---
kind: "range"
citation: "24 C.F.R. §§ 245.416–245.419"
title: "24"
from: "245.416"
to: "245.419"
count: 4
url: "https://uscodex.org/cfr/24/245.416..245.419"
---

# §245.416. Initial submission of materials to HUD: Conversion from project-paid utilities to tenant-paid utilities or a reduction in tenant utility allowances.


In the case of a conversion from project-paid utilities to tenant-paid utilities or a reduction in tenant utility allowances, the mortgagor must submit the following materials to the local HUD office:

- (a) A copy of the notice to tenants;
- (b) **In the case of a proposed conversion from project-paid utilities to tenant-paid utilities—**
  - (1) **A statement indicating—**
    - (i) The type of utility or utilities involved;
    - (ii) The number of units in the project by type and size;
    - (iii) The average utility consumption data by unit type and size for comparable projects, and utility rate information, as obtained from the utility supplier;
    - (iv) The estimated monthly cost of the utilities to be paid by the tenants by unit type and size, based upon the consumption data and rate information described in [paragraph (b)(1)(iii)](#b-1-iii) of this section;
    - (v) The monthly cost for the past year of paying for the utility or utilities involved on a project basis (actual cost) and by unit type and size (estimated breakdown);
    - (vi) An estimate of the cost of conversion, as obtained from the utility supplier or from bids from contractors;
    - (vii) The source and terms of financing for the conversion (to the extent known); and
    - (viii) The estimated effect of the conversion on the total housing costs of the tenants by unit type and size, taking into account the estimated cost of conversion (including the cost of its financing), the estimated monthly cost of utilities to be paid by the tenants by unit type and size, the proposed utility allowances, and the estimated change in the rents paid to the mortgagor resulting from the conversion; and
  - (2) A copy of the portion of the project's Energy Conservation Plan which addresses the cost-effectiveness determination associated with converting the project to tenant-paid utilities; and
- (c) In the case of a proposed reduction in tenant utility allowances, a statement indicating the information described in paragraphs [(b)(1)(i)](#b-1-i), [(b)(1)(ii)](#b-1-ii), [(b)(1)(iii)](#b-1-iii) and [(b)(1)(iv)](#b-1-iv) of this section, the utility allowances proposed for reduction, and a justification of the proposed reduction.

# §245.417. Initial submission of materials to HUD: Conversion of residential units to a nonresidential use, or to cooperative housing or condominiums.


In the case of a conversion of residential units to a nonresidential use, or to cooperative housing or condominiums, the mortgagor must submit the following materials to the local HUD office in accordance with §§ [245.415](/cfr/24/245.415.md) and [245.419](/cfr/24/245.419.md):

- (a) **In the case of a proposed conversion of residential rental units to nonresidential use—**
  - (1) A statement describing the proposed conversion;
  - (2) A statement describing the estimated effect of the proposed conversion on the value of the project, the project rent schedule, the number of dwelling units in the project, a list of the units to be converted and their occupancy, the amount of subsidy available to the project, and the project income and expenses (including property taxes);
  - (3) A statement assessing the compatibility of the proposed nonresidential use with the residential character of the project;
  - (4) Written approval of the mortgagee if required;
  - (5) An undertaking by the mortgagor to pay all relocation costs that may be required by HUD for tenants required to vacate the project because of the conversion; and
  - (6) **A copy of the notice to tenants.**
- (b) In the case of a proposed transfer of the project to a cooperative housing mortgagor corporation or association (conversion of residential rental units to residential cooperative housing), the materials specified in paragraphs [(a)(1)](#a-1), [(a)(2)](#a-2) and [(a)(3)](#a-3) of this section and the following additional materials:
  - (1) An estimate of the demand for cooperative housing, including an estimate of the number of present tenants interested in purchasing cooperative housing;
  - (2) Estimates of downpayments and monthly carrying charges that will be required; and
  - (3) Copies of proposed organizational documents, including By-Laws, Articles of Incorporation, Subscription Agreement, Occupancy Agreement, and Sale Document.
- (c) In the case of a proposed conversion of residential rental units to condominium units, the materials specified in paragraphs [(a)(1)](#a-1), [(a)(4)](#a-4), and [(a)(6)](#a-6) of this section and the following additional materials:
  - (1) An estimate of the demand for condominium housing, including an estimate of the number of present tenants interested in purchasing units;
  - (2) Estimates of downpayments, monthly mortgage payments and condominium association fees that will be required; and
  - (3) **A list of the units to be converted and their occupancy.**

# §245.418. Initial submission of materials to HUD: Partial release of mortgage security.


In the case of a partial release of mortgage security, the mortgagor must submit the following materials to the local HUD office:

- (a) A statement describing the portion of the property that is proposed to be released and the transaction requiring the release;
- (b) A statement describing the estimated effect of the proposed release on the value of the project, the number of dwelling units in the project, the project income and expenses (including property taxes), the amount of subsidy available to the project, and the project rent schedule;
- (c) A statement describing the proposed use of the property to be released and the persons who will have responsibility for the operation and maintenance of that property, and assessing the compatibility of that use with the residential character of the project;
- (d) A statement describing the proposed use of any proceeds to be received by the mortgagor as a result of the release; and
- (e) **A copy of the notice to tenants.**

# §245.419. Initial submission of materials to HUD: Major capital additions.


In the case of major capital additions, the mortgagor must submit the following materials to the local HUD office:

- (a) The general plans and sketches of the proposed capital additions;
- (b) A statement describing the estimated effect of the proposed capital additions on the value of the project, the project income and expenses (including property taxes), and the project rent schedule;
- (c) A statement describing how the proposed capital additions will be financed and the effect, if any, of that financing on the tenants;
- (d) A statement assessing the compatibility of the proposed capital additions with the residential character of the project; and
- (e) **A copy of the notice to tenants.**