(c) Subject to the maximum amount stated in paragraph (a) (3) of this Section, the Annual Contribution for any Fiscal Year may include such amount as the Government may determine to be necessary to assure that the lower-income character of the Project will be maintained, which amount shall be credited to an account maintained by the PHA or the Government as determined by the Government. To the extent funds are available in said account, the Annual Contribution for any Fiscal Year may exceed the maximum amounts stated in paragraph (a) of this Section by such amount, if any, as may be required for increases reflected in the estimates of required Annual Contributions applicable to such Fiscal Year as approved by the Government in accordance with Section 2.11 below. Any amount remaining in said account after payment of the last Annual Contribution with respect to the Project shall be applied by the Government in accordance with law.

(d) The Government will make periodic payments on account of the Annual Contributions upon requisition therefor by the PHA in the form prescribed by the Government. Each requisition shall include certifcations by the PHA that housing assistance payments have been or will be made only:

(1) In accordance with the provisions of the Contract as such provisions apply respectively to (a) units under lease by Families and (b) units not under lease by Families; and

(2) With respect to units which the PHA has inspected or caused to be inspected, pursuant to Section 2.4 of Part II of this ACC, within one year prior to the making of such housing assistance payments.

(e) Following the end of each Fiscal Year, the PHA shall promptly pay to the Government, unless other disposition is approved by the Government, the amount, if any, by which the total amount of the periodic payments during the Fiscal Year exceeds the total amount of the Annual Contribution payable for such Fiscal Year in accordance with this Section.

1.5, Fiscal Year. The Fiscal Year for the Project shall be the Fiscal Year established by Section 0.3 of this ACC; Provided, however, that the first Fiscal Year for the Project shall be the period beginning with the effective date of the Contract and ending on the last day of said established Fiscal Year which is not less than 12 months after such effective date. If the first Fiscal Year exceeds 12 months, the maximum Annual Contribution in Section 1.4(a) may be adjusted by the addition of the pro rata amount applicable to the period of operation in excess of 12 months.

1.6. Periodic adjustment of contract rents. (a) The Contract may provide for periodic adjustments in the Contract rents chargeable by the Owner and commensurate increases in amounts of housing assistance payments up to the total annual housing assistance pay

ments committed under Section 1.4(a)(1) of this ACC.

(b) The provisions of Section 1.4 (c) of this ACC are designed (by providing for maximum total annual commitments in excess of the amounts required at the time of the initial rental of dwelling units and by setting aside such excess amounts in a project reserve) to assure that housing assistance payments will be increased on a timely basis to cover increases in Contract rents or decreases in Family incomes. The Government shall take such additional steps authorized by Section 8(c) (6) of the Act as may be necessary to carry out this assurance, including (as provided in that section) "the reservation of annual contributions authority for the purpose of amending housing assistance contracts or the allocation of a portion of new authorizations for the purpose of amending housing assistance contracts.

1.7. Affirmative fair housing marketing regulation. The PHA shall require the Owner to comply with the Affirmative Fair Housing Marketing Regulation (subject to any exceptions therein) including the submission for Government approval of an Affirmative Fair Housing Marketing Plan and compliance with such approved Plan, as if the Owner were expressly subject to said Regulation.

1.8 Expeditious carrying out of project. The PHA shall proceed expeditiously with the Project. If the PHA fails to proceed expeditiously, and no Agreement with the Owner has yet been entered into, the Government by notice to the PHA, may terminate or reduce its obligation hereunder with respect to the Project. If an Agreement has been entered into, and the PHA or the Owner is not proceeding expeditiously with the Project, the Government will take appropriate action, including the Governmental action provided for in the Agreement.

1.9. Responsibility for administration of contract. The PHA is primarily responsible for administration of the Contract. However, if the PHA is the lender, the following provisions shall be included in the Contract:

(1) The Government shall have the right to make independent audits, reviews, and determinations as to compliance by the Owner with any or all of his obligations under the Contract;

(2) In the event the Government determines that the Owner is in default with respect to any or all of his obligations, the Government shall have the right to take direct action (as if the Government were the party to the Contract primarily responsible for its administration) to enforce any or all available remedies, including, but not limited to, abatement of housing assistance payments, collection of payments previously made in violation of the Contract, and termination of the Contract in whole or in part; and

(3) The Owner hereby expressly agrees to recognize the rights of the Government in the event it takes any action under this Section in the same manner and to the same

(a) "Families" means Families

(including "Very

Lower-Income Low-Income

Families") and includes Families consisting of a single person in the case of Elderly Families and Displaced Families and includes the remaining member of a tenant family.

(b) "Elderly Families" means Families whose heads (or their spouses), or whose sole members, are persons who are at least 62 years of age or are under a disability as defined in section 223 of the Social Security Act or in section 102(5) of the Developmental Disabilities Services and Facilities Construction Amendments of 1970, or are handicapped. The term Elderly Families includes two or more elderly, disabled, or handicapped individuals living together, or one or more such individuals living together with another person who is determined under regulations of the Secretary to be a person essential to their care or well being.

(c) "Displaced Families" means Families displaced by governmental action, or Families whose dwellings have been extensively damaged or destroyed as a result of a disaster declared or otherwise formally recognized pursuant to Federal disaster relief laws.

(d) "Lower-Income Families" means Families whose incomes do not exceed 80 percent of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may establish income limits higher or lower than 80 percent of the median for the area on the basis of his findings that such variations are necessary because of prevailing levels of construction costs, unusually high or low family incomes, or other factors.

(e) "Very Low-Income Families" means Families whose incomes do not exceed 50 percent of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families.

(f) "Income" means income from all sources of each member of the household, as determined in accordance with criteria prescribed by the Secretary.

(g) "Owner" means the person or entity, including a cooperative, with which the Agreement and Contract are entered into.

(h) "Rent" or "rental" mean, with respect to members of a cooperative, the charges under the occupancy agreements between such members and the cooperative.

(1) "Project Receipts" with respect to each Project means the Annual Contributions payable hereunder and all other receipts, if any, accruing to the PHA from, out of, or in connection with such Project.

(j) "Project Expenditures" with respect to each Project means all costs allowable under Section 1.4(b), Part I of this ACC with respect to such Project.

(k) "Substantial Default" means the occurrence of any of the events listed in Section 2.17.

2.2. Lower-income housing use; compliance with act and regulations. The PHA shall use the Annual Contributions solely for the purpose of providing Decent, Safe, and Sanitary dwellings for Families in compliance with all applicable provisions of the Act and all regulations issued pursuant thereto.

2.3. Eligibility and amount of housing assistance payments.

(a) The PHA, shall comply with the income limits established by the Government and the requirements of the Government pursuant to section 8(c) (7) of the Act concerning the leasing of at least 30 percent of assisted units to Very Low-Income Families.

(b) The PHA, shall comply or assure compliance with the schedules and criteria established by the Government with respect to the amounts of housing assistance payments made on behalf of Families.

(c) The PHA shall make or cause to be made periodic reexaminations of the income, composition, and extent of exceptional medical or other unusual expenses of Families for whom housing assistance payments are being made for the purpose of confirming or adjusting, in accordance with the applicable schedules established by the Government, the amount of rent payable by the Family and the amount of housing assistance payment.

(d) Prior to the approval of eligibility of a Family, and thereafter on the date established for each reexamination of the status of such Family, the PHA shall review or cause to be reviewed a written application, signed by a responsible member of such Family, which application shall set forth all data and information necessary for a determination of the amount, if any, of housing assistance payment which can be made with respect to the Family.

2.4 Inspections.

(a) The PHA shall require, as a condition for the making of housing assistance payments, that the Owner maintain the assisted dwelling units and related facilities in Decent, Safe, and Sanitary Condition.

(b) The PHA shall inspect or cause to be inspected dwelling units and related facilities prior to commencement of occupancy by Families and shall make or cause to be made subsequent inspections at least annually, adequate to assure that Decent, Safe, and

tract for work pursuant to this Contract in excess of $50,000 cost, the following clause: EMPLOYMENT OF PROJECT AREA RESIDENTS AND CONTRACTORS

A. The work to be performed under this Contract is on a project assisted under a program providing direct Federal financial assistance from the Department of Housing and Urban Development and is subject to the requirements of section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u. Section 3 requires that, to the greatest extent feasible, opportunities for training and employment be given lower-income residents of the project area and contracts for work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in, the area of the project.

B. The parties to this Contract will comply with the provisions of said section 3 and the regulations issued pursuant thereto by the Secretary of Housing and Urban Development set forth in 24 CFR, Part 135, and all applicable rules and orders of the Department issued thereunder prior to the execution of this Contract. The parties to this Contract certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements.

C. The contractor will send to each labor organization or representative of workers with which he has a collective bargaining agreement or other contract or understanding, if any, a notice advising the said labor organization or workers' representative of his commitments under this section 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training.

D. The contractor will include this section 3 clause in every subcontract for work in connection with the project and will, at the direction of the applicant for or recipient of Federal financial assistance, take appropriate action pursuant to the subcontract upon a finding that the subcontract is in violation of regulations issued by the Secretary of Housing and Urban Development, 24 CFR, Part 135. The contractor will not subcontract with any subcontractor where it has notice or knowledge that the latter has been found in violation of regulations under 24 CFR, Part 135, and will not let any subcontract unless the subcontractor has first provided it with a preliminary statement of ability to comply with the requirements of these regulations.

E. Compliance with the provisions of section 3, the regulations set forth in 24 CFR, Part 135, and all applicable rules and orders of the Department issued thereunder prior to the execution of the Contract, shall be a condition of the Federal financial assistance provided to the project, binding upon the applicant or recipient for such assistance, its successors, and assign. Failure to fulfill these

e. The Owner agrees that he will by the above Employment of Pro Residents and Contractors clause spect to his own employment practi he participates in federally assiste c 2.3 Cooperation in equal opportu pliance reviews. The Owner shall with the Government in the cond compliance reviews and complaint i = tions pursuant to all applicable ci statutes, Executive Orders, and: 5 regulations pursuant thereto.

2.4 Flood insurance. If the pro cated in an area that has been ide the Secretary of Housing and Urban ment as an area having special floo and if the sale of flood insurance made available under the Nation Insurance Act of 1968, the Owner a the project will be covered, during i pated economic or useful life, by surance in an amount at least eq development or project cost (less land cost) or to the maximum limit age made available with respect to ticular type of property under the Flood Insurance Act of 1968, whi less.

2.5. Clean air act and federal wa tion control act. In compliance wit tions issued by the Environmenta tion Agency ("EPA"), 40 CFR, Part! 11099, pursuant to the Clean Ai amended ("Air Act”), 42 U.S.C. 185 the Federal Water Pollution Contr amended ("Water Act"), 33 US et seq., and Executive Order 11738, t agrees that:

a. Any facility to be utilized in formance of this Contract or any su shall not be a facility listed on the of Violating Facilities pursuant of said regulations;

b. He will promptly notify the De of Housing and Urban Developm office director of the receipt of munication from the EPA indicati facility to be utilized for the Co under consideration to be listed on List of Violating Facilities;

c. He will comply with all the requ of section 114 of the Air Act and se of the Water Act relating to in monitoring, entry, reports, and inf as well as all other requirements in section 114 and section 308 of Act and the Water Act, respectively

2 Strike this Section if the Contrs on the effective date of this Contr the maximum total term of this ( are $100,000 or less.

-ations and guidelines issued thereunder;

He will include or cause to be included rovisions of this Section in every nonpt subcontract, and that he will take action as the Government may direct means of enforcing such provisions.

Reports and access to premises and

ds.

The Owner shall furnish such informaand reports pertinent to the Contract asonably may be required from time to by the Government.

The Owner shall permit the Govern

or any of its duly authorized repreitives to have access to the premises and he purpose of audit and examinations, ave access to any books, documents, rs and records of the Owner that are nent to compliance with this Contract iding the verification of information nent to the monthly requests for housAssistance payments.

Default by the owner.

A default by the Owner under this Conshall result if:

The Owner has violated or failed to ly with any provision of, or obligation r, this Contract or of any Lease; or

The Owner has asserted or demoned an intention not to perform some or of his obligations under this Contract nder any Lease.

Upon a determination by the Governt that a default has occurred, the Govent shall notify the Owner of the nature he default, or the actions required to be n on account of the default (including curing of the default by the Owner, the ement of housing assistance payments in He or in part, where appropriate, or any bination of actions), and of the time in which the Owner shall respond with owing that he has taken all the actions ired of him. If the Owner fails to red or take action to the satisfaction of Government, the Government shall take -opriate actions to achieve compliance

terminate the Contract in whole or in

SO

resolution of such disputes shall be final and conclusive, unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any proceeding under this Section, the Owner shall be afforded an opportunity to be heard and to offer evidence in support of his position. b. This section does not preclude consideration of questions of law in connection with the decision rendered under paragraph a of this Section; Provided, however, that nothing herein shall be construed as making final the decision of any administrative official, representative, or board, on a question of law.

2.9 Interest of members, officers, or employees of PHA, members of local governing body or other public officials. No member, officer, or employee of the PHA, no member of the governing body of the locality (city and county) in which the project is situated, no member of the governing body of the locality in which the PHA was activated and no other public official of such locality or localities who exercises any functions or responsibilities with respect to the project, during his tenure or for one year thereafter, shall have any interest, direct or indirect, in this Contract or in any proceeds or benefits arising therefrom.

2.10 Interest of member of or delegate to congress. No member of or delegate to the Congress of the United States of America or resident commissioner shall be admitted to any share or part of this Contract or to any benefits which may arise therefrom.

a. The Owner agrees that he has not made and will not make any sale, assignment, or conveyance or transfer in any other form, of this Contract or the project or any part thereof or any of his interest therein, without the prior consent of the Government; Provided, however, that in the case of an assignment as security for the purpose of obtaining financing of the project, the Government shall consent in writing if the terms of the financing have been approved by the Government. An assignment by the Owner to a limited partnership of which the Owner is the sole general partner shall not be considered an assignment herein.

b. The Owner agrees to notify the Government promptly of any proposed action covered by paragraph a of this Section. The Owner further agrees to request the written consent of the Government in regard thereto, except in the case of an assignment as security as provided in paragraph a of this Section.

c. For the purpose of this Section, a transfer of stock in the Owner in whole or in part, by a party holding ten percent or more of the stock of said Owner, or a transfer by more than one stockholder or the Owner of ten percent or more of the stock of said Owner, or any other similarly significant

Sanitary housing accommodations are being provided and that the agreed-to services are being furnished.

2.5. Nondiscrimination in housing.

(a) The PHA shall comply with all requirements imposed by Title VI of the Civil Rights Act of 1964, Public Law 88-352, 78 Stat. 241; the regulations of the Department of Housing and Urban Development issued thereunder, 24 CFR, Subtitle A, Part 1, Section 1.1, et seq.; the requirements of said Department pursuant to said regulations; and Executive Order 11063 to the end that, in accordance with that Act and the regulations and requirements of said Department thereunder, and said Executive Order, no person in the United States shall, on the ground of race, color, creed, religion, or national origin, be excluded from participation in, or be denied the benefits of, the Housing Assistance Payments Program or be otherwise subjected to discrimination. The PHA shall, by contractual requirement, convenant, or other binding commitment, assure the same compliance on the part of any subgrantee, contractor, subcontractor, transferee, successor in interest, or other participant in the program or activity, such commitment to include the following clause:

This provision is included pursuant to the regulations of the Department of Housing and Urban Development, 24 CFR, Subtitle A, Part 1, Section 1.1, et seq.; issued under Title VI of the said Civil Rights Act of 1964, and the requirements of said Department pursuant to said regulations; and the obligation of the [contractor or other] to comply therewith inures to the benefit of the United States, the said Department, and the PHA, any of which shall be entitled to invoke any remedies available by law to redress any breach thereof or to compel compliance therewith by [contractor or other].

(b) The PHA shall incorporate or cause to be incorporated into all Housing Assistance Payments Contracts a provision requiring compliance with all requirements imposed by Title VIII of the Civil Rights Act of 1968, and any rules and regulations issued pursuant thereto.

(c) The PHA shall not, on account of creed or sex, discriminate in the sale, leasing, rental, or other disposition of housing or related facilities (including land) included in any Project or in the use of occupancy thereof, nor deny to any Family the opportunity to apply for such housing, nor deny to any eligible applicant the opportunity to lease or rent any dwelling in any such housing suitable to its needs. No person shall automatically be excluded from participation in or be denied the benefits of the Housing Assistance Payments Program because of membership in a class such as unmarried mothers, recipients of public assistance, etc. 2.6. Equal employment opportunity. (a) The PHA shall not discriminate against any employee or applicant for employment because of race, color, creed, re

ligion, sex, or national origin. The PHA shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to race, color, creed, religion, sex, or national origin, Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

(b) (1) The PHA shall incorporate or cause to be incorporated into any contract for construction work, or modification thereof, as defined in the regulations of the Secretary of Labor at 41 CFR, Chapter 60, which is to be performed pursuant to this contract, the following Equal Opportunity clause:

EQUAL EMPLOYMENT OPPORTUNITY During the performance of this contract, the contractor agrees as follows:

(A) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, creed, sex, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, creed, sex, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the PHA setting forth the provisions of this Equal Opportunity clause.

(B) The contractor will in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, creed, sex, or national origin.

(C) The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided by the PHA advising the said labor union or workers' representative of the contractor's commitments under this Section, and shall post copies of the notice inconspicuous places available to employees and applicants for employment.

(D) The contractor will comply with all provisions of Executive Order No. 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.

(E) The contractor will furnish all information and reports required by Executive Order No. 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and