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Formation of the Owner Corporation

The Section 202 and Section 811 programs require that the Sponsor form a single asset owner corporation following approval of the fund reservation. The New York HUD office looks to the Section 202 sponsor to form a corporation under Article XI of the New York State Private Housing Finance Law. For sponsors of Section 811 projects, the owner is to be formed under Article 75 of the New York State Mental Hygiene Law.

HUD has published guidelines for the certificate of incorporation. In addition, some points to bear in mind are:

• The minimum number of board members for a Section 202 project is seven. For a Section 811 project, the minimum number is three. The maximum number of board members for both projects is 15.

• Board members of the new Owner Corporation are typically members of the sponsor organization or, if not, must be approved by the sponsor to be members.

• Each board member of the newly formed Owner Corporation, as well as each board member of the sponsor, must sign a Conflict of Interest and Disclosure Certification and a Previous Participation Certification, Form HUD-2530. Note, HUD requires that baseline information be submitted in APPS for the Owner, Sponsor and Management Agent.