5.5.1 New Construction and Substantial Rehabilitation

A. New construction and substantial rehabilitation projects require a General Contractor and the services of a Project Architect (See Section 5.3 above.) The contracts between the parties must be coordinated using the following forms:

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1. Owner and General Contractor

   • The construction contract between the owner and General Contractor shall be form HUD-92442M Construction Contract for Insured Advances:

• 1. Form HUD-92442M, Construction Contract Lump Sum (Article 4 Option 2), may be used when there is no identity of interest between the Borrower and the contractor.
• 2. Form HUD- 92442M, Construction Contract Cost Plus (Article 4 Option 1), may be used in any case, and shall be used when an identity of interest exists between the Borrower and contractor. A Builder’s Profit will not apply.

• Form HUD-92554M Supplementary Conditions to the Contract for Construction must be attached.

• AIA Document A201-2017 General Conditions of the Contract for Construction must be attached.

  • HUD does not specify a form of construction contract for Insurance Upon Completion projects. However, some form of binding contract must be executed and submitted to HUD for review and approval.

2. In addition, the Building and Loan Agreement between the Borrower and the Lender (form HUD92441M) must be used.