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LEASE WITH OPTION TO PURCHASE HUD ACQUIRED

SINGLE FAMILY PROPERTIES FOR USE BY THE HOMELESS

(PREPARE ON FIELD OFFICE LETTERHEAD. DO NOT MODIFY)

This lease is made on (insert month, day and year), between the

Department of Housing and Urban Development, LESSOR, and (insert name of

homeless provider), LESSEE.

1\. LESSOR agrees to lease to the LESSEE and the LESSEE agrees to

rent the property commonly known as: (Insert common street

address including city, state and zip code), referred to

hereafter as \"the property\".

2\. LESSEE shall use the property only for the purposes of providing

temporary shelter for homeless persons as defined in 24 CFR

Section 291.405, and as further defined in the Master Agreement

incorporated hereafter. LESSOR reserves the right to review the

application and qualifications of any person being considered for

occupancy by the LESSEE.

3\. LESSEE shall refrain from providing shelter to any individual,

family, or group of individuals in which a conflict of interest

may ensue. Employees, officers or relatives of the LESSEE,

regardless of their financial circumstances, shall be subject to

this restriction. This shall be governed by 24 CFR Section

291.435(b).

4\. LESSEE agrees to shelter homeless person(s) in the subject

property within thirty (30) days of entering into this Lease

Agreement. This time period may be extended by the LESSOR.

5\. LESSEE agrees to pay, as they become due, all charges for

utilities and other services. LESSOR shall pay all local, state,

and other specially assessed taxes due on the property, including

condominium fees, and LESSEE shall reimburse LESSOR for such

payment unless LESSOR provides evidence of an exemption from said

local, state or other specially assessed taxes. LESSEE shall

establish an escrow account in a financial institution insured by

the Federal Deposit Insurance Corporation (FDIC), and shall make

the LESSOR a cosigner on the account unless LESSEE provides

evidence of exemption from local or state taxes. LESSEE shall

provide LESSOR the name of the institution and the account

number. Only payments for taxes shall be held in said account.

Releases from this account must be preapproved by LESSOR. If the

lease is terminated, these expenses will be prorated between the

LESSOR and the LESSEE.

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6\. LESSEE agrees to keep the property in a clean and sanitary

condition and to comply with all federal, state and local laws

and regulations, codes and ordinances, restrictive covenants,

condominium declarations and by laws, and homeowners\' association

rules. LESSEE agrees to obtain an occupancy permit if required

and to reimburse LESSOR for any fines, penalties and costs and

all liability for violation or noncompliance with any

requirements related to the property.

7\. LESSEE agrees that if any damage to the property shall be caused

by its acts or neglect, or its occupants\' acts or neglect,

the LESSEE shall repair such damage at its own expense, and

should the LESSEE fail or refuse to make such repairs within

a reasonable time after the occurrence of such damage, the LESSOR

may at its option make such repairs and charge the cost thereof

to the LESSEE, and the LESSEE shall reimburse the LESSOR for the

total cost of all damages so caused. Failure or refusal by the

LESSEE to cure gives LESSOR the right to terminate the lease and

recover any costs.

8\. LESSEE agrees to make all repairs to the property necessary to

make the premises tenantable and to pay operating costs including

reasonable maintenance and repair and at the end of the lease

term to deliver up and surrender said property to the LESSOR in

as good a condition as when received, including boarding up and

other security. No alteration, addition, or improvements shall

be made to the property without the consent of the LESSOR in

writing, and all additions and improvements made by the LESSEE

shall belong to the LESSOR.

9\. LESSEE agrees to remove tenants, or pursue eviction proceedings,

whichever may be the case, upon a conviction of

such tenants for breaching the peace.

10\. LESSEE agrees to maintain the property free from the illegal use,

possession or distribution of drugs or alcohol. Evidence of

illegal use, possession, or distribution of drugs or alcohol

shall result in immediate eviction of tenants by the LESSEE.

11\. LESSEE shall indemnify and save harmless the LESSOR its officers,

agents, servants and employees from all liability for death or

injury to any person, or loss or damage to the property of any

person resulting from the use of the property by the LESSEE.

12\. LESSEE shall maintain general liability insurance on the

property in the amount of \$ (insert dollar amount) against loss

by reason of death or injury to any person or loss or damage to

property of any person resulting from the use of the property.

The Secretary of the Department of Housing and Urban Development

shall be named as the insured, coinsured, or additionally

insured. LESSEE shall provide LESSOR a binder as proof of

insurance upon the signing of this lease. LESSEE shall provide

LESSOR a copy of the insurance policy within 30 days of the

signing of this LEASE.

13\. LESSEE agrees that it will not place or allow to be placed any

liens on the property without the express written consent of

LESSOR and further agrees to remove and to indemnify the LESSOR

for any costs incurred related to the removal of any liens,

including mechanic\'s liens, placed on the property during the

period of tenancy without LESSOR\'s approval.

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14\. LESSEE agrees that the LESSOR shall have the right to enter the

property at all reasonable hours for the purpose of inspecting

the condition of the property.

15\. LESSEE shall not assign, sublet, or part with the possession of

the whole or any part of the property without first obtaining the

written consent of LESSOR, except as to comply with paragraph 25

of this lease. LESSEE may terminate this lease at any time

without penalty upon 30-day written notice to LESSOR.

16\. LESSEE agrees that if it should fail to comply with any

provisions of this lease, it shall be lawful for the LESSOR, at

its option, to re-enter and take possession upon 30-day written

notice to LESSEE, and thereupon this lease shall terminate.

LESSEE agrees to remove all sublessees occupying the property to

adequate housing within the 30-day notice period so that the

property will be vacant upon LESSOR\'S re-entry. The failure of

the LESSOR to insist upon the strict performance of the terms of

this lease shall not be construed as a waiver of the LESSOR\'s

right to later enforce any provision of the lease.

17\. LESSEE agrees not to discriminate against any individual,

employee or applicant on the basis of race, color, religion, sex,

national origin, handicap, age or familial status, pursuant to

the requirements of the Fair Housing Act, 42 U.S.C. Section 3601-20,

and to comply with the further nondiscrimination and equal

opportunity requirements of 24 CFR Section 291.435(a).

18\. LESSEE agrees that it will submit at any time to such examination

of any and all of its records and accounts, including but not

limited to those related to this transaction, as the Secretary of

Housing and Urban Development or the Comptroller General may

require.

19\. All goods and chattels placed or stored in or about the property

are at the risk of the LESSEE.

20\. No member of, or Delegate to Congress, or Resident Commissioner

shall be admitted to any share or part of this lease or to any

benefit that may arise therefrom.

21\. LESSEE warrants that it has not employed any person to solicit or

secure this lease upon any agreement for a commission,

percentage, brokerage or contingent fee. Breach of this warranty

shall give the LESSOR the right to annul this lease or in its

discretion to recover from the LESSEE the amount of such

commission, percentage, brokerage or contingent fee in addition

to the consideration herein set forth.

LESSEES have the option to purchase said property for a purchase price

of the lower of the fair market value as of the date of first

lease initiation, of \$ (insert dollar amount), less 10 percent,

or, if conditions outside the control of the LESSEE cause the

fair market value of the property to decrease after the

initiation of the lease, the purchase price will be the fair

market value at the date of sale, less 10 percent, provided the

LESSEE agrees to use said property to either house

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low-income tenants for a period of not less than ten (10) years

subsequent to the date of sale, or sell the property to a low-income

individual. If the LESSEE does not agree to this

condition, the purchase price of subject property is the higher

of the fair market value at the date of first lease initiation,

of \$ (insert dollar amount), or at the time of sale, less 10

percent.

Any repairs to or rehabilitation of a property done by LESSEE

during the lease term shall not be reflected in the purchase

price. LESSEE may exercise this option at any time during the

term of this lease. LESSEE may exercise this option only be

execution of Form HUD-9548, Sales Contract. The property is

being sold on an \"as is,\" \"all cash\" basis. FHA mortgage insurance

may be made available for the purchase of the property at the

sole discretion of the LESSOR, HUD will not pay a fee for a

selling broker. HUD will pay the closing agent\'s fee. The

LESSEE must pay all other closing costs.

23\. The term of the lease shall be for a period of one year,

beginning on (insert month, day and year), at a rent of \$1 per

year. LESSEE may elect, with agreement of the LESSOR, to renew

the lease for four additional lease terms of one year each.

24\. LESSEE may charge the homeless persons occupying the property a

rental or occupancy charge at a rate appropriate to the financial

means of the person in accordance with the provisions of Section

291.415( c)(2). This charge may be the greater of either 30

percent of the family\'s monthly adjusted income or 10 percent of

the family\'s monthly income, but in no event shall the occupancy

charge exceed the operating costs.

25\. LESSEE shall enter into a sublease agreement with each homeless

person(s), with said sublease agreement including the following

minimum conditions:

1\) The rental agreement shall provide for month-to-month

tenancy under the laws of the state in which

the property is located and shall be limited to no

longer than two years.

2\) The sublease shall notify the homeless person(s)

that their tenancy is subject to the continuation

of LESSEE\'s lease with LESSOR, and will be

terminated in accordance with the requirements of

State law upon any termination of LESSEE\'s lease,

either at the initiation of the LESSEE, the end of

the term of LESSEE\'s lease with LESSOR, or by

LESSOR upon failure of LESSEE to abide by the terms

of the Lease.

3\) The homeless person(s) and tenant(s) agrees to

refrain from using the property for unlawful

purposes including but not limited to, the illegal

use, possession or distribution of drugs or

alcohol.

4\) The LESSEE (as Landlord) agrees to maintain the

property according to local code requirements.

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26\. The following provisions shall only apply for properties

constructed prior to 1978. LESSOR has provided LESSEE with a

copy of the notice: Watch Out for Lead-Based Pain Poisoning!

LESSOR will inspect the property for defective paint surfaces

and will treat any defective surfaces found. If LESSEE knows

or has reason to expect that the property will be occupied by

families with children under the age of seven years, LESSEE

must test for lead-based paint on all painted surfaces before

initial occupancy. Where lead-based paint is identified,

LESSEE must abate at its own expense as required in 24 CFR

Section 291.430(d). LESSEE may not permit occupancy until

testing and any required abatement is completed. LESSEE must

obtain certification that required abatement is completed.

This lease contains the entire agreement between the parties,

except for the Master Agreement, which is incorporated by

reference herein, and neither party is bound by any

representations or agreements of any kind except as herein

contained.

SECRETARY OF HOUSING AND URBAN DEVELOPMENT

LESSOR

BY:

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

(Name)

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

(Title)

LESSEE:

BY:

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

(Name)

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

(Title)

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

(LESSEE Organization)

WITNESS:

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

(Witness #1)

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

(Witness #2)

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