HUD-92442-CA Capital Advance Program Construction Contract Lump Sum

U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner

Capital Advance Program
Construction Contract
Lump Sum

OMB Approval No. 2502-0011
(exp. 04/30/2007)

For use under Section 202 of the Housing Act of 1959
or Section 811 of the National Affordable Housing Act)
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estimate or any other aspect of this collection of information, including This information collection suggestions for reducing this burden, to the Reports Management
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The Department of Housing and Urban Development (HUD) is authorized to collect this information by provisions set forth in Article 1.E of the National Housing Act
(Public Law 479, 48 Stat. 1246, 12 U.S.C., 1701 et. seq.). It is provided by contractors and mortgagors to obtain approval from the FHA Commissioner’s approval for
any changes in the terms of the Contract Document, or order for extra work, or changes by altering or adding to the work, or which will change the design concept of the
Construction Contract. This information is used by HUD to ensure that viable projects are being developed. Furnishing this information is mandatory, and failure to
provide it may result in your not receiving your benefits. The information is considered non-sensitive, and no assurance of confidentiality is
provided.
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This Agreement, made the ____________ day of __________________ 20____, between __________________________________
____________________________________________________________________________ (hereinafter called the “Contractor”) and
____________________________________________________________________________ (hereinafter called the “Owner”).
Witnesseth, that the Contractor and the Owner, for the consideration hereinafter set out, agree as follows:
Article 1 – Scope of Contract
Contractor's Surety or Guarantor have been placed on file with the
A. The Contract between the parties is set forth in the “Contract
Documents” which consists of this Agreement, the Drawings and
Specifications, together with any addenda thereto, the current
edition of AIA Document A201, “General Conditions of the Contract
for Construction,” except all paragraphs concerning arbitration, and
Form HUD 2554, “Supplementary Conditions of the Contract for
Construction.” The provisions of this instrument and the said HUD
Supplementary Conditions take precedience over all inconsistent
provisions in the said AIA General Conditions. This Contract
constitutes the entire agreement between the parties, and any
previously existing contract concerning the work contemplated by
the Contract Documents is hereby revoked.
B. The Contractor shall furnish all of the materials and perform all
of the work (within the property lines) shown on, and in accordance
with,
the
Drawings
and
Specifications
entitled
_____________________
_________________________________________________ ,
HUD
Project
_______________.

No.___________________,

dated

C. The Drawings, which are numbered _____________________,
and the Specifications,
numbered__________,

the

pages

of

which

are

and addenda numbered _________________________________ ,
have been prepared by ___________________, (“Design
Architect”).
The Architect administering the Construction Contract (hereinafter,
and elsewhere in the Contract Documents, referred to as the
“Architect”) is _______________________________________
_________________________________________________ .
D. A master set of said Drawings and Specifications, identified by
the parties hereto and by the Design Architect, the Architect, and the
Previous editions are obsolete

Department of Housing and Urban Development (“HUD”), and shall
govern in all matters which arise with respect to such Drawings and
Specifications.
E. Changes in the Drawings and Specifications or any terms of the
Contract Documents, or orders for extra work, or changes by altering
or adding to the work, or which will change the design concept, may
be affected only with the prior written approval of HUD under such
conditions as HUD may establish.
Article 2 – Time
A. The work to be performed under this Contract shall be
commenced within ______ days of this Agreement, and shall be
completed by __________________, 20___. The time by which the
work shall be completed may be extended in accordance with the
terms of the said AIA General Conditions only with the prior written
approval of HUD.
B. The Contractor shall correct any defects due to faulty materials
or workmanship which appear within one year from the date of final
completion.
C. If the work is not brought to final completion in accordance with
the Drawings and Specifications, including any authorized changes,
by the date specified above, or by such date to which the contract
time may be extended, the sum stated in Article 3A below shall be
reduced by the actual cost of taxes and insurance, as approved by
HUD, for the period from the scheduled date of completion through
the date construction was actually completed, shall be determined.
This cost shall be reduced by an amount equal to the project’s net
operating income (as determined by HUD) for the period upon which
the aforementioned actual costs are based.
D. The Owner and Contractor may amend this contract prior to
initial endorsement, in a form prescribed by the Commissioner, to
provide for an incentive payment to the Contractor, which will result
in an increase in the contract sum stated in Article 3A below, if the
work is completed before the date specified in this contract. The
Contractor will not be entitled to any incentive payment resulting

Page 1 of 3

form HUD-92442-CA (11/00)
ref. Handbooks 4571.4 & 4571.5

from early completion if HUD determines that the Contractor’s cost
certification, if required by Article 7, is fraudulent or materially
misrepresents the Contractor’s actual cost of construction.
E. The date of final completion shall be the date the HUD
representative signs the final HUD Representative’s Trip Report
provided that the trip report is subsequently endorsed by the Chief
Architect.
Article 3 – Contract Sum and Payments
A. The Owner shall pay the Contractor for the performance of the
Contract, as hereinafter provided, the sum of $ ________________
.
B. Each month after the commencement of work hereunder, the
Contractor shall make a monthly request on Form HUD 92448 for
payment by the Owner for work done during the preceding month.
Each request for payment shall be filed at least __________ days
before the date payment is desired. Subject to the approval of HUD,
the Contractor shall be entitled to payment thereon in an amount
equal to (1) the total value of classes of the work acceptably
complete; plus (2) the value of materials and equipment not
incorporated in the work, but delivered to and suitably stored at the
site; plus (3) the value of components stored off-site in compliance
with applicable HUD requirements less (4) 10 percent holdback and
less prior payments. The “values” of (1), (2) and (3) shall be
computed in accordance with the amounts assigned to classes of the
work in the “Contractor's and/or Mortgager's Cost Breakdown,”
attached hereto as Exhibit “A”. The Contractor agrees that no
materials or equipment required by the Specifications will be
purchased under a conditional sale contract or with the use of any
security agreement or the vendor's title or lien retention instrument.
C. The balance due the Contractor hereunder shall be payable
upon the expiration of 30 days after the work hereunder is fully
complete, provided the following have occurred:
(1) All work hereunder requiring inspection by municipal or
other governmental authorities having jurisdiction has been
inspected and approved by such authorities and by the rating or
inspection organization, bureau, association or office having
jurisdiction;
(2) All certificates of occupancy, or other approvals, with
respect to all units of the project have been issued by State or local
governmental authorities having jurisdiction; and
(3) Permission(s) To Occupy (Form HUD-92485) for all units of
the project have been issued by HUD.
D. With its final application for payment by the Owner, the
Contractor shall disclose, on a form prescribed by HUD, all unpaid
obligations contracted in connection with the work performed under
this Contract. The Contractor agrees that, within 15 days following
receipt of final payment, it will pay such obligations in cash and
furnish satisfactory evidence of such payment to the Owner.

The Owner may require the Contractor to attach to each request for
payment its acknowledgement of payment and all subcontractors'
and material supplier's acknowledgements of payment for work done
and materials, equipment and fixtures furnished through the date
covered by the previous payment. Concurrently with the final
payment, the Owner may require the Contractor to obtain similar
waivers or releases from all subcontractors and material suppliers.
Article 5 – Requirements of Contractor
The Contractor shall furnish, at its own expense, all building and

Previous editions are obsolete

B. If the Contractor observes that the Drawings and Specifications
are at variance with any applicable codes, laws, ordinances, rules or
regulations, or protective covenants, it shall promptly notify the
Architect in writing, and any necessary changes shall be made as
provided in this Contract for changes in the Drawings and
Specifications. If the Contractor performs any work knowing it to be
contrary to such codes, laws, ordinances, rules or regulations, or
protective covenants, without giving such notice to the Architect, it
shall bear all cost arising therefrom.
C. Upon completion of construction, the Contractor shall furnish to
the Owner a survey showing the location on the site of all
improvements constructed thereon, and showing the location of all
water, sewer, gas and electric lines and mains, and of all existing
utility easements. Such survey shall be prepared by a licensed
surveyor who shall certify that the work is installed and erected
entirely upon the land covered by the mortgage and within any
building restriction lines on said land, and does not overhang or
otherwise encroach upon any easement or right-of-way of others. In
addition, the Contractor shall furnish additional surveys when
required by the Owner for any improvements, including structures
and utilities, not theretofore located on a survey. The Contractor shall
furnish copies of such survey required hereunder for HUD.
D. The Contractor shall assume full responsibility for the
maintenance of all landscaping which may be required by the
Drawings and Specifications until such time as both parties to this
Contract shall receive written notice from HUD that such landscaping
has been finally completed. The Owner hereby agrees to make
available to the Contractor, for such purpose, without cost to the
latter, such facilities as water, hose and sprinkler.
Article 6 – Assurance of Completion
The Contractor shall furnish to the Owner assurance of completion
of the work in the form of (specify) ________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________

Article 4 – Receipts and Releases of Liens

A.

other permits, licenses, tools, equipment and temporary structures
necessary for the construction of the project. The Contractor shall
give all required notices and shall comply with all applicable codes,
laws, ordinances, rules and regulations, and protective covenants,
and with the current regulations of the National Board of Fire
Underwriters, wherever applicable. The Contractor further shall
comply with the provisions of the Occupational Safety and Health Act
of 1970. The Contractor shall immediately notify HUD of the delivery
of all permits, licenses, certificates of inspection, certificates of
occupancy, and any other such certificates and instruments required
by law, regardless of to whom issued, and shall cause them to be
displayed to HUD upon request.

__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
_________________________________________________ .
Such assurance of completion shall run to the Owner and HUD as
obligees.

Page 2 of 3

form HUD-92442-CA (11/00)
ref. Handbooks 4571.4 & 4571.5

Article 7 – Cost Certification

Article 9 – Assignments, Subcontracts and Termination

An identity of interest between the Owner and the Contractor is
prohibited. In the event HUD determines that there is an identity of
interest between the Owner and the Contractor, the Contractor shall
certify on a form prescribed by HUD, its cost incurred in the
performance of work under this Contract.

A. This Contract shall not be assignable by either party without
prior written consent of the other party and HUD, except that the
Owner may assign the Contract, or any rights hereunder, to HUD.

Article 8 – Right of Entry and Interpretation
A. HUD, its agents or assigns, at all times during construction, has
the right of entry and free access to the project and the right to inspect
all work done and materials, equipment and fixtures furnished,
installed or stored in and about the project. For such purpose, the
Contractor shall furnish such enclosed working space as HUD may
require and find acceptable as to location, size, accommodations
and furnishings.
B. HUD shall also have the right to interpret the Contract
Documents and to determine compliance therewith.

B. The Contractor shall not subcontract all of the work to be
performed hereunder without the prior written consent of the Owner
and HUD.
C. Upon request by the Owner, or HUD, the Contractor shall
disclose the names of all persons with whom it has contracted or will
contract with respect to work to be done and materials and
equipment to be furnished hereunder.
D. The Contractor understands that the work under this contract is
to be financed by a capital advance to be secured by a mortgage and
subject to the terms of a Capital Advance Agreement between the
Owner and HUD.
The Contractor further understands that said Capital Advance
Agreement provides that in the event of the failure of the Owner to
perform its obligations to HUD thereunder, HUD may, as attorney-infact for the Owner, undertake the completion of the project in
accordance with this Contract. In the event HUD elects not to
undertake such completion, the Contractor's obligations under this
Contract shall terminate.

In Witness Whereof, the parties to these presents have executed this contract in six (6) counterparts, each of which shall be deemed an original,
in the year and day first above mentioned.
(Seal) Attest:

Owner

Witness

By

Witness

Title

(Seal)

Contractor

Witness

By

Witness

Title

Note: If Contractor or Owner is a corporation, Secretary should attest.

Previous editions are obsolete

Page 3 of 3

form HUD-92442-CA (11/00)
ref. Handbooks 4571.4 & 4571.5