Conditional Commitment with fee (two dollars per thousand dollars of mortgage requested) under the applicable mortgage insurance program. Such Final Proposals will not be approved under Section 8 unless they also qualify for issuance of a HUD-FHA Conditional Commitment under the applicable mortgage insurance program. The HUD notification of approval of the Final Proposal will be accompanied by a HUD-FHA Conditional Commitment for HUD-FHA mortgage insurance. The Owner's acceptance of HUD's notification of approval of the Final Proposal will constitute concurrent acceptance of the conditions and terms of the HUD-FHA Conditional Commitment for mortgage insurance.

(3) The rents of those units scheduled for assisted occupancy, when projected for purpose of determining a mortgage limitation based on the debt service criterion, shall be the Contract Rents set forth in the approved Final Proposal.

(4) Prior to the execution of the Agreement, the Owner will be required to obtain a Firm Commitment for HUDFHA mortgage insurance. This will require the submission of an application for a Firm Commitment, with an additional fee (one dollar per thousand dollars of the mortgage requested), upon submission of the architect's certificate accompanying the working drawings and specifications in accord with § 1273.211.

(c) Delayed mortgage insurance processing. Where an Owner does not indicate in his Preliminary Proposal that he intends to utilize HUD-FHA mortgage insurance and applies for HUDFHA mortgage insurance after HUD approval of the Preliminary Proposal under this Part, he risks (1) having his approved proposal rejected for HUD-FHA mortgage insurance and (2) having lower rents approved under the mortgage insurance program than the rents set forth in the approved proposal under this Part.

tation and the Developers Packet, the HUD field office shall give the Owner the shortest reasonable time (generally not to exceed 10 days) to remedy the deficiency.

(b) A-95 Clearance; notice to unit of general local government. (1) Promptly after the deadline date for receipt of proposals (or after the appropriate later date for proposals completed pursuant to paragraph (a) of this section), the HUD field office will, for each complete and responsive Preliminary Proposal which is subject to A-95 clearance, send a copy of the proposal to the appropriate A-95 Clearinghouse for review, inviting a response within 34 days from the date of the letter of transmittal.

(2) Within 10 working days after the deadline date for receipt of proposals (or after the appropriate later date for proposals completed pursuant to paragraph (a) of this section), the HUD field office will forward, under cover of a letter in the appropriate prescribed form, a copy of each complete and responsive Preliminary Proposal to the chief executive officer (or such designee as such officer may designate in writing to the HUD field office) of the unit of general local government in which the proposed housing is to be located. The cover letter will invite a response within 30 days from the date the letter and copy of the proposal are received.

(c) Evaluation of preliminary proposals by HUD. HUD may begin its evaluation promptly after the deadline date, but no selection or ranking may be completed until the response periods referred to in paragraph (b) of this section have ended. Each Preliminary Proposal will be evaluated and ranked by HUD on the basis of all pertinent factors under this Part including the best combination of rent, site, design and previous experience of the proposed Owner and on the basis of comments, if any, received during the response periods from the appropriate A-95 Clearinghouse and the unit of general local government.

(d) Selection where approvable proposals do not exceed number (by size) of units advertised. For each geographic area HUD will determine which Preliminary Proposals, in its judgment, can be developed into Final Proposals meeting the requirements of the Developer's Packet. If the units covered by such Preliminary Proposals could all be accommodated in the number of units (by unit size) specified in the Invitation, HUD

will request all Owners of acceptable Preliminary Proposals to prepare Final Proposals in accordance with § 1273.209.

(e) Selection where approvable proposals exceed number (by size of units advertised). If the units covered by acceptable Preliminary Proposals cannot all be accommodated by the number of units (by unit size) specified in the Invitation, HUD will proceed as follows: (1) Proposals consisting of projects to be developed entirely or predominantly for the elderly shall be listed in rank order and a second rank listing shall be established for projects to be developed entirely or predominantly for family housing.

(2) With respect to the listing of proposals for elderly housing, the HUD field office will identify for selection the highest ranking proposals in descending order which will most nearly provide the number of units of elderly housing called for in the Invitation.

(3) With respect to the listing of proposals for family housing, the HUD field office will identify for selection the highest ranking proposals in descending order which collectively will most nearly provide the number and sizes of units of family housing called for in the Invitation; provided however that if there is a Preliminary Proposal for construction of more than 50 units of family housing which indicates that assistance will be limited to 20 percent or less of the units to be constructed, this proposal shall be given priority over the lowest ranking proposal(s) identified for selection which is for more than 50 units and which is for generally the same number and sizes of units.

(4) The field office shall determine whether the combined results of the tentative selections from both listings would exceed the number and sizes of units called for in the Invitation. If so, the field office shall make such revisions in the tentative selections as it may determine to be necessary.

(f) Use of residual units. For any residual number of units, HUD may publish another Invitation for Proposals, but this shall not delay the further processing of those Preliminary Proposals submitted in response to the prior Invitation that have been selected as a result of the prior Invitation.

(g) Notification of selection. (1) With respect to those Preliminary Proposals which have been selected in accordance with this section, HUD will notify the

Owners, on a prescribed form, and request them to submit within a reasonable time (to be specified in the notification) a Final Proposal in accordance with the requirements of the provisions of § 1273.209. The notification shall specify:

(i) The Contract Rents that will be acceptable to HUD where these are lower than the Contract Rents proposed by the Owner, and the reason for the reduction;

(ii) The estimate of the amount of relocation payments, where applicable; and

(iii) Other special conditions or requirements, if any.

(2) The notification will request the Owner to return a copy of the notification with an indication of his acceptance thereof by a specified date. If the Owner does not accept the notification by the date specified, HUD may rescind the notification and select another approvable proposal.

(h) Notification of nonselection. Owners whose Preliminary Proposals were not selected by HUD shall be sent a letter notifying them of such determination. §1273.209 Final proposals.

(a) Contents of final proposal. Each Final Proposal shall indicate or include the following:

(1) A copy of the site option agreement(s), contract(s) of sale, or other document(s) which evidence (s) the proposer's effective control of the site(s) (however, only the proposed price is required for a New Communities project).

(2) A description of the proposed housing together with preliminary drawings and plans, and the outline specifications on the prescribed form. Preliminary drawings and plans shall include: site layout based on the topographical information available from existing records and the known subsurface soil conditions; landscape plans; general floor plans and unit plans, at the scale of 1⁄4 inch equals one foot; and elevation drawings for each typical building at the same scale.

(3) The Contract Rent per unit, by size and structure type.

(4) The equipment to be included in the Contract Rent.

(5) The utilities and services to be inIcluded in the Contract Rent and those utilities and services not so included. For each utility and service not so included, an estimate of the average monthly cost (for the first year of occupancy) to the

Occupants by unit size and structure type.

(6) In the case of a PHA-Owner Project, a statement that (i) the PHA will undertake liability for and provide the funding of all relocation payments under sections 202, 203, and 204 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, or (ii) other commitments, which the Owner believes to be satisfactory to HUD, have been made for the funding of such payments. In the latter case, the PHA shall specify such other commitments. (In the case of a Private-Owner Project or a Private-Owner/PHA Project, the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 is inapplicable.)

(7) Submission of an Affirmative Fair Housing Marketing Plan (if the proposal is for five or more units), a signed assurance of compliance with Title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, Executive Order 11063, and certifications required pursuant to Executive Order 11246.

(8) Submissions as required by HUD regulations and other requirements pursuant to section 3 of the Housing and Urban Development Act of 1968.

(9) The identity of the Owner, developer, builder, architect, and managing agent (if known); the qualifications and experience of each; and the names of officials and principal members, shareholders and investors, and other parties having substantial interest, and the prior participation of each in HUD programs, using the prescribed form.

(10) Submission of evidence of management capability and a proposed maner intends to utilize FHA mortgage inagement plan and a certification by the Owner and the management agent, if any, in a format acceptable to HUD; or, if the proposal is for less than 15 units, evidence of capability of providing the required management and maintenance services. If the Owner proposes to contract with another entity, including a PHA for management and/or maintenance services for the project, he shall include a copy of the proposed contract(s).

(11) Submission of the form of Lease the Owner proposes to use, which shall be in accordance with § 1273.218(c).

(12) The proposed method of financing and whether the Owner intends to - pledge or offer the Agreement and/or Contract as security for any loan or ob

ligation (see § 1273.103 (q)). If the Owner intends to utlize FHA mortgage insurance, an application for a Conditional Commitment on the prescribed form shall be completed and submitted with the prescribed fee with the Final Proposal.

(13) Evidence that the proposed construction is permissible under the applicable zoning, building, housing and other codes, ordinances or regulations; or a statement of the proposed action to make the construction permissible and that such action will be successfully completed prior to the architect's certification pursuant to § 1273.211(b).

(14) The anticipated time required for completion of the project after the Agreement is signed (if the project is to be completed in stages, identification of the units comprising each stage and the estimated dates for commencement and completion of each stage).

(b) Consistency with preliminary proposal. The Final Proposal shall be consistent with the Preliminary Proposal. Any material deviations from the Preliminary Proposal in the Final Proposal will cause reconsideration by HUD of such Final Proposal and may result in its rejection.

§ 1273.210 Evaluation of final proposals.

(a) Evaluation of final proposals by HUD. Each Final Proposal will be evaluated by HUD to determine that the provisions of this Part have been complied with and that such Final Proposal is consistent with the Preliminary Proposal.

(b) Clarifications or modifications. HUD may request clarification of individual items, additional information, or modifications of the Final Proposal.

(c) HUD determination. HUD shall notify the Owner (and the PHA, if applicable) as to whether the Final Proposal is:

(1) Approved.

(2) Approvable only if specified deficiencies are corrected and that HUD will approve the Final Proposal if it receives within a specified time evidence of such necessary corrections.

(3) Not approved. If a Final Proposal is not approved or if the conditions for approval under paragraph (c) (2) of this section are not met, HUD shall so advise the Owner and may request the preparation of a Final Proposal (s) with respect to the highest ranking Prelimi

nary Proposal (s) not previously selected, or may issue another Invitation for Preliminary Proposals.

(d) Notification. The appropriate A-95 Clearinghouses and the unit of general local government shall be notified by HUD of its final action.

§ 1273.211 Owner's acceptance of notification and submission of architect's certification.

(a) Owner's Acceptance. Upon receipt by the Owner of the notification of approval of the Final Proposal, the Owner shall return to HUD a copy indicating his acceptance within the time prescribed in such notification (copy to the PHA, if applicable). If the Owner does not accept the notification by the date specified, HUD may rescind the notification and proceed in accordance with $1273.210(c) (3).

(b) Architect's certification. (1) Before HUD may enter into an Agreement (or, where applicable, an ACC and an Agreement) the Owner shall submit to HUD the architect's certification on the prescribed form. Such certification shall be made by the architect responsible for the preparation of the working drawings and specifications.

(2) The architect's certification shall state that, to the best of the architect's knowledge, belief, and professional judgment, (i) the working drawings and specifications are consistent with the approved Final Proposal (including any modifications required by HUD in its review of the Final Proposal), and (ii) the proposed construction in accordance with these plans and specifications is permissible under the applicable zoning, building, housing, and other codes, ordinances or regulations, as modified by any waivers obtained from the appropriate officials. This certification shall also cover compliance with the appropriate HUD Minimum Property Standards and other standards, guidelines and criteria applicable under this Part, except that in the case of mobile homes the manufacturer shall certify that the mobile homes will comply with the American National Standards Institute Standard No. A-119.1, as amended and adopted by HUD under Title I of the National Housing Act.

(3) One copy of the certified working drawings and specifications shall be submitted with the architect's certification to HUD, which shall retain it and any changes approved by HUD for at least

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three years from the date of acceptance of the project; provided, however, that receipt and retention by HUD of these working drawings and specifications shall not denote or constitute HUD review or approval of such drawings or specifications.

(4) If the Owner fails to submit the certification by the date specified in the notification, HUD shall rescind the notification (and may proceed in accordance with 1273.210(c) (3)) unless it determines that a reasonable extension of time should be granted.

§ 1273.212 Annual contributions contract and agreement (private-owner/ PHA projects).

(a) Preparation of ACC. After receipt of the architect's certification with the working drawings and specifications, the HUD field office shall prepare the ACC, shown as Appendix III. The ACC shall be transmitted to the PHA for execution and returned to HUD. This transmittal shall advise the PHA that it must simultaneously submit for HUD approval its Initial Estimate of Required Annual Contributions (Preliminary Costs) and an Estimate of Total Required Annual Contributions (see § 1273.213).

(b) Preparation of agreement. The Agreement shall be prepared by the HUD field office at the time the ACC is prepared (see § 1273.214), and shall conform to the prescribed shall include all required information and required attachments.

(c) Execution of ACC and agreement. After receipt of the PHA-executed ACC, accompanied by the Estimates of Required Annual Contributions, HUD shall review the Estimates and, if approved, execute the ACC. HUD shall then transmit a fully executed copy of the ACC to the PHA, together with four copies of the unexecuted Agreement. After execution of the Agreement by the PHA and the Owner, all copies shall be returned by the PHA to HUD for approval. HUD shall return three copies to the PHA, retaining one for its records.

§ 1273.213 Submission of estimates of required annual contributions (private-owner/PHA projects).

(a) Initial submission. An allowance may be provided for preliminary costs incurred by the PHA prior to the beginning of the first fiscal year. When the ACC is executed by the PHA, it shall submit an Initial Estimate of Required An

nual Contributions (Preliminary Costs) together with an Estimate of Total Required Annual Contributions on the prescribed forms. This submission includes estimates of costs of administration and non-expendable equipment up to the beginning of the first fiscal year.

(b) First fiscal year submission. Not earlier than 150 and not later than 90 days prior to the estimated date of the beginning of the first fiscal year, the PHA shall submit an Estimate of Required Annual Contributions (Housing Assistance and Administration) covering the estimated amount required for the first fiscal year for housing assistance payments and for the fee for administration together with an Estimate of Total Required Annual Contributions.

(c) Subsequent fiscal year submissions. Not earlier than 150 and not later than 90 days prior to the beginning of each subsequent fiscal year, the PHA shall submit an Estimate of Required Annual Contributions (Housing Assistance and Administration) and an Estimate of Total Required Annual Contributions, with supporting documentation, for any requested changes in the amount of housing assistance payments and the fee for administration.

(d) Revisions of Estimates. Any of the above Estimates may be revised to reflect changes in circumstances and available data.

(e) HUD Approval. All Estimates of Required Annual Contributions and any revisions thereto submitted by the PHA shall be subject to HUD approval. § 1273.214 Preparation and execution of agreement (private-owner and PHA-owner projects).

After receipt of a copy of the accepted notification, the architect's certification and the working drawings and specifications, the HUD field office shall prepare the Agreement in the prescribed form shown as Appendix I. The Agreement shall include all required information and required attachments. HUD shall transmit to the Owner three copies of the unexecuted Agreement. After the Owner executes all copies of the Agreement, he shall return them to HUD. HUD shall execute the Agreement, returning one copy to the Owner and retaining two for its records.

§ 1273.215 Construction period.

(a) Timely performance of work. After execution of the Agreement, the Owner

shall promptly proceed with construction as provided in the Agreement. In the event the work is not so commenced, diligently continued, and/or completed, HUD (or the PHA with HUD approval, as appropriate) reserves the right to rescind the Agreement, or take other appropriate action.

(b) Delays. Although extensions of time may be granted for the reasons specified in the Agreement, no increases in Contract Rents may be granted on that account.

(c) Changes. The Owner shall submit for HUD approval any changes from the approved Final Proposal which will materially reduce or alter his obligations or any changes which alter the design or materially reduce the quality or amenities of the project. HUD may condition its approval of such changes on a reduction of Contract Rents. If such changes are made without prior HUD approval, HUD may determine that Contract Rents shall be reduced or that the Owner shall remedy the deficiency as a condition for acceptance of the project. Contract Rents may not be increased by reason of any changes or modifications.

(d) Inspection of HUD-FHA insured projects. For projects financed with HUD-FHA insured mortgages, required HUD inspection procedures shall be followed including compliance with equal opportunity requirements.

(e) Equal opportunity review. Equal opportunity review may be conducted with any scheduled HUD inspection or at any other time deemed advisable by HUD.

(f) Commencement of marketing. The Owner shall commence and diligently continue marketing as soon as possible, but in any event no later than 90 days prior to the estimated completion date. The Owner shall notify HUD (or the PHA in the case of a Private-Owner/ PHA Project) of the date of commencement of marketing. The Owner shall also comply with all reporting requirements under the Affirmative Fair Housing Marketing Regulations. Not later than 30 days prior to the estimated completion date and periodically thereafter, the Owner shall notify HUD (or the PHA in the case of a Private-Owner/PHA Project) of any units which he anticipates will be vacant on the effective date of the Contract. At the time the Contract is executed (see § 1273.217), the Owner will be required to submit a list of the dwelling units leased as of the effective