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RE•RE ORE'ED
<br />200008000 200006301
<br />(i) Approve a rental schedule that is ncccssary to compensate
<br />(2) No distribution shall be made from borrowed funds, prior
<br />for any net increase, occurring since the last approved
<br />to the completion of the project or when there is any default
<br />rental schedule, in taxes (other than income taxes) and
<br />under this Agreement or under the note or mortgage;
<br />operating and maintenance cost over which Owners have
<br />(3) Any distribution of any funds of the project, which the party
<br />no effective control or:
<br />receiving such funds is not entitled to retain hereunder,
<br />(ii) Dcny the increase stating the reasons therefor.
<br />shall be held in trust separate and apart from any other
<br />5. (a) If the mortgage is originally a Secretary -held purchase money
<br />funds; and
<br />mortgage, or is originally endorsed for insurance under any
<br />(4) There shall have been compliance with all outstanding
<br />Section other than Sections 331 or 232 and is not designed
<br />notices of requirements for proper maintenance of the
<br />primarily for occupancy by elderly persons, Owners shall not in
<br />project_
<br />selecting tenants discriminate against any person or persons by
<br />(f) Engage, except for natural persons, in any other business or
<br />reason of the fact that there are children in the family.
<br />activity, including the operation of any other rental project, or
<br />(b) If the mortgage is originally endorsed for insurance under
<br />incur any liability or obligation not in connection with the
<br />Section 321, Owners shall in selecting tenants give to displaced
<br />project.
<br />persons or families an absolute preference or priority of occu-
<br />(g) Require, as a condition of the occupancy or leasing of any unit
<br />pancy which shall he accomplished as follows:
<br />in the- project, any consideration or deposit other than the
<br />( I) For a period of sixty (60) days from the date of original
<br />prepayment of the first month's rent plus a security deposit in an
<br />Offering, unless a shorter period of time is approved in
<br />amount not in excess of one month's rent to guarantee the
<br />writing by the Secretary, all units shall be held for such
<br />pertormance of the covenants of the ]case. Any funds collected
<br />preferred applicants, after which time any remaining
<br />as security deposits shall be kept separate and apart from all
<br />unrcntcd units may be rented to non - preferred applicants
<br />other funds of the prgjcct in a trust account the amount of which
<br />(''_} Thereafter, laid on a continuing basis, such preferred appli-
<br />shall at all times equal or exceed the aggregate of all outstanding
<br />cants shall be given preference over nonpreferrcd appli-
<br />obligations under said account
<br />cants in their placement on a waiting list to he maintained
<br />(h) Permit the use of the dwelling accommodations or nursing
<br />by the Owners; and
<br />facilities of the project for any purpose except the use which was
<br />(3) Through such further provisions agreed to in writing by the
<br />originally intended, or permit commercial use greater than that
<br />originally approved by the Secretary_
<br />parties.
<br />7,
<br />(e) Without the prior written approval of the Secretary not nttorc
<br />Owners shall maintain the mortgaged premises, accommodations
<br />than 25;% of the number of units in a project insured under
<br />and the grounds and equipment appurtenant thereto, in good repair
<br />Section 231 shall he occupied by persons other than elderly
<br />and condition. In the event all or any of the buildings covered by the
<br />mortgage shall be destroyed or damaged by fire or other casualty, the
<br />persons.
<br />money derived from any insurance on the property shall be applied
<br />(d) All advertising or efforts to rent a project insured under Section
<br />in accordance with the terms of the mortgage.
<br />331 shall reflect a bona fide effort of the Owners to obtain
<br />R.
<br />Owners shall not file any petition in bankruptcy or for a nccivcr or
<br />occupancy by elderly persons.
<br />in msolveney or for reorganization or composition, or make any
<br />6. Owners shall not without the prior written approval of the Secretary:
<br />assignment for the benefit of creditors or to a trustee for creditors, or
<br />permit an adjudication in bankruptcy or the taking possession of the
<br />(a) Convey, transfer, or encumber any of the mortgaged property, or
<br />mortgaged property or any part thereof by a receiver or the seizure
<br />permit the conveyance, transfer or encumbrance of such prop-
<br />and salt of the mortgaged property or any part thereof under judicial
<br />erty'
<br />process or pursuant to any power of sale, and fail to have such adverse
<br />(b) Assign, transfer, dispose of, or encumber any personal property
<br />actions set aside within forty -five (45) days_
<br />of the project, including rents, or pay out any funds except from
<br />9.
<br />(a) Any management contract entered into by Owners or any of
<br />surplus cash, except for reasonable operating expenses and
<br />them involving the project shall contain a provision that, in the
<br />necessary repairs.
<br />event of default hereunder, it shall be subject to termination
<br />(c) Cunvcy, assign, or transfer any beneficial interest in any trust
<br />without penalty upon written request by the Secretary. Upon
<br />holding title to the property, or the interest of any general partner
<br />such request Owners shall immediately arrange to terminate the
<br />in a partnership owning the property, or any right to manage or
<br />contract within a period of not more than thirty (30) days and
<br />receive the rents and profits from the mortgaged property.
<br />shall make arrangements satisfactory to the Secretary for con-
<br />tinuing proper management of the project_
<br />(d) Remodel, add to, reconstruct, or demolish any part of the
<br />mortgaged property or subtract from any real or personal prop-
<br />(b) Payment for services, supplies, or materials shall not exceed the
<br />erty of the project.
<br />amount ordinarily paid for such services, supplies, or materials
<br />in the area where the services arc rendered or the supplies or
<br />(c) Make, or receive and retain, any distribution of assets or any
<br />materials furnished.
<br />income of any kind of the pmjcct except surplus cash and except
<br />on the following conditions:
<br />(c) The mortgaged property, equipment, buildings, plans, offices,
<br />apparatus, devices, books, contracts, records, documents, and
<br />(I) All distributions shall he made only as of and after the end
<br />other papers relating thereto shall at all times be maintained in
<br />of a semiannual or annual fiscal period, and only as
<br />reasonable condition for proper audit and subject to examination
<br />permitted by the law of the applicable jurisdiction;
<br />and inspection at any reasonable time by the Secretary or his
<br />Replaces FHA -2466 which may be used until supply exhausted Page 4 of 6
<br />form HUD-92466 (10 -85)
<br />ref Handbook4571.1
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