HUD-9643 Watch List Renewal Contract

Attachment 17

U.S. Department of Housing and Urban Development
Office of Affordable Housing Preservation

Project-based Section 8
HOUSING ASSISTANCE PAYMENTS

WATCH LIST RENEWAL CONTRACT

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Exp. (09/30/2014)
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PREPARATION OF CONTRACT
Reference numbers in this form refer to notes at the end of the contract text.
These endnotes are instructions for preparation of the Watch List Renewal
Contract. The instructions are not part of the Renewal Contract

Watch List Renewal Contract form HUD-9643
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Attachment 17

TABLE OF SECTIONS

1 CONTRACT INFORMATION

1

PROJECT

1

TYPE OF RENEWAL

2

2 TERM AND FUNDING OF RENEWAL CONTRACT

2

3 DEFINITIONS

3

4 RENEWAL CONTRACT

4

a Parties

4

b Statutory authority

4

c Expiring Contract

4

d Purpose of Renewal Contract

4

e Contract units

6

5 EXPIRING CONTRACT – PROVISIONS RENEWED

6

6 CONTRACT RENT

7

a Contract rents

7

b Contract rent adjustments

7

7 OWNER WARRANTIES

7

8 OWNER TERMINATION NOTICE

7

9 HUD REQUIREMENTS

8

10 STATUTORY CHANGES DURING TERM

8

11 PHA DEFAULT

8
Watch List Renewal Contract form HUD-9643
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Attachment 17

12 EXCLUSION OF THIRD-PARTY RIGHTS

9

13 WRITTEN NOTICES

9

SIGNATURES

10

Watch List Renewal Contract form HUD-9643
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U.S. Department of Housing and Urban Development
Office of Housing

Project-based Section 8

HOUSING ASSISTANCE PAYMENTS
WATCH LIST RENEWAL CONTRACT1

1

CONTRACT INFORMATION2

PROJECT
Section 8 Project Number:
Section 8 Project Number of Expiring Contract:
FHA Project Number (if applicable):
Project Name:
Project Description:3

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TYPE OF RENEWAL
Check this box for a Watch List project renewed under Section 524(a) of
MAHRA (while retaining eligibility under the Mark-To-Market Program).
PARTIES TO RENEWAL CONTRACT
Name of Contract Administrator4

Address of Contract Administrator

Name of Owner5

Address of Owner

2

TERM AND FUNDING OF RENEWAL CONTRACT
a

The Renewal Contract begins on
of one year.

6

and shall run for a period

b

Execution of the Renewal Contract by the Contract Administrator is
an obligation by HUD of $
,7 an amount sufficient to provide
8
housing assistance payments for approximately
months of
the Renewal Contract term.

c

HUD will provide additional funding for the remainder of the
Renewal Contract term subject to the availability of sufficient
appropriations. When such appropriations are available, HUD will
obligate additional funding and provide the Owner written
notification of (i) the amount of such additional funding, and (ii) the

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approximate period of time within the Renewal Contract term to
which it will be applied.
3

DEFINITIONS
ACC. Annual contributions contract.
Contract units. The units in the Project which are identified in Exhibit A
by size and applicable contract rents.
Contract rent. The total monthly rent to owner for a contract unit,
including the tenant rent (the portion of rent to owner paid by the assisted
family).
HAP contract. A housing assistance payments contract between the
Contract Administrator and the Owner.
HUD. The United States Department of Housing and Urban Development.
HUD requirements. HUD regulations and other requirements, including
changes in HUD regulations and other requirements during the term of the
Renewal Contract.
MAHRA. The Multifamily Assisted Housing Reform and Affordability Act of
1997 (Title V of Public Law No.105-65, October 27, 1997, 111 Stat. 1384),
as amended.
PHA. Public housing agency (as defined and qualified in accordance with
the United States Housing Act of 1937. 42 U.S.C. 1437 et seq.).
Project. The housing designated in section 1 of the Renewal Contract.
Section 8. Section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f).
Renewal Contract. This contract, including applicable provisions of the
Expiring Contract (as determined in accordance with section 5 of the
Renewal Contract).

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4

RENEWAL CONTRACT
a

b

Parties
(1)

The Renewal Contract is a housing assistance payments
contract (“HAP Contract”) between the Contract
Administrator and the Owner of the Project (see section 1).

(2)

If HUD is the Contract Administrator, HUD may assign the
Renewal Contract to a public housing agency (“PHA”) for the
purpose of PHA administration of the Renewal Contract, as
Contract Administrator, in accordance with the Renewal
Contract (during the term of the annual contributions contract
(“ACC”) between HUD and the PHA). Notwithstanding such
assignment, HUD shall remain a party to the provisions of
the Renewal Contract that specify HUD’s role pursuant to
the Renewal Contract, including such provisions of section 9
(applicable requirements), section 10 (statutory changes
during term) and section 11 (PHA default), of the Renewal
Contract.

Statutory authority
The Renewal Contract is entered pursuant to section 8 of the
United States Housing Act of 1937 (42 U.S.C. 1437f), and section
524 of the MAHRA.

c

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

d

Purpose of Renewal Contract
(1)

The purpose of the Renewal Contract is to renew the
expiring contract for an additional term. During the term of
the Renewal Contract, the Contract Administrator shall make
housing assistance payments to the Owner in accordance
with the provisions of the Renewal Contract.

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(2)

The Renewal Contract also constitutes a binding
commitment for purposes of section 579 of MAHRA. In
accordance with section 514 of MAHRA , the project will
remain eligible for full debt restructuring if and only if prior to
the expiration of this renewal contract, or any renewal
thereof, the owner and HUD mutually agree to terminate this
contract and then enter into a new HAP contract, at current
rents, pursuant to section 514(c) of MAHRA. In addition, if
prior to the expiration of this renewal contract, the owner
requests re-entry into the Mark-to-Market Program, it must
submit a Contract Renewal Request Form for Reelection
(see Attachment 3a(2) of HUD’s section 8 Renewal Guide)
thirty (30) days prior to such sunset date. HUD reserves the
right to reassess the Project’s eligibility for debt restructuring
at the time such Request Form for Reelection is submitted.
If a reelection to full debt restructuring has occurred, HUD
will offer the Owner an interim restructuring contract (the
"Interim Full Renewal Contract") at current rents (i.e., the
market rents determined in this Renewal Contract), subject
to the availability of appropriations in any year. Any such
Interim Full Renewal Contract will be entered into pursuant
to section 514(c) of MAHRA and will contain language that
the Interim Renewal Contract shall be considered a "binding
commitment", as that phrase is used in section 579, during
the entire term of that Interim Renewal Contract.

(3)

If HUD determines that the project is eligible for full debt
restructuring, the Owner and HUD will amend this contract in
its entirety by entering into a new HAP contract, at current
rents (i.e., the market rents determined in this Watch List
Renewal Contract). HUD will offer the Owner an interim full
contract (the "Interim Full Renewal Contract") for up to
twelve months at current rents subject to the availability of
appropriations in any year. Any such Interim Renewal
Contract will be entered into pursuant to section 514(c) of
MAHRA and will contain language that the Interim Renewal
Contract shall be considered a "binding commitment", as
that used in section 579, during the entire term of that
Interim Renewal Contract.

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e

(4)

If HUD determines that the property is no longer eligible for a
full debt restructuring, HUD may decide, among other things,
to: (a) offer the owner a Basic Renewal Contract; (b) continue
the property on the Watch List; (c) refer the project to HUD’s
enforcement division; or (d) take other action as appropriate.

(5)

Housing assistance payments shall only be paid to the Owner
for contract units occupied by eligible families leasing decent,
safe and sanitary units from the Owner in accordance with
statutory requirements, and with all HUD regulations and other
requirements. If the Contract Administrator determines that
the Owner has failed to maintain one or more contract units in
decent, safe and sanitary condition, and has abated housing
assistance payments to the owner for such units, the Contract
Administrator may use amounts otherwise payable to the
Owner pursuant to the Renewal Contract for the purpose of
relocating or rehousing assisted residents in other housing.

Contract units
The Renewal Contract applies to the Contract units.

5

EXPIRING CONTRACT – PROVISIONS RENEWED
a

Except as specifically modified by the Renewal Contract, all
provisions of the Expiring Contract are renewed (to the extent such
provisions are consistent with statutory requirements in effect at the
beginning of the Renewal Contract term).

b

Any and all provisions of the Expiring Contract concerning any of
the following subjects are not renewed, and shall not be applicable
during the renewal term:
(1)

Identification of contract units by size and applicable contract
rents;

(2)

The amount of the monthly contract rents;

(3)

Contract rent adjustments; and

(4)

Project account (sometimes called “HAP reserve” or “project
reserve”) as previously established and maintained by HUD
pursuant to former Section 8(c)(6) of the United States
Housing Act of 1937 (currently Section 8(c)(5) of the Act, 42
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U.S.C. 1437f(c)(5)). Section 8(c)(5) does not apply to the
Renewal Contract, or to payment of housing assistance
payments during the Renewal Contract term.
c
6

The Renewal Contract includes those provisions of the Expiring
Contract that are renewed in accordance with this section 5.

CONTRACT RENT
a

Contract rents
Throughout the Renewal Contract term, the contract rent for each
bedroom size (number of bedrooms) shall be the contract rent
amount listed in Exhibit A, which is attached to and, by this
reference, is hereby made a part of the Renewal Contract.

b

Contract rent adjustments
There shall be no contract rent adjustments during the term of the
Renewal Contract. Special adjustments shall not be granted.

7

8

OWNER WARRANTIES
a

The Owner warrants that it has the legal right to execute the
Renewal Contract and to lease dwelling units covered by the
contract.

b

The Owner warrants that the rental units to be leased by the Owner
under the Renewal Contract are in decent, safe and sanitary
condition (as defined and determined in accordance with HUD
regulations and procedures), and shall be maintained in such
condition during the term of the Renewal Contract.

OWNER TERMINATION NOTICE
a

Before termination of the Renewal Contract, the Owner shall
provide written notice to the Contract Administrator and each
assisted family in accordance with HUD requirements.

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b

9

If the Owner fails to provide such notice in accordance with the law
and HUD requirements, the Owner may not increase the tenant
rent payment for any assisted family until such time as the Owner
has provided such notice for the required period.

HUD REQUIREMENTS
The Renewal Contract shall be construed and administered in accordance
with all statutory requirements, and with all HUD regulations and other
requirements, including changes in HUD regulations and other
requirements during the term of the Renewal Contract. However, any
changes in HUD requirements that are inconsistent with the provisions of
the Renewal Contract, including the provisions of section 6 (contract rent),
shall not be applicable. The Owner will submit, for the term of this
contract, monthly accounting reports, as prescribed in HUD Handbook
4370.1, to the Multifamily HUB/Program Center Project Manager
evidencing the financial condition of the project covered under this
contract.

10

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

11

PHA DEFAULT
a

This section 11 of the Renewal Contract applies if the Contract
Administrator is a PHA acting as Contract Administrator pursuant to
an annual contributions contract (“ACC”) between the PHA and
HUD. This includes a case where HUD has assigned the Renewal
Contract to a PHA Contract Administrator, for the purpose of PHA
administration of the Renewal Contract.

b

If HUD determines that the PHA has committed a material and
substantial breach of the PHA’s obligation, as Contract
Administrator, to make housing assistance payments to the Owner
in accordance with the provisions of the Renewal Contract, and that
the Owner is not in default of its obligations under the Renewal
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Contract, HUD shall take any action HUD determines necessary for
the continuation of housing assistance payments to the Owner in
accordance with the Renewal Contract.
12

13

EXCLUSION OF THIRD-PARTY RIGHTS
a

The Contract Administrator does not assume any responsibility for
injury to, or any liability to, any person injured as a result of the
Owner's action or failure to act in connection with the Contract
Administrator’s implementation of the Renewal Contract, or as a
result of any other action or failure to act by the Owner.

b

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

c

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

WRITTEN NOTICES
a

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

b

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

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SIGNATURES
Contract administrator (HUD or PHA)
Name of Contract Administrator

By:
Signature of authorized representative

Name and official title
Date ___________________________

U.S. Department of Housing and Urban Development
By:
Signature of authorized representative
Name and official title
Date ________________________

Owner
Name of Owner

By:
Signature of authorized representative

Name and title
Date _____________________________
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EXHIBIT A
IDENTIFICATION OF UNITS ("CONTRACT UNITS")
BY SIZE AND APPLICABLE CONTRACT RENTS
Section 8 Contract Number:
FHA Project Number (if applicable):
Effective Date of the Rent Increase (if applicable):

Number
of Contract Units

Number
of Bedrooms

Utility
Allowance

Contract
Rent

Gross
Rent

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INSTRUCTIONS FOR PREPARATION OF RENEWAL CONTRACT
The following instructions are not part of the Renewal Contract.
Endnote numbers are keyed to references in the text of the Renewal Contract.

1

This form of Renewal Contract is only to be used to renew a Watch List
Contract where HUD and the Owner wish to retain the Project’s eligibility under
the Mark-To-Market Program.
Section 2 of the Renewal Contract specifies the contract term.
2

To prepare the Renewal Contract for execution by the parties, fill out all
contract information in section 1 and section 2.
3

Enter a description of the housing that will be covered by the Renewal
Contract. The description must clearly identify the Project by providing the
Project’s name, street address, city, county, state and zip code, block and lot
number (if known), and any other information necessary to clearly designate the
covered Project.
If necessary, attach an exhibit with a site plan, legal description or other
descriptive information. Enter a reference to the attached exhibit.
4

Enter the name of the Contract Administrator that executes the Renewal
Contract. If HUD is the Contract Administrator, enter “United States of America –
Department of Housing and Urban Development (HUD)”. If the Contract
Administrator is a public housing agency (“PHA”), enter the full legal name of the
PHA.
5

Enter the full legal name of the Owner. For example: “ABC Corporation, Inc., a
Maryland corporation.”
6

The Renewal Contract must be entered before expiration of the Expiring
Contract. Enter the date of the first day after expiration of the term of the
Expiring Contract.
7

Enter the amount of funding obligated.

8

Enter a whole number of months.
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