HUD-92442-A-CA Capital Advance Program Construction Contract Cost Plus

Capital Advance Program
Construction Contract Cost Plus
Under Section 202 of the Housing Act of 1959 or
Section 811 of the National Affordable Housing Act

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

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

Public reporting burden for this collection is estimated to average 2 hours per response, including the time for reviewing, searching existing data sources, gathering
and maintaining the data needed, and compiling and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this
collection of information, including suggestions for reducing this burden, to the Reports Management Officer, Paperwork Reduction Project (2502-0011), U.S. Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410-3600.
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 document the terms and conditions of the Construction
Contract; i.e., change for extra work or changes by altering or adding to the work, or which will change the design concept of the Construction Document for the
approval of the FHA Commissioners. This information is used by HUD to ensure that viable projects are being developed. This information is considered non-sensitive
and no assurance of confidentiality is provided. Furnishing of this information is mandatory, and failure to provide it may result in your not receiving your benefits.
Privacy Act Notice. The United States Department of Housing and Urban Development, Federal Housing Administration, is authorized to solicit the information
requested in this form by virtue of Title 12, United States Code, Section 1701 et seq., and regulations promulgated thereunder at Title 12, Code of Federal Regulations.
While no assurance of confidentiality is pledged to respondents, HUD generally discloses this data only in response to a Freedom of Information request. This agency
may not collect this information, and you are not required to complete this form, unless it displays a currently valid OMB control number.

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
E. Changes in the Drawings and Specifications or any terms of the
Contract Documents, or orders for extra work, or changes by altering
A. The Contract between the parties is set forth in the “Contract
or adding to the work, or which will change the design concept, may
Documents” which consists of this Agreement, the Drawings and
be effected only with the prior written approval of HUD under such
Specifications, the current edition of AIA Document A201, “General
conditions as HUD may establish.
Conditions of the Contract for Construction,” except for all paragraphs concerning arbitration and Form HUD 2554, “Supplementary
Article 2 – Time
Conditions of the Contract for Construction.” The provisions of this
A. The work to be performed under this Contract shall be cominstrument and the said HUD Supplementary Conditions take precemenced within ___________ days of this Agreement, and shall be
dence over all inconsistent provisions in the said AIA General
completed by ____________________, 20_____. The time by which
Conditions. This Contract constitutes the entire agreement between
the work shall be completed may be extended in accordance with the
the parties, and any previously existing contract concerning the work
terms of the said AIA General Conditions only with the prior written
contemplated by the Contract Document is hereby revoked.
approval of HUD.
B. The Contractor shall furnish all of the materials and perform all
B. The Contractor shall correct any defects due to faulty materials
of the work (within the property lines) shown on, and in accordance
or workmanship which appear within one year from the date of final
with, the Drawings and Specifications entitled ______________
completion.
_________________________________________________ ,
C. If the work is not brought to final completion in accordance with
HUD Project No.___________________, dated _______________.
the Drawings and Specifications, including any authorized changes,
by the date specified above, or by such date to which the contract
C. The Drawings, which are numbered _____________________,
time may be extended, the contract sums stated in Article 3A(1)
below shall be reduced by the actual cost of taxes and insurance, as
and the Specifications, the pages of which are numbered___________
approved by HUD, for the period from the scheduled date of completion through the date construction was actually completed. 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
have been prepared by _______________________________
aforementioned actual costs are based.
__________________________________ (“Design Architect”).
D. The Owner and Contractor may amend this contract prior to
initial endorsement, in a form prescribed by the Commissioner, to
The Architect administering the Construction Contract (hereinafter,
provide for an incentive payment to the Contractor, which will result
and elsewhere in the Contract Documents, referred to as the “Archiin an increase in the contract sums stated in Article 3A below, if the
tect”) is ____________________________________________
work is completed before the date specified in this contract. The
_________________________________________________ .
Contractor will not be entitled to any incentive payment resulting
from early completion if HUD determines that the Contractor’s cost
D. A master set of said Drawings and Specifications, identified by
certification, required by Article 10, is fraudulent or materially misrepthe parties hereto and by the Design Architect, the Architect, and the
resents the Contractor’s actual cost of construction.
Contractor's Surety or Guarantor have been placed on file with the
Department of Housing and Urban Development (“HUD”), and shall
govern in all matters which arise with respect to such Drawings and
Specifications.
Previous editions are obsolete

Page 1 of 3

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

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. (1) Subject to the provisions hereinafter set out, the Owner
shall pay to the Contractor for the performance of this Contract the
following items in cash:
(a) The actual cost of construction as defined in Article 10
below; plus
(b) A fee of $ _____________________. In no event,
however, shall the total cash payable pursuant to this
paragraph (1) exceed $ ________________.
(2) If, upon completion, the Contractor shall have received
cash payments in excess of (a) the actual cost of construction, plus
(b) the cash fee specified in paragraph (1), all such excess shall be
refunded to the Owner.
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
completed; 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 Mortgagor'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 other 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
completed, 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.

Article 5 – Requirements of Contractor
A. The Contractor shall furnish, at its own expense, all building and
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.
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.
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
The Owner may require the Contractor to attach to each request
for payment its acknowledgement of payment and all subcontractors'

Previous editions are obsolete

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 execute a waiver or
release of lien for all work performed and materials furnished
hereunder, and may require the Contractor to obtain similar waivers
or releases from all subcontractors and material suppliers.

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

Page 2 of 3

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

Article 7 – Waiver of Lien or Claim
The Contractor shall file no mechanic's or materialman's lien or
maintain any claim against the Owner's real estate or improvements
for or on account of any work done, labor performed or materials
furnished under this Contract, and shall include in each subcontract
a clause which shall impose this requirement on the subcontractor.
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.
Article 9 – Assignments, Subcontracts and Termination
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.
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.

with this Contract. In the event HUD elects not to undertake such
completion, the Contractor's obligations under this Contract shall
terminate.
Article 10 – Certification of Actual Cost
A. The “actual cost of construction,” as used in Article 3 above,
shall include all items of cost and expense incurred by the Contractor
in the performance of this Contract, including costs and expenses of
labor, materials for construction, equipment and fixtures, field engineering, sales taxes, workmen's compensation insurance, social
security, public liability insurance, job overhead expenses, and all
other expenses directly connected with construction, and including
general overhead expenses, but excluding kickbacks, rebate and
discounts received in connection with the construction of the project;
and excluding any return on or cost of the Contractor's working
capital, such return on or cost of working capital being a part of or to
be paid from the Contractor's fee or profit.
B. The Contractor shall keep accurate records of account of the
said actual cost of construction, and shall upon demand, make such
records and invoices, receipts, subcontracts and other information
pertaining to the construction of the project available for inspection
by the Owner and HUD.
C. With its final application for payment, the Contractor shall
furnish to the Owner a completed “Contractor's Certificate of Actual
Cost,” which shall be accompanied and supported by an independent public accountant's certificate as to actual cost (in form acceptable to HUD).
D. The Contractor shall include in all subcontracts, equipment
leases and purchase orders a provision requiring the subcontractor,
equipment lessor or supplier to certify its costs incurred in connection
with the project, in the event HUD determines there is an identity of
interest between the Owner or the Contractor and any such subcontractor, equipment lessor or supplier.

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-in-fact for
the Owner, undertake the completion of the project in accordance
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

Previous editions are obsolete

Page 3 of 3

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