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HomeMy WebLinkAboutCastillo, Bertha Alicia Homebuyer Written Agreement- 3-4-25HOMEBUYER WRITTEN AGREEMENT HOME Investment Partnerships Program Homebuyer Agreement for Mortgage Assistance NOTICE TO HOMEBUYER: This Agreement contains requirements you must fulfill in exchange for the federal assistance you are receiving through the HOME Investment Partnerships Program (HOME Program). You should read each paragraph carefully and ask questions regarding any sections you do not fully understand. This Agreement will be enforced through a loan and mortgage as set forth in Section 1 below. You should be sure that you thoroughly understand these documents before you sign them. This Agreement is entered into this March 4, 2025, by and between Bertha Alicia Castillo, a single individual (herein referred to as HOMEBUYER) and the City of Fresno, a municipal corporation (herein referred to as CITY), to provide low-income homebuyer mortgage assistance through funding made available to the CITY from the United States Department of Housing and Urban Development (HUD), HOME Program. The HOME Program assistance enables the HOMEBUYER to purchase the residence located at 1460 E_ Timber Avenue, Fresno, California 93706. The house must remain HOMEBUYER'S principal place of residence during the entire period of time covered by this Agreement. Section 1: Scope of Program The CITY will loan the HOMEBUYER the sum of One Hundred Thirty -Two Thousand Nine Hundred Nine dollars and 00/100 ($132,909.00) (Loan), the funding for which was provided to the CITY through the HOME Program as a developer subsidy, thus providing for the construction of the house and after transfer of the completed house to the HOMEBUYER represents a direct mortgage subsidy to the HOMEBUYER. The Loan will be protected by mortgage recorded on the property. The Promissory Note and Deed of Trust will be released once the loan is paid in full. Section 2: Affordabilit Period The period of affordability for the house will be 30 years, based on the amount of the direct subsidy to the HOMEBUYER. During this 30-year period of affordability, the HOMEBUYER must always maintain the house as her principal place of residence. The HOMEBUYER should be aware that according to HUD regulations at 24 CFR Part 92, the period of affordability does not begin until the activity is shown as completed in the HUD's Integrated Disbursement and Information System (IDIS). Therefore, the 30-year period of affordability shall begin at the recordation of the Commencement of Affordability, which a conformed copy shall be provided to the HOMEBUYER. At the end of the 30- year period of affordability, the Declaration of Restriction will be released. Section 3. Loan and Interest Rate The CITY will provide federal HOME Program funds in the form of a 30-year mortgage at 0% interest to the HOMEBUYER, the sum of One Hundred Thirty -Two Thousand Nine Hundred Nine dollars and 00/100 ($132,909.00). The HOME mortgage assistance in the form of a Promissory Note will be secured by a Deed of Trust recorded against the property. The HOMEBUYER understands and agrees that the Promissory Note secured by a Deed of Trust is made for the sole purpose of Page 1 of 5 HOMEBUYER WRITTEN AGREEMENT assisting the HOMEBUYER in the purchase of the HOMEBUYER'S house as her principal place of residence. Therefore, the HOMEBUYER understands and agrees that the Promissory Note secured by this Deed of Trust shall be immediately due and payable upon the earlier of: (1) any change in residency of the HOMEBUYER from the HOMEBUYER'S house which is used as security for the Note described above, unless having obtained the written consent of the CITY; or (2) the sale or transfer, without the CITY's prior written consent, of all or any part of the property, or any interest in the property. A "sale or transfer" means the conveyance of the property or any right, title or interest therein; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, lease -option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the property, or by any other method of conveyance of land interest. The CITY and the HOMEBUYER acknowledges and agrees that this security instrument is second and subordinate in all respects to the liens, terms, covenants and conditions of the first Deed of Trust and shall not impair the rights of any institutional lender which is the maker of a loan secured by such first deed of trust, or such lender's assignee or successor in interest, to exercise its remedies under the deed of trust in the event of default by the HOMEBUYER. These remedies include the right to foreclosure or exercise a power of sale or to accept a deed or assignment in lieu of foreclosure. The terms and provisions of the first Deed of Trust are paramount and controlling, and they supersede any other terms and provisions hereof in conflict therewith. In the event of a foreclosure or deed in lieu of foreclosure of the first Deed of Trust, any provisions herein or any provisions in any other collateral agreement restricting the use of the property to low- income households or otherwise restricting the HOMEBUYER'S ability to sell the property shall have no further force or effect on subsequent owners or purchasers of the property. Any person, including his/her successors or assigns (other than the HOMEBUYER or a related entity of the HOMEBUYER, receiving title to the property through a foreclosure or deed in lieu of foreclosure of the first Deed of Trust shall receive title to the property free and clear from such restrictions. In the event of a catastrophic occurrence that results in the property having to be sold, the portion of the existing second mortgage lien that results in the combined loan -to -value ratio being more than 100% of the value of the property will be released with no forgiveness of that portion of the debt, and the contemporaneous execution of an unsecured promissory note equal to the amount released from the second mortgage, and a modification agreement that reduces the secured debt of the existing second mortgage by the amount of the new unsecured promissory note. Section 4. Use of HOME Funds The Loan provided to the HOMEBUYER was initially provided to the Developer as a construction loan for the construction of the house located at 1460 E. Timber Avenue, Fresno, California 93706. The Developer's construction loan subsequently converted to a mortgage assistance loan at the transfer of the property title through escrow to the HOMEBUYER, thus representing a direct mortgage subsidy assistance to the HOMEBUYER. Page 2 of 5 HOMEBUYER WRITTEN AGREEMENT Section 5. Principal Residence Requirement This Agreement shall remain in force throughout the 30-year period of affordability so long as the house remains the principal residence of the HOMEBUYER. The house shall remain the HOMEBUYER'S principal place of residence for the entire 30-year period of affordability as evidence by the fully executed and recorded Declaration of Restrictions which contains the affordability covenants which shall run with the land and be recorded against the property. Should the HOMBUYER fail to maintain the house as her principal place of residence, or should she rent or sell the residence to another party, the HOMEBUYER will be in default of this Agreement and will be required to repay any amount of the HOME loan outstanding as of the date the house is no longer the principal place of residence of the HOMEBUYER. Section 6. Recapture Agreement The CITY requires that HOME funds be recaptured if the house does not continue to be the HOMEBUYER'S principal residence or if all or any part of the property or any interest in it is sold, rented, conveyed, or transferred for the duration of the 30-year period of affordability. If the net proceeds are not sufficient to recapture the full HOME investment plus enable the HOMEBUYER to recover the amount of the HOMEBUYER'S down payment and any capital improvement investment made by the HOMEBUYER since purchase, the CITY may share the net proceeds. The net proceeds are the sales price minus superior loan repayment (other than HOME funds) and any closing costs. In the event of foreclosure, the amount subject to recapture is based on the amount of net proceeds (if any) from the foreclosure sale. The net proceeds may be divided proportionally as set forth in the following mathematical formulas: HOME investment x Net = HOME recaptured proceeds HOME investment + homeowner investment Homeowner x Net = amount to homeowner investment proceeds HOME investment + homeowner investment Section 7. Low-income Homebu er The HOMEBUYER attest, and the CITY has verified, that the HOMEBUYER qualifies as a low-income individual or household as defined in the HOME Program regulations and has a total income that does not exceed 80% of the Area Median Income for Fresno County as defined by HUD. Section 8. Appraised Value of HOLIsing Determined to be Modest The CITY certifies that the property appraiser has appraised the value of the house located at 1460 E. Timber Avenue, Fresno, California, 93706, that is subject of this Agreement is $330,000.00. The CITY has verified that the purchase price of the house Page 3 of 5 HOMEBUYER WRITTEN AGREEMENT does not exceed 95% of the median purchase price of the area, as set forth in 24 CFR Part 92.254(a)(2)(iii). Section 9. Insurance Requirement The HOMEBUYER must at all times during the duration of the Agreement maintain a valid and current insurance policy on the house for the current appraised or assessed value of the house. Failure to maintain a valid and current insurance policy will be considered a breach of this Agreement, and the CITY will have the right to foreclose on its mortgage lien if necessary to protect the HOME Program investment. Section 10. Property Standards Pursuant to the HOME Program rules, the property located at 1460 E. Timber Avenue Fresno, California 93706, must meet all State and local housing quality standards and CITY code requirements. If no such standards or codes apply, the property must at a minimum meet the HUD Section 8 Housing Quality Standards/Uniform Physical Conditions Standards. Page 4 of 5 HOMEBUYER WRITTEN AGREEMENT I:1:11rd:1 l Bertha Alicia Cas lo, a single individual CITY OF FRESNO, A Californi municipa corp ration By: Name: GE@rgeanne A. White Title: City Manager APPROVED AS TO FORM: ANDREW JANZ City Attorney J rr, By: [ a , v Name: Tracy to'arvanian Title: Assistant City Attorney ATTEST: TODD STERMER, CMC City Clerk By:►' Name 1 Title: Deputy City Clerk Page 5 of 5