HomeMy WebLinkAbout065302 - General - Contract - FW Hughes House II, LPCITY SECRETARY CONTRACT NO. 65302
STATE OF TEXAS §
COUNTY OF TARRANT §
This contract ("Contract") is made and entered into by and between the City of Fort Worth
(hereafter "City" or "Lender") and FW Hughes House II, LP, (hereafter "Developer"), a Texas
limited partnership. Lender and Developer may be referred to individually as a "Party" and jointly
as "the Parties".
The Parties state as follows:
WHEREAS, Lender has received a grant from the United States Department of Housing
and Urban Development through the HOME Investment Partnerships Program, Catalog of Federal
Domestic Assistance No. 14.239, with which Lender desires to promote activities that expand the
supply of affordable housing and the development of partnerships among City, local governments,
local lenders, private industry and neighborhood -based nonprofit housing organizations;
WHEREAS, the primary purpose of the HOME program pursuant to the HOME
Investment Partnerships Act at Title II of the Cranston Gonzales National Affordable Housing Act
of 1990, as amended, 42 U.S.C. 12701 et seq. and the HOME Investment Partnerships Program
Final Rule, as amended, 24 CFR Part 92 et seq., is to benefit low and moderate income individuals
and families by providing them with affordable housing;
WHEREAS, Lender and the Housing Authority of the City of Fort Worth doing business
as Fort Worth Housing Solutions ("FWHS") were co -applicants for a federal Choice
Neighborhood Initiatives ("CNI") grant;
WHEREAS, Lender and FWHS were awarded a $35 million CNI grant in spring of 2020
to be used over six phases of development through 2026;
WHEREAS, as part of the fifth phase of development, FWHS proposes building a 302-
unit mixed -income affordable family rental housing development to be known as Hughes House
H (the "Project') to be located at 5028 AVENUE G , FORT WORTH, TEXAS 76105
("Property"), and will use a portion of the CNI grant funds among various other funding sources;
WHEREAS, Developer proposes to use HOME funds for the development, construction
and operation of the Project, an eligible project under the HOME Regulations, whereby Developer
will receive the funds from Lender in the form of a non -forgivable loan;
WHEREAS, Developer is a Texas limited partnership consisting of Hughes House II GP,
LLC a Texas limited liability company, with Fort Worth Affordability, Inc., ("FWAI") as its sole
member, as General Partner; Red Stone Equity — Fund 88 Limited Partnership, a Delaware limited
partnership, as Investor ("Investor"), and Red Stone Equity Manager, LLC, a Delaware limited
liability company, as Special Investor;
OFFICIAL RECORD
CITY SECRETARY
HOME DEVELOPER RENTAL CONTRACT
Hughes House II Apartments FT. WORTH, TX Page I
WHEREAS, FWAI is an instrumentality of FWHS and operates as a Texas nonprofit
corporation with a purpose of assisting with the creation, development, and rehabilitation of
affordable, decent, and safe housing in Fort Worth;
WHEREAS, Developer has received an award of a 2024 4% Housing Tax Credits from
the Texas Department of Housing and Community Affairs for a portion of the costs of the
development of the Project; and
WHEREAS, City residents and the City Council have determined that the development of
quality, accessible, affordable housing is needed for moderate, low, and very low-income City
residents.
NOW, THEREFORE, in consideration of the mutual covenants and obligations and
responsibilities contained herein, including all Exhibits and Attachments, and subject to the terms
and conditions hereinafter stated, the Parties understand and agree as follows:
1. INCORPORATION OF RECITALS.
Lender and Developer hereby agree that the recitals set forth above are true and correct and
form the basis upon which the Parties have entered into this Contract.
2. DEFINITIONS.
In addition to terms defined in the body of this Contract, the following terms shall have the
definitions ascribed to them as follows:
Accessible Units means units accessible to handicapped tenants. Developer must comply with
Section 504 requirements and all other applicable Federal accessibility requirements.
The Required Improvements must contain 23 Accessible Units. Of these 23 units, 16 must
be accessible to individuals with mobility impairments, and the other 7 must be accessible
to individuals with visual or hearing impairments.
Act means the HOME Investment Partnerships Act at Title II of the Cranston Gonzales National
Affordable Housing Act of 1990, as amended, 42 U.S.C. 12701 et seq.
Affordable Rent means a rent amount that does not exceed the High HOME Rent Limit published
annually by HUD, with adjustment for the bedroom size of the housing unit as more particularly
described on Exhibit "A" — Project Summary.
Affordability Period means the period of time that HOME Units must be leased to HOME
Eligible Households for Affordable Rent.
The Affordability Period for this Project is 20 years. The Affordability Period begins on
the date that the Project status is changed to "complete" in IDIS.
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Affordability Requirements means the HOME Units remain occupied by HOME Eligible
Households paying Affordable Rent throughout the Affordability Period in accordance with the
terms of this Contract and the HOME Regulations.
Area Median Income or AMI means the median family income for the Fort Worth -Arlington
metropolitan statistical area as set annually by HUD.
Complete Documentation means the following documentation as applicable:
1. Attachments I and II of Exhibit "F", with supporting documentation as follows:
a. Proof of expense: invoices, leases, service contracts, expenses based on work
completed and costs actually incurred or other documentation showing the nature
of the cost and that payment is due Developer.
b. Proof of payment: cancelled checks, bank statements, or wire transfers necessary
to demonstrate that amounts due by Developer were actually paid by Developer.
2. Other documentation: (i) final lien releases signed by the general contractor or
subcontractors, if applicable; (ii) copies of all City permits and City -issued "pass"
inspections for such work; (iii) documentation to show compliance with BDE or DBE
bidding process for procurement or Contract activities, as applicable; (iv) proof of
contractor, subcontractor and vendor eligibility as described in Section 6.6; and (v) any
other documents or records reasonably necessary to verify costs spent for the Project.
3. Complete Documentation shall meet the standards described in Exhibit "J" — Standards
for Complete Documentation.
4. The City, at its sole discretion, may accept alternative documentation to support
reimbursement requests, provided such documentation satisfies the requirements outlined
in the City Charter and any applicable City policies and procedures.
Completion means the substantial completion of the Required Improvements as evidenced by a
Neighborhood Services Department Minimal Acceptable Standard Inspection report, HUD
Compliance Inspection Report or any other applicable final inspection approval from Lender
showing that the Required Improvements have met City and HOME standards, or City inspection
results in a Certificate of Occupancy.
Completion Deadline means September 30, 2028.
DBE means disadvantaged business enterprise in accordance with 49 CFR Part 26.
Deed of Trust means any deed of trust from Developer to Lender securing a loan or performance
made using Lender's HOME Funds and covering the Project and securing the indebtedness
evidenced therein and Developer's performance of the requirements of the Loan and the HOME
Regulations, as the same may be extended, amended, restated, supplemented or otherwise
modified.
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Deed Restrictions means the recorded deed restriction, covenant running with the land, or
agreement restricting the use of the Property, which imposes the Affordability Requirements
beginning after Project completion as required by 24 CFR Part 92.252(e)(1) which will give
Lender the right to require specific performance, among other enforcement rights. The Parties
agree to the use of the Deed Restriction in substantially the same form attached as Exhibit "L" —
Deed Restriction.
Director means the Director of the City's Neighborhood Services Department or any successor
department thereto.
Effective Date means the date of this Contract is fully executed by the Parties as shown by the
date written under their respective signatures.
Ground Lease means the lease agreement for the Property executed between FWHS as lessor and
Developer as lessee, as amended or modified from time to time.
High HOME Unit means a unit that must be leased to High HOME Eligible Tenant for High
HOME Rent. High HOME Units can float among units that are materially similar in number of
bedrooms, square footage, and amenities; however, if the units are not materially similar, then the
High HOME units must be fixed.
The Project contains 3 HIGH HOME Units. Of these High HOME Units, 1 is a one -
bedroom unit, 2 is a two -bedroom unit
High HOME Eligible Tenant means (i) for a tenant who is the first to occupy a High HOME
Unit, a tenant whose annual income adjusted for family size does not exceed 60% of AMI, and
(ii) for a tenant who is not the first to occupy a High HOME Unit, a tenant whose annual income
adjusted for family size does not exceed 80% of AMI. Tenant income must be verified using the
most current HUD Income Guidelines and Technical Guidance for Determining Income and
Allowances subject to the income verification requirements of Section 7.2.
High HOME Rent means a rent amount that is the lesser of (i) the HUD -established Fair Market
Rent for existing comparable housing units in the area, or (ii) 30% of the adjusted income of a
family whose annual income equals 65% of AMI with adjustment for the bedroom size of the
housing unit. High Home Rent may not exceed the maximum rent limitations set by HUD minus
utility allowances as more particularly described in Section 7.5.4.
HOME means the HOME Investment Partnerships Program.
HOME Eligible Household means a household whose annual income adjusted for family size
does not exceed 80% of AMI using the most current HUD Income Guidelines and Technical
Guidance for Determining Income and Allowances. The definition of annual income to determine
tenant income eligibility shall be the definition at 24 CFR Part 5.609, as amended from time to
time.
HOME Funds means the HOME Program grant funds supplied by Lender to Developer under
the terms of this Contract.
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HOME Regulations means the HOME Investment Partnerships Program Final Rule at 24 CFR
Part 92 et seq.
HOME Unit means a housing unit subject to the HOME Regulations leased to a HOME Eligible
Household at Affordable Rent for the duration of the Affordability Period as further described in
Exhibit "A" — Project Summary. The HOME Units must be designated as Low HOME units.
The HOME Units are floating.
The Project contains 6 Home Units. Of these HOME Units, 3 are one -bedroom unit, 3 are
a two -bedroom unit.
Housing Tax Credits means the federal housing tax credits allocated by the Texas Department of
Housing and Community Affairs under Section 42(h) of the Internal Revenue Code of 1986, as
amended.
HUD means the United States Department of Housing and Urban Development.
IDIS means Integrated Disbursement Information System, HUD's project tracking system.
Investor means Red Stone Equity — Fund 88 Limited Partnership, a Delaware limited partnership,
and any successors and assigns.
Loan means the HOME Funds provided to Developer by Lender for the purpose described in the
Loan Documents.
Loan Documents means security instruments which Developer has executed and delivered to
Lender including without limitation, the Promissory Note, the Deed of trust, or any other similar
security instruments evidencing, securing or guaranteeing Lender's interest and further
evidencing, securing, or guaranteeing Developer's performance of all City and federal
requirements, including the Affordability Requirements during the Affordability Period, as the
same may from time to time be extended, amended, restated, supplemented or otherwise modified.
Low HOME Eligible Tenant means a tenant whose annual income adjusted for family size does
not exceed 50% of AMI set by HUD. Tenant income must be verified using the most current
HUD Income Guidelines and Technical Guidance for Determining Income and Allowances subject
to Section 7.2 of this Contract.
Low HOME Rent means a rent amount that is no more than 30% of the annual income of a family
at 50% of AMI adjusted for family size. Low Home Rent may not exceed the maximum rent
limitations established by HUD minus utility allowances as more particularly described in Section
7.5.4.
Low HOME Unit means a unit that must be leased to Low HOME Eligible Tenant for Low
HOME Rent. Low HOME Units can float among units that are materially similar in number of
bedrooms, square footage, and amenities; however, if the units are not materially similar, then the
Low HOME units must be fixed.
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The Project contains 3 Low HOME Units. Of these Low HOME Units, I is a one -bedroom
unit, 2 is a two -bedroom unit
Neighborhood Services Department means the City's Neighborhood Services Department or
any successor department thereto.
Permanent Supportive Housing Program or PSH Program means the combination of dedicated
PSH Units and the accompanying supportive services provided by the Supportive Services
Provider to the tenants of the PSH Units.
Permanent Supportive Housing Tenant means a tenant of the PSH Units.
Permanent Supportive Housing Unit or PSH Unit means a housing unit for which supportive
services are provided to assist homeless persons with disabilities to live independently. The Project
contains 21 PSH Units.
Plans means the plans and specifications related to the Required Improvements prepared by the
Developer's architect which have been delivered to and then reviewed and approved by Lender on
or before the Effective Date, and any and all amendments thereto approved by Lender.
Project Stabilization means issuance of a final certificate of occupancy for the Project and ninety
percent (90%) of the Project's units leased up by tenants.
Promissory Note means any note in the amount of the HOME Funds executed by Developer
payable to the order of Lender, as the same may be extended, amended, restated, supplemented or
otherwise modified. The Parties agree to the use of a Promissory Note in substantially the same
form attached as Exhibit "E" — Loan Documents.
Property means the land on which the Required Improvements shall be constructed as more
particularly described in and encumbered by the Ground Lease, the Developer Deed of Trust and
the Deed Restrictions.
Required Improvements or the Project means all the improvements for the 302-units, mixed -
income, affordable family rental housing project to be constructed on the Property, together with
all fixtures, tenant improvements and appurtenances now or later to be located on the Property
and/or in such improvements. The Required Improvements are commonly known as the Hughes
House II Apartments. The current address for the Project 5028 Avenue G Fort Worth, Texas
76105.
Reimbursement Request means all reports and other documentation described in Section 10
submitted by Developer to Lender.
Section 504 requirements means the requirements of Section 504 of the Rehabilitation Act of
1973 to provide accessible housing to persons with disabilities. Section 504 requires that 5% of
the units (but not less than 15 units) in a newly constructed multifamily project must be accessible
to individuals with mobility impairments, and an additional 2% of the units (but not less than 6
unit) must be accessible to individuals with sensory impairments.
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TDHCA means the Texas Department of Housing and Community Affairs.
Tenant Documentation means any documentation allowed under the definition of annual income
in 24 CFR Part 5.609 sufficient to show that a tenant is a HOME Eligible Household.
Documentation may include but is not limited to copies of paychecks, Social Security and
disability verification letters, interest or rental income statements, retirement income statements,
child support and alimony verification, unemployment benefit letters, and the like for initial tenant
income eligibility verifications, and the tenant income verification required every 6t1 year of the
Affordability Period. Documentation for tenant income eligibility verifications for other than the
initial lease and the 61 year of the Affordability Period shall be a Lender -approved income self -
certification form.
3. TERM AND EXTENSION.
3.1 Term of Contract.
The term of this Contract commences on the Effective Date and ends 40 years after Project
Stabilization occurs, unless earlier terminated as provided in this Contract. All provisions relating
to completion of the Required Improvements terminate in 3 years unless earlier terminated as
provided in this Contract or extended as provided in Section 3.2. All provisions relating to the
HOME Program, the HOME Regulations and the HOME Units shall remain in full force and effect
until the end of the Affordability Period.
3.2 Extension of Contract.
This provisions in this Contract relating to completion of the Required Improvements may
be extended for 2 one-year extensions upon Developer submitting a request for an extension in
writing at least 60 days prior to the end of the initial 3 year period described in Section 3.1, or the
end of the first one-year extension. The first one-year extension request shall be granted upon the
written request of Developer. The second one-year extension request shall include the reasons for
the extension, Developer's anticipated budget, construction schedule and goals for the additional
time. It is specifically understood that it is within Lender's reasonable discretion whether to
approve or deny Developer's request for a second one-year extension to complete the Required
Improvements. Any such extension shall be in the form of an amendment to this Contract. It shall
be an event of default under this contract if the Required Improvements are not completed within
the time period required herein, including any extensions.
3.3 Term of Loan.
The term of the Loan shall commence on the date of the Promissory Note and ends 40 years
after Project Stabilization, so long as the terms and conditions of this Contract and the Loan
Documents have been met.
4. DUTIES AND RESPONSIBILITIES OF CITY.
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4.1 Provide HOME Funds.
Lender shall provide up to $1,000,000.00 of HOME Funds to Developer in the form of a
non -forgivable Loan to fund part of the construction of the Required Improvements, under the
terms and conditions of this Contract and the Loan Documents.
4.2 Lender Will Monitor.
Lender will monitor the activities and performance of Developer and any of its contractors,
subcontractors or vendors throughout the Affordability Period, but no less than annually as
required by 24 CFR Part 92.504.
5. DUTIES AND RESPONSIBILITIES OF DEVELOPER.
5.1 Construction of Required Improvements.
Developer shall complete the construction of the Required Improvements as described in
Exhibit "A" — Project Summary in accordance with the Plans, the schedule set forth in Exhibit
"C" - Construction and Reimbursement Schedule, and the terms and conditions of this
Contract.
5.1.1 Written Cost Estimates, Construction Contracts and Construction
Documents.
Developer shall submit any written cost estimates, construction contracts and construction
documents (collectively, the "Construction Documents") to Lender to show the work to be
undertaken for the Required Improvements in sufficient detail that Lender can perform all required
inspections in accordance with 24 CFR Part 92.251 (a)(2)(iv). Lender shall review and approve
written cost estimates for the construction of the Required Improvements to determine that such
costs are reasonable prior to the commencement of construction. In the event Lender in its
reasonable discretion determines that such costs are unreasonable, Developer shall revise said costs
estimates to Lender's satisfaction.
5.2 Use of HOME Funds.
5.2.1 Costs in Compliance with HOME Regulations and Contract.
Developer shall be reimbursed for eligible Project costs with HOME Funds only if Lender
determines in its sole discretion that:
5.2.1.1 Costs are eligible expenditures in accordance with the HOME
Regulations.
5.2.1.2 Costs comply with the requirements of the HOME program and as
otherwise listed in this Contract and are reasonable and consistent with
industry norms.
5.2.1.3 Complete Documentation, as applicable, is submitted by Developer.
5.2.2 Budget.
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Developer agrees that the HOME Funds will be paid on a reimbursement basis in
accordance with Exhibit "B" - Budget and Exhibit "C" - Construction and Reimbursement
Schedule. Developer may increase or decrease line item amounts in the HOME Funds Budget
with the Director's prior written approval, which approval shall be in the Director's sole discretion.
Any such increase or decrease in line items in the Budget shall comply with Section 5.2.1, Exhibit
"A — Project Summary, and shall not increase the total amount of HOME Funds.
5.2.3 Change in Budget.
5.2.3.1 Developer will notify Lender promptly of any additional funds it
receives for construction of the Project, and Lender reserves the right to
amend this Contract in such instances to ensure compliance with HUD
regulations governing cost allocation and subsidy layering.
5.2.3.2 Developer agrees to utilize the HOME Funds to supplement rather than
supplant funds otherwise available for the Project.
5.3 Payment of HOME Funds to Developer.
HOME Funds will be disbursed to Developer within thirty (30) days of Lender's approval
of Developer's Reimbursement Requests, including submission of Complete Documentation to
Lender in compliance with Section 10. Developer must provide complete documentation to
support the reimbursement request. As more particularly described in the HOME Funds Budget
and in Exhibit "C" - Construction and Reimbursement Schedule, Lender will hold back
$100,000.00 of the HOME Funds until Lender verifies that all HOME Units have been leased to
HOME Eligible Households. It is expressly agreed by the Parties that any HOME Funds not
reimbursed to Developer shall remain with Lender.
5.4 Identify Project Expenses Paid with HOME Funds.
Developer agrees to keep accounts and records in such a manner that Lender may readily
identify and account for Project expenses reimbursed with HOME Funds. These records shall be
made available to Lender for audit purposes and shall be retained as required hereunder.
5.5 Acknowledgement of Lender Payment of HOME Funds.
Upon completion, Developer shall sign an acknowledgement that the City has paid all
HOME funds due under this Contract, or shall deliver a document executed by Developer
identifying any portion of the HOME Funds that remain unpaid. Once the City has fulfilled all of
its obligations for payment of HOME Funds, the Developer shall sign an acknowledgement
confirming the same. For purposes of this section, email correspondence from the Developer may
serve as sufficient written acknowledgement.
5.6. Security for Lender's Interest and Developer's Performance.
To secure Lender's interest in the Required Improvements and Lender's interest in
preserving the affordability of the HOME Units, in accordance with the requirements of the HOME
Regulations , Developer shall execute the Deed Restriction and Deed of Trust, which must be
recorded in lien priority agreed to by Lender at the earlier of (i) the acquisition of the Property, or
(ii) the closing of Developer's construction loan. No HOME Funds will be paid or reimbursed
until the Deed of Trust and the Deed Restriction are recorded.
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5.6.1 Loan Terms and Conditions.
5.6.1.1 Developer will be required to:
5.6.1.1.1 Execute and deliver the Deed Restriction, the Promissory Note and Deed
of Trust along with any other Loan Documents required by Lender.
5.6.1.1.2 Provide Lender with a Mortgagee's Policy of title insurance in the
amount of the Loan.
5.6.1.1.3 Pay all costs associated with closing the Loan.
5.6.1.1.4 Provide Lender with an estimated settlement statement from the title
company at least 3 Business Days before closing.
5.6.1.1.5 Ensure Lender's lien is subordinate only to the permitted exceptions
shown on the Mortgagee's Policy of title insurance. Lender must
approve in writing any secured financing for the Project that is to be
subordinate to the Loan. Lender hereby approves the following loans
to the Developer that are subordinate to the Loan: The $7,678.333 land
loan from the Housing Authority of the City of Fort Worth, Texas d/b/a
Fort Worth Housing Solutions to the Developer, , the $400,000 ARPA
loan from FWAI to Developer, and the $3,293,023 CPF loan from
FWAI to Developer.
5.6.1.1.6 INTENTIONALLY OMITTED.
5.6.1.1.7 Make all required payments on The Loan. The Loan is a deferred
payment loan and shall bear 0% simple interest on an annual basis. All
unpaid amounts are due at Maturity. After the Maturity Date, Borrower
promises to pay any unpaid principal balance plus 12% interest.
Payment shall be made to the order of Lender and delivered to
Neighborhood Services Department, or any successor department
thereto, at the address listed in the notice section of this Contract ("Place
for Payment").
5.6.1.2 Developer acknowledges that:
5.6.1.2.1 Early repayment of the Loan shall not relieve Developer of its
obligations under this Contract or the HOME Regulations including but
not limited to the Affordability Requirements and other HOME
requirements. The Deed of Trust shall secure both repayment of the
HOME Funds and performance by Developer of its obligations under
this Contract during the Affordability Period and through the end of the
Loan Term. This Contract and the Promissory Note shall secure
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repayment of the HOME Funds and performance by Developer of all
obligations under this Contract during the term of the Loan.
5.6.1.2.2 Except for permanent loan conversion with Developer's permanent
lender, any future refmancing by Developer or any new or subordinate
financing shall require the review and prior written approval of Lender
for the purpose of ensuring compliance with the underwriting and
subsidy layering requirements of the HOME Regulations, which
approval shall not be unreasonably withheld, conditioned or delayed.
Such approval will be based on Lender's review of the then -current
financial information, underwriting and subsidy layering requirements,
and may require renegotiation of the Loan terms to comply with the
HOME Regulations. Renegotiation of the Loan term may include
modification of the maturity date (if permitted by any senior lender),
payment amount adjustment, or any other modification necessary to
comply with the HOME Regulations. A refinance of the Senior Loan
or any subsequent refinance shall not automatically cause repayment of
the Loan. Notwithstanding the foregoing, refinancing by Developer of
the Senior Indebtedness will not require prior written approval of
Lender so long as such refinancing would not increase the principal
amount of the Senior Indebtedness beyond the original principal amount
of the Senior Indebtedness (excluding any amounts having been
advanced by Senior Lender for the protection of its security interest
pursuant to the Senior Loan Documents), increase the interest rate of the
Senior Indebtedness, or decrease the original maturity term of the Senior
Indebtedness; provided however that Lender must review and approve
any loan documents, including subordination agreements, approval of
which shall not be unreasonably withheld or delayed, and nothing herein
shall limit Lender's rights to modify the Loan as allowed herein.
5.6.1.2.3 Failure by Developer to comply with this Section 5.6.1 will be an
event of default under this Contract and the Loan Documents
subject to all notice and cure periods.
5.7 Maintain Affordability Requirements.
The HOME Units must be occupied by HOME Eligible Households throughout the
Affordability Period as required by the HOME Regulations. Developer must notify Lender in
writing within 30 days of either of the following occurrences: (i) a HOME Unit is occupied by a
tenant who is not a HOME Eligible Household, or (ii) a HOME Unit remains vacant for more than
90 days. In the event that a HOME Unit is occupied by a tenant who is not a HOME Eligible
Household, Developer shall have 45 days to determine if another tenant qualifies as a HOME
Eligible Household or fill an empty unit with a HOME Eligible Household. If either (i) or (ii)
takes place and is not cured within the time limits described in this Section, then Developer
shall pay to Lender 10% of the Loan amount as liquidated damages within thirty days after
notice is provided by Lender to Developer. The Parties agree that Lender's actual damages
in the event of either (i) or (ii) happening and remaining uncured are uncertain and would
be difficult to ascertain and may include a finding by HUD, a repayment of funds to HUD by
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Lender or otherwise impact Lender's HOME grant or other federal grant funds. Therefore,
the Parties agree that payment under this Section of 10% of the Loan amount by Developer
to Lender is liquidated damages and not a penalty. Failure by Developer to make payment
under this section shall be an event of default under this Contract.
5.8 Deed Restriction.
Developer shall execute and deliver the Deed Restriction, which shall secure the
Affordability Requirements for the Affordability Period, as required by HUD Regulations. Early
repayment of the Loan shall not relieve Developer of the obligations under the Deed Restriction,
this Contract, or the HOME Regulations including but not limited to the Affordability
Requirements and other HOME requirements.
5.9 Affordability Requirements Survive Transfer.
The HOME Units must remain affordable without regard to the term of any mortgage or
transfer of ownership, pursuant to the terms of the Loan Documents, the Deed Restriction, or any
other mechanism provided by HUD. Developer agrees that any sale or transfer of the Project
during the Loan Term, excluding a transfer due to condemnation or to obtain utility services, may
at Lender's sole discretion require the repayment of the HOME Funds unless the new owner or
transferee affirmatively assumes in writing the obligations established hereunder for the HOME
Units for whatever time remains of the Affordability Period, subject to Lender's consent in its sole
discretion, which shall not be unreasonably withheld or delayed. Failure of the new owner or
transferee to promptly assume all of Developer's obligations under this Contract, the Loan
Documents, and/or the Deed Restriction will result in immediate termination of this Contract and
any HOME Funds already paid to Developer must be repaid to Lender within 30 days of such
termination. In addition, Lender may pursue any of its remedies under the Loan Documents or the
Deed Restriction if the new owner or transferee fails to assume Developer's obligations to maintain
the Affordability Requirements throughout the Affordability Period or any other obligation
hereunder throughout the Loan Term.
6. CONSTRUCTION.
6.1. Construction Schedule.
Developer shall construct the Required Improvements in accordance with the schedule set
forth in the attached Exhibit "C" — Construction and Reimbursement Schedule. Developer
shall not begin construction until Lender sends a Notice to Proceed. Developer's failure to meet
the Construction Schedule (as it may be modified in accordance with Section 14.19) or the
Completion Deadline shall be an event of default under this Contract and the Loan Documents.
Subject to Section 14.19, Developer may not change the Construction Schedule without the
Director's prior written approval, which approval shall be in the Director's reasonable discretion.
6.1.1 Construction Inspections.
City will conduct progress and final inspections of construction of the project to ensure that
the work is done in accordance with applicable building codes and the Construction Documents.
The construction of the project must pass a Neighborhood Services Department Minimal
Acceptable Standard Inspection report, a HUD Compliance Inspection Report, or any other
applicable HUD -required inspections during the construction period, along with any applicable
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final inspections by City building inspectors upon completion of construction and will ensure that
the project meets all requirements necessary to obtain a Certificate of Occupancy.
6.2 Applicable Laws, Building Codes and Ordinances.
Developer shall require that the Plans and construction for the Required Improvements (i)
conform to all applicable Federal, State, City and other local laws, ordinances, codes, rules and
regulations, including the HOME Regulations; (ii) meet all City building codes; (iii) meet the
Energy Conservation requirements as required by the State of Texas in Chapter 11 of the
International Residential Code; (iv) if new construction, must conform to the Model Energy Code
published by the Council of American Building Officials; and (v) must pass a HUD Compliance
Inspection Report and inspection by City's Neighborhood Services Department inspectors.
6.3 Property Standards During Construction.
Developer shall comply with the following as applicable during the construction of the
Required Improvements: (i) the Property Standards in 24 CFR Part 92.251(a), (ii) accessibility
standards under 24 CFR Part 92.25 1 (a)(2)(i), (iii) any City property standards, and (iv) all other
applicable accessibility standards for the Project.
6.4 Lead -Based Paint Requirements.
Developer shall comply with any applicable Federal lead -based paint requirements
including lead screening in buildings built prior to 1978 in accordance with 24 CFR Part 92.355
and 24 CFR Part 35, subparts A, B, J, K, M, and R, and the Lead: Renovation, Repair and Painting
Program Final Rule, 40 CFR Part 745, in the construction and/or rehabilitation of the Required
Improvements.
6.5 Approval of Plans and Specifications by Lender Not Release of Responsibility.
Approval of the Plans by Lender shall not constitute or be deemed (i) to be a release of the
responsibility or liability of Developer or any of its contractors or subcontractors, or their
respective officers, agents, employees and lower tier subcontractors, for the accuracy or the
competency of the Plans or the Construction Documents, including, but not limited to, any related
investigations, surveys, designs, working drawings and specifications or other documents; or (ii)
an assumption of any responsibility or liability by Lender for any negligent act, error or omission
in the conduct or preparation of any investigation, surveys, designs, working drawings and
specifications or other documents by Developer or any of its architects, contractors or
subcontractors, and their respective officers, agents, employees and lower tier subcontractors.
6.6 Contractor, Subcontractor and Vendor Requirements.
Developer shall use commercially reasonable efforts to ensure that all contractors or
vendors utilized by Developer or subcontractors utilized by Developer's general contractor are
appropriately licensed and such licenses are maintained throughout the construction of the
Required Improvements and the operation of the Project when applicable. Developer shall ensure
that all contractors utilized by Developer, subcontractors utilized by Developer's general
contractor in the construction of the Required Improvements, or vendors utilized by Developer in
the operation of the Project are not debarred or suspended from performing the contractor's,
subcontractor's or vendor's work by Lender, the State of Texas, or the Federal government. For
purposes of this Contract, the term "vendors" does not include suppliers or materialmen.
Developer acknowledges that 2 CFR Part 200 forbids Developer from hiring or continuing
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to employ any contractor, subcontractor or vendor that is listed on the Federal Excluded
Parties List System for Award Management, www.sam.gov ("SAM"). Failure to submit or
require such proofs of search shall be an event of default. In the event that Lender determines
that any contractor, subcontractor or vendor has been debarred, suspended, or is not properly
licensed, Developer or Developer's general contractor shall immediately cause such contractor,
subcontractor or vendor to immediately stop work on the Project and Developer shall not be
reimbursed for any work performed by such contractor, subcontractor or vendor. However, this
Section should not be construed to be an assumption of any responsibility or liability by Lender
for the determination of the legitimacy, quality, ability, or good standing of any contractor,
subcontractor or vendor. Developer acknowledges that the provisions of this Section
pertaining to the SAM shall survive the termination of this Contract and be applicable for
the length of the Affordability Period.
6.7 Furnish Complete Set of "As Built" Plans.
Developer shall furnish Lender a complete set of "as built" or marked -up plans for the
Project at completion of construction after all final approvals have been obtained.
6.8 Broadband Infrastructure Requirements.
In compliance with the requirements of 24 CFR Part 5.100, Developer shall provide for the
installation of broadband infrastructure, to include cables, fiber optics, wiring, or other permanent
infrastructure, including wireless infrastructure, that is capable of providing access to Internet
connections in individual housing units, and that meets the definition of "advanced
telecommunications capability" determined by the Federal Communications Commission under
Section 706 of the Telecommunications Act of 1996 (47 U.S.C. 1302).
7. TENANT AND LEASE REQUIRMENTS; PROPERTY STANDARDS DURING
AFFORDABILITY PERIOD.
7.1 Income Eligibility.
Developer (1) must use the definition of annual income used by 24 CFR 5.609 to establish
tenant income eligibility, (2) shall use the most current HUD Income Guidelines, and (3) shall
maintain Tenant Documentation sufficient to show that the HOME Units are occupied by HOME
Eligible Households. This Section shall survive the earlier termination or expiration of this
Contract and be applicable for the length of the Affordability Period.
7.2 Income Verification.
Developer shall comply with the following:
7.2.1 Developer must verify that all tenants of HOME Units are HOME Eligible
Households with full Tenant Documentation at the time the initial lease for a HOME Unit is
executed. Tenants must certify the number of people in tenant's household along with such
person's names and ages. Developer shall obtain financial information on all members of a
tenant's household.
7.2.2 Developer must verify the income of the tenants of the HOME Units annually after
the initial lease is executed, but may use a Lender -approved tenant self -certification form as Tenant
Documentation. Notwithstanding the foregoing, Developer must verify the income eligibility
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of all HOME Eligible Households with full Tenant Documentation every 6th year of the
Affordability Period.
7.2.3 Developer must maintain copies of Tenant Documentation as required under this
Contract.
7.2.4 Lender will review Tenant Documentation during the Affordability Period as part
of its monitoring.
7.3 Tenant Lease.
7.3.1 Developer shall submit to Lender the form of its tenant lease prior to leasing any
HOME Unit. Such lease shall comply with the provisions of 24 CFR Part 92.253 regarding the
following issues:
7.3.1.1 Length of lease term shall not exceed 2 years and may not be shorter
than 1 year for the initial lease term. If the lease is renewed, tenant and
landlord may agree to a longer or shorter term.
7.3.1.2 Lease may not include agreement by tenant to allow landlord to take,
hold or sell tenant's personal property without notice and a court
decision on the rights of the parties.
7.3.1.3 Lease may not include agreement by the tenant to excuse owner or
owner's agents from responsibility for any action or failure to act,
whether intentional or negligent acts.
7.3.1.4 Lease may not authorize landlord to institute a lawsuit without notice to
the tenant.
7.3.1.5 Lease may not include agreement by tenant to waive a jury trial or right
of appeal.
7.3.1.6 Lease may not include an agreement by tenant to pay legal costs of court
proceeding even if the tenant prevails in those proceedings regardless of
outcome.
7.3.1.7 Lease may not include an agreement by the tenant to be sued, to admit
guilt or to a judgment in favor of the owner in a lawsuit brought in
connection with the lease.
7.3.1.8 Lease may not include an agreement by the tenant that the owner may
evict the tenant or household members without instituting civil court
proceedings in which the tenant has the opportunity to present a defense,
or before a court decision on the rights of the parties.
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7.3.1.9 Lease may not include an agreement by the tenant to waive the tenant's
right to appeal or otherwise challenge in court a court decision in
connection with the lease.
7.3.1.10 Lease may not include an agreement by the tenant to accept supportive
services that are offered.
7.3.2 Termination of Tenancy of HOME Units.
Developer shall not terminate the tenancy of a HOME Eligible Household in a HOME Unit
except for serious or repeated violation of the terms and conditions of the lease; for violation of
applicable federal, state or local laws; or for other good cause. Good cause does not include an
increase in the income of the HOME Eligible Household. To terminate or refuse to renew the
tenancy, Developer must serve written notice upon the tenant specifying the grounds for the action
at least 30 days before the termination of tenancy.
7.3.3 Revised Lease Forms.
Developer shall provide Lender copies of revised lease forms within 30 days of any change
to its lease form. All changes to Developer's lease form shall comply with the requirement of
Section 7.3.1.
7.4 Tenant Household Characteristics.
7.4.1 Developer shall provide Lender with the information about the household
characteristics of the first tenant renting a HOME Unit on Exhibit "G" — Project Compliance
Report: Rental Housing.
7.4.2 At Lender's request, Developer shall provide demographic information on all
tenants in the Project in order to show compliance with Section 7.7 during the Affordability Period.
7.5 Tenant Rent.
7.5.1 Rents charged to tenants of the HOME Units are subject to 24 CFR 92.252 (a) and
(b) and are subject to review and approval by Lender at initial lease up and prior to any rent
increases. Under no circumstances may the maximum rent charged to tenants of HOME Units
exceed the High Home Rent minus utility allowances (excluding telephone). Developer agrees to
abide by and does abide by the HUD -approved schedules of HOME rent levels.
7.5.2 Lender shall provide Developer with information on updated HOME rent limits so
that rents may be adjusted (not to exceed the maximum HOME rent limits). Developer shall
provide Lender annually with information on rents and occupancy of the HOME Units to
demonstrate compliance with 24 CFR Part 92.252 (a) and (b). Lender shall review the rents for
compliance and approve or disapprove them every year.
7.5.3 Any increase in rents for the HOME Units is subject to the provisions of any
outstanding leases for said units. Developer shall provide tenants of the HOME Units with not
less than 30 days prior written notice before implementing any increase in rents.
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7.5.4 Lender shall adopt utility allowances in accordance with HOME Regulations and
HUD guidance. Such allowances shall be updated regularly, and shall be furnished to Developer.
Developer shall adjust tenant rents accordingly in compliance with HOME Regulations.
7.6 Tenant Selection.
Within 120 days prior to commencement of initial lease up, Developer must submit to
Lender for Lender's approval Developer's tenant selection policy and criteria that address the
following:
7.6.1 The tenant selection policy must be consistent with the purpose of providing
housing for very low and low income persons.
7.6.2 The tenant selection policy must provide for:
7.6.2.1 Selection of tenants from a written waiting list in the chronological order
of their application, insofar as is practicable;
7.6.2.2 Prompt written notification to any rejected applicant of the grounds for
such rejection; and
7.6.2.3 Bi-lingual leasing and management assistance.
7.6.3 Holders of rental assistance subsidies (such as HUD's Housing Choice Voucher or
similar subsidy) must not be excluded from renting a unit in the Project.
7.6.4 The tenant selection policy must address non-discrimination and affirmative
marketing as discussed in Section 7.7.
7.6.5 Developer shall market Accessible Units in the following order:
7.6.5.1 Within the Project to persons requiring an accessible unit.
7.6.5.2 To persons on the waiting list requiring an accessible unit.
7.6.5.3 To the general community for persons requiring accessible unit.
7.6.5.4 To persons that do not require an accessible unit.
7.6.6 The tenant selection policy must (i) address the lease requirements described in
Section 7.3, (ii) address managing HOME Unit requirements, and (iii) must comply with state and
local tenant/landlord laws.
7.7 Affirmative Marketing.
Developer must adopt and implement affirmative marketing procedures as required by 24
CFR 92.351 if the Project involves the construction of 5 or more HOME Units. The procedures
and requirements must include methods for informing the public, owners and potential tenants
about fair housing laws and policies so as to ensure that all individuals are given an equal
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opportunity to participate in the Project without regard to sex, age, race, color, creed, nationality,
national origin, religion, handicap status, disability, familial status, sexual orientation, gender
identity, gender expression or transgender. The procedures shall include methods to be used by
Developer to inform and solicit applications for tenancy from persons in the housing market area
who are not likely to apply for the housing without special outreach (e.g., through the use of
community organizations, places of worship, employment centers, fair housing groups, or housing
counseling agencies.) The procedures and requirements must designate an individual who will be
responsible for marketing the Project and must establish a clear application screening plan.
Developer's affirmative marketing procedures must be submitted to Lender for approval prior to
implementation; provided however, Lender shall have no responsibility for affirmative marketing
of the Project.
7.7.1 Developer shall keep records describing actions taken to affirmatively
market the HOME Units and the Project sufficient to enable Lender to assess the
results of the affirmative marketing.
7.8 Property Inspections During Initial Lease -Up of HOME Units; Annual
Inspections of HOME Units.
Lender shall inspect units in the Project before they are placed into service. Lender shall
inspect the HOME Units prior to a HOME Eligible Household occupying such unit to ensure that
each HOME Unit meets the appropriate HOME standards. Thereafter, Lender will inspect the
HOME Units annually. Developer shall comply with inspection requirements.
7.9 Project Maintenance and Inspections During Affordability Period.
Developer shall ensure that the Project is maintained in accordance with all applicable
HUD property standards for the duration of the Affordability Period, which at a minimum shall be
those property standards required in 24 CFR Part 92. Lender will verify maintenance of the Project
to these standards through on -site inspections every year.
7.10 Violence Against Women Act Requirements.
7.10.1 As Applicable, Developer agrees to comply with the Violence Against Women Act
("VAWA") and shall ensure that its property manager shall, at the time of application for a unit
in the Project, provide all potential tenants receiving rental assistance with a Notice of
Occupancy Rights under the Violence Against Women Act in substantially the same form as the
form attached and incorporated as Exhibit "N" — VAWA Forms in compliance with VAWA
and 24 CFR Part92.359 of the HOME Regulations.
7.10.2 Developer agrees that no applicant for a unit in the Project may be denied on
the basis or as a direct result of the fact that they are or have been a victim of domestic violence,
dating violence, sexual assault, or stalking, as long as they would otherwise qualify for the unit.
7.10.3 Developer agrees to be responsible for reviewing VAWA and any applicable
regulations and shall respond to all emergency transfer requests in accordance with the
requirements of those provisions. Developer may request that all tenants requesting an emergency
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transfer under VAWA fill out the form attached and incorporated in Exhibit "N" — VAWA
Forms or its own form that is substantially the same.
8. ADDITIONAL HOME REQUIREMENTS.
8.1 Environmental Review.
HOME Funds will not be paid and costs cannot be incurred until Lender has conducted and
completed an environmental review and completed an Environmental Review Record as required
by 24 CFR Part 58. The environmental review may result in a decision to proceed with, modify,
or cancel the Project. Further, Developer will not undertake or commit any funds to physical or
choice limiting actions, including if applicable, property acquisition, demolition, movement,
rehabilitation, conversion, repair or construction prior to the environmental clearance. Any
violation of this Section will (i) cause this Contract to terminate immediately; (ii) Developer
shall repay to Lender any HOME Funds received and forfeit any future payments of HOME
Funds within thirty days of receiving notice from Lender; and (iii) Developer shall pay 10%
of the Loan to Lender as liquidated damages within thirty days after notice from Lender.
The Parties agree that Lender's actual damages in the event of Developer violating this
Section are uncertain and would be difficult to ascertain and may include a finding by HUD,
a repayment of funds to HUD by Lender or otherwise impact Lender's HOME grant or other
Federal grant funds. Therefore, the Parties agree that payment of 10% of the Loan amount
by Developer to Lender under this Section is liquidated damages and not a penalty.
8.1.1 Mitigation.
Developer agrees to take the mitigation actions outlined in Exhibit "A-2" —
Environmental Mitigation Actions. Failure to complete the required
mitigation action is an event of default under this Contract.
8.2 Contract Not Constituting Commitment of Funds.
Notwithstanding any provision of this Contract, the Parties agree and acknowledge that
this Contract does not constitute a commitment of HOME Funds, and that such commitment or
approval may occur only upon satisfactory completion of environmental review and receipt by
Lender of an authorization to use grant funds from HUD under 24 CFR Part 58.
8.3. Monitoring.
8.3.1 Developer understands and agrees that it will be subject to monitoring by Lender
for compliance with the HOME Regulations, the terms of this Contract, and the Loan Documents,
during the Affordability Period. Developer shall provide reports and access to Project files as
requested by Lender during the Affordability Period and for 5 years after it ends.
8.3.2 Representatives of Lender, HUD, HUD Office of the Inspector General, and the
United States Comptroller General shall have access during regular business hours, upon at least
48 hours prior notice, to Developer's offices and records and to Developer's officers and agents
that are related to the use of the HOME Funds and the requirements of the HOME Regulations
during the Affordability Period, and to Developer's officers, agents, employees, contractors,
subcontractors and vendors for the purpose of such monitoring
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8.3.3 In addition to other provisions of this Contract regarding frequency of monitoring,
Lender reserves the right to perform desk reviews or on -site monitoring of Developer's compliance
with the terms and conditions of this Contract and the Loan Documents. After each monitoring
visit, Lender shall provide Developer with a written report of the monitor's findings. If the
monitoring report notes deficiencies in Developer's performance, the report shall include
requirements for the timely correction of said deficiencies by Developer. Failure by Developer to
take the action specified in the monitoring report may be cause for suspension or termination of
this Contract as provided herein, or Lender may take all actions allowed in the Contract and the
Loan Documents.
8.3.4 Developer agrees to annually provide to Lender the results of any state or federal
monitoring related to the Project including any monitoring by TDHCA. Such results shall be
submitted annually to Lender with the submission of its annual audit and financial statements.
8.3.5 This Section 8.3 shall be applicable for the duration of the Affordability Period
and shall survive the earlier termination or expiration of this Contract.
8.4 Compliance with the Uniform Relocation Act.
If applicable, Developer shall comply with the relocation requirements of 24 CFR Part
92.353 and all other applicable federal and state laws and City ordinances and requirements
pertaining to relocation.
8.5 Compliance with Davis -Bacon Act.
If applicable, Developer and its general contractor and all lower tier subcontractors shall
comply with the Davis -Bacon Act as described in Section 14.14 and Exhibit "H" — Federal
Labor Standards Provisions - Davis -Bacon Requirements.
8.6 Developer Procurement Standards.
Developer shall ensure that procurement of materials and services is done in a cost effective
manner, that Developer complies with all applicable federal, state and local laws, regulations, and
ordinances for making procurements under this Contract or the Developer Loan Agreement, and
that Developer establishes written procurement procedures to ensure that materials and services
are obtained in a cost-effective manner.
8.7 Cost Principles/Cost Reasonableness.
The eligibility of costs incurred for performance rendered shall be determined in
accordance 2 CFR Part 200.402 through 2 CFR Part 200.405, as applicable, regarding cost
reasonableness and allocability.
8.8 Financial Management Standards.
Developer shall adhere to the accounting principles and procedures required in 2 CFR Part
200, as applicable, utilize adequate internal controls, and maintain necessary supporting and back-
up documentation for all costs incurred in accordance with 2 CFR Part 200.302 and Part 200.303.
8.9 Uniform Administrative Requirements.
Developer shall comply with the Uniform Administrative Requirements, Cost Principles,
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and Audit Requirements for Federal Awards in 2 CFR Part 200, as applicable, or any reasonably
equivalent procedures and requirements that Lender may require.
8.10 Compliance with FFATA and Whistleblower Protections.
Developer shall provide Lender with all necessary information for Lender to comply with
the requirements of 2 CFR 300(b), including provisions of the Federal Funding Accountability and
Transparency Act ("FFATA") governing requirements on executive compensation and provisions
governing whistleblower protections contained in 10 U.S.C. 2409, 41 U.S.C. 4712, 10 U.S.C.
2324, 41 U.S.C. 4304 and 41 U.S.C. 4310.
8.10.1 Developer shall provide Lender its DUNS number prior to the payment of any
Reimbursement Requests.
8.11 Internal Controls.
In compliance with the requirements of 2 CFR 200.303, Developer shall:
8.11.1 Establish and maintain effective internal control over the HOME Funds that
provides reasonable assurance that Developer is managing the HOME Funds in compliance with
federal statutes, regulations, and the terms and conditions of this Contract. These internal controls
shall be in compliance with guidance in "Standards for Internal Control in the Federal
Government" issued by the Comptroller General of the United States or the "Internal Control
Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO");
8.11.2 Comply with federal statutes, regulations, and the terms and conditions of this
Contract;
8.11.3 Comply with statutes, regulations and the tenns and conditions of this Contract and
the Loan Documents;
8.11.4 Take prompt action when instances of noncompliance are identified including
noncompliance identified in audit findings; and
8.11.5 Take reasonable measures to safeguard protected personally identifiable
information and other information that HUD or Lender designates as sensitive or Developer
considers sensitive consistent with applicable federal, state, local and tribal laws regarding privacy
and obligations of confidentiality.
8.12 Copyright and Patent Rights.
No reports, maps, or other documents produced in whole or in part under this Contract shall
be the subject of an application for copyright by or on behalf of Developer. HUD and Lender shall
possess all rights to invention or discovery, as well as rights in data which may arise as a result of
Developer's performance under this Contract.
8.13 Terms Applicable to Contractors, Subcontractors and Vendors.
All terms of this Contract, whether regulatory or otherwise, shall apply to any and all
contractors, subcontractors and vendors of Developer which are in any way paid with HOME
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Funds or who perform any work in connection with the Project. Developer shall cause all
applicable provisions of this Contract to be included in and made a part of any contract or
subcontract executed in the performance of its obligations hereunder, including its obligations
regarding the Affordability Requirements and the HOME Regulations during the Affordability
Period. Developer shall monitor the services and work performed by its contractors,
subcontractors and vendors on a regular basis for compliance with the Affordability
Requirements, the HOME Regulations and Contract provisions. Developer understands and
agrees it is responsible and obligated to cure all violations of the HOME Regulations committed
by its contractors, subcontractors or vendors. Lender maintains the right to insist on Developer's
full compliance with the terms of this Contract and the HOME Regulations and Developer shall
be responsible for such compliance regardless of whether actions to fulfill the requirements of
this Contract or the HOME Regulations are taken by Developer or by Developer's contractors,
subcontractors or vendors. Developer acknowledges that the provisions of this Section shall
survive the earlier termination or expiration of this Contract and be applicable for the
length of the Affordability Period and for 5 years thereafter.
8.14 Payment and Performance Bonds.
Developer shall furnish Lender with payment and performance bonds in the total amount
of the construction cost in accordance with the requirement of 2 CFR Part 200.325. At Lender's
discretion other forms of assurance, including a guarantee from Developer or other parties on
Developer's behalf, may be acceptable so long as such assurance meets the requirements of the
HOME Regulations.
9. RECORD KEEPING, REPORTING AND DOCUMENTATION
REQUIREMENTS, RIGHT TO AUDIT.
9.1 Record Keeping.
9.1.1 Developer shall maintain a record -keeping system as part of its performance of this
Contract and shall promptly provide Lender with copies of any document Lender deems necessary
for the effective fulfillment of Lender's monitoring and evaluation responsibilities. Specifically,
Developer shall keep or cause to be kept an accurate record of all actions taken and all funds spent,
with supporting and back-up documentation as well as all Tenant Documentation. Developer will
maintain all records and documentation related to this Contract for 5 years after the end of the
Affordability Period. If any claim, litigation, or audit related to this Contract or the Project is
initiated before the expiration of the 5-year period, the relevant records and documentation must
be retained until all such claims, litigation or audits have been resolved.
9.1.2 Access to Records.
Lender representatives and HUD and any duly authorized officials of the federal
government will have full access to, and the right to examine, audit, excerpt and/or transcribe any
of Developer's records pertaining to all matters covered by this Contract throughout the
Affordability Period and for 5 years thereafter. Such access shall be during regular business hours
upon at least 48 hours prior notice.
9.2 Reports.
Developer shall submit to Lender all reports and documentation described in this Contract
in such form as Lender may prescribe, which may also include a final performance and/or final
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financial report if required by Lender at the termination of this Contract and/or the termination of
the Loan in such form and within such times as Lender may prescribe. Developer shall be
responsible for the submission of all reports to the extent Developer has not submitted such report.
Lender shall notify Developer of any such failure by Developer and shall provide 45 days' notice
as required herein for Developer to cure. Failure to require the submission or Developer's
failure to actually submit any report or documentation to Lender required by this Contract
shall be an event of default and Lender may exercise all of it remedies for default under this
Contract, and the Loan Documents. Lender shall not exercise its rights hereunder for default
until it gives Developer 45 days' notice of such failure and Developer has failed to cure such
default.
9.2.1 Additional Information.
Developer shall to provide Lender with additional information as may be required by state
or federal agencies to substantiate HOME Program activities and/or expenditure eligibility.
9.3 Change in Reporting Requirements and Forms.
Lender retains the right to change reporting requirements and forms at its reasonable
discretion. Lender will notify Developer in writing at least 30 days prior to the effective date of
such change, and the Parties shall execute an amendment to the Contract and any other necessary
documents reflecting such change, if necessary.
9.4 Lender Reserves the Right to Audit.
Lender reserves the right to perform an audit of Developer's Project operations and
finances at any time during the term of this Contract and during the Affordability Period and for 5
years thereafter, if Lender determines that such audit is necessary for Lender's compliance with
the HOME Regulations or other City policies. Developer agrees to allow access to all pertinent
materials as described herein. If such audit reveals a questioned practice or expenditure, Developer
shall require that such questions must be resolved within 15 Business Days after notice to
Developer of such questioned practice or expenditure. If questions are not resolved within this
period, Lender reserves the right to withhold further funding under this Contract, the Developer
Loan Agreement, and/or other contract(s) Developer. IF AS A RESULT OF ANY AUDIT IT
IS DETERMINED THAT DEVELOPER HAS FALSIFIED ANY DOCUMENTATION OR
MISUSED, MISAPPLIED OR MISAPPROPRIATED HOME FUNDS OR SPENT HOME
FUNDS ON ANY INELIGIBLE ACTIVITIES, DEVELOPER AGREES TO REIMBURSE
LENDER THE AMOUNT OF SUCH MONIES PLUS THE AMOUNT OF ANY
SANCTIONS, PENALTY OR OTHER CHARGE LEVIED AGAINST LENDER BY HUD
BECAUSE OF SUCH ACTIONS WITHIN THIRTY DAYS FROM THE DATE THE
LENDER PROVIDES NOTICE.
10. REIMBURSEMENT REQUIREMENTS.
Developer shall provide Lender with Complete Documentation and the following reports
as shown in Exhibit "F" — Reimbursement Forms with each Reimbursement Request:
10.1 Attachment I — Invoice.
This report shall contain the amount requested for reimbursement in the submitted request,
and the cumulative reimbursement requested to date (inclusive of the current request). By signing
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Attachment I, Developer is certifying that the costs are valid, eligible, and consistent with the
terms and conditions of this Contract, and the data contained in the report is true and correct.
10.2 Attachment II — Expenditure Worksheet.
This report shall itemize each expense requested for reimbursement by Developer or
equivalent as determined by City:
10.2.1 Invoices for each expense with an explanation as to how the expense pertains
to the Project, if necessary; and
10.2.2 Proof that each expense was paid by Developer, which proof can be satisfied
by cancelled checks, wire transfer documentation, paid receipts, executed American Institute of
Architects (AIA) forms, or other appropriate banking documentation.
10.3. Deadline for Submitting Reimbursement Requests.
Developer shall submit all Reimbursement Requests along with Complete Documentation
to City using the, on or before the deadlines as shown in Exhibit "C" — Construction
and Reimbursement Schedule.
10.3.1 LENDER SHALL HAVE NO OBLIGATION TO MAKE PAYMENT
ON ANY REIMBURSEMENT REQUEST THAT IS NOT RECEIVED WITHIN 60 DAYS
OF THE DEADLINES SHOWN IN EXHIBIT "C" — CONSTRUCTION AND
REIMBURSEMENT SCHEDULE. In addition, Developer's failure to timely submit
Reimbursement Requests and Complete Documentation along with any required reports
shall be an event of default.
10.3.2 LENDER SHALL HAVE NO OBLIGATION TO MAKE PAYMENT ON
ANY REIMBURSEMENT REQUEST THAT IS NOT RECEIVED WITHIN 30
CALENDAR DAYS OF THE COMPLETION DEADLINE.
10.3.3 Final Payment.
Developer shall not be reimbursed for Final Payment until it submits Exhibit "G" —
Project Compliance Report: Rental Housing to Lender.
10.4 Withholding Payment.
LENDER SHALL WITHHOLD PAYMENT ON ANY REIMBURSEMENT
REQUEST THAT DOES NOT INCLUDE THE REQUIRED COMPLETE
DOCUMENTATION. Lender shall notify Developer when it is withholding payment
due to lack of required complete documentation within 10 Business Days of making such
determination.
11. DEFAULT AND TERMINATION.
11.1 Failure to Begin or Complete the Required Improvements
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11.1.1 If Developer fails to begin construction within 3 months of the Effective Date,
this Contract shall automatically terminate without further warning or opportunity to cure, and
with no penalty or liability to Lender.
11. L2 If Lender determines that the Required Improvements were not completed by
the Completion Deadline (as may be modified in accordance with Section 14.19) or have failed to
pass any of the inspections described in Section 6.1.1 (or to promptly correct any noted deficiency
and subsequently pass such inspection), within 45 calendar days following written notice by
Lender (or such other longer notice period as may be specified herein), or if Developer has
diligently and continuously attempted to cure following receipt of such written notice but
reasonably required more than 45 calendar days to cure, as determined by both Parties mutually
and in good faith, Lender shall have the right to terminate this Contract with no penalty or liability
to Lender, with such termination to be effective immediately upon written notice. Lender shall
also be entitled to demand repayment of the HOME Funds from Developer and enforce any of the
provisions of Loan documents for default.
11.2 Failure to Submit Complete Documentation During Construction.
11.2.1 If Developer fails to submit all applicable Complete Documentation during
construction of the Required Improvements in accordance with Exhibit "C" — Construction and
Reimbursement Schedule, or if any report or documentation submitted as part of Complete
Documentation is not in compliance with this Contract or the HOME Regulations as determined
by Lender, Lender will notify Developer in writing and Developer will have 15 calendar days from
the date of the written notice to submit or resubmit any such report or documentation. If Developer
fails to submit or resubmit any such report or documentation within such time, Lender shall have
the right to withhold payments. If such failure continues for an additional 30 days (a total of 45
days) Lender shall have the right to terminate this Contract effective immediately upon
written notice of such intent with no penalty or liability to Lender. Notwithstanding anything
to the contrary herein, Lender will not be required to pay any HOME Funds to Developer during
the period that any such report or documentation is not in compliance with this Contract or the
HOME Regulations.
11.2.2 If any of Developer's Reimbursement Requests are incomplete or otherwise not
in compliance with this Contract or the HOME Regulations as determined by Lender, Lender will
notify Developer in writing of such default and Developer will have 15 calendar days from the
date of the written notice to resubmit any such Reimbursement Request to cure the default. If
Developer fails to cure the default within such time, Developer shall forfeit any payments
otherwise due under such Reimbursement Request, and if such failure to resubmit such
Reimbursement Request continues for an additional 30 days (a total of 45 days) the Lender shall
have the right to terminate this Contract effective immediately upon written notice of such
intent with no penalty or liability to Lender. Notwithstanding anything to the contrary herein,
Lender will not be required to pay any HOME Funds to Developer during the period that any such
Reimbursement Request is not in compliance with this Contract or the HOME Regulations.
11.2.3 In the event of more than 3 instances of uncured default under Sections
11.2.1 or 11.2.2 which have a material adverse impact on the Project, Lender reserves the
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right at its sole option to terminate this Contract effective immediately upon written notice
of such intent with no penalty or liability to Lender.
11.2.4 Notwithstanding anything to the contrary herein, Lender will not be required to
pay any HOME Funds to Developer during the period that any Reimbursement Requests, reports
or documentation are past due or are not in compliance with this Contract or the HOME
Regulations, or during any period during which Developer is in default of this Contract.
11.2.5 In the event of termination under this Section 11.2, all HOME Funds awarded
but unpaid to Developer pursuant to this Contract shall be immediately forfeited and Developer
shall have no further right to such funds. Any HOME Funds already paid to Developer must be
repaid to Lender by Developer within 30 days of termination under this Section. Failure to repay
such HOME Funds will result in Lender exercising all legal remedies available to Lender
under this Contract and the Loan Documents. For clarification, the defaults and related
remedies set out in this Section 11.2 are not intended to arise from mathematical errors or other
minor defects in a Reimbursement Request.
11.3 Failure to Submit Required Reports and Documentation During
Affordability Period.
If Developer fails to maintain all records and documentation as required in Section 9, or
fails to submit any report or documentation required by this Contract after the Required
Improvements are completed, or if the submitted report or documentation is not in compliance
with this Contract or the HOME Regulations as determined by Lender, Lender will notify
Developer in writing and Developer will have 45 calendar days from the date of the written notice
to obtain or recreate the missing records or documentation, or submit or resubmit any such report
or documentation to Lender. If Developer fails to maintain the required reports or documentation,
or submit or resubmit any such report or documentation within such time, Lender shall have the
right to terminate this Contract effective immediately upon written notice of such intent with
no penalty or liability to Lender. In the event of termination under this Section 11.3, any
HOME Funds paid to Developer must be repaid to Lender by Developer within 30 days of
termination, and that failure to repay such HOME Funds will result in Lender exercising all
legal remedies available to Lender under this Contract and the Loan Documents.
11.4 In General.
11.4.1 Subject to Sections 11.1, 11.2 and 11.3, and unless specifically provided
otherwise in this Contract, Developer shall be in default if Developer breaches any term or
condition of this Contract, the Loan Documents, its obligations under the Ground Lease, or
breaches any term of its loan agreements with FWAI that use other funds from Lender or the Fort
Worth Housing Finance Corporation related to the Project. In the event that such a breach remains
uncured after 45 calendar days following written notice by Lender (or such other longer notice
period as may be specified herein or with respect to the Ground Lease, in the Ground Lease), or if
Developer has diligently and continuously attempted to cure following receipt of such written
notice but reasonably required more than 45 calendar days to cure, as determined by both Parties
mutually and in good faith, Lender shall have the right to elect, in Lender's sole discretion, to (i)
extend Developer's time to cure, (ii) terminate this Contract effective immediately upon written
notice of such intent to Developer, or (iii) pursue any other legal remedies available to Lender.
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11.4.2 Developer to acknowledges that Lender's remedies include but are not limited
to:
11.4.2.1 Direct Developer to prepare and follow a schedule of actions for
carrying out the affected activities, consisting of schedules,
timetables and milestones necessary to implement the affected
activities, including extending the Affordability Period.
11.4.2.2 Direct Developer to establish and follow a management plan that
assigns responsibilities for carrying out the remedial activities.
11.4.2.3 Cancel or revise activities likely to be affected by the performance
deficiency, before expending HOME Funds for the activities.
11.4.2.4 Reprogram HOME Funds that have not yet been expended from
affected activities to other eligible activities or withhold HOME
Funds.
11.4.2.5 Direct Developer to reimburse Lender in any amount of HOME
Funds not used in accordance with the HOME Regulations.
11.4.2.6 Suspend reimbursement of HOME Funds for affected activities.
11.4.2.7 Any other appropriate action including but not limited to any
remedial action legally available such as declaratory judgment,
specific performance, damages, temporary or permanent
injunctions, termination of this Contract, the Loan Documents, or
any other contracts held by Lender with Developer, and any other
available remedies.
11.4.3 In the event of termination under this Section 11.4, all HOME Funds awarded
but unpaid to Developer pursuant to this Contract shall be immediately rescinded and Developer
shall have no further right to such funds and any HOME Funds already paid to Developer must be
repaid by Developer to Lender within 30 days of termination. Failure to repay such HOME
Funds will result in Lender exercising all legal remedies available to Lender under this
Contract and the Loan Documents.
11.5 No Funds Disbursed While in Breach.
Developer acknowledges and agrees that no HOME Funds will be paid to Developer until
all defaults are cured to Lender's satisfaction.
11.6 No Compensation After Date of Termination.
Developer acknowledges that in the event of termination, Developer shall not receive any
HOME Funds in compensation for work undertaken after the date of termination.
11.7 Rights of Lender Not Affected.
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Developer acknowledges that termination shall not affect or terminate any of the existing
rights of Lender against Developer, or which may thereafter accrue because of such default, and
this provision shall be in addition to any and all other rights and remedies available to Lender
under the law and various loan documents including, but not limited to, compelling Developer to
complete the Required Improvements in accordance with the terms of the Contract or the Loan
Documents. Such termination does not terminate any applicable provisions of this Contract that
have been expressly noted as surviving the term or termination of this Contract. No delay or
omission by Lender in exercising any right or remedy available to it under this Contract shall
impair any such right or remedy or constitute a waiver or acquiescence in any Developer default.
11.8 Waiver of Breach Not Waiver of Subsequent Breach.
The waiver of a breach of any term, covenant, or condition of this Contract, the Loan
Documents, or the Ground Lease shall not operate as a waiver of any subsequent breach of the
same or any other term, covenant or condition hereof.
11.9 Civil, Criminal and Administrative Penalties.
Failure to perform all the Contract terms may result in civil, criminal or administrative
penalties, including, but not limited to those set out in this Contract.
11.10 Termination for Cause.
11.10.1 Developer acknowledges that Lender may terminate this Contract in the event
of Developer's default under this Contract, inability, or failure to perform, subject to notice, grace
and cure periods. In the event Lender terminates this Contract for cause, all HOME Funds awarded
but unpaid to Developer pursuant to this Contract shall be immediately rescinded and Developer
shall have no further right to such funds and any HOME Funds already paid to Developer must be
repaid to Lender by Developer within 30 calendar days of termination. Failure to repay such
HOME Funds will result in Lender exercising all legal remedies available to Lender under this
Contract and the Loan Documents. IF LENDER TERMINATES THIS CONTRACT FOR
CAUSE, NEITHER DEVELOPER, NOR ANY AFFILIATES OF DEVELOPER, SHALL
BE CONSIDERED FOR ANY OTHER CITY CONTRACT FOR HOME FUNDS FOR A
MINIMUM OF 5 YEARS FROM THE DATE OF TERMINATION. This provision shall
not apply to the Investor.
11.10.2 Developer may terminate this Contract if Lender does not provide the HOME
Funds substantially in accordance with this Contract. In such event, the termination of the Contract
shall have the effect of returning the Parties to their respective circumstances as existed prior to
the execution of this Contract, all HOME Funds shall be repaid to Lender by Developer within 30
calendar days, and no terms or obligations shall survive the date of termination, including but not
limited to, reporting, inspections or the Affordability Period.
11.10.3 A default by Developer under the Ground Lease after the expiration of any
applicable cure period will constitute a default under this Contract subject to all of the remedies
for default under this Contract andthe Loan Documents.
11.11 Termination for Convenience.
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In terminating in accordance with 2 CFR 200, Appendix II, this Contract may be terminated
in whole or in part only as follows:
11.11.1 By Lender with the consent of Developer and Investor, if Investor then owns
an interest in Developer, in which case the Parties shall agree upon the termination conditions,
including the effective date and in the case of partial termination, the portion to be terminated; or
11.11.2 By Developer upon written notification to Lender setting forth the reasons for
such termination, the effective date, and in the case of partial termination, the portion to be
terminated. In the case of a partial termination, Lender may terminate the Contract in its entirety
if Lender determines in its sole discretion that the remaining portion of the Contract to be
performed or HOME Funds to be spent will not accomplish the purposes for which this Contract
was made.
11.12 Dissolution of Developer Terminates Contract.
In the event Developer is dissolved or ceases to exist, this Contract shall terminate. In the
event of termination under this Section, all HOME Funds are subject to repayment as required
herein and/or Lender may exercise all of its remedies under this Contract and the Loan
Documents.
11.13 Reversion of Assets.
Developer acknowledges that in the event this Contract is terminated with or without cause
by either parry, all tangible personal property owned by Developer that was acquired or improved
with the HOME Funds included but not limited to plans, drawings, surveys, renderings,
construction documents and any other real or personal property shall belong to Lender and shall
automatically transfer to Lender or to such assignees as Lender may designate, subject to the rights
of any senior lender.
11.14 Notice of Termination.
Lender shall not terminate this Contract without first giving notice and opportunity to cure
as described herein.
11.15 Notice to Investor of Default.
Lender shall furnish the Investor with notice of any default under this Contract or any of
the loan documents. Lender shall accept cure by the Investor on the same terms as cure by
Developer.
12. REPAYMENT OF HOME FUNDS.
All HOME Funds are subject to repayment in the event the Project does not meet the
requirements as set out in this Contract or in the HOME Regulations. If Developer takes any
action that results in Lender being required to repay all or any portion of the HOME Funds
to HUD, Developer agrees it will reimburse Lender for the full amount such repayment
within thirty days of such notice. If Developer takes any action that results in Lender
receiving a finding from HUD about the Project, whether or not repayment to HUD is
required of Lender, Developer agrees it will pay Lender an additional 10% of the Loan
amount as liquidated damages. Developer acknowledge that Lender's damages in the event
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of either repayment to HUD being required or receiving a finding from HUD are uncertain
and would be difficult to ascertain and may include an impact on Lender's HOME grant or
other Federal grant funds, in addition to a finding by HUD or a repayment of funds to HUD
by Lender; therefore, the Parties agree that payment under this Section of 10% of the Loan
amount by Developer to Lender is liquidated damages and not a penalty.
13. MATERIAL OWNERSHIP CHANGE.
Developer acknowledges that, except as provided in the Deed of Trust and the Deed
Restriction, and transfers in accordance with Developer's Partnership Agreement, as may be
amended and restated from time to time to admit Investor or other partners, or otherwise with
Lender consent, if ownership of Developer materially changes after the date of this Contract,
Lender may, but is not obligated to, terminate this Contract. Lender has 30 days to make such
determination after receipt of notice from Developer and failure to make such determination in
that time period will constitute a waiver. In the event of termination under this Section 13, all
HOME Funds awarded but not yet paid to Developer pursuant to this Contract shall be immediately
rescinded and Developer shall have no further right to such funds, and any HOME Funds already
paid to Developer must be repaid to Lender within 30 days of termination under this Section in
accordance with the terms of this Contract. Notwithstanding anything to the contrary contained
herein, Lender approves the assumption of the Loan by FWHS, or its designated affiliate, in the
event the right of first refusal is exercised by FWHS, or its designated affiliate, in accordance with
the Developer's Partnership Agreement.
14. GENERAL PROVISIONS.
14.1 Developer an Independent Contractor.
Developer shall operate hereunder as an independent contractors and not as an officer,
agent, servant or employee of Lender. Developer shall have exclusive control of, and the exclusive
right to control, the details of the work and services performed hereunder, and all persons
performing same, and shall be solely responsible for the acts and omissions of its officers,
members, agents, servants, employees, contractors, subcontractors, vendors, tenants, licensees or
invitees.
14.2 Doctrine of Respondeat Superior.
The doctrine of respondeat superior shall not apply as between Lender and Developer, any
officers, members, agents, servants, employees, contractors, subcontractors, vendors, tenants,
licensees or invitees. Nothing herein shall be construed as the creation of a partnership or joint
enterprise between Lender and Developer. It is further understood that Lender shall in no way be
considered a Co -employer or a Joint employer of Developer or any officers, agents, servants,
employees or subcontractor of Developer. Neither Developer nor any officers, agents, servants,
employees or subcontractor of Developer shall be entitled to any employment benefits from
Lender. Developer shall be responsible and liable for any and all payment and reporting of taxes
on behalf of itself, and any of its officers, agents, servants, employees or subcontractor. Lender
does not have the legal right to control the details of the tasks performed hereunder by Developer,
its officers, members, agents, employees, contractors, subcontractors, vendors, licensees or
invitees.
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14.3 Developer Property.
Lender shall under no circumstances be responsible for any property belonging to
Developer, any officers, members, agents, employees, contractors, subcontractors, vendors,
tenants, licensees or invitees that may be lost, stolen or destroyed or in any way damaged and
DEVELOPER, TO THE EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
INDEMNIFIES AND HOLDS HARMLESS CITY AND ITS OFFICERS, AGENTS, AND
EMPLOYEES FROM ANY AND ALL CLAIMS OR SUITS PERTAINING TO OR
CONNECTED WITH SUCH PROPERTY, SAVE AND EXCEPT THOSE ARISING OUT
OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE CITY, ITS
OFFICERS, AGENTS OR EMPLOYEES.
14.4 Religious Organization.
Developer acknowledges that no portion of the HOME Funds shall be used in support of
any sectarian or religious activity. In addition, there must be no religious or membership criteria
for tenants of a HOME -funded property.
14.5 Venue.
Venue for any action, whether real or asserted, at law or in equity, arising out of the
execution, performance, attempted performance or non-performance of this Contract or the
Developer Loan Agreement, shall lie in Tarrant County, Texas.
14.6 Governing Law.
This Contract shall be governed by and construed in accordance with the laws of the State
of Texas. If any action, whether real or asserted, at law or in equity, arises out of the execution,
performance or non-performance of this Contract or on the basis of any provision herein, for any
issue not governed by federal law, the choice of law shall be the laws of the State of Texas.
14.7 Severability.
The provisions of this Contract are severable, and if for any reason a clause, sentence,
paragraph or other part of this Contract shall be determined to be invalid by a court or federal or
state agency, board or commission having jurisdiction over the subject matter thereof, such
invalidity shall not affect other provisions which can be given effect without the invalid provision.
14.8 Written Agreement Entire Agreement.
This written instrument and the Exhibits, Addendums and Attachments attached hereto,
which are incorporated by reference and made a part of this Contract for all purposes, constitute
the entire agreement by the Parties concerning the work and services to be performed under this
Contract. Any prior or contemporaneous oral or written agreement which purports to vary the
terms of this Contract shall be void. Any amendments to the terms of this Contract must be in
writing and be executed by the Parties.
14.9 Paragraph Headings for Reference Only, No Legal Significance; Number.
The paragraph headings contained herein are for convenience in reference to this Contract
and are not intended to define or to limit the scope of any provision of this Contract. When context
requires, singular nouns and pronouns include the plural and the masculine gender shall be deemed
to include the feminine or neuter and the neuter gender to include the masculine and feminine.
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The words "include" and "including" whenever used herein shall be deemed to be followed by the
words "without limitation".
14.10 Compliance With All Applicable Laws and Regulations.
Developer shall comply fully with all applicable laws and regulations that are currently in
effect or that are hereafter amended during the performance of this Contract. These laws include,
but are not limited to:
• HOME Investment Partnerships Act as set out above
• Title VI of the Civil Rights Act of 1964 (42 U.S.C. Sections 2000d et seq.) including
provisions requiring recipients of federal assistance to ensure meaningful access by
person of limited English proficiency
• The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. Sections
3601 etseq.)
• Executive Orders 11063, 11246 as amended by 11375 and 12086 and as supplemented
by Department of Labor regulations 41 CFR, Part 60
• The Age Discrimination in Employment Act of 1967
• The Age Discrimination Act of 1975 (42 U.S.C. Sections 6101 et seq.)
• The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970
(42 U.S.C. Sections 4601 et seq. and 49 CFR Part 24) ("URA")
• Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Sections 794 et seq.) and 24
CFR Part 8 where applicable
• National Environmental Policy Act of 1969, as amended, 42 U.S.C. sections 4321 et
seq. ("NEPA") and the related authorities listed in 24 CFR Part 58.
• The Clean Air Act, as amended, (42 U.S.C. Sections 1251 et seq.) and the Clean Water
Act of 1977, as amended (33 U.S.C. Sections 1251 et seq.), related Executive Order
11738 and Environmental Protection Agency Regulations at 40 CFR Part 15. In no
event shall any amount of the assistance provided under this Contract be utilized with
respect to a facility that has given rise to a conviction under the Clean Air Act or the
Clean Water Act.
• Immigration Reform and Control Act of 1986 (8 U.S.C. Sections 1101 et seq.)
specifically including the provisions requiring employer verifications of legal status of
its employees
• The Americans with Disabilities Act of 1990 (42 U.S.C. Sections 12101 et seq.), the
Architectural Barriers Act of 1968 as amended (42 U.S.C. sections 4151 et seq.) and
the Uniform Federal Accessibility Standards, 24 CFR Part 40, Appendix A
• Regulations at 24 CFR Part 87 related to lobbying, including the requirement that
certifications and disclosures be obtained from all covered persons
• Drug Free Workplace Act of 1988 (41 U.S.C. Sections 701 et seq.) and 24 CFR Part
23, Subpart F
• Executive Order 12549 and 24 CFR Part 5.105(c) pertaining to restrictions on
participation by ineligible, debarred or suspended persons or entities
• Regulations at 24 CFR Part 882.708(c) pertaining to site and neighborhood standards
for new construction projects
• Regulations at 24 CFR Part 983.6 for Site and Neighborhood Standards Review
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• Section 6002 of the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act
• Guidelines of the Environmental Protection Agency at 40 CFR Part 247
• For contracts and subgrants for construction or repair, Copeland "Anti -Kickback" Act
(18 U.S.C. 874) as supplemented in 29 CFR Part 5
• For construction contracts in excess of $2,000, and in excess of $2,500 for other
contracts which involve the employment of mechanics or laborers, Sections 103 and
107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327A 300) as
supplemented by 29 CFR Part 5
• Section 3 of the Housing and Urban Development Act of 1968, and implementing
regulations related to housing and community development financial assistance at 24
CFR Part 75
• Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 43021 et seq.), as amended by
the Residential Lead -Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851 et
seq.) and implementing regulations at 24 CFR Part 35, subparts A, B, M, and R
• Regulations at 24 CFR Part 92, Home Investment Partnerships Program Final Rule
• Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, 2 CFR Part 200 et seq.
• Federal Funding Accountability and Transparency Act of 2006, (Pub.L. 109-282, as
amended by Section 6205(a) of Pub.L. 110-252 and Section 3 of Pub.L. 113-101)
• Federal Whistleblower Regulations, 10 U.S.C. 2409, 41 U.S.C. 4712, 10 U.S.C. 2324,
41 U.S.C. 4304 and 41 U.S.C. 4310
• Broadband Infrastructure Requirements, 24 CFR Part 5.100 and Section 706 of the
Telecommunications Act of 1996, 47 U.S.C. 1302
14.11 HUD -Assisted Proiects and Employment and other Economic
Opportunities; Section 3 Requirements.
14.11.1 Requirement to be included in Construction Contracts.
As mandated by Section 3 of the Housing and Urban Development Act of 1968 and
its related regulations at 24 CFR Part 75, Developer and Project Construction Contractors shall,
to the greatest extent feasible, provide employment opportunities to low and moderate income
workers and to low and moderate income residents of the Project Service Area and to businesses
owned by or employing low and moderate income workers, as further defined and described in the
Sections below.
14.11.2 Section 3 Definitions
14.11.2.1 Section 3 Worker means either a) a worker whose income is below
the income established by HUD for Section 3 compliance, which is 80% of the area median
income, or b) a worker that is employed by a Section 3 Business.
14.11.2.2 Targeted Section 3 Worker means a worker that lives within the
Project Service Area and also meets the definition of a Section 3 Worker.
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14.11.2.3 Section 3 Business means a business that meets one of the following
conditions: a) is at least 5 1 % owned by low or moderate income persons; b) has had over 75% of
its labor hours performed over the last the months by low or moderate income persons; or c) is at
least 51 % o owned by public housing residents or residents that currently live in Section 8-assisted
housing.
14.11.2.4 Project Service Area means the geographic area within one mile of
the Project Site which includes 5000 population, or the geographic area around the Project Site
which is large enough to include 5000 residents, as represented on Section 3 Project Service Area
Map attached as Exhibit I-1 to this Contract.
14.11.3 Developer's Responsibilities for Section 3 Requirements.
Lender and Developer understand and agree that compliance with the provisions of
Section 3, the regulations set forth in 24 CFR Part 75, and all applicable rules and orders of HUD
shall be a condition of the federal financial assistance provided to the Project binding upon Lender
and Developer, and their respective successors, assigns, contractors and subcontractors. Failure to
fulfill these requirements shall subject Developer and its contractors and subcontractors and their
respective successors and assigns to those sanctions specified by the grant agreement through
which federal assistance is provided and to such sanctions as are specified by 24 CFR Part 75.
Developer's responsibilities for fulfilling Section 3 requirements include:
14.11.3.1 Implementing procedures to notify potential Section 3 Workers and
Section 3 Businesses about training, employment, and contracting
opportunities generated by this Contract; ;
14.11.3.2 Notifying potential contractors working on Section 3 covered
projects of their responsibilities;
14.11.3.3 Facilitating the training and employment of Section 3 Workers and
the award of contracts to Section 3 Businesses;
14.11.3.4 Assisting and actively cooperating with the Neighborhood Services
Department in making contractors and subcontractors comply;
14.11.3.5 Documenting actions taken to comply with Section 3; and
14.11.3.6 Submitting Section 3 Reports to Lender as further described below.
14.11.4 Section 3 Reporting Requirements.
In order to comply with the Section 3 requirements, Developer must:
14.11.4.1 Report to Lender within 30 days of award of the prime construction
contract, and regularly thereafter, the names, hourly wages, hours
worked, and related required information for all nonprofessional
workers working on the Project, as shown on Exhibit G-1. This
information must be reported through Lender's designated Section
3 and Davis -Bacon reporting software. These reports shall be
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submitted monthly, or with each construction draw request.
14.11.4.2 Require the Prime Contractor and all subcontractors to provide the
information required by Exhibit G-1 via Lender's designated
Section 3 reporting software..
14.11.4.3 Submit, via Lender's designated Section 3 reporting software, or on
applicable forms as attached to this Contract, certifications
regarding the Section 3 Worker and Targeted Section 3 Worker
status of all nonprofessional workers on the Project.
14.11.4.4 Require all subcontractors to complete and submit Section 3
Business Certifications for subsequent submission to Lender.
14.11.4.5 Advertise employment opportunities created by the Project to the
public for open competition within the City of Fort Worth, and
within the Project Service Area(s), and provide copies of such
advertisements to Lender with each quarterly Section 3 report, in
the form of printout of Texas Workforce Commission posting, copy
of newspaper advertisement, copy of flyers and listing of locations
where flyers were distributed, and the like.
14.11.4.6 Report to Lender within 30 days of award of the Contract to the
Prime Contractor, and on a monthly basis thereafter, a list of all
contracts awarded to to subcontractors for the Project. This shall
include name of all such subcontractors, their, addresses, zip codes,
and the amounts of each subaward as of the date of the report, as
well as the contact information for each subcontractor's Human
Resources Department or primary hiring official
14.11.4.7 Participate in, and require the Prime Contractor and subcontractors
to participate in at least one Neighborhood/Project Service Area Job
Fair organized by the Neighborhood Services Department to
promote employment of Section 3 and Targeted Section 3 Workers
during the contract period.
14.11.4.8 Coordinate and cooperate with Lender in efforts to publicize
employment and contracting opportunities associated with the
Project, including programs of Lender's Minority and Women's
Business Enterprise (MWBE) office, as described herein.
14.11.5 This Section 14.11 shall be included in its entirety in all Project construction
contracts or subcontracts totaling $200,000 or more.
14.12 Prohibition Against Discrimination.
14.12.1 General Statement.
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Developer, in the execution, performance or attempted performance of this Contract shall
comply with all non-discrimination requirements of 24 CFR 92.350 and the ordinances codified at
Chapter 17, Article III, Division 4 — Fair Housing of the City Code. Developer may not
discriminate against any person because of race, color, sex, gender, religion, national origin,
familial status, disability or perceived disability, sexual orientation, gender identity, gender
expression, or transgender, nor will Developer permit its officers, members, agents, employees,
contractors, vendors or Project participants to engage in such discrimination.
This Contract is made and entered into with reference specifically to the ordinances
codified at Chapter 17, Article III, Division 3 - Employment Practices of the City Code, and
Developer hereby covenant and agree that Developer, its officers, members, agents, employees
and contractors, have fully complied with all provisions of same and that no employee, or applicant
for employment has been discriminated against under the terms of such ordinances by either or its
officers, members, agents, employees, contractors or vendors.
14.12.2 No Discrimination in Employment during the Performance of this
Contract.
During the performance of this Contract, Developer agrees to the following provision, and
will require that its contractors, subcontractors and vendors also comply with such provision by
including it or a substantially similar provision in all contracts with its contractors and vendors:
f Contractor s, Subcontractor's or Vendor's Namel will not unlawfully discriminate
against any employee or applicants for employment because of race, color, sex, gender,
religion, national origin, familial status, disability or perceived disability, sexual
orientation, gender identity, gender expression or transgender. f Contractor's,
Subcontractor's or Vendor's Namel will take affirmative action to ensure that applicants
are hired without regard to race, color, sex, gender, religion, national origin, familial status,
disability or perceived disability, sexual orientation, gender identity, gender expression or
transgender and that employees are treated fairly during employment without regard to
their race, color, sex, gender, religion, national origin, familial status, disability or
perceived disability, sexual orientation, gender identity, gender expression or transgender.
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.
f Contractor's, Subcontractor's or Vendor's Name] agrees to post in conspicuous places,
available to employees and applicants for employment, notices setting forth the provisions
of this nondiscrimination clause.
[Contractor's, Subcontractor's or Vendor's Name] will, in all solicitations or
advertisements for employees placed by or on behalf of [Contractor's, Subcontractor's or
Vendor's Namel , state that all qualified applicants will receive consideration for
employment without regard to race, color, sex, gender, religion, national origin, familial
status, disability or perceived disability, sexual orientation, gender identity, gender
expression or transgender.
[Contractor's, Subcontractor's or Vendor's Name] covenants that neither it nor any of its
officers, members, agents, employees, or contractors, while engaged in performing this
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Contract, shall, in connection with the employment, advancement or discharge of
employees or in connection with the terms, conditions or privileges of their employment,
discriminate against persons because of their age or because of any disability or perceived
disability, except on the basis of a bona fide occupational qualification, retirement plan or
statutory requirement.
[Contractor's, Subcontractor's or Vendor's Name] further covenants that neither it nor its
officers, members, agents, employees, contractors, or persons acting on their behalf, shall
specify, in solicitations or advertisements for employees to work on this Contract, a
maximum age limit for such employment unless the specified maximum age limit is based
upon a bona fide occupational qualification, retirement plan or statutory requirement.
14.12.3 Developer's Contractors and ADA.
In accordance with the provisions of the Americans With Disabilities Act of 1990
("ADA"), Developer warrants that it will not unlawfully discriminate on the basis of disability in
the provision of services to the general public, nor in the availability, terms and/or conditions of
employment for applicants for employment with, or employees of Developer. DEVELOPER
SEPARATELY WARRANT IT WILL FULLY COMPLY WITH ADA'S PROVISIONS
AND ANY OTHER APPLICABLE FEDERAL, STATE AND LOCAL LAWS
CONCERNING DISABILITY AND WILL TO THE EXTENT PERMITTED BY
APPLICABLE LAW, DEFEND, INDEMNIFY AND HOLD CITY HARMLESS
AGAINST ANY CLAIMS OR ALLEGATIONS ASSERTED BY THIRD PARTIES,
CONTRACTORS, SUBCONTRACTORS OR VENDORS AGAINST CITY ARISING
OUT OF ITS AND/OR ITS CONTRACTORS', SUBCONTRACTORS', VENDORS',
AGENTS' OR EMPLOYEES' ALLEGED FAILURE TO COMPLY WITH THE ABOVE -
REFERENCED LAWS CONCERNING DISABILITY DISCRIMINATION IN THE
PERFORMANCE OF THIS CONTRACT.
14.13 Conflict of Interest and Violations of Criminal Law.
14.13.1 Developer Safeguards.
Developer shall establish safeguards to prohibit its employees, board members, advisors
and agents from using positions for a purpose that is or gives the appearance of being motivated
by a desire for private gain for themselves or others, particularly those with whom they have
family, business or other ties. Developer shall disclose to Lender any conflict of interest or
potential conflict of interest described above, immediately upon discovery of such.
14.13.2 General Prohibition Against Conflicts of Interest.
No persons who are employees, agents, consultants, officers or elected officials or
appointed officials of Lender or of Developer who exercise or have exercised any functions or
responsibilities with respect to activities assisted with HOME funds or who are in a position to
participate in a decision -making process or gain inside information with regard to these activities
may occupy a HOME Unit, may obtain a financial interest or benefit from a HOME -assisted
activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the
proceeds thereunder, either for themselves or those with whom they have family or business ties,
during their tenure or for 1 year thereafter, unless they are accepted in accordance with the
procedures set forth at 24 C.F.R. Part 92.356.
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14.13.2.1 Developer shall establish conflict of interest policies for Federal
Awards and shall provide such policies in writing to Lender in
accordance with the requirements of 2 CFR Part 200.112.
14.13.3 Disclosure of Conflicts of Interest.
In compliance with 2 CFR Part 200.112, Developer is required to timely disclose to Lender
in writing any potential conflict of interest, as described in this Section.
14.13.4 Disclosure of Texas Penal Code Violations.
Developer will adhere to the provisions of the Texas Penal Code which prohibits bribery
and gifts to public servants.
14.13.5 Disclosure of Federal Criminal Law Violations.
In compliance with 2 CFR Part 200.113, Developer is required to timely disclose to Lender
all violations of federal criminal law involving fraud, bribery or gratuity violations potentially
affecting this Agreement.
14.14 Labor Standards.
Developer acknowledges and agrees to the following:
14.14.1 As applicable, Developer agrees to comply with the requirements of the
Secretary of Labor in accordance with the Davis -Bacon Act (40 U.S.C. 276a-7) as amended, the
provisions of Contract Work Hours and Safety Standards Act (40 U.S.C. 327 et seq.) and all other
applicable Federal, state and local laws and regulations pertaining to labor standards insofar as
those acts apply to the performance of this Contract. Developer agree to comply with the Copeland
Anti -Kick Back Act (18 U.S.C. 874 et seq.) and its implementing regulations of the United States
Department of Labor at 29 CFR Part 5. Developer shall maintain documentation that demonstrates
compliance with hour and wage requirements of this Contract and HOME Regulations. Such
documentation shall be made available promptly to Lender for review upon request.
14.14.2 Developer agrees that, except with respect to the rehabilitation or construction
of residential property containing less than 12 units assisted with HOME funds, all contractors
engaged under contract for construction, renovation or repair work financed in whole or in part
with assistance provided under this Contract, shall comply with Federal requirements adopted by
Lender pertaining to such contracts and with the applicable requirements of the regulations of the
Department of Labor under 29 CFR Parts 1, 3, 5 and 7 governing the payment of wages and ratio
of apprentices and trainees to journey workers; provided that, if wage rates higher than those
required under these regulations are imposed by state or local law, nothing hereunder is intended
to relieve Developer of its obligation, if any, to require payment of the higher wage. Developer
shall cause or require to be inserted in full, in all such contracts subject to such regulations,
provisions meeting the requirements of this paragraph.
14.14.3 If Davis -Bacon is applicable, Developer shall provide Lender access to
employee payrolls, contractor and subcontractor payrolls and other wage information for persons
performing construction of the Required Improvements. Payrolls must be submitted to the
Neighborhood Services Department with each Reimbursement Request, and must be available to
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Neighborhood Services Department staff upon request. In addition, Developer shall ensure that
Lender will have access to employees, contractors and subcontractors and their respective
employees in order to conduct onsite interviews with laborers and mechanics. Developer shall
inform its contractors and subcontractors that Lender or federal agencies may conduct periodic
employee wage interview visits during construction of the Project to ensure compliance.
14.15 Intentionally Deleted
14.16 Other Laws.
Failure to list any federal, state or City ordinance, law or regulation that is applicable to
Developer does not excuse or relieve Developer from the requirements or responsibilities in regard
to following the law, nor from the consequences or penalties for Developer's failure to follow the
law, if applicable.
14.17 Assignment.
14.17.1 Developer shall not assign all or any part of its rights, privileges, or duties under
this Contract without the prior written approval of Lender. Any attempted assignment of same
without approval shall be void, and shall constitute a breach of this Contract. Any approved
assignment of this Contract shall include assumption of the HOME Loan.
14.18. Right to Inspect Developer Contracts.
Lender has the right to inspect and approve in writing any proposed contracts or other
legally binding documents between (i) Developer and its general contractor and subcontractors,
including any lower tier subcontractors engaged in any activity that is funded as part of the
construction of the Required Improvements, (ii) Developer and any vendor contracts arising out
of the operation of the Project, and (iii) Developer and any third parry contracts to be paid with
HOME Funds, prior to any charges being incurred.
14.19 Force Majeure.
If Developer becomes unable, either in whole or part, to fulfill its obligations under this
Contract due to acts of God, strikes, lockouts, or other industrial disturbances, acts of public
enemies, wars, blockades, insurrections, riots, pandemics and epidemics, earthquakes, fires,
floods, restraints or prohibitions by any court, board, department, commission or agency of the
United States or of any States, civil disturbances, or explosions, inclement weather, or some other
reason beyond Developer's control (collectively, "Force Majeure Event"), the obligations so
affected by such Force Majeure Event will be suspended only during the continuance of such event
and the completion date for such obligations shall be extended for a like period. Developer will
give Lender written notice of the existence, extent and nature of the Force Majeure Event as soon
as reasonably possible after the occurrence of the event. Failure to give notice will result in the
continuance of the Developer's obligation regardless of the extent of any existing Force Majeure
Event. Developer will use commercially reasonable efforts to remedy its inability to perform as
soon as possible.
14.20 Survival.
Any provision of this Contract that pertains to Affordability Requirements, indemnity
obligations, reporting requirements, auditing, monitoring, tenant income eligibility, record keeping
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and reports, City ordinances, the provisions of Section 6.6 pertaining to SAM, or any HOME
requirements, and any default and enforcement provisions necessary to enforce such provisions,
shall survive the termination of this Contract for the longer of (i) 5 years after the termination date
of this Contract, or (ii) 5 years after the termination of the Affordability Period unless a different
survival period is specifically set forth herein, and shall be enforceable by Lender against
Developer.
14.21 REVIEW OF COUNSEL.
The Parties acknowledge that each Parry and its counsel have reviewed and revised this Contract
and that the normal rules of construction to the effect that any ambiguities are to be resolved against
the drafting parry shall not be employed in the interpretation of this Contract or any of the exhibits
attached hereto.
15. INDEMNIFICATION AND RELEASE.
DEVELOPER, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
COVENANTS AND AGREES TO INDEMNIFY, HOLD HARMLESS AND DEFEND, AT
ITS OWN EXPENSE, LENDER AND ITS OFFICERS, AGENTS, SERVANTS AND
EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS OF ANY
HIND OR CHARACTER, INCLUDING BUT NOT LIMITED TO CLAIMS FOR
PROPERTY LOSS OR DAMAGE AND/OR PERSONAL INJURY, INCLUDING
DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER HIND OR CHARACTER,
WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION WITH
THE EXECUTION, PERFORMANCE, ATTEMPTED PERFORMANCE OR
NONPERFORMANCE OF THIS CONTRACT AND/OR THE OPERATIONS,
ACTIVITIES AND SERVICES OF THE PROJECT DESCRIBED HEREIN, WHETHER
OR NOT CAUSED IN WHOLE OR IN PART, BY ALLEGED NEGLIGENCE OF
OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR
SUBCONTRACTORS OF CITY, BUT NOT FROM THE LENDER'S, OR LENDER'S
OFFICERS, AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR
SUBCONTRACTORS ACTUAL GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, AND DEVELOPER HEREBY ASSUMES ALL LIABILITY AND
RESPONSIBILITY OF LENDER AND ITS OFFICERS, AGENTS, SERVANTS, AND
EMPLOYEES FOR ANY AND ALL CLAIMS OR SUITS FOR PROPERTY LOSS OR
DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL
PERSONS, OF WHATSOEVER KINDS OR CHARACTER, WHETHER REAL OR
ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE EXECUTION,
PERFORMANCE, ATTEMPTED PERFORMANCE OR NONPERFORMANCE OF
THIS CONTRACT AND AGREEMENT AND/OR THE OPERATIONS, ACTIVITIES
AND SERVICES OF THE PROJECT DESCRIBED HEREIN, WHETHER OR NOT
CAUSED IN WHOLE OR IN PART BY ALLEGED NEGLIGENCE OF OFFICERS,
AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS OF
LENDER, BUT NOT FROM THE LENDER'S, OR LENDER'S OFFICERS, AGENTS,
SERVANTS, EMPLOYEES, CONTRACTORS OR SUBCONTRACTORS ACTUAL
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. DEVELOPER, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, FURTHER COVENANTS AND
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AGREES TO AND DOES HEREBY INDEMNIFY AND HOLD HARMLESS LENDER
FROM AND AGAINST ANY AND ALL INJURY, DAMAGE OR DESTRUCTION OF
PROPERTY OF CITY, ARISING OUT OF OR IN CONNECTION WITH ALL ACTS
OR OMISSIONS OF DEVELOPER, ITS OFFICERS, MEMBERS, AGENTS,
EMPLOYEES, CONTRACTORS, SUBCONTRACTORS, INVITEES, LICENSEES, OR
PROJECT PARTICIPANTS, OR CAUSED, IN WHOLE OR IN PART, BY ALLEGED
NEGLIGENCE OF OFFICERS, AGENTS, SERVANTS, EMPLOYEES,
CONTRACTORS OR SUBCONTRACTORS OF LENDER, BUT NOT FROM THE
LENDER'S, OR LENDER'S OFFICERS, AGENTS, SERVANTS, EMPLOYEES,
CONTRACTORS OR SUBCONTRACTORS ACTUAL GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
IT IS THE EXPRESS INTENTION OF THE PARTIES, BOTH DEVELOPER AND
LENDER, THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION INCLUDES
INDEMNITY BY DEVELOPER, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, TO INDEMNIFY AND PROTECT LENDER FROM THE CONSEQUENCES OF
LENDER'S OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE IS ALLEGED TO
BE THE SOLE OR CONCURRING CAUSE OF THE INJURY, DAMAGE OR DEATH,
BUT NOT THE LENDER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
DEVELOPER, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
AGREES TO AND SHALL RELEASE LENDER, ITS AGENTS, EMPLOYEES,
OFFICERS AND LEGAL REPRESENTATIVES FROM ALL LIABILITY FOR INJURY,
DEATH, DAMAGE OR LOSS TO PERSONS OR PROPERTY SUSTAINED IN
CONNECTION WITH OR INCIDENTAL TO PERFORMANCE UNDER THIS
CONTRACT, EVEN IF THE INJURY, DEATH, DAMAGE OR LOSS IS CAUSED BY
LENDER'S SOLE OR CONCURRENT NEGLIGENCE, BUT NOT THE LENDER'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
DEVELOPER SHALL REQUIRE ALL OF ITS CONTRACTORS AND
SUBCONTRACTORS TO INCLUDE IN THEIR CONTRACTS AND SUBCONTRACTS
A RELEASE AND INDEMNITY IN FAVOR OF LENDER IN SUBSTANTIALLY THE
SAME FORM AS ABOVE.
16. WAIVER OF IMMUNITY BY DEVELOPER.
If Developer is a charitable or nonprofit organization and has or claims an immunity or
exemption (statutory or otherwise) from and against liability for damages or injury, including
death, to persons or property, Developer hereby expressly waives its rights to plead defensively
such immunity or exemption as against Lender. This section shall not be construed to affect a
governmental entity's immunities under constitutional, statutory or common law.
17. INSURANCE AND BONDING.
Developer shall maintain coverage in the form of insurance or bond in the amount of
$1,000,000.00, which is the total amount of the Loan, to insure against loss from the fraud, theft
or dishonesty of any of Developer's officers, agents, trustees, directors or employees. The
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Hughes House II Apartments Page 41
proceeds of such insurance or bond shall be used to reimburse Lender for any and all loss of HOME
Funds occasioned by such misconduct. To effectuate such reimbursement, such fidelity coverage
shall include a rider stating that reimbursement for any loss or losses shall name Lender as a Loss
Payee.
Developer shall furnish to Lender, in a timely manner, but not later than 60 days after the
Effective Date, certificates of insurance as proof that it has secured and paid for policies of
commercial insurance as specified herein. Further, if Lender has not received such certificates as
set forth herein, Developer shall be in default of the Contract, and Lender may at its option,
terminate the Contract.
Such insurance shall cover all insurable risks incident to or in connection with the
execution, performance, attempted performance or nonperformance of this Contract. Developer
shall maintain, or require its general contractor to maintain, the following coverages and limits
thereof:
Commercial General Liability (CGL) Insurance
$1,000,000 each occurrence
$1,000,000 aggregate limit
Business Automobile Liability Insurance
$300,000 each accident on a combined single -limit basis
$300,000 Aggregate
Insurance policy shall be endorsed to cover "Any Auto' defined as autos owned, hired and
non -owned. Pending availability of the above coverage and at the discretion of Lender, the
policy shall be the primary responding insurance policy versus a personal auto insurance policy if
or when in the course of Developer's business as contracted herein.
Workers' Compensation Insurance
Part A: Statutory Limits
Part B: Employer's Liability
$100,000 each accident
$100,000 disease -each employee
$500,000 disease -policy limit
Note: Such insurance shall cover employees performing work on any and all projects
including but not limited to construction, demolition, and rehabilitation. Developer or its
contractors shall maintain coverages, if applicable. In the event the respective contractors
do not maintain coverage, Developer shall maintain the coverage on such contractor, if
applicable, for each applicable contract.
Additional Requirements
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Hughes House II Apartments Page 42
Such insurance amounts shall be revised upward at Lender's reasonable option and no more
frequently than once every 12 months, and Developer shall revise such amounts within 30 days
following notice to Developer of such requirements.
Developer must submit to Lender documentation that it, and its general contractor, have obtained
insurance coverage and have executed bonds as required in this Contract prior to payment of any
monies provided hereunder.
where applicable and appropriate, insurance policies required herein shall be endorsed to include
Lender as an additional insured as its interest may appear. Additional insured parties shall include
employees, officers, agents, and volunteers of Lender.
The Workers' Compensation Insurance policy shall be endorsed to include a waiver of
subrogation, also referred to as a waiver of rights of recovery, in favor of Lender.
Any failure on part of Lender to request certificate(s) of insurance shall not be construed as a
waiver of such requirement or as a waiver of the insurance requirements themselves.
Insurers of Developer's insurance policies shall be licensed to do business in the state of Texas by
the Department of Insurance or be otherwise eligible and authorized to do business in the state of
Texas. Insurers shall be acceptable to Lender insofar as their financial strength and solvency and
each such company shall have a current minimum A.M. Best Key Rating Guide rating of A: VII
or other equivalent insurance industry standard rating otherwise approved by Lender.
Deductible limits on the foregoing insurance policies shall be at commercially reasonable levels,
and in no event exceed $100,000 per occurrence.
In the event there are any local, federal or other regulatory insurance or bonding requirements for
the Project, and such requirements exceed those specified herein, the former shall prevail.
Developer shall require its contractors to maintain applicable insurance coverages, limits, and
other requirements as those specified herein; and, Developer shall require its contractors to provide
Developer with certificate(s) of insurance documenting such coverage. Also, Developer shall
require its contractors to have Lender and Developer endorsed as additional insureds (as their
interest may appear) on their respective insurance policies where applicable and appropriate.
Developer shall require its builder to maintain builders risk insurance at the value of the
construction.
18. CERTIFICATION REGARDING LOBBYING.
that:
The undersigned for Developer hereby certifies, to the best of its knowledge and belief,
No Federal appropriated funds have been paid or will be paid, by or on behalf of
Developer, to any person for influencing or attempting to influence an officer or
employee of any agency, a member of Congress, an officer or employee of Congress
in connection with the awarding of any Federal contract, the making of any federal
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Hughes House II Apartments Page 43
grant, the making of any Federal loan, the entering into of any cooperative
agreement and the extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan or cooperative agreement.
If any funds other than federally appropriated funds have been paid or will be paid
to any person for influencing or attempting to influence an officer or employee of
any agency, member of Congress in connection with this Federal contract, grant,
loan or cooperative agreement, Developer shall complete and submit Standard
Form-LLL, "Disclosure Form to Report Lobbying, " in accordance with its
instructions.
This certification is a material representation of fact upon which reliance was
placed when this Contract was made or entered into. Submission of this certificate
is a prerequisite for making or entering into this Contract imposed by 31 U.S.C.
Section 1352. Any person who fails to file the required certification shall be subject
to a civil penalty of not less than $10,000.00 and not more than $100,000.00 for
each such failure.
Developer shall require that the language of this certification be included in all subcontracts
or agreements involving the expenditure of federal funds.
19. RELIGIOUS ORGANIZATION.
Developer shall comply with all applicable requirements as more particularly described in
24 CFR Part 5.109. No portion of the HOME Funds shall be used in support of any sectarian or
religious activity. In addition, there must be no religious or membership criteria for tenants of a
HOME -funded unit.
19.1 Separation of Explicitly Religious Activities.
Developer retains its independence and may continue to carry out its mission, including
the definition, development practice, and expression of its religious beliefs, provided that it does
not use HOME Funds to support or engage in any explicitly religious activities (including activities
that involve overt religious content such as worship, religious instruction, or proselytization), or
in any other manner prohibited by law.
19.2 Explicitly Religious Activities.
If Developer engages in explicitly religious activities (including activities that involve
overt religious content such as worship, religious instruction, or proselytization), the explicitly
religious activities must be offered separately, in time or location, from the programs or activities
supported by HOME Funds and participation must be voluntary for tenants of a HOME -funded
unit.
20. LITIGATION AND CLAIMS.
Developer shall give Lender immediate notice in writing of any action, including any
proceeding before an administrative agency, filed against Developer in conjunction with this
Contract or the Project generally. Developer shall furnish immediately to Lender copies of all
pertinent papers received by Developer with respect to such action or claim. Developer shall
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provide a notice to Lender within 10 calendar days upon filing under any bankruptcy or financial
insolvency provision of law.
21. NOTICE.
All notices required or permitted by this Contract must be in writing and shall be effective
upon receipt when (i) sent by U.S. Mail, with proper postage, certified mail return receipt
requested; (ii) by a nationally recognized overnight delivery service; (iii) by electronic mail or
other commercially reasonable manner; and addressed to the other Party at the address set out
below or at such other address as the receiving Party designates by proper notice to the sending
Party.
Lender:
City Attorney's Office
100 Fort Worth Trail
Fort Worth, TX 76102
Attention: Leslie Hunt
Telephone: 817-3 92-275 8
Copy to:
Neighborhood Services Department
100 Fort Worth Trail
Fort Worth, TX 76102
Attention: Chad LaRoque
Telephone: 817-392-2661
Developer:
FW Hughes House II, LP
1407 Texas Street
Fort Worth, TX 76102
Attn: Mary -Margaret Lemons
With a copy to:
Coats Rose, P.0
9 Greenway Plaza, Suite 1000
Houston, Texas 77046
Attn: Barry J. Palmer
Investor:
Red Stone Equity — Fund 88 Limited Partnership
c/o Red Stone Equity Partners, LLC
90 Park Avenue, 28th Floor
New York, NY 10016
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Hughes House II Apartments Page 45
Attn: Chief Executive Officer & Director/Senior Vice President, Legal
With a copy to:
Nixon Peabody LLP
Exchange Place
53 State Street
Boston, MA 02109
Attention: Roger W. Holmes
22. DEVELOPER HAS LEGAL AUTHORITY TO ENTER INTO CONTRACT.
Developer represents that it possesses the legal authority, pursuant to any proper,
appropriate and official motion, resolution or action passed or taken, to enter into this Contract and
to perform the responsibilities herein required.
23. INVESTOR'S RIGHTS TO CURE.
The Parties agree that the Investor shall independently have the right, but not the obligation,
to cure any default by or complete any obligation of the Developer under this Contract and the
Loan Documents during the cure period or completion period provided therein, and the Parties
hereto agree to accept any such cure or completion tendered by the Investor.
24. BOYCOTTING ISRAEL PROHIBITED.
Developer acknowledges that in accordance with Chapter 2270 of the Texas Government
Code, Lender is prohibited from entering into a contract with a company for goods or services
unless the contract contains a written verification from the company that it: (1) does not boycott
Israel; and (2) will not boycott Israel during the term of the contract. The terms "boycott Israel"
and "company" shall have the meanings ascribed to those terms in Section 3028.001 of the Texas
Government Code. By signing this Contract, Developer certifies that Developer's signature
provides written verification to Lender that Developer: (1) does not boycott Israel; and (2)
will not boycott Israel during the term of this Contract.
25. IMMIGRATION NATIONALITY ACT.
Developer shall verify the identity and employment eligibility of its employees who
perform work under this Contract, including completing the Employment Eligibility Verification
Form (I-9). Upon request by Lender, Developer shall provide Lender with copies of all I-9
forms and supporting eligibility documentation for each employee who performs work under this
Contract. Developer shall adhere to all Federal and State laws as well as establish appropriate
procedures and controls so that no services will be performed by any Developer employee who is
not legally eligible to perform such services. DEVELOPER, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, SHALL INDEMNIFY LENDER AND HOLD
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Hughes House II Apartments Page 46
LENDER HARMLESS FROM ANY PENALTIES, LIABILITIES, OR LOSSES DUE TO
VIOLATIONS OF THIS PARAGRAPH BY DEVELOPER, DEVELOPER'S
EMPLOYEES, SUBCONTRACTORS, AGENTS, OR LICENSEES. Lender, upon written
notice to Developer, shall have the right to immediately terminate this Contract for violations of
this provision by Developer.
26. COUNTERPARTS.
This Contract may be executed in multiple counterparts, each of which shall be considered
an original, but all of which shall constitute one instrument which may be sufficiently evidenced
by one counterpart.
27. PROHIBITION ON BOYCOTTING ENERGY COMPANIES.
In accordance with Chapter 2274 of the Texas Government Code, as added by Acts 2021,
87th Leg., R.S., S.B. 13, § 2, Lender is prohibited from entering into a contract for goods or
services that has a value of $100,000 or more that is to be paid wholly or partly from public funds
of Lender with a company with 10 or more full-time employees unless the contract contains a
written verification from the company that it: (1) does not boycott energy companies; and (2) will
not boycott energy companies during the term of the contract. The terms "boycott energy
company" and "company" have the meaning ascribed to those terms by Chapter 2274 of the Texas
Government Code, as added by Acts 2021, 87th Leg., R.S., S.B. 13, § 2. To the extent that Chapter
2274 of the Government Code is applicable to this Agreement, by signing this Agreement,
Developer certifies that Developer's signature provides written verification to Lender that
Developer: (1) does not boycott energy companies; and (2) will not boycott energy companies
during the term of this Contract.
28. PROHIBITION ON DISCRIMINATION AGAINST FIREARM AND
AMMUNITION INDUSTRIES.
Except as otherwise provided by Chapter 2274 of the Texas Government Code, as added
by Acts 2021, 87th Leg., R.S., S.B. 19, § 1, Lender is prohibited from entering into a contract for
goods or services that has a value of $100,000 or more that is to be paid wholly or partly from
public funds of Lender with a company with 10 or more full-time employees unless the contract
contains a written verification from the company that it: (1) does not have a practice, policy,
guidance, or directive that discriminates against a firearm entity or firearm trade association; and
(2) will not discriminate during the term of the contract against a firearm entity or firearm trade
association. The terms "discriminate," "firearm entity" and "firearm trade association" have the
meaning ascribed to those terms by Chapter 2274 of the Texas Government Code, as added by
Acts 2021, 87th Leg., R.S., S.B. 19, § 1. To the extent that Chapter 2274 of the Government Code
is applicable to this Agreement, by signing this Agreement, Developer certifies that Developer's
signature provides written verification to Lender that Developer: (1) does not have a practice,
policy, guidance, or directive that discriminates against a firearm entity or firearm trade
HOME DEVELOPER RENTAL CONTRACT
Hughes House II Apartments Page 47
association; and (2) will not discriminate against a firearm entity or firearm trade association
during the term of this Contract.
29. ELECTRONIC SIGNATURES.
This Contract may be executed by electronic signature, which will be considered as an
original signature for all purposes and have the same force and effect as an original signature. For
these purposes, "electronic signature" means electronically scanned and transmitted versions (e.g.
via pdf file or facsimile transmission) of an original signature, or signatures electronically inserted
via software such as Adobe Sign.
[SIGNATURES APPEAR ON NEXT PAGE]
HOME DEVELOPER RENTAL CONTRACT
Hughes House II Apartments Page 48
IN WITNESS W REOF, the Parties have executed 3 duplicate originals of this
Contract to be effective as of the Effective Date.
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ATTEST:=$ °''d CITY OF FORT W TH
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City Secretary
M&C 25-1107
Dated Dec. 9, 2025
Dana Burghdoff, Assistant City Manager
Date: 07/06/2026
APPROVED AS TO FORM AND LEGALITY:
lqut.
06slie Hunt (Jul 2, 2026 14:08:25 CDT)
Leslie L. Hunt, Senior Assistant City Attorney
City of Fort Worth Contract Compliance Manager:
By signing I acknowledge that I am the person responsible
For the monitoring and administration of this contract, including
Ensuring all performance and reporting requirements.
Anderson Stoute (Jul 2, 2026 12:21:30 CDT)
Anderson Stoute, Assistant Director
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
HOME DEVELOPER RENTAL CONTRACT
Hughes House II Apartments Page 49
FW HUGHES HOUSE II, LP,
a Texas limited partnership
By: FW Hughes House II GP, LLC,
a Texas limited liability company,
its general partner
By: Fort Worth Affordability, Inc.,
a Texas nonprofit corporation,
its sole member
By:' wwAtL�6
Name: Mary- argar Lern, n
Title: Secret ry/Tre rrer l
Date:
HOME DEVELOPER RENTAL CONTRACT
Hughes House II Apartments Page 50
EXHIBITS:
Exhibit
"A" —
Project Summary
Exhibit
"A-1"
— HUD Rent Limits
Exhibit
"A-2"
— Environmental Mitigation Action
Exhibit
`B" —
Budget
Exhibit
"C" —
Construction and Reimbursement Schedule
Exhibit
"D" —
Audit Requirements — Not Applicable
Exhibit
"E" —
Loan Documents
Exhibit
"F" —
Reimbursement Forms
Exhibit "G" — Project Compliance Report: Rental Housing
Exhibit "H" — Federal Labor Standards Provisions — Davis -Bacon Requirements
Exhibit "I" — Section 3 Reporting Forms
Exhibit " I-1" — Section 3 Project Service Area Map
Exhibit "J" — Standards for Complete Documentation
Exhibit "K"
— Not Applicable
Exhibit "L"
- Deed Restriction
Exhibit "M" - Not Applicable
Exhibit "N"
- VAWA Forms
Exhibit "O"—
HOME Requirements
HOME DEVELOPER RENTAL CONTRACT
Hughes House II Apartments List of Exhibits Page
EXHIBIT "A"
PROJECT SUMMARY
HUGHES HOUSE II APARTMENTS
Capitalized terms not defined herein shall have meanings assigned to them in the Contract.
DESCRIPTION:
Developer will use HOME Funds for a portion of the costs to develop the Hughes House II
Apartments, an affordable housing development for families to be located at 5028 Avenue G, Fort
Worth, Texas, 76105.
The proposed Hughes House II Development is part of a broader housing initiative that is one of
the three major components of the $35 Million Choice Neighborhoods Implementation grant
awarded to Fort Worth Housing Solutions and the City of Fort Worth by the U.S. Department of
Housing and Urban Development in April 2020. The Choice Neighborhoods Project will be located
at or near 1401 Etta Street, Fort Worth, 76105 City of Fort Worth, Council District 5. It is
anticipated that the construction of Hughes House II will begin in the third quarter of 2026 and
take 26 months to reach substantial completion. The Hughes House II Apartments will be a new
affordable multifamily development designed to support mixed income levels.
The Hughes House II Project will be designed and constructed to market -rate standards and will
feature amenities to serve all residents of the new multifamily community, including a pool and
splash pad, multiple playgrounds, a fully enclosed dog park, passive park areas with benches and
pathways, and a multi -purpose building with mail and package rooms and flex space. The new
community will consist of multiple two and three-story apartments and townhome buildings. The
buildings will be set around the site perimeter, with frontage along Avenue G, Etta Street, Pollard
Smith Avenue. In addition, a new north to south street will be constructed as part of comprehensive
public improvements plan.
In consideration for the HOME Funds, Developer agrees to provide the following infonnation and
meet the following requirements:
• Designate 23 Accessible Units in accordance with Section 504 requirements and the terms of the
Contract, of which 16 must be accessible to individuals with mobility impairments, and 7must be
accessible to individuals with visual impairments. Accessible Units shall be marketed in
accordance with Section 7.7 of the Contract.
• Designate 6 floating HOME Units in the project. Of these 6 HOME Units, 3 will be High HOME
Units and 3 will be Low HOME Units. HOME Rents will be charged in accordance with the rents
set forth in Exhibit "A-1" — HUD Rent Limits, published annually by HUD, and shall not exceed
the Low HOME Rent.
• Submit Exhibit "G" - Project Compliance Report: Rental Housing regarding the household
income, size, race, ethnicity, gender of head of household, disability status, and rental assistance type
for the initial tenant of the first HOME Unit to be leased. LENDER WILL WITHHOLD $50,000.00
OF THE HOME FUNDS UNTIL LENDER VERIFIES THAT ALL HOME UNITS ARE
LEASED TO HOME ELIGIBLE HOUSEHOLDS.
• If the 6 HOME Units do not qualify as affordable rental housing immediately upon lease -up or at
any time during the Affordability Period, Lender may invoke any remedies provided in the Contract
or the Loan Documents.
• Submit to Lender, throughout the Affordability Period, a copy of its annual audit and annual reports
that are submitted to TDHCA.
SPECIFIC PURPOSE:
The specific purpose of this project is to benefit low- and moderate -income individuals and families
by providing them with affordable housing.
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 1
PROJECT OBJECTIVES:
The project will feature 302 residential units in a mix of 1-,2-,3-, and 4 bedroom floor plans. Of
these, 89 units will be Project -Based Vouchers reserved for returning families from Cavile Place;
216 units will be income restricted for households earning 60% or less of the Area Medium Income;
80 units will be offered at market rate; and 21 units will provide Permanent Supportive Housing
for individuals experiencing homelessness.
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 2
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EXHIBIT "A-2"
ENVIRONMENTAL MITIGATION ACTION
HUGHES HOUSE II APARTMENTS
HOME Funds may be reimbursed for exempt activities; however, HOME funds will not be paid, and costs
cannot be incurred, until Lender has conducted and completed an environmental review of the proposed
project site as required under 24 CFR Part 58. The environmental review may result in a decision to
proceed with, modify, or cancel the project. Further, Developer will not undertake or commit any funds
to physical or choice limiting actions, including property acquisition, demolition, movement, rehabilitation,
conversion, repair or construction until satisfactory completion of environmental review and receipt by
Lender of an authorization to use grant funds from HUD under 24 CFR Part 58.
Special conditions, procedures, and requirements identified for the project may include and are not limited
to mitigation of any adverse effects identified by the environmental review process. The special conditions,
procedures, and requirements may differ and are subject to approval by Lender and HUD.
Environmental Mitigations are as follows:
Lender will provide Developer the executed environmental review record and certifications. Developer
agrees to abide by the special conditions, procedures, and requirements of the executed environmental
review certification approved by HUD.
Law, Authority, or Factor Mitigation Measure or Condition
Contamination and Toxic Substances -Any action required under the TRRP, PST Program, or other
TCEQ Program, including investigation, monitoring, and
remediation, must be conducted in accordance with 30 TAC,
334; 30 TAC, 350; or other applicable TCEQ program rules.
Before grading or building permits can be pulled for Hughes
House II (Parcels C, D, G, H, and 1), a No Further Action Letter
issued by the TCEQ stating that the site meets residential
standards must be supplied to the City.
-To address the arsenic exceedances on the remainder of the
subject property, which are believed to be naturally
occurring, a TRRP Report must be prepared and submitted to
TCEQ to gain their concurrence on the Tier 2 and
representative concentration evaluations. Before grading or
building permits can be pulled for Hughes House 11, a No
Further Action Letter issued by the TCEQ stating that the site
meets residential standards must be supplied to the City.
-AARST "Soil Gas Control Systems in New Construction of
Buildings" (CC-1000 2018) must be used in the design and
construction of buildings located on Parcels E, D, H, and I.
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House II Apartments Page 4
oise Abatement and Control Before construction of each phase of development can begin,
the following must be submitted to the project manager at
the City of Fort Worth:
-Calculations from HUD's Sound Transmission Classification
Assessment Tool (STraCAT), supplied by the architect,
confirming that materials used in the construction of all
residential buildings north of Ave G sufficiently reduce
interior noise to a day -night average of below 45 dBA,
factoring in fenestration
-For all residential buildings with balconies north of Ave G, an
Operations and Maintenance plan must be put in place that
requires periodically inspecting seals and repairing or
replacing building components when their performance
diminishes
Solid Waste Disposal and Recycling
Solid waste and recycling providers must be selected and in
(Feasibility and Capacity)
place before construction can begin.
Waste Water and Sanitary Sewers
Prior to construction of each phase, the associated waste
(Feasibility and Capacity)
water infrastructure plan must be submitted to and approved
by the City of Fort Worth.
Water Supply (Feasibility and
Prior to construction of each phase, the associated municipal
Capacity)
water infrastructure plan must be submitted to and approved
b the City of Fort Worth.
Vegetation / Wildlife (Introduction,
Should construction activities coincide with migratory bird
Modification, Removal, Disruption,
nesting season, all active nests should be avoided, and if
etc.)
found, a biologist with the USFWS should be notified before
any construction activities can begin.
Permits, reviews, and approvals
Information on commercial permitting can be found on the
City's website at
https://www.fortworthtexas.gov/departments/development-
services/permits/commercial
Project Mitigation Plan
-CFW will add the list of Required Mitigation Measure(s) to EXHIBIT "A-2" ENVIRONMENTAL MITIGATION
ACTION in the City's HOME or CDBG contract; -CFW will required the Developer to confirm that the
Required Mitigation Measure(s) have been added as an addenda to any Developer/Architect agreements;
CFW will discuss the list of Required Mitigation Measure(s) with the Architect and Developer during the
pre -design or pre -construction meeting; -CFW will required the Developer to provide construction
specs/designs at no earlier than 60% to demonstrate compliance with the Required Mitigation Measure(s);
-Developer is required to submit a certification or memo to file confirming that that the Required
Mitigation Measure(s) have met; and, -Final payment will be contingent upon the certification or memo to
file confirming that that the Required Mitigation Measure(s) have met. The project manager at the City
for this particular project is responsible for ensuring all mitigation measures and conditions are satisfied
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House II Apartments Page 5
Cavite -Place -Redevelopment- Fort Worth, TX 900000010218208
and -Disposition
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 6
EXHIBIT "B"
BUDGET
HUGHES HOUSE II APARTMENTS
SOURCES AND USES
Priority
Source #
Funding Description
of Lien
Financing
Financing Participants
Keybanc Capital
Markets; Trinity River
Public Facility
1
Permanent Loan
$48,765,000
Corporation
Tax Credit Equity
$ 28,688,955
2
Redstone Equity
Seller Note
Fort Worth Housing
3
$7,678,333
Solutions
HOME Investment
Partnerships Program
4
(HOME)
$1,000,000
City of Fort Worth
Urban Development
5
Action Grant AG
$450,000
City of Fort Worth
6
FWHFC PSH
$525,000
City of Fort Worth
HUD CPF
$ 3,293,023
HUD CPF; Fort Worth
7
Affordability, Inc.
Choice Neighborhood
Implementation (CNI)
$ 7,500,000
HUD CNI; Fort Worth
8
Loan
Affordability, Inc.
Fort Worth
9
FWAI PSH Match
$525,000
Affordability, Inc.
10
City IPRC Cost Sharing
$1,208,673
City of Fort Worth
Interim Cash Flow & Re -
Investment Earnings
$4,674,051
11
12
1 Deferred Developer Fee
1
$4,282,020
Fort Worth
13
ARPA
$400,000
Affordability, Inc.
TOTAL SOURCES
$108,042,070
HOME Funds Budget
Construction Hard Costs
$950,000*
Holdback**
$50,000*
TOTAL
$1,000,000
*Developer agrees to be reimbursed for eligible expenses and based on work completed and costs actually
incurred. The amounts are estimates and are subject to change.
** Lender will hold back $50,000.00 of the HOME Funds until Lender verifies that all HOME Units are leased
to HOME Eligible Households as well as the other requirements in Exhibit "C" - Construction and
Reimbursement Schedule.
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 7
EXHIBIT "C"
CONSTRUCTION AND REIMBURSEMENT SCHEDULE
HUGHES HOUSE APARTMENTS
Activity
HOME Funds
PHASE I
Land Acquisition and Predevelopment Soft Cost
COMPLETE by:
$0
June 2026
Prior to Reimbursement in Phase II, Developer must submit
PHASE II
the contractor/subcontractor/vendor searches under the
COMPLETE by:
Federal System for Award Management (www.sam.gov).
$500,000.00
December 2026
Construction Hard Cost
First Payment" (approx. 30% complete)***
Prior to Reimbursement in Phase II, Developer must submit
PHASE III
the contractor/subcontractor/vendor searches under the
COMPLETE by:
Federal System for Award Management (www.sam.gov).
June, 2027
$300,000.00
Second Payment** (approx. 60% complete)***
Prior to Reimbursement in Phase III, Developer must submit
PHASE IV
the contractor/subcontractor/vendor searches under the
COMPLETED by:
Federal System for Award Management (www.sam.gov).
$150,000.00
December 2027
Third Payment** (approx. 90% complete)***
PHASE V
Prior to Reimbursement in Phase IV, Developer must
COMPLETED by:
submit the following items:
September 2028
1. Rent Schedule for HOME Units. See Section 7.5
2. Tenant Selection Policy. See Section 7.6
3. Affirmative Marketing Plan. See Section 7.7
$50,000.00*
Prior to Reimbursement for Final Payment, Exhibit "G" -
Project Compliance Report: Rental Housing must be
submitted to Lender.
Final Payment** (Lease -Up of all HOME Units)***
TOTAL
$1,000,000.00
*Developer will request reimbursement for eligible expenses and based on work completed and costs
actually incurred. The amounts are estimates and are subject to change.
**Developer must submit Complete Documentation with Reimbursement Request within 60 days from
each of the abovementioned deadlines in order to be reimbursed. Failure to timely submit
Reimbursement Requests and Complete Documentation along with any required reports shall be an
event of default.
***If milestone is reached before the Phase completion date, reimbursement will be made when the
milestone percentage is reached and Lender is provided all required documentation.
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 8
EXHIBIT "D"
AUDIT REQUIREMENTS
HUGHES HOUSE II APARTMENTS
NOT APPLICABLE
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 9
EXHIBIT "E"
LOAN DOCUMENTS
HUGHES HOUSE II APARTMENTS
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 10
Attachment I
EXHIBIT "F"
REIMBURSEMENT FORMS
HUGHES HOUSE II APARTMENTS
INVOICE
Developer:
FW Hughes House II, LP
Address:
5028 Avenue G
City, State, Zip:
Fort Worth, TX 76105
Project:
Hughes House II Project
Tax ID Number
Amount'
This Invoice Cumulative to Date
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 11
Attachment 11
City of Fort Worth
Neighborhood Services Department
Expenditure Worksheet
Line No.
Date
Check No.
Description*
Amount
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Total
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 12
EXHIBIT "G"
PROJECT COMPLIANCE REPORT: RENTAL HOUSING
HUGHES HOUSE APARTMENTS
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 13
PROJECT COMPLIANCE REPORT: RENTAL HOUSING
EXHIBIT "G"
Project Name: Contract #: Owner Name:
Reporting Period: From To
# of HOME -Assisted Units: # of High HOME Units Required: = cf Low hOME Units Required:
"All data reported should be consistent with requirements described in contract and any amendments
Lease date
Unit Number
Low or High
HOME
Rent Unit?
Tenant Name
- =
= C^s
m HH
# of BRs
Date of Last
Income
Certticaticn
Max Rent
Utility
Allowance
Un t
Monthly
Rent
Tenart's
Annual
Gross
% of
Medan
Income
HisPanic7
Race
Other
Assistance
Type
Type of
household
Type Of HaUeeh Old
Other Assistance Type
lees'
;elect:
n sng�, rorvlaeny
I ;ectwn 5
2 Eklery
2 HOME T5RA
3 s'ngfe
3 Other'eaeral, 63.e
6 Too parerm
ar local 3661613rce
5 Other
3 40 36616tanm
Race
5ele m
i Vmhe
2 Black, Amcan American
3 Aswan
.t American ndar.'Aaskar Native
f Nat, Hara ar.'Otner pacific Warraer
Law HOME rents may not exceed 3C% o' ere adjustea noome of not sena]s a 50% of area Tee ar
tricorn. adjusted for houserold size and adjusted for tenant -paid uttTes. Addblorlaly. ww HOME rents
may not exceed the High HOME standard I Mwh maybe Capped by the FMR } At lease 2C-% W HOME
Wits In projects With 5 or more HOME-3661sted units mist have low HOME rents.
High HOME rents apply to all caner HOME -ash tea urns and are cawUatea as the e66er of the .Sectan e
(Choice Voucher] Fair Market Rent a 30% of adjusted monthly name •ar nousero106 at 65% are
medlan Income. adjusted for nousenold size, and adjusted for tenarh-pale utilte6.
Bode sets of rents are published try HUD, and both Ilmt ere local contract rent, Including recta
assistance. exceot for croect-based assistance br yie Loa HOME fern Ur Z.
6 Amenrar mdW,AlarA3r Natve 6 Write
Kan It White
5 Back 6 wnlR
9 Arredaar IndlanAlaskan Native 6 Bax
10 03W
Certricaron: The undersigned_ hereby, gves assurance that to the best of my knowledge and belief, the data nciudec
in this report s true and accurate. and I is a non-profit agency, has been approved by the govern rap body of the organ zation
pror to submission.
This completes and sgned occument should be submitted to the City annually per your contract A copy should be retared ^ your files.
Title:
Prnt Name
Sigaahae:.
Date:
Ptione No
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House II Apartments Page 14
EXHIBIT "H"
FEDERAL LABOR STANDARD PROVISIONS - DAVIS-BACON REQUIREMENTS
HUGHES HOUSE APARTMENTS
Davis -Bacon Requirements are applicable to the Project due to the Senior Indebtedness and Section 8
Project -Based Vouchers. The HOME funds did not trigger Davis -Bacon. In the event a HUD monitor
requests proof of compliance with the Davis -Bacon Requirements, Developer shall produce reports
showing compliance in the form agreed upon and required by the Senior Lender to Lender within 10
business days
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House II Apartments Page 15
EXHIBIT "I"
SECTION 3 REPORTING FORMS
HUGHES HOUSE II APARTMENTS
SECTION 3 BUSINESS CERTIFICATION
SECTION 3 SUMMARY REPORT (Form HUD-60002)
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 16
FORT WORTH,
Irpo—
City of Fart Worth
Section 3 Business Certification for C'ontraet n2
Instruction: Enter the folloINI Mg information and select the criteria that applies to certify your business'
Section Business stains.
Business Information:
Name of Business:
Address of Business:
Name of Business Owner:
Telephone and Email of
Business Otimer:
Type of Business:
(check ripe that a
applies)
Corporation
Parttlership
Sale Proprietorship
Joint Venture
Select from ONE of the follonang tln•ee options that applies:
At least 51°,6 of the business is oi,,med and controlled by low- or ti� loti�-income persons. A low•-
or Ivry lows -income person is an individual -�,ho earns at or below SOP -a' ?►NII or no niore than S45. 300,00
anmWly effecti%v April 1. 2021.
At least 514,6 of the business is owned and controlled by current public housing residents who
currently hire in Section 8-assisted housing.
Cher 50o of the labor hours performed for the busies o%w the prior three-month period are
performed by Section 3 workers_ A Section 3 worker is an individual %&rh.o earns at or below 90% AMI or
no mx a than $4 5,300.00 annually effective Atari! 1, 2021.
Business Affirmation:
I affirm that the above statements are true, complete, and correct to the best of my knotvledge_ I understand
that businesses who misrepresent themselves as Section 3 businesses and report false information to the
City of Fort Forth may have their contracts terminated as defauult and be barred from ongoing and future
considerations for contracting opportunities_ I hereby certify. under penalty of lain. we meet the definition
of a Section 3 Business under federal regulations of the U.S. Department of Housing and Urban
Development at 24 CFR Part +5, and that the followsing information is correct to the best of my Imowledge_
Print Name:
Signanre:
Certification aspires x ithin six months of the date of signature.
Date:
-------- FOR CFI"' USE O N-LY
Is the business a Section 3 business based upon their certificate" YES NO
EMPLOYERS UST RET4EY IHF.S FOR_4!LY THER? .SECTTO.Y 3 COIIPLLi'CE FILE FOR
FIVE IT ARS.
City of Fort worth 1Jeighborhood 5ervkes Deot.
Ver.2 EffeCtiue os of August 2021
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 17
Cry of Eon Worth
Section 3 Worker and Targeted Section 3 Wo,*er Cenifi--
Background: Seeton 3 is a provision of the HUD Act of 1969 that promotes let etondmic development. neighb-t oci —1— imprevemntt, aM individual self—ff-My. To the greatest ststent possible, Section 3 regwrcs that the City of Fort Worth
CFW) u a recipi—cf certain HUD financial assistance le g.. CBDG. HOME, and HOPWA program fundsl Wovde lob tra n.ng and employment opportunities to low- or very lou- come 4em m connection with prq«ts a d w-ides thatthese funds help
ara, de in their neighborhoodz Developers. comraRors, or subwnuactm:.tteiving CEW' funds murt make reasonable effort: to comely with ehis program. Thu report demonmrtes how bu:iners ertitles certify the Secoan 3 status of char emPbyees and
x port er Nnr labor hours that support Section 3 ernp1oy r--. goals
FOR1%IH.
Project Name and Address:
-11r-
Bmml s Informabcxh
Nerve of Business:
Address of Business:
Name of Cmtan.
Contact Tele
Corttect Emeil:
Emolovee Certifl Cation Information and Total Libor Fours Reoort
Project St— Dete
Reporting Period:
®®.
the :.
®
fool Ubor rWu.zl 0.00I owl
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 18
Goals summary
HUD established Sector 3 goals to hod mcip— if a CF.VI .—,table for --Ho- to support the program. The goals <: a,e char 25% of the total abw hours reported are per! red by S c 3 workets and that 5% of the mesa labor hours reported
are perrormec by Targeted Section 3 worter_
0.00
Total Labor Hosts Tel i— ee Hour Prolmsaror serwa.aaa wus T se sic to tab meet one 3ecu- 3 ana'r3eea Secoowr 3 for ors gut it, not to incAAtd this tow uCa rtut.
heal met d at least Z5% of the project hours arc atmb ced to Section 3 Werkers.
0.00
Seetim 3 Worker labor Hoes aD1Y/0! %d Totel labor Hours
Goal Met? CeB rums gran if met and yellow if not met
Goal met if a least 5% of the total pojece hours are si—io ted to Targeted
0.00
Targeted Section 3Worker labor Hoar aDIV/t! % of Total labor Hours
Goel Met? Section 3 Workers, Cell tums green if met and yellow if not met
Outreach EVents: Contractor must provide evidence that they have made efforts W assist low and very low-income pe^.an, wrtn employment
and in nime oppa tunities. Quart— efforts consist of, but are not limited to, EnYoion Center
n outreach events. emvi.— iob fair v loin ire. emolwmert ooaortunm firers or lob vaoncv ad.. community meetin es. Omer eaamolc of act, hoes arc inducted in the Defiam— Se <ipn
Date
Type of Eon or Amity
No_11
At
Desvbe buses- Participation
Fa 07/20/'2021
c—ay Bosh@ as, Cniscent cone-0 cenmm
AP s
c4iii— Posoow..."c cs rentwad roo.icIt" orc'ro times
D etcher goal Was not met (ir eilning the goal labor hours cell is yellow), please eaplam ypeH efforts to meet the unmet goal. You may reference the above events held and! at9vlOe5 01Wertaket.
Wiliness Affirmation:
I affirm that the oboe statements are vase, complete. antl cortex to tlu best of my knowledge I vnderatand that businesses who misyepresmt in/orrnrtion afoot thelr employees and report here nformaedn to ti+e Cry of Fort W carer may bare tha r
mn[rxss tarminaud as dehuh and be barred from ongeng and future consrderxon: for contracting mportunities. 1 hereby certify, under pmahy of law. we meet the definition of a 5 son 3 Business under federal regulators of the US, Deprtment of
Mousing and Urban Devebpnmt x 24 CFR Part 75. and that tine falowing inF«matmr c co -rest m me best of my btwkdge.
Print Name
Signature:
Du
Dehnilow
For the purposes of this report, a low or very low-income worker s one who earns at or below W% and 50%of the afea medan income {AMI), respectively. For fiscal year 2021, HfUD has established a ktw income salary for an individual as rap more than
SQ5,300.DD arwua0y (effective April 1, Z021).
Ouc-och e/furts include but arc not limited to the following:
{1) Engage in o —,I efforts w generate job appl itarI who are Targeted Section 3 workers.
{21 PMVded training or apprentoce-hip opportunities.
{3) Provided technical assisbnce to help Section 3 workers coo pet. for jabs (erg., resume assistance, coaching).
(B) Held one or more job fibs.
{5) P—ided assistance to apply for/or rtmend community college, afour-year educational institution, or -cation* technical vaiinmg.
{6l Prvrided technical assistance m help Sestian 3 business concerns understand and bid o contracts.
j7) Divided oonttacts intosmalle, job, to fadlimte participation by Section 3 business wmerns.
Professional services means nonconmuction services that require an advanced degree or profesiod licensing, inducing, but not limited co, contracts for legal services, financial consulting accounungsenices, environmental assessment. architectural
se es, and civil engineering services. Professional service hours arc escluded from the total labor holes but can be included in the Section 3 or Targeted Section 3 Labor hours if the employee meets time definitio, of a Section 3 or Targeted Section 3 worker.
A Section 3 business is one that meets sa least one tithe following criteria, documented within the prior six -mold period of su bmicong the certification and report:
{3) At least 51% owned and controlled by low- or very low-income persons; OR
{2l Over 75%of the labor hours performed for the business over the prior three -moth period am performed by Section 3 workers: OR
{3l h iz a huzines at least 51%coned and mMmlletl bywment public haudng rrsidcrrcs sir residents wM cument+y live in Sector B-aszistad housing.
A Section 3 worker is any worker who currently fits or when hired within the past Five years fit at least one of the following categories, as d—mented:
{s)The worker's income for the previous or annudiaed calendar year is below the income limit estati sheis by HUD: OR
{2)The worker is emploted by a—.f d Section 3 busi.s OR
{3) The worter is a Youthauild participant.
ATargeted Section3 walker for projoctt mcemn, housing and communicty developmentfinandal assistance means a Section 3 worker who.-
ill isemployed by a Section 3 business: OR
(21 currently fcs or when hired fit at lean one of the following categoric. as doaemmmed within the past foe years:
{i) living within the service area or the neigh boyhood of the project or
{iij A Yo ithauild participant
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 19
Section 3 Summary Report
Economic Opportunities for
Low— and Very Low -Income Persons
Section back of page for Public Reporting Burden statement
U.S. Department of Housing
and Urban Development
Office of Fair Housing
And Equal Opportunity
OMB Approval No: 2529-0043
(exp. 11/30/2010)
HUD Field Office_
1. Recipient Name R Address: (street, city, state, zip)
2. Federal Identification: (grant no.)
3. Total Amount of Award:
4. Contact Person
5. Phone: (include area code)
6. Length of Grant:
7. Reporting Period:
8. Date Report Submitted:
9. Program Code: (Use separate sheet
for each program code)
10. Program Name:
Part I: Employment and Training (" Columns B, C and F are mandatory fields. Include New Hires in E &F)
A
Job Category
B
Number of
New Hires
C
Number of New
Hires that are
Sec. 3 Residents
D
% of Aggregate Number
of Staff Hours of New Hires
that are Sec. 3 Residents
E
% of Total Staff Hours
for Section 3 Employees
and Trainees
F
Number of Section 3
Trainees
Professionals
Technicians
Office/Clerical
Construction by Trade (List)
Trade
Trade
Trade
Trade
Trade
Other (List)
Total
' Program Codes 3 = Publidlndian Housing 4 = Homeless Assistance
1 = Flexible Subsidy A = Development, 5 = HOME
2 = Section 2021811 B = Operation 6 = HOME State Administered
C = Modernization 7 = CDBG Entitlement
Page 1 of 2
8 = CDBG State Administered
9 = Other CD Programs
10 = Other Housing Programs
form HUD 60002 (62001)
Ref 24 CFR 135
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments
Page 20
Part If: Contracts Awarded
1. Construction Contracts:
A. Total dollar amount of all contracts awarded on the project $
B. Total dollar amount of contracts awarded to Section 3 businesses $
C. Percentage of the total dollar amount that was awarded to Section 3 businesses %
D. Total number of Section 3 businesses receiving contracts
2. Non -Construction Contracts:
A. Total dollar amount all non -construction contracts awarded on the project/activity $
B. Total dollar amount of non -construction contracts awarded to Section 3 businesses $
C. Percentage of the total dollar amount that was awarded to Section 3 businesses %
D. Total number of Section 3 businesses receiving non -construction contracts
Part III: Summary
Indicate the efforts made to direct the employment and other economic opportunities generated by HUD financial assistance for housing
and community development programs, to the greatest extent feasible, toward low -and very low-income persons, particularly those who
are recipients of government assistance for housing. (Check all that apply.)
Attempted to recruit low-income residents through: local advertising media, signs prominently displayed at the project site,
contracts with the community organizations and public or private agencies operating within the metropolitan area (or
nonmetropolitan county) in which the Section 3 covered program or project is located, or similar methods.
Participated in a HUD program or other program which promotes the training or employment of Section 3 residents.
Participated in a HUD program or other program which promotes the award of contracts to business concerns which meet the
definition of Section 3 business concerns.
Coordinated with Youthbuild Programs administered in the metropolitan area in which the Section 3 covered project is located.
Other: describe below.
Public reporting for this collection of information is estimated to average 2 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.
This agency may not collect this information, and you are not required to complete this form, unless it displays a currently valid OMB
number.
Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701 u, mandates that the Department ensures that
employment and other economic opportunities generated by its housing and community development assistance programs are directed
toward low- and very -low income persons, particularly those who are recipients of government assistance housing. The regulations are
found at 24 CFR Part 135. The information will be used by the Department to monitor program recipients' compliance with Section 3, to
assess the results of the Department's efforts to meet the statutory objectives of Section 3, to prepare reports to Congress, and by
recipients as self -monitoring tool. The data is entered into a database and will be analyzed and distributed. The collection of information
involves recipients receiving Federal financial assistance for housing and community development programs covered by Section 3. The
information will be collected annually to assist HUD in meeting its reporting requirements under Section 808(e)(6) of the Fair Housing Act
and Section 916 of the HCDA of 1992. An assurance of confidentiality is not applicable to this form. The Privacy Act of 1974 and OMB
Circular A-108 are not applicable. The reporting requirements do not contain sensitive questions. Data is cumulative; personal identifying
information is not included.
Page 2 of 2 form HUD 60002 (112010)
Ref 24 CFR 135
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House II Apartments Page 21
EXHIBIT "I-1"
SECTION 3 Project Service Area Map
HUGHES HOUSE II APARTMENTS
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 22
EXHIBIT "J"
STANDARDS FOR COMPLETE DOCUMENTATION
HUGHES HOUSE II APARTMENTS
FoRTWORTH.,
Standard of Documentation for Reimbursement of (Development Costs
Cost Type
Documentation Standard
Acquisition of Real Property
. Notice to Seller (date must be on or before the date cf option- agrve-ne~
or sales contract and signed try the buyer and seller)
Recorded Deed of Trust
PurchaseAgreementw/ Required HUD language
Master Settlement Statement/HUD-1
AppraisaI or other document used to determine,purchase price
Proof of Payment (i.e., bank statement/cance.11ed check)
Verificatior of Vmeant Status (as applicable)
Pre -Development and Soft
. Invoice should include:
Costs (Architect, Engineer,
■ date;
Landscape Design, Surveys,
■ company's letterhead;
Appraisals, Environmental, Legal
■ address for which service is provided-,
Fees, (ether Consultants, Etc.)
■ description of service(s) and i#ern(s);
■ amount for itemized services; and
■ total amount
Proof of Payment (i_e_, bank statement or cancelled check)
Fully executed contract/service agreements/letter agreements and
applicable amendments
o Provide printout from wmw_sam_eovverifying
contractor/subcontractoris not listed on the debarred and
suspension list
If only a portion Is being paid with City funds, then shoal calculation and
documentation of how costs are allocated -
Neighborhood Services
FINAIL as of 6/ 1 /2017
Page 1
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 23
FoRTWORTH..
Standard of Documentation for Reimbursement of Development Costs
Corstri,cticn Costs
;Contras crs. ° 5ubr_ontractars)
Materials Purchased by Developer
(if applicable)
Developer Fee
(if paid directly from H 0 M E funds)
Neighbor flood Services
FINAL as of 6/21/2017
Invoiceshoulc-cluce:
■ date,
■ company's letterhead;
■ address for which service is provided;
■ description of service(s) and item,(s);
■ amount for itemized services; and
■ total amount
Proof of Payment (Le_, bank statement or cancelled check)
Copy of applicable inspection report(s) conducted by N SD Inspector
Copy of executed agreements
■ Provide printout from www.sam_go verifying
contractor/subcontractoris not listed on the debarred and
suspension list
If only a portion is being paid with City funds, then show calculation and
documentation of how costs are allocated_
For payment of final retainage for the prime contractor, provide lien
waivers for the prime and all subcontractors.
List of subcontractors
lavoiceshould include_
■ date;
■ company's letterhead;
■ address, for which sere ce is provided;
■ description of service(s) and item(s);
■ amount for itemized services -,and
■ total amount
Proof of Payment (Le_, bank statement or cancelled check)
Verification of delivery
Final Invoice Reflecting, Total Development Cost
Proof of payment for arty other entity/funding source contri c.�_ g
development costs
Show calculation of agreed upon developer fee percentage
Copies of final lien releases from contractor/subcontractor
Complete Documentation income eligibility of buyers/renters (Le_, income
documents for eligible homebuyeritenants, sales contract between
developer/homebuyer, HAP Deed of Trust with required affordability
period language, etc_)
Lease documents
Final inspections of completed units
Page 2
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments
Page 24
EXHIBIT "K"
CONTRACT AND SUBCONTRACT ACTIVITY REPORTING FORM
HUGHES HOUSE APARTMENTS
Excel spreadsheet to be provided. This form must be completed and returned to NSD within 30 days after
the pre -construction meeting
and annually thereafter on June 30th of each year while the contract is active.
Contract and Subcontract Activity U.S. Department of Housing and Urban Development
OMB Approval No 2535-0117 (exp. 113112013)
Public Reporting Burden for this collection of rnlonrlation is estimated to avenge .50 hours par response, imuldhng Me time for reviewing instructions, searching existing data souroes, gathering and maintaining the data needed, and completing and reviewing the
collection of Information. This information Is voluntary. HUD may not collect this information, and you are trot required to complete this form. unless it displays a currently valid OMB Control Number.
Executive Order 12421 dated July 14. 1983, directs the Minority Business Development Plans shall be developed by each Federal Agency and that these annual plans shall establish mrrroray business development objectives. The Information is used by HUD to monitor
and evaluate MBE aclMles against the total program activity and the designated minority business enterprise (MBE) goals. The Deparbrlent requires the intonation to Provide guidance are oversight for programs for the developmentl of minority business enterprise
concemmg Minority Business Development If the information is rot colnCted HUD would not be able to establish meaningful M8E goals nor evaluate MBE performance against these goals.
While no assurances of confldentbtiy Is pledged to respondents. HUD generally ducbses this data only In response to a Freedom of Intonation request.
Privacy Act Notice - The United Stales Department of Housing and Urban Development, Federal Housing Administration, Is authorized to solicit the information requested In Ins loan by virtue of True 12, United States Code, Section 1701 at seq., and regulations
promulgated thereunder at Title 12, Code of Federal Regulations. It will trot be disclosed or released outside the United States Department of Housing and Urban Development wi9rout your consent, except as required or pemnmed by law.
1. GlanbWPmIQL1 Owrwr!DavgoporlsponsmBulborlA9oncy Check n:
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Te: Type of This Codes:
To: Raclal/Etllnic Codes:
5: Program Codeslwmpabrm Nowirp rNPdd2Wen HouetM pmverms oreyl:
CPD:
HousingilPublle Housing:
I - White Americans
1 All Insured, including Section B 5 = $action ion 202
1 = New Construction
1 = New Construction 8 = Phofesslonel
2 = &ack Americans
2 = Flexible Subsidy 6 = HUD�Helo (Management)
2 = Educaton/T2lnlrg
2 = Substantial Rehab. 7 = Tenant Services
3 = Native Americans
3 = Section 8 Noninsured, Non-HFDA 7 = PubNUlndian Housing
3 = Other
3 = Repair 8 = Educatlon'ria ing
4 = Service 9 = Aron./Engrg. Appraisal
4 = Hispanic Americans
5 = AslaruPacdtc Americans
4 = Insured (Management
5 = Project Man, 0 = Omer
6 = Hasidic Jews
Previous edtlbns are obsolete.
form HUD-2516 (948)
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 25
EXHIBIT "L"
DEED RESTRICTION
HUGHES HOUSE APARTMENTS
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 26
EXHIBIT "N"
VAWA FORMS
HUGHES HOUSE II APARTMENTS
Notice of Occupancy Rights under the Violence Against Women Act (Form HUD-5380)
Model Emergency Transfer Plan for Victims of Domestic Violence, Dating Violence, Sexual Assault, or
Stalking (Form HUD-5381)
Emergency Transfer Request for Certain Victims of Domestic Violence, Dating Violence, Sexual Assault,
or Stalking (Form HUD-5383)
Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking and Alternate
Documentation (Form HUD-5382)
Violence, Dating Violence or Stalking Lease Addendum (Form HUD-91067)
Where permitted by federal regulations, Developer may use its own forms so long as they meet the
requirements of the VAWA and its accompanying regulations. Developer is responsible for ensuring that
the proper forms and required actions are taken in compliance with VAWA and any applicable
regulations, and acknowledges that it is solely responsible for using the appropriate forms as they may be
changed from time to time.
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House II Apartments Page 27
EXHIBIT "O"
HOME REQUIREMENTS
HUGHES HOUSE II APARTMENTS
Capitalized terms not defined herein shall have meanings assigned to them in the Contract.
Developer shall ensure that the Property Manager receives a copy of the HOME Contract which outlines the
HOME Regulations. Below is an outline of the HOME Requirements that the Property Manager will be
responsible for while managing the HOME Units in the project.
Developer shall ensure compliance with the following and include the following requirements in its property
management agreement:
1. Property Manager acknowledges that the project operates under the HOME Program's Section 504
requirements. Accordingly, Property Manager shall exercise its commercially reasonable efforts to take
the following steps to:
Comply with Section 504 requirements and other federal accessibility requirements. The project
must contain 23 Accessible Units. Of these, 16 must be accessible to individuals with mobility
impairment, and 17 must be accessible to individuals with visual impairments.
2. Property Manager will follow the procedures given by Developer to rent HOME Units to tenants who
have incomes at or below 80% AMI; provided however, the first tenant to occupy a High HOME Unit,
as defined in the HOME Contract, must be a tenant whose annual income adjusted for family size does
not exceed 60% of AMI.
3. Property Manager must manage the HOME Units as set forth in the chart below to ensure that they are
occupied by tenants that are either High HOME Eligible Tenants or Low HOME Eligible Tenants as
described in the chart. Of the 6 HOME Units, 3 must be HIGH HOME Units and 3 must be LOW HOME
Units. The Low HOME Units must be occupied by households earning at or below 50% AML These very
low-income tenants must occupy HOME Units at or below the Low HOME Rent. The mix of bedroom
units for the HOME Units is shown on the chart below. The mix of bedrooms of the HOME Units must
be proportional to the overall bedroom mix of all the units in the project. Property Manager must manage
the HOME Units in accordance with the chart, the HOME Requirements and the guidelines contained in
the Managing Rental Unit Mix Under HOME published by HUD at:
https: //files.hudexchange. info/resources/documents/Managing-Rental-Unit-Mix-Under-HOME.pdf.
HOME UNIT MIX
Proposed Units
48: 1-BR
202: 2-BR
43: 3-BR
9: 4-BR
302 total
High HOME Units
3 total)*
One 1-BR
Two 2-BR
0 3-BR
0 4-BR
Low HOME Units
One 1-BR
Two 2-BR
0 3-BR
0 4-BR
(3 total)*
*The HOME Units may be designated as floating, if the HOME Units are comparable to the non -assisted
units in the project.
4. Property Manager must notify Developer in writing within 30 days if any HOME Unit is occupied by a
tenant who is not income eligible, or if any HOME Unit remains vacant for more than 90 days.
5. The HOME Units are floating. When a "floating" unit is changed within the project, the newly designated
"floating" unit must be comparable to the non -HOME assisted units.
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 28
6. Property Manager must charge the appropriate High HOME and Low HOME rents and not charge rents
in excess of the HOME Program rents for any given year. These program rents change annually and
Lender will provide Developer and Property Manager with updated HOME rent limits so that rents may
be adjusted (not to exceed the maximum HOME rent limits). For projects that have floating HOME Units,
per HUD regulations, changes may need to be made where instances of tenant's income either rises above
or falls below certain thresholds. Property Manager should refer to the Managing Rental Unit Mix Under
HOME found at htlps:Hfiles.hudexchange.info/resources/documents/Managing-Rental-Unit-Mix-Under-
HOME.pdf for guidance. Property Manager should retain necessary documentation to demonstrate that
each HOME Unit is occupied by an income -eligible tenant. General rental housing records must be kept
on -file for 5 years after the Affordability Period, as defined in the HOME Contract, ends.
7. Before executing any lease for a HOME Unit, Property Manager must verify all new tenants' income
eligibility using the annual income definition in 24 CFR 5.609. Income documentation must be sufficient
to show that a tenant is a HOME Eligible Household. Tenant Documentation may include but is not limited
to copies of paychecks, Social Security and disability verification letters, interest or rental income
statements, retirement income statements, child support and alimony verification, unemployment benefit
letters, and the like for initial tenant income eligibility verifications, and the tenant income verification
required every 611 year of the Affordability Period. Documentation for tenant income eligibility
verifications for other than the initial lease and the 6th year of the Affordability Period shall be a Lender
approved income self -certification form. Property Manager shall use the most current HUD Income
Guidelines and Technical Guidance for Determining Income and Allowances to determine tenant
eligibility.
8. Property Manager shall maintain copies of Tenant Documentation and all tenant self -certification forms
as required under the HOME Contract.
9. Property Manager shall submit for Lender approval a sample tenant lease prior to accepting tenant
applications. This sample lease must include:
a. Tenant must be given at least 30 days written notice before rent increases may be implemented,
and 30 days written notice must be given notifying the tenant must vacate the unit.
b. The lease term for a HOME Unit must be for at least 1 year, unless the tenant and Property Manager
agree on a shorter term.
Tenant rents may not increase until the original lease expires, or until the 1-year anniversary of
tenant entering into the lease, whichever occurs first.
d. HUD publishes the HIGH and LOW HOME rents annually, and Property Manager should use the
numbers provided to calculate rents for the HOME Units.
e. Maximum allowable HOME rents must be reduced if the tenant pays utilities.
f. Tenant lease must inform tenant that their income will be reexamined annually, either at the
anniversary of the initial income verification, or at lease renewal.
g. Tenant lease must explicitly state that their rent may increase if the tenant is placed in a HOME
Unit and at the time of income recertification, their income increases above the required thresholds.
10. Rents charged to tenants are subject to the HOME Regulations at 24 CFR 92.252 (a) and (b). Under no
circumstances may the maximum rental amounts charged to tenants of HOME Units exceed the High
Home Rent minus monthly allowances for utilities and services (excluding telephone) established by
HUD. Property Manager agrees to abide by HUD -approved schedules of HOME rent levels and locally
adopted utility allowances published by the local housing authority. Property Manager should keep
records that include documentation to back up rent levels and utility allowances.
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 29
11. Property Manager must have a tenant selection policy which provides for:
a. The selection of tenants from a written waiting list in the chronological order of their application,
insofar as is practicable;
b. The prompt written notification to any rejected applicant providing the grounds for such rejection;
and bi-lingual leasing and management assistance.
c. Ensure that holders of rental assistance subsidies (such as HUD's Housing Choice Voucher or
similar subsidy) are not excluded from renting a unit in the Required Improvements.
d. The tenant selection policy must address non-discrimination and affirmative marketing per federal
guidelines.
e. Market accessible units in the following order:
1. Market within the property to persons requiring an accessible unit.
2. Reference waiting list to check for persons requiring accessible unit.
3. Market to general community for persons requiring accessible unit.
4. Market to persons that do not require accessible unit.
The tenant selection policy must address managing HOME Unit mix under HOME Regulations. The
tenant selection policy must comply with state and local tenant/landlord laws.
Property Manager shall adopt affirmative marketing procedures and requirements for the HOME Units.
The procedures and requirements must include methods for informing the public, owners and potential
tenants about fair housing laws and policies so as to ensure that all individuals, without regard for sex,
age, race, color, creed, nationality, national origin, religion, handicap status, disability, familial status,
sexual orientation, gender identity, gender expression or transgender, are given an equal opportunity to
participate in the project. The procedures and requirements must also include the designation of an
individual that will be responsible for marketing the project and establishing a clear application screening
plan and the maintenance of documentation and records to evidence affirmative marketing procedures
have been implemented. Lender shall have no responsibility with regard to affirmative marketing of the
project. Affirmative marketing procedures shall be submitted to Lender for approval prior to
implementation.
12. Property Manager shall abide by all federal non-discrimination and fair housing laws.
13. Property Manager understands and agrees that it will be subject to monitoring by Lender for compliance
with the HOME Regulations for the duration of the 20-year Affordability Period. Property Manager will
provide reports and access to project files as requested by Lender during the Affordability Period and for
5 years after the end of the Affordability Period, and will meet all the reporting requirements set out in the
HOME Contract. These requirements shall survive the early termination or expiration of the HOME
Contract. Lender shall have access at all reasonable hours to the Property Manager's offices and records
dealing with the HOME Units, and its officers, directors, agents, employees, and contractors for the
purpose of such monitoring
HOME DEVELOPER RENTAL CONTRACT — EXHIBITS
Hughes House H Apartments Page 30
CERTIFICATE OF INTERESTED PARTIES FORM 1295
1 of 1
Complete Nos. 1- 4 and 6 if there are interested parties.
OFFICE USE ONLY
Complete Nos. 1, 2, 3, 5, and 6 if there are no interested parties.
CERTIFICATION OF FILING
Certificate Number:
1 Name of business entity filing form, and the city, state and country of the business entity's place
of business.
2025-1306298
FW Hughes House Il, LP
Fort Worth, TX United States
Date Filed:
05/07/2025
2 Name of governmental entity or state agency that is a party to the contract for which the form is
being filed.
City of Fort Worth
Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
HOME/UDAG 2024
HUD HOME Investment/Urban Development Action Grant (UDAG)
Nature of interest
4
Name of Interested Party
City, State, Country (place of business)
(check applicable)
Controlling
Intermediary
FW Hughes House II GP, LLC
Fort Worth, TX United States
X
Fort Worth Affordability Inc.
Fort Worth, TX United States
X
5 Check only if there is NO Interested Party. ❑
6 UNSWORN DECLARATION
My name is Mary -Margaret Lemons and my date of birth is
My address is 1407 Texas Street Fort Worth TX 76102 USA
(street) (city) (state) (zip code) (country)
I declare under penalty of perjury that the foregoing is true and correct.
Executed in Tarrant County, State of Texas —on the 7 day of May 2025
(month) (year)
�/J t
Signature of authorized agent of contracting business entity
(Declarant)
Forms provided by Texas Ethics Commission www.etnlcs.state.tx.us version vv.l.u.euzuozu
M&C Review Page 1 of 5
0
Official site of the City of Fort Worth, Texas
CITY COUNCIL AGEND FoRT�WORTII
Create New From This M&C
DATE: 12/9/2025 REFERENCE **M&C 25- LOG NAME: 19HUGHES HOUSE II —
NO.: 1107 HOME UDAG FUNDS
CODE: C TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: (CD 5) Approve Financial Actions in Support of Hughes House II Apartments Located at
1401 Etta Street as Part of the Choice Neighborhoods Implementation Grant for the
Cavile Place/Historic Stop Six Area Consisting of (A) Authorizing (i and ii) Expenditure
of $2,000,000.00 of HOME Investment Partnerships Program Grant Funds as a Non -
Forgivable Loan to FW Hughes House II, LP, or an Affiliate, Which Loan May Convert to
Forgivable on Specified Conditions being Met, and Execution of Related Contracts; (iii
and iv) Expenditure of $450,000.00 of Urban Development Action Grant Miscellaneous
Revenue as a Loan to Fort Worth Affordability Inc., and Execution of Related Contracts;
(v) Acceptance of Assignment from Fort Worth Affordability Inc., of Contracts and Loan
Documents for its Loan to FW Hughes House Il, LP; (vi) Authorization of Assignment
from Fort Worth Affordability Inc. to FW Hughes House II, LP. of Federal Grant
Obligations; (vii and viii) Authorize Execution of Necessary Amendments and Extensions
to All Contracts and Documents to Facilitate Project Completion; (ix) Authorize Execution
of Agreement with Fort Worth Housing Solutions for the Conversion of the HOME
Investment Partnerships Program Loan to Forgivable Under Specified Conditions; and (x)
Authorize the Substitution of Funding Years; (B) Find that the Loans Serve a Public
Purpose and that Adequate Controls are in Place; and (C) Adopt Appropriation Ordinance
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize expenditure in the amount of $2,000,000.00 of HOME Investment Partnerships
Program grant funds in the form of a non -forgivable loan to Hughes House II, L.P.;
2. Authorize execution of an agreement with the Housing Authority for the City of Fort Worth, Texas,
doing business as Fort Worth Housing Solutions, to allow for the conversion of the non -forgivable HOME
Loan to a forgivable loan so long as conditions are met, including without limitation the condition that
the Project is directly or indirectly owned 100\% by Fort Worth Affordability Inc., Fort Worth Housing
Solutions and/or an affiliate thereof, following expiration of the Project's compliance period;
3. Authorize expenditure in the amount of $450,000.00 of Urban Development Action Grant Miscellaneous
Revenue as a forgivable loan to Fort Worth Affordability Inc.;
4. Authorize the City Manager, or his designee, to execute all related contracts, loan documents, and
other documents necessary for lending activities with terms as specified below;
5. Authorize the acceptance of an assignment to City by Fort Worth Affordability, Inc. of the loan
documents for the $450,000.00 loan to be made by Fort Worth Affordability Inc.;
6. Authorize the assignment of the UDAG obligations from Fort Worth Affordability Inc., to FW Hughes
House II, LP to ensure compliance with applicable federal regulations;
7. Authorize the City Manager or his designee to extend the contracts if such extensions are necessary for
completion of the Project, and to extend all other required documents for lending activities as
necessary for the development of the Project;
8. Authorize the City Manager, or his designee, to amend the contracts and other required documents if
necessary to achieve project goals, provided that the amendments are within the scope of the Project
and in compliance with City policies and applicable laws and regulations governing the use of federal
funds;
9. Find that providing a forgivable UDAG loan and a non -forgivable HOME Loan that may be converted to
forgivable so long as certain conditions are met, serves the public purpose of providing decent, safe,
and sanitary housing for low-income residents and that adequate controls are in place through the
various loan documents and agreements to ensure the public purpose is carried out;
10. Authorize the substitution of current and prior funding years in order to meet commitment,
disbursement, and expenditure deadlines for grant funds from the United States Department of
Housing and Urban Development;
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11. Accept interest revenue and miscellaneous revenue receipts in the Grants Operating Other Funds
account; and
12. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Grants Operating Other Fund, in the amount of $643,224.31, from Urban Development Action Grant
Miscellaneous Revenue Program Income, for the purpose of funding future projects.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to approve financial actions in support of an
affordable housing development in the Cavile Place/Historic Stop Six area as part of the multi -year Choice
Neighborhoods Implementation grant.
On October 22, 2019, Mayor and Council M&C 19-0268 authorized the City to partner with Fort Worth Housing
Solutions (FWHS) as a co -applicant for a Choice Neighborhoods Implementation (CNI) grant from the U.S.
Department of Housing and Urban Development (HUD). The City Council also adopted a revised Cavile
Place/Historic Stop Six Neighborhood Transformation Plan and committed $39,375,654.00 over six years for
improvements in the area, contingent on receiving the grant. In spring 2020, the City was notified that the City
and FWHS had been awarded the CNI grant. As co -applicant, the City agreed to support FWHS in implementing
the Transformation Plan by providing resources for eligible activities, including a commitment of $3,000,000.00 in
HOME Investment Partnerships Program (HOME) funds, $3,250,000.00 in Community Development Block Grant
(CDBG) funds, and $1,110,000.00 in Urban Development Action Grant (UDAG) funds, for a total of
$7,360,000.00 to be awarded over six years.
During the implementation of the Transformation Plan, when the Hughes House project was presented to City
Council (M&C 22-0400), the Council was informed that instead of allocating $500,000.00 in CDBG funds per
development phase of the CNI, the funding would be revised to $1,000,000.00 in HOME funds. This change was
made because CDBG funds are more difficult to use for new housing construction, while HOME funds are more
flexible and easier to utilize under federal regulations.ln addition to the funding commitment, in March 2021
President Biden signed the American Rescue Plan Act providing aid relief to various sectors of the national
economy. Through the ARPA allocations that the City of Fort Worth received, city staff recommended that a total
of $400,000.00 be provided to the first four phases of the CNI developments totaling $1,600,000.00 in ARPA
funds (M&C 21-0814). All CNI development phases have been approved by City Council. Due to the nature of
the implementation of the Transformation plan, funding allocations might have differed due to regulatory
adherence.
In addition to HOME and UDAG funding, The Fort Worth Housing Finance Corporation (FWHFC) authorized the
expenditure of $1,250,000.00 to be used for the development of Permanent Supportive Housing (PSH) and $1,
250,000.00 for construction in permanent loans for financing the developments (Resolution No. 2019-06). Of that
$1,250,000.00 in PSH funds, $525,000.00 has been authorized in the form of a forgivable loan for 21 PSH units
for the Project (Resolution No. FWHFC- 2025- 01).
Approval of this M&C allows the Project to move forward with the fourth phase of the six -year Transformation
Plan and award $2,000,000.00 in HOME funds and $450,000.00 in UDAG funds for a total of $2,450,000.00 to
be used for eligible activities for the Project.
The table below outlines the City's funding commitment for each phase of the Stop Six Choice Neighborhood
Implementation Grant, demonstrating its contributions to the Transformation Plan. The figures below do not
include the $27 million in 2022 Bond funds allocated for construction of the community Hub.
Funding
Source
Cowan Place:
Phase I
Hughes House:
Phase II
Babers
Manor:
Phase III
Hughes
House II:
Phase IV
Hughes
House III:
Phase V
Total funding
per source
HOME
$500,000.00
$1,000,000.00
$1,000,000.00
$2,000,000.00
$-
$4,500,000.00
UDAG
$360,000.00
$150,000.00
$150,000.00
$450,000.00
$-
$1,110,000.00
CDBG
PSH FWHFC
]$225,000.00
$1,250,000.00
$-
$325,000.00
$-
$100,000.00
$
$525,000.00
$-
$75,000.00
$1,250,000.00
$1,250,000.00
HFC
Vnstruction
$1,250,000.00
$-
$- 11
$
$-
$1,250, 000.00
ARPA
$400,000.00
$400,000.00
$-
$400,000.00
$400,000.00
$1,600,000.00
$3,985,000.00
$1,875,000.00
$1,250,000.00
$3,375,000.00
$475,000.00
$10,960,000.00
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Funding
Source
Cowan Place:
Phase I
Hughes House:
Phase II
Babers
Manor:
Phase III
Hughes
House II:
Phase IV
Hughes
House III:
Phase V
Total funding
per source
TOTAL
funding to
L-IL
each phase
The Hughes House II Apartments will be a newly developed, affordable multifamily community designed to
support mixed income levels. The project will feature 302 residential units in a mix of 1-, 2-, 3-, and 4-bedroom
floor plans. Of these, 89 units will be project -based voucher (PBV) apartments reserved for returning families
from Cavile Place; 112 units will be income -restricted for households earning 60\% or less of the area median
income (AMI); 80 units will be offered at market rate; and 21 units will provide Permanent Supportive Housing
(PSH) for individuals experiencing chronic homelessness. The development will consist of eleven buildings,
including two with elevator access, ensuring accessibility and convenience for all residents. It is anticipated that
the construction of Hughes House II will begin in the first quarter of 2026 and take 26 months to reach substantial
completion. FW Hughes House II, L.P. (Developer) will develop and own the Project. It is a Texas limited
partnership consisting of FW Hughes House II, LLC as the general partner (owned by FWHS or an affiliate), and
Cavile Place MBS SLP, Inc. as a special limited partner (owned by McCormack Baron Salazar, Inc.)
Fort Worth Affordability, Inc. (FWAI) a Texas nonprofit corporation, which is the managing member of FW
Hughes House II GP, LLC, is an instrumentality of FWHS, and has requested to be the initial borrower of the
UDAG funds ("UDAG Loan Funds") instead of the Developer for tax purposes. FWAI will execute a loan
agreement and promissory note in favor of the City for the UDAG Loan Funds and simultaneously loan the
UDAG Loan Funds to the Developer for the development of the Project. To collateralize the loan from the City to
FWAI and ensure compliance with federal requirements, FWAI will (1) assign its loan documents (from the loan
from FWAI to the Developer) to the City and (2) assign its obligations under the City's UDAG contract to the
Developer.
To further the implementation of the Transformation Plan and aid the infrastructure improvements in support of
the Project, staff recommends the following loan terms and conditions:
HOME Loan Terms:
1. Loan term to commence on execution of the loan documents and terminate 40 years after project
stabilization. Payment of principal and accrued, unpaid interest will be due 40 years after project
conversion coterminous with final payment date of permanent loan;
2. Interest rate of zero percent so long as borrower complies with all of the terms of the contract and loan
documents;
3. Performance of the HOME requirements and payment of the HOME loan, if required, will be secured by
a deed of trust and HOME Deed Restrictions on the real property through the affordability period or the
loan term, whichever is longer;
4. Affordability period to begin on the date the project status is changed to "Complete" in the Integrated
Disbursement and Information System (IDIS) and continue for 20 years thereafter;
5. HOME loan to be subordinate to any construction/permanent financing and any financing provided by
Fort Worth Housing Finance Corporation;
6. HOME -assisted units will be designated according to the HOME regulations with a 20-year affordability
period;
7. HOME funds will be provided on a reimbursement basis for eligible costs only; and
8. Development and operation will comply with all HOME Regulations in 24 CFR Part 92 et seq.
The expenditure of HOME funds is conditioned upon the following:
Satisfactory underwriting in accordance with federal guidance for use of HOME funds and City policies
for funding of HOME units;
Compliance with all HOME requirements contained in 24 CFR Part 92 et seq;
Construction and permanent financing acceptable to City;
Satisfactory completion of an environmental review pursuant to 24 CFR Part 58;
Receipt of authorization to use grant funds from HUD;
Receipt of acceptable, fully executed loan documents; and
Closing on all other financing for the Project.
Approval of this M&C also authorizes the City to convert the HO Loan from a repayment loan to a forgivable
loan only if FWHS, FWAI, or an affiliate acquires either (i) the Project in fee simple or (ii) 100\% of the interest in
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Development following the expiration of the compliance period. For the avoidance of doubt, the HOME Loan shall
not be forgivable unless the Project is directly or indirectly owned 100\% by FWHS, FWAI and/or an affiliate
thereof. This M&C further authorizes the City to execute an agreement with FWHS to memorialize the terms on
which the loan will be converted to forgivable. In the event the HOME Loan is converted to a forgivable loan, it
shall only be forgiven if all loan terms and conditions are met and FWHS/Developer has complied with all City
and HOME regulations and requirements.
UDAG Loan Terms:
1. Loan term to commence on the date of execution and terminate 40 years after project stabilization.
Final payment of principal and accrued, unpaid interest will be due 40 years after project conversion
coterminous with final payment date of permanent loan;
2. Performance period to begin on the date the project status is changed to "Complete" in the Integrated
Disbursement and Information System (IDIS) and will continue for 5 years thereafter;
3. UDAG funds to be subordinate to any construction/permanent financing, the City's HOME loan, and any
financing provided by the Fort Worth Housing Finance Corporation;
4. Interest rate of zero percent so long as borrower complies with all of the terms of the contract and loan
documents;
5. UDAG funds will be used for eligible construction costs associated with the new multifamily housing
construction;
6. UDAG funds will be used in compliance with all CDBG requirements contained in 24 CFR Part 570,
including but not limited to the Project being located in a CDBG-eligible census tract and will
accomplish the public benefit of furthering a CDBG National Objective of promoting activities that
benefit low -and -moderate income residents;
7. Developer must or must require property management company to employ the equivalent of at least 2
full-time positions for Central City residents at all times during the performance period;
8. UDAG funds shall be repaid by FWAI to the extent FWAI receives repayment from Developer;
9. UDAG funds shall be forgiven if all terms and conditions are met, FWAI has not received any repayment
from Developer, and Developer has complied with all City and CDBG regulations and requirements; and
10. UDAG funds will be provided on a reimbursement basis for eligible construction costs only.
Staff recommends approving the expenditure and execution of contracts and related loan documents with FWAI
and Developer in the amount of $2,000,000.00 in HOME funds and $450,000.00 in UDAG funds, for the
construction costs in support of the Project; approving acceptance of the collateral assignment by FWAI to City of
related UDAG loan documents, and approving the assignment of the related UDAG obligations from FWAI to the
Developer; and approval of an agreement between FWHS and the City memorializing the conditions under which
the HOME Loan may be converted to a forgivable loan.
Through this M&C, the City Council finds that the Project serves a public purpose by assisting the City in fulfilling
its goals under the Choice Neighborhoods Implementation Grant, Transformation Plan, by providing quality,
accessible, affordable housing for low- to moderate- income residents and supporting economic development
and revitalization, and that the forgivable UDAG loan and the HOME Loan that may be converted to forgivable so
long as the conditions listed above are met, are vital to the financial feasibility of the Project. The Council further
finds that adequate controls are in place through the various loan documents and agreements to ensure that the
public purpose is carried out.
Approval of this M&C also allows Action Plan funding years to vary and be substituted in order to expend the
oldest grant funds first. Appropriations supporting the HOME Loan will come from the annual program
appropriation for the funding years against which the loan is booked. A public comment period was held from
June 1,2025 through July 1, 2025; no comments were received.
UDAG Miscellaneous Revenue funds are rental revenues received from the lease of the City -owned parking
garage under General Worth Square (City Contract No. 11085). UDAG Funds must be used for projects that
meet certain CDBG program requirements, including use in a CDBG-eligible area, qualification as a CDBG
economic development project and inclusion of private investment. Annual revenue from the parking garage is
approximately $108,000.00. Currently the City has an appropriated balance of $463,639.38 in UDAG funds. In
addition, the City is in receipt of but has not appropriated a total of $643,224.31 of UDAG Funds from prior
years. After funding this loan, and after all funds have been appropriated, the garage rental revenues account
will have a remaining balance of approximately $656,863.69. Adoption of the attached appropriation ordinance
will appropriate the current balance of program revenue with the balance of appropriated funds to be
programmed for other eligible projects in the future.
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FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that funds are currently available in the Hyatt Regency Parkg Garage Rev,
Home Grant (PY24/FY25) and in the Home (PY22/FY23) projects within the Grants Operating Federal Fund and
the Grants Operating Other Fund, and upon approval of the above recommendations, funds will be available in
the Grants Operating Federal Fund and the Grants Operating Other Fund to support the loan contract. The
Neighborhood Services Department (and Financial Management Services) will be responsible for the collection
and deposit of funds due to the City. Prior to an expenditure being incurred, the Neighborhood Services
Department has the responsibility to validate the availability of funds. This is a reimbursement grant.
'O
Fund Department Account Project Program Activity Budget Reference # Amount
ID ID Year (Chartfield 2)
Fund Department Account Project Program Activity Budget Reference # Amount
ID I I ID Year (Chartfield 2)
Submitted for City Manager's Office by:
Originating Department Head:
Additional Information Contact:
Dana Burghdoff (8018)
Kacey Thomas (8187)
Chad LaRoque (2661)
Lilian Bastidos (8454)
ATTACHMENTS
FID Table HUGHES lI.xlsx (CFW Internal)
Funds Availability HH Il.docx (CFW Internal)
ORD.APP 19HUGHES HOUSE II — HOME UDAG FUNDS 21003 A026.docx (Public)
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FORTWORTH.
City Secretary's Office
Contract Routing & Transmittal Slip
Contractor's Name: HOME DEVELOPER RENTAL CONTRACT
Subject of the Agreement: Developer will use HOME Funds for a portion of the costs to develop
the Hughes House II Apartments, an affordable housing development for families
M&C Approved by the Council? * Yes 9 No ❑
If so, the M&C must be attached to the contract.
Is this an Amendment to an Existing contract? Yes ❑ No N
If so, provide the original contract number and the amendment number.
Is the Contract "Permanent"? *Yes 8 No ❑
If unsure, see back page for permanent contract listing.
Is this entire contract Confidential? *Yes ❑ No 8 If only specific information is
Confidential, please list what information is Confidential and the page it is located.
Effective Date: Date of execution of the contract Expiration Date:
If different from the approval date. If applicable.
Is a 1295 Form required? * Yes 0 No ❑
*If so, please ensure it is attached to the approving M&C or attached to the contract.
Project Number: If applicable.
*Did you include a Text field on the contract to add the City Secretary Contract (CSC)
number? Yes N No ❑
Contracts need to be routed for CSO processing in the following order:
1. Katherine Cenicola (Approver)
2. Jannette S. Goodall (Signer)
3. Allison Tidwell (Form Filler)
*Indicates the information is required and if the information is not provided, the contract will be
returned to the department.