing the agreed-upon timetable

for project development.

4\. HUD State/Area Office\'s Responsibilities:

\(a\) Schedule a Project Planning Conference within 30-45

days of issuance of the fund reservation and inform the

sponsor/owner that a firm commitment application will

not be accepted until after the conference takes place.

\(b\) Develop, with the sponsor/owner, a mutually acceptable

timetable to reach initial closing and start of

construction within the established timeframe.

\(c\) Monitor the progress of each fund reservation in

accordance with the processing time schedules.

C. Notices of Intent to Cancel the Fund Reservation.

1\. HUD State/Area Offices no longer need the Assistant

Secretary\'s authorization to issue Notices of Intent to

Cancel the Fund Reservation.

2\. Such Notices are to be issued in accordance with the

instructions contained herein.

D. Owner\'s Appeal of Notification to Cancel the Fund Reservation.

1\. Prior to cancelling any fund reservation, owner\'s must be

afforded the opportunity to appeal any action to cancel its

fund reservation.

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2\. The procedures for appealing a cancellation notice as stated

in subparagraphs 3-65.F. of Section 202 Handbook 4571.3 REV-1

and 3-63.D. of Section 811 Handbook 4571.2 remain in

effect.

3\. The above applies regardless of the year in which the project

was funded.

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SECTION III. ACTIVITIES PRIOR TO SUBMISSION OF REQUEST

FOR FIRM COMMITMENT PROCESSING

Section XIV of HUD Handbook 4571.3 REV-1 for Section 202

applications and in Section XIV of HUD Handbook 4571.2 for Section 811

applications provide instructions covering project planning activities

for Field Office staff and sponsors/ owners. Additionally,

sponsors/owners must comply with any special instructions set forth in

their Notification of Selection Letters.

In view of the sponsor\'s/owner\'s responsibilities, and its

development team members\' responsibilities, along with the reduction of

HUD\'s role in the review and processing of Section 202 and Section 811

applications, it is critical that Field Offices hold project planning

conferences as soon as possible after the sponsor accepts the fund

reservation award (within 30 to 45 days and preferably after the site

has been appraised and formation of the owner corporation). The

conference must cover every aspect of the sponsor/owner\'s

responsibilities and that of its development team members.

A. Project Planning Conference with Sponsor/Owner.

1\. Required Attendance. The conference must be attended by:

\(a\) Sponsor/Owner and Development Team Members:

o Sponsor and owner

o Consultant (if different from the sponsor)

o Design architect

o Attorney

o Contractor (if identified)

o Management Agent (if identified)

\(b\) HUD staff:

o Production Branch Chief

o Multifamily Housing Representative

o Designated Design Architect

o Cost Analyst

o Appraiser

o Mortgage Credit Examiner

o Field Office Attorney

o Asset Manager

o Staff from FHEO

o Staff from CPD (if relocation is involved)

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2\. Project Planning Conference Agenda. It is important to cover

every aspect of project development from firm commitment

processing to final closing, with emphasis on the changes

announced herein. Items to discuss include:

\(a\) Discussion of Meeting Purpose

\- Review Development Process/Program Requirements

(asset management issues to be discussed at pre-occupancy

conference)

\- Review Asset Management\'s concerns regarding

Management Agent, etc.

\- Identify project issues

\- Establish development schedule

\- Define development team roles and responsibilities

(HUD and Sponsor)

\- Identify HUD\'s development and management

expectations

\- Provide references re: program requirements

\- Discuss the accessibility requirements of Section

504 of the Rehabilitation Act of 1973 and its

implementing regulations at 24 CFR, Part 8, and the

Fair Housing Act of 1988 and its implementing

regulations at 24 CFR, Part 100.

\(b\) Project Development

\- Funding commitment requirements and conditions

o Capital Advance

o PRAC

o Potential Sponsor cash requirements

\- land appraisal

\- construction cost

\- off-site construction

\- minimum capital investment (MCI)

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o Requests for additional funding

o Taxes

o Sponsor commitments for additional funds

o Cost Savings

\- Clarify construction deadline, fund reservation

extension, and amendment policy

\- Marketing of the project

\- Discuss specific project issues noted by the

development team (such as environmental issues)

\- Review change of site policy

\- FHEO requirements relating to the Fair Housing

Marketing Plan and the FHEO certification

requirements

\(c\) Legal Considerations

\- Maintaining site control

\- Conflict/Identity of Interest

\- Establishing the Owner entity

\(d\) Project Design/Contractor/Construction Issues

\- Processing handbooks

\- Recommendations for selection of architect

\- Need for close working relationships

\- Design issues/Sponsor paid amenities

\- Appropriate structure type for site and occupants

\- Proposed utility type for the project

\- Accessibility requirements

\- Need for contractor participation before final

drawings

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\- Construction contract solicitation

\- Independent construction cost estimate

\- Change orders, approvals And funding

\- Requisition process

\- Project inspections

\(e\) Project Development Schedule

\- Development process overview, from funding to final

closing

\- HUD\'s expectations

\- Owner incentives for timely completion (MCI)

\- Application requirements - identify exhibits

\- Establish development timeframe for project signed

by all development team members

\(f\) Supportive Service Plans

3\. Design Considerations. Since project design is a critical

function during project development, it is important that the

owner\'s architect and the HUD designated architect talk with

each other throughout the design development phase. It is

particularly important to discuss the following subjects with

the owner and its design architect at the planning conference:

\(a\) The owner has wide latitude in designing the project as

long as the project is being designed within the design

and cost standards, legal requirements, the applicable

codes and the available fund reservation amount.

\(b\) The owner has a choice between using capital advance

funds for acceptable amenities or sharing in cost savings

if the fund reservation is not increased beyond the

initial reservation.

\(c\) Costs may be covered by the capital advance as long as

the project is designed following the design and cost

standards and other requirements as stated in Sections

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891.120, 891.210, 891.220, 891.310 and 891.315 of the

Section 202/811 regulations published on March 22, 1996.

\(d\) Projects may not include facilities for infirmaries,

nursing stations, and spaces for overnight care (Section

202 projects) or spaces dedicated to the delivery of

medical treatment physical therapy, etc, (Section 811

projects) regardless of the source of funding (pursuant

to Sections 891.220 and 891.315 of the Section 202/811

regulations).

B. Formation of Owner Corporation.

The sponsor must legally form a single-purpose owner corporation in

accordance with Section 891.205 (Section 202) and Section 891.305

(Section 811) of the regulations and Paragraph 3-66 of Section 202

Handbook 4571.3 REV-1 and Paragraph 3-64 of Section 811 Handbook

4571.2 before submitting the firm commitment application to the

local HUD Office and proof of such action must be included in the

firm commitment application. The owner corporation should be

formed within 30 days of the notification of fund reservation so

representatives of the owner corporation can attend the Project

Planning Conference.

1\. Capitalization of Owner Corporation. The sponsor must

capitalize the owner in a sufficient amount to permit the

owner to meet its obligations in connection with the project.

This includes the minimum capital investment, start-up costs,

excess land costs, ineligible amenities and excessive

construction costs and any other funds the sponsor

specifically commits to the project.

2\. Tax Exempt Status.

\(a\) Section 202 owners must obtain a tax exemption ruling

under either IRS Code 501(c)(3) or 501(c)(4).

\(b\) Section 811 owners must obtain a tax exemption ruling

under IRS Code 501(c)(3) only.

\(c\) Previously, Section 202 and Section 811 nonprofit

organizations in Puerto Rico were exempt from obtaining

their tax exempt status under IRS Code 501(c)(3) or

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(c)(4) for Section 202 proposals and 501(c)(3) for

Section 811 proposals provided they were exempt from

income taxation under Puerto Rico law, have never been

liable for payment of Federal income taxes, and do not

pay patronage dividends. HUD has learned, however,

that nonprofit organizations in Puerto Rico may apply

and be granted IRS Section 501(c)(3) and 501(c)(4) tax

exemption rulings. Therefore, in Puerto Rico, Section

202 owner corporations must obtain a tax exemption

ruling under IRS Code 501(c)(3) or 501(c)(4) and

Section 811 owner corporations must obtain such a

ruling under IRS Code 501(c)(3) only.

C. Transfer of Fund Reservation from Sponsor to Owner.

1\. Sponsor. The sponsor must legally form the owner

corporation as soon as possible after fund reservation award

and provide evidence of same to the HUD Field Office. This

is important because:

\(a\) The State/Area Office transfers the fund reservation

from the sponsor to the newly-formed owner;

\(b\) The sponsor transfers control of the site to the owner;

and

\(c\) Contracts with development team members must be

executed by the owner.

2\. State/Area Office. Upon HUD approval of the newly-formed

owner corporation, the Multifamily Housing Representative

(MHR):

\(a\) Prepares Forms HUD-718 and the PADs to effect the

transfers of the Section 202 and Section 811 capital

advance and project rental assistance fund reservations

from the sponsors to the owners;

\(b\) Transmits the Forms HUD-718 and the PADs to the Office

of the Comptroller, Accounting Division, (formerly

Regional Accounting Division); and

\(c\) Follows-up with the Accounting Division to make sure that

the transfer action has been completed.

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NOTE: The above transactions are amendatory actions and

are not to be construed as recaptures.

D. Individual Conflict of Interest and Disclosure Certifications.

Paragraph 3-68 and Paragraph 3-66 of Section 202 Handbook 4571.3

REV-1 and Section 811 Handbook 4571.2, respectively, discuss the

requirement for submission of the individual conflict of interest

and disclosures certifications. These certifications must be

submitted on all officers, directors, board members, trustees,

stockholders and authorized agents of the sponsor and owner.

Although these certifications are required to be submitted with the

firm commitment application, sponsors and owners should begin

obtaining the individual certifications as early as possible so

that these individuals will be informed of this requirement during

the development of the project.

1\. The fund reservation is subject to cancellation if the

certifications are not provided for ALL officers, directors,

board members, trustees, stockholders and authorized agents.

2\. Certifications from any Executive Boards of the sponsor and

owner are NOT acceptable.

E. Housing Consultant. HUD will no longer review and approve housing

consultant contracts nor set compensation limits.

1\. Selection of a housing consultants is the responsibility of

the sponsor/owner.

2\. A housing consultant is not required for participation in the

Section 202 or section 811 programs. The sponsor/owner may

perform these services with in-house staff. If a sponsor is

going to contract with a consultant, consideration should be

given to contracting with a consultant in close proximity to

the project site.

3\. Housing consultant\'s efforts must be directed exclusively

toward serving the owner.

4\. Compliance with HUD\'s Identity of Interest and Disclosure

Requirements.

3-7

\(a\) The consultant must certify that it is in compliance with

HUD\'s identity of interest requirements by signing the

Identity of Interest and Disclosure Certification in

Appendix 3 of Section 202 Handbook 4571.3 REV-1 and

Appendix 4 of Section 811 Handbook. More detailed

information about this requirement is in Paragraphs 1-11.D.

(Section 202) and Paragraph 1-11.C. (Section 811)

of the above handbooks.

\(b\) The certification assures the complete independence of

the consultant and precludes any other party, including

the contractor, the architect and the land seller from

receiving payment for consultant services.

\(c\) Exception. In addition to entering into management or

supportive service contracts, the sponsor or the

sponsor\'s nonprofit affiliate may be the housing

consultant provided that no more than two persons

salaried by the sponsor or management affiliate serve as

nonvoting directors on the owner\'s board of directors.

5\. No individual or entity having an identity of interest with

the sponsor/owner may earn a fee beyond their normal

compensation for services that would otherwise be provided on

a fee basis by a housing consultant (for example, an Executive

Director or other employee of the sponsor).

6\. Previous Participation and Resume.

\(a\) Within 14 days from the date of receipt of the

Notification of Selection Letter, the sponsor/owner must

submit to HUD an original of Form HUD-2530, Previous

Participation Certificate and the resume for the

consultant (if a consultant will be used).

\(b\) The Form HUD-2530 and resume are required for all

consultants, including sponsors (or sponsors\' nonprofit

affiliates) that have entered into contracts with the

owners to provide consultant services.

3-8

\(c\) If the sponsor will be the consultant, the submission of

these documents may be deferred until after formation of

the owner corporation. However, within the 14-day period

mentioned above, the sponsor must at least advise the HUD

State/Area Office of its intention to enter into a

consultant contract with the owner when formed. The Form

HUD-2530 and resume must be submitted to the HUD

State/Area Office immediately after execution of the

consultant contract.

\(d\) HUD staff will only look at the required Form HUD-2530,

Previous Participation Certificate, and the resume. The

MCE:

\(1\) Initiates the Form HUD-2530 review process and a

credit investigation on the consultant.

o Orders a credit report on the consultant.

o Considers the Field Office\'s working

experience with the potential consultant.

o Reviews the qualifications and suitability of

the proposed housing consultant.

o Determines if conflicts of interest or

identities of interest exist.

o Makes inquiries of other Field Offices that

have done business with the consultant.

\(2\) Makes recommendations to the owner on the strengths

and weaknesses of the proposed consultant.

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7\. HUD suggests to the owner to release the funds using the

following schedule:

Services to be Performed by Percentage of

the Housing Consultant Total Fee Earned

Fund Reservation Application

and up to HUD Approval of an

Acceptable Site 25%

At Initial Closing: Up to a

total of 50%

During the Construction

Period: Up to a total of 65%

At Final Closing: Up to a

total of 85%

One Year After Final Closing

and Provided Project is not

Having any Financial

Difficulties: The Remainder 100%

F. Land Appraisals. HUD will no longer conduct the land appraisals.

The sponsor/owner is responsible for obtaining the land

appraisal.

1\. HUD provides the sponsor/owner a list of HUD-approved

appraisers which will be used by the sponsor/owner to obtain

an appraiser.

2\. The sponsor/owner selects and hires a certified general

appraiser from the local office appraiser list. For Section

811 group homes, the sponsor/owner has the option of hiring

an appraiser from the local office residential appraiser

roster.

3\. The sponsor/owner\'s appraiser must follow the instructions

for land appraisals as contained in HUD Handbook 4465.1,

Valuation Analysis Handbook for Project Mortgage Insurance,

and Uniform Standards of Professional Appraisal Practice

(USPAP).

4\. The land appraisal must be completed within 30 days after

fund reservation award for all Section 202 and Section 811

projects with site control at the fund reservation stage.

For Section 811 projects funded without site control,

complete the land appraisal within 30 days of HUD\'s

notification of site approval.

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5\. HUD will perform a \"desk\" review of land appraisals for all

Section 202 projects and Section 811 independent living

facilities.

NOTE: If the desk review indicates that a field review

is necessary, the State/Area Office may use either

HUD staff or contract for the appraisal review

services with an independent appraiser using

Section 202/811 contract funds.

6\. HUD will make a \"checklist\" review of land appraisals

involving Section 811 group homes. The checklist review

applies to single family lots whose appraised value is

compared to local market benchmarks (updated annually). (See

Attachment A). For the checklist review:

\(a\) Use 3 to 5 comparables.

\(b\) Make sure comparables are recent sales.

\(c\) Make sure each comparable is adjusted from the sale

comparable to the subject site.

\(d\) Use comparables with the same or similar zoning.

\(e\) The location of the comparables should be in reasonable

proximity to the subject site.

\(f\) Determine whether a desk or field review is necessary.

G. Construction Cost Analysis. In addition to a land appraisal, the

sponsor/owner shall contract for a construction cost analysis for

the proposed project.

1\. The sponsor/owner shall hire a professional with experience

in cost estimation to prepare the construction cost analysis

which includes both a structure and a land improvement

estimate.

2\. The owner\'s hired professional shall follow the instructions

in the Multifamily Underwriting Forms Catalog,,and, at a

minimum, provide all applicable information required on Form

HUD-92264, Rental Housing-Project Income Analysis and

Appraisal.

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3\. The construction cost analysis must be completed before and

submitted with the firm commitment application.

4\. The construction cost analysis will vary in detail based on

the complexity of the project:

\(a\) For group homes, only a bottom-line structure and

bottom-line land improvement cost estimate must be

provided. Calculate costs per square foot and also per

occupant.

\(b\) For garden apartments and similar non-elevator

structures comprising 25 or fewer dwelling units, a

more detailed cost estimate must be provided, but is

not required to conform to HUD\'s trade item format as

shown on Form HUD-92328, Contractor\'s and/or

mortgagor\'s Cost Breakdown. Instead, subtotals of

building components may be provided, such as the

Segregated cost method of Marshall and Swift. Another

permissible method would be for trade items to be

combined in groups if the estimator possesses such

data, for example:

\(1\) Rough carpentry, finish carpentry, insulation,

lath and plaster, drywall

\(2\) Heating, ventilating, air conditioning

However, a bottom-line cost estimate as in (a) is not

acceptable. Conversely, the estimator may choose to

provide a detailed cost estimate conforming to HUD\'s

line item format as shown on Form HUD-92328,

Contractor\'s and/or Mortgagor\'s Cost Breakdown.

\(c\) For garden apartments and similar non-elevator structures

comprising greater than 25 dwelling units, and for high-rise

elevator structures (4 stories and higher) with

masonry, steel and/or concrete construction, a detailed

cost estimate conforming to HUD\'s line item format as

shown on Form HUD-92328, Contractor\'s and/or Mortgagor\'s

Cost Breakdown, is required.

3-12

H. Affirmative Fair Housing Marketing Plan (AFHMP). Remind sponsors

that an AFHMP must be approved prior to issuance of the firm

commitment. They also should be advised that FHEO staff is

available to provide technical assistance in the completion of the

Form HUD-935.2.

I. Sponsor\'s Acceptance of Notification of Selection Letter..

1\. The sponsor notifies HUD within 14 days from the date it

receives the Notification of Selection Letter of its

acceptance (or nonacceptance) of the fund reservation award.

2\. The sponsor returns two signed copies of the Notification of

Selection Letter to HUD, along with the information on its

consultant as discussed in Section E. above.

J. Site Changes. State and Area Offices are no longer permitted to

approve a change in sites when more than 12 months have elapsed

after the fund reservation award. This applies to both Section 202

and Section 811 projects. See Section II. of this Notice

pertaining to fund reservations extensions and cancellations for

additional information regarding the time limit imposed on the

owners to obtain control of an acceptable site.

3-13

SECTION IV. SUBMISSION OF APPLICATION FOR A FIRM COMMITMENT

FOR CAPITAL ADVANCE FINANCING

The owner submits a one-step firm commitment application. This

Notice revises paragraphs 1-2 of Section 202 Handbook 4571.5 and Section

811 Handbook 4571.4 to by-pass the conditional commitment application

stage for all Section 202 and Section 811 applications. Accordingly,

the following revises Chapter 1 of the aforementioned handbooks and

provides instructions for combining the conditional commitment

application with the firm commitment application.

A. General.

The owner submits a request for a firm commitment for capital

advance financing:

1\. Within 180 days from the date of the Notification of Selection

Letter.

2\. Using Form HUD-92013, Application for Multifamily Housing

Project, along with the exhibits listed in Attachment B of

this Notice and discussed in Paragraphs B. and C. below.

3\. In conformance with the proposal approved at the fund

reservation stage.

4\. In full compliance with the design and cost standards and

programmatic policies, including any special conditions

contained in the Notification of Selection Letter.

5\. In compliance with any agreements reached at the project

planning conference.

B. Description of Required Exhibits - New Construction.

The exhibits required to be submitted with the application for firm

commitment for capital advance financing are described below (see

Attachment B for the number of copies the owner submits for each

exhibit).

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1\. Form HUD-92013, Application for Multifamily Housing Project,

completed in its entirety. Indicate the proposed equipment

and utilities. If the owner plans to contribute all or a

portion of its land draw to meet the minimum capital

investment, it should so indicate on this form under Sources

of Cash to Meet Requirements.

2\. Form HUD-92013Supp, Supplement to Application for a

Multifamily Housing Project for the sponsor entity, owner

corporation, all operating officers of the owner corporation

(which typically include the President, Vice President,

Secretary and Treasurer) and for the general contractor.

NOTE: Board members of the owners corporation are not

required to submit Form HUD-92013Supp unless they

also serve as an operating officer of the owner.

Also, since the operating officers of the owner are

not being relied upon for financial capacity,

information relative to their bank account balances

need not be provided on the form.

3\. Evidence of formation of the owner corporation (Form HUD-91732A-CA),

Incumbency Certificate listing all duly qualified

and sitting officers and directors by title and the beginning

and ending dates of each person\'s term, and evidence of IRS

tax exemption, if not previously submitted.

NOTE: Submit a current Incumbency Certificate for the

sponsor if there has been any change in its

officers or directors.

4\. A certified balance sheet and Request for verification of

Deposit (Form HUD-92004F) on the owner corporation evidencing

that it has been adequately capitalized by the sponsor, if not

previously submitted.

NOTE: Part I of Form HUD-92004F must be completed and

signed for each bank reference included on the

owner\'s Form HUD-92013Supp (including any

additional bank accounts as identified on owner\'s

balance sheet).

4-2

5\. Evidence of site control for Section 811 projects with sites

identified only at the fund reservation stage and updated

evidence of site control for Section 202 and Section 811

projects with site control at the fund reservation stage.

6\. Evidence or confirmation of permissive zoning.

\(a\) Provide a statement from the local zoning board

indicating that the proposed project complies with

existing zoning, unless such statement was submitted at

the fund reservation stage.

\(b\) Any rezoning which may have been necessary as indicated

in the application submitted at the fund reservation

stage must have been accomplished prior to submission of

the firm commitment application.

7\. Resume and Form HUD-2530, Previous Participation Certificate

on the Housing Consultant, if one is proposed and if not

submitted earlier.

8\. Form HUD-2530, Previous Participation Certificate, on all

officers and directors of the sponsor and owner, general

contractor, and management agent.

9\. Owner-Architect Agreement (AIA Document B181) including:

\(a\) HUD Amendment (Form HUD-90169-CA).

\(b\) Design Architect\'s Certification with an attached

listing of any ineligible or excessive amenities (See

Attachment C).

NOTE: See Paragraph 1-6.B.4. of Section 202 Handbook

4571.5 and Paragraph 1-6.B.6. of Section 811

Handbook 4571.4 for further information concerning

this exhibit. Subparagraph 1-6.B.4.b.(2) of the

Section 202 Handbook dealing with the Architect\'s

fee is hereby revised to state that the amount

requested in the draw is limited to the lesser of

the amount shown on Form HUD-92403-1 or the AIA

B181. The Section 811 Handbook 4571.4 is correct.

4-3

\(c\) Evidence that the architect has obtained professional

liability insurance in a minimum amount of \$50,000

(Section 811) or \$250,000 (Section 202) for errors and

omissions. The insurance must be kept in force through

the construction of the project and for a period of 3

years after project completion.

10\. Final Working Drawings and Specifications with the

Architect\'s certification that the project design has been

reviewed and approved by the local Building Department and

that it complies with local codes and ordinances,

accessibility, program and regulatory requirements.

11\. Topographic Survey.

12\. Soil Test Borings.

13\. Form HUD-92457, Survey Instructions and Certificate and

Surveyor\'s Report.

14\. Form HUD-51994, Life Cycle Cost Analysis of Utility

Combinations, if the most efficient utility type for the

area of the proposed project has not been previously

determined.

15\. Current resume of general contractor\'s construction

experience, including type, size, and location of buildings

constructed, geographic areas of contractor\'s construction

business involvement, length of time contractor has acted-in

that capacity, and contractor\'s use of minority and women-owned

businesses.

16\. Financial statements on the general contractor for the last

three years, the latest of which is not more than three

months old.

\(a\) An exception would be an audited financial statement,

not more than 12 months old, containing an unqualified

opinion of an Independent CPA or Public Accountant.

\(b\) The exception applies, provided the audited statement

is supplemented with updated interim statements if more

than 6 months have expired since the closing date of

the audited statement.

4-4

\(c\) If the financial statement is not submitted on Form

HUD-92417, Personal Financial and Credit Statement (for

use by individuals, not companies), it must contain, at

a minimum, the information contained on Form HUD-92417,

original signatures, and the following certification

and criminal warning:

I HEREBY CERTIFY that the foregoing figures and

statements contained herein submitted by me as agent of

the owner for the purpose of obtaining a Section 202

capital advance under Section 202 of the Housing Act of

1959, as amended, or a Section 811 capital advance

under Section 811 of the National Affordable Housing

Act of 1990, as amended, \[whichever applies\], are true

and give a correct showing of

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\'s (insert name of owner)

financial position as of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(date of financial statement). Signed this \_\_\_\_ day of

\_\_\_\_\_\_\_\_\_\_, 19\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Signature of authorized agent with name printed or

typed under signature.)

Warning \-- HUD will prosecute false claims and

statements. Conviction may result in criminal and/or

civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C.

3729, 3802)

17\. Form HUD-92328, Contractor\'s and/or Mortgagor\'s Cost

Breakdown.

18\. Contractor\'s Certification regarding compliance with MBE/WBE

objectives.

19\. Construction Cost Analysis (prepared by owner\'s hired

professional).

20\. Owner\'s List Showing Intended Use of Developer\'s Fee.

21\. Form HUD-935.2, Affirmative Fair Housing Marketing Plan.

22\. Form HUD-9832, Management Entity Profile, for management

agents new to the State/Area Office in which the proposed

project will be located.

4-5

23\. Form HUD-9839-A, Project Owner\'s Certification for Owner-Managed

Multifamily Housing Projects,

\-\-- OR \-\--

Form HUD-9839-B, Project Owner\'s and Management Agent\'s

Certification for Multifamily Housing Projects for Identity-of-

Interest or Independent Management Agents,

\-\-- OR \-\--

Form HUD-9839-C, Project Owner\'s/Borrower\'s Certification

for Elderly Housing Projects Managed by Administrators.

24\. Resume on the Resident Manager or Management Agent which

includes qualifications and experience.

25\. Model Form of Lease.

26\. Evidence of state/local exemption from real and/or personal

property taxes, tax abatement, Payment in Lieu of Taxes

(PILOT), OR ineligibility from any tax relief.

27\. Any amendments to relocation plan, if site occupants are to

be displaced.

28\. Schedule of Capital Expenditures (e.g., furniture, supplies,

equipment, and other items necessary to the basic operation

of the project) that will not be covered by proceeds from

the capital advance. The schedule should include the

owner\'s plan on how it will meet these costs \-- through

donations, cash outlays, etc.

NOTE: The capital advance will include a developer\'s fee

which may be used to cover the costs of capital

expenditures. The owner is required to submit a

list showing the intended use of the developer\'s

fee (see item 20. above).

29\. For Section 811 projects, evidence of supportive services

funding. Submit written evidence from the appropriate

agency(s) indicating its continued firm commitment to fund

or provide the supportive services for the proposed project

to at least the same degree as what was originally committed

in the letter of intent included in the Application for a

Fund Reservation. The letter

4-6

must describe the terms of the commitment and indicate the

number of disabled persons/units for which the commitment is

being made.

NOTE: If the agency(s) has reduced or withdrawn its

original commitment, the owner must submit

evidence of funding for the supportive services

from other sources or the fund reservation will be

cancelled.

30\. For Section 811 Group Homes to be Licensed as Intermediate

Care Facilities, a Certificate of Need.

31\. Individual Conflict of Interest and Disclosures

Certifications on all officers, directors, board members,

trustees, stockholders and authorized agents of the sponsor

and owner. See Appendix 2 and paragraph 1-11.D. of Section

202 Handbook 4571.3 REV-1, and Appendix 3 and Paragraph 1-11.C.

of Section 811 Handbook 4571.2.

NOTE: Certifications from any Executive Boards of the

sponsor and owner are NOT acceptable. The fund

reservation is subject to cancellation if the

certifications are not provided for ALL of these

individuals. Once the fund reservation

application has been filed, the conflict of

interest provisions apply to these individuals for

two years after resignation or final closing,

whichever is later.

32\. Individual Identity of Interest and Disclosures

Certifications for all development team members. This

includes the consultant, attorney, architect, general

contractor, management and seller of the land. See Appendix

3 and Paragraph 1-11.D. of Section 202 Handbook 4571.3 REV-1,

and Appendix 4 and Paragraph 1-11.C. of Section 811

Handbook 4571.2.

33\. Owner Certification/Disclosure of Lobbying Activities,

Standard Form-LLL.

34\. Applicant/Recipient Disclosure/Update Report, Form HUD-2886

from the owner.

4-7

35\. Consolidated Owner Certifications \-- See Attachments D and E

of this Notice for a consolidated certification format,

which includes:

\(a\) Certification required by OMB Circular A-129. OMB

Circular A-129, managing Federal Credit Programs,

requires all owners to certify that they have been

unable to obtain the necessary funds to develop the

project from private sources upon terms and conditions

equally favorable as the terms and conditions available

under Section 202 or Section 811.

\(b\) Form HUD-92010, Equal Employment Opportunity

Certification.

\(c\) Certification of Drug-Free Workplace.

\(d\) Certification in Connection with the Development and

Operation of a Section 202 or Section 811 Supportive

Housing Project.

\(e\) Certification of Compliance with Design and Cost

Standards, the Uniform Federal Accessibility Standards

and HUD\'s implementing regulations at 24 CFR part 40,

Section 504 of the Rehabilitation Act of 1973, and

HUD\'s implementing regulations at 24 CFR Part 8, and

for covered multifamily dwellings designed and

constructed for first occupancy after March 13, 1991,

the design and construction requirements of the Fair

Housing Act and HUD\'s implementing regulations at 24

CFR Part 100, and the Americans with Disabilities Act

of 1990.

\(f\) Certification regarding Compliance with the

Requirements of the Uniform Relocation Assistance and

Real Property Acquisition Policies Act.

\(g\) Certification of Compliance with Davis-Bacon Act.

NOTE: Section 811 Group Homes and other small-size

project with fewer than 12 units are exempt

from the requirements of the Davis-Bacon Act.

4-8

\(h\) For Section 811 projects, certification that owner will

not require residents to accept any supportive services

as a condition of occupancy.

\(i\) Flood Disaster Protection Act of 1973 Certification.

\(j\) Certification of Compliance with the National

Environmental Policy Act.

\(k\) Certification for Contracts, Grants, Loans and

Cooperative Agreements.

\(l\) Certification that the information in the Firm

commitment Application is True and Accurate.

NOTE: Form HUD-92013-E, Supplemental Application

and Processing Form-Housing for the

Elderly/Disabled has been eliminated. Owners

shall show any proposed services and the

funding for such services in the \"remarks\"

section of Form HUD92013, Application for

Multifamily Housing Project.

C. Rehabilitation or Acquisition Without Rehabilitation. In

addition to the exhibits described in Paragraph B. above, the

owner must submit the following exhibits if the proposal involves

rehabilitation or acquisition without rehabilitation.

1\. Projects Involving Rehabilitation.

\(a\) Authorization to inspect the project.

\(b\) Narrative description of rehabilitation proposed.

\(c\) Final working drawings and specifications of units as

proposed to be rehabilitated.

\(d\) Final working drawings and specifications of any

structural changes or changes in floor plans or other

significant alterations.

\(e\) Survey/site plan drawing, as built.

\(f\) Drawings and specifications of existing facilities, if

obtainable.

4-9

2\. Acquisition Without Rehabilitation.

\(a\) Authorization to inspect the project.

\(b\) Narrative description of any repair work proposed,

including how the project will provide program

accessibility to people with disabilities.

\(c\) Survey/site plan drawing, as built.

\(d\) Drawings and specifications of existing facilities, if

available.

3\. Lead-Based Paint Certification. For Section 811 projects,

certification of compliance with the Lead-Based Paint

Poisoning Prevention Act. The requirements of the Lead-Based

Paint Poisoning Prevention Act apply to the dwellings (except

zero-bedroom dwellings units) in housing:

\(a\) Which were constructed or substantially rehabilitated

before 1978, and

\(b\) In which any child under seven years of age resides or is

expected to reside.

D. Receipt of Firm Commitment Applications. The outstanding

procedures for logging-in, date-stamping, and screening firm

commitment applications for completeness remain unchanged.

E. Eligibility for Technical Processing.

1\. Acceptable Applications for a Firm Commitment of Capital

Advance Financing.

\(a\) The MHR shall determine whether the firm commitment

application is complete and acceptable for technical

processing based on a review of the comments received

from the technical and program staffs.

\(b\) The MHR shall advise the Program Assistant that the firm

commitment application is acceptable for technical

processing.

\(c\) The Program Assistant staff notifies the technical and

program staffs to begin processing of the application.

4-10

2\. Incomplete Applications for a Firm Commitment of Capital

Advance Financing.

\(a\) The MHR prepares a letter for the signature of the

Chief, Production Branch, which:

\(1\) Lists the deficiencies;

\(2\) Invites the owner to correct the deficiencies by a

specified date (generally within 15 working days);

\(3\) States that if additional information is not

received by the specified date, the firm

commitment application will be returned and may be

resubmitted when it is complete.

\(b\) Receipt of Additional Information.

\(1\) The Program Assistant logs-in the additional

information and forwards it to the MHR for review

for acceptability.

\(2\) For additional information which is complete, the

MHR shall follow the procedures outlined in

Paragraph C.l. above.

\(3\) For incomplete information, the MHR prepares a

letter to the owner and;

o Returns the application,

o Lists the deficiencies, and

o Invites a prompt resubmission of the

application upon correction.

F. Coordination of Technical and Program Reviews. The Program

Assistant and MHR have a shared responsibility for tracking
and-monitoring

the progress of the technical reviews. These

responsibilities are described in Paragraph 2-8 of Section 202

Handbook 4571.5 and Section 811 Handbook 4571.4.

G. Target Date for Issuance of Firm Commitment for Capital Advance

Financing. The target date for issuing a firm commitment for

capital advance financing is 30 days after receipt of a firm

commitment application that is complete and acceptable for

technical processing.

4-11

SECTION V. TECHNICAL REVIEW OF FIRM COMMITMENT APPLICATION

Make all Technical reviews following Chapters 1 and 2 of Section

202 Handbook 4571.5 and Section 811 Handbook 4571.4, except as

modified herein:

A. Office Counsel.

1\. If the owner\'s application includes provisions for tax

abatement, payment in lieu of taxes (PILOT) or exemption of

real property taxes, the office Counsel must review this

information in accordance with Paragraph 1-12 of the above

referenced handbooks.

2\. If the MHR\'s review of the individual Conflict/Identity of

Interest and Disclosure Certifications reveals questionable

conflict or identity of interest relationships/activities,

the Office Counsel shall review the application and make a

determination regarding its acceptability.

B. Architectural and Engineering Analysis (A/E). Paragraphs 1-15

through 1-22 and 2-9 of the above handbooks are no longer

applicable because HUD accepts the final plans and specifications

without a review. The exception to this policy is a review for

handicapped accessibility. HUD will review the final plans and

specifications pursuant to the Fair Housing Accessibility

Guidelines and Section 504. HUD relies on the owner\'s

architect\'s certification as discussed below:

1\. Architect\'s Certification. The HUD representative:

\(a\) Accepts the owner\'s Architect\'s Certification (see

Attachment C of this Notice) that the project design is

in compliance with local codes and ordinances,

accessibility, program and regulatory requirements.

\(b\) Requires the owner\'s architect to identify and attach

to the certification any ineligible items or excessive

features, such as individual unit balconies and decks,

atriums, bowling alleys, swimming pools, saunas,

jacuzzis, etc. Forwards copies of this attachment to

the HUD Cost Analyst, HUD appraiser and MCE.

NOTE: Owners may include these items but they must

pay for them from sources other than the

Section 202 or Section 811 capital advance.

They must also pay for the continuing

operating costs associated

5-1

with any excess amenities from sources other

than the Section 202 or Section 811 Project

Rental Assistance Contract.

Exception: An exception to this requirement

may be granted if the proposed project

involves rehabilitation or acquisition from

the Resolution Trust Corporation, the

additional amenities or design features were

incorporated into the existing structure

before the submission of the application, and

the total development cost of the project

does not exceed the development costs limits

published in the annual Notice of Fund

Availability for the Sections 202 and 811

programs (unless the owner is willing to pay

the excess costs from other than capital

advance proceeds.

2\. The HUD representative receives and retains copies of the

final plans and specifications.

3\. The HUD representative accepts the final plans and

specifications as submitted with only a review for

handicapped accessibility.

NOTE: HUD relies on the owner\'s architect\'s

certification that the project design complies

with all local codes, program and regulatory

requirements.

4\. Form HUD-51994, Life-Cycle Cost Analysis of Utility

Combinations. The HUD representative reviews this form to

determine the most efficient utilities, fuels, related

mechanical equipment and methods of purchase ONLY if such a

determination has not been previously made for similar

projects in the area of the proposed project.

5\. The HUD representative makes sure that the owner\'s architect

has obtained professional liability insurance for errors and

omissions. This insurance must be:

\(a\) In a minimum amount of \$50,000 (Section 811) or \$250,000

(Section 202) projects.

5-2

\(b\) Kept in force through the construction of the project and

for a period of 3 years after project completion.

C. Cost. This Notice replaces Paragraphs 1-23 through 1-30 and 2-10

of the above handbooks with the following instructions:

1\. Architect\'s Certification. The HUD Cost Analyst accepts the

owner\'s Architect\'s Certification with attachment identifying

any ineligible or excessive amenities (see Attachment C of the

Notice) that:

\(a\) The costs of construction of community spaces do not

exceed 10 percent of the total cost of construction, OR

\(b\) The costs of construction of community spaces exceed 10

percent of the total cost of construction and the owner

is willing to contribute these incremental development

costs and the continuing incremental operating costs.

2\. Review of Construction Cost Analysis and Form HUD-92328,

Contractor\'s and/or Mortgagor\'s Cost Breakdown.

\(a\) The Cost Analyst compares the construction cost analysis

and Form HUD-92328 with the owner\'s application (Form

HUD-92013) for consistency.

NOTE: The owner is responsible for resolving any

inconsistencies noted among these documents.

\(b\) If there is a general agreement between the contractor\'s

estimate and the construction cost analysis, accept the

contractor\'s estimate as the Commissioner\'s estimate.

\(c\) Cost review of land improvement trade items is limited to

the bottom line total per square foot in all cases with

the following exceptions:

\(1\) The bottom line total per square foot grossly

exceeds available data without documentation from

the contractor. In this instance, isolate the

inflated trade items(s), request documentation and

check against available data.

5-3

\(2\) Contractor identifies and provides documentation

for unusual land improvements. In this instance,

check against available data.

\(3\) Note that site contamination testing and

remediation should be completed before the start of

construction and should not be included in the

construction contract. In the case of site

contamination eluding standard testing procedures

and only becoming evident after the start of

construction, further testing and remediation

should be included in the construction contract by

use of change orders and categorized under \"unusual

site conditions.\"

\(d\) Cost review of structure trade items will vary in detail

based on the complexity of the project:

\(1\) For group homes, review only the bottom line

structures totals. Calculate costs per square foot

and also per occupant.

\(2\) For garden apartments and similar non-elevator

structures comprising 25 or fewer dwelling units,

where the owner\'s cost estimator has broken the

costs into building components or trade item

groupings (see III.G.4. above for examples), review

the components or trade item groupings based on

available data. Calculate bottom-line costs per

square foot and also per occupant.

NOTE: In cases where an ordinarily non-elevator

structure contains an elevator either by

local requirement or at the request of

the sponsor, the above non-elevator cost

review guidelines will still apply.

\(3\) For garden apartments and similar non-elevator

structures comprising greater than 25 dwelling

units, and for high-rise elevator structures (4

stories and higher) with masonry, steel and/or

concrete construction, a detailed review will be

made on individual

5-4

trade items prepared in accordance with HUD\'s line

item format as shown on Form HUD-92328,

Contractor\'s and/or Mortgagor\'s Cost Breakdown.

Front-end loading will be checked only when

reviewing construction cost analyses done in HUD\'s

line item format.

\(e\) If evidence of front-end loading exists, contact the

owner to bring this to resolution. To expedite

resolution, you may contact the contractor directly.

However, you must keep the owner informed of any

discussions.

3\. Cost Not Attributable to Dwelling Use (CNA). Do not calculate

the CNA. It will be calculated by the person or firm hired by

the owner to perform the construction cost analysis.

4\. Cost Estimation. The Cost Analyst will not provide an

independent estimate.

D. Valuation. Paragraphs 1-31 through 1-43 and 2-11 of the above

handbooks describe Valuation processing which will remain the same,

except as noted below:

1\. Form HUD-92013-E, Supplemental Application and Processing

Form-Housing for the Elderly/Disabled. Form HUD-92013-E is

eliminated for these programs. Check the \"remarks\" section of

the owner\'s application (Form HUD-92013, Application for

Multifamily Housing Project) to determine if any services are

proposed and the funding sources for such services.

2\. Operating Expense Analysis.

a\) Do not conduct an operating expense analysis.

Accordingly, Form HUD-92274, Operating Expense Analysis

Worksheet, is eliminated for these programs.

\(b\) The owner is responsible for providing HUD the project\'s

estimate of operating expenses which will be used in

HUD\'s processing.

NOTE: Any adjustments in the project rental

assistance contract authority reserved for the

project will be made after one full year of

project operation, if necessary.

5-5

3\. Estimate of \"Soft\" Costs. Do not estimate the \"soft\" costs.

Accept and include in processing the owner\'s estimate of such

costs as shown in the owner\'s firm commitment application,

Form HUD-92013, Application for Multifamily Housing Project.

4\. Construction Cost Analysis. Make a checklist review to

determine consistency with owner\'s firm commitment

application, Form HUD-92013.

NOTE: The owner is responsible for resolving any

inconsistencies noted between the construction cost

analysis and the Form HUD-92013.

5\. Developer\'s Fee. In lieu of a project contingency allowance

and amounts for consultant services and organizational fees,

include a developer\'s fee of 8 percent of the total

replacement cost of the project. However, the minimum

developer\'s fee for inclusion in the capital advance amount is

\$30,000 and the maximum is \$400,000 plus 2 percent of any

replacement cost amount over \$5,000,000.

\(a\) Eligible Uses of Developer\'s Fee. The developer\'s fee

may be used to pay for costs associated with developing

the project including but not limited to:

o Cost of necessary change orders approved prior to

final closing.

o Housing consultant services.

o Organizational expenses.

o Owner\'s cash requirement at initial closing, except

as noted in the following paragraph entitled

\"Ineligible Uses of Developer\'s Fee.\"

o Increased taxes and insurance caused by unavoidable

delays in construction.

o Increases in otherwise eligible non-construction

line items.

o Environmental studies.

5-6

NOTE: These studies do not replace the HUD

environmental review but may supplement

it. HUD staff must still conduct an

environmental assessment.

o Appraisal costs.

o Capital expenditures, such as major moveable

furnishings and equipment (e.g., computers and

lawn mowers), including, but not limited to,

office and maintenance equipment and furnishings

for the public areas.

o Costs directly related to the rent-up of the

project, such as advertisement.

o Accruals for taxes and insurance after completion

of construction if current income from the project

is insufficient to meet such accruals. This

includes the period after the cut-off date.

\(b\) Ineligible Uses of the Developer\'s Fee.

o Excessive design features and ineligible

amenities, such as individual unit balconies and

decks, atriums, bowling alleys, swimming pools,

saunas, jacuzzis, etc.

o Additional fees to the architect and attorney

(i.e., over and above the contractual amount).

o Non-major equipment and furnishings, such as

dishes and eating utensils.

o Items with short-term life cycle, such as office

and maintenance supplies.

o Furnishings within the residential units.

o Motor vehicles.

\(c\) The developer\'s fee is in addition to the legal, audit

and other fees, such as impact fees.

\(d\) Unused funds, if any, are deposited in the project\'s

Reserve for Replacement Account at final closing.

5-7

\(e\) Two percent of the developer\'s fee is withheld (by the

MCE) at initial closing to cover project contingency

items, furnishings and equipment.

6\. If a site change has been approved:

\(a\) Owner is required to complete a Transaction Screening

Questionnaire and/or Phase I Environmental Study, and a

Phase II study, if applicable.

\(b\) Valuation staff will complete an environmental

assessment on Form HUD-4128, Environmental Assessment,

for a new construction proposal and Form HUD-4128.1,

Compliance and LAC Conditions Record (short form) for a

proposal involving rehabilitation of an existing

structure in accordance with Paragraph 1-32 of Section

202 Handbook 4571.5 and Section 811 Handbook 4571.4.

\(c\) Land appraisals are to be conducted in accordance with

Section III.F. of this Notice.

E. Mortgage Credit. Follow the instructions in Paragraphs 1-44

through 1-52 and 2-12 of the above handbooks, except as noted

below:

1\. In analyzing the owner\'s capability, review the owner\'s

balance sheet and Form HUD-92004F, Request for Verification

of Deposit (VOD) for each bank reference with Part I

completed to determine whether the owner has been

capitalized by the sponsor in an amount adequate to close

the transaction and operate the project. Be sure to

consider all funds committed by the sponsor.

2\. VOD.

\(a\) Instruct owner to complete Part I of the VOD form and

send it along with a covering letter to the financial

institution requesting the financial institution to

complete the bottom portion and transmit the completed

VOD directly to HUD. This should be done before

submission of the firm commitment application.

5-8

\(b\) Require owner to include in the firm commitment

application, at least, a copy of the VOD and covering

letter forwarded to the financial institution.

3\. Credit Reports.

\(a\) On behalf of the Asset Manager:

o Order credit reports of the proposed management

firms and resident managers.

o Make a recommendation to the Asset Manager

regarding the creditworthiness of the management

firm/resident manager.

NOTE: The responsibility for determining the

acceptability of the management firm or

resident manager rests with the Asset

Manager.

\(b\) Order \"in-file\" credit reports only on the sponsor

entity, owner corporation and operating officers of the

owner, consultant, general contractor, management firm

or resident manager.

\(c\) Order credit reports on new officers of the owner

corporation whenever there is a change in officers.

4\. The MCE is still responsible for determining whether the

owner has adequate funds to defray the cost of placing the

project into operation, including the cost of capital

expenditures. However, consider the developer\'s fee in

reaching this determination.

5\. Developer\'s Fee.

\(a\) See above Paragraph D.5. for a detailed description of

eligible and ineligible uses of the developer\'s fee.

\(b\) Review owner\'s listing of the intended use of the

developer\'s fee.

\(c\) Holdback 2 percent at initial closing to cover project

contingency items, furnishings and equipment.

5-9

\(d\) At cost certification, the full amount of the

developer\'s fee should be recognized as an allowance.

\(e\) At final closing, deposit any unused funds in the

project\'s Reserve for Replacement Account.

6\. Housing Consultant. The determination regarding the

acceptability of the housing consultant is made prior to

submission of the firm commitment application. If there is

a change in consultants, refer to Section III.E. of this

Notice for the MCE\'s responsibilities in reviewing the

resume, Form HUD-2530, Previous Participation Certificate,

and credit report on the consultant.

7\. Consult with the A/E and Cost staff to determine if the

owner is proposing any ineligible or excessive amenities

which will have to be paid for from sources other than the

Section 202 or Section 811 capital advance.

F. Asset Management. Asset Management staff shall follow the

instructions in Paragraphs 1-53 through 1-57 of Section 202

Handbook 4571.5 and Section 811 Handbook 4571.4. The exceptions

are:

1\. The submission and review of the Management Entity Profile,

Form HUD-9832, is limited to management agents and resident

managers who are new to the applicable local HUD office.

2\. The ordering of credit reports on the management agents and

resident managers is now required.

\(a\) The MCE orders the credit reports.

\(b\) The Asset Manager will coordinate the review and analysis

of the credit report with the MCE.

NOTE: The Asset Manager is responsible for determining

the acceptability of the proposed management agent

and management services.

5-10

SECTION VI. AWARD OF CONSTRUCTION CONTRACT

Paragraphs 2-25 of Section 202 Handbook 4571.5 and Section 811

Handbook 4571.4 are hereby revised to encourage the use of Form
HUD-92442-CA,

Construction Contract - Lump Sum, for all Section 202 and

Section 811 projects regardless of the type of construction or

rehabilitation contract awarded. If an owner has limited Section

202/811 program experience/knowledge and/or the general contractor has

limited construction experience, the local office may require the use

of a cost plus construction contract.

An identity of interest between the sponsor/owner and the general

contractor is prohibited. If, at any time, the local office becomes

aware of a prohibited relationship between the sponsor/owner and

general contractor, the local office will take appropriate sanctions,

including requiring cost certification by the general contractor.

6-1

SECTION VII. REQUESTS FOR INCREASES IN CAPITAL ADVANCE AND

PROJECT RENTAL ASSISTANCE CONTRACT FUNDS

Upon completion of firm commitment application processing,, if it

is determined that increases in the capital advance and PRAC

reservations are needed, the following shall be followed.

A. Section 202/811 Projects Funded in FY 1995 and Earlier.

1\. Capital Advance Increases. State/Area offices may

continue to approve capital advance increases in

accordance with Paragraphs 1-72 and 2-15 of Section 202

Handbook 4571.5 and Section 811 Handbook 4571.4.

2\. PRAC Increases. State/Area Offices may continue to

approve PRAC increases subject to outstanding

instructions.

B. Section 202/811 Projects Funded in FY 1996 and Later.

1\. Capital Advance Increases. The provision for

permitting amendments to the fund reservation before

initial closing for these projects has been eliminated.

\(a\) Fund reservations may be amended only after

initial closing for approved change order items,

subject to the availability of amendment funds.

\(b\) Increases resulting from change orders approved

during construction may be approved, but will be

funded first out of the developer\'s fee. In cases

where the developer\'s fee has been depleted for

approved change order items, HUD will consider a

mortgage increase on a case-by-case basis.

\(c\) All requests for mortgage increases (after initial

closing) shall be processed as usual based on

handbook instructions.

2\. No increases in the PRAC reservation are to be made

until after one full year of project operation. This

revises the instructions in Paragraphs 1-72 and 4-13 of

the aforementioned handbooks.

7-1

SECTION VIII. INITIAL CLOSING TO FINAL CLOSING

A. Initial Closing.

Initial Closings are to be conducted following Chapter 3 of

Section 202 Handbook 4571.5 and Section 811 Handbook 4571.4. A

change, however, has been made to the documents required to be

submitted by the owner at initial closing. Refer to Attachment F

to this Notice for the list of the revised initial closing

documents. In addition, a copy of Form HUD-290, Closing

Memorandum, is to be submitted to Jane E. Luton, Director, New

Products Division, HMDN, Room 6142, for goals reporting purposes.

B. Construction Period.

The instructions outlined in Chapter 4 of the aforementioned

handbooks apply, except as follows:

1\. Processing Change Orders. Paragraph 4-5 of the above

handbooks is revised to limit HUD review of change orders,

Form HUD-92437, Request for Construction Changes on Project

Mortgages, to a cursory review; i.e., an acknowledgment of

the change order for the record.

\(a\) The Cost Analyst\'s review is limited to informing the

HUD appraiser which change orders are necessities,

equivalents, or betterments.

\(b\) The owner\'s architect is responsible for making sure

that the project is being constructed in compliance

with applicable local codes and HUD program

requirements.

NOTE: PROCESSING CHANGE ORDERS INVOLVING REQUESTS FOR

MORTGAGE INCREASES AND EXTENSIONS OF CONSTRUCTION

TIME SHALL BE HANDLED AS USUAL BASED ON HANDBOOK

INSTRUCTIONS.

2\. HUD Inspections. The HUD inspections during construction

are to be made in accordance with HUD Handbook 4460.1 REV-2.

8-1

C. Final closing.

There are no changes to the final closing procedures as stated in

Chapter 6 of the above handbooks, except to note that any unused

developer\'s fee is to be deposited in the project\'s Reserve for

Replacement Account at final closing. Attached to this Notice

(Attachment G) is a list of final closing documents.

Nicolas P. Retsinas

Assistant Secretary for Housing-

Federal Housing Commissioner

Attachments

8-2

Attachment A

LAND APPRAISAL CHECKLIST FOR GROUP HOMES

UNDER THE SECTION 811 CAPITAL ADVANCE PROGRAM

INSTRUCTIONS:

1\. Use 3 to 5 comparables.

2\. Make sure comparables are recent sales.

3\. Make sure each comparable is adjusted from the sale comparable to

the subject site.

4\. Use comparables with the same or similar zoning.

5\. The location of the comparables should be in reasonable proximity

to the subject site.

6\. Determine whether a desk or field review is necessary.

SECTION I

Project
No.\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project
Sponsor/Owner\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project
Location\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Street Address)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(City, State, Zip Code)

SECTION II

Dimensions\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Site Area\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Corner
Lot \_\_Yes \_\_No

Specific Zoning Classification and
Description\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Zoning Compliance \_\_ Legal \_\_ Legal Nonconforming

(Grandfathered Use)

\_\_ Illegal \_\_ No Zoning

Market Value of Land \_\_ Present Use

\_\_ Intended Use (Group Home)

\_\_ Other Use (Explain)

Attachment A - Page

2

SECTION III

Topography
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Size
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Shape/Plottage
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Drainage
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

View
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Landscaping/Demolition/Piling
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Driveway Surface
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Apparent Easements
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

FEMA Special Flood Hazard Area \_\_ Yes \_\_ No

FEMA Zone \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Map
Date \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

FEMA Map
No.\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

SECTION IV

Utilities Public Other

Electricity \_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Gas \_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Water \_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Sanitary Sewer \_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Storm Sewer \_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

SECTION V

Off-Site Improvements

Type Public Private

Street \_\_\_\_\_\_\_\_\_\_\_ \_\_ \_\_

Curb/gutter \_\_\_\_\_\_\_\_\_\_\_ \_\_ \_\_

Sidewalk \_\_\_\_\_\_\_\_\_\_\_ \_\_ \_\_

Street Lights \_\_\_\_\_\_\_\_\_\_\_ \_\_ \_\_

Alley \_\_\_\_\_\_\_\_\_\_\_ \_\_ \_\_

Attachment A - Page

3

SECTION VI

Comments: (apparent adverse easements, encroachments, special

assessments, slide areas, illegal or legal nonconforming

zoning use, etc.)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

SECTION VII

Environmental Considerations:

Flood Hazards:

Are the property improvements in a Special Flood Hazard Area?

\_\_ Yes \_\_ No

(If \"yes\", a Letter of Map Amendment (LOMA) or Letter of Map

Revision (LOMR) is attached.) \_\_ Yes \_\_ No

The flood insurance Map (FIRM) Number and Date:

Noise:

Is the property located within 1,000 feet of a highway, freeway,

or heavily traveled road? \_\_ Yes \_\_ No

Within 3,000 feet of a railroad? \_\_ Yes \_\_ No

Within one mile of a civil airfield or 5 miles of a military

airfield? \_\_ Yes \_\_ No

Runway Clear Zones/Clear Zones:

Is the property within 3,000 feet of a civil or military

airfield?

\_\_ Yes \_\_ No

If \"yes\", is the property in a Runway Clear Zone/Clear Zone?

\_\_ Yes \_\_ No

Explosive/Flammable Materials Storage Hazard:

Does the property have an unobstructed view, or is it located

within 2,000 feet of any facility handling or storing explosive

or fire prone materials? \_\_ Yes \_\_ No

Attachment A - Page

4

Toxic Waste Hazards:

Is property within 3,000 feet of a dump or landfill, or a site on

an EPA Superfund (NPL) list or equivalent State list?

\_\_ Yes \_\_ No

Foreseeable Hazards or Adverse Conditions:

Does the site have any rock formations, high ground water levels,

inadequate surface drainage, springs, sinkholes, etc?

\_\_ Yes \_\_ No

Does the site have unstable soils (expansive, collapsible, or

erodible)? \_\_ Yes \_\_ No

Does the site have any excessive slopes?\_\_ Yes \_\_ No

Does the site have any earthfill? \_\_ Yes \_\_ No

If \"yes\", will foundations, slabs, or flatwork rest on the fill?

\_\_ Yes \_\_ No

SECTION VIII

Recommendation:

\_\_ Approve

\_\_ Approve with Conditions

\_\_ Disapprove

Comments/Conditions:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Prepared by: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Signature)

Supervisor: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Signature)

Attachment

B

REQUIRED EXHIBITS FOR REQUEST FOR FIRM COMMITMENT FOR

CAPITAL ADVANCE FINANCING

All requests for Section 202 or Section 811 Firm Commitments must be

accompanied by the exhibits listed below.

The submission must contain the number of copies indicated and must be

tabbed and indexed accordingly.

Exhibit Document No. of Copies

1\. Form HUD-92013, Application for

Multifamily Housing Project Original & 2 Copies

2\. Form HUD-92013.Supp, Supplement

to Application for a Multifamily

Housing Project (for Sponsor, Owner,

including owner\'s Operating Officers

and General Contractor) Original & 2 Copies

3\. Form HUD-91732A-CA, Certificate

of Incorporation, for Owner with

Incumbency Certificate on Officers

and Directors and Evidence of

Owner\'s IRS Tax Exemption

(if not previously submitted) Original & 2 Copies

NOTE: Include updated Incumbency

Certificate on Sponsor if

there has been any change

in its officers and directors.

4\. Certified Balance Sheet with

Request for Verification of Deposit

(Form HUD-92004F) on Owner Original & 2 Copies

5\. Evidence (or Updated Evidence)

of Site Control 3 Copies

6\. Evidence (or Confirmation) of

Permissive Zoning 3 Copies

7\. Information on Housing Consultant

(if applicable and not previously

submitted): Resume and Form

HUD-2530, Previous Participation

Certificate Original

Attachment B - Page

2

8\. Form HUD-2530, Previous

Participation Certificate

(for Officers and Directors

of Sponsor and Owner, General

Contractor and Management Agent) Original

9\. Owner-Architect Agreement (AIA

Document B181), with Amendment -

Form HUD-90169-CA, Architect

Certification that includes a

List of Any Ineligible or

Excessive Amenities, and

Evidence of Professional

Liability Insurance Original & 2 Copies

10\. Final Working Drawings and

Specifications 3 Sets

11\. Topographic Survey 3 Copies

12\. Soil Test Borings 3 Copies

13\. Form HUD-92457, Survey

Instructions and Certificate

and Surveyor\'s Report 3 Copies

14\. Form HUD-51994, Life Cycle

Cost Analysis of Utility

Combinations (if applicable) Original & 2 Copies

15\. Resume on General Contractor\'s

Construction Experience 3 Copies

16\. Financial Statements on

General Contractor (for Last

Three Years) Original & 2 Copies

17\. Form HUD-92328, Contractor\'s

and/or Mortgagor\'s Cost Breakdown Original & 2 Copies

18\. Contractor\'s Certification

Regarding Compliance with

MBE/WBE Objectives Original & 2 Copies

19\. Construction Cost Analysis

prepared by Owner\'s Hired Professional Original & 2 Copies

20\. Owner\'s List Showing the Intended

Use of the Developer\'s Fee Original & 2 Copies

Attachment B - Page

3

21\. Form HUD-935.2, Affirmative Fair

Housing Marketing Plan Original & 1 Copy

22\. Form HUD-9832, Management Entity

Profile (if Management Entity is

New to the Field Office having

Jurisdiction over the Project) Original & 1 Copy

23\. Form HUD-9839-A, Project Owner\'s

Certification for Owner-Managed

Multifamily Housing Projects Original & 1 Copy

\- OR -

Form HUD-9839-B, Project Owner\'s

and Management Agent\'s Certification

for Multifamily Housing Projects

for Identity-of-Interest or

Independent Management Agents Original & 1 Copy

\- OR -

Form HUD-9839-C, Project Owner\'s/

Borrower\'s Certification for Elderly

Housing Projects Managed by

Administrators Original & 1 Copy

24\. Resume on Management Agent or

Resident Manager Original & 1 Copy

25\. Model Form of Lease (in accordance

with HUD requirements) Original & 1 Copy

26\. Evidence of State/Local Exemption

from Real and/or Personal Property

Taxes, Tax Abatement, Payment in

Lieu of Taxes (PILOT), OR

Ineligibility from Any Tax Relief 3 Copies

27\. Amendments to Relocation, if any

(if Site Occupants are to be Displaced) 3 Copies

28\. Schedule of Capital Expenditures 3 Copies

29\. Individual Conflict of Interest and

Disclosure Certification for Sponsor

and Owner Original & 2 Copies

30\. Identity of Interest and Disclosure

Certifications for Development Team

Members Original & 2 Copies

Attachment B - Page

4

31\. Standard Form- LLL, Owner

Certification/Disclosure of

Lobbying Activities Original & 2 Copies

32\. Form HUD-2880, Applicant/Recipient

Disclosure/Update Report, from

Owner Original & 2 Copies

33\. Owner Certifications \-- A Original & 2 Copies

Consolidated Certification

Regarding:

o Owner\'s Inability to Obtain

Financing from Private Sources

as Equally Favorable as under

the Section 202 or Section 811

Program pursuant to OMB

Circular A-129

o Form HUD-92010, Equal Employment

Opportunity

o Drug-Free Workplace

o Development and Operation of a

Section 202 or Section 811

Project

o Compliance with Design and Cost

Standards and Accessibility

Requirements

o Compliance with Uniform Relocation

Assistance and Real Property

Acquisition Policies Act

o Compliance with Davis-Bacon Act

o Flood Disaster Protection Act

of 1973

o National Environmental Policy Act

o Contracts, Grants, Loans and

Cooperative Agreements

o Truth and Accuracy of the

Submitted Information

o Compliance with the Lead-Based

Paint Poisoning Prevention Act

(for Section 811 projects

proposing Rehabilitation or

Acquisition without

Rehabilitation only)

Attachment B - Page

5

\<\<\< ADDITIONAL EXHIBITS \>\>\>

FOR SECTION 811 APPLICATIONS ONLY:

34\. Evidence of Supportive Services

Funding Original & 2 Copies

35\. Certificate of Need (for Group

Homes Proposed as Intermediate

Care Facilities) Original & 2 Copies

FOR PROJECTS PROPOSING REHABILITATION ONLY:

36\. Authorization to Inspect Project 3 Copies

37\. Narrative Description of

Rehabilitation Proposed 3 Copies

38\. Final Working Drawings and

Specifications of Units as

Proposed to be Rehabilitated 3 Copies

39\. Final Working Drawings and

Specifications of any Structural

Changes or Changes in Floor Plans

or Other Significant Alterations 3 Copies

40\. Survey/Site Plan Drawing, as

Built 3 Copies

41\. Drawings and Specifications of

Existing Facilities, if Obtainable 3 Copies

FOR PROJECTS PROPOSING ACQUISITION WITHOUT REHABILITATION ONLY:

42\. Authorization to Inspect Project 3 Copies

43\. Narrative Description of Any

Repair Work Proposed 3 Copies

44\. Survey/Site Plan Drawing, as

Built 3 Copies

45\. Drawings and Specifications of

Existing Facilities, if Available 3 Copies

Attachment C

DESIGN ARCHITECT\'S CERTIFICATION

For use in HUD\'s Section 202 Supportive Housing for the Elderly and

Section 811 Supportive Housing for Persons with Disabilities Programs

The following certification shall be submitted at the Firm Commitment

Application stage of processing and shall be completed by the licensed

professional executing the Owner-Architect Agreement (AIA Document
B-181)

with HUD Amendment (Form HUD 90169-CA).

Owner:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

HUD Project No.:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project Address:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

I,
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Registered

Architect, do hereby certify that I have personally prepared, reviewed

and/or supervised the preparation of the Working Drawings and

Specifications for this project. I further certify that, to the best

of my knowledge, the Working Drawings and Specifications comply with

the applicable building codes specified below and have been prepared

in accordance with HUD regulations, Handbook requirements and

guidelines as identified below.

A. The attached Working Drawings and Specifications are:

1\. For the project identified above, which is described as

follows: (Describe project by indicating number and types of

units, etc.)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Attachment C - Page

2

2\. Identified as
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

(Identify Working Drawings and Specifications by inserting

information normally found in the Title Block of drawings.)

3\. In compliance with Local, State or Model Building Code:

(Specify name and year.)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4\. In compliance with other Laws, Ordinances, Exceptions,

Deletions, Waivers, Additions, etc., required or granted by

the appropriate Local, State, and/or Federal authority

(attached herewith).

5\. In compliance with the (1) Uniform Federal Accessibility

Standards and HUD\'s implementing regulations at 24 CFR Part

40; (2) Section 504 of the Rehabilitation Act of 1973 and

HUD\'s implementing regulations at 24 CFR Part 8; (3) Fair

Housing Act of 1988 and HUD\'s implementing regulations at 24

CFR Part 100 for covered multifamily dwellings designed and

constructed for first occupancy after March 13, 1991; and

\(4\) the Americans Disabilities Act of 1990.

6\. In compliance with HUD\'s (1) current Minimum Property

Standards (Handbook 4910.1); (2) design and cost standards

as contained in 24 CFR, Sections 891-120 (applicable to both

Section 202 and Section 811 projects), 891.210 and 891.220

(Section 202 projects only), 891.310 and 891.315 (Section

811 projects only); and (3) current Handbooks 4571.5 Section

202 Supportive Housing for the Elderly, 4571.4 Section 811

Supportive Housing for Persons with Disabilities and 4460.1

REV-1, Architectural Analysis and Inspections for Project

Mortgage Insurance.

B. Professional liability insurance in a minimum amount of \$50,000

(Section 811) or \$250,000 (Section 202) for the signatory/firm

below covering errors and omissions is in force and will remain

in force through the construction of the project and for a period

of 3 years after project completion.

Attachment C - Page 3

C. Three sets of the Working Drawings and Specifications which are

properly and legally dated, sealed and signed by the Design

Architect and professional Engineer responsible for each design

component, i.e., consultant\'s seal and signature for engineering

divisions such as civil, structural, electrical, mechanical,

plumbing, etc., are attached.

Signature:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Date:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Print or Type Name)

Name of Firm:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Business Address:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Telephone No.:
\_(\_\_\_\_)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

License Number:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(SEAL)

WARNING: Title 18 U.S.C., Sections 1001 and 1010, provides in part

that whoever knowingly and willfully makes or uses a

document containing any false, fictitious, or fraudulent

statement or entry, in any matter in the jurisdiction of any

Department or agency of the United States, shall be fined

not more than \$10,000 or imprisoned for not more than five

years or both. A false statement shall constitute a

violation of Sections 1001 and 1010 of Title 18 U.S.C.

Attachment D

OWNER CERTIFICATIONS - SECTION 202 PROGRAM

The Owner, to the best of its knowledge and belief, hereby assures and

certifies that it will comply with respect to the following:

1\. CERTIFICATION IN CONNECTION WITH THE DEVELOPMENT AND OPERATION OF

A SECTION 202 SUPPORTIVE HOUSING FOR THE ELDERLY PROJECT:

Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and

the implementing regulations at 24 CFR Part 8; the Fair Housing Act

(42 U.S.C. 3600-3619) and the implementing regulations at 24 CFR

Part 100, 108, 109, 110; Title VI of the Civil Rights Act of 1964

(42 U.S.C. 2000d) and the implementing regulations at 24 CFR part

1; section 3 of the Housing and Urban Development Act of 1968 (12

U.S.C. 1701u) and the implementing regulations at 24 CFR Part 135;

the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and the

implementing regulations at 24 CFR Part 146; Executive Order 11246

(as amended) and the implementing regulations at 41 CFR Chapter 60;

the regulations implementing Executive Order 11063 (Equal

Opportunity in Housing) at 24 CFR Part 107; the Americans with

Disabilities Act (42 U.S.C. 12101 et seq.) to the extent

applicable; the affirmative fair housing marketing requirements of

24 CFR part 200; subpart M and the implementing regulations at 24

CFR part 108; and other applicable Federal, State and local laws

prohibiting discrimination and promoting equal opportunity.

2\. DRUG-FREE WORKPLACE ACT

Provide drug-free workplaces in accordance with the Drug-Free

Workplace Act of 1988 (41 U.S.C. 701) by:

a\. publishing a statement notifying employees that the unlawful

manufactures, distribution, dispensing, possession, or use of

a controlled substance is prohibited in the sponsor\'s

workplace and specifying the actions that will be taken

against employees for violation of such prohibition;

Attachment D - page 2

b\. establishing an ongoing drug-free awareness program to inform

employees about -

\(1\) the dangers of drug abuse in the workplace;

\(2\) the sponsor\'s policy of maintaining a drug-free

workplace;

\(3\) any available drug counseling, rehabilitation, and

employee assistance programs; and

\(4\) the penalties that may be imposed upon employees for drug

abuse violations occurring in the workplace;

c\. making it a requirement that each employee to be engaged in

the performance of the capital advance be given a copy of the

statement required by paragraph (a);

d\. notifying the employee in the statement required by paragraph

\(a\) that, as a condition of employment under the capital

advance, the employee will -

\(1\) abide by the terms of the statement; and

\(2\) notify the employer in writing of his or her conviction

for a violation of a criminal drug statute occurring in

the workplace no later than five calendar days after such

conviction;

e\. notifying the HUD in writing, within ten calendar days after

receiving notice under subparagraph (d)(2) from an employee or

otherwise receiving actual notice of such conviction.

f\. taking one of the following actions, within 30 calendar days

of receiving notice under subparagraph (d) (2), with respect

to any employee who is so convicted -

\(1\) taking appropriate personnel action against such an

employee, up to and including termination, consistent

with the requirements of the Rehabilitation Act of 1973,

as amended; or

\(2\) requiring such employee to participate satisfactorily in

a drug abuse assistance or rehabilitation program

approved for such purposes by a Federal, State or local

health, law enforcement, or other appropriate agency;

Attachment D - Page 3

g\. making a good faith effort to continue to maintain a drug-free

workplace through implementation of paragraphs (a), (b), (c),

(d), (e) and (f);

h\. providing the street address, city, county, state, and zip

code for the site or sites where the performance of work in

connection with the grant will take place.

3\. DESIGN AND COST STANDARDS:

It will comply with HUD\'s design and cost standards, the Uniform

Federal Accessibility Standards and HUD\'s implementing regulations

at 24 CFR part 40, Section 504 of the Rehabilitation Act of 1973

and HUD\'s implementing regulations at 24 CFR part 8, and for

covered multifamily dwellings designed and constructed for first

occupancy after March 13, 1991, the design and construction

requirements of the Fair Housing Act of 1988 and HUD\'s implementing

regulations at 24 CFR part 100, and the Americans with Disabilities

Act of 1990.

4\. ACQUISITION AND RELOCATION

It will comply (or has complied) with the acquisition and

relocation requirements of the Uniform Relocation Assistance and

Real Property Acquisition Policies Act of 1970, as amended (URA),

implemented by regulations at 49 CFR part 24, and 24 CFR S

891.155(e).

5\. DAVIS-BACON

The Davis-Bacon Requirements and the Contract Work Hours and Safety

Standards Act.

6\. FLOOD DISASTER PROTECTION ACT OF 1973

The requirements under the Flood Disaster Protection Act of 1973

(42 U.S.C. 4001-4128) and the Coastal Barrier Resources Act (16

U.S.C. 3601).

7\. NATIONAL ENVIRONMENTAL POLICY ACT

The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C.

4321\) and applicable related environmental authorities at 24 CFR

Part 50.4 and HUD\'s implementing regulations at 24 CFR Part 50.

Attachment D - Page 4

8\. CERTIFICATION FOR CONTRACTS, GRANTS, LOANS AND COOPERATIVE

AGREEMENTS

No Federal appropriated funds have been paid or will be paid, by or

on behalf of the undersigned, to any person for influencing or

attempting to influence an officer or employee of an 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

any Federal contract, the making of any Federal grant, the making

of any Federal loan, the entering into of any cooperative

agreement, and the extension, continuation, renewal, amendment or

modification of any Federal contract, grant, loan, or cooperative

agreement.

If any funds other than Federal appropriated funds have been paid

or will be paid 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 this Federal contract, grant,

loan, or cooperative agreement, the undersigned shall complete and

submit Standard Form-LLL, \"Disclosure Form to Report Lobbying,\" in

accordance with its instructions.

The undersigned shall require that the language of this

certification be included in the award documents for all subawards

at all tiers (including subcontracts, subgrants, and contracts

under grants, loans, and cooperative agreements) and that all

subrecipients shall certify and disclose accordingly.

This certification is a material representation of fact upon which

reliance was placed when this transaction was made or entered into.

Submission of this certification is a prerequisite for making or

entering into this transaction imposed by Section 1352, title 31,

U.S. Code. Any person who fails to file the required certification

shall be subject to a civil penalty of not less than \$10,000 and

not more than \$100,000 for each such failure.

Attachment D - Page 5

9\. COMPLIANCE WITH OMB CIRCULAR A-129

It has complied with OMB Circular A-129, Managing Federal Credit

Programs and that it has been unable to obtain the necessary funds

to develop the project from private sources upon terms and

conditions equally favorable as the terms and conditions available

under the Section 202 program.

10\. TRUTH AND ACCURACY

The information provided to HUD in its application under the

Section 202 Supportive Housing for the Elderly is true and

accurate, to the best of its knowledge.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Signature of Authorized Title

Certifying Official

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Applicant Organization Date

WARNING

HUD will prosecute false claims and statements. Convictions may result

in criminal and/or civil penalties (18 U.S.C. 1001,1010,1012; 31 U.S.C.

3729 /FS3802).

Attachment E

OWNER CERTIFICATIONS - SECTION 811 PROGRAM

The Owner, to the best of its knowledge and belief, hereby assures and

certifies that it will comply with respect to the following:

1\. CERTIFICATION IN CONNECTION WITH THE DEVELOPMENT AND OPERATION OF

A SECTION 811 SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES

PROJECT:

Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and

the implementing regulations at 24 CFR Part 8; the Fair Housing Act

(42 U.S.C. 3600-3619) and the implementing regulations at 24 CFR

Part 100, 108, 109, and 110; Title VI of the Civil Rights Act of

1964 (42 U.S.C. 2000d) and the implementing regulations at 24 CFR

Part 1; section 3 of the Housing and Urban Development Act of 1968

(12 U.S.C. 1701u) and the implementing regulations at 24 CFR Part

135; the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and

the implementing regulations at 24 CFR Part 146; Executive Order

11246 (as amended) and the implementing regulations at 41 CFR

Chapter 60; the regulations implementing Executive Order 11063

(Equal Opportunity in Housing) at 24 CFR Part 107; the Americans

with Disabilities Act (42 U.S.C. 12101 et seq.) to the extent

applicable; the affirmative fair housing marketing requirements of

24 CFR part 200, subpart M and the implementing regulations at 24

CFR part 108; and other applicable Federal, State and local laws

prohibiting discrimination and promoting equal opportunity.

2\. DRUG-FREE WORKPLACE ACT

Provide drug-free workplaces in accordance with the Drug-Free

Workplace Act of 1988 (41 U.S.C. 701) by:

a\. publishing a statement notifying employees that the unlawful

manufacture, distribution, dispensing, possession, or use of

a controlled substance is prohibited in the sponsor\'s

workplace and specifying the actions that will be taken

against employees for violation of such prohibition;

Attachment E - Page 2

b\. establishing an ongoing drug-free awareness program to inform

employees about -

\(1\) the dangers of drug abuse in the workplace;

\(2\) the sponsor\'s policy of maintaining a drug-free

workplace;

\(3\) any available drug counseling, rehabilitation, and

employee assistance programs; and

\(4\) the penalties that may be imposed upon employees for drug

abuse violations occurring in the workplace;

c\. making it a requirement that each employee to be engaged in

the performance of the capital advance be given a copy of the

statement required by paragraph (a);

d\. notifying the employee in the statement required by paragraph

\(a\) that, as a condition of employment under the capital

advance, the employee will -

\(1\) abide by the terms of the statement; and

\(2\) notify the employer in writing of his or her conviction

for a violation of a criminal drug statute occurring in

the workplace no later than five calendar days after such

conviction;

e\. notifying the HUD in writing, within ten calendar days after

receiving notice under subparagraph (d)(2) from an employee or

otherwise receiving actual notice of such conviction.

f\. taking one of the following actions, within 30 calendar days

of receiving notice under subparagraph (d) (2), with respect

to any employee who is so convicted -

\(1\) taking appropriate personnel action against such an

employee, up to and including termination, consistent

with the requirements of the Rehabilitation Act of 1973,

as amended; or

Attachment E - Page 3

\(2\) requiring such employee to participate satisfactorily in

a drug abuse assistance or rehabilitation program

approved for such purposes by a Federal, State, or local

health, law enforcement, or other appropriate agency;

g\. making a good faith effort to continue to maintain a drug-free

workplace through implementation of paragraphs (a), (b), (c),

(d), (e) and (f);

h\. providing the street address, city, county, state, and zip

code for the site or sites where the performance of work in

connection with the grant will take place.

3\. DESIGN AND COST STANDARDS

It will comply with HUD\'s design and cost standards, the Uniform

Federal Accessibility Standards and HUD\'s implementing regulations

at 24 CFR part 40, Section 504 of the Rehabilitation Act of 1973

and HUD\'s implementing regulations at 24 CFR part 8, and for

covered

multifamily dwellings designed and constructed for first occupancy

after March 13, 1991, the design and construction requirements of

the Fair Housing Act of 1988 and HUD\'s implementing regulations at

24 CFR part 100, and the Americans with Disabilities Act of 1990.

4\. ACQUISITION AND RELOCATION

A certification by the Sponsor(s) that it will comply (or has

complied) with the acquisition and relocation requirements of the

Uniform Relocation Assistance and Real Property Acquisition

Policies Act of 1970, as amended (URA), implemented by regulations

at 49 CFR part 24, and 24 CFR S 891.155(e).

5\. LEAD-BASED PAINT POISONING PREVENTION ACT

A certification that the Sponsor will comply with the requirements

of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846)

and implementing regulations at 24 CFR part 35 (except as

superseded in Sec. 891.325(b).

6\. DAVIS-BACON

It will comply with the Davis-Bacon Requirements and the Contract

Work Hours and Safety Standards Act.

Attachment E - Page 4

7\. FLOOD DISASTER PROTECTION ACT OF 1973

It will comply with the requirements under the Flood Disaster

Protection Act of 1973 (42 U.S.C. 4001-4128) and the Coastal

Barrier Resources Act (16 U.S.C. 3601).

8\. NATIONAL ENVIRONMENTAL POLICY ACT

It will comply with the National Environmental Policy Act of 1969

(NEPA) (42 U.S.C. 4321) and applicable related environmental

authorities at 24 CFR Part 50.4 and HUD\'s implementing regulations

at 24 CFR Part 50.

9\. CERTIFICATION FOR CONTRACTS, GRANTS, LOANS AND COOPERATIVE

AGREEMENTS

No Federal appropriated funds have been paid or will be paid, by or

on behalf of the undersigned, to any person for influencing or

attempting to influence an officer or employee of an 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

any Federal contract, the making of any Federal grant, the making

of any Federal loan, the entering into of any cooperative

agreement, and the extension, continuation, renewal, amendment or

modification of any Federal contract, grant, loan, or cooperative

agreement.

If any funds other than Federal appropriated funds have been paid

or will be paid 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 this Federal contract, grant,

loan, or cooperative agreement, the undersigned shall complete and

submit Standard Form-LLL, \"Disclosure Form to Report Lobbying,\" in

accordance with its instructions.

The undersigned shall require that the language of this

certification be included in the award documents for all subawards

at all tiers (including subcontracts, subgrants, and contracts

under grants, loans, and cooperative agreements) and that all

subrecipients shall certify and disclose accordingly.

Attachment E - Page 5

This certification is a material representation of fact upon which

reliance was placed when this transaction was made or entered into.

Submission of this certification is a prerequisite for making or

entering into this transaction imposed by section 1352, title 31,

U.S. Code. Any person who fails to file the required certification

shall be subject to a civil penalty of not less than \$10,000 and

not more than \$100,000 for each such failure.

10\. COMPLIANCE WITH OMB CIRCULAR A-129

It has complied with OMB Circular A-129, Managing Federal Credit

Programs, and that it has been unable to obtain the necessary funds

to develop the project from private sources upon terms and

conditions equally favorable as the terms and conditions available

under the Section 811 program.

11\. CERTIFICATION REGARDING RESIDENTS\' ACCEPTANCE OF SUPPORTIVE

SERVICES

The owner certifies that it will not require residents to accept

any supportive services as a condition of occupancy.

12\. TRUTH AND ACCURACY

It certifies that the information provided to HUD in its

application under the Section 811 Supportive Housing for Persons

with Disabilities is true and accurate, to the best of its

knowledge.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Signature of Authorized Title

Certifying Official

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Applicant Organization Date

WARNING

HUD will prosecute false claims and statements. Convictions may result

in criminal and/or civil penalties (18 U.S.C. 1001,1010,1012; 31 U.S.C.

3729/FS3802).

Attachment F

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

LEGAL REQUIREMENTS FOR INITIAL CLOSING

Section 202/Section 811

Project Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project Number:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name of owner:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name of Sponsor:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The HUD Attorney will obtain three copies of all of the following

documents unless otherwise indicated below. These will be Originals

(Or), Executed (E), Certified (C), or Conformed (Ant) as indicated after

each document below. N/F means no form. Photocopies of fully executed

documents may be submitted for conformed copies.

INITIAL CLOSING

1\. Capital Advance Agreement (HUD 90167-CA) (HUD will have copies of

this)

2\. Firm Commitment for Capital Advance Financing (using Form
HUD-92432-CA

until revised) including reissued, revised or amended firm

commitment (8/92) (3Cn)

3\. Certificate of Incorporation (Form HUD-91732A-CA) (4/92) (C, 2Cn)

4\. Bylaws (C, 2Cn)

5\. Incumbency Certificate (N/F Or, 2Cn)

6\. Certificate of Existence (N/F Or, 2Cn) (must be within 30 days of

closing)

7\. Regulatory Agreement (HUD-92466-CA)(4/92) (E, 2Cn)

B. Corporate Resolution (authorizing mortgage transaction) (C, 2Cn)

9\. Lease (if mortgage is on leasehold) (C, 2Cn)

10\. Land-Disposition Contract and Deed (required only for projects in

urban renewal areas) (E, 2Cn)

11\. Title Policy (1992 ALTA loan Policy with 8.1 endorsement) (Or, 2Cn)

Attachment F Page 2

12\. Evidence of Zoning Compliance (3Cn)

13\. Building Permits (3Cn)

14\. Surveyor\'s Report (HUD-92457) (Or, 2Cn)

15\. Survey (3Cn)

16\. Mortgage, Deed of Trust or Security Deed (HUD 90165-CA) (Or, 3Cn)

(Use HUD\'S typed form)

17\. Mortgage Note (HUD-93432-CA)(4/92) (Or, 3Cn)

18\. a. Construction Contract, Lump Sum (HUD 92442-CA)(3/94) (E, 2Cn)

and Contractor\'s Requisition (HUD 92448) (E, 2Cn)

OR

b\. Construction Contract, Cost Plus (HUD 92442A-CA)(3/94) (E,

2Cn) and Contractor\'s Requisition (HUD 92448) (E, 2Cn)

AND (If Applicable)

c\. Construction Contract, Incentive Payment (HUD-92443-CA) (3/94)

(E, 2Cn)

19\. Contractor\'s and/or Mortgagor\'s Cost Breakdown (HUD 2328) (3Cn)

(HUD will have copies of this for closing)

20\. Assurance of Completion:

a\. Performance Bond (Dual-Obligee) (FHA 2452) (E, 2Cn); Payment

Bond (HUD 92452A)(5/89) (E, 2Cn) and Surety Company\'s Telegram

or Facsimile (Or, 2Cn)

OR

b\. Performance/Payment Bond (Dual Obligee) (HUD-92452-CA) (4/92)

(E, 2Cn)

OR

c\. Completion Assurance Agreement (HUD 92450-CA)(8/92) (E, 2Cn)

21\. Owner-Architect Agreement (AIA Document B181) (see attached to

Capital Advance Agreement; HUD 90167-CA); HUD Amendment (HUD 90169-CA)

(4/92); and Architect\'s Certification (E, 2Cn)

Attachment F - Page 3

22\. Assurance of Completion of Off-Site Facilities (E, 2Cn)

a\. Off-Site Bond (HUD 90177-CA)(4/92) OR

b\. Escrow Agreement for Off-Site Facilities (HUD 90170-CA) (8/92)

23\. Assurance of Utility Services (water, electricity, sewer, gas,

heat) (E, 2Cn)

24\. Owner\'s I.R.S. Tax-Exemption Ruling (3Cn)

25\. Owner\'s Certificate (HUD 92433-CA)(4/92) (Or, 2Cn)

26\. Owner\'s Attorney\'s Closing Opinion (new long form developed by
HUD

Office of General Counsel is required including Owner\'s

Certification)

27\. Evidence of Owner\'s Deposit (minimum capital investment) and

ability to provide moveable furnishings and equipment not covered

by capital advances (Or, 2Cn)

28\. Owner\'s assurance of funds to cover costs over and above capital

advance (Or, 2Cn) IF APPLICABLE

29\. FHEO Certification in Connection with the Development and Operation

of the project (Appendix 23 to Handbook 4571.2 or 4571.3) (Or, 2Cn)

30\. Blanket Fidelity Bond (E, 2Cn)

31\. Part I of Agreement to Enter into Project Rental Assistance

Contract (HUD-90172A-CA), if not previously executed (Or, 2Cn)

32\. Part II of Agreement to Enter into Project Rental Assistance

Contract (HUD-90172B-CA), if not previously executed (Or, 2Cn)

33\. Use Agreement (HUD-90163-CA)(4/92) (Or, 3Cn)

34\. Agreement and Certification (HUD 93566-CA)(4/92) (Or, 2Cn)

35\. Collateral Agreements, if any (Or, 2Cn)

36\. Attendance List (HUD office provides this to be signed at closing)

Attachment F - Page 4

37\. Additional Closing Requirements (State or local requirements):

a\. Security Agreement and Financing Statements (UCC-1) (Or, 2Cn)

b\. Builder\'s Risk Insurance

Attachment G

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

LEGAL REQUIREMENTS FOR FINAL CLOSING

Section 202/Section 811

Project Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project Number:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name of Owner:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name of Sponsor:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The HUD Attorney will obtain three copies of all of the following

documents unless otherwise indicated below. These will be Originals

(Or), Executed (E), Certified (C), or Conformed (Ant) as indicated after

each document below.

1\. \*(a) The Increase Note Or, 2 Cn

\*(b) The Increase Mortgage Or, 2 Cn

\*(c) The Consolidation Agreement or Or, 2 Cn

New Note & Mortgage for the Total Amount

\*\*(d) Modification Agreement Or, 2 Cn

\*2. Mortgagor\'s Attorney\'s Opinion as to Increase Or, 2 Cn

3\. Title Policy updated by Endorsement or Or, 2 Cn

New Policy.

4\. Survey of completed project as-built 3 Cn

5\. Surveyor\'s Report (HUD-92457)(7/88) Or, 2 Cn

6\. Request for Final Closing (HUD-90175-CA)(4/92) Or, 2 Cn

7\. Escrow Deposit Agreement (for incomplete on-site Or, 2 Cn

and/or off-site improvements (HUD-90176-CA)(8/92)

\[If HUD-92403-CA (Requisition) indicates that some

work is incomplete.\]

8\. Current Incumbency Certificate for Owner and

Sponsor Or, 2 Cn

\* Required only if increase is involved

\*\* Required only if mortgage is decreased by FHA 2580