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oper, subject to approval by the Secre- fied plans, as approved by the Secretary, tary of

and the Secretary's agreement to guar(1) The initial investors (in the case antee obligations of the developer issued of a private sale of such obligations) or pursuant to those plans, subject to the the terms and conditions of the under- limitations set forth in the Act and writing (in the case of a public sale of this part. The agreement shall further such obligations);

include(2) The rate of interest to be borne by (a) An express covenant to the effect such obligations or the formula by which that the Government's interests in the such rate will be determined;

project are not limited to its financial (3) The repayment and maturity pro- interests as guarantor but extend to acvisions of such obligations;

complishment of the public purposes of (4) The specific measures for the pro- the Act; tection of the security interests of the

(b) Provisions setting forth the duties United States, liens and releases of liens,

and responsibilities of the developer with and payment of taxes; and

respect to parts or portions of the project (5) All other terms and conditions of

which will not be carried out by the the financing arrangements which might

developer; affect the interest of the United States;

(c) Provisions governing the security and subject to such further conditions as

to be provided to the United States; the Secretary may prescribe.

(d) Provisions setting forth the rights (c) Acceptance of offer of commit

and remedies of the United States in the ment. The offer to commit contained in

event of default, including rights to seek any such letter shall expire 90 days after

injunctive or other equitable relief; the issuance thereof unless accepted by

(e) Special provisions as necessary to the applicant prior to such expiration by

assure compliance with equal opportupayment of the commitment charge spec

nity, labor standards, and other particuified in $ 710.25. Within 90 days after the

lar requirements; expiration of such offer to commit, it

(f) Duties of the developer to provide may be reopened and accepted by the ap

information, data, and reports as replicant by request in writing to the Sec

quired by the Secretary; to maintain retary accompanied by tender of the commitment charge and the reopening

adequate books and records; and to per

mit and provide as necessary for inspeccharge, if the Secretary in his discretion

tions and on-site examinations by or on approves such request. An accepted offer

behalf of the Secretary; and to commit shall remain effective as a commitment to enter into a project

(g) Such other provisions as the Sec

retary may require as necessary or apagreement pursuant to $ 710.20 for 6 months, at which time the commitment

propriate to assure adherence to the shall expire unless the applicant has

project as approved, or the provisions of taken all steps that the Secretary deter

the Act or of this part, or to protect the mines to be required under this part as a

Government against loss. prerequisite to the execution of such $710.21 Issuance of guaranteed obligaproject agreement or unless such 6

tions. month period is extended at the discre

At the request of the developer purtion of the Secretary.

suant to the project agreement and upon 8 710.20 Project agreement.

satisfaction of the conditions specified in Following satisfaction of all conditions

such agreement, the Secretary will enstated in any commitment of the Secre

dorse his guarantee upon obligations tary, and before the making of any guar

duly issued by the developer pursuant antees, the developer will be required to

to a purchase or underwriting agreeenter a project agreement which shall

ment approved by the Secretary. The be in a form satisfactory to the Secre

guarantee fee specified in $ 710.27 must tary. The agreement shall set forth the

be paid at the time the guarantee is

made. understandings of the Secretary and the developer with respect to the entire proj- $ 710.22 Project execution and monitorect, including the understandings, if any, ing. as to how the project is to be carried out (a) Inspections and reports. To insure in stages. The agreement shall also set that the project is being executed in a forth the developer's agreement to carry manner consistent with the objectives of out the project in accordance with speci- the Act and as provided in the project

agreement, the developer will be required to submit periodic financial and other reports on project execution. The Secretary will also be afforded access to the project site at all reasonable times for purposes of inspection.

(b) Use of proceeds of guaranteed obligations—(1) Land valuation and cost certification. Disbursement to the developer of proceeds from the sale of obligations guaranteed under the Act must be supported by prior submission to the Secretary of an independent valuation of land acquired or to be acquired by the developer or certification of actual costs of land acquisition or land development, or a combination of such valuation and certification. Any such valuation must be prepared in accordance ith the principles set forth in § 710.11 to the satisfaction of the Secretary. Any such certification must be in the form satisfactory to the Secretary and must be accompanied by such documentation as he may deem necessary to assure that such costs (1) have in fact been incurred by the developer for the project and (11) are eligible for financing under the Act. If it is expected that guaranteed obligations will be issued and sold in anticipation of land acquisition or of costs for land development incurred in the future, appropriate provisions must be made for escrow or trusteeship of the proceeds of sale to the extent and so long as disbursement of such proceeds is unsupported by valuation of land actually acquired or certification of actual costs incurred.

(2). Loan disbursements. Funds to be derived from obligations which the Secretary has guaranteed or agreed to guarantee shall be disbursed or made available to the developer in accordance with limitations as to disbursements approved by the Secretary. Such limitations shall be based upon project needs, the progress of work completed as against work planned, the maintenance by the developer of required equity and working capital, the possibility of overruns or unanticipated costs, the extent to which allowable land values exceed land costs, and such other matters as the Secretary may deem relevant. Amounts properly allowable and credited, but withheld pursuant to such limitations and not otherwise paid to the developer for approved purposes, will be made available upon conclusion of the project, or the stage of a project to which such amounts re

late, or are apportioned, as the Secretary may determine.

(c) Records. The developer must maintain, to the satisfaction of the Secretary, records of all costs incurred for the project and must require his contractors and subcontractors to maintain similar records. Upon request, all such records and all agreements relevant thereto shall be made available at all reasonable times for examination by the Secretary. Insofar as such records and agreements relate to any grants or guarantees made pursuant to this part, the financial transactions of recipients of Federal grants or of developers whose obligations are guaranteed by the United States, pursuant to this title, may be audited by the General Accounting Office under such rules and regulations as may be prescribed by the Comptroller General of the United States. The representatives of the General Accounting office shall have access to all books, accounts, records, files, and all other papers, things, or property belonging to or in use by such developers or recipients of grants pertaining to such financial transactions and necessary to facilitate the audit.

(d) Amendments. As a result of changes in market demand, employment patterns, costs and revenues or other factors or conditions, it may become desirable to make certain amendments to the plans initially approved by the Secretary. All proposals for amendments by the developer must be submitted to the Secretary for approval, together with full justification therefor. Such approval will be based upon the same criteria, and will take account of the same purposes, as are set forth in this part for onsideration of the initial application. The Secretary may recommend, or require, subject to conditions set forth in the project agreement, amendments to an approved plan when, in his opinion, such amendments are necessary or desirable to insure the Anancial stability of the project or to prevent situations which would impair the value of the project or its ability to carry out the purposes of the Act.

Subpart E-Fee and Charge Schedule $710.24 Application charge.

An application charge of $5,000, nonrefundable, shall accompany the application.

& 710.25 Commitment charge.

A commitment charge equal to 0.5 percent of the principal amount of the commitment up to $30 million, and, in addition, 0.1 percent of the principal amount above $30 million, shall be paid upon acceptance of an offer of commitment or at the time a guarantee is made, whichever occurs first. $710.26 Reopening charges.

А reopening request pursuant to $ 710.19(C) shall be accompanied by a charge of 0.05 percent of the expired offer of commitment. An offer of commitment which has expired because of the failure to pay the commitment charge may be reopened and accepted only upon payment of the commitment charge and the reopening charge. 8710.27 Guarantee fee.

A guarantee fee equal to 3 percent of the principal amount of obligations

guaranteed by the Government shall be paid at the time of the issuance of such obligations. $ 710.28 Annual fee.

An annual fee equal to 0.5 percent of the average ipal amount of guaranteed obligations outstanding during the preceding year shall be paid on the first anniversary date of the initial guarantee and on each following anniversary date of the guarantee, until the seventh such date; and, thereafter, an annual fee of 1 percent of the average principal amount of guaranteed obligations outstanding during the preceding year shall be paid on each subsequent anniversary date of the initial guarantee until the total obugation is paid in full. § 710.29 Transfer charge.

Upon application for approval of a case involving the substitution of developers, & transfer charge of 0.05 percent of the unused portion of the commitment shall be paid.

DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT

Part 888 Section 8 Housing Assistance Payments Program-Fair Market Rents. 1200-1269 [Reserved] 1270 Low-rent housing homeownership opportunities. 1271 [Reserved] 1272 Section 23 Housing Assistance Payments Program-New Construction. 1273 Section 8 Housing Assistance Payments Program—New Construction. 1274 Section 23 Housing Assistance Payments Program Existing Housing. 1275 Section 8 Housing Assistance Payments Program—Existing Housing. 1276 Section 23 Housing Assistance Payments Program-Substantial Rehabili

tation. 1277 Housing Assistance Payments Program-Substantial Rehabilitation. 1278 [Reserved] 1279 Section 23 Housing Assistance Payments Program. 1280-1299 [Reserved]

PART 888_SECTION 8 HOUSING ASSIST

ANCE PAYMENTS PROGRAM--FAIR
MARKET RENTS AND CONTRACT RENT
AUTOMATIC ANNUAL ADJUSTMENT
FACTORS

Subpart A-Fair Market Rents
Sec.
888.101 Fair market rents for new construc-

tion and substantial rehabilita

tion. 888.102 Fair market rents for existing

housing (Reserved). 888.103 Manner of publication.

Schedule A Fair Market Rents for New Construction and Substantial Rehabilitation (including Housing Finance and Development Agencies Program).

Schedule B Fair Market Rents for Existing Housing (including Housing Finance and Development Agencies Program). Subpart B-Contract Rent Automatic Annual

Adjustment Factors 888.201 Purpose of applicability. 888.202 Manner of publication.

Schedule C Contract Rent Automatic Annual Adjustment Factors for New Construction and Substantial Rehabilitation (including Housing Finance and Development Agencies Program).

AUTHORITY: Sec. 7(d), Department of Housing and Urban Development Act (42 U.S.C. 3535(d)), sec. 5(b) of the U.S. Housing Act of 1937 (42 U.S.C. 1437f).

SOURCE: 40 FR 14502, Mar. 31, 1975, unless otherwise noted.

Subpart A-Fair Market Rents $ 888.101 Fair market rents for new

construction and Substantial Reha.

bilitation. (a) Purpose and Applicability. Schedule A of this part sets forth Fair Market Rents, as determined by the Department of Housing and Urban Development (HUD), for the section 8 Housing Assistance Payments Program-New Construction 24 CFR, Part 880, Substantial

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