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Units Summary
The unit mix of the Project is as follows:
Number Of Units Composition Approximate Square Footage
94 One Bedroom 625 & 747
101 Two Bedroom 700 & 938
44 Three Bedroom 1,100
Total: 239
The HAP Contract
The Project has received the benefit of a Section 8 Housing Assistance Payment Contract (the
“HAP Contract”) covering all 239 of the units at the Project. The HAP Contract went into effect on January
1, 2022, and is expected to expire 20 years after that date on January 1, 2042. Subject to all applicable laws
and regulations in effect upon expiration, the HAP Contract is expected to be renewed for an additional
term of 20 years beginning on [August 1, 2026]*.
Funding under the HAP Contract will be subject to annual Congressional appropriations, as more
particularly described below. The Section 8 project-based housing assistance payment program (the
“Section 8 Program”) is authorized by Section 8 of the United States Housing Act of 1937, as amended,
and in the case of Section 8 contracts is administered by local public housing authorities. Renewals of
Section 8 HAP contracts are governed by the Multifamily Assisted Housing Reform and Affordability Act,
as amended (“MAHRA”). The Section 8 Program authorizes housing assistance payments to owners of
qualified housing for the benefit of low-income families (defined generally as families whose incomes do
not exceed 80% of the area median income for the area as determined by HUD, and very low-income
families (defined generally as families whose income do not exceed 50% of the area median income as
determined by HUD). Section 8 housing assistance payments generally represent the difference between
the “contract rent” for the unit approved by HUD and the eligible tenant’s contribution, which is generally
30% of income, as adjusted for family size and certain expenses, subject to a minimum rent contribution.
The rents approved by HUD for the Project, as they may be adjusted from time to time with procedures set
forth in MAHRA and the HAP Contract, are the “contract rents” for the Project. The HAP Contract will
require the Borrower to maintain the Project in decent, safe and sanitary condition and to comply with other
statutory and regulatory requirements governing the operation of the Project, use of project funds, and other
matters. If the Borrower fails to comply with the terms of the HAP Contract, HUD or the contract
administrator could seek to abate or terminate the payments under the HAP Contract, or take other
sanctions. MAHRA requires that upon the request of the Borrower, HUD shall renew the HAP Contract
under the Section 8 Program. However, because the HAP Contract is subject to receipt of annual
appropriations by Congress, there is no assurance that the HAP Contract will be renewed or replaced upon
its expiration. Funding for HAP contracts is appropriated by Congress on an annual basis, and there is no
assurance that adequate funding will be appropriated each year during the term of the HAP Contract. Since
payments received under the HAP Contract constitute a primary source of revenues for the Project, the
expiration of the HAP Contract, or the failure of Congress to appropriate funds sufficient to fund the HAP
Contract during each year of its term, would have a material adverse effect on the ability of the Project to
generate revenues.
* Preliminary; subject to change.
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