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Project Rental Assistance Contract and Occupancy Requirements

Project Rental Assistance Contract

The HUD inspector will conduct a final inspection at the project site when construction has been completed. At that time, the Owner will present to the inspector five(5) original Form HUD-92485, Permission to Occupy, as well as evidence of property insurance and a permanent or temporary Certificate of Occupancy. When the Permission to Occupy has been approved by HUD, the owner applies to HUD for the Project Rental Assistance Contract (PRAC). At the Initial Closing, HUD had issued the Agreement to Enter into the PRAC. The owner will now need the approved PRAC in order to voucher housing operating subsidies. The following expands upon the HUD handout, Preparing for Initial Occupancy and PRAC Execution:

Required Documents

Please refer to Completing Forms in How to Use the Guide for instructions on filling out forms.

In Advance (as per above cited HUD guidance):

Have access to Web Access Secure Systems (WASS) by completing Business Partner Registration at http:www.hud.gov/offices/hsg/mfh/apps/appsmfhm.cfm. Contact your Project Manager when this is completed.

Obtain access to the Enterprise Income Verification System (EIV). http://www.hud.gov/offices/hsg/mfh/rhiip/eiv/eivhome.cfm.

Determine the software you will use for TRACS submission. The Guide recommends that you can also consider the use of an private electronic service company.

Secure a DUNS number and register in CCR for the Owner. For mixed finance tax credit projects, secure the DUNS number and CCR registration for both the Limited Partnership and the HDFC (owner corporation)

Establish your Operating Account - Use 1199a Direct Deposit Form. Note that this is separate from your construction account.

The following documents are to be submitted to your HUD Project Manager (one original, one copy):

1. Form HUD-92485, Permission to Occupy, fully executed by the Owner, architect, HUD Field Inspector and HUD NY Multifamily HUB

2. Owner's Certification of Completion

3. Evidence of general contractor's compliance with Section 3 of the Housing and Urban Development Act of 1968 as amended, which requires affirmative action to hire low income community residents and/or businesses who are locally based. As evidence, the general contractor can submit a letter on company letterhead, indicating new hires of local low income persons or use of local businesses that meet the definition under Section 3. Also, the Sponsor can provide a letter indicating any new hires that are low income and who have been assigned to the project. The Section 3 Summary Report (Form HUD-60002) can be used.

4.Evidence of compliance with the HUD-approved Affirmative Fair Housing Marketing Plan, with completed document, FHEO Rental Housing-Affirmative Fair Housing Marketing Report. This shall include copies of all newspaper ads (tear sheets) and letters to community contact organizations listed in the approved Plan as well as evidence that each community contact organization received your letter about the project. Evidence can include a copy of the return receipt for certified mail or a signed copy of your letter by the community organization acknowledging receipt.

5. List of leased and unleased units as of the date of the Permission to Occupy. In the case of a group home, provide a table showing the address of the group home and the number of leased and unleased beds. HUD also requests an explanation of any lease-up or absorption delays in order to determine eligibility for vacancy claims. Submit an explanation for any delays between the date of the Permission to Occupy and the date when PRAC documents are submitted and provide an updated list of leased/unleased units as of the date of submission. If all beds are not occupied as of the report of current lease status, advise HUD in writing if the waiting list is sufficient to occupy all beds and to provide additional residents upon turnover.

6. Direct Deposit Sign-Up Form, SF 1199A, for your separate operating banking account. For the PRAC application, HUD requires that you establish a new banking account for project operations. Make sure that your DUNS number appears on the form. The new account is separate from your direct deposit construction account. HUD also requires that you submit a copy of a voided check from the operating account.

7. R.E.M.S. Verification of Critical Elements. The information requested on the form should be retyped on owner letterhead, signed and dated. Please complete ALL information requested on the form, e.g., all information for the owner and management agent as well as all information for the contact person for each entity.

In additon to the items above, provide the following dates:

Fiscal Year end date
Cost Certification Cut-off date
Confirmation on effective PRAC date- this is normally the date that the HUD field inspector signs the HUD Permission to Occupy.

Occupancy Requirements

Upon approval of the PRAC application, HUD will send to the owner an executed PRAC, together with a letter of Occupancy Requirements for the owner.