HomeMy WebLinkAboutHabitat for Humanity Home Inv Partnership Garrett Ave�rpm �� �
rflfew��s/ REPORT TO THE CITY COUNCIL
jebruary 11, 2010
ROM'. KEITH BERGTHOLD, Assistant Director
Planning and Development Department
AGENDA ITEM NO. 9;15am B
COUNCILMEETING 2/1010
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CrYMVA
CLAUDIA GAZARES, Manager(tj-
Housing and Community Development Divisii
Planning and Development Department
$USJECT. APPROVAL OF A$160,000 DISPOSITION AND DEVELOPMENTAGREEMENT AND HOME
AGREEMENT WITH HABITAT FOR HUMANITY FRESNO, INC., FOR CONSTRUCTION OF
TWO AFFORDABLE SINGLE-FAMILY HOMES ON EAST GARRETT AVENUE FOR
ASSESSOR'S PARCEL NUMBERS 481-39046T AND 481-390477
RECOMMENDATIONS
Staff recommends City Council approve a $160.000 Disposition and Development Agreement and HON
Agreement (Exhibit A) with Habitat for Humanity Fresno, Ina, (Habitat) for the construction of N
affordable single-family homes on East Gained Avenue (Exhlblt B) for Assessors Parcel Numbers 48
39046T and 481-3904]".
EXECUTIVE SUMMARY
On January 9. 2009, the CM issued a Request for Proposals (RFP) from qualified developers to develop
aRmdalte housing on surplus City -owned infill properties located at various sites throughout the City. As an
incentive, the City offered the Initial Purchase price of the property as Me HOME subsidy to a proposed
affordable housing project. In response to the RFP, Habitat submided a successful ProPpsal to construct two
'sweat equity- affordable single4amily homes on the East Gained Avenue sites. The instal purchase prirs of
parcel number 481-3904 T was $78,400 antl $81,600 for parcel number 481-3901 A portion of these
amounts will be forgiven to make the home affordable to the low-income homebuyer. The balance (loan
potlion) will be provided to Me homebuyers as mortgage assistance. In addition, tNe homebuyers will receive
'sweat Nuttycri toward the purchase of their home, as reminded through Habitat.
7- gX1:Tslsl:H:
In January of 2007, the Housing and Community Development Division purchased two infill Iota on East
Garret Avenue (4979 and 4983). The lot purchases were part of a larger neighborhood development at
the northwest comer of Jensen and Willow Avenues in southeast Fresno. The neighborhood
development consists of a 41 -unit single-family subdivision to the west of the project site and 8 84 -unit
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REPORT TO THE CITY COUNCIL
SPPROVAL OF A $181 DISPOSITION AND DEVELOPMENT AND HOME AGREEMENT WITH
FOR HUMANITY FRESNO
February 11, 2010
Fage 2
senior housing development to the south. Due to the detaining property values, during early 2008, the
previous developer cancelled the proposed development of the Garrett Avenue sites.
Therefore, in January of 2009, the City Issued an RFP to dispose of the previously acquired East Garrett
sites while creating additional affordable housing opportunities at Willow/Jensen location. In response to
the RFP, Habitat, a leading non-proft development organization, submitted a successful proposal to
construct two "sweat equity" affordable single-family homes an the East Garrett Avenue sites.
Habitat's -sweat equity" method of housing development consists of training families in basic wnsimction
so that they may assist in the building of their home. In addition to the basic construction training. Habitat
provides workshops and support services in the areas of home maintenance, home improvement, interior
design, budgeting, and consumer awareness. Habitat has a 23 -year history of partnering with low-income
families to ensure their homeownership achievement is a successful and positive experience.
Habitat will acquire the East Gained Avenue lots through escrow and enter into a 2% interest loan in the
amount of $160,000 (the initial purchase prim that the City paid for the two lots), as provided for In Me
Agreement.
The properties to be purchased and developed by Habitat are as follows
Sam houses will consist of threo-bedrwms aid two-hathrooms, solar panels, and Universal Design features.
Once the homes are wnanded, the City will forgive a portion ($33,4011 for 4979 E. Ganef Avenue add
$36,600 for 4983 E. Garrett Avenue) of the loan to accommodate for the difference between the City'a milml
purchase prim and the 2006 appraised value. The loan forgiveness is the only option to accommodate for the
reduction in property value, ensure Me City is fully reimbursed for the initial property acquisition cast, and Mat
the home Is affordaNe for a low-income homebuyer.
The balance of Me HOME subsidy (loan portion) will ba providetl as mortgage assistance. In addition to the
City's mortgage assistance, the homebuyers will receive 'sweat equity" creak toward the purchase of their
home from Habitat. Upon conveyance of Habitat's $18,000 Note to the homebuyers, the Note will convert to
two nates (ane note for each homebuyerl, behead for a period of 30 years at zero percent interest.
Prior to purchase of the Garrett Avenue properties, the City completed an evaluation of the project, in
accordance with the provisions of the California Environmental Quality Act, which resulted in a Mitigated
Negative Declaration. Additionally, pursuant to federal regulators, the City completed a review of the project,
under the National Environmental Policy Act guidelines, which resulted in a Finding of No Significant Impact.
CITYCOUNCIL
8160;000 DISPOSITION AND DEVELOPMENT AND HOME AGREEMENT WITH
Page 3
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
The Housing and Community Development Commission considered and recommended this Rem for approval
on September 23, 2008.
FISCAL IMPACT
There will be no fiscal impart to the Planning and Development Department's FY 09-10 Budget. The properties
eere purchased in FV09 using $160.000 in City funds. Council approval of the Agreement wall allow for the City
'.o be reimbumed with HOME funds for the land cost.
attachments:
Exhibit A— Disposition and Development Agreement and HOME Agreement
Exhibit B — Prated Sites Map
bb FR61W CountyReorder
RECORDED AT THE REQUEST OF Robert C. UerMr
AND WHEN RECORDED RETURN TO DOC -2010-002808'2
Tuead.y, MAR 02 0010 13:51:31
City of Fresno TlI Po $6.00 Wr•0N31698%
City Clerk's Office JZG/113/ 1-66
No Fee -Gok Code 6103
2600 Fresno Sawn, Room 2133
Fresno. CA 83721
lsvgca qao vs Txrs unE soe Recoreosns use are n
This Agreement is recorded at the request and for the benaN of the City of Fresno and m exempt
from the payment of a recording fee pursuant to Govemment Code Section 6103 and 27383.
CITY OF FRESNO
NCatl Udd
Its. Assistant City Manage
Dem
DISPOSITION AND DEVELOPMENT AGREEMENT
AND
HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT
by and between
CITY OF FRESNO.
a municipal corporation
and
Habitat for Humanity Fresno, Inc.
a nonprofit corporation
regarding
"4979 E. Garred Avenue (APN. 4111-390-461) and
4983 E. Garrett Avenue (APN: 481-39047T)"
Low -Income Single -Family Housing Development
Page 1 of 36
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS.................................................................................................4
ARTICLE 2.
TRANSFER OF AFFORDABLE PROJECT PROPERTY ..............................8
ARTICLE 3.
TERMS.........................................................................................................10
ARTICLE 4.
GENERAL REPRESENTATIONSIWARRANTIES.......................................10
ARTICLE S.
HOME PROGRAM REPRESENTATION/WARRANTIES ............................
12
ARTICLE 6.
COVENANTS AND AGREEMENT OF DEVELOPER ..................................
Is
ARTICLE 7.
HOME PROGRAM FUNDS..........................................................................
20
ARTICLE B.
DEVELOPMENT AND CONSTRUCTION OF PROJECT ............................
21
ARTICLE 9.
PROJECT OPERATIONS . ............... ....................... .....................................
26
ARTICLE 10.
INDEMNIFICATION AND INSURANCE.....................................................
28
ARTICLE 11.
DEFAULT AND REMEDIES.......................................................................
30
ARTICLE 12.
GENERAL PROVISIONS................................... ........................................
32
EXHIBIT
S
EXHIBIT A: PROPERTY DESCRIPTION
EXHIBIT B: PROJECT DESCRIPTION AND SCHEDULE
EXHIBIT C: EXEMPLAR DECLARATION OF RESTRICTIONS
EXHIBIT D: BUDGET
EXHIBIT E: EXEMPLAR CERTIFICATE OF COMPLETION
EXHIBIT Fl: EXEMPLAR NOTE- TEMPLATE RIDER TO DEED OF TRUST
EXHIBIT F2: EXEMPLAR NOTE - TEMPLATE RIDER TO DEED OF TRUST
Page 2 of 36
DEVELOPMENT AND DISPOSITION AGREEMENT
AND
HOME INVESTMENT PARTNERHIPS PROGRAM AGREEMENT
This Development and Disposition and HOME Investment Partnerships Program
Agreement (hereinafter referred to as the "Agreement') is entered into this, C I I ,
2010, by and between the CITY OF FRESNO, a municipal corporation, acting through its
Planning and Development Department—Housing and Community Development Division
(hereinafter referred to as the "CITY"), and Habitat for Humanity Fresno, Inc., a CalBomm
nonprofit corporation (hereinafter referred to as "DEVELOPER').
RECITALS
WHEREAS, the CITY has received a HOME Investment Partnerships Program
(hereinafter referred to as "HOME Program') grant from the U.S. Department of Housing
and Urban Development (hereinafter referred to as "HUD"), under Title II of die Cranston -
Gonzalez National Affordable Housing Act of 1990, as amended (hereinafter referred to as
the "ACT")r and
WHEREAS, to advance the supply of Affordable Housing within the City of Fresno,
the CRY desires, among other things, to encourage private investment in the affordable
housing market; and
WHEREAS, the Project will be constructed upon two HOME eligible parcels
(collectively "Properly') located within the bounden" of the City of Fresno, owned by the
CITY, as mare particularly described in the attached EXHIBIT "A", to be transferred to the
DEVELOPER in fee at an agreed upon fair market price through an escrow as provided
hereunder: and
WHEREAS, We DEVELOPER desires to construct two (2) separate single-family
Affordable Housing Units to be sold as Low -Income Housing and related on -she and off-
site Improvements, hereinafter referred to as the "Project", as more particularly described in
the Project Descdpfion and Schedule attached hereto as EXHIBIT "B", incorporatetl herein;
and
WHEREAS, to advance the supply of Affordable Housing within the City of Fresno,
the CITY desires to provide assistance to the Project in the total amount of One Hundred
Sixty Thousand Dollars and 00/100 ($180,000.00) in HOME Funding as an assumable and
partially forgivable Loan, for eligible HOME Project property acquisition costs, upon the
terms and conditions in this Agreement, as further identified in EXHIBIT "D" (Budget), to be
secured by the underlying Properly and Me Affordable Housing covenants, we attached
Exhibits "Fi"and 'F2" Exemplar Notes (Project Loan) and the attached EXHIBIT "C"
Declaration of Restrictions, respectively; and
WHEREAS, the CITY will transfer fare title M the Project Property 'as is" to the
DEVELOPER through Escrow with Chicago Title Company located at 7330 N. Palm, Suite
101, Fresno, CA 93711 (Attention: Cherie Zuniga at [55"51-3700D The parties
acknowledge and agree that the fair market purchase price for Me Property is the amount
of One Hundred Sixty Thousand Dollars and 00/100 (180,000.00). This Agreement. when
Page 3 of 36
signed by both parties and deposited with the Escrow holder will be the parties' joint
escrow instructions. The DEVELOPER and the CITY will sign any other form instructions
required by Escrow holder. Paribas may submit supplemental escrow instructions.
DEVELOPER will deposit all instruments, documents, money, and other items with the
Escrow holder that are: (i) identified in this Agreement; or (ii) required by the Escrow holder
to effect the closing. The Escrow will be considered closed on the data that the Escrow
holder Is prepared to issue a standard CLTA/ALTA owner's title insurance policy to
DEVELOPER insuring fee title and records the grant deed. It is agreed and confirmed by
DEVELOPER and CITY that notwithstanding other provisions in this Agreement, the right
of possession and use of the Property by DEVELOPER shall commence only upon close of
Escrow;and
WHEREAS, the CITY has conducted an environmental review of the Project
pursuant to the National Environmental Policy Act ("NEPA"), resulting in a finding of no
significant impact according to the provisions of the NEPA (Environmental Assessment No.
014-06155) and the California Environmental Quality Act ("CEQA"), resulting in an Exempt
Status according to the provisions of CEQA (Environmental Assessment No. 014-06155)
and CITY has received federal approval for release of HOME Program finds pursuant to
24 CFR Part 58 on January 2. 2007; and
WHEREAS, the CITY has determined that this Agreement is in the best interests of,
and will materially contribute to, the Housing Element of the General Plan. Further, the
CITY has found that the Project (i) will have a positive influence in the neighborhood and
surrounding environs, (ii) is In the vital and best interests of the CIN, and the health.
safety, and well of CITY residents, (iii) complies with applicable federal, state, and local
laws and requirements, (iv) will increase, improve, and preserve the community's Supply of
Low -Income Housing available at affordable housing cost to persons and families of Low -
Income, as defined hereunder, (v) planning and administrative expenses incurred in pursuit
hereof are necessary for the production, improvement, or preservation of Low -Income
Housing, and (vi) will comply with any and all owner participation rules and criteria
applicable thereto; and
WHEREAS, on September 23, 2009, the Housing and Community Development
Commission of the City of Fresno reviewed this Agreement and recommended approval.
NOW, THEREFORE, IN CONSIDERATION of the above recri els, which recitals are
contractual in nature, the mutual promises herein contained, and for other good and
valuable consideration hereby acknowledge, the parties agree as follows:
ARTICLE 1. DEFINITIONS
The following terms have me meaning and content set forth in this Article wherever used in
this Agreement, attached exhibits or attachments that are incorporated into this Agreement
by reference.
1.1. Acquisition means vesting of Property in fee title to the Developer.
1.2. ADA means the Americans with Disabilities Act of 1990, as most recently
amended.
Page 4 of 36
1 Affirmative Mediation means a good faith effort to afraid eligible persons of
all racial, ethnic and gender groups, in the housing market area. to purchase the Housing
Unit(s) that are proposed for construction on the eligible Property, as hereinafter defined.
1.4. Affordable Hous no means the proposed Affordable Housing Project Units,
consisting of two (2) separate single-family homes, each of which will be required to meet
the affordability requirements of this Agreement and 24 CFR 92.254 and which affodat ity
requirements shall run with the land for the Affordability Period subject to release as
provided In this Agreement.
1.5. Affordability Period means the thirty(30) year period commencing from the
date of first sale of each Project Unit following CITY'S issuance and recordation of the
Certificate of Completion, as more fully described in the Declaration of Restrictions,
attached hereto as EXHIBIT "C" incorporated herein.
1.6, Budget means the pro forma Budget, and any changes thereto, approved by the
CITY's Housing and Community Development Division Manager provided the total amount of
HOME Funding allocated to the Project shall not be increased without City Council approval,
attached hereto as EXHIBIT "D".
1.7. Certificate of Comolet on means that certificate Issued in the form attached
as EXHIBIT "E" ("Certificate of Completion"), to DEVELOPER by the CITY evidencing
completion of each Project Unit constructed on the Property for purposes of this
Agreement.
1.8. CFR means the Code of Federal Regulations.
1.9. Commencement of Construction means the time DEVELOPER or
DEVELOPER'S construction contractor begins substantial physical work of the
Projectfi ach Project Unit an the Property, including, without limitation, delivery of materials
and any work, beyond maintenance of the Property in its status quo condition, and not later
than March 12, 2011.
1.10. Declaratiton of Restrictions means the Declaration of Resbictions in the forth
attached hereto as EXHIBIT "C", which shall be recorded against the Property no later than
the close of escrow hereunder, selling out the Affordable Housing covenants and
requirements of this Agreement which shall run with the land.
1.11. Deed of Trust means that Dead of trust (including security agreement) given
by DEVELOPER as Trustor, to the CITY as beneficiary, through an escrow established by
DEVELOPER at its sole cost and expense with Chicago Title Company, and recoiled
against the Property to ensure the Ni together with the Rider to Deed of Trust attached
as Exhibits 'F1" and'F2" to the Notes and acceptable to the City Attorney, as well as any
amendments to, modifications of and restatements of said Dead of Trust, which Dead of
Trust shall be subordinated to the persons or entities that provide financing to the
Developer for the Project per the Budget attached as EXHIBIT "D". The terms deny such
Deed of Trust are hereby incorporated into this Agreement by this reference.
Page 5 of 36
1 1 Eligible Costs means the HOME Program eligible property acquisition costs
funded by the Loan, consistent with the Budget attached as EXHIBIT'0", allowable under
24 CFR Part 92, as speed in 24 CFR 92.205 and 92.206, and not disallowed by 24 CFR
92214, provided, however, that costs incurred in connection with any activity that is
determined to be ineligible under the Program by HUD or the CITY shall not constitute
Eligible Costs.
1.13. Event of Defeo H shall have the meaning assigned to such term under Section
11.1 hereunder.
1.14. Family has the same meaning given that term in 24 CFR 5403.
1.15. Hazardous Matenals means any hazardous or toxic substances, materials,
wastes, pollutants or contaminants which are defined, regulated or listed as "hazardous
substances" 'hazardous wastes," "hazardous materials," "pollutants, "'contaminants" or
"toxic substances" under federal or state environmental and health safely laws and
regulations, including without limitation, petroleum and petroleum byproducts flammable
explosives, urea formaldehyde Insulation, radioactive materials, asbestos and lead.
Hazardous Materials do not include substances that are used or consumed in the normal
course of developing, operating or occupying a housing project, to the extent and degree
that such substances are stored, used and disposed of in the manner and in amounts that
are consistent with normal practice and legal standards.
1.16. HOME Investment Partnerships Furfj= (also retained to in this Agreement as
HOME Funds) means the HOME Program monies constituting the Loan, in an amount not
to exceatl the sum of One Hundred Sixty Thousand Dollars and 00/100 ($160,000.00) used
for HOME Program eligible property acquisition costs.
1.17. HousehoM means one or more persons occupying a Unit in the proposed
Affordable Housing Project.
1.18. HUD means the United States Department of Housing and Urban
Development.
1.19. Loan means the assumable Project Loan of HOME Funds, in Na total amount
not to exceed the lesser of the sum of One Hundred Sixty Thousand Dollars and 001100
($160,000 00) and the aggregate HOME Program per unit cap (24 C.F.R. 92.250) for the
Mo (2) HOME -assisted Units as determined by the CITY made available by the CITY ro the
Project pursuant to this Agreement, as more specifically described in the Budget and In the
Promissory Notes attached hereto as Exhibits "Fi' and "72'. The Loan shall he allocated
$78,400.00 to APN: 481-39046T and $81,600.00 b APN: 481-390-07T, and shall be
payable in accordance with the terms of the Notea, shall be secured by a deed of trust on
each parcel constituting the Property, and shall be subject to the Rider to Deed of Trust
attached to the Exhibits 'F1"and "F2' Exemplar Nates. As to each such Note and Deed of
Trust there shall be forgiven from the principal due thereunder the sum of $33,400.00
(APN: 481-390467) and $36,600.00 (APN: 481-390471) upon conveyance of a
completed Unit to a Low Income homebuyer through purchase escrow, ee long as
DEVELOPER is not than In default of this Agreement and confirms said reduction in
principal In a writing noticed to the CITY in the manner provided herein.
Page 6 of 36
1.20. Loan Documents are collectively this Agreement, the Note(s), Deed(s) of
Trust, Declarabon(s) of Restrictions and all related documentslnstrumems as they may be
amended, modified or restated from time to time along with all exhibits and attachments
thereto, relative to the Loan.
1.21. Low-Income Families means families whose annual income does not exceed
sixty percent (60%) of the median income for the Fresno, California area as detemlined by
HUD, except as HUD may establish income ceilings higher or lower than 60% of the
median for the area on the basis of HUD findings that such variations are necessary.
1.23. Note or Notes means) the assumable, partially forgivable Project Note on
each parcel, substantially in the form attached hereloencorporated herein as Exhibit "P in
principal amount of $78,400.00 allocated to APN: 481-390AST and $81,600.00 allocated to
APN 481-39047T, given by DEVELOPER as promissor, in favor of the CITY, as
promissee, evidencing the Loan and performance of the affordability and other covenants
and restrictions set forth In this Agreement, secured by a standard Deed of Trust creating a
Ion upon the Property, naming the CITY as beneficiary and provided to the CITY no later
than the date of initial disbursement hereunder, as well as any amendments to,
modifications of and restatements of said Note consented to by CrrY,
1.25. Problem Income has Ne meaning provided in the HOME program including
24 CFR 92.503.
1.26. Project means the two (2) single -family low-income Affordable Housing Units
to be constructed, marketed, and sold as Low-Income Housing, and related on-site and off-
site improvements all as described in the Project Description and Schedule attached hereto
and incorporated herein as EXHIBIT "B', upon the Property as more particularly described
in EXHIBIT -A".
1.27. Proiea Completion Date means the data that the CITY shall have determined
that the Project has reached completion in accordance with this Agreement. The Project
Completion Date for this project is October 1, 2011.
1.28. Project Schedule means the schedule for completion of the Project Included
within the EXHIBIT W Project Description and Schedule, consistent with the above Project
Completion Date.
1.29. Prove means the vacant. unimproved CITY-owned HOME Program eligible
property located at 4979 E. Garrett Avenue (APN: 481-390-06T) and 4983 E. Garrett
Avenue (APN: 461-39047T), Fresno, California, more specifically described in the
attached EXHIBIT "A to be transferred in fee to the DEVELOPER from the CITY prior to
Commencement of Project Construction through escrow and developed as a low-income
housing project as provided herein.
1.30. Unit means each of the two (2) single -family homes developed upon the
Property and preserved as Affordable Housing for the duration of the Affordability Period.
Page 7 of 36
ARTICLE 2. TRANSFER OF AFFORDABLE PROJECT PROPERTY
2.1 Purchase and Sale. The CITY agrees to convey the Affordable Project
Property to DEVELOPER, and DEVELOPER agrees to accept conveyance of fire
Affordable Project Property from the CRY, upon the terms and wrmltions set forth in this
Agreement.
2.2 Purchase Pnce- The fair market purchase price for the Affordable Project
Property shall be One Hundred Sixty Thousand Dollars and OOH00 ($180,000.00)
("Purchase Price'). DEVELOPER and the CITY agree that the Purchase Price is to be
based upon the August 16, 2006 appraised value of the Affordable Project Property. The
Purchase Price shall be paid as follows:
A. Within fifteen (15) days after the effective data of this Agreement the
parties shall open an escrow (the "Esci owl with Chicago Title Company, 7330 N. Palm,
Suite 101, Fresno, CA 93711 (Attention Cherie Zuniga at 559-451-3700). At the close of
escrow the DEVELOPER shall deliver two (2) Notes to the City in the full amount of the
Purchase Price as payment for each parcel constituting lite Property.
B. DEVELOPER shall pay all escrow fees and dosing vests, including
document preparation fees and recording fees, and the premium for the buyer's policy of
title insurance.
2.3 Condition of Title. Upon the Closing, CITY shall convey to DEVELOPER
marketable and insurable fee simple title to Me Affordable Project Property by duly
executed and acknowledged standard Title Company form grant deeds) ("Deed').
Evidence of delivery of marketable and insurable fee simple title shall be the issuance by
Chicago Title Company (the "Tdle Company") to DEVELOPER of CLTAAALTA Owners
Policy of Title Insurance in the amount of the Purchase Price, insuring fee simple title to the
Affordable Project Property, the DEVELOPER will accept title subject to exceptions through
11 shown on those certain Preliminary Title Reports prepared by the Title Company under
Order No. 0915025907-13-JAH Dated September 10, 2009 (the "Title Policies").
2.4 Conditions Precedent to Closing. The following are conditions precedent t0
DEVELOPER's obligation to purchase Has Affordable Project Property, accept the Loan
and perform its obligation under this Agreement (the 'Affordable Project Conditions
Precedent"). The Affordable Project Conditions Precedent are intended solely for the
benefit of DEVELOPER and may be waived only by DEVELOPER in writing. In the event
of the failure of the satisfaction of any of the Affordable Project Conditions Precedent,
DEVELOPER shall have the right, but not the obligation, to terminate the Agreement with
respect to Me Affordable Project.
A. DEVELOPER shall have received the unconditional commitment of
Title Company to issue the Title Policy upon the Closing in the forth approved by
DEVELOPER as buyer.
S. DEVELOPER shall have approved but amount of the construction
flnancing required for the development of the Affordable Housing Project.
Page 8 of 36
C. DEVELOPER shall have given written notice to the CITY whin fifteen
If 5) days after the effective date of this Agreement that It has inspected the Affordable
Project Property and shall accept the Property in AS IS condition. If DEVELOPER, after its
inspection of the Affordable Project Property and review of an environmental reports
disapproves of the Affordable Project Property's environmental or other conditions or
aspect of the Affordable Project Property or Affordable Project In hs We and absolute
discretion, then DEVELOPER may terminate the Agreement by written notice to the CITY
and without liahility for breach or otherwise.
D. The CITY shall have received all necessary approvals from HUD,
received! the HOME funds and shall be irrevocably committed to fund Me Loan at Closing.
E. DEVELOPER has submitted the Finance Plan to the CIT' and the
CITY has approved the Finance Plan.
2.5 Access to the ProserN. DEVELOPER shall be permitted m enter the
Affordable Project Property during reasonable daylight hours, upon DEVELOPER'S
satisfaction of liability insurance requirements of this Agreement. DEVELOPER will give
Me CITY 24 hourswritten notice of its intent to enter onto the Affordable Project Property.
2.6 Joint Escrow Instructions. This Agreement, when signed by both parties and
deposited wdh the Escrow holder will be the partiesjoint escrow inslrucbons.
DEVELOPER and the CITY will sign any other form instructions required by Escrow holder.
CITY and DEVELOPER will deposit all instruments, documents, money, and other items
with the Escrow holder that are: (i) identded in this Agreement; or (ii) required by the
Escrow holder to effect the closing. Eimer party may tender supplemental escrow
instructions consistent with this Agreement.
2.7 Escrow Clos'no. The parties intend for me Closing to take place on a date
selected by Developer but in no event later than March 30, 2010 (the "Affortlable Project
Closing Date').
A. At or before the Closing, CITY shall deliver ro Escrow holder or
DEVELOPER the following:
(i) a duly executed and acknowledged Deed(s);
(it) any other instruments, records or correspondence called for
hereunder which have not previously been delivered.
B. At of before Closing, DEVELOPER shall deliver to Escrow holder or
CITY me following:
(i) duly executed (and acknowledged, where required) Loan
Documents; and
(ii) any other instrument, records or correspondence called for
hereunder which have not previously been delivered.
Page 9 of 36
C. As a further condition to close, DEVELOPER shall have received the
unconditional commitment of Title Company to issue the Title Policy upon the Closing in
the form approved by DEVELOPER as buyer.
2.6 Possession. Possession of the Affordable Project Property shall be
delivered to DEVELOPER on the Closing Date free of any and all other tenancies and/or
occupancy rights. The parties acknowledge and agree that each has inspected the
Property and determined R is vacant and unoccupied.
ARTICLE 3. TERMS
3.1 Loan of HOME fund . The CITY agrees to convey the Property to the
DEVELOPER, and to accept two (2) Notes from the DEVELOPER in fine full amount of the
Purchase Price, all under the terns and conditions provided in this Agreement. The Loan
shall be assignable as provided in this Agreement and the Ni
32 Loan Documents- The DEVELOPER shall execute and deliver to the CITY
the Loan Documents including the f1cm(s), and notarized Deeds) of Trust, for recordation
against the Property.
3.3 Term of Agreement. This Agreement is effective upon the date of execution
and shall remain in force for the duration of the longer of the Affordability Period and the
Loan unless earlier terminated as provided herein. It is understood and agreed upon,
however, that if for any reason this Agreement should be terminated in whole or in part as
provided hereunder, without default, by DEVELOPER prior to Property sale to
DEVELOPER hereunder, the CITY agrees to record a Notice of Cancellation regarding this
Agreement, upon the written request of DEVELOPER.
3.4 Loan Repament and M to tv. The Loan will be due and payable in
accordance with the Ncte(s) and not later then the maturity dam provided in the Note(s).
3.5 Incorporation of Documents. The DEVELOPER proposal dated February 3,
2009 and the CITY Council approved Minutes of 4jr. l l , 2010, approving this Agreement.
the Loan Documents, the Act and HUD regulations at 24 CRF Part 92, and all exhibits,
attachments, documents and instruments referenced herein, as now in effect and as may
be amended from time to time, constitute part of this Agreement and are incorporated
herein by reference. All such documents have been provided to the parties herewith or
have been otherwise provided to/procure i by the parties and reviewed by each of them
prior to execution hereof.
3.6 Covenants of DEVELOPER. The DEVELOPER for itself and its
agents/assigns covenants and agrees to comply with all the terms and conditions of this
Agreement and the requirements of 24 CFR Part 92.
ARTICLE 4. GENERAL REPRESENTATIONS AND WARRANTIES OF DEVELOPER
4.1 Existence and Oualfcation The DEVELOPER represents and warrants as
of the date hereof, that DEVELOPER is a duly organized California Corporation.
DEVELOPER has the requisite power, right, and legal authority to execute, deliver and
Page 10 of 36
perform its obligations under this Agreement and has taken all actions necessary to
authorize the execution, delivery, performance, and observance of its obligations under this
Agreement. This Agreement, when executed and delivered, shall constitute the legal, valid
and binding obligations of the DEVELOPER enforceable against the DEVELOPER In
accordance with its respective terms, except as such enforceability may be limited by (a)
bankruptcy,insolvency,fraudulent,conveyance, reorganization, moratorium, or other
similar laws of general applicability affecting the enforcement of creditorsrights generally,
and (b) the application of general principles of equity without the joinder of any other party.
4.2 No Litigation Material to Financial Corsi The DEVELOPER represents
and warrants as of the dale hereof that, except as disclosed to and approved by CITY in
writing, no litigation or administrative proceeding before any court or govemmental body or
agency is now pending, nor, to the best of DEVELOPER'S knowledge, is any such Ikigation
or proceeding now threatened, or anticipated against DEVELOPER that, if adversely
determined, would have a material adverse effect on the financial condition, business, or
assets of DEVELOPER or on the operation of the Project.
4.3 No Conflict of Interest. The DEVELOPER represents and warra s as of the
date hereof that no ofFicial, officer, agent, or employee of the CITY directly or indirectly
owns or controls any Interest in DEVELOPER, and no person, directly or indirectly awning
or controllingany interest in DEVELOPER, is an official, officer, agent, or employee Mthe
CITY.
44 No Llan Bar. The DEVELOPER represents and wartime as ofthe date
hereof that the execution, delivery, performance, or observance by DEVELOPER of this
Agreement will not. to the best m DEVELOPER'S knowledge, materially violate or
contravene any provisions of. (a) any existing law or regulation, or any ower m decree of
any court, governmental authority, bureau, or agency; (b) governing documents and
instruments of DEVELOPER; or (c) any mortgage, indenture, security agreement, contract,
undertaking, or other agreement or instrument to which DEVELOPER is a party or that is
binding on any of its properties or assets, the result of which would materially or
substantially impair DEVELOPER'S ability to perform and discharge its obligations or its
ability to complete the Project under this Agreement.
4.5 No Violationof Law. The DEVELOPER represents and warrants as&Me
date hereof that, to Me beat of the DEVELOPER'S knowledge, this Agreement and the
operation of the Project as contemplated by DEVELOPER, do not violate any existing
federal, state, or local laws or regulations.
4.6 No Lliaation Material to Pro'ect. The DEVELOPER represents and warrants
as of the date hereof that, except as disclosed to, and approved by the CITY In writing,
there is no action, proceeding, or investigation now pending, or any basis therefor known or
believed to exist by DEVELOPER that questions the validity of this Agreement, or of any
action to be taken under this Agreement, that would, if adversely determined, materially or
substantially impair DEVELOPER'S ability to perform and observe its obligations under this
Agreement, or that would either directly or indirectly have an adverse effect on or impair the
completion of the Pmjed.
4.7 Alisgrance of Governmental Approvals and L' . DEVELOPER
Page 11 of 36
represents and warrants, as of the date hereof, that DEVELOPER has obtained and, to the
best of DEVELOPER'S knowledge, is in compliance with all federal, state, and local
governmental reviews, consents, authorizations, approvals, and licenses presently required
by law to he obtained by DEVELOPER for the Project as of the date hereof.
ARTICLE 5. HOME PROGRAM REPRESENTATION AND WARRANTIES BY
DEVELOPER
DEVELOPER, for itself and its development team, represents and warrants that
5.1 Universal Design Ordnance. The design and construction requirements of
the CITY Universal Design Ordinance No. 2008-53 requirements:
I. No step accessible entryway.
ii. All doorways and passageways at least 34 inches when.
iii. One downstairs Tex mom" antl accessible bathroom with
reinforcements for grab bars.
iv. Six square feet of accessible kitchen counter space.
v. Hallways at least 42 inches wide.
5.2 Affirmative Markebng. The DEVELOPER warrants, covenants and agrees
that it shall comply with all affirmative marketing requirements, including without limitation,
those set out at 24 CFR 92.350, 24 CFR 92.351, in order to provide information and
otherwise attract eligible persons from all racial, ethnic and gentler groups in Me housing
market in the sale of Project Units. DEVELOPER shall be responsible for complying with
the CITY'S "Affirmative Marketing Policy' document, incorporated herein, as amended from
time to time. DEVELOPER shall maintain records of actions taken to affirmatively market
units constructed In the future, and to assess the results of these actions.
5,3 Availab'Ihv of HOME Funds, The DEVELOPER understands and agrees that
Me availability of HOME Funds is subject to Me control of HUD, or other federal agencies,
and should said Funds be encumbered, withdrawn or otherwise made unavailable to the
CITY, whether earned by or promised to DEVELOPER, and/or should CITY in any fiscal
year hereunder fail to allocate said Funds, the CITY shall not provide said Funds unless
and until they are made available for payment W the CITY by HUD and the CITY receives
and allocates said Funds. No other funds owned or controlled by the CITY shall be
obligated underthis Agreement.
5.4 Compliance with Amason". The DEVELOPER warrants, covenants and
agrees that, in accordance with the requirements of 24 CFR 92.254 and 24 CFR Part 85,
upon any uncured default by DEVELOPER within the meaning of Article 11 of Nis
Agreement, the CITY may suspend or terminate this Agreement and all other agreements
with DEVELOPER without waiver or limitation of rightsRemedies otherwise available to the
CITY.
5.5 Conflict of Interest. The DEVELOPER warrants, covenants and agrees that it
shall comply with the Conflict of Interest requirements of 24 CFR 92.358 including, wdhout
limitation, that no officer. employee, agent or consultant of DEVELOPER may oci a
Project Unk. DEVELOPER understands and acknowledges that no employee, agent,
Page 12 of 36
consultant, aRcer or elected official or appointed official of the CITY, who exercises or has
exercised any functions or responsibilities with respect to the Project, or who Is in a position
to participate in a decision making process or gain inside information with regard to these
activities, may obtain a financial interest or benefit from the Project, or have an interest in
any contract, subcontract or agreement with respect thereto, or the proceeds thereunder,
either for him or herself or for anyone with which that person has family or business ties,
during his or her tenure or for one year thereafter. To the extent provided at 24 CFR
92.356(f), no owner, developer or sponsor of the Project. or offer, employee, agent or
consuttent thereof, may occupy a Project Und.
5.6 Cpnstructon Standards. DEVELOPER shall construct the proposed housing
units assisted under this Agreement In compliance with all applicable local codes,
ordinances and zoning requirements in effect at the time of issuance of Certification of
Completion. In the absence of a local code for construction, DEVELOPER agrees to
comply with the applicable standards IdentRied in 24 CFR 92.251.
5] Covenants and Restrictions to Run with the Land. The CITY and
DEVELOPER expressly warrant, covenant and agree to ensure that the covenants and
restrictions set forth in this Agreement are recorded and will con with the land, provided,
however, that, consistent with the Loan Documents, CITY may release mid covenants and
restnchons only upon recapture of all HOME funding allocated to the Units) by Use CITY.
DEVELOPER further warrants, covenants and agrees to ensure that the covenants and
restrictions set forth herein shall con in favor of the CITY.
A. The CITY and DEVELOPER hereby declare their understanding and
Intent that the covenants and restrictions set forth herein directly benefit the land (a) by
enhancing and increasing fire enjoyment and ownership of the proposed Project by certain
Low -Income Families, and (b) by making possible the obtaining of advantageous financing
for construction.
B. The DEVELOPER covenants and agrees that it shall cause the two (2)
of the Project Units to be sold as Affordable Housing to Low -Income Families.
C, Without waiver or limitation, the CITY shall be entitled to injunctive or
other equitable relief against any violation or attempted violation of any covenants and
restrictions, and shall, in addition, be entitled to damages available under law or contract
for any injuries or losses resulting from any violations thereof,
D. The failure or delay at any time of the CITY or any other person
entitled to enforce any such covenants or restrictions shall in no event be deemed a waiver
of the same, or of Me right to enforce the same at any time or from time to time thereafter,
or an estoppel against Me enforcement thereof.
5.8 Displacement of Persons. The DEVELOPER warrents. covenants and
agrees Mat pursuant to 24 CFR 92.353, it will fake all reasonable steps to minimize the
displacement of any persons (families, individuals, businesses, nonprofit organizations and
farms). The parties acknowledge and agree Mat the Property is vacant and unimproved.
5.9 Initial Income Certification. The DEVELOPER warrants, covenants and
Page 13 of 36
agrees that it shall comply with the procedures for income determinations at 24 CFR
92.203. DEVELOPER shall obtain, complete and maintain on file, immediately prior to
initial occupancy, income certifications from each of the two (2) Affordable Project Unit's
Household. DEVELOPER shall make a good faith effort to verify that the income provided
by an applicant or occupying Household in an income certification Is accurate by taking one
or more of the following steps as part of the venfil lion process: (1) obtain a pay stub for
the most recent pay period; (2) obtain an income verification form from the applicant's
current employer, (3) obtain an income verification forth from the Social Security
Administration and California Department of Social Services tithe applicant receives
assistance from either of such agencies', (4) obtain an income fax return for the most recent
tax year, or (5) if the applicant is unemployed and has no such tax return, obtain another
form of independent verification. Copies of household income certification and verification
must be available for review and approval by the CITY prior to the close of escrow and the
transfer of title to the low-income homebuyer. DEVELOPER further warrants. covenants
and agrees that it shall cooperate with the CITY in the CITY'S income
cedification/affordability monitoring activities at the time subsequent to initial transfer of the
Unit Property.
5.10 Lead -Based Paint. The DEVELOPER warrants, covenants and agrees that it
shall comply with all applicable requirements of the Lead -Based Paint Poisoning
Prevention Act of 42 U.S.C. 4821 at seq.. 24 CFR Part 35 including the HUD 1012 Rule,
and 24 CFR 982 4010). including any amendments thereto, in the Affordable Housing
Project. These requirements apply to all units and common areas in the Affordable
Housing Project. DEVELOPER shall incorporate or cause incorporation of this provision in
all contracts and subcontracts for work performed on Me Project, which involve the
application of paint. DEVELOPER shall be responsible for all disclosure, inspection.
testing, evaluation, control and abatement activities.
5.11 Minority Outreach Activities. The DEVELOPER warrants, covenants and
agrees Nat it shall comply with all federal laws and regulations described in Subpart H of
24 CFR Part 92, including, without limitation, any requirement that DEVELOPER comply
with the CITY'S minority outreach program.
5.12 Other Lewis and Regulations. The DEVELOPER warrents, covenants and
agrees that, in addition to complying with the federal laws and regulations already cited in
this Agreement, DEVELOPER has reviewed and shell comply with, all other federal laws
and regulations that apply to the HOME Program, including, witbeut limitation,
requirements of 24 CFR 58.8 and Me Flggtl Disaster Protection Act of 1973, as amended
(42 U.S.C. 4001-0128) and the following:
A, The DEVELOPER does not intend to use any financing that is secured
by a mortgage insured by HUD in connection with Me Project as part of its acquisition
and/or construction of this Project.
B. The Project is not located in a tract identified by the Federal
Emergency Management Agency as having special flood requirements.
C. The Project requirements, Subpart F of 24 CFR Part 92, as applicable
and in accordance with the type of Project assisted, including. but not limited to, the lima on
Page 14 of 36
per-unit subsidy amount at 24 CFR 92.250,
D. The property standards at 24 CFR 92.251,
E. The Project "Labor° requirements, as applicable, of 24 CFR 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276e -276a-7), as
supplemented by Department of Labor regulations (29 CFR Part 5).
F The provisions of Section 102 and 107 of the Contract Work Hours and
Safety Standards AG (40 D.S.D. 327-333), as supplemented by Department of Labor
Regulations (29 CFR Part 5), in regards to the construction and management of the
proposed Projed_
G. The DEVELOPER antl its contractors, subcontractors and service
Providers for the Project, shall comply with all applicable local, state and federal
requirements concerning equal employment opportunity, including compliance with EO.
11246. "Equal Employment Opportunity; as amended by E.O. 11375, "Amending
Executive Order 11246 Relating to Equal Employment Opportunity," and as supplemented
by regulations at 41 CFR part 60, "Office of Federal Contract Compliance Programs, Equal
Employment Opportunity, Department of Labor."
H. The provisions of the Copeland "Anti -Kickback" Act (18 U.S.C. 874), as
supplemented by Department of Labor regulations (29 CFR part 3, "Contractors and
Subcontractors on Public Building or Public Work Financed in Whole or In Part by Loans or
Grants from the United Slates").
I. The provisions of the Clean Air Act (42 U.S.C. 7401 et seq.) and the
Federal Water Pollution Control Act (33 U.S.C. 1251 in seq.), as amended
1352). J. The provisions of the Byrd Anti -Lobbying Amendment (31 U.S.C.
K. The provision of E.Os 12549 and 12689, "Debarment and
Suspension,' as set forth at 24 CFR part 24.
L. The provisions of the Drug -Free Workplace Act of 1988 (42 U.S.C.
701), in accordance with the Act and with HUD's rules at 24 CFR part 24, subpart F.
M. Title 8 of the Civil Rights Act of 1968 PL. 90-264,
N. Executive Order 11063 on Equal Opportunity and Housing.
O. Section 3 of the Housing and Urban Development Act of 1968.
P. The Housing and Community Development Act of 1974.
O. Clean Water Requirements 33 U.S.C. 1251.
R. Civil Rights Requirements, 29 U.S.C. Section 623,42 U.S.0 Section
Page 15 of 36
2000, 42 U.S,C Section 67D2, 42 U.S.C. section 12112, 42 U.S.0 Section 12132, 49
U.S.C. Section 5332, 29 CRF Part 1630, 41 CFR Parts 60 et. seq.
5.13 Religious OrtutinimDons and Faith Based! Ar 'C . DEVELOPER warrants,
covenants and agrees that It shall not engage in any prohibited activities described in 24
CFR 92.257.
5.14 Recording Requirements. The DEVELOPER warrants. covenants and agrees
that it shall submit performance reports to the CITY as required hereunder. Furthermore,
the DEVELOPER agrees to provide, at the sate cost of the DEVELOPER, annual audited
Financial Statements for the Project expenses and ongoing financial transactions which
occur as a result of this Agreement as required hereunder. The DEVELOPER agrees to
account for the expenditure of HOME Funds using generally accepted accounting
principals, which financial documentation shall be made available to the CITY and HUD
upon their respective written request(s).
5.15 Housing Affordability The DEVELOPER warrants, covenants and agrees
that the Project will meet the Affordable Housing, income targeting and other requirements
of 24 CFR 92.254 upon sale of the two (2) homes to eligible Low-Income homebuyers.
except upon foreclosure by a lender or transfer in lieu of foreclosure following default under
a Dead of Trust
5.16 Tenn nated Pro solids). The DEVELOPER understands and agrees that. if
the Project is terminated before completion, either voluntarily or otherwise, such constitutes
an Ineligible activity and the CITY will not W required to provide any further HOME
Program assistance funding to the Project Units and the City may seek available relief.
ARTICLE 6. COVENANTS AND AGREEMENTS OF DEVELOPER.
The DEVELOPER covenants and agrees to the following, for the entire term of the
Agreement.
6.1 Andalusia Repair and Maintenance The DEVELOPER during its time on title
shall maintain the Projects and Property in compliance with all applicable codes, laws, and
ordinances.
62 Affordable Housing The DEVELOPER covenants and agrees that the two
(2) Project Units ffiashall be sold only to Low-income families to constitute Affordable Housing,
as variously provided at 24 CFR 92254.
6.3 Compliance With Environmental La . The DEVELOPER shall cause the
Project to be in compliance with, and not to cause or permit the housing project to be in
violation of, any environmental law, role, regulation, ordinance, or statute. Although the
CITY will utilize its employees and agents for regular inspection and testing of the eligible
Property, the DEVELOPER agrees that. if the CITY has reasonable grounds to suspect any
such violation, the DEVELOPER shall be entitled to thirty (30) days' notice and opportunity
to cure such violation. If the suspected violation is not cured, the CITY shall have the right
to retain an independent consultant to inspect and test the eligible Property for such
violation. If a violation is discovered, the DEVELOPER shall pay for the reasonable cost of
Page 16 of 36
the independent consultant,
Additionally, the DEVELOPER agrees'
A. That the CITY shall not be directly or indirectly involved with the
inspection, testing, removal or abatement of asbestos or other hazardous or toxic
chemicals, materials, substances, or wastes and that all cost, expense and liability for such
work shall be and remain solely with the DEVELOPER;
B. Not to transport to or from the proposed project site(s), or use,
generate, manufacture, produce, store, release, discharge, or dispose of on, under, or
about the project siods), or surrounding real estate, or transport to or from the project
site(s), or surrounding real estate, any hazardous or toxic chemicals. materials, substance,
or wastes or allow any person or enthy to do so except in such amounts and under such
terms and conditions permitted by applicable laws, rules, regulations, ordinances, and
statutes;
C. To give prompt written notice to me CITY of the following'
1. Any proceeding or inquiry by any governmental authority with
respect to the presence of any hazardous or toxic chemicals, materials, substance, or
waste in or on the eligible Property or the surrounding real estate or the migration thereof
from or to other property;
2. All claims made or threatened by any third party against the
DEVELOPER or such properties relating to any loss or injury resulting from any hazardous
or toxic chemicals, materials, substance, or waste; and
3. The DEVELOPER'S discovery of any occurrence or condition
on any real property adjoining or in the vicinity of such properties that would cause such
properties or underlying or surrounding real estate or part thereof to be subject to any
restrictions on the ownership, occupancy, transferability, or use of the property under any
environmental law, rule, regulation, ordinance or statute.
D. To indemnify, defend, and hold the CITY harmless from any and all
claims, actions, causes of action, demands, judgments, damages, injuries. administrative
orders, consent agreements, orders, liabilities, penalties, costs, expenses (including
attorney's fees and expenses), and disputes of any kind whatsoever arising out of or
relating to Me DEVELOPER or any other part's me or release of any hazardous or toxic
chemicals, materials, substance, or wastes on the eligible Property regardless of cause or
origin, including any and all liability arising out of or relating to any investigation, site
monitoring, containment, cleanup, removal, restoration, or other remedial work of any kind.
6.4 Compliance With Laws. The DEVELOPER shall promptly and
faithfully comply with, confomr to and obey all present and future federal, state and local
statutes, regulations, rules, ordinances and other legal requirements applicable by reason
of this Agreement or otherwise to the Project. The DEVELOPER acknowledges that the
use of HOME Funds subjects the Project to extensive federal regulation and covenants and
agrees that it shall comply with, conform to and obey (and take such steps as are required
Page 17 of 36
of the DEVELOPER to enable the CITY to comply with, conform to and obey) all federal
statutes. regulations, miss and policies applicable to the Program and the Project. The
CITU and DEVELOPER acknowledge that (i) pursuant to 24 CFR 92.354 a contract for the
construction (new construction) of housing that includes fewer than 12 units assisted with
HOME funs need not contain a provision requiring the payment of the wages prevailing in
the locality as predetemrioed by the Secretary of Labor pursuant to the Davis -Bacon Act
(40 U.S.C. 276a -276a-5), to all laborers and mechanics employed in the development of
any part of the housing, or the overtime provisions, as applicable, of the Contract Work
Hours and Safety Standards Act (40 U.S.C. 327-332), and (i) pursuant to Cal. Labor Code
1720 the public paumpatlan in the Project that would otherwise meet the criteria of a
public work for which State prevailing is required under Cal. Lab. Code 1720 at seq. is
exempt where the public funding is in the form of below-market interest rate loan for a
project in which occupancy of at least 40 percent of the units is restricted for at least 20
years, by deed or regulatory agreement, to individuals or families earning no more that 80
percent of the area median income. Nonetheless DEVELOPER shall be solely responsible
for determining and effectuating compliance. Notwithstanding anything to the contrary
contained herein, nothing in this Agreement shall be construed as imposing any
independent prevailing wage requirements that are different from those imposed by
applicable federal or state law.
6.5 Existence, Qualification and Authority The DEVELOPER shall provide to
the CITY any evidence required or requested by the CITY to demonstrate the continuing
existence. qualification, and authority of the DEVELOPER to execute this Agreement and
to perform the acts necessary to carry out the Project.
6.6 Financial Statements and Add'Rs. The DEVELOPER, as a recipient of federal
financial assistance, is required to comply with the provisions of the Single Audit Act of
1964 (31 U.S.C. Sections 7501 et seq.), as amended. Annually, within one hundred and
eighty (160) days following: 1) the and of fiscal years) in which the HOME Funds are
disbursed hereunder, and 2) the end of fiscal years) in which this contract shall terminate,
and otherwise upon the CITY'S, written request during the term of this Agreement.
DEVELOPER, an its sole cost and expense shall submit to the CITY:
A. Audited annual financial statements Nat are current, signed, and
prepared according to generally accepted accounting principles consistently applied
(except as otherwise disclosed therein); and
B. Audited Financial Statements covering the income and expenses, and
the financial transactions for the Project during the prior fiscal year.
6.7 linsidection and Audit of Books Reggrigg and Documenth. The DEVELOPER
shall be accountable to the CITY for all HOME Funds disbursed for this project pursuant to
this Agreement. Any duly authorized representative of the CITY, the State, or HUD shall,
at all reasonable times, have access to and the right to inspect, copy, make excerpts or
transcripts, audit, and examine all books of accounts, records, files and other papers or
property, and other documents of the DEVELOPER pertaining to the Project or all matters
covered In this Agreement and for up to six (6) years after the expiration or teonination of
this Agreement.
Page 18 of 36
A. The DEVELOPER will maintain books and records for the Project
using generally accepted accounting principles. The DEVELOPER agrees to maintain
books and records that accurately and fully show the date, amount, purpose and payee of
all expenditures financed with HOME Funds and W keep all invoices, receipts and other
documents related to expenditures financed with HOME Funds for not less than six (6)
years after the expiration or termination of the Agreement. Books and records must be
kept accurate and current. For purposes of this section, "books, records and documents"
include, without limitation; plans, drawings, specifications, ledgers, journals, statements,
contracts/agreements, funding information, funding applications, purchase orders,
invoices, loan documents. computer printouts, correspondence, memoranda, and
electronically stared versions of the foregoing. This section shall survive the termination of
this Agreement.
B. The CITY may audit any conditions relating W this Agreement at the
CITY'S expense, unless such audit shows a significant discrepancy in Information reported
by the DEVELOPER in which case the DEVELOPER shall bear the wet W such audit. The
DEVELOPER shall also comply with any applicable audit requirements of 24 CFR 92.50(1.
This section shall survive the termination of this Agreement.
C- The DEVELOPER will cooperate fully with the CITY, the State, and
HUD In connection with any interim or final audit rotating to the Programs and the Project
that may be performed relative to the Performance of this Agreement.
6.8 Inseeclion of Property. Any duty authorized representative of the CITY, the
State, or HUD shall, at all reasonable times, have access and the right to inspect the
Property until completion of the Project.
6.9 No Other Lens. The DEVELOPER shall not create or incur, or suffer to be
created or incurred or W exist, any additional mortgage, pledge, encumbrance, lien,
charge, or other security interest of any kind on the eligible Property, other than those
related to construdion or pre -development loans In relation to the Affordable Housing
Project consistent with the attached EXHIBIT"D" Protect Budget, without the prior wrdten
consent of the CITY.
6.10 Nondiscrimination. The DEVELOPER shall comply with and cause any and
all contractors and subcontractors to comply with any and all federal, stale, and local laws
with regard to illegal discrimination, and the DEVELOPER shall not illegally discriminate
against any Persons on amount W race, religion, sex, family status, age, handicap, or place
of national origin in Its Performance of this Agreement and the completion of the Project.
6.11 Ownership. Except as required in pursuit hereof, the DEVELOPER shall not
sell, lease, transfer, assign or otherwise dispose of all or any material part of any interest it
might hold in the Property or the Project without the prior written consent of the CITY,
Mich consent shall not be unreasonably withheld or delayed.
6.12 Payment of Liablit es. The DEVELOPER shall pay and discharge in the
ordinary course of its business all material obligations and liabilities, the nonpayment of
which could have a material or adverse impact on as financial condition, business, or
assets or on the operation of the Project(s), except such obligations and liabilities that have
Page 19 of 36
been disclosed to the CITY in writing and are being contested in good faith
8.13 Report of Events of Default. The DEVELOPER shall promptly give written
notice to the CITY upon becoming aware of any Event of Default under this Agreement.
ARTICLE 7. HOME PROGRAM FUNDS
Without waiver of limitation, the parties agree as follows, regarding HOME Funds:
7.1 HOME Program Funds The DEVELOPER warrants, covenants and agrees
that HOME Program Loan Funds shall be applied to pay for HOME eligible Project Property
acquisition costs to finance the sale of the Property to DEVELOPER through an escrow
account established by with Chicago Title Company as provided herein. The CITY'S
obligations shall in no event exceed the HOME Funds amount specified in this Agreement.
7.2 Conditions Precedent t Property SalThe CITY shall not be obligated to
convey the Property to DEVELOPER or take any other action under this Agreement unless
the following conditions are satisfied:
A. There exists no Event of Default as provided in Article 11, nor any act,
failure, omission or condition that with the passage of time or the giving of notice or both
would constitute an Event of Default.
B. The DEVELOPER, by signing this Agreement, commits to construct
two (2) Units on the Property and to sell each Unit to a Low Income homebuyer that has
submitted evidence to the CITY of a primary home loan sufficient to purchase the Unit If
the CITY determines Mat said funds are not sufficient to purchase the Unit, the
DEVELOPER or the individual homebuyer(s) may satisfy this condition by depositing the
amount of the deficiency with the CITY or escrow account, as applicable.
C, The CITY has approved the requested eligible Property costs
D. The DEVELOPER has acquired insurance coverage and delivered to
the CITY evidence of insurance as required in Article 10.
E, Upon CITY'S reasonable request, the DEVELOPER has provided the
CITY copies of Project surety (payment and performance) bonds.
R The DEVELOPER is current with its compliance of all reporting
requirements set forth in this Agreement.
G. Upon CITY'S reasonable request, the DEVELOPER has delivered a
Unit construction schedule satisfactory to Me CITY.
H. The City has received the Certification required by this Article 7 of this
Agreement.
7.3 Request for Crack of HOME Promam Funds throuah Escrow. The
DEVELOPER shall request Mat the CITY convey the Property through escrow as a form of
Page 20 of 36
disbursement of HOME funds. The DEVELOPER shall only request a maximum of One
Hundred Sony Thousand and 00/100 ($160,000.00) In HOME Program assistance to
finance acquisition and sale of the Property, or as otherwise agreed to by CITY. All
requests for HOME funds shall be accompanied with the Certification required by this
Article 7 of this Agreement.
7.4 DEVELOPER Certification. The DEVELOPER shall submit to the CITY a
written certification that, as of the data of the written Request for Disbursement
("Certficetion"):
A. The representations and warranties contained in or incorporated by
reference in this Agreement continue to be true, complete and accurate;
B. The DEVELOPER has carried out all of its obligations and Is in
compliance with all the obligations or covenants specified in this Agreement, to the extent
that such obligations or covenants ere required to have been carried out or are applicable
at the time of the request for the Disbursement;
C. The DEVELOPER has not committed or suffered an act, event,
occurrence, or circumstance that constitutes an Event of Default or that with me passage of
time or giving of notice or both would constitute an Event of Default; and
D. Loan disbursement requested will be used solely for HOME eligible
Property acquisition casts that have been property incurred and are properly chargeable in
connection with the Project.
ARTICLE B. DEVELOPMENT AND CONSTRUCTION OF PROJECT
Without waiver of limitation, the parties agree as follows:
8.1 PrenllLtjgfion Meeting Remardim HOMEP Processes and
Procedures. CITY will schedule, and the DEVELOPER shall attend a meeting priorto
construction with the CITY'S Housing and Community Development Division Manager for
the purpose of outlining HOME program processes and procedures.
82 Commencement and Completion of Proect The DEVELOPER shall
commence and complete construction in accordance with the Project Description and
Schedule. All Project Construction shall be completed no later than October 1, 2011.
8.3 Contracts and Subcontracts. Consistent with Article 6, all demolition,
hazamous waste abatement, construction work and professional services for the Project
shall be performed by persons or entities licensed or otherwise legally authorized to
perform the applicable work or service in the State of Calgomia and the City of Fresno.
The DEVELOPER shall provide the CITY with copies of all agreements with any and all
coMraMors or subcontractors for Nis Project. The DEVELOPER shall require that each
contractor and subcontractor agreement contain a provision whereby the party(les) to the
agreement other than the DEVELOPER agree to (i) notify the CITY immedialeiy of any
event of default by the DEVELOPER thereunder; (it) notifythe CITY immediately of the
filing of a mechanic's lien, (iii) notify the CITY Immediately of termination or cancellation of
Page 21 of 36
the agreement, and (iv) provide the CITY, upon the CITY $ request, an Estoppel Certificate
certifying that the agreement is in full force and affect and the DEVELOPER is not in
default thereunder _ The DEVELOPER agrees to notify the CITY immediately oftennlnation
or cancellation of any such agreement(s). notice of filing of a mechanic's lien, or breach or
default by other party(ies) thereto.
BA Damage to ProoeM. To the extent consistent with the requirements of any
permitted encumbrance, or as otherwise approved by the CITY, and subject to Ar iota 10 of
this Agreement, if any building or improvement constructed on the Property is damaged or
destroyed by an insurable cause, the DEVELOPER shall, at its cost and expense, diligently
undertake to repair or restore said buildings and improvements consistent with the original
Plans and Specifications of the Project Unit. Such work or repair shall commence within
ninety (90) days after the insurance proceeds are made available to the DEVELOPER and
shall be complete within one (1) year thereafter. All insurance proceeds colleted for such
damage or destruction shall be applied to the cost of such repairs or restoration and, 0
such insurance proceeds shall be Insufficient for such purpose, Me DEVELOPER shall
make up the deficiency.
8.5 Fees. Taxes and Other Levies. The DEVELOPER shall be responsible for
payment of all fees, assessments, taxes, charges and levies imposed by any public
authority or utllity company with respect b the Property or the Project, and shall pay such
charges prior to delinquency. However, the DEVELOPER shall not be required to pay and
discharge any such charge so long as; (a) the legality thereof is being contested diligently
and in good farm and by appropriate proceedings, and (b) if requested by the CITY, the
DEVELOPER deposits with the CITY any funds or other forms of assurances that the
CITY, in good faits, may determine from time to time are appropriate to protect the CITY
from the consequences of the contest being unsuccessful.
8.8 Financing The DEVELOPER shall promptly inform the CITY of any new or
additional financing or funding, and Me DEVELOPER shall provide the CITY copies of all
agreements with any and all Funding Sources for this Project. The DEVELOPER shall
require each agreement with any and all Funding Sources to contain a provision whereby
the party(tes) to the agreement other than the DEVELOPER, agree to (i) notify the CITY
immediately of any event of default by the DEVELOPER thereunder, (ii) notify the CITY
immediately of termination or cancellation of the agreement; and (iii) provide the CITY,
upon CITY'S request, an Estoppel Certificate certifying that the agreement is in full force
and effect and the DEVELOPER is not in default thereunder. The DEVELOPER agrees to
notify the CITY immediately of termination or cancellation of any such agreement(s) or
receipt of notice of defaultmemunder The DEVELOPER shall comply with all obligations
of any such agreements) with any and all Funding Sources until the respective expiration
of such agreement(s). In the event DEVELOPER fails to comply with its obligations of this
section, the Loan shall become immediately due and payable as provided for in this
Agreement. This section shall survive expiration or termination of this Agreement.
8.7 Identification Signed . Before the start of const action, the DEVELOPER
shall place a poster or sign, with a minimum four feet by four feet in size, identifying the
City of Fresno, Planning and Development Department, Housing and Community
Development Division, as a Project participant. The syn shall also include the CITY'S
Housing Logo. as well as the Equal Housing Opportunity logo, as mandated by HUD. Ford
Page 22 of W
size shall be a minimum of inches. The posterlsign shall be appropriately placed, and
shall be in place throughout the Project construction.
8.8 Inspections. The DEVELOPER shall permit facilitate, and require its
contractors and consultants to permit and facilitate observation and inspection at the job
site by the CITY and other public authorities during reasonable business hours, for
determining compliance with this Agreement.
8.9 Insurance and Bonds. Upon CITY'S reasonable request, the DEVELOPER
shall submit for CITY approval bonds, policies, certificates and applicable endorsements for
all Insurance and bonds required by this Agreement in accordance with Article 10.
8.10 Mechanic's Liens and Stop Notices. If any claim of lien is filed against the
Property or a stop notice affecting any financing, HOME Program Funds or Funding
Sources for the Project is served on the CITY or any other third party in connection with the
Project, me DEVELOPER shall, within twenty (20) days of such filing or service, either pay
and fully discharge the lien or stop notice, effect line release of such lien or stop notice by
delivering to the CITY a surety bond in sufficient form and amount, or provide the CITY with
other assurance satisfactory to the CITY that the claim of lien or stop notice will be paid or
discharged
A. If the DEVELOPER fails to discharge, bond or otherwise sagsfy the
CITY with respect to any lien, encumbrance, charge or claim referad to in this Section,
then, in addition to any other night or remedy, the CITY may, but shall not be obligated to,
discharge such lien, encumbrance, charge, or claim at the DEVELOPER expense.
Alternatively, the CITY may require the DEVELOPER to immediately deposit with me CITY
the amount necessary to satisfy such lien or claim and any costs, pending resolution
thereof. The CITY may use such deposit th satisfy any claim or Ilen that is adversely
determined against the DEVELOPER. The DEVELOPER hereby agrees to indemnify and
hold the CITY harmless from liability for such liens, encumbrances, charges or claims
together with all related costs and expenses.
8.11 Permits and Licenses. Upon CITY'S reasonable request, the DEVELOPER
shall submit, for CITY approval, all the necessary permits and licenses required for
Commencement of Construction. As the CITY may reasonably request, the DEVELOPER,
at its sole cost and expense, shall provide to tire CITY copies of any and all permit
approvals and authorizations including plot plan, plat, zoning variances, sewer, building,
and other permits required by govammental authorities other man me CITY in pursuit of the
Affordable Housing Project, and for its stated purposes in accordance with all applicable
building, environmental, ecological, landmark, subdivision, zoning codes, taws, and
regulations. The DEVELOPER is responsible, at its sole cost and expense, to determine
the location of any utilities on the Property and b negotiate with the utility companies far
and to relocate the utilities, 8 any, as necessary to complete the Project.
8.12 Plans and Specifications. Before Commencement of Construction, the
DEVELOPER shall submit to the CITY, for ifs review and approval, the final Plans and
Specifications for the Project. The DEVELOPER wilt construct the homes in full
conformance with the Plans and Specifications and modifications thereto approved by the
Page 23 of 36
CITY. The DEVELOPER shall obtain the CITY'S prior written approval for any
modifications to the Plans and Spefcations.
8.13 Proect Resoonsb'lilies. The DEVELOPER shall be solely responsible for all
aspects of the DEVELOPER'S conduct in connection with the Project, including but not
limited to, the applicability of and compliance with all local. state and federal laws including,
without limitation, as to prevailing wage and public bidding requirements (the CITY'S
annual resolution setting out per them wage rates is available from the CITY'S Construction
Management Division), the quality and suitability of the work completed, the supervision of
all contracted work, qualifications and financial conditions of and performance of all
contractors, subcontractors, consultants and suppliers. Any review or inspection
undertaken by the CITY with reference to the Project is solely for the purpose of
determining whether the DEVELOPER is property discharging its obligation to the CITY,
and shall not be relietl upon by Me DEVELOPER or by any third parties as a warranty or
representation by the CITY as to the quality of the work completed for the Project. This
Project is a public work subject to prevailing wage requirements except as provided in
Section 6.4 hereof.
8.14 Quality of Wolk, The DEVELOPER shall ensure that construction of the
proposed Project, employs building materials of a quality suitable for the requirements of
the Project. The DEVELOPER shall cause completion of construction of the proposed
Project on the Property in full conformance with applicable local, state and federal laws,
statutes, regulations, and building and housing codes.
8.15 Relocation. If and to the extent that construction of the proposed Project
results in Me permanent or temporary displacement of residential tenants, homeowners or
businesses, the DEVELOPER shall comply with all applicable local, state and federal
statutes and regulations with respect to relocation planning. advisory assistance and
payment of monetary berrefits. The DEVELOPER shall be solely responsible for payment
of any relocation benefits to any displaced persons and any other obligations associated
with complying with mid relocation laws,
8.16 Reporting Regu rements. The DEVELOPER shall submitto the CITY the
following Project reports:
A. From the data of Me Commence of the Project, until issuance of the
final Certificate of Completion, evidencing the construction of the last Project Unit, the
DEVELOPER shall submit a Quarterly Report, in a forth approved by the CITY, which will
include, ata minimum, the following information: progress of the Project and effirmathre
marketing efforts (as applicable). The Quarterly Reports are due Poteen (15) days after the
and of each March 31', June 301h, September 30n, and December 3Y, during said pend.
B. Annually, beginning on Me first day of the month following the CITY'S
issuance of the final Certificate of Completion, evidencing Me construction of Me last
Project Unit, and continuing until the termination of the Agreement, the DEVELOPER shall
submit an Annual Report to the CITY, in a form approved by Me CITY. The Annual Report
shall include, at a minimum, Me following information: the date the occupancy commenced,
certification from an officer of the DEVELOPER that the Project is in compliance with the
Affordable Housing Requirements, and such other information Me CITY may be required
Page 24 of 36
by law to obtain. The DEVELOPER shall provide any additional information reasonably
requested by the CRY.
C. Annually, beginning on the first day of the month following the CITY'S
issuance of the final Certificate of Completion, evidencing the construction of the last
Project Unit, and continuing until the expiration of the Agreement, DEVELOPER shall
submit proof of insurance as may be required in Article 10,
8.17 SchpiJulinin and Extension of Time Unavoidable Del P do . It
shall be the responsibility of the DEVELOPER to coordinate and schedule the work to be
performed so that the Commencement of the Protect and issuance of the Certificate of
Completion(s) will take place in accordance with the provisions of the Agreement. The
CITY, through its Housing and Community Development Division Manager, may emend
such time in writing at its sole and absolute discretion, and upon written request of the
DEVELOPER, as follows:
A. The time for performance of provisions of the Agreement by either
party shall be extended for a period equal to the period of any delay directly affecting the
Protect or this Agreement which is caused by: war, insurrection, strike or other labor
disputes, lockouts, hots, goods, earthquakes, fres, casualties, acts of God, acts of a public
enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, suits
fled by third parties concerning or arising out of this Agreement, or unseasonable weather
conditions. An extension of time for any of the above specified causes will be granted only
if written notice by the party claiming such extension is sent to the other party within ten
(10) calendar days from the data the affected parry Teams of the commencement of the
cause and the resulting delay and such extension of time is accepted by the other party in
writing. In any event, the Protect must be completistl no later than one hundred eighty
(180) calendar days after the scheduled completion date specified in this Agreement,
notwithstanding any delay caused by that included in this section.
B. Any and all extensions hereunder shall be by mutual when
agreement of the CITY'S Housing and Community Development Division Manager and the
DEVELOPER and shall not cumulatively exceed one hundred eighty (180) days.
8.18 Certificate of Completion. Upon completion of the construction of each
Project Unit, the DEVELOPER shall cera fy, in writing, within thirty (30) days, to Me CITY
that construction of the Protect Unit has been completed in accordance with the plans and
specifications approved by the CITY. Upon completion of each Project Unit, the
DEVELOPER shall also submit to the CITY a cost-certifying final budget where the
DEVELOPER shall identify the actual cords of construction of each Project Unit This final
cost-certification shall identify costs in line -kern format, consistent with the Project Budget.
Upon a determination by the CITY that the DEVELOPER is in compliance with all of the
DEVELOPER'S construction obligations, as specified in this Agreement, for that Project
Unit, the CITY shall furnish, within thirty (30) calendar days of a written request by Me
DEVELOPER, a recordable Certificate of Completion for the Project(s) in the form attached
hereto as EXHIBIT "E", The CITY will not unreasonably withhold or delay furnishing the
Certificate of Completion. If the CITY fails to provide Me Certificate of Completion within
the speed time, it shall provide the DEVELOPER with a written statement indicating in
what respects the DEVELOPER has failed to complete the Project in conformance with this
Page 25 of 36
Agreement or has otherwise failed to comply with the terms of this Agreement, and what
measures the DEVELOPER will need to take or what standards it will need to meet in order
to obtain the Certificate of Completion. Upon the DEVELOPER taking the specified
measures and meeting the specRed standards, the DEVELOPER will certify to the CITY in
writing of such compliance and the CITY shall deliver the recordable Certificate of
Completion to the DEVELOPER in accordance with the provisions of this section.
ARTICLE 9. PROJECT OPERATIONS
9.1 Oceralion of the Project. The DEVELOPER shall operate and/or manage the
Project in full conformity with the teems of this Agreement
9.2 Occupancy Reau cements. Two (2) Project Umt(s) shall be marketed and
sold as principal residence for single-family owner -occupancy by low-income households.
The DEVELOPER shall comply with the income targeting and Affordable Housing
requirements of 24 CFR 92.217 and 92.254. No homebuyer shall take occupancy of any
home prior to the dose of escrow vesting title in mid hortrebuyer.
9.3 Fair Marketing Plan. Before marketing any Project Unit and at least sixty (60)
calerMar days prior to the Completion of Construction of the first Project Unit, the
DEVELOPER shall submit to the CITY, for review and approval a plan, for marketing the
Units)("Fair Marketing Plan"). The Fair Marketing Plan shall address in detail how the
DEVELOPER or its designated management entity plans to market the availability of Units
to prospective low-income purchasers and how the DEVELOPER plans to certify the
eligibility of potential buyers. The Final Marketing Plan shall contain detailed descriptions
of policies and procedures with respect to buyer selection(s). Topica to be covered in
these procedures shall include at a minimum Me following:
• I merviewing procedures for prospective buyers,
• Buyer references;
• Credlt reports and checks;
• Deposit amounts, purpose, use and refund policy;
• Employment/Income verification;
• Occupancy restrictions;
• Income limits;
• Homebuyer education requirements;
• Equal Housing Opportunity Statement; and
• Restrictions on use of the premises and Program Income.
The Final Marketing Plan shall contain copies of all standardized forms
associated with the above listed topics. The DEVELOPER shall abbe by the terms of this
Final Marketing Plan, approved by the CITY, in marketing, managing and maintaining the
Housing.
94 Propedv Management. With respecito the Project, DEVELOPER shall
comply with the following.
A. Management Responsibilities. The DEVELOPER is specifically
responsible for all management functions with respect to the Project Including, without
Page 26 of 36
limitation, construction management, affirmative marketing, property disposition and initial
cemmcation of household size and income. The DEVELOPER during its time on this shall
be responsible for Project maintenance, landscaping, routine and extraordinary repairs,
replacement of capital Items and security. The CITY shall have no responsibility for such
management of Me Project.
9.5 Maintenance and SecurM. The DEVELOPER shall (i) at its own expense
maintain the homes in good condition, in good repair and in decent, safe, sanitary,
habitable and tenantable living conditions for Me benefit of Me purchasers, (ii) not commit
or permit any waste on or to the homes, and shall prevent and/or rectify any physical
deterioration of the homes; and (iii) maintain the homes in conformance with all applicable
federal, state and local laws, ordinances, codes and regulations and this Agreement, until
such are sold to Low-Income buyers.
9.6 Nondiscrimination. All of the Units shall be available for Initial purchase to
members of the general public who are income eligible. The DEVELOPER shall not
illegally discriminate or segregate In Me development construction, use, enjoyment,
occupancy or conveyance of any part of Me Affordable Housing Project or Property on the
basis of race, color, ancestry, national origin, religion, sex, age, mantel status, family
status, source of income/rental assistance subsidy, physical or mental disability, Acquired
Immune Deficiency Syndrome (AIDS) or AIDS-related condsons (ARC), sexual orientation,
or any other arbitrary basis. The DEVELOPER shall otherwise comply with all applicable
local, state and federal laws conceming nondiscrimination in housing. Neither the
DEVELOPER nor any parson claiming under or through the DEVELOPER, shall establish
or permit any such practice or practices of illegal discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants or vendees of
any Unit or in connection with employment of persons for the construction of any Unit. All
deeds or contracts made or entered into by the DEVELOPER as to Me Units or the housing
project or portion thereof, shall contain covenants concerning nondiscrimination consistent
with this section. The DEVELOPER shall include a statement In all advertisements, nofices
and signs for availability of Units to the effect Mal the DEVELOPER is an Equal Housing
Opportunity Provider.
A. Nothing in this section is intended to require the DEVELOPER to
change the character, design, use or operation of the Project; or M require the
DEVELOPER to obtain licenses or permits other Man those required for Me Project.
9,7 Pro Home Sale Price. The Initial sale price of each home is the total
amount paid by the homebuyer for the home conveyance, inclusive of any first lien/loan
and exclusive of escrow fees, Mle insurance costs, brokers commission (it any), loan fees
or any other closing or transaction costs. Notwithstanding the foregoing, the sale price of
each home shall not exceed ninety five percent (95%) of the median purchase price for Me
area as applied under 24 CFR 92.254. The CITY shall approve in advance all
homebuyers. Homebuyer financing shall be based upon buyefs ability to pay, consistent
with this Agreement.
9.10 Affordable Housing. The purpose of this Agreement is to use HOME Loan
Funds to ensure the affordability of two (2) Project Units to be sold to Low-Income
households. The DEVELOPER, and those taking ownership of the Project Property under
Page 27 of 36
or through ittthem, covenant and agree that the Project shall constitute Affordable Housing
by ensuring that the homes are sold only to Low -Income households, during the entire
Affordability Period.
A. If a Project Unit initially built and sold to a lower-income household is
subsequently resold, otherwise transferred and/or is no longer the principal residence of
the individuai(s) who initially purchased the property as Affordable Housing during the
Affordability Period, and without waiver or limitation, the entire HOME -Funded Loan
allocated to Unit shall be repaid to/recaplured by the CITY'S HOME Program Trust Fund
and thereupon the balance of the Affordability CovenanilPeriod shall be released.
B. The DEVELOPER shall require that each hone buyer assume the
Loan. Said Trust Deed Notes) as assumed shall be security for the provision of HOME
Funding for the Project by Me CITY. In the event of a failure to comply with the
Affordability Restrictions, in addition to any and all other remedies available to it, the CITY
shall be entitled to enjoin sale of the Project Units, damages not being an adequate remedy
at law for such breach.
C. In the event of a failure to comply with the Affordable requirements, as
applicable, the CITY shall be entitled to enjoin selling Me Units in Me Project, as the parties
acknowledge that damages are not an adequate remedy at law for such breach.
ARTICLE 10. INDEMNIFICATION AND INSURANCE.
Without waiver of limitation. Me parties agree as follows regarding the DEVELOPER'S
Indemnification and Insurance Obligations:
10.1 Indemnification The DEVELOPER shall indemnify, hold harmless and
defend the CITY and each of its officers, officials, employees, agents and volunteers from
any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in
contract, toll or stnct liability, including bud not limited to personal injury, death at any time
and property damage) incurred by the CITY, Me DEVELOPER or any other person, and
from any and all claims, demands and actions in law or equity (including attorney's fees
and litigation expenses), arising or alleged to have arisen directly or indirectly out of
Performance of this Agreement The DEVELOPER'S obligations under the preceding
sentence shall apply regardless of whether CITY or any of be off cem, officials, employees,
agents or authorized volunteers are negligent, but shall not apply to any loss, liability, fines,
penalties, forfeitures, casts or damages caused solely by the gross negligence, or caused
by the willful misconduct, of CITY or any of its officers, officials, employees, agents or
authormed volunteers.
A. If the DEVELOPER should contact all or any Portion of the work to be
performed under this Agreement, Me DEVELOPER shall require each contractor and
subcontractor to indemnify, hold harmless and defend the CITY and each of its officers,
officials, employees, agents and volunteers in accordance with the terms of Me preceding
paragraph,
S. This section shall survive termination or expiration of this Agreement.
Page 28 of 36
10.2 InsuranceThroughout the life of this Agreement, the DEVELOPER shall
hall and/or through its consultands), assignee(s), nominee(s), contractors and
subcontractors pay for and maintain in full force and effect all policy(ies) of insurance
required hereunder with (an) insurance company(m) either (1) admitted by the California
Insurance Commissioner to do business in the State of Cal'domia and rated rot less Man
"A -VII" in Best's Insurance Rating Guide, or (2) authorized by the CITY'S Risk Manager.
The following policies a insurance are required:
A. Until issuance of CertRcate(s) of Completion, BUILDERS RISK
(Course of Construction) Insurance in an amount equal to the completed value of Me
project with no coinsurance penalty provisions.
B. Following issuance of Certificates) of Completion, Fire and Extended
Coverage Insurance against loss or damage to the project by fire and lightning, with
extended coverage for vandalism and malicious mischief and sprinkler system leakage.
Such extended coverage insurance will, as nearly as practicable, cover lass or damage by
explosion, windstorm, not, aircraft, vehicle, smoke and such other hazards as are normally
covered by such insurance. Such insurance shall be in an amount equal to the
replacement cost (without deduction for depreciation) of the project with no coinsurance
penalty provisions. DEVELOPER, or its CITYapproved lender. shall ensure that the
required insurance is acquired by the individual homebuyers.
1. The above described policy(ies) of insurance shall be endorsed to
provide that the coverage shall not be cancelled, non -renewed, reduced in coverage or in
limits except after thirty (30) calendar day written notice has been given to CITY an
unrestricted thirty (30) day mitten notice in favor of the CITY, of policy cancellation, change
or reduction of coverage. Upon issuance by the insurer, broker, or agent of a notice of
cancellation, non -renewal, change or reduction in coverage, Me DEVELOPER or hs
contractorslsubcontractors, as the case may be, shall furnish CITY with a new certificate
and applicable endorsements for such policy(ies). In Me event the policy is due to expire
dunng the tens of this Agreement, DEVELOPER shall provide a new certificate, and
applicable endorsements, a new certificate evidencing renewal of such policy shall tie
provided not less Man fifteen (15) days prior to the expiration data of the expiring policy.
Upon issuance by the insurer, broker, or agent of a notice of cancellation, change or
reduction in coverage, the DEVELOPER or its contreporslsubcontractors, as Me was may
be, shall file with the CITY a cued copy of the new or renewal policy and certificates for
such policy.
2. The CITY shall be named as a loss payee.
3. If at any time during the life of this Agreement or any extension, the
DEVELOPER fails to maintain Me required insurance in full farce and affect, all work under
this Agreement shall be discontinued immediately, until notice is received by Me CITY that
Me required insurance has been restored to full force and effect and Mat the premiums
therefore have been paid for a period satisfactory to the CITY. Any failure to maintain Me
required insurance, subject to notice and cure requirements herein, shall be sufficient
cause for the CITY to terminate the Agreement,
10,3 Bonds. The DEVELOPER shall obtain, pay for and deliver or cause to be
Page 29 of 36
obtained, paid for and delivered good and sufficient surety bonds from a corporate surety,
admitted by the California Insurance Commissioner to do business in the Stale of Calfforma
and Treasury -listed, in a form satisfactory to Me CITY and naming Me CITY as Co -Obligee.
A. The "Fahhful Performance Bond" shall be at least equal to 100% on
DEVELOPER'S estimated construction costs to guarantee faithful Performance of the
Project, wahin the time prescribed, in a manner satisfactory to the CITY, and that all
materials and workmanship will be free from original or developed defects.
B. The "Material and Labor Bond" shall be at least equal to 100% of
DEVELOPER'S estimated construction coats to satisfy claims of material supplies and of
mechanics and labarers employed for this Project. The bond shall be maintained by
DEVELOPER in full force and effect until Me Project is completed, and until all claims for
materials and labor are paid, released, or time barred, and shall otherwise comply With any
applicable provisions of Chapter 7, Title 15, Part 4, Division 3 of Me California Civil Code.
C- In lieu of the bonds required above, CITY may accept from
DEVELOPER an Inevocable Standby Latter of Credit issued with the CITY named as the
sole beneficiary. The Irrevocable Standby Letter of Credit is to be issued by a bank, and in
a fom , acceptable to CITY. Throughout the lite of this Agreement, DEVELOPER shall pay
for and maintain In full force and effect Me Irrevocable Standby Letter of Credit in the
amount(s) of the bonds required above. This Irrevocable Standby Letter of Credit shall be
maintained by DEVELOPER in full force and effect until Me Project Is completed and shall
be subject to and governed by the laws of the State of California.
ARTICLE 11. DEFAULT AND REMEDIES
11.1 Events of Default. The parties agree that each of the following shall
constitute an "Event of Default" for purposes of this Agreement
A. The DEVELOPER'S use of HOME Funds for costs other Man Eligible
Costs or for uses not Perri tted by the terms of this Agreement;
B. The DEVELOPER'S failure to obtain and maintain the insurance
coverage required under this Agreement;
C Except as otherwise provided in this Agreement, Me failure of the
DEVELOPER to punctually and property Perform any other covenant or agreement
contained in this Agreement Including without limitation the following; (1)Me
DEVELOPER'S substantial deviation in the Project work specified in Me Project
Description as identified in this Agreement, without the GINS prior written consent; (2) the
DEVELOPER'S use of defective or unauthorized materials or defective workmanship in
pursWt of the Project; (3) Me DEVELOPER'S failure to commence or complete the Project,
as specified in this Agreement, unless delay is permMed under Article S of this Agreement;
(4) the cessation of the Project for a period of more than fifteen (15) consecutive days
(other Man as provided in Article B of this Agreement) prior to submitting to the CITY,
pursuant to Article 8 certification that the Project is complete: (5) any material adverse
change in the condition of Me DEVELOPER or the Project that gives the CITY reasonable
cause to believe that the Project cannot be completed by Me scheduled completion data
Page 30 of 36
according to the terms of this Agreement: (6) the DEVELOPER'S failure to remedy any
deficiencies in record keeping or failure to provide records to the CITY upon the CITYS
request; (7) the DEVELOPER'S failure to substantially comply with any federal, slate or
local laws or applicable CITY restrictions governing the Project, including but not limited to
provisions of this Agreement pertaining to equal employment opportunity, nondiscrimination
and lead-based paint;
D. Any representation, warranty, or certificate given or furnished by or on
behalf of the DEVELOPER shall prove to be materially false as of the data of which the
representation, warranty, or cerlMcation was given, or Mat the DEVELOPER concealed or
failed to disclose a material fact to the CITY, provided, however, that if any representation,
warranty, or certification that proves M be materially false is due merely to the
DEVELOPERS inadvertence, the DEVELOPER shall have a thirty (30) day opportunity
after written notice thereof a cause such representation, warranty, or certification to be true
and complete in every respect;
E, The DEVELOPER shall file, or have filed against it, a petition of
bankruptcy, insolvency, or similar law, state or federal, or shall file any petition or answer
seeking, consenting to, or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief, and such petition shall not have been
vacated within fourteen (14) days; or shall be adjudicated bankrupt or insolvent, under any
present or future statute, law, regulation, under state or federal law, and such judgment or
decree is not vacated or set aside within fourteen (14) days;
F. The DEVELOPER'S failure, inability or admission in writing of its
inability to pay its debts as they became due or the DEVELOPER assignment for the
benefit of creditors;
G. A receiver, trustee, or liquidator shall be appointed for the
DEVELOPER or any substantial part of the DEVELOPER'S assets or properties, and not
be removed within ten (10) days;
H. The failure of the DEVELOPER to cause completion of the Project
prior to October 1, 2011;
I. The DEVELOPER'S breach of any other material condition, covenant,
warranty, promise or representation contained in this Agreement not othercdse identified
within this Section; and
J. Any substantial or continuous breach by the DEVELOPER of any
material obligation owed by the DEVELOPER imposed by any other agreement with
respect to the financing, development, construction or operation of the Project, whether or
not the CITY is a party to such agreement
11.2 Nogo of Default and Opportunity t Cum. The CITY shall give written notice
to the DEVELOPER of any Event of Default by specifying (1) the nature of the event or
deficiency giving Has to the default, (2) the action required to cure Me deficiency, if any
action to cure is possible, and (3) a date, which shall not be ass Man the lesser of any time
period provided in this Agreement any time period provided for in Me notice, or thirty (30)
Page 31 of 36
calendar days from the date of the notice, by which such deficiency must be cured,
provided that X the specified deficiency or default cannot reasonably be cured within the
specified time, with the CITY'S written consent, the DEVELOPER shall have an additional
reasonable period to cure so long as it commences cure within the specified time and
thereafter diligently pursues the cure in good faith.
11.3 Ramedes Upon an Event of Default. Upon the happening of an Event of
Default by the DEVELOPER and a failure to cure said Event of Default within the time
specified, the CITY'S obligation to transfer the property shall terminate. The CITY may
also at its option and without notice institute any action, suit, or other proceeding in law, in
equity of otherwise, which it shall deem necessary or proper for the protection of its
interests and may without limitation proceed with any or all of the following remedies in any
order or combination that the CITY may choose in its sole discretion:
A. Terminate this Agreement immediately upon written notice to the
DEVELOPER;
R. Bring an action in equitable relief 11) seeking spec performance by
the DEVELOPER of the terms and conditions of this Agreement, and/or (2) enjoining,
abating or preventing any violation of said terms and conditions, and/or (3) seeking
declaratory relief; and
C. Pursue any other remedy allowed by law or in equity or under this
Agreement.
ARTICLE 12. GENERAL PROVISIONS.
Without waiver of limitation, the parties agree that the following general provisions shall
apply in the performance hereof:
12.1 Amendments. No modification or amendment of any provision of this
Agement shall be effective unless made in writing and signed by the parties hereto.
12.2 Attorney's Fees. If either party is required to commence any proceeding or
legal action to enforce or interpret any term, covenant or corWition of this Agreement, the
prevailing parry wall be entitled to recover from the other party its reasonable attorney's fees
and legal expenses.
12.3 Bindino on All Successors and Ass ens. Unless otherwise expressly provided
in this Agreement, all the terms and provisions of this Agreement shall be binding on and
inure to the benefit of the parties hereto, and their respective nominees, heirs, successors,
assigns, and legal representatives.
12.4 Counterparts. This Agreement may be executed in counterparts, each of
which when executed and delivered will be deemed an orginal, and all of which together
will constitute one instrument. The execution of this Agreement by any party hereto will not
become effective until counterparts hereof have been executed by all parties hereto.
Page 32 of 36
12.5 Disdaimer of Relationship. Nothing contained in this Agreement, nor any act
of the CITY or of the DEVELOPER, or of any other person, shall in and by itself be deemed
or construetl by any person to create any relationship of third parry beneficiary, or of
Principal and agent, of limited or general partnership, or of joint venture.
12.6 Discretionary Governmental Actions. Certain planning, land use, zoning and
other permits and public actions required in connection with the Project including, without
limitation, the approval of this Agreement, the environmental review and analysis under
NEPA, CEOA or any other statute, and other transactions contemplated by this Agreement
are discretionary government actions. Noting in this Agreement obligates the CITY or any
other governmental entity to grant final approval of any matter described herein. Such
actions are legislative, quasi-judicial, or otherwise discretionary in nature. The CITY cannot
take action with respect to such matters before completing the environmental assessment
of the Project under NEPA, CEOA and any other applicable statutes. The CITY cannot and
does not commit in advance that it will give final approval to any matter. The CITY shall not
be liable, in contract, law or equity, to the DEVELOPER or any of its executors,
administrators, transferees, successors -in -interest or assigns for any failure of any
governmental entity to grant approval on any matter subject to discretionary approval,
12] Effective Dete. This Agreement shall be effective upon the data first above
written, upon the parties' complete execution following CITY Council approval.
12.8 Entire Agreement. This Agreement represents the entire and integrated
agreement of the parties with respect to the subject matter hereof. This Agreement
supersedes all prior negotiations, representations or agreements, either written or oral.
12.9 Exhibits Each exhibit and attachment referenced in this Agreement is, by the
reference, incorporated into and made a part of this Agreement.
12.10 Expenses Incurred Upon Event of Default. The DEVELOPER shall reimburse
this CITY for all reasonable expenses and costs of collection and enforcement, including
reasonable attorneys fees, incurred by the CITY as a result of one or more Events of
Default by the DEVELOPER under this Agreement.
12.11 Governing Law and Venue. Except to the extent preempted by applicable
federal law, the laws of the State of Callfomia shell govern all aspects of this Agreement,
including execution, interpretation, performance, and enforcement. Venue for filing any
action to enforce or interpret this Agreement will be Fresno, California.
12.12 Headings. The headings of the articles, sections, and paragraphs used in
Mis Agreement are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision.
12.13 Interpretation. This Agreement in its final form is the result of the combined
efforts of the parties. Any ambiguity will not De conabued in favor or against any party, but
rather by construing the terms in accordance with their generally accepted meaning.
12.14 No Assignment or Succession. Except as may be otherwise expressly
provided by this Agreement, neither this Agreement, nor any interest of the DEVELOPER
Page 33 of 36
in, under. or to this Agreement. or the Project, may be atu fined or transferred by the
DEVELOPER without me prior written censent of the CITY, which consent shall not be
unreasonably withheld or delayed. Any assignment without consent is null and void.
12.15 No Third -Pant Benefciarv. No contractor, subcontractor, mechanic,
materialman, laborer, vendor, or other person hired or retained by the DEVELOPER shall
be, nor shall any of them be deemed to be, third -pant beneficiaries of this Agreement, but
each such penton shall be deemetl to have agreed (a) that they shall look to the
DEVELOPER as their sole source M recovery if not paid, and (b) except as otherwise
agreed to by the CITY and any such person in writing, may may not enter any claim or
bring any such action against the CITY under any circumstances. Except as provided by
law, or as otherwise agreed to in writing between the CITY and such Person, each such
person shall be deemed to have waived in writing all right to seek redress from the CITY
under any circumstances whatsoever.
12.16 No Waiver. Neither failure nor delay on the part of the CITY in exercising any
right under this Agreement shall operate as a waiver of such right, nor shall any single or
partial exercise of any such right preclude any further exercise thereof or the exercise of
any other right. No waiver of any provision of this Agreement or consent W any departure
by the DEVELOPER therefrom shall be effective unless the same shall be in writing, signed
on behalf of the CITY by a duly authmlzed officer thereof. and the same shall be effective
only in the specific instance for which it is given. No notice to or demand on me
DEVELOPER in any was shall entibe the DEVELOPER to any other or further notices or
demands in similar or other circumstances, or constitute a waiver of any of the CITY'S right
to take other or further action in any circumstances without notice or demand.
12.17 Nonreliance. The DEVELOPER hereby acknowledges having obtained such
independent legal or other advice as it has deemed necessary and declares that in no
manner has it relied on the CITY, it agents, employees or attorneys in entering into this
Agreement.
12.18 Notice. Any notice W be given to either party under the terms of this
Agreement shall be given by certified United States mail, Postage prepaid, retum receipt
requested, at the addresses specified below, or at such other addresses as may be
specified in writing by the parties.
If to the CITY: City of Fresno
Housing and Community Development Division
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
Ifto DEVELOPER: Habitat for Humanity Fresno Inc.
Attn: Anthony Miranda
2219 San Joaquin
Fresno, CA 93721
12.19 Precedence f Documents. In the event of any conflict between the body of
this Agreement and any exhibit or attachment hereto, the terms and conditions of the body
of this Agreement will control.
Page M of 36
12.20 Recordin of Documents. The DEVELOPER agrees to cooperate with the
CITY and execute any documents required, promptly upon the CITY'S request, the Deed(s)
of Trust, and any other documenbuinstruments that the CITY requires to be recorded, in
the Oficial Records of Fresno County, California, consistent with this Agreement.
12.21 Remedies Cumulat ve. All powers and remedies given by this Agreement
shall be cumulative and in addition to those otherwise provided by law.
12.22 Severability. The invalidity, illegality, or un -enforceability of any one or more
of the provisions of this Agreement shall not affect the validity, legality, or enforceability of
the remaining provisions hereof or thereof.
Page 35 of W
IN WITNESS WHEREOF, the parties have executed this Agreement in Fresno,
California, the day and year first above written.
CITY OF FRESNO, a Municipal Corporation
By: / / li/%
�rQ Rntlq Assistant Clty Manager
(Attach notary certificate of acknowktlgmanh
Dade: c,?
ATTEST:
REBECCA E. KLISCH
City Clark
yq/
By: Xf/!Y/I -
Deputy
Date:
DEVELOPER
Habitat for Humanity Fresno, Inc.
a California Corporation
By
Anthony J. Miranda wave Director
IAnaca notarywrtirrat of of acknoMeOgmentT
Date: 0- �2
Attachments'
APPROVED AS TO FORM'
JAMES SANCHEZ
City Attorney
By:
--f2_ _.Oepury Ciy Apomey
Date:. 1 -al, 1s
EXHIBITA
PROPERTY DESCRIPTION
EXHIBIT B:
PROJECT DESCRIPTION AND SCHEDULE
EXHIBIT C.
EXEMPLAR DECLARATION OF RESTRICTIONS
EXHIBIT D'.
BUDGET
EXHIBIT E:
EXEMPLAR CERTIFICATE OF COMPLETION
EXHIBIT F1:
EXEMPLAR NOTE AND TEMPLATE RIDER TO DEEDS) OF TRUST
EXHIBIT F2:
EXEMPLAR NOTE AND TEMPLATE RIDER TO DEED(S) OF TRUST
Page 36 of 36
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
ca�cstsr
Slate of California
County of Lil C J
on .1-2-12 before me, /r[ P. ff4sfc, n rail lupi 4mP%l. t,
personally appeared PiPmQpGq �. Itl'tr.,dw eAlmsv.nmay.m w�a
who shaved m me on fine Iasis of satisfactory eMence to
W the parsmy) whose ramex i ass supearlbad to me.
wimin instrument and acknowledged to me that
® AWk M he/aRePPSY emuletl by prom in nal iarvMdr ion on the
Cww tplq cappinstrument
end that Is or thelhn entity
upon lsl on me
eatall� inslmmenf Me pemmte), or the entity upon bahall of
which the personae) acted, evecWed the instrument
I cettlty under PENAM OF PERJURY under the laws
of the State al Caalarnia that he foregoing paragraph is
true and current
WITNESS my hand and official seal.
.�.BN... wi.m. Signature
OPTIONAL
ilicw9n rl 1In6"1hiM'M¢rglrryinmliry Yw ros Phare wLeYe NrrerspmrNpnponpre pmmrenr
arMcmN wnilnWphnrrmgrelaMAeXMiimemollMl'pre memlAerebnmpnF
Description of AN Che Document
nice or Type of Grummenl'. Oap
Document Gas �'o— ps fm5�n P9 Number of Pages:^Vvr
Signors) 011ier Than Named AMre: _
Capecitypord Claimed by Signal
Signers Name,
Signers No
individual
L I
Corporate West—Tnklel:
-Concept Gil—Tnielel:
Panner—I Limned i General
L Partner --Lar General
I Aflamryln Pach
FAel In Fact
T Trustee
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int Downs nmv
Guardmn of Cowurwtor
L German or Conservabr
J Omer:
I 011leu
Signer la reaarNhg;
Signer Is Raprasenflrg:
chary Nim®n Aqu. ,vw a rce.u. in omvn or oIrlaw,.....rmmury r. rmr nor, cn+l.rarrsvm
57
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
Slate of California j
Counlydf FYf SnC IIS
on a la barereme, C r'r c,CNsh�,��4�. Nock. P blit—
pareonaiiy appearedvi u,v te 2r&6J
who proal! ro me on me bash segsf d" wool to
ba the psmonl g whose namely iware subacrined a me
® GNTuma within instrument and mo in acknowledged ro me that
GrwAlRnr h0lsheppq ea mmat by semamhismeMPelr atMon be
Pease Real
amberent t, ere mal try norM a airslgnmorely on the
}wrr Gar} which the the personal, or me entity upon benan m
InrIY} NI} which iM1B parsanlHBclIM. ByecmBd lM1e ln0num0nt
car* under PENALTY OF PERJURY under the laws
of the Stale of Callahan that the foregoing paragraph is
true and calrecl.
WITNESS my hand and Dmclel sea
.i... waw. SlgnaNte L{A gwe.rvw.i.0 r,nr/_
OPTIONAL
Prougli uw.nbmuWn Wkw i¢ yl remxrM 0Y9ry b meY Pmw re0uhk foparsgrs Mym9�^ tMMrmam
a�aan m.anr raomx.nt:.mmetam ma.mmemawd a,m to e�wnam�„mm
Description of AlYched Document ````� 1 r�
Title or Type of Document: QO(1 h4i�.REn Ca� o� rlffnD` ry`a ryT Tyr�Hi[V
4q E. f -i .A l'l�4i w 1h r
Document Dale: Numeor d Paged'.
Figures) OMar Than Named
Capecityfle rl Claimed by Signarls)
man e_
SlgnaA Name:
:a. mawtauel
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Cotporalemmmr—Tllata:
co Gfhver—TNely:. _.
Pemrer— J Limited '_ General
— —,—. Dream '_ I Canaal
—Antalya, Fact
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le Repi ng:
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Signer Is Rapresanling:
2
EXHIBIT A: PROPERTY DESCRIPTION
Legal Description:
PARCEL 1: 4979 E. Garrett Avenue, Fresno, CA (APN: 481-39036n
PARCEL 2: 4983 E Garrett Avenue, Fresno, CA (APN: 481-390 71)
'A1
Page 1 of 1 A
LEGAL OESCRIMON
TXE MD REFERRE M HEREAI BELOW IS SITUAT IN THE WUM OF FRESNO, SPATE DFGI¢g W
AND IS DEmtRED AS FDIInWS:
TM[pwtgnp LOR i3anJ 29IXNewM1aBT22a UIngNMe m9Dtll¢reclremNg{In &wk2 Pape 92 ct
Nemrtl pf S owns Frgro Cnunry W21EaslN one Nabl poperwEpuao rMe Sono the puaeRFIN
Scree IB,Tw.ndl as 145aM, pangeil Emi,Mwitt ppW pope and Mandan,ettmtllnp Iu[M1e ONklal Pbt
Nivml. Jesolbetazhlqun:
C ntlnp at Me Southmst menu of MOlM 23; thence S 86° M'OS W= abed the South INeM
mq W B and along M¢ N[M t fttF Y ore a Eat Garr[ Avenue as dWlmW M pubk ENEN
Pappas bn� the map of Trent No. MEL RpmNsahady
,dtlk4rceIX1A.D]fatNMe Hylnnay afipAd M l^�tJ9�eaq¢Iand 110
utyW aha#naop Faeon,
f2P.BpGnat ice Westr lV, 0Me art NsabnmaaNmnWWpakng tlNaM ipMaf waV Rne,
and
Mm he¢naale pIX32°9Jphan3 pe art l¢n, at 13B9latb Ne Lyle rq ofe revaze arm
warmth Np End ar hawrga redl.apr 223.BBren hMaMNW7,almgdea2dsagmmrsewrmantl
and
ro Me Tr�icaPolmn[Of Hep nlnE fpho Eesaine'gYn MHeuxemn�tlnu9ry Wpererty ab anN epfgIXN Md9.2 tee[
ofW hBMtheSoudh ttoaa aLed jamannE Tra3 No 52lB;MmS NaM BP 1555'WaLebgMe
'a"5eWW Iyt 1, nee
MaNneatLe N#vq anhe WI lna saq NedM1 uAIRAwM'IM,a tl6bnce of
t32051CC N tM1e rend Yea UNe Central Qrel; MbNc NyM ]4° 51' S!" fMq. aloeq csq tpaMalM, a
d6 n pf JB 59Ist Mena SauM 11°31'S9'Fast, NEWn9 ME renrblFbaObYanmM119.Sfifce[tatle
True Print IX&phall, .
AM: Qi 390.967
q0
LEGAL DESCRIMON
THE LAND REFERRED TO HEREW GELOW ISSUJAM IN THE Ct)j T OF Dal yATEIXCALIFgW1A,
AND IS OESONEIM 0.5 FWOWw
That Peal Ropnty halq a podbn of Int 23 and lot 24 of NeWhall Tran, aauNing to Ne men lhereN
reratled N Vallee 2 of RaLN 9 Surveys at page 42, Fro County Amanda, SMOIow In the S rtnanrt
iguana dNe SwMW G OadmalUnNed d SMbn IB, TgGwYeernm lig Sons, Panee Townshp Page; 2l Faa� saw R 0lablo mase ago
MCMlan,amnOnthatPouud WERMalas AIN 481ll Rand IS
tlwer ands a aka
Grant
a rertbn ead medal Pound I07, 2007 u AIN pal lNDM and 15 antl tl�IM'I Gird ower sntla Io tet
Grad ANN
med Fg onan 02,2N]as eodbed thin -W245], pfpal RmorKdF24hp CqunsY.
Satl R®I Platy lelq ngre ryMNkNy tleWl� ybIItlAY:
Commahcllp M tM Sultem: corner aAmbat 23; trsre Smon G6"M'R4 West ab rq NeSa WBFSMW
1M 23 and Alum Mmph ph Nam d way lire d thatGarra[ Awme as dMazom he, NNYNI SWrmses b,•
@� �02No. 210 notopay M munte740 PlaM M page 10 eM 11, Fresno County RmvEa,a
beginning of a rangart terve on aup Anal and having a mW of 272.04
feed; Move w>al¢M, along the arc of had curve and we 6lhuug Megail nem Pont mway area, tbramn a
tra1 angle V% 19°'Ol an ahc "Un N 72.21 Nam b mNt d e Tom PaBrylnnln9 of mk EmgOrh;
monce CoNnuing Wa@Ry, alum the art d sap Cannot am oarmum ahrg saw norm right away IMC
omhpb a Canto Wangle ofIA51'46", an art 4gm d GEM fM b Me paMnnypofarcrersearve¢nmre
nam b lhgaablhg 1 na onN MIX2we3.0) Am Mae awa�ly, elgp t Nap renew arve and
mehhm.Nflaweaonni 3f'S9"Wegnm-pn 1 ftaenbalan dM'230T,ans it ffid9.28fi ,
dtwnre d 11956 teen b the mnaNliN me Damew (amidkow Saw came ; thencend NorthNoNry 74°51'S3N Add north d'Oral btd way ane, a
re Arne, atlgancea M.9q lret Mena fboh 62.17M Eem, wrdnulmaMngup wMMmaaE6ganm
of 65.62fnare
11 mSwM 03°16'59' hem leavYgsapmhtedlne, a dban¢a IIE.W fs[b NrtTne Ptlnt
of Imaging.
APN: 4a W9a 4R
�I
EXHIBIT B; PROJECT DESCRIPTION AND SCHEDULE
I. PROJECT DESCRIPTION:
The Project consists of Property acquisition and the construction of two (2) all
family homes for occupancy by law -income feel to be sold at affordable housing
cost. DEVELOPER shall pay for on-site and off site improvements, construction,
marketing, and selling of the homes. Consistent with the attached Budget the
DEVELOPER whit fund all non -acquisition pre -construction and construction costs
with non -HOME Program Funds. The DEVELOPER, or its CITY -approved lender,
will qualify all households. Upon CITY approval and consistent with the Agreement
to which this Exhibit "B" is an attachment, the two (2) affordable homes shall be sold
to the low-income families. Both of the three-bedroom two -bathroom Units will
feature solar panels and Universal Design features.
Maximum HOME funding for the Project is a total of One Hundred Sixty Thousand
Dollars and 007100 ($160,000 00), for acquisition of bath parcels which shall be
assumable dead trust notes on the We (2) affordable homes, to be made through the
sales escrow or as otherais r directed by CITY for the affordability of the purchase of
each home
11. PROJECT SCHEDULE:
A. Commencement of Construction: March 12, 2011
B, Completion of Construction: October 1, 2011
C. Completion of Home Sales: November 1, 2011
Page 1 of 1 4
EXHIBIT C: EXEMPLAR DECLARATION OF RESTRICTIONS
RECORDING REQUESTED BY AND fer Ma Marvin
of the City of Fresno and is exempt hem Me payment
of a recording fee in aexwrdance with Government
Code Sections 5103 and 27383.
CITY OF FRESNO
City Clerk s Office
No Fee—COM Code 6103
2600 Fresno Steer, Room 2133
Fresno. CA 93721
Tire Order Na. Escrow No
DECLARATION OF RESTRICTIONS
THIS DECLARATION OF RESTRICTIONS, ('Declaration"), is executed as of this
by f 1, ("Declarant") in favor of the City of Fresno, acting by and
through Its Planning and Development Department, Housing and Community
Development Division ('City").
WHEREAS, Declarant is the owner of the real estate in the county of Fresno,
state of California, consisting of APN: which is more particularly
described in Exhibit "A', abached hereto and made a part hereof (Me "Property'); and
WHEREAS, Pursuant to a certain Dispositon and Development Agreement and
HOME Investment Partnerships Agreement dated , 2010 incorporated herein.
("DDNHOME Agreement") and instruments referenced therein, Declarant agrees to
utilize and City agrees to provide certain HOME Program Funds from the United States
Department of Housing and Urban Development (HUD), to Declarant for certain
affordable housing (the "Protect") upon the Property to be sold and maintained as
affordable to low-income families, subject M the terms and corrections set forth in the
DDAMOME Agreement; and
WHEREAS, the HOME Program regulations promulgated by HUD, including
Without limitation 24 CFR Section 92.259, and the DDAHOME Agreement impose
certain affordability requirements upon property benefited thereby, which affordability
restrictions shall be enforceable for a thirty (30) year period; and
WHEREAS, these restrictions are intended to bind all purchasers and their
successors.
NOW THEREFORE, Declarant declares that the Project home upon the Property
4 -
Page 1 of 5
is held and will be held, transferred encumbered, used, sold, conveyed and occupied
subject to the covenants, restrictions, and limitations set forth in this Declaration, all of
which are declared am agreed to be in furtherance of the plan for the construction, sale
and occupancy of the home upon the Property. All of the restrictions, covenants and
limitations will run with the land and will be binding on all parties having or acquiring any
right. titte or interest in the Project home upon the Property or any part thereof, will inure
to me benefit of the future Owners of the home or any part thereof, the United States
and the City and will be enforceable by any of them. Any purchaser under a contract of
sale covering any right, title or interest in any part of the Project Home upon the
Property, by accepting a dead or a contract of sale or agreement of purchase, accepts
the document subject to, and agrees to be bound by, any and all restrictions, covenant,
and limitations set form in this Declaration for the period of miry (30) years constituting
the Affordability Period
1. Declarations. Declarant hereby declares that the home upon the Property
is and shall be subject to the covenants and restrictions hereinafter set forth, all of which
are declared to be in furtherance of the Project and the DDA HOME Agreement Project,
and are established and agreed upon for the purpose of enhancing and protecting the
value of the Project Property and in consideration for City entering into the DDA/HOME
Agreement with Declarant. All terms not otherwise defined herein shall have the
meaning ascribed to such term in the DDArHOME Agreement.
2. Restrictions. The following covenants and restrictions on the use and
enjoyment of the Project homes upon the Property shall be in addition to any other
covenants and restrictions affecting the Project Property, and all such covenants and
restrictions are for the benefit and protection of City, and shall run with the home upon
the Property and be binding on any future ownees of the Project home upon the
Property and inure to the benefit of and be enforceable by City. These covenants and
restrictions are as follows:
a. Crucial for brief and its successions) on title covenants and
agrees that it shall cause the two (2) Project homes upon me Property to be used as
Affordable Housing for the duration of me Affordability Period Declarantfurtheragrees
to file a recordable document setting forth the Prefect Completion Dates) and the
Affordability Period when determined by the City. Unless otherwise provided in the
DDAMOME Agreement, the term Affordable Housing shall include. without limitation,
compliance with the following requirements:
Nondiscrimination. There shall be no discrimination against nor
segregation of any person or group of persons on account of race, color, creed, religion,
sex, martial status, national origin, ancestry, or handicap in the sale, transfer, use,
occupancy, tenure, or enjoyment of any of the Project Property, nor shall Declarant or
any person claiming under me Declarant, establish or permit any practice of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of owners or vendees of the Project Property.
Page 2 of 5
Principal Residence. Each home constituting the Project upon the
Property shall be sold only to natural persons, who shall occupy the home as the
purchaser's principal residence. The foregoing requirement that the purchaser of each
home constituting the Project Property occupy the home as the purchaser's principal
residence does not apply to (i) persons, other than natural persons, who acquire the
Project Property or portion thereof by foreclosure or deed in lieu of foreclosure; or (ii)
HUD qualified entities that acquire the Project Property or portion thereof, with the
consent of the City.
Homeowner Income Requirements. The homes constituting the Project
upon the Property and each of them may be conveyed only M (a) natural persons)
whose annual household income at the time is not greater than sixty percent (60%) of
the most recent annual median income calculated and published by HUD for Me Fresno
Metropolitan Statistical Area applicable to such household s size.
Recapture Requirements. Should each of Me two (2) affordable homes
upon the Properly not continue to be the principal residence of the family purchasing the
Property/home as affordable housing for the duration of the period of affordability then
the entire financial assistance provided by City and allocated to the Prolm rtylhome
including all HOME Program Funding assistance shall immediately came due and must
be repaid to/recaptured by the City's HOME Program Trust Fund and thereupon the
balance of the affordability restrictions shall be released. The affordability restrictions
also may terminate upon occurrence of any of the following termination events:
foreclosure, transfer in lieu of foreclosure or assignment of an FHA insured mortgage to
HUD, provided the affordability restrictions shall be revived according to the original
terms I during the original affordability period, the owner of record before such
termination events obtains an ownership interest in Me housing. The City shall be
possessed of a first night of refusal to purchase the home before foreclosure to preserve
affordability.
Item (a) above is hereinafter retained to as the Covenant and Restrictions
3. Enforcement of Restrictions. Without waiver or limitation, the City shall be
entitled to injunctive or other equitable relief against any violation or attempted violation
of any Covenant and Restriction, and shall. in addition, be entitled to damages for any
injuries or losses resulting from any violations thereof.
4. Acceptance and Ratification. All present and future owners of the Project
home upon the Property and other persons claiming by. through, or under Mem shall be
subject to and shall comply with the Covenant and Restrictions. The acceptance of a
deed of conveyance M the Project Property shall constitute an agreement that the
Covenant and Restrictions, as may be amended or supplemented from time to time, are
accepted and ratified by such future owners, tenant or occupant, and such Covenant
and Restriction shall be a covenant running with the land and shall hind any person
having at any time any interest or estate in Me Project Property, all as though such
Covenant and Restriction was recited and stipulated at length in each and every deed,
Page 3 of 5 Y"
conveyance, mortgage or lease thereof
Notwithstanding the foregoing, upon foreclosure by a lender or other
transfer in lieu of foreclosure, or assignment of an FHA -insured mortgage to HUD, the
Affordability Peril shall be terminated if the foreclosure or other transfer in lieu of
foreclosure or assignment recognizes any contractual or legal rights of public agencies,
nonprofit sponsors, or others to fake actions that would avoid the termination of low -
Income affordability. However, the requirements with respect to Affordable Housing
shall be revived according to their original terms, if during the original Affordability
Period, the owner of record before the foreclosure or other transfer, or any entity that
includes the former owner or those with whom the former owner has or had formerly,
family or business ties, obtains an ownership interest in the Project or the Property, and
the Affordability Period shall be revived according to its original terns.
5. Beneft. This Declaration shall run with and bind thetwo (2) Project
homes upon the Property for a term commencing on the date this Declaration is
recorded in the Office of the Recorder of the county Fresno, state of California, and
expiring upon the expiration of the Affordability Period. The failure or delay at any time
of City or any other person entitled to enforce this Declaration shall in no event be
deemed a waiver of the same, or of the right to enforce the same at any time or from
time to time thereafter, or an estoppel against the enforcement thereof.
6. Costs and Attorney's Fees. In any proceeding arising because of failure
of Declarant or any future owner of the Project homes upon the Property to comply with
the Covenant and Restrictions required by this Declaration, as may be amended from
time to time, City shall be entitled to recover its costs and reasonable attorney's fees
incurred in connection with such default or failure.
7. Waiver. Neither Declarant nor any future owner of the Project homes
upon the Property may exempt ftseff from liability for failure to comply with the Covenant
and Restrictions required in this Declaration.
8. Severability, The invalidity of the Covenant and Restrictions or any other
covenant, restriction, condition, limitation, or other provision of this Declaration shall not
impair or affect in any manner the validity, enforceability, or effect of the rest of this
Declaration and each shall be enforceable to Me greatest extent permided by law.
9. Pronouns. Any reference to Me masculine, feminine, or neuter gentler
herein shall, unless the context dearly requires the contrary, be deemed to refer to and
include all genders. Wards in the singular shall include and refer to the plural, and vice
versa, as appropriate.
10. Interpretation. The captions and titles of the various articles, sections,
subsections, paragraphs, and subparagraphs of Mis Declaration are inserted herein for
ease and convenience of reference only and shall not be used as an aid in interpreting
or construing this Declaration or any provision hereof.
Page 4 of 5
11. Amendment. No amendment or modification of this Declaration shall be
permitted without the prior written consent of City.
12. Recordation. Declarant acknowledges that this Declaration will be filed of
record in the Office of the Recorder of county of Fresno, State of California.
13, Capitalized Terms. All capitalized terms used in this Declaration, unless
otherwise defined herein, shall have the meanings assigned to such terms In that
certain DDAIHOME Agreement by and between Declarant and City, of even date.
14. Headings. The headings of the articles, sections, and paragraphs used in
this Agreement are for convenience only and shall net be mad or constmed to affect the
meaning or construction of any provision.
//
IN WITNESS WHEREOF, Declarant has executed this Declaration of
Restrictions on the data first written above.
"DECLARANT"
Habitat for Humanity Fresno, Inc.
By:
Anthony J. Mirantla, Executive Director
Page 5 of 5 4:-1
DECLARATION OF RESTRICTIONS
Exhibit "A"
IFGAL DESCR[PFIDN
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APN: 481390
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AM: 481 N047
5")
EXHIBIT D: BUDGET
Page 1 of 1 �
Total
HabOat
Resseaue
HOME
Funds
"NO
Prort #1
Proed #2
$81.6m
$-0-
$81,6M
SOFT COSTS
Permit and Fees
$23200
$23200
$-0-
Architectureand En ineerin
$10000
$10,000
$-a-
Legal
$-0.
$4-
$4-
Taxesllnsurance
$3000
$3000
$4
Other
$-0-
$4
$-O-
TotalSORCosts
Sw.mo I
$38,200
$0
HARD COSTS
Sde Pre Gradin
$-0
$_0
$-o-
OflSee lmrovemams
E0.
$-o-
$A
On Site Improvements
¢0.
$-0-
-0-
DirevConstruction
$152000
$152000
$4 -
Conti enues
$O
$-d-
Contractor Overhead
$50,000
$54000
$-0-
Other
$-0-
$-0.
$-0-
TotalHand Costs
$208000
$208000
$d
DEVELOPER —FEE
$p
¢6
CONSTRUCTION
FINANCING FEES
-6
$-0-
OTHER
SuWivisionfftle)CensuBlnO
Fees
Merketin and Select
$-0-
$b
$`0
Total OHtar Ceeb
y0-
$-0-
$-0-
TOTAL E%PENSES
$002,200
$242,200
$1 so D00
Page 1 of 1 �
EXHIBIT E: EXEMPLAR CERTIFICATE OF COMPLETION
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO'.
City of Fresno
City Clark S Office
No Fee- GoW. Code 6103
2600 Fresno Siseet Room 2133
Fresno, CA 93721
(SVPCEOH.OVE The LINE FOR RECORD PS
This Certificate of Completion is recorded at the request and for the benefit of the City of
Fresno and is exempt from the payment of a recording fee pursuant to Government Code
Section 6103.
City of Fresno
By:
John M. Dugan, Director
Planning and Development Department
Page 1 of 3 � J.
CERTIFICATE OF COMPLETION
APN:
Recitals:
A. By a Disposition and Development Agreement and HOME Investment Partnerships
Program Agreement ('DDA/HOME Agreement") dated 20 between the City
of Fresno, a municipal corporation ("ClT ), and Habitat for Humanity Fresno, Inc, a
California Corporation, ("DEVELOPER"), the DEVELOPER agreed to develop two (2)
affordable single-family homes ("Project), upon the premises legally described in EXHIBIT
"A" attached to the DDAIHOME Agreement as amended from time to time, made a part
hereof by this reference, (the "Property") for the sale of the Affordable Units to/occupancy
by two (2) low-income homebuyers, with the assistance of HOME funds while meeting the
affordable housing, income targeting and other requirements of 24 CFR 92 according to the
terms and conditions of the DDAMOME Agreement and the Loan Documents and other
documentlnstruments referenced therein.
B. The DDAMOME Agreement or a memorandum of it was recorded on
20_ as Instrument No. in the Official Records of Fresno County,
California,
C. Under the terms of the DDAIHOME Agreement, after the DEVELOPER completes
the construction of a Project Affordable Unit, the DEVELOPER may ask CITY to record a
Certificate of Completion.
D. The DEVELOPER has asked CITY to furnish the DEVELOPER with a recordable
Certificate of Completion.
E The CITY'S issuance of this Certificate of Completion is conclusive evidence that the
DEVELOPER has completed construction the PmjecryProject Unit as set forth in the
DDAMOME Agreement.
NOW THEREFORE:
1. CITY certifes that the DEVELOPER commenced the construction of
the Project Unit on , 20_ antl completed the construction work cn the
Project Unit on 20and has done so in full compliance with me
DD MAOME Agreement.
2. This Certificate of Completion Is not evidence of the DEVELOPER
compliance with, or satisfaction of, any obligation to any mortgage or security interest
holder, or any mortgage or security interest insurer. securing money lent to finance work on
Ne Property or Project, or any part of the Property or Project.
3. This Certificate of Completion is not a notice of completion as referred
to in California Civil Code Section 3093.
4. Nothing contained herein modifies any provision of the DDA/HOME
Agreement.
Page 2 of 3 C�
IN WITNESS WHEREOF, CITY has executed this Certificate of Completion as of
this: day of 20.
CITY OF FRESNO
By:
John M. Dugan, Director
Planning and Development Department
ATTEST: APPROVED AS TO FORM:
CITY CLERK JAMES C. SANCHEZ
By:
Deputy City Attorney
Date: Date:
Owner/Developer Name: Habitat for Humanity. Fresno. Inc.
By signing below, the owners) of the property consent to recording this Certificate of
Completion against the Property desent ed herein.
IAsaih mlary MU Wt NaMw dgMnp yVIMMarymel#Neerxl�waMlanxN)
Page 3 of 3 414
EXHIBIT F1: EXEMPLAR NOTE
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to
Borrower for Correlation
PROMISSORY NOTE
$78,400.00 , 2010
APN'. 481-39046T
Fresno. Cali
Promise to Pay. For value received, the undersigned, Habitat for Humanity Fresno,
Inc., a California nonprofit corporation ("Developer" or "Borrower"), promises be pay to
the order of the City of Fresno, a California municipal corporation, ('Lender'), the sum of
Seventy Eight Thousand Four Hundred Dollars and 00/100 ($78,4D0 00) along with
interest on unpaid principal at the rate of 2% per annum, all due and payable on or
before October 30, 2011. (the "Developer Loan Maturity Date') pursuant to the parties'
Disposition and Development Agreement and HOME Investment Partnerships Program
Agreement dated 2010("DDA/HOME Agreement'), on which date the
unpaid principal balance together with interest and unpaid penalties or late charges
where applicable thereon shall be due and payable, along with allomey s fees and costs
of collection, without relief from valuation and appraisement laws; provided that, in the
event the Developer is not then in default of the DDA/HOME Agreement, the Developer
may at any time prior to the Developer Maturity Date convey the completed Unit
severing the Note to a Law Income buyer through a purchase escrow (Escrow) that
conforms to the DDAIHOME Agreement and concurrent therewith assign this Note to
the Low Income Buyer, who shall assume such Note at 0% interest with lump sum
principal only payment due and payable from the Low Income Buyer on or before
("Low Income Homebuyer Loan Maturity Date".) In that event and
concurrent therewith the City shall forgive from principal due thereunder the sum of
Thirty Three Thousand Four Hundred and 001100 ($33,400.00) (provided the Developer
confirms said reduction in a writing noticed to the Escrow Officer and the City in the
manner provided in Ne DDA/HOME Agreement), and the Developer shall be released
from any further liability to the Lender under this Note, including as to any interest
accrued prior to assumption of the Note by the Low Income Homebuyer. Any failure to
make a payment required hereunder shall constitute a default under this Note.
Definitions. All capitalized terms used in this Note, unless otherwise defined, will have
the respective meanings speed in the DDAIHOME Agreement.
Business Day. Means any day other than Saturday, Sunday, or public holiday or the
equivalent for banks generally under the laws of California. Whenever any payment to
be made under this Note is aimed to be due on a day other than a Business Day, that
payment may be made on the raid succeeding Business Day. However, 8 the
extension would cause the payment to be made in a new calendar month, that payment
will be made on the next preceding Business Day.
Security
This Note, and any extensions or renewals hereof,
is secured by a Deed of
Page 1 of 12
J
Trust, Security Agreement and Fixture Filing with Assignment of Rents executed by
Borrower and recorded against the Property in Fresno County California. as Document
No. on ,that provides for acceleration upon stated
events, and executed in favor of the Lender ("Deed of Twat), creating and insured as a
not worse than 2nd position lien on the Property, subordinated only to a lien created by
Borrower to insure payment of monies borrowed to pay for the construction of a
completed Unit on the Property. Said Deed of Trust shall be subject to the terms of the
Template Rider to the Deed of Trust attached hereto, and such shall automatically be
incorporated in fine terms of me Dead of Trust that secures this Note. Said Dead of
Trust is insured by CLTA Lenders policy in the principal amount of, and endorsed for
this Note.
Time is of the Essence. It will be a default under this Note if Borrower defaults under
the DDAMOME Agreement, defaults under any other Loan Documents, or if Borrower
fails to pay when due any sum payable under this Note. In the event of a default by
Borrower, the Borrower shall pay a late charge equal to the lesser of 2% of any
outstanding payment or the maximum amount allowed by law. All payments collected
shall be applied first to payment of any costs, fees or other charges due under this Note
or any other Loan Documents then to the interest and then to principal balance. On the
occurrence of a default or on the occurrence of any other event that under the termsof
the Loan Documents give rise to the right to accelerate the balance of the indebtedness,
then, at the option of Lender, this Note or any notes or other instruments that may be
taken in renewal or extension of all or any part of the indebtedness will immediately
become due without any further presenhnenf demand, protest, or notice of any kind
Terms of Payment The indebtedness evidenced by this Note may, at the option of the
Borrower. be prepaid in whole or in part without penalty. Lender will apply all the
prepayments first to the payment of any costs, fees, late charges, or other charges due
under this Nate or under any of me other Loan Documents and then to the interest and
then to the principal balance.
All Loan payments are payable in lawful money of the United Stales of America at any
place that Lender or the legal holders of this Note may, tram time to time, in writing
designate, and in the absence of that designation, to:
City of Fresno - Finance
Accounts Receivable
2600 Fresno Street, Suite 2158
Fresno, CA 93721
Borrower agrees to pay all costs including, without limitation, attorney fees, incurred by
the holder of this Note in enforcing payment, whether or not suit is filed and including.
without limitation, all costs, attorney fees, and expenses incurred by the holder of this
Note in connection with any bankruptcy, reorganization, arrangement, or other similar
proceedings involving the undersigned that in any way affects the exercise by the holder
of this Note of As rights and remedies under this Note. All costs incurred by the holder
of this Nate in any action undertaken to obtain relief from the stay of bankruptcy statutes
are specdically included in those costs and expenses to be paid by Borrower. Borrower
Page 2 of 12 57s
will pay to Lender all attorney fees and other costs referred to in this paragraph on
demand.
Any notice, demand, or request relating to any matter set forth herein shall be in writing
and shall be given as provided in the DDAIHOME Agreement. No delay or omission of
Lender in exercising any right or power arising in connection with any default will be
construed as a waiver or as acquiescence. nor will any single or partial exercise
preclude any further exercise. Lender may waive any of the conditions in this Note and
no waiver will be deemed to be a waiver of Lenders rights under this Note, but rather
will be deemed to have been made in pursuance of this Note and not in modficetion.
No wa Iver of any default will be construed to be a waiver of or acquiescence In or
consent to any preceding or subsequent default.
Terms of Security Instruments The Deed of Trust securing this note provides as
follows:
DUE ON SALE -CONSENT BY BENEFICIARY. Beneficiary may, at its option, declare
immediately due and payable all sums secured by this Dead of Trust upon the sale or
transfer of all or any portion of the Property, or any interest therein, other than a sale to
a Low Income homebuyer as provided in the DDA/HOME Agreement, without the
Beneficiary's prior consent. 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
contrail, contract for deed, leasehold Interest with a term greater than three (3) years,
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 If any Trustor is a corporation, partnership or limited liability, company,
transfer also includes any change in ownership of more than twenty-five percent (25%)
of the voting stock, partnership interests or limited liability company interests, as the
case may be, of Trustor. However, this option shall not be exercised by Beneficiary if
such exercise is prohibited by applicable law.
Assignment by Lender. Lender may transfer this Note and deliver to the transferee all
or any part of the Property then held by It as security under this Note, and the transferee
will then become vested with all the powers and rights given to Lender, and Lender will
Men be forever relieved from any liability or responsibility in the matter, but Lender will
retain all rights and powers given by this Note with respect to Property not transferred.
Enforceablihv. If anyone or more of the provisions in this Note is held to be invalid,
iI or unenforceable in any respect by a court of oompetent judstliction, the validity,
legality, and enforceability of the remaining provisions will not in any way be affected or
impaired. This Note will be binding on and inure to the benefit of Borrower, Lender, and
their respective successors and assigns.
Governing Law, Borrower agrees that this Note will be deemed to have been made
under and will be governed "a laws of California in all respects, including matters of
construction, validity, and performance, and that none of its terms or provisions may be
waived, altered, modified, or amended except as Lender may consent to in a writing
duly signed by Lender or its authorized agents.
Page 3 of 12 J q
In wiliness whereof, Borrower has caused this Promissory Note to be executed by
its authorized agent as of the date and year first above wntten.
Habitat for Humanity Fresno Inc., Borrower
By: Date'
Name'. Anthony J. Miranda
Title: Executive Director
IAXV AmerymnlaSb of eGn1w mmnry
Page 4 of 12
ITEM PLATE RIDER TO DEED(S) OFTROSTI
The Truster (herein "Borrower") understands and agrees that the Note secured by this
Deed of Trust is made for the sole purpose of assisting in the purchase of the
Borrower's home as their principal place of residence. Therefore, the Borrower
understands and agrees that said Note secured by this Deed of Trust shall be
immediately due and payable upon the earlier of (1) upon any change in residency of
the Borrower from the Borrowers home used as security for the Note described above,
unless having obtained the written consent of the Beneficiary (herein "Lender') (2)
upon the sale or transfer, without the Lenders poor 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 deadlease,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.
Borrower also assigns to Lender all rents, issues and profits from said real property
reserving, however, the fight to called and use the same so long as there is no exisfing
default hereunder, and does hereby authorize Lender to collect and recover the same in
the name or Borrower of his successor in interest by use of any lawful means.
The Lender and Borrower acknowledge and agree that this security instrument is
second and subordinate in all respects to the liens, terms, covenants and conditions of
Me first Deed of Trust and shall not impair the rights of any institutional lender which is
Me maker of a loan secured by such first dead of trust, or such lenders assignee or
successor in interest, to exercise its remedies under the deed of trust in the event of
default by the Borrower. 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 farms and
provisions of Me first Deed of Trust are paramount and controlling, and they supersede
any other terms and provisions hereof in conflict herewith. 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 law
income households or otherwise restricting he Borrowers ability to sell the property
shall have no further force or effect on subsequent owners of purchasers of Me
property. Any person, including his successors or assigns (cher than he Borrower or a
related entity of the Borrower), receiving sole to the property through a foreclosure or
dead in lieu of foreclosure of the first Deed of Trust shall receive tole to Me property free
and clear from such restrictions.
In the event of a catastrophic occurrence that results in Me property having to be sold,
the portion of this existing second mortgage lien that results in the combined loci
value ratio being more than 100% of the value of he property will be released with no
forgiveness of that portion of the debt, and he contemporaneous execution of an
unsecured promissory note equal to the amount released from the second mortgage,
and a modification agreement that reduces he secured debt of Me existing second
mortgage by the amount of the new unsecured promissory note.
Page 6 of 12 55
Period of Affordability: The HOME Investment Partnerships Program sets periods of
affordability as provided in 24 CFR 92.254 based on the amount of HOME funds
provided. The minimum period of affordability for this program is thirty years (30 years.)
Year one shall be the 12 -month period following date of first sale after issuance of the
Certificate of Completion of the home which is the subject hereat with each succeeding
year beginning on the anniversary thereof and ending 12 month hence. There will be
no partial years.
Recapture of HOME Funds: Pursuant to 24 CFR 92.254(a)(5)(ii), the City of Fresno
requires that HOME funds be recaptured tithe home does not continue to be the
Bormwer's principal residence or if all or any part of Ne property or any interest in it is
said, rented, conveyed or transferred for the duration of the Period of Affordability. If the
net proceeds are not sufficient to recapture the full HOME investment plus enable the
homeowner to recover the amount of the homeowners downpayment and any capital
improvement investment made by the owner since purchase, the City of Fresno may
share the net proceeds. The net proceeds are the sales price minus superior loan
repayment (other than HOME funds) and any closing costs. The net proceeds may be
divided proportionally as set forth in the following mathematical formulas.
HOME investment x Net HOME amount to be recaptured
Proceeds
HOME inv narnern+
homeowner investment
Homeowner investment x Net = amount to homeowner
proceeds
HOME investment +
homeowner investment
In the event of foreclosure, the amount subject to recapture Is based on the amount of
net proceeds (B any) from the foreclosure sale.
THIS DEED OF TRUST IS SECOND AND SUBORDINATE TO THAT CERTAIN DEED
OF TRUST RECORDED I 1.
Page 6 of 12 60
EXHIBIT F2: EXEMPLAR NOTE
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to
Borrower for Cancellation.
PROMISSORY NOTE
$81,6000 2010
APN: 481-39047T
Fresno, California
Promise to Pay. For value received the undersigned, Habitat for Humanity Fresno,
Inc., a California noproft corporation ("Developer" or"Borrovisi, promises to pay to the
order of the City of Fresno, a California municipal corporation, ('Lender'). the sum of
Eighty One Thousand Six Hundred Dollars and 001100 ($81,600.00) along with interest
on unpaid principal at the rate of 2% per annum, all due and payable on or before
October 30, 2011, (the "Developer Loan Maturity Dale") pursuant to the poi
Disposition and Development Agreement and HOME Investment Partnerships Program
Agreement dated ("DDNFIOME Agreement'), on which date the unpaid
principal balance together with interest and unpaid penalties or late charges wham
applicable thereon shall be due and payable, along with attorney's fees and costs of
collection, without relief from valuation and appraisement laws; provided that, in the
event the Developer is not Nen in default of the DDAMOME Agreement, the Developer
may at any time poor to the Developer Maturity Data convey the completed Unit
securing the Note to a Low Income buyer through a purchase escrow (Escrow) that
conforms to the DDAMOME Agreement and concurrent therewith assign this Note to
the Low Income Buyer. who shall assume such Note at 0% interest with lump sum
prindpal only payment due and payable from the Low Income Buyer on or before
("Low Income Homebuyer Loan Maturity Data') In that event and
concurrent therewith the City shall forgive from principal due thereunder the sum of
Thirty Six Thousand Six Hundred and 00/100 ($36,600.00) (provided the Developer
confine mid reduction in a writing noticed N the Escrow Officer and the City in the
manner provided in the DDAIHOME Agreement), and the Developer shall be released
from any further liability to the Lender under this Note, including as to any Interest
accrued prior to assumption of the Note by the Low Income Homebuyer. Any failure to
make a payment required hereunder shall constitute a default under this Note.
Definitions. All capolized terms used in this Note, unless otherwise defined, will have
Me respective meanings specked in the DDA/HOME Agreement.
Business Day Means any day other than Saturday, Sunday, or public holiday or the
equivalent for banks generally under Ne laws of California. Whenever any payment to
be made under this Note is stated to be due on a day other than a Business Day, that
payment may be made on the next succeeding Business Day. However, if the
extension would cause the payment to be made in a new calendar month, that payment
will be made on the next preceding Business Day.
Page 7 of 12 /i
Security. This Note, and any extensions or renewals hereof, is secured by a Dead of
Trust, Security Agreement and Fixture Filing with Assignment of Rents executed by
Borrower and recorded against the Property in Fresno County, California, as Document
No. on that provides for acceleration upon stated
events, and executed in favor of the Lender ('Deed of TrusP), creating and insured as a
not worse than 2nd position lien on the Property, subordinated only to a lien created by
Borrower to insure payment of monies borrowed la pay for the construction of a
completed Unit on the Property. Said Deed of Trust shall be subject to the terns of the
Template Rider to the Deed of Trust attached hereto, and such shall automatically be
incorporated in the terms of the Dead of Trust that secures this Note. Said Deed of
Trust is insured by CLTA Lender's policy In the principal amount of, and endorsed for
this Note.
Time is of the Essence. It will be a default under this Note H Borrower defaults under
the DDA/HOME Agreement, defaults under any other Loan Documents, or t Borrower
fails to pay when due any sum payable under this Note. In the event of a default by
Borrower, the Borrower shall pay a late charge equal to the lesser of 2% of any
outstanding payment or the maximum amount allowed by law. All payments collected
shall be applied first to payment of any costs, fees or other charges due under this Note
or any other Loan Documents then to the interest and then to principal balance. On the
occurrence of a default or on the occurrence of any other event that under the terms of
Me Loan Documents give rise to the right to accelerate the balance of the indebtedness,
then, at the option of Lender, this Note or any notes or other Instruments that may be
taken in renewal or extension of all or any part of me indebtedness will immediately
become due without any further presentment, demand protest, or notice of any kind
Terms of Payment The intlebtetlness evidenced by this Note may, at the option of the
Borrower, be prepaid In whole or in part without penalty. Lender will apply all the
prepayments first to the payment of any costs, fees, late charges, or other charges due
under Mis Note or under any of Me other Loan Documents and then to the interest and
then to the principal balance.
All Loan payments are payable in lawful money of the United States of America at any
place that Lender or the legal holders of this Note may, from time to time, in writing
designate, and in the absence of that designation, to:
City of Fresno - Finance
Accounts Receivable
2600 Fresno Street, Suite 2156
Fresno, CA 93721
Borrower agrees to pay all costs including, without limitation, attorney fees, incurred by
the holder of this Note in enforcing payment, whether or not suit is filed, and including.
without limitation. all costs, attorney fess, and expenses incurred by the holder of this
Note in connection with any bankruptcy, reorganization, arrangement, or other similar
proceedings involving the undersigned that in any way affects the exercise by the homer
of this Note of its rights and remedies under this Note. All costs incurred by the holder
of this Note in any action undertaken to obtain relief from the stay of bankruptcy statutes
Page 8 of 12 61
are specifically included in those costs and expenses to be paid by Borrower. Borrower
will pay to Lender all attorney fees and other costs referred to in Nis paragraph on
demand. Any notice, demand, or request relating to any matter set forth herein shall be
in writing and shall be given as provided in the HOME Agreement No delay or omission
of Lender in exercising any right or power arising in connection with any default will be
constmed as a waiver or as acquiescence, nor will any single or partial exercise
preclude any further exercise. Lender may waive any of the conditions in this We and
no waiver will be deemed to be a waiver of Lender's nghts under this Note, but rather
will be deemed to have been made In pursuance of this Note and not in modification.
No waiver of any default will be construed to be a waiver of or acquiescence in or
consent to any preceding or subsequent default.
Terms of Security Instruments The Deed of Trust securing this note provides as
follows,
DUE ON SALE—CONSENT BY BENEFICIARY. Beneficiary may, at its option, declare
immediately due and payable all sums secured by this Deed of Trust upon the sale or
transfer of all or any portion of the Property, or any interest therein, other than a sale to
a Low Income homebuyer as providetl in the DDA/HOME Agreement. without the
Beneficiary's prior consent 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 outhght sale, dead installment sale contract, land
contract, contract for deed leasehold interest with a term greater than three (3) years.
lease -option contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to Me Property, or by any other method of conveyance a
land interest. If any Trustor is a corporation, partnership or limited liability, company,
transfer also includes any change in ownership of more than twenty-five percent (25%)
of the voting stock, partnership interests or IimHetl liability company interests, as the
case may be, of Trustor. However, this option shall not be exercised by Beneficiary R
such exercise is prohibited by applicable few.
Assignment by Lender. Lender may transfer this Note and deliver to the transferee all
or any part of the Property then held by it as security under this Note, and the transferee
will then become vested with all the Powers and rights given to Lender; and Lender will
then be forever relieved from any liability or responsibility in the matter, but Lender will
retain all rights and powers given by this Note with respect to Property not transferred.
Enforceability. If anyone or more of the provisions in this Nola is trek tons invalid
illegal, or unenforceable in any respect by a court of competent jurisdiction, the validity,
legality, and enforceability of the remaining provisions will not in any way be affected or
impaired. This Note will be binding on and inure to the benefilof Borrower, Lender, and
their respective successors and assigns.
Governing Law. Borrower agrees that this Note will be deemed to have been made
under and will be governed by the laws of California in all respects. including matters of
construction, validity, and performance. and that none of its terms or provisions may be
waived, altered. modified or amended except as Lender may consent to In a writing
duly signed by Lender or its authorized agents,
Page 9 of 12 6 2
In witness whereof, Borrower has caused this Promissory Note to be executed
by its authorized agent as of the date and year f rst above written.
Habitat for Humanity Fresno Inc., Borrower
By: Date'
Name: Anthony J. Miranda
Title: Executive Director
IAarh owmmd�m m xaowf cared)
Page 10 of 12 �lY
OFTROSTI
The Trustor (herein "Borrower") understands and agrees that the Note secured by this
Dead of Trust is made for the sole purpose of assisting in the purchase of the
Borrowers home as their principal place of residence. Therefore, the Borrower
understands and agrees that said Note secured by this Deed of Trust shall be
immediately due and payable upon the earlier of (1) upon any change in residency of
the Borrower from the Borrower's home used as security for the Note described above,
unless having obtained the written consent of the Beneficiary (herein 'Lei ', (2)
upon the sale or transfer, without the Lender'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, Ede or interest therein: whether legal, beneficial or
equitable', whether voluntary or involuntary: whether by outight sale, deed, installment
sale contract, land contract, contract for dead, lease -option contract, or by sale,
assignment, or transfer of any beneficial interest in or to any land trust holding fide to
the Property, or by any other method of conveyance of land interest.
Borrower also assigns to Lender all rents, issues and profits from said real property
reserving, however, the right to collect and use the same so long as there is no existing
defaust hereunder, and does hereby authorize Lender to wiled and recover the same in
the name. of Borrower of his successor in interest by use of any lawful means.
The Lender and Borrower acknowledge and agree 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 lenders assignee or
successor in interest, to exercise its remedies under the dead of trust In fire event of
default by the Borrower. These remedies include the right to foreclosure or exercise
power of sale or to accept a dead or assignment in lieu of foreclosure. The terns 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 dead in lieu of foreclosure of the first Dead 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 Borrowers ability to sell the property
shall have no further form or effect on subsequent owners or purchasers of the
property. Any person, including his successors or assigns (other than the Borrower or a
related entity of the Borrower), receiving title to the property through a foreclosure or
dead in lieu of foreclosure of the first Dead of Trust shall reserve title to the property free
and clear from such restrictions
Inthe event of a catastrophic occurrence that results in the property having to be sold.
the portion of this existing second mortgage lien that results in the combined loan -to-
value mfio 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 Ne amount of the new unsecured promissory note.
Page 11 of 12 i
r4
Period of Affordability: The HOME Investment Partnerships Program sets pends of
affordability as provided in 24 CFR 92.254 based on the amount of HOME funds
provided. The minimum period of affordability for this program is thirty years (30 years I
Year one shall be the 12 -month period following date of first sale after issuance of the
Certifcate of Completion of the home which is the subject hereof, with each succeeding
year beginning on me anniversary thereof and ending 12 month hence. There will be
no partial years.
Recapture of HOME Funds: Pursuant to 24 CFR 92.254(a)(5)(ii), the City of Fresno
requires that HOME funds be recaptured'd the home does not continue to be the
Borrower's principal residence or g all or any part of the property or any interest in it is
sold rented, conveyed or transferred for the duration of the Period of Affordability. lithe
net proceeds are not sufficient to recapture the full HOME investment plus enable the
homeowner to recover the amount of the homeowner's downpayment and any capital
improvement investment made by the owner since purchase, the City of Fresno may
share the net proceeds. The net proceeds are the sales price minus superior loan
repayment (other than HOME funds) and any closing costs. The net proceeds may be
divided proportionally as set forth in the following mathematical formulas:
HOME investment x Net = HOME amount to be recaptured
proceeds
HOME investment+
homeowner investment
Homeowner investment x Net amount to homeowner
proceeds
HOME investment+
homeowner investment
In the event of foreclosure, the amount subject to recapture is based on the amount of
net proceeds (if any) from the foreclosure sale.
THIS DEED OF TRUST IS SECOND AND SUBORDINATE TO THAT CERTAIN DEED
OF TRUST RECORDED I ].
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f ID