GRAND TRAVERSE BAND HOUSING DEPARTMENT

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APPENDIX 27

Sample Lease

MARKET BASED

GRAND TRAVERSE BAND HOUSING DEPARTMENT

MARKET BASED

DWELLING LEASE

1. DESCRIPTION OF THE PARTIES AND PREMISES.

a The Housing Department does hereby rent to

(Tenant) the dwelling unit described below, under the terms and

conditions stated herein.

b. Address of Rented Premises:

C. Occupancy Date:

Pa AMOUNT AND DUE DATE OF RENTAL PAYMENTS.

a.._—*Term of Lease. This lease creates a month to month tenancy beginning

on the occupancy date to the 1st day of the month following the

occupancy date, and thereafter from month to month on the 1st of each

month.

b. Rent. Monthly rent under this lease shall be $ Per month.

Rent shall be due and payable in advance on the 1st day of each monin.

C. Pro-ration. The monthly rent amount shall be pro-rated for any term of

less than one month.

d. Renewal of Term. The term of this lease shall be renewable from

month-to-month unless terminated according to the terms and conditions

hereinafter set forth.

3. SECURITY DEPOSIT.

a. Payment of Security Deposit. Tenant agrees to pay the sum of

$ as a security deposit, equal to one month’s rent

payable in advance prior to occupancy of the unit.

Tenant(s) Initials:

Date: . 1

MARKET BASED DWELLING LEASE ‘ overs

b. Use of Security Deposit. The security deposit shall be applied by the

Housing Department at the termination of this lease toward

reimbursement of the cost of repairing any damages to the dwelling unit

caused by the Tenant, his family, or dependents, or toward rent, cleaning,

unpaid utilities, costs and legal expenses incurred in the termination of the

lease.

Refund of Security Deposit. Any unused portion of the security deposit,

together with a written itemization of any deductions therefrom, will be

refunded and provided to the Tenant at Tenant's last known address

within forty-five (45) calendar days after tenant has actually vacated the

unit to the Housing Department.

d. Joint Tenants. In the event that joint tenants or more than one tenant

occupy one rental unit, the security deposit shall not be refunded as long

as one of the tenants continues to occupy the dwelling unit and the unit is

not vacated by all tenants.

4. UTILITIES.

Furnishing of Utilities. If any of the following are checked, the Housing

Department agrees to furnish the following utilities in accordance with the

current Schedule of Utilities posted in the Housing Department Lobby:

Gas ELectricttYO WaATERO SEWERO GARBAGE 0

b. Interruption of Utilities. The Housing Department will not be

responsible for interruption of utilities by reason of any cause beyond its

control.

Other Utilities. The Tenant shall be solely responsible for utilities, which

are not provided by the Housing Department.

Tenant(s) Initials:

Date:

MARKET BASED DWELLING LEASE

Heat and Electrical Service. If LP gas or electricity is not to be furnished

by the Housing Department, it is the responsibility of the Tenant to

provide LP gas (see NOTE) and electricity to the dwelling unit. Tenant

agrees to maintain sufficient heat and electrical service to prevent freezing

of piped water and any other damages to the dwelling unit caused by

failure to furnish such LP gas heat or electricity. If for any reason Tenant

is unable to maintain sufficient heat or electricity, Tenant shall immediately

notify the Housing Department.

Note: Each unit has been equipped with a large capacity LP gas

tank for use by the Tenant. LP CYLINDER TANKS ARE NOT ACCEPTABLE

FOR FUEL STORAGE. Tenant agrees NOT to install (or contract to have

installed) LP cylinder tanks.

5. OCCUPANCY OF THE DWELLING UNIT.

Use of Unit. The premises herein are leased to Tenant for use as a

private family residence and uses normally incident thereto and for no

other purpose. Tenant shall not assign this Agreement, nor sublet or

transfer possession of the premises, nor give accommodations to

boarders or lodgers without the prior written consent of Housing

Department. Tenant further agrees not to use or permit the use of the

dwelling unit for any illegal or immoral purpose or for any purpose other

than_as a private dwelling solely for the Tenant and family. The following

persons are legal occupants of the residence:

Overnight Guests. The Tenant shall not permit any overnight guests or

visitors to occupy the premises for more than three (3) calendar days in

any one (1) month without written permission of the Housing

Department.

Compliance with Requlations. Tenant agrees to abide by the

necessary and reasonable regulations as may be adopted by the Housing

Department for the benefit and well-being of the Tenant, Housing

Department and surrounding Tenants, which regulations are posted in the

Housing Department Office and in the Tenant Handbook and Rules of

Occupancy and which regulations are made a part hereof by reference.

Tenant(s) Initials:

Date: 3

MARKET BASED DWELLING LEASE

d. Criminal Activity. Tenant, any member of the Tenant’s household, or

any guest or other person under the Tenant’s control shall not engage in

criminal activity, including drug-related criminal activity, om or near the

premises while the Tenant resides in Housing Department property, and

such criminal activity shall be cause for termination of tenancy. For

purposes of this paragraph, “drug-related criminal activity’ means the

illegal manufacture, sale, distribution, use, or possession with intent to sell

distribute, or use, of a controlled substance as defined in section 102 of

the Controlled Substances Act (21 U.S.C. 802). Criminal activity shall

include the harboring of fugitives.

e. Damages. Tenant shall refrain from, and cause Tenant's family and

guests to refrain from deliberately or negligently destroying, defacing,

damaging or removing any part of the premises or project. Tenant's

family and guests shall conduct themselves in a manner which will not

disturb the neighbors’ peaceful enjoyment of their accommodations and

will be conducive to maintain the project in a safe and sanitary condition.

Any damages caused by Tenant or Tenant’s family or guests beyond

reasonable wear and tear shall be the sole responsibility of Tenant and

the costs of repair shall be paid by Tenant within sixty days after repair of

the damage. Tenant shall pay for any damages caused to the premises or

to the development of which the premises are a part. caused by the

Tenant, by his immediate family occupying the premises, or by the

Tenant’s guests or invitees. Tenant shall pay for parts, materials, fixtures,

or replacements and the labor services of person or persons engaged to

repair or replace the damage.

Tenant shall not be eligible for occupancy of any housing offered by

Housing Department until the cost of such repairs or maintenance have

been paid in full. Housing Department agrees to maintain the buildings

and common areas and grounds of the project in a decent, safe, and

sanitary condition in conformity with the requirements of adopted housing

codes and applicable regulations or guidelines of the Department of

Housing and Urban Development. Housing Department shall make all

necessary repairs, alterations, and improvements to the dwelling unit

necessitated by normal wear and tear. It shall be presumed that any

damage to the premises were caused by Tenant, his/her family or guests

unless Tenant provides evidence to the contrary.

Tenant(s) Initials:

Date: 4

MarKET BASED DWELLING LEASE

f. Notification of Damages. Tenant shall notify the Housing Department

within two (2) calendar days in writing by furnishing an incident report of

any damage to the premises and shall immediately notify Housing

Department in the event that the premises are damaged to an extent that

renders the premises uninhabitable. Tenant shall immediately notify

Housing Department whenever damage to the premises may cause

further damage or deterioration to the dwelling unit or surrounding

buildings or property.

Health-Safety-Peaceful-Enjoyment. Tenant, tenant’s family and tenant's

guests shall refrain from purposely or negligently engaging in any activity

which threatens the health or safety of, or right to peaceful enjoyment of

the premises by, other residents or employees of the Housing units, or

persons residing in the vicinity of the premises.

h. Surrender of Premises. Tenant shall surrender the premises at the

termination of this lease in good order and repair reasonable wear and

tear excepted. Tenant shall remove all personal property, belongings, and

furnishings from the premises at the termination of the lease. Failure by

the Tenant to remove all personal property, belongings and furnishings

shall result in the removal of the items by the Housing Department.

Tenant shall be fully responsible for the reasonable costs of removal and

shall not be eligible for occupancy of any housing offered by the Housing

Department until the costs of removal have been paid in full.

6. REGULATIONS.

The Tenant agrees to follow all rules and regulations prescribed by Housing

Department which are included in the Tenant Handbook and Rules of

Occupancy and in bulletins issued by Housing Department from time to time,

including all amendments made to such regulations. This Handbook and Rules

of Occupancy are made part of this lease and a violation of said rule is a violation

of this lease.

Tenant(s) Initials:

Date:

MARKET BASED DWELLING LEASE

ABANDONMENT OF DWELLING UNIT.

Effect of Abandonment. The premises shall be deemed abandoned

and this lease shall be terminated at the option of Housing Department if

Tenant is absent from the premises for fourteen (14) calendar days

without notifying Housing Department or essential utilities have been

disconnected making the premises untenantable. The Tenant shall

remain subject to the obligations of this lease, including the obligation to

make the monthly payments until the Housing Department provides

Notice of Termination to Tenant. Such notice shall be communicated by

the Housing Department to the Tenant at the Tenant's last known

address and the Termination shall be effective ten (10) calendar days from

the date of Notice. In the event the Tenant(s) cannot be located, notice

shall be deemed given if mailed by certified mail to the Tenant’s last

known address.

Re-entry and Personal Property. Upon giving the Notice, the Housing

Department shall have the right to re-enter the premises, and remove all

persons and personal property therefrom. The Housing Department may

sell or dispose of any personal property and apply the proceeds, if any, to

any charges due to the Housing Department after the Termination date

set forth in the notice.

Securing of Premises. In the event of abandonment, the Housing

Department may at its discretion secure the premises to prevent the

Tenant(s) Initials:

Date:

Tenant from re-entering the premises.

Personal Property upon Termination. Any personal property remaining

in a premises after the lease has been terminated and the Tenant

removed shall be subject to sale or disposal by Housing. The costs

associated with such sale or disposal shall be the responsibility of Tenant.

MARKET BASED DWELLING LEASE

INSPECTIONS.

Inspection. Tenant agrees to permit the Housing Department or its

representative to enter the premises during all reasonable hours to inspect

the unit or to make such repairs, additions, or alterations as may be

deemed necessary. Such entry may be made only during reasonable

hours after reasonable advance notice in writing or by telephone.

Unsafe or Unsanitary Condition. If, during the course of an inspection

by the Housing Department, the dwelling unit is found to be in an unsafe

or unsanitary condition caused by the Tenant, or damaged beyond normal

wear and tear, the Tenant shall be given fourteen (14) calendar days to

repair or correct the condition. Housing Department may, at its

discretion, have an Indian Health Service representative inspect the

dwelling unit. Housing Department will conduct a re-inspection to verify

compliance. Failure by Tenant to repair or correct the condition or

damage shall result in termination of the lease.

Entry Upon Emergency or to Prevent Waste. Housing Department

shall also have the right to immediately re-enter the premises in the event

of an emergency or to prevent substantial damage or waste to the

premises without prior written or telephone notice to the Tenant if the

Housing Department reasonably believes that an emergency situation

exists which requires such entrance The Housing Department must

thereafter promptly notify the Tenant of the date, time and intended

purpose of entry, and of the emergency which necessitated it.

Pre-occupancy Inspection. Prior to occupancy, the Tenant and

Housing Department shall jointly inspect the dwelling unit and shall sign

a: statement describing the condition of the dwelling unit and the

equipment in the unit. A copy of this statement shall be retained by both

parties to this Agreement.

Inspection Upon Vacation of Premises. When the Tenant vacates the

dwelling unit, the Housing Department will inspect the unit and will

provide a written statement to the Tenant at the Tenant's last known

address of any deductions from the security deposit within forty-five (45)

calendar days of the date the Housing Department is notified that Tenant

has vacated the premises.

Tenant(s) Initials:

Date: 7

MARKET BASED DWELLING LEASE

f. Tenant’s Duties Upon Vacating Premises. Prior to vacating the

premises, the Tenant shall notify Housing, request a move-out inspection,

and shall return the keys to the premises to the Housing Department.

9. TERMINATION OF THE RENTAL AGREEMENT.

a. Reasons for Termination. Either party may terminate this lease upon

thirty days written notice to the other party. The Housing Department

may terminate this lease without thirty days written notice in the case of

any serious violations by Tenant.

Ds: Serious Violations. The following violations shall be considered “serious”

or repeated violations and shall result in the termination of this lease:

Failure to pay Rent when due;

Failure to repair damage to premises in accordance with the terms

of this lease;

3) Failure to properly maintain utilities;

4) Engagement in criminal activities;

5) Failure to notify Housing of damage to premises;

6) Failure to maintain premises and grounds in sanitary condition;

7) Engaging in conduct which threatens the health safety or peaceful

enjoyment of any person in accordance with Section 5(g) of this

lease;

8) Intentionally causing damage to premises,

9) Failure to pay money owed to Housing pursuant to this lease;

10) Possession of a firearm in violation of Housing rules.

C. Repeated Violations. Repeated violations shall mean two (2) or more

Tenant(s) Initials:

Date:

MARKET BASED DWELLING LEASE

violations of any provision of this lease or the attached Handbook and

Rules.

Termination Notice. The lease shall be terminated fourteen (14)

calendar days from receipt of notice by Tenant of termination pursuant to

this section.

10. LEGAL NOTICES.

Sufficiency of Notice to Tenant. Any notice to Tenant required

hereunder will be sufficient if:

1) Delivered in writing to the Tenant personally, or

2) To an adult member of Tenant’s family residing in the dwelling unit.

3) If notice cannot be given under 10.a.1) or 10.a.2) with reasonable

diligence, then the Housing Department or its designated

representative will:

a) Deliver the notice by mail to the Tenant by certified mail,

return receipt requested or;

b) Affix a copy of the notice in a conspicuous place on the

rental premises where it can conveniently read and by

mailing a copy by regular or other mail to the Tenant's last

known address.

Sufficiency of Notice to Housing Department. Notices to the Housing

Department are to be given to the Housing Department in writing and

shall be delivered to a Housing Department employee at the Housing

Department Office or delivered by mail to the Housing Department by

certified mail, return receipt requested.

Tenant(s) Initials:

Date: 9

MARKET BASED DWELLING LEASE

11.

14.

GRIEVANCE PROCEDURE.

All grievances or appeals arising under this Dwelling Lease shall be processed

and resolved pursuant to the Grievance Procedure of the Housing Department

which is in effect at the time such grievance or appeal arises, which procedure is

posted in the Housing Department office and incorporated herein by reference.

ENTIRE AGREEMENT.

This Lease, consisting of eleven (11) pages and incorporating by reference the

Tenant Handbook and Rules of Occupancy, which evidences the entire

agreement between Housing Department and Tenant.

TENANT HANDBOOK AND RULES OF OCCUPANCY.

Tenant has received a copy of the Tenant Handbook and reviewed the same with

a resident service representative understands the provisions thereof.

TIME OF ESSENCE.

It is specifically declared and agreed that time is of the essence of this lease

agreement. .

15.

16.

GOVERNING LAW.

It is agreed that this lease agreement shall be governed by, construed, and

enforced in accordance with the laws of the Grand Traverse Band of Ottawa

and Chippewa Indians.

WAIVERS.

A waiver by lessor of a breach of any covenant or duty of Tenant under this lease

is not a waiver of a breach of any other covenant or duty of lessee, or of any

subsequent breach of the same covenant or duty.

Tenant(s) Initials:

Date: 10

MARKET BASED DWELLING LEASE

IN WITNESS WHEREOF, the parties have executed this lease agreement this

day of 20 _, at Peshawbestown, MI.

TENANT - HEAD OF HOUSEHOLD DATE

TENANT - SPOUSE DATE

DIRECTOR - HOUSING DEPANENT DATE

DATE

RESIDENT SERVICES REPRESENTATIVE

Tenant(s) Initials:

Date: 11

APPENDIX 28

Sample Lease

MHOA

(Pre - NAHASDA)

Mutual Help

Homeownership Opportunity Program

Mutual Help and

Occupancy Agreement

Exhibit A

Land Description

U. S. Department of Housing

and Urban Development

Office of Public and Indian Housing

The Lessor (the Homebuyer) hereby leases to the Lessee (the 1HA) the following real property situated

described as follows:

The above property will comprise approximately

dwelling site(s).

IHA

by: (Name)

(Official Title)

(Homebuyer)

(Homebuyer's Spouse)

THA Seal:

Page 1 of 1

form HUD-53056 (4/93)

ref Handbook 7460.1

OMB Approval No. 2577-0114 (Exp.8/31/93)

Mutual Help Homeownership U. S. Department of Housing

O rtunity P and Urban Development

Pppo unity rogram Office of Public and Indian Housing

Mutual Help and Occupancy Agreement

Public reporting burden for this collection of information is estimated to average 0.3 hours per response, including the time for reviewing instructions, searching existing

data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate

or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management Officer, Paperwork Reduction Project

(2577-0114), Office of Information Technology, U.S. Department of Housing and Urban Development, Washington, D.C. 20410-3600. This agency may not conduct

or sponsor, and a person is not required to respond to, a collection of information unless that collecton displays a valid OMB control number.

Do not send this form to the above address.

This revised form of MHO Agreement shall be used for all Mutual Help Contents Page

Projects placed under ACC on or after October 1, 1992. This MHO Article 1 Parties: Definitions 2

Agreement should be used in conjunction with 24 CFR, Part 905, Indian Article 1 Special Provision 3

Housing: Revised Consolidated Regulations; Rule. When a unit is Article Ill Change in Income 3

converted to the Mutual Help program, the participant shall execute this Article IV Mutual Help Contribution 3

form of Mutual Help and Occupancy Agreement. Article V Commencement of Occupancy 4

Article VI Inspections, Responsibility for Items

Covered by Warranties; 4

Article VII Homebuyer Payments 5

Article Vill Maintenance, Utilities, and Use of Home 5

Article IX Homebuyer Reserves and Accounts 6

Artide X Purchase of Home 7

Articde XI !HA Homeownership Financing 8

Artide XII Termination of MHO Agreement 9

Article XIIl_ Succession Upon Death or Mental Incapacity 10

Article XIV Miscellaneous 10

Article XV Counseling of Homebuyers 11

Artide XVI Cross-References to Defined Terms 11

form HUD-53056 (4/93)

Page fort ref Handbook 7460.1

Article| Parties: Definitions

1.1 Parties.

This Mutual Help and Occupancy Agreement (“Agreement”) is entered

into by and between

(“LHA”) and the Homebuyer whose signature(s) appears below. The

1HA has entered into an Annual Contmibutions Contract (“ACC”) with

the U.S. Department of Housing and Urban Development (“HUD”)

under which the IHA will develop a Project under the HUD Mutual Help

Homeownership Opportunity Program in compliance with HUD requirements. Under this Agreement, the LHA will give the homebuyer

an opportunity to achieve ownership of a home in the Project in retum

for fulfilling the homebuyer’s obligations to make a contribution to the

development of the Project, to make monthly payments based on

income, to provide all maintenance of the home and to satisfy all other

program requirements including an annual certification of income and

family composition. The terms and conditions of this Agreement are

attached hereto and made a part hereof. This Agreement has been

executed in duplicate original, and the Homebuyer hereby acknowledges receipt of one such onginal.

IHA :

By:

(Official Title)

(Homebuyer)

and telegraph, office supplies; office space, maintenance and utilities

for office space; general liability insurance or risk protection costs;

accounting services; legal expenses; and operating reserves requirements; and (b) General expenses, such as premiums for fire and related

insurance, payments in lieu of taxes, if any, and other similar expenses.

Construction Contract. Thecontract forconstruction in the case of the

Conventional method, or the Contract of Sale in the case of the Tumkey

method.

Home. The dwelling unit covered by this MHO Agreement.

Homebuyer. The person(s) who has executed this MHO Agreement

and who has not yet achieved homeownership.

Homeowner. A former homebuyer who has achieved ownership ofhis

or her home and acquired title to the home.

HUD. The U.S. Department of Housing and Urban Development.

HUD Field Office. The HUD Offices in Chicago, Oklahoma City,

Denver, Phoenix, Seattle, and Anchorage, which have been delegated

authority to administer programs under the United States Housing Act

of 1937 for the area in which the IHA is located.

1HA. Indian Housing Authority. An entity thatis authorized to engage

in or assist in the development or operation of low income housing for

Indians that is established either (1) by exercise of the power of selfgovernment of an Indian Tribe independent of State law; or (2) by

operation of State law providing specifically for housing authonties for

Indians, including regional housing authorities in the State of Alaska.

1HA Homeownership Financing. IHA financing for purchase of a

home by an eligible homebuyer who gives the IHA a promissory note

and mortgage for the balance of the purchase price.

MEPA. Monthly Equity Payments Account. A homebuyer account in

the Mutual Help Homeownership Opportunity Program credited with

the amount by which each required monthly payment exceeds the

(Homebuyer's Spouse)

(Project #) (Unit #)

{_] Initial Homebuyer

[] Subsequent Homebuyer

Date:

1.2 Definitions.

Inaddition to the definitions listed below, certain Construction Contract

terms as used herein shall have the same meaning as in the Construction

Contract.

Administration Charge. The amount budgeted by the IHA for

monthly operating expenses covering the following categories (andany

other operating expense categories included in the IHA’s HUD-

approved operating budget for a fiscal year or other period, excluding

any operating cost for which operating subsidy is provided): (a)

administrative salaries, payroll, taxes, etc; travel, postage, telephone

administration charge.

MH. Mutual Help.

MH Contribution. Land, labor, cash materials or equipment - or a

combination of these - contributed toward the development cost of a

project in accordance with a homebuyer’s MHO Agreement, credit for

which is to be used toward purchase of a home.

MHO Agreement. A Mutual Help and Occupancy Agreement

between the LHA and a homebuyer. The MHO Agreement constitutes

a lease-option agreement. The homebuyer is a lessee during the term

of the Agreement and acquires no equitable interest in the home until

the option to purchase is exercised.

MH Program. The MH Homeownership Opportunity Program.

Project. Housing developed, acquired, or assisted by an [HA under the

Act and the improvement of this housing.

Subsequent Homebuyer. Any homebuyer other than the homebuyer

who first occupies a home pursuant to an MHO Agreement.

VEPA. Voluntary Equity Payment Account. A homebuyer account in

the MH Program credited with the amountof any periodic or occasional

voluntary payments in excess of the required monthly payments.

Page 2 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

Article Il Special Provision.

2.1 This Agreement shall be subjectto revocation by the 1HA ifthe IHA

or HUD decides not to proceed with the development of the project in

whole orinpart. Insuch event, any contribution made by the homebuyer

or Tnbe shall be retumed. If the conaibution was a land contribution,

it will be returned to the contributor.

Article Ill Change in Income.

3.1 lfa family’s income changes after the MHO Agreementis executed

but before the unit is occupied so that it no longer qualifies for the

program, the IHA may reject the family for this program. If it becomes

evident that a family’s income is inadequate to meet its obligations, the

IHA may counsel the family about other housing options, such as its

rental program. Inability of the family to meet its obligations under the

homebuyer Agreement is grounds for termination of the Agreement.

Article 1V MH Contribution

The MH contribution may consist of land, labor, cash matenals,

equipment, or any combination thereof. Contributions other than labor

may be made by an Indian tribe on behalf ofa family. The value of the

contribution must be $1,500.

4.1 Land Contributions.

Landcontnibuted to satisfy this requirement must be owned in fee simple

by the homebuyer or must be assigned or allotted to the homebuyer for

his or her use before application for an MH unit. Contributions of land

donated by another person on behalf of the homebuyer will satisfy the

requirement for an MH contribution.

Land as identified in Exhibit A of this Agreement has been leased or

conveyed to the LHA, or will be so leased or conveyed before execution

of the Construction Contract, as a contributed site for the home. This

land is valued at $ . The IHA shall determine the market value of the land, but in no case will the land credit

4.2 MH Work Contribution.

(a) Amount. The homebuyer shall provide work of a total value of

$ as a contribution to the development of

the Project.

(b) Homebuyer’s Work Obligation.

(1) The homebuyer shall provide the work obligation under the

direction of the construction contractor on jobs assigned to the

homebuyer by the contractor. The work shall be performed in a

diligent and workmanlike manner. The work obligation of the

homebuyer may be performed by members of the family. The work

may also be performed by an arrangement for others (relatives or

friends, for example) to work on the homebuyer’s behalf, but only

with the approval of the [HA and the contractor.

(2) Prior to the submission ofa proposal or a bid for construction

of the Project, or prior to execution of the Construction Contract,

the bidder or contractor shall be permitted to review information

relating to the ability and capacity of the homebuyer to provide MH

work, and to interview those who are to perform the work, with

regard to this information.

(1) The specific jobs to be performed by homebuyers, and the value

of each job, shall be listed in an appendix to the Construction

Contract, which shall be available for inspection by the homebuyer.

The homebuyer may be assigned to any of the listed jobs, and may

be reassigned from one job to another during the course of

construction. However, the total value of the jobs assigned to the

homebuyer’s credit will not exceed $1500 per homesite of the MH

work the homebuyer is required to provide as stated in Section

4.2(a) of this Agreement.

(2) The homebuyershall provide as many hours of work, recorded

in accordance with the contractor’s system approved by the IHA,

as necessary to complete the assigned jobs. The credit (not to

exceed $1500 perhomesite) given the homebuyer shall be the value

of the assigned jobs, regardless of the number of hours actually

worked to perform the jobs.

3) Asanaltemative, the contractor may make assignments to the

homebuyer in terms of numbers ofhours of work. In that event, the

homebuyer shall be credited (not to exceed $1500 per homesite)

with the full MH work contribution when the number of hours of

work assigned to the homebuyer has been completed.

(d) Failure to Provide MH Work.

(1). The IHA may terminate this Agreement if the homebuyer is

unable or unwilling to provide, or for any other reason fails to

provide, the MH work obligation.

(2) Ifinthe judgment ofthe contractora homebuyer is notmeeting

his/her MH work obligations, the contractor may request the

assistance of the IHA. Where the deficiency cannot otherwise be

remedied, the contractor may request the IHA to terminate this

Agreementand select another homebuyer to provide the MH work.

(3) Ifthe contractor calls upon the [HA to terminate this Agreement and the contractor fumishes to the IHA sufficient proof of the

alleged nonperformance by the homebuyer, the [HA shall then take

the action called for by the contractor.

(e) Workmen’s Compensation Insurance. The contractor shall provide Workmen’s Compensation Insurance for members of the

omebuyer’s ly or others who perform work.

insurance is not available, the contractor shall obtain private

insurance of substantially comparable coverage.

4.3. Cash Contribution.

(a) The homebuyer agrees to make a cash contribution to the project

inthe amount of$ which shall be paid in full to the

1HA not later than the date the home is available for occupancy in

accordance with the following schedule:

Dates for Payment Amounts

Page 3 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

(b) [fa cash contribution to the Project is to be made by the tribe, as

evidenced by a tribal resolution given to the IFLA, the homebuyer’s

share (MH credit) of this contribution is $ :

4.4 Materials or Equipment Contribution.

[fany part of the Contribution is to be provided by furnishing materials

or equipment to the Project, such contribution shall be provided and

accounted for in accordance with the special provisions of the Construction Contractcoveringsuch contribution. In accordance with the special

provisions of the Construction Contract, the amount of the MH

Contribution credit to. the homebuyer is $

4.5 Disposition of Contributions on Termination Before Date of

Occupancy.

Ifthis Agreement is terminated by the IHA orthe homebuyer before the

date of occupancy, the homebuyer may receive reimbursement of the

value of the MH contribution made plus other amounts contributed by

the homebuyer in accordance with Article LX.

Article V Commencement of Occupancy

5.1 Notice.

(a) Upon acceptance by the IHA from the contractor of the home as

ready for occupancy, the JHA shall determine whether the

homebuyer has met all requirements for occupancy, including

meeting the MH Contribution requirements and fulfillment of

mandatory homebuyer counseling requirements. In the eventofan

affirmative determination, the homebuyer shall be notified in

writing that the home is available for occupancy as of a date

specified in the notice (“Date of Occupancy’’).

(b) Ifthe LHA determines that the homebuyer has not fully provided

the MH Contribution or met any of the other conditions for

occupancy the homebuyer shall be so notified in writing. The

Notice:

(1) must specify the date by which all requirements must be

satisfied; and

(2) shall advise the homebuyer that the MHO Agreement will be

Article VI Inspections: Responsibility for ltems Covered by

Warranty.

6.1 Inspection before Move-in and Identification of Warranties.

(a) To establish a record of the condition of the home on the date of

occupancy, the homebuyer (including a subsequent homebuyer)

and the IHA shall make an inspection of the home as close as

possible to, but not later than, the date the homebuyer takes

occupancy. (The record of this inspection shall be separate from

the certificate of completion, but the inspections may, if feasible,

be combined.) After the inspection, the IHA representative shall

give the homebuyera signed statement of the condition of the home

and equipment and a full written description of all homebuyer

responsibilities. The homebuyer shall signa copy of the statement,

acknowledging concurrence or stating objections; and any differences shall be resolved by the IHA and a copy of the signed

inspection report shall be kept at the IHA.

b) Within 30 days of commencement of occupancy of the home, the

IHA shall furnish the homebuyer with a list of applicable contractors’, manufacturers’ and suppliers’ warranties indicating the items

covered and the periods of the warranties, and stating the

homebuyer’s responsibility for nou fying the IHA of any deficiencies that would be covered under the warranties.

6.2 Inspections during contractors’ warranty periods,

responsibility for items covered by contractors’,

manufacturers’ or suppliers’ warranties.

In addition to inspection required under Section 6.1(a), the IHA will

inspect the home regularly in accordance with paragraph 8.3(a).

However, it is the responsibility of the homebuyer, during the penod of

the applicable warranties, to promptly inform the LHA in writing ofany

deficiencies arising during the warranty period (including manufacturers’ and suppliers’ warranties) so that the IHA may enforce any nights

under the applicable warranties. If'a homebuyer fails to furnish such a

written report in time, and the IHA is subsequently unable to obtain

redress under the warranty, correction of the deficiency shall be the

responsibility of the homebuyer.

terminated and a substitute homebuyer selected for the unit if the

requirements are not satisfied.

5.2 Lease Term.

The term of the homebuyer’s lease under this Agreement shall commence on the first day of the calendar month following the Date of

Occupancy and shall expire when the Initial Purchase Price has been

fully amortized in accordance with the homebuyer’s Purchase Price

Schedule (see Sections 10.2(b) and 10.3(b)) unless this Agreement is

previously terminated orthe homebuyer previously acquires ownership

of the Home.

5.3 Credits to MH Accounts and Reserves.

Promptly after the date of occupancy, the IHA shall credit the amount

of the MH contributions to the appropriate reserves and accounts in

accordance with Article LX and shall provide the homebuyer a statement

of the amounts so credited.

6.3 Annual Inspections.

The LHA shall perform inspections annually in accordance with Section

8.3(a).

6.4 Inspection Upon Termination of Agreement.

Ifthis Agreement is terminated for any reason after commencement of

occupancy, the HA shall inspect the home, afternotifying thehomebuyer

of the time for the inspection, and shall give the homebuyer a wmitten

statement of the cost of any maintenance work required to put the home

in satisfactory condition for the next occupant (see Section 12.4(a)(1)).

6.5 Homebuyer Permission for Inspections; Participation in

Inspections. ;

The homebuyer shall permit the IHA to inspect the home at reasonable

hours and intervals during the period of this Agreement in accordance

with rules established by the IHA. The homebuyer shall be notified of

the opportunity to participate in the inspection made in accordance with

this section.

Page 4 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

Article Vil Homebuyer Payments

7.1 The amount of the required monthly payment for a homebuyer

admitted to occupancy in an existing or converted project is determined

in accordance with Section 7.2 through 7.4 below.

7.2 Establishment of Payment.

(a) Each homebuyer shall be required to make a monthly payment

(“required monthly payment”) as determined by the IHA and

approved by HUD. The payment will provide that the minimum

required monthly payment equal the administration charge.

(b) Subject to the requirement for payment of at least the administra-

tion charge, each homebuyer shall pay an amount of required

monthly payment computed by:

(1) Multiplying adjusted income by a specified percentage; and

(2) Subtracting from that amount the utility allowance determined for the unit. The specific percentage shall be no less than 15

percent and no more than 30 percent, as determined by the IHA and

approved by HUD.

payment may not be more than a maximum amount. The

maximum shall not be less than the sum of:

(1) The administration charge; and

(2) The monthly debt service amount shown on the homebuyer’s

purchase price schedule.

(d) If the “required monthly payment” exceeds the administration

charge, the amount ofthe excess shall be credited to the homebuyer’s

Monthly Equity Payments Account (MEPA) (see Section 9.2(a)).

7.3 Administration Charge.

The administration charge should reflect differences in expenses

attributable to different sizes or types of units. It is the amount budgeted

by the IHA as defined in Section 1.2.

7.4 Adjustments in the Amount of the Required Monthly Payment.

(a) Afterthe initial determination of the homebuyer’s required monthly

payment, the IHA shall increase or decrease the amount of such

payment in accordance with HUD regulations to reflect changes in

copy of such written policies shall be posted prominently in the IHA

office, and shall be provided to an applicant or homebuyer upon entry

into the program and upon request.

8.2 Provision for MH projects.

For a MH Project, the written maintenance policies shall contain

provisions on at least the following subjects:

(a) The responsibilities of homebuyers for maintenance and care of

their dwelling units and common property;

(b) Procedures for providing advice and technical assistance to

homebuyers and to enable them to meet their maintenance responsibilities;

(d) Procedures for IHA performance of homebuyer maintenance

responsibilities (where homebuyers fail to satisfy such responsibilities), including procedures for charging the homebuyer’s proper

account for the cost thereof;

(e) Special arrangements, if any, for obtaining maintenance services

from outside workers or contractors; and

(f) Procedures for charging homebuyers for damage for which they are

responsible.

8.3 IHA Responsibility in MH Project.

(a) The IHA shall enforce those provisions of this Agreement under

which the homebuyer is responsible for maintenance of the home.

The LHA has overall responsibility to HUD for assuring that the

housing is being kept in decent, safe, and sanitary condition, and

that the home and grounds are maintained in a manner that will

preserve their condition, normal wear and tear excepted. Failure

of a homebuyer to meet the obligations for maintenance shal] not

relieve the IHA of responsibility in this respect. Accordingly, the

JHA shall conduct a complete interior and exterior examination of

each home at least once a year, and shall finish a copy of the

inspection reportto the homebuyer. The IHA shall take appropriate

action, as needed, to remedy conditions shown by the inspection,

including steps to assure performance of the homebuyer’s obligations under this Agreement. The LHA may inspect the home once

adjusted income (pursuant to a reexamination by the IHA), adjustment in the administration charge or in any of the other factors

affecting the computation of the homebuyer’s required monthly

payment.

(b) In order to accommodate wide fluctuations in required monthly

payments due to seasonal conditions, an JHA may agree with any

homebuyer for payments to be made in accordance with a seasonally adjusted schedule which assures full payment of the required

amount for each year.

7.5 Homebuyer Payment Collection Policy.

Each 1HA shall establish and adopt written policies, and use its best

efforts to obtain compliance to assure the prompt payment and collection of required homebuyer payments. A copy of the policies shall be

posted prominently in the IHA office, and shall be provided to the

homebuyer upon request.

Article Vill Maintenance, Utilities, and Use of Home

8.1 Each LHA shall establish and adopt, and use its best efforts to obtain

compliance with, written policies to assure full performance of the

respective maintenance responsibilities of the IHA and homebuyers. A

every three years, in lieu of annual inspection where the homebuyer.

(1) 1sin full compliance with the original terms ofthis Agreement,

including payments, and

(2) The home is maintained in decent, safe, and sanitary condition, as reflected by the last inspection by the HA. However, ifat

any time the IHA determines that the homebuyer is not in

compliance with this Agreement, it must reinstitute annual inspections.

8.4 Homebuyer’s Responsibility In MH Program.

(a) The homebuyer shall be responsible for routine and nonroutine

maintenance of the home, including all repairs and replacements

(including those resulting from damage from any cause). The IHA

shall not be obligated to pay for or provide any maintenance of the

home other than the correction of warranty items reported dunng

the applicable warranty period.

(b) Homebuyer’s Failure to Perform Maintenance.

(1) Failure of the homebuyer to perform the maintenance obligations constitutes a breach of this Agreement and grounds for its

termination. Upona determination by the 1HA that the homebuyer

has failed to perform its maintenance obligations, the IHA shall

require the homebuyer to agree to a specific plan of action to cure

Page 5 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

the breach and to assure future compliance. The plan shall provide

for maintenance work to be done within a reasonable time by the

homebuyer, with such use of the homebuyer’s account as may be

necessary, orto be done by the JHA and charged to the homebuyer’s

account. Ifthe homebuyer fails to carry out the agreed-to plan, this

Agreement shall be terminated in accordance with Sections 12.1

and 12.2.

(2) Ifthe IHA determines that the condition of the property creates

a hazard to the life, health or safety of the occupants, or if there is

a nsk of damage to the property if the condition is not corrected,

the corrective work shall be done promptly by the JHA with such

use of the homebuyer’s accounts as the HA may determine to be

necessary, or by the homebuyer with a charge of the cost to the

homebuyer’s accounts in accordance with Section 9.3(a).

(3) Any maintenance work performed by the IHA shall be

accounted for through a work order stating the nature ofand charge

forthe work. The LHA shall give the homebuyer copies of all work

orders for the home.

8.5 Homebuyer’s Responsibility for Utilities.

The homebuyer is responsible for the cost of furnishing utilities for the

home. The 1HA shall have no obligation for the utilities. However, if

the LHA determines that the homebuyer is unable to pay for the utilities

forthe home, and that this inability creates conditions that are hazardous

to life, health or safety of the occupants, or threatens damage to the

property, the IHA may pay for the utilities on behalf of the homebuyer

and charge the homebuyer’s accounts for the costs in accordance with

Article LX. When the homebuyer’s accounts have been exhausted, the

1HA shall pursue termination of the homebuyer Agreement and may

offer the homebuyer a transfer into the rental program if a unit is

available.

8.6 Obligations with Respect to Home and Other Persons and

Property.

(a) The homebuyer shall agree to abide by all provisions of this

Agreement concerning homebuyer responsibilities, occupancy

and use of the home.

shall be atthe homebuyer’s expense, and in the event of termination

of this Agreement the homebuyer shall not be entitled to any

compensation for such changes or additions.

(c) If the homebuyer is in compliance with the terms of this Agreement, the IHA may agree to allow the homebuyer to use the funds

in the MEPA for betterments and additions to the MH home. In

such event, the IHA shall determine whether the homebuyer will

be required to replenish the MEPA or if the funds are to be loaned

to the homebuyer at an interest rate determined by the IHA. The

homebuyer cannot use MEPA funds for luxury items, as determined by the IHA.

Article IX Homebuyer Reserves and Accounts

9.1 Refundable and Nonrefundable MH reserves (“Reserves”).

The IHA shall establish separate refundableand nonrefundable reserves

for each homebuyer effective on the date of occupancy.

(a) The refundable MH reserve represents a homebuyer’s interest in

funds that may be used to purchase the home at the option of the

homebuyer. The LHA shall credit this account with the amount of

the homebuyer’s cash MH contribution or the value of the labor,

material or equipment MH Contribution.

(b) Thenonrefundable MH Reserve represents a homebuyer’s interest

in funds that may be used to purchase the home at the option of the

homebuyer. The IHA shall credit this account with the amount of

the homebuyer’s share of any credit for land contributed to the

project and the homebuyer’s share of any credit for non-land

contributions by a terminated homebuyer.

9.2 Equity Accounts.

(a) Monthly Equity Payments Account (“MEPA”). The IHA shall

maintain a separate MEPA for each homebuyer. The IHA shall

credit this account with the amount by which each required

monthly payment exceeds the administration charge. Should the

homebuyer fail to pay the required monthly payment, the IHA may

elect to reduce the MEPA by the amount owed each month towards

fully ex-

the admini

tie aannnist

(b) The homebuyer may request IHA permission to operate a small

business in the unit. An 1HA shall grant this authority where the

homebuyer provides the following assurances and may rescind this

authority upon violation of any of the following assurances:

(1) The unit will remain the homebuyer’s principal residence;

(2) The business activity will not disrupt the basic residential

nature of the housing site; and

(3) The business will not require permanent structural changes to

the unit that could adversely affect a future homebuyer’s use of the

unit. The IHA may rescind such authority whenever any of the

above assurances are violated.

8.7 Structural Changes.

(a) A homebuyer shall not make any structural changes in or additions

to the home unless the 1HA has determined that such change would

not:

(1) Impair the value of the home, the surrounding homes, or the

project as a whole; or

(2) Affect the use of the home for residential purposes.

(b) Additions to the home include, but are not limited to, energyconservation items such as solar panels, wood-burning stoves, flues

and insulation. Any changes made in accordance with this section

pended. The MEPA balance must be comprised of an amount

backed by cash actually received in order for any such reduction to

be made.

(b) Voluntary Equity Payments Account (“VEPA”). The IHA shall

maintain a separate VEPA for each homebuyer. The IHA shall

credit this account with the amounts of any periodic or occasional

voluntary payments (in excess of the required monthly payment)

"thatthe homebuyer may desire to make to acquire ownership of the

home within a shorter period of time. The IHA may amend an

individual homebuyer’s MHO Agreement to permit a more flexible use of the VEPA for alterations of the unit, cosmetic changes,

additions, betterments, etc.

accounts ofall homebuyers in the project shall be invested in HUD-

approved investments. Income eamed on the investments of such

funds shall periodically, but at least annually, be prorated and

credited to each homebuyer’s equity accounts in proportion to the

amount in each such account on the date of proration.

9.3 Charges for Maintenance.

(a) Ifthe IHA has maintenance work done in accordance with Section

8.4(b)(2), the cost thereof shall be charged to the homebuyer’s

MEPA.

Page 6 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

(b) Atthe end ofeach fiscal year, the debit balance, ifany inthe MEPA

shall be charged, first to the VEPA; second, to the refundable MH

reserve; and third, to the nonrefundable MH reserve, to the extent

of the credit balances in that account and those reserves.

refundable MH reserve and/ornonrefundable MH reserve, the LHA

may allow the debit balance to remain in the MEPA pending

replenishment from subsequent credits to the homebuyer’s MEPA.

(d) The IHA shall atno time permitthe accumulation ofa debit balance

in the MEPA in excess of the sum of the credit balances in the

homebuyer’s refundable and nonrefundable MH reserves, unless

the expenditure is required to alleviate a hazard to the life, health

or safety of the occupants, or to alleviate risk of damage to the

property.

9.4 Disposition of Reserves and Accounts.

When the homebuyer purchases the home, the balances in the

homebuyer’s reserves and accounts shall be disposed of in accordance

with Section 10.5(c) and (d). If this Agreement is terminated by the

homebuyer or the IHA, the balances in the homebuyer’s reserves and

accounts shall be disposed of in accordance with Section 12.4.

9.5 Use of Reserves and Accounts; Nonassignability.

The homebuyer shall have no night to receive or use the funds in any

reserve or account except as provided in this Agreement, and the

homebuyer shall not, without the approval of the IHA and HUD, assign,

mortgage or pledge any night in this Agreement or to any reserve or

account.

Article X Purchase of Home

10.1 General.

The IHA provides the family an opportunity to purchase the dwelling

under this Agreement (a lease with an option to purchase), under which

the purchase price is amortized over the period of occupancy, in

accordance with a 2 Durchase ‘price Schedule: fh or acquisition under this

ownership i ina dorier period than that shown on the purchase price

schedule, the homebuyer may exercise the option to purchase the home

on or after the date of occupancy, but only if the homebuyer has met all

obligations under this Agreement. The homebuyer may obtain financing, from the IHA or an outside source, at any time, to cover the

remaining purchase price. The financing may be provided using such

methods as a mortgage or a loan agreement. If the homebuyer is able

to obtain financing from an outside source, the IHA will release the

homebuyer from this Agreement and terminate the homebuyer’s

participation in this program. For acquisition under methods other than

under this Agreement, see Section 10.4 and Article XJ.

10.2Purchase Price and Purchase Price Schedule.

(a) Initial Purchase Price. The 1HA shall determine the initial purchase

price of the home for the homebuyer who first occupies the home,

pursuant to this Agreement as follows (unless the IHA, after

consultation with the homebuyer, has developed an alternative

method of apportioning among the homebuyers, the amount

determined in Step | and the alternative method has been made a

part of the HUD-approved development program):

Step 1:

From the estimated Total Development Cost (TDC) (including the

full amount for contingencies as authorized by HUD) of the project

as shown in the development cost budget in effect at the time of

execution of the construction contract, deduct the amounts, ifany,

not directly attributable to the dwelling cost and equipment,

including, but not limited to:

(1) Relocation costs,

(2) Counseling costs,

(3) The cost of any community, administration or management

facilities, including the land, equipment and furnishings attnbutable to such facilities as set forth in the development program for

the project, and

(4) the total amount attributable to land for the project,

(5) Off-site water and sewer,

(6) Other administrative costs associated with the development

of the project.

Step 2:

Multiply the amount determined in Step 1 by a fraction of which

thenumerator is the development cost standard for the size and type

ofhome being constructed forthe homebuyer, and the denominator

is the sum of the unit development cost standards for the homes of

various sizes and types comprising the project.

Step 3:

Determine the amount chargeable to developmentcosts, ifany, for

acquisition of the homesite.

Step 4:

Add the amount determined in Step 3 to the amount determined in

Step 2. The sum determined under this step shall be the initial

purchase price of the home.

(b) Purchase Price Schedule. Promptly after execution of the construction contract, the IHA shall furnish to the homebuyer a statement

of the initial purchase price of the home and a purchase price

schedule that will apply, based on amortizing the balance (purchase

Price! less the MH contribution) overa penod notless than 15 S years

ema iy the IHA, sonra de the: rate ness not ecco the

prevailing interest rate for Veterans Administration (VA) guaranteed mortgage loans at the time the schedule is established. The

IHA may choose to forego charging interest and calculate the

payment with interest rate of zero.

10.3Purchase Price Schedule for Subsequent Homebuyer.

(a) Initial Purchase Price. When a subsequent homebuyer executes

this Agreement, the purchase price for the subsequent homebuyer

shall be determined by the IHA based on one of the following

procedures:

(1) The current appraised value;

(2) The current replacement cost of the home or,

(3) The remaining purchase price of the unit.

(b) Purchase Price Schedule. Each subsequent homebuyer shall be

provided with a purchase price schedule, showing the monthly

declining purchase price over the term of this Agreement, commencing with the first day ofthe month following the effective date

of this Agreement.

Page 7 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

10.4 Notice of Eligibility for Financing.

If the IFLA offers IHA homeownership financing in accordance with

Article XJ and has funds available for that purpose, it shall determine,

at the tume of each examination or reexamination of the family’s

earnings and other income, whether the homebuyer is eligible for that

financing. Ifthe IHA determines thatthe homebuyers eligible, the IHA

shall noufy the homebuyer in writing that HA homeownership financing is available to enable the homebuyer to purchase the home, if the

homebuyer wishes to do so and, that if the homebuyer chooses not to

purchase the home at that time, all the rights of a homebuyer shall

continue (including the right to accumulate credits in the equity

accounts) and all obligations under this Agreement shall continue

(including the obligations to make monthly payments based on income). The IHA shall convey ownership of the home when the

homebuyer exercises the option to purchase and has complied with all

the terms of this Agreement. The homebuyer can exercise the option

to purchase only by written notice to the IHA, in which the homebuyer

specifies the manner in which the purchase price and settlement costs

will be paid.

10.5 Conveyance of Home.

(a) Purchase Procedure. In accordance with this Agreement, the IHA

shall convey title to the homebuyer when the balance of the

purchase price can be covered from the amount in the two equity

accounts (MEPA and VEPA). The homebuyer may supplement

the amount in the equity accounts with reserves or any other funds

of the homebuyer.

(b) Amounts tobe Paid. The purchase price shall be the amount shown

on the purchase price schedule for the month in which the

settlement date falls.

acquiring ownership, including, the costs and fees for credit report,

field survey, title examination, title insurance, inspections, attorneys other than the 1HA’s attorney, closing, recording, transfer

taxes, financing fees and mortgage loan discount. Settlement costs

shall be paid by the homebuyer who may use equity accounts or

(f) WHA Investment and Use of Purchase Pnce Payments. After

conveyance, all homebuyer funds held orreceived by the IHA from

the sale of a unit in a project financed with grants shall be held

separate from other project funds, and shall be used for purposes

related to low-income housing use, as approved by HUD.

Homebuyer funds held or received by the LHA from the sale to a

homebuyer of a unit in a project financed by loans are subject to

loan forgiveness. Homebuyer funds include the amount applied to

payment of the purchase price from the equity accounts (MEPA

and VEPA), any cash paid by the homebuyer for application to the

purchase price and, if the IHA finances purchase of the home in

accordance with Article XJ, any portion of the mortgage payments

by the homeowner attributable to payment of the debt service

(principal and interest) on the mortgage.

(g) Removal ofthe Home from MH Program. When a home has been

conveyed to the homebuyer, whether ornot with IHA financing, the

unit is removed from the IHA’s MH project under its ACC with

HUD. Ifthe IHA has provided financing, its relationship with the

homeowner is transformed by the conveyance to that of lender, in

accordance with documents executed during settlement.

(h) Homebuyers with delinquencies. lf a homebuyer has a delinquency at the end of the amortization period, the unit is no longer

available for assistance from HUD or the 1HA, even though the unit

has not been conveyed. The JHA must take action to terminate this

Agreement or to develop a repayment schedule for the remaining

balance to be completed in a reasonable period, but not longer than

three years. The payment should be equal to a monthly pro-rated

share of the remaining balance owed by the homebuyer, plus an

administrative fee consisting of the cost of insurance and the LHA’s

processing cost. Ifthe homebuyer fails to meet the requirements

of the repayment schedule, the IHA should proceed immediately

with eviction.

Article Xl |HA Homeownership Financing

11.1 Eligibility.

reserves available for the purchase in accordance with Section 9.4.

(d) Disposition of Homebuyer Accounts and Reserves. When the

homebuyer purchases the home, the net credit balances in the

homebuyer’s equity accounts (MEPA and VEPA) as described in

Article LX, supplemented by the nonrefundable MH reserve and

then the refundable MH reserve, shall be applied in the following

order:

(1) Forthe initial payment for fire and extended coverage insurance

on the home after conveyance, if the IHA finances purchase of the

home in accordance with Article XI;

(2) For Settlement costs, if the homebuyer so directs;

(3) For the purchase price; and

(4) The balance, if any, for refund to the homebuyer.

(e) Settlement. A home shall notbe conveyed until the homebuyer has

met all the obligations under this Agreement, except as provided

forin(h) below. The settlement date shall be mutually agreed upon

by the parties. On the settlement date, the homebuyer shall receive

the documents necessary to convey to the homebuyer the IHA’s

right, title and interest in the home, subject to any applicable

restrictions or covenants as expressed in such documents. The

required documents shall be approved by the attorneys representing the IHA and by the homebuyer or the homebuyer’s attorney.

If the IHA offers homeownership financing, the homebuyer is eligible

for it when the IHA determines that:

(a) The homebuyer can pay (from the balance in the homebuyer’s

reserves or accounts, or from other sources):

(1) The amount necessary for settlement costs; and

(2) The initial payment for fire and extended coverage insurance

carried on the home after conveyance; and

(3) Maintenance reserve (at the option of the IHA).

(b) The homebuyer’s income has reached the level, and is likely to

continue at such level, at which 30 percent of monthly adjusted

income is at least equal to the sum of the monthly debt service

amount shown on the homebuyer’s purchase price schedule and the

IHA’s estimates of the following monthly payments and allowances:

(1) Payment for fire and extended coverage insurance;

(2) Payment for taxes and special assessments, if any;

(3) The IHA mortgage servicing charge;

(4) Amount necessary for maintenance of the home; and

(5) Amount necessary for utilities for the home.

(Additional information relative to IHA Financing will be provided to

homebuyer upon request.)

Page 8 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

Article XIl_ Termination of MHO Agreement

12.1 Termination Upon Breach.

(a) In the event the homebuyer fails to comply with any of the

obligations under this Agreement, the IHA may terminate the

Agreement by written notice to the homebuyer, enforced by

eviction procedures applicable to landlord-tenant relationships.

Foreclosure is an inappropriate method for enforcing termination

of this Agreement, which constitutes a lease (with an option to

purchase). The homebuyer is a lessee during the term of this

Agreement and acquires no equitable interest in the home until the

option to purchase is exercised.

(b) Misrepresentation or withholding of material information in applying for admission or in connection with any subsequent reexamination of income and family composition constitutes a breach of the

homebuyer’s obligations under this Agreement. “Termination,” as

used in this Agreement, does not include acquisition of ownership

by the homebuyer.

12.2Notice of Termination of MHO Agreement by IHA, Right of

Homebuyer to Respond.

Termination of this Agreement by the IHA for any reason shall be by

written notice of termination. Such notice shall be in compliance with

the terms of this Agreement and, in all cases, shall afford a fair and

reasonable opportunity to have the homebuyer’s response heard and

considered by the IHA. Such procedures shall comply with the Indian

Civil Rights Act, if applicable, and shall incorporate all the steps and

provisions needed to comply with State, local, or Tribal law, with the

least possible delay.

12.3Termination of MHO Agreement by Homebuyer.

The homebuyer may terminate this Agreement by giving the JHA

written notice in accordance with the Agreement. If the homebuyer

vacates the home without notice to the LHA, the homebuyer shall remain

subject to the obligations of this Agreement including the obligation to

make monthly payments, until the [HA terminates the Agreement in

writing. Notice of the termination shall be communicated by the IHA

effective on the date stated i in the notice.

12.4Disposition of Funds Upon Termination of the MHO

Agreement.

If this Agreement is terminated, the balances in the homebuyer’s

accounts and reserves shall be disposed of as follows:

(a) The MEPA shall be charged with:

(1) Any maintenance and replacement costs incurred by the IHA

to prepare the home for the next occupant;

(2) Any amounts the homebuyer owes the IHA, including required monthly payments;

(3) The required monthly payment for the period the home is

vacant, not to exceed 60 days from the date of receipt of the notice

of termination, or if the homebuyer vacates the home without

notice to the IHA, for the period ending with the effective date of

termination by the IHA; and

(4) The cost of securing a vacant unit, the cost of notification and

associated termination tasks, and the cost of storage and/or disposition of personal property.

(b) If, after making the charges in accordance with Section 12.4(a),

there is adebit balance in the MEPA, the [HA shall charge that debit

balance, first, to the VEPA; second, to the refundable MH reserve;

and third, to the nonrefundable MH reserve, to the extent of the

credit balances in these reserves and accounts. Ifthe debit balance

in the MEPA exceeds the sum of the credit balances in these

reserves and accounts, the homebuyer shall be required to pay to

the IH.A the amount of the excess.

(b), there is a credit balance in the MEPA, this amount shall be

refunded, except to the extent it reflects the value of land donated

on behalf of the family. Similarly, any credit balance remaining in

the VEPA after making the charges described above shail be

refunded.

(d) Any credit balance remaining in the refundable MH reserve after

making the charges described above shall be refunded to the

homebuyer.

(e) Any credit balance remaining in the nonrefundable MH reserve

after making the charges described above shall be retained by the

{HA for use by the subsequent homebuyer.

12.5 Settlement Upon Termination.

(a) Time for Settlement. Settlement with the homebuyer following a

termination shall be made as promptly as possible after all charges

provided in Section 12.4 have been determined and the IHA has

given the homebuyer a statement of such charges. The homebuyer

may obtain settlement before determination of the actual cost of

any maintenance required to put the home in satisfactory condition

for the next occupant, if the homebuyer is willing to accept the

IHA’s estimate of the amount of such cost. In such cases, the

amounts to be charged for maintenance shall be based on the IHA’s

estumate of the cost thereof.

(b) Disposition of Personal Property. Upon termination, the [HA may

dispose of any item of personal property abandoned by the

homebuyer in the home, ina lawful manner deemed suitable by the

IHA. Proceeds, if any, after such disposition, may be applied to the

payment of amounts owed by the homebuyer to the IHA.

12.6 Responsibility of IHA to Terminate.

@) The IHA is tespaaible f for oe appropad action with fespeet

cases of noncompliance that are not cperecteda as proved further

in this section, it is the responsibility of the IHA to terminate this

Agreement in accordance with the provisions of this section and to

institute eviction proceedings against the occupant.

(b) As promptly as possible after a noncompliance comes to the

attention of the IHA, the LHA shall discuss the matter with the

homebuyer and give the homebuyer an opportunity to identify any

extenuating circumstances or complaints which may exist. A plan

of action shall be agreed upon that will specify how the homebuyer

will come into compliance, as well as any actions by the LHA that

may be appropiate. This plan shall be in writingand signed by both

parties.

30 days from the date thereof. In the event of refusal by the

homebuyer to agree to such a plan or failure by the homebuyer to

comply with the plan, the IHA shall issue a notice of termination

of this Agreement and evict the homebuyer in accordance with the

provisions of this section on the basis of the noncompliance with

this Agreement.

(d) Arecord of meetings with the homebuyer, written plans of action

agreed upon and all other related steps taken in accordance with

Section 12.6 shall be maintained by the LHA for inspection by HUD.

Page 9 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

12.7 Subsequent Use of Unit.

After termination ofa homebuyer’s interest in the unit, itremains as part

of the MH project under the ACC. The IHA must follow its policies for

selection ofa subsequent homebuyer for the unit underthe MH program.

Article XIll_ Succession upon Death or Mental Incapacity

13.1 Definition of “Event”.

Event means the death or mental incapacity of all of the persons who

have executed this Agreement as homebuyers.

13.2 Designation of Successor by Homebuyer.

(a) A homebuyer may designate a successor who, at the time of the

event would assume the status of homebuyer, provided that at that

time he or she meets the conditions stated in Section 13.3. The

designation shall be made at the time of execution of this Agreement, and the homebuyer may change the designation at any later

time by written notice to the IHA.

(b) The designated successor as of the date of execution

of this Agreement is:

First Name: Initial: Last Name:

Street & Number:

City, State:

Relationship:

13.3 Succession by Person Designated by Homebuyer.

(a) Upon occurrence of an “event,” the person designated as the

Successor, in Section 13.2(b), shall succeed to the former

homebuyer’s rights and responsibilities under this Agreement ifthe

designated successor meets the following conditions:

(1) The successor is a family member and will make the home his

or her primary residence;

are living in the home, the IHA may, in order to protect their continued

occupancy and opportunity for acquiring ownership of the home,

approve as occupant of the home an appropmiate adult who has been

appointed legal guardian of the children with a duty to perform the

obligations of this Agreement in their interest and behalf.

13.6 Succession and Occupancy on Trust Land.

In the case of a home on trust land subject to restrictions on alienation

under federal (including federal trust or restricted land and land subject

to trust or restriction under State law), orunder State or Tribal law where

such laws do not violate federal statutes, a person who is prohibited by

law from succeeding to the IHAs interest on such land may, nevertheless, continue in occupancy with all the rights, obligations and benefits

of this Agreement, modified to conform to these restrictions on

succession to the land.

13.7 Termination in Absence of Qualified Successor or Occupant.

Ifthere is no qualified successor in accordance with the IHA’s approved

policy, the IHA shall terminate this Agreement and select a subsequent

homebuyer from the top of the waiting list to occupy the unit under a

new MHO Agreement. Ifa new homebuyer is unavailable or ifthe home

cannot continue to be used for low-income housing in accordance with

the Mutual Help program, the JHA may submit an application to HUD

to approve a disposition of the home.

Article XIV Miscellaneous

14.1 Annual Statement to Homebuyer.

The IHA shall provide an annual statement to the homebuyer that sets

forth the credits and debits to the homebuyer’s equity accounts and

reserves during the year and the balance in each account at the end of

each IHA fiscal year. The statement shall also set forth the remaining

balance of the purchase price.

14.2 Insurance Before Transfer of Ownership, Repair or

Rebuilding.

(a)_] ISUFaNCE The LELAA SAait Carry aH nsurane Y

including fire and extended coverage insurance upon the home.

(2) The successor is willing and able to pay the administration

charge and to perform the obligations of a homebuyer under this

Agreement;

(3) The successor satisfies program eligibility requirements; and

(4) The successor executes an assumption of the former

homebuyer’s obligations under this Agreement.

(b) Ifasuccessor satisfies the requirements of Section 13.3(a), except

for 13.3(a)(3), the successor may execute an outright purchase of

the home.

13.4 Designation of Successor by IHA.

If at the time of the event there is no successor designated by the

homebuyer, or if any of the conditions in Section 13.3 are not met by

the designated successor, the IHA may desi gnate, in accordance with

its occupancy policy, any person who qualifies under Section 13.3.

13.5 Occupancy by Appointed Guardian.

If at the time of the event there is no qualified successor designated by

the homebuyer or by the IHA in accordance with the foregoing

provisions of this Article, and aminorchild or children of the homebuyer

(b) Repair or Rebuilding. In the event the home is damaged or

destroyed by fire or other casualty, the IHA shall consult with the

homebuyersas to whether the home shall be repaired or rebuilt. The

IHA shall use the insurance proceeds to have the home repaired or

rebuilt unless there is good reason for not doing so. In the event the

1HA determines that there is good reason why the home should not

be repaired or rebuilt and the homebuyer disagrees, the matter shall

be submitted to the HUD field office for final determination. If the

final determination is that the home should not be repaired or

rebuilt, the IHA shall terminate this Agreement, and the homebuyer’s

obligation to make required monthly payments shall be deemed to

have terminated as of the date of the damage or destruction.

Agreement because of damage or destruction of the home, or if the

home must be vacated during the repair period, the IHA will use

its best efforts to assist in relocating the homebuyer. If the home

must be vacated during the repair period, required monthly payments shall be suspended during the vacancy period.

Page 10 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

14.3 Notices.

Any notices by the IHA to the homebuyer required under this Agreement or by law shall be delivered in writing to the homebuyer personally

orto any adult member of the homebuyer’s family residin g in the home,

or shall be sent by certified mail, retum receipt requested, properly

addressed, postage prepaid. Notice to the IHA shall be in writing, and

either delivered to an HA employee at the office of the IHA, or sent to

the LHA by certified mail, return receipt requested, properly addressed,

postage prepaid.

Article XV Counseling of Homebuyers

15.1 General.

The 1HA shall provide counseling to homebuyers in accordance with

this section. The purpose ofthe counseling program shall be to develop:

(a) A full understanding by homebuyers of their responsibilities as

participants in the MH Program.

(b) Ability on their part to carry out these responsibilities, and

homebuyers shall be required to participate in and cooperate fully

in all official pre-occupancy and post-occupancy counseling activities. Failure without good cause to participate in the program

shall constitute a breach of this Agreement.

Article XVI Cross-References to Defined Terms

ACC. Sec. Ll.

Administration Charge. Sec. 1.2., 7.3

Agreement. Sec. 1.1.

Counseling of Homebuyers. Sec. 15

Date of Occupancy. Sec. 5.1

Event. Sec. 13.1

Home. Sec. 1.2

Homebuyer. Sec. 1.2

Homeowner. Sec. 1.2

HUD. Sec. 1.2

HUD Field Office. Sec. 1.2

IHA. Sec. 1.1, Sec. 1.2

1HA Homeownership Financing. Sec. 1.2, Sec.

Initial Purchase Price. Sec. 10.2(a), 10.3(a)

Maintenance Credit. Sec. 8.4

Maintenance Reserve. Sec. 9.3(a)

MEPA. Sec. 1.2, 9.2(a)

MH. Sec.1.2. |

MH Contribution. Sec. 1.2, Sec. 4

MHO Agreement. Sec. 1.2

MH Program. Sec. 1.2

Nonrefundable MH Reserve. Sec. 9.1(b)

Notice of Termination. Sec. 12.2

11.1

Project. Sec. 1.2

Purchase Price Schedule. Sec. 10.2(b), 10.3(b)

Refundable MH Reserve. Sec. 9.1(a)

Required Monthly Payment. Sec. 7

Settlement Costs. Sec. 11.5(c)

Subsequent Homebuyer. Sec. 1.2, Sec. 10.3(a)

Succession. Sec. 13

Termination. Sec. 12.1 .

Utilities. Sec. 8.5

Utility Allowance . Sec. 7.2

Voluntary Equity Payments Account. Secs. 1.2, 9(b)

Work Order. Sec. 8.4(b)(3)

Page 11 of 11

form HUD-53056 (4/93)

ref Handbook 7460.1

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.