MIXED-FINANCE AMENDMENT TO CONSOLIDATED
ANNUAL CONTRIBUTIONS CONTRACT
[OPERATING FUNDS ONLY]
Section 1. This Mixed-Finance Amendment to Consolidated Annual Contributions Contract [Operating Funds Only] is entered into between the United States Department of Housing and Urban Development (“HUD”) and (the
“Authority”) and covers the public housing units and related appurtenances, which is part of: (A) Public Housing Project name: ____________________________________ (the "Project" or the "Project Units" as further defined in Section 4(E)); (B) which has a Public Housing Project number of __________________________________; and (C) which is part of a larger development known as _________________________________ (the "Development," as further defined in Section 4(E)).
Section 2. This Mixed-Finance ACC Amendment is an amendment to Consolidated Annual Contributions Contract (“ACC”) (Form HUD-53012A and Form HUD-53012B)
Number: , dated , , as Amendment Number .
Section 3. The ACC is amended to provide assistance in the form of Operating Fund assistance under section 9(e) of the United States Housing Act of 1937 (42 U.S.C. 1437, et. seq.)
(the "Act”) for the Project and/or the Project Units (as those terms are defined in Section 4(E)),
and to add the Project Units to the ACC. This Mixed-Finance Amendment is part of the ACC and incorporates Exhibits A-D, which are attached hereto.
Section 4. The following provisions are applicable to the Project:
(A) Number of Project Units: , which shall include a total of bedrooms.
(B) Housing Type: .
(C) The Project Units will be (check one): [designated units ]; [undesignated units ]
in the Development.
(D) The definitions set forth in 24 CFR part 941, subpart F, are applicable to this Mixed Finance ACC Amendment.
(E) As used in this Mixed-Finance ACC Amendment, the term "Development" shall refer to the entire housing facility, containing dwelling units, being developed using a mixed-
finance strategy, and the term "Project," as used herein and as used in the ACC with respect to
Replacement Unit Project Number , shall refer only to the units
of the Development (containing bedrooms) all of which must be “replacement units” as that
term is defined by HUD at 24 CFR ? 941.102(c), or any successor provision, and must be developed and continuously set aside, operated, and maintained as public housing units (the "Project Units"), except as expressly provided herein. Nothing contained in this Mixed Finance ACC Amendment shall be construed as requiring that any dwelling units included in the Development shall at any time be maintained and operated in accordance with the ACC, or constitute part of a "project" as defined in the ACC, other than the units contained therein constituting from time to time the Project Units.
(F) As used in this Mixed-Finance ACC Amendment, the term “Proposal” means a
mixed finance proposal approved by HUD which meets the requirements of 24 CFR ? 941.606, as modified by this Section 4(F), and which includes the following: (a) an identification of the participating parties and a description of the activities to be undertaken by each of the participating parties and the Authority; (b) a description of the proposed Development, including the number and type of Project Units (with bedroom count) and, if applicable, the number and type of non-Project Units (with bedroom count); (c) the proposed methodology for providing operating subsidies on behalf of the Project Units; (d) a summary of the proposed management and occupancy policies to be implemented at the Project, including any use of local preferences, restricting admissions to the elderly or physically disabled, use of a site-based waiting list, etc.; (e) if the Project is to be newly constructed, evidence of compliance with section 6(h) of the Act; (f) the Authority certifications required by 24 CFR 941.606(n)(1); and (g) relocation information, as required by 24 CFR 941.606(i).
Section 5 - Authority certifications and assurances.
(A) By executing this Mixed-Finance ACC Amendment, the Authority certifies to HUD and, as applicable, agrees that:
(1) it has executed with HUD a 1995 version of the ACC to facilitate the execution of
Mixed Finance ACC Amendment;
(2) it has the legal authority under State and local law to develop the Project Units through the establishment or selection of an owner entity (“Owner Entity”), and to enter into all
agreements and provide all assurances required under 24 CFR part 941 (subpart F), the HUD-approved Proposal, and this Mixed-Finance ACC Amendment. The Authority also warrants that it has the legal authority under State and local law to enter into any proposed partnership and to fulfill its obligations as a partner thereunder, and that it has obtained all necessary approvals for this purpose;
(3) the Project Units qualify as “replacement units,” as provided by HUD under 24 CFR
? 941.102(c)(1) (or, if applicable, any successor provision);
(4) it will ensure that the Project Units are constructed, rehabilitated or acquired without using Federal public housing capital funds, including but not limited to Capital Funds provided under section 9(d) of the Act or HOPE VI grant funds;
(5) it will ensure that the Project is developed in accordance with all requirements applicable to the development of public housing, including, without limitation, the Act, the ACC (except that any requirement set forth in the ACC shall be superseded by a modified requirement set forth in this Mixed Finance ACC Amendment), the Mixed Finance ACC Amendment, the Proposal, the HUD-approved declaration of restrictive covenants to be recorded against the Development (the "Declaration"), the HOPE VI grant agreement and the HOPE VI Revitalization Plan (if applicable), and all other pertinent Federal statutory, executive order, and regulatory requirements, as those requirements may be amended from time to time.
(6) it will ensure that the requirements for admission to, continued occupancy of, management, and modernization of the Project Units are in accordance with all requirements applicable to public housing, including the Act, HUD regulations thereunder (and, to the extent applicable, any HUD-approved waivers of regulatory requirements), the ACC, this Mixed Finance Amendment, the HOPE VI grant agreement and the HOPE VI Revitalization Plan for the Project (if applicable), the HUD-approved mixed finance proposal under 24 CFR part 941 (subpart F) relating to the Project (the “Proposal”), the Authority’s standard public housing admissions and occupancy policies adopted in accordance with Federal law and described in the Authority’s approved Public Housing Agency Annual Plan, or any approved amendment to the
Plan (the “Plan”); provided, however, that the Authority may adopt modifications of its standard
public housing admissions and occupancy policies for purposes of its mixed finance projects generally, or specifically for the Project, to the extent these modifications conform with the requirements of Federal law, including but not limited to 24 CFR parts 903, 960, and 966 (and expressly including tenants’ advance notice and comment rights afforded by 24 CFR ? 966.3 and ? 966.52 relating to modifications of standard public housing lease and grievance procedures, respectively), and such modified admissions and occupancy policies are described in the Plan and made applicable to the Project, and all other pertinent Federal statutory, executive order, and regulatory requirements, as those requirements may be amended from time to time (the requirements set forth in subparagraphs (5) and (6) of this Section 5(A) are hereafter to be collectively referred to as the “Applicable Public Housing Requirements”);
(7) it will ensure that the Project Units, after being developed in accordance with this Mixed Finance ACC Amendment, shall not be eligible to be rehabilitated with Capital Funds, except as follows:
(i) the Authority, with the approval of the Owner Entity and HUD, must enter into a
Capital Fund amendment to the ACC that specifically covers the number of Project
Units in the Development and includes provisions relating to the Owner Entity’s
obligations with respect to the Project Units in the event of casualty or condemnation,
and that also requires the Project Units to be operated and maintained as public
housing in accordance with the requirements of paragraph (6) for a 20-year period
beginning on the latest date on which modernization of the Project Units (or any
portion thereof) is completed, or as otherwise required by law;
(ii) the parties to the Ground Lease, the Regulatory and Operating Agreement, and/or any
other document, as required by HUD, must enter into amendments to those
agreements, in form and substance satisfactory to HUD, providing that the Project
Units will be operated as public housing in accordance with the public housing
requirements for not less than the 20 year period described in subparagraph (i); and
(iii) the Owner Entity must fully execute and record as the first encumbrance against the
Development the Declaration to protect the rights and interests of HUD throughout
the 20-year period described in subparagraph (i), during which time the Authority and
the Owner Entity shall be obligated to cause the operation of the Project Units in
accordance with all public housing requirements as set forth in paragraph (6).
(8)(i) The parties hereto acknowledge section 9(e)(3) of the Act prohibits the disposition of any portion of the Project before the expiration of the 10-year period beginning upon the end of the fiscal year in which operating subsidies were provided, “except as otherwise provided in the Act.” Section 9(m)(2) of the Act thereafter permits the Secretary to reduce, by regulation, the term of this prohibition on disposition. The parties further acknowledge that regulations to implement the authority in section 9(m)(2) of the Act have not yet been issued; however, in the event the Project satisfies the terms set forth in such regulations for an early termination of the 10-year prohibition on disposition, the Project may obtain the benefit of this subsequent regulatory authority. Moreover, if the Project qualifies for an early termination of the 10-year prohibition on disposition under section 9(m)(2) of the Act and HUD's implementing regulations, the Authority may (on behalf of the Owner Entity) request a waiver of the 10-year low income use requirement in 24 CFR ? 969.105(a). HUD will not unreasonably withhold its approval of such a waiver so long as the Authority has demonstrated good cause for the waiver.
Alternatively, the Authority may seek, pursuant to section 18 of the Act, to (ii)
dispose of the units and thereby terminate the 10-year prohibition on disposition and the low-income use restrictions. In such case, HUD may approve the disposition of the Project from the public housing program if it determines such action to be consistent with the Act.
(9) it will ensure that the Project Units are operated as public housing in accordance with the requirements of paragraph (6) for the period that is the longer of:
(i) expiration of the 10-year period beginning upon the conclusion of the fiscal year for
which Operating Fund assistance is last provided by the HA for the benefit of the
Project Units, as provided in 24 CFR ? 969.105 (or successor regulation); or
(ii) if applicable, the expiration of the 20-year period beginning on the latest date on
which modernization of the Project Units (or any portion thereof) is completed using
Capital Funds, in accordance with paragraph (7) of this Mixed Finance ACC
Amendment, and as required by section 9(d)(3)(B) of the Act;
(10) the Project Units shall be treated, for purposes of calculating the Authority's Operating Fund formula allocation, as any other public housing unit in the Authority's inventory (see 24 CFR part 990);
(11) the Project Units shall be treated, for purposes of calculating the Authority's Capital Fund formula allocation, as any other mixed finance public housing unit in the Authority's inventory, in accordance with such requirements as may be prescribed by statute and/or HUD regulations.
(12) to the extent the Authority intends to provide Capital Funds for the rehabilitation of undesignated Project Units within the Development, over a five-year period such funds may only be provided to the number of Project Units indicated in Section 4(A) of this Mixed Finance ACC Amendment.
(13) it will ensure that the Applicable Public Housing Requirements are binding upon the Owner Entity and any partner of the Authority and, to the extent determined necessary by HUD, upon any other participating party.
(14) it will ensure that the Owner Entity complies with its obligations under the Ground Lease, the Regulatory and Operating Agreement, the Declaration, and/or any other agreement(s) required by HUD (as identified in Exhibit D to this Mixed Finance ACC Amendment) with respect to the development, operation and maintenance of the Project Units. In addition, in the event of any noncompliance with the Applicable Public Housing Requirements, the Authority
agrees to take all necessary enforcement action to ensure such compliance or, alternatively, to pursue any legal or equitable remedies that HUD deems appropriate.
(15) it will ensure that any reserves to be funded with Operating Fund assistance provided under section 9(e) of the Act (the "Project Reserves") shall, following the termination of the Mixed Finance ACC Amendment, remain dedicated for use in operating and maintaining the Project Units, or shall be returned to the Authority for use in connection with its other public housing projects;
(16) there is no action, proceeding, or investigation now pending, nor any basis therefor, known or believed to exist by the Authority, which: (i) questions the validity of this Mixed-Finance ACC Amendment, or any action taken, or to be taken, under it, or; (ii) is likely to result in any materially adverse change in the authorities, properties, liabilities, or condition (financial or otherwise) of the Authority or the Proposal, or of any participating party, that would materially or substantially impair the Authority's or such participating party's ability to perform any of the obligations imposed upon it under the Proposal and/or this Mixed-Finance ACC Amendment;
(17) it will immediately notify HUD of: (i) any material change in any representations, statements, certifications or other matters contained in the Authority's Proposal, this Mixed-Finance ACC Amendment; and (ii) any default of which it has notice under any agreement submitted to HUD as part of the evidentiary materials hereunder.
(18) it will use its best efforts to assure the performance of all Authority, Owner Entity, and participating party(ies) obligations under this Mixed-Finance ACC Amendment in accordance with the timeframes established in the development schedule attached hereto as Exhibit C.
(19) it will take all steps necessary to ensure that, in the event of a foreclosure or other adverse action brought against the Owner Entity with respect to the Development (including, but not limited to the Project Units), the operation of the Project Units will not be adversely affected;
(20)(i) The Authority hereby acknowledges that HUD has approved the Proposal in reliance upon the Authority's representations that the Authority, the partner(s), the Owner Entity(ies), and other participating parties will, and the Authority hereby further agrees that it will, or will cause the participating parties to:
(a) carry out the activities ascribed to them in accordance with the Proposal, the approved evidentiary documents (as set forth in Exhibit D hereto), and the requirements of this Mixed Finance ACC Amendment;
(b) complete those activities in accordance with the schedule set forth in Exhibit C, including the development of the Project Units;
(c) have (or will have when necessary to implement their activities in accordance with the Proposal) the financial capacity to assure carrying out the activities to their completion; and
(ii) the representations, statements, certifications and other matters contained in the Proposal are, to the best of the Authority's information and belief, true and complete in all material respects as of the dates of submission of the Proposal to HUD (including the dates of any separate submissions for a specific phase), and upon the execution of this Mixed-Finance ACC Amendment and will continue to be true and complete in all material respects as of the date of any amendment to this Mixed-Finance ACC Amendment, except as modified by such amendment (and any corollary modification to the Proposal that the Authority deems necessary);
(21) this Mixed-Finance ACC Amendment has been executed and delivered by the Authority in such a manner and form as to comply with all applicable laws so as to make this Mixed-Finance ACC Amendment the valid and legally binding act and agreement of the Authority; and
(22) it will use, or ensure the use of, program income during the grant period, in accordance with 24 CFR ? 85.25, only for eligible program costs or other low-income housing purposes. The Authority agrees that after the end of the award period, any gross income received by the Authority or a subgrantee that was directly generated by a grant-supported activity (or earned only as the result of funding provided under Section 3 of this Mixed-Finance ACC Amendment) will be utilized solely for eligible program costs or other low-income housing purposes. This covenant will survive any termination of the grant and, at HUD's direction, may be incorporated into any documentation related to the closeout of the grant.
(B) The Authority warrants that it will include, or cause to be included:
(1) in all its agreements or contracts with the partner, the Owner Entity, and/or other participating parties receiving Operating Fund assistance an acknowledgement that a transfer of public housing operating subsidies by the Authority to the partner, the Owner Entity, or other
participating party will not be (and shall not be deemed to be) an assignment of public housing operating subsidies, and the partner, Owner Entity, or other participating party will not succeed to any rights or benefits of the Authority under the ACC or this Mixed-Finance ACC Amendment, or attain any privileges, authorities, interests, or rights in or under the ACC or this Mixed-Finance ACC Amendment.
(2) in all its agreements or contracts with the partner, the Owner Entity, or other
participating parties, and in all contracts with any party involving the use of Operating Fund assistance, a provision that nothing contained in the ACC or this Mixed-Finance ACC Amendment, nor in any agreement or contract between the parties, nor any act of HUD, the HA, or any of the parties, will be deemed or construed to create any relationship of third-party beneficiary, principal and agent, limited or general partnership, or joint venture involving HUD.
Section 6 - Evidentiary Materials.
(A) Content. The Authority shall submit to HUD for review and approval the evidentiary materials specified in Exhibit D to this Mixed-Finance ACC Amendment. Such evidentiary materials must be submitted in the form of legally binding and enforceable commitments of the parties to the Proposal to undertake and complete specified activities connected with the Proposal, as set forth below:
(1) Evidence of Contracts
Evidence of contractual commitments submitted to HUD must include all documents evidencing the contractual commitments, with an opinion of counsel attached (see paragraph (B)(2) of this section regarding the proper form for opinions of counsel).
(2) Evidence of Title.
(i) Evidence of fee simple or leasehold title to real property must be in the form of an
original ALTA (or other form acceptable to HUD) policy of owner's or
mortgagee's title insurance, which must identify the real property and the
ownership interests of the Authority, Owner Entity, and other participating parties
(as appropriate) as the owners or lessees of record of such property;
(ii) The title policy must also reflect any instruments securing any private or public
financing that have been recorded against the title, and the Declaration (as
required by Section 8 of this Mixed Finance ACC Amendment) must be recorded
as the first encumbrance against the Development to ensure that the Project Units
are operated as public housing for the period required by law and this Mixed-
Finance ACC Amendment.
(B) Form of evidentiaries.
(1) Submissions. All documentary evidence submitted to HUD must be in the form of either duplicate original(s) of the fully executed document(s), or photographic copies of the fully
executed original of the document(s), unless otherwise specified, with a certification attached that the document is a true and complete copy of the original.
(2) Opinions of counsel.
(i) Counsel must opine to the following for each document submitted as evidentiary material under Exhibit D to this Mixed-Finance ACC Amendment:
(a) An examination of the authority of all parties to the documents and all persons executing the documents on behalf of the parties has been made and that the parties and said persons were authorized to enter into and execute the documents; and
(b) Each document constitutes a valid and legally enforceable agreement or contract under the laws of the Authority's State and the commitments and/or agreements evidenced thereby can be carried out in accordance with their terms under State and local law, and conform to the provisions of the Proposal approved by HUD and the requirements of this Mixed-Finance ACC Amendment, and that there is nothing in such document that conflicts with, or is inconsistent with, the Proposal and this Mixed-Finance ACC Amendment.
(ii) Each opinion of counsel must be in writing and include the separate opinions of the Authority's counsel and the Owner Entity's counsel, unless otherwise specified.
(iii) Counsel may rely upon the certification of other persons, or the written statements or opinions of other counsel, provided that a copy of each such certification, statement, or opinion must be attached to the opinion of that counsel.
(iv) If counsel predicates an opinion upon "information and belief," then in all such cases the counsel's opinion must contain, or have attached thereto, a statement or description of all of the information upon which the belief of counsel is predicated.
(C) Amendment of approved evidentiaries. After HUD has approved an evidentiary
submitted in accordance with this Mixed Finance ACC Amendment, the evidentiary may not be amended in any material respect without the prior written approval of HUD.
Section 7 - Covenant Against Disposition and Encumbrances.
With respect only to the Project under this Mixed-Finance ACC Amendment, Section 7 of the ACC is modified in its entirety to read as follows:
(A) Neither the Project, nor any part thereof, shall be demolished or disposed of
other than in accordance with the terms of the Applicable Public Housing Requirements, so long as this Mixed-Finance ACC Amendment remains in force with respect to the Project. With the exception of: (1) any mortgages that have been approved by HUD; (2) dwelling leases with eligible families for the Project Units; and (3) normal uses associated with the operation of the Project, neither the Project nor any portion thereof shall be encumbered in any way, nor the assets of the Project pledged as collateral for a loan, without the prior written approval of HUD;
(B) No transfer, conveyance, or assignment shall be made without the prior written approval of HUD of: (i) any interest of a managing member, general partner, or controlling stockholder (any such interest being referred to as a “Controlling Interest”) of the Owner Entity; or (ii) a Controlling Interest in any entity which has a Controlling Interest in the Owner Entity; or (iii) prior to the payment in full of all equity contributions described in the approved evidentiary documents listed in the Mixed Finance ACC Amendment, any other interest in the Owner, or in any partner or member thereof.
(C) Notwithstanding the foregoing, HUD consent is not required where a business organization that has a limited interest (non-controlling and non-managing) in the Owner Entity transfers a non-controlling and non-managing interest in the business organization provided that the Owner Entity: (i) provides HUD with written notice of such transfer; and (ii) certifies to HUD that the new owner of the limited interest remains obligated to fund its equity contribution in accordance with the terms of the HUD-approved organizational documents of the Owner Entity.
(D) HUD will not unreasonably withhold, delay, or condition a request by the Owner Entity for HUD's consent to an internal reorganization of the corporate or partnership structure of the Owner Entity or any of the partners, members or stockholders of the Owner Entity.
Section 8 - Declaration of Restrictive Covenants.
With respect only to the Project under this Mixed-Finance ACC Amendment, Section 8 of the ACC is modified in its entirety to read as follows:
The HA shall ensure that the Owner Entity executes and files for record against the Development, prior to the recordation of any other encumbrance, a Declaration in form and substance as approved by HUD. The Declaration shall affirm and evidence that the Project Units must be developed, operated and maintained in compliance with the Applicable Public Housing Requirements. Such requirements include, without limitation, the restrictions against demolition or disposition of the Project Units, and of the interests in the Owner Entity, as set forth in Section 7 of the ACC. The Declaration shall provide further that it may not be modified, amended or released without the prior written approval of HUD.