HomeMy WebLinkAboutHabitat for Humanity Single Family Homes Echo AveREPORT TO THE CRY COUNCIL
Apol 30, 2009
FROM: KEITH BERGTHOLD, Interim Director
Planning and Development Department
BY: CLAUDIA CAZARES, Interim Manager
Housing and Community Development D v
SUBJECT: APPROVE A$M,000 DISPOSITION ANDi
WITH HABITAT FOR HUMANITY FRESNO,
AFFORDABLE SINGLE-FAMILY HOMES 01
KEY RESULT AREA hnmimacgcou c
c.uY 9d o
One Fresno Oi1v4t in
RECOMMENDATION
Sten recommends Cly Council approve a $1T ,000 Oisp x
with Habitat for Humanity Fresno, Inc. (Habitat) for =no"
North Echo Avenue.
EXECUTIVE SUMMARY
On September 12, 2009, the City issued a Request for Pmpo:
affordable housing on surplus City -owned Infill properties coal
incentive,
to CM offered to sell the property to to developer
that amount as the HOME subsidy to the proposed afdrdable
Submttes a successful propose! to construct two -sweat oquff
Etlw Avenue stria. The sale price of each property will be So
sale to the homebuyer to make Me Mme affordable. In addill
homebuyers will receiv r -teau t equity crest thorned Me pact
KEY OBJECTIVE BALANCE
Approvd of the Agreement presents an opportunity to maks
Satisfaction, Employee Satisfaction, and Financial Menage
impacts the Customer Service aspect by damonstratng the
Partnerships to ensure adequate and affordable housing to
attributes to Employee Satisfaction by supporting efforts th,
producing affordable housing. In addition, it demonstrates
by encouraging the practice of leveraging available resourc
BACKGROUND
In October of 2 , Me Housing and Community Developm
Echo Avenue (172 and 182 N. Echo). The lot to Me south'
rehabilitation of two existing structures that will be contends
AGENDA ITEM NO.: j N
COUNCIL MEETING: April 30, 2009
MI'MWEO By
DEPARTMENT DIRE
CITYWISAGER
elann i
)EVELOPMENT AND HOME AGREEMENT
INC., FOR CONSTRUCTION OF TWO
J NORTH ECHO AVENUE
ition and Development and HOME Agreement
lion of two affordable single-family homes on
at (RFP) hom qualified developers to develop
ad at various sites throughout the City. As an
at Me City's initial purchase prim, and provide
housing project. In raepooee to the RFP. Habitat
f affordable single-family homes on Me North
9,500 each, of which a portion will be forgiven at
an 0 Me Ciys mortgage asabtarKe, the
mea of Meir home, as facilitated through HabMt.
t a positive Impact to the Customer
hent Key Objectives. The approval also
City's commitment to strengthening
low-income householde. The approval also
it help achieve Housing Element goals of
creative and resourceful Financial Management
So to develop affordable housing.
ant Division purchased two infill lots on North
was sold to Marko Construction to complete
of into a duplex.
REPORT TO THE CITY COUNCIL
RE APPROVAL OF $177,000 DISPOSITION AND DEVELOPMENT AND HOME AGREEMENT WITH
HABITAT FOR HUMANITY FRESNO
April W, 2009
Page 2
A smell porton of the south tot was combined with the larger lel to the north, and subsequently split into
two equal lots; creating two single-family lots, in addition to Me duplex lot.
In September of 2008, the City issued an RFP to create affordable housing opportunities while disposing
of this site on North Echo and other scattered infill sites throughout the City. In response to the RFP,
Habitat submitted a successful proposal to construct two "sweat equity affordable single-family homes on
the North Echo Avenue sites. Habitat is a local leading non-profit housing development organization
committed to providing safe, decent, and affordable housing, and has a 23 -year history of partnering with
low -Income families to ensure that their housing and homeownership experience is positive and
successful.
Habitat will acquire the lots through esi and enter into a 2% Interest loan In the amount of $177,000 (floe
initial purchase price that the City old for the two lots), all the City.
The propera s to be sold to and developed by Habitat are as follows:
Iwaeal •.a..avi sa twPm.1 oppalwevaue We Av
Nunhr xwe
172 N. Edeavznie 959 -292 -An 71,45 f]5,500 patim
18214.GMa�e 054392.28 7.9th 535.500 mi
Once the houses ere constructed. Ne City will forgive a porton of the loan to accommodate for the difference
between the Cry's Initial purchase price and the current medal value ($35,500) per home. The loan
forgiveness is the only viable option to accommodate for Me reduction in property value, ensure not only that
the City is fully reimbursed for the initial property acquisition cost, but that the home Is affordable for a low-
income homebuyer.
The two affordable 'sweat equity houses will be sold to low -Income households with a photon of the HOME
subsidy to beI used as mortgage assistance. In addition to the mortgage assistance, the homebuyers will
reserve 'sweat equity credit toward the purchase of their home from Habitat. Both houses will be Mrea-
bedroom. two -bathroom units, and have solar panels add Universal Design features in accordance with City
Ordinenca No.200853. Habltat's'sweat equity meMM of Musirg development consists of training families In
basic construction so that May may assist in the building of their home. Habitat also provides training and
support services in the areas of home maintenance, Mme improvement, Intenor design, budgetng, and
consumer awareness.
A National Environmental Policy Act review resulted in a finding of no significant impact and the California
EnWrenmental Quality Act review resulted In an Exempt Status. The Cry received federal approval for release
of HOME Program funds pursuant to 26 CFR Pad M on September 5, 2006.
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
The Housing and Community Development Commission considered and recommended approval of this had on
April 22, 2009,
FISCAL IMPACT
This action will have no impact to the Planning and Development Department's FY 2009 Budget
L,s IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII
FRESNO County Recorder
g RECORDED AT THE REQUEST OF Robert CWerner
5$
AND MEN RECORDED RETURN TO: DOC— 2009-0073859
g CNyof Fmeno Monday, JUN 01, Me 13:17:07
g6
city darn§Office Tit Pd $0.00 JZGbrR-00 HI750
i#
NoFes—Gov? Coda5103
a fTV 2600 Finano Street, Room 2133
Fresno, CA 93721
space ABOVE rHS LME EORFECORJERS UBEOM'n
This Agreement is renarded at the request and fm the benefit of the Cdy of Fresno and is exempt
from Me payment of a recording fee pursuant to Government Code Section 6103 and 27363.
CITY OF FRESNO
By
ASouza
It's:: City Manaoer
Date Ahuovadm
DISPOSITION AND DEVELOPMENT
AND
HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT
by and between
CITY OF FRESNO,
a municipal corporztion
and
Habitat for Humanity Fresno, Inc.
regarding
`172 and 182 North Echo Avenue (APN: 459-292-287/459-292-27T)"
Low -Income Single -Family Housing Development
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS..................................................................
ARTICLE 2. TRANSFER OF AFFORDABLE PROJECT PROPERTY
ARTICLE 3. TERMS.............................................................................
ARTICLE 4. GENERAL REPRESENTATIONSIWARRANTIES....................................... 10
ARTICLE S. HOME PROGRAM REPRESENTATIONIWARRANTIES ............................. 12
ARTICLES. COVENANTS AND AGREEMENT OF DEVELOPER .................................. 16
ARTICLE T. HOME FUNDS.............................................................................................. 20
ARTICLE S. DEVELOPMENT AND CONSTRUCTION OF PROJECT_ .......................... 21
ARTICLE 9. PROJECT OPERATIONS............................................................................. 25
ARTICLE 10. INSURANCE AND INDEMNITY
ARTICLE 11. DEFAULT AND REMEDIES....,
ARTICLE 12. GENERAL PROVISIONS.........
EXHIBITS
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 F: EXEMPLAR NOTE -TEMPLATE RIDER TO DEED(S) OF TRUST
DEVELOPMENT AND DISPOSITION
AND
HOME INVESTMENT PARTNERHIPS PROGRAM AGREEMENT
This Development and Disposition and HOME Investment Partershi a Pr rem
Agreement (hereinafter referred M as the "Agreement") is entered iota th'
2009, by and between the CITU OF FRESNO, a municipal mryoretion, acting th ugh its
Planning and Development Department— Housing and Community Development Division
(hereinafter referred to as the "CITY'), and Habitat for Humanity Fresno, Inc., a California
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 Me U.S. Department of Housing
and Urban Development (hereinafter referred to as "HUD"), under Title II of the Cranston-
Gonzalez National Affordable Housing Act of 1990, as amended (hereinafter referred to as
the "ACT"); and
WHEREAS, to advance the supply of Affordable Housing within the City of Fresno,
the CITY 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'Property") located within the boundaries of the City of Fresno, owned by the
CITY, as more particularly describetl 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, the DEVELOPER desires to construct two (2) separate single -family
Affordable Housing Units to be sold as Low-Income Housing and related on-site and off-site
improvements, hereinafter referred to as the'Pmjecr, as more particularly described in the
Project Description and Schedule attached hereto as EXHIBIT "B', incorporated herein; and
WHEREAS, to advance the supply of Affordable Housing within the City of Fresno,
Me CITY desires to provide assistance to the Project in the total amount of One Hundred
Seventy-Seven Thousand and 00!100 Dollars ($1]],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 Property and Na Affordable Housing covenants,
see attached Exhibit "F" Exemplar Note (Project Loan) and the attached Exhibit "C'
Declaration of Restrictions, respectively, and
WHEREAS, the CITY will transfer fee title to the Project Property "as is" to the
DEVELOPER through Escrow with the Chicago Ti le Company located at 7330 N. Palm,
Suite 101, Fresno, CA 93711 (Attention: Cherie Zuniga at [559-051-3700]), The partes
acknowledge and agree that the fair market purchase price for Me Property is the amount of
One Hundred Seventy-Seven Thousand Dollar: and 00/100 (177,000.00). This Agreement,
when 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. Parties 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 (it) required by the Escrow holder
to effect the closing. The Escrow will be considered closed on the date that the Escrow
holder is prepared! to issue a standard CLTA/ALTA ownefs title insurance policy to
DEVELOPER insuring fee lBle and records the grant dead. 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 Projed
Pursuant to the National Environmental Policy Ad ("NEPA"), resulting In a finding of no
sgnificant impact according to the provisions of the NEPA (Environmental Assessment No.
014-06051) and the California Environmental Quality Ad ("CEQA"), resulting in an Exempt
Status according to the provisions of CEQA (Environmental Assessment No. 014-06051)
and CITY has received federal approval for release of HOME Program funds pursuant to 24
CFR Part 58 on September 5, 2006; 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, (it) is in the vital and best interests of the CITY, and the health,
safety, and welfare 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 admintslrabve 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, onA%r, 2009. Me Housing and Community Development
Commission of the City, resno reviewed this Agreement and recommended approval.
NOW, THEREFORE, IN CONSIDERATION of the above recitals, 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 the meaning and content set forth In this Article wherever used in
this Agreement, attached exhibits or alfachments 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 Ad of 1990, as most recently
amended
1.3. Affirmative Madretina means a good faith effort to attract eligible persons of all
anal, ethnic and gentler groups, in the housing market area, to purchase the Housing
Units) that are proposed for construction an the eligible Property, as hereinafter defined.
1.4. Affordable Housing means Me 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 affordability
requirements shall run with the land for the Affordability Period subject to release as
provided in this Agreement.
1.5. Affordability Pedgd Means the twenty (20) 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.
1.8. Butlget means the pro forma Budget, and any changes thereto, approved by the
CITY's Housing and Community Development Division Manager provided Me total amount of
HOME Funding allocated to the Project shall not be increased without City Council approval.
attached hereto as EXHIBIT "D".
11 Certificate of Completion means Nat certificate issued, in the form attached as
EXHIBIT "E" ("CertMcate 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 Projectmach
Project Unit on the Property, including, without limitation, delivery of materials and any
wodc, beyond maintenance of the Property in be status quo condition, and not later than
August 1, 2009.
1.10. Declaration of Restrictions means the Declaration of Restrictions in the form
attached hereto as EXHIBIT "C", which shall be recorded against the Property no later than
the close of escrow hereunder, setting out the Affordable Housing covenants and
requirements of this Agreement which shall run with the land.
1.11. Dead of Trust means that Deed of trust (including security agreement) given
by DEVELOPER as Trustor, to Me CITY as beneficiary, through an escrow established by
DEVELOPER at its sole cost and expense with Chicago Title Company, and recorded
against the Property to ensure the Note, together with the Rider to Dead of Trust attached
as Exhibit 'Fm to the Note and acceptable to the City Attorney, as well as any amendments
to, motlfications of and restatements of said Dead of Trust, which Dead of Trust shall be
subordinated m Project lenders Per the Budget attached as Exhibit "O". The terms of any
such Dead of Trust are hereby incorporated into this Agreement by this reference.
1.12. Eligible Costs means the HOME Program eligible property acquisition costs
funded by the Loan, consistent with the Budget attached as EXHIBIT "D", allowable under
24 CFR Part 92, as specified in 24 CFR 92.205 and 92.208, and not disallowed by 24 CFR
92.214, provided, however, that costs incurred in connection with any activity Nat is
determined to be ineligible under the Program by HUD or the CITY shall not constitute
Eligible Costs.
1.13. Event of Default shall have the meaning assigned to such term under Section
11.1 hereunder.
1.14. Family has the same meaning givers that term in 24 CFR 5403,
1.15. Hazardous Materials 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 safety 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 Mat are used or consumed in the normal
course of developing, operating or occupying a housing project, to Me 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 Funds (also referred to In Mis Agreement as
HOME Funds) means the HOME Program monies constituting Me Loan, in an amount not
to exceed the sum of One Hundred Seventy -Seven Thousand Dollars and 00/100
($177,000.00) used for HOME Program eligible property acquisition costs.
1.17. Household 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 the total amount
not to exceed the lesser of Me sum of One Hundred Seventy -Seven Thousand Dollars and
00/100 ($177,000.00) and the aggregate HOME Program per unit rap (24 C.F.R. 92.250)
for the two (2) HOME- assisted Units as determined by Me CITY made available by the
CITY to the Project pursuant to this Agreement, as more specifically described in the
Budget and in Me Promissory Note attached hereto as Exhibit "F". The Loan shall be
allocated $88,500 to each of the two parcels, shall be payable in accordance with the terms
of the Note, shall be secured by a dead of trust on each parcel constituting Me Property,
and shall be subject to the Rider to Dead of Trust attached to the Exhibit "F" Exemplar Note.
As to each such Note and Dead of Trust there shall be forgiven from the principal due
thereunder the sum of $53,000 upon conveyance of a completed Unit to a Low Income
homebuyer through purchase escrow, so long as Developer is not then in default of this
Agreement and confirms said reduction in principal in a writing noticed to the CITY in the
manner provided herein.
1.20. Loan Documents are collectively this Agreement, Me Note(s). Deeds) of
Trust, Declaration(s) of Restrictions and all related documents/instruments 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 notexceed
silly percent (60%) of the median income for the Fresno, California area as determined 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 Mat such variations are necessary.
1.23. Note or Notes mean(s) the assumable, partially forgivable Project Note on
each parcel, substantially in the form attached hereto/incorperaled herein as Exhib@'F' in
principal amount of $88,500 allocated to each parcel. 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 lien 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 CITY.
1.25 Pronram Income has the meaning provided in the HOME program including 24
CFR 92.503.
1.26 Pro ed means Me two(2)single-family low-income Affordable Housing Units
to be constructed, marketed, and sold as Low -Income Housing, and related onsite and off-
site improvements all as described in the Project Descriptlon and Schedule attached hereto
and incorporated herein as EXHIBIT "B'. upon the Property as more particularly described!
in EXHIBIT "A".
1.27 Protect 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 January 30, 201 O.
1.28 Project Schedule means the schedule for completion of the Project included
within the EXHIBIT "B° Project Description and Schedule, consistent with the above Project
Completion Date.
1.29 Property means the vacant, unimproved City -owned HOME Program eligible
property located at 172 North Echo Avenue (Assessor Parcel Number 459-292-28T) and
182 North Echo Avenue (Assessor Parcel Number 459-292-27T), Fresno, Califamia, 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 alow-income housing project as provided herein.
1.30 Unit means each of the two (2) single-family homes developed upon Me
Property and preserved as Affordable Housing for the duration of the Affordability Period.
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 Me
Affordable Project Property from the CITY, upon the terms and conditions set forth in this
Agreement.
2.2 Purchase Price. The fair market purchase price for the Affordable Project
Properly shall be One Hundred Seventy-Seven Thousand Dollars and 001100
($177,000.00) ("Purchase Price'.) DEVELOPER and Me CITU agree that the Purchase
Price is M be based upon Me January 6, 2006 appraised value of the Affordable Project
Property. The Purchase Price shall be paid as follows'.
A. Within fifteen (15) days after the effective date of this Agreement the
parties shall open an escrow (the "ESUDW) with Chicago Title Company, 7330 N. Palm,
Suite 101, Fresno, CA 93711 (Attention Cherie Zuniga at (559) 451-3700). At the Gose of
escrow the DEVELOPER shall deliver two (2) Notes to the City in the full amount of Me
Purchase Price as payment for each parcel constituting the Property.
B. DEVELOPER shall pay all escrow fees and closing costs, including
document preparation fees and recording fees, and the premium for the buyer's Policy of
title insurance.
2.3 Condition of Tdle. Upon the Closing, CITY shall convey to DEVELOPER
marketable and insurable fee simple title to the Affordable Project Property by duly
executed and acknowledged! standard Title Company form grant deed(s) ("Deed").
Evidence of delivery of marketable and insurable fee simple title shall be the issuance by
Chicago Title Company (the "Title Company") to DEVELOPER of CLTAIALTA Owner's
Policy of Title Insurance in the amount of the Purchase Price, insuring lee simple Idle to the
Affordable Project Property, the DEVELOPER will accept title subject to exceptions 1
through 4 shown on Mose certain Preliminary Title Reports prepared by the Title Company
under Order No. 0935023518 and 0935023519, Dated March 25 and March 26, 2009 (Me
"Tkle Policies'),
2.4 Conditions Precedent to Cimino. The following are condkions precedent to
DEVELOPER's obligation to purchase the Affordable Project Property, accept the Loan and
perform its obligation under this Agreement (Me "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 Me event of the
failure of the satisfaction of any of the Affordable Project Conditions Precedent.
DEVELOPER shall have Me right. but not the obligation. to terminate the Agreement with
respect to the Affordable Project.
A. DEVELOPER shall have receive! Me unconditional commitment of
Title Company to issue the Title Policy upon the Closing in Me farm approved by
DEVELOPER as buyer.
B. DEVELOPER shall have approved Me amount of the construction
financing required for the development of the Affordable Housing Projact.
C. DEVELOPER shall have given written notice to the CITY within fifteen
(15) days after Me effective date of this Agreement that it has inspected the Affordable
Project Property and shall accept Me 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 its sole and absolute discretion,
than DEVELOPER may terminate the Agreement by written notice to the CITY and without
Iiabilty 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 the Loan at Closing.
E. DEVELOPER has submitted the Finance Plan to the CITY and the
CITY has approved the Finance Plan.
2.5 Access to the Property. DEVELOPER shall be pemritted to enter the
Affordable Project Property during reasonable daylight hours, upon DEVELOPER's
satisfaction of liability insurance requirements of this Agreement DEVELOPER will give the
CITY 24 hours written notice of its intent to enter onto the Affordable Project Property.
2.8 Joint Escrow Instructions. This Agreement, when signed by both parties and
deposited with the Escrow holder will be the partiesjoint escrow instructions. 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) identified in this Agreement; or (ii) required by the Escrow holder
to effect Me closing. Either party may tender supplemental escrow instructions consistent
with this Agreement.
2.7 Escrow Closing. The parties intend for the Closing to take place on a date
selected by Buyer but in no event later Man May 30, 2009 (the "Affordable Project Closing
Date').
A. At or before the Closing, CITY shall deliver to Escrow holder or
DEVELOPER the following:
(i) a duly executed and acknowledged Deed(s);
(ii) 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 the 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.
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.
2.8 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 It is vacant and unoccupied.
ARTICLE 3, TERMS
3.1 Loan of HOME funds. The CITY agrees convey Ne Property to the
Developer, and ro accept two (2) Notes from the Developer in the full amount of the
Purchase Price, all under the terms and conditions provided in this Agreement. The Loan
shall be assignable as provided in this Agreement and the Note(s).
3.2 Loan Documents. The DEVELOPER shall execute and deliver to Ne CITY
the Loan Documents including the Note(s), and notarized Deed(s) of Trust, for recordation
against Vie Property.
3.3 Tenn of Agreement This Agreement is e0ecbve upon the date of execution
and shall remain in force for the duration of Me 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 of in on as
provided hereunder, without default, by DEVELOPER prior to Property sale to
DEVELOPER hereunder, Ne CITY agrees to record a Nonce of Cancellation regarding this
Agreement, upon the written request of DEVELOPER.
3.4 Loan Repayment and MatunN. The Loan will be due and payable in
accordance with the Note(s) and not later Men Me maturity data provided in Ne Note(s).
3.5 Incorporation of Documents. The DEV LOPER proposal date October 13,
2008, and the CITY Council approved Minutes c o , 2009, approving this Agreement,
Me Loan Documents, the Act and HUD regulatfons 24 CRF Part 92, and all exhibhs,
attachments, documents and instruments referenced herein, as now in effect and as may
be amended from time to time, constitute pan of this Agreement and are incorporated
herein by reference. All such documents have been provided to the parties herewith or
have been othervdse provided to/procured by the parties and reviewed by each of them
prior to execution hereof.
36 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 Pan 92
ARTICLE 4. GENERAL REPRESENTATIONS AND WARRANTIES OF DEVELOPER
4.1 Existence and Qualification. 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 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 creditors' rights generally, and (b) the
1101
application of general principles of equity without the joinder of any other party
4.2 No Litigation Material to Financial Condition. The DEVELOPER represents
and warrents as of the date hereof that, except as disclosed to and approved by CITY in
writing, no litigation or administrative proceeding before any court or governmental body or
agency is now Pending, nor, to the best of DEVELOPER's knowledge, is any such litigation
or proceeding now Unfastened 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 warrants as of the
date hereof that no official, officer. agent, or employee of the CIN directly of indirectly
owns or controls any interest In DEVELOPER, and no person, directly or indirectly owning
or controlling any interest in DEVELOPER, is an official, officer, agent or employee of the
CITY.
4.4 No Legal Ber. The DEVELOPER represents and warrants as of the date
hereof that the execution, delivery, performance, or observance by DEVELOPER of this
Agreement will not, to the best of DEVELOPER'S knowledge, materially violate or
contravene any provisions of. (a) any existing law or regulation, or any order of 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 IN 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 Violation of Law. The DEVELOPER represents and warrants as of the
date hereof that, to the best 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 Litigation Material to Prous . The DEVELOPER represents and warrents
as of the date hereof that, except as disclosed W. 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, of 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 eller directly or indirectly have an adverse effect on or impair the
completion of the Project.
4.7 Assurance of Governmental Approvals and Licenses. DEVELOPER
represents and warrants, as of me data hereof, that DEVELOPER has obtained and, to the
best of DEVELOPER'S knowledge, is in compliance with all federal, state, and local
govemmental reviews, consents, authorizations, approvals, and licenses presently required
by law to be obtained by DEVELOPER for the Project as of the data hereof,
ARTICLE 5. HOME PROGRAM REPRESENTATION AND WARRANTIES BY
DEVELOPER
DEVELOPER, for itself and its development team, represents and warrants that:
51 Accessibility. The DEVELOPER warrants, covenants and agrees that it shall
comply with 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973
(29 U.S.C. 794), including, without limitation, the construction of the Project so that it meets
the applicable accessibility requirements, including, but not limited to, Ne following:
A. All housing units shall be made accessible, upon request of the
prospective homebuyer, if the nature of the handicap of an expected occupant so requires.
In such rase, the homebuyer shall be given the opportunity to consult with DEVELOPER
regarding the specific design features to be provided If accessibility features selected at
the option of the homebuyer are ones covered by the standards prescribed by 24 CFR Sac.
8.32, those features shall comply with the standards prescribed in Sec. 8.32. The
homebuyer shall be permitted to depart from particular specifications of these standards in
order to accommodate his or her specific handicap. The cost of making a unit accessible
under this paragraph may be included in Ne mortgage amount within the atlowable
mortgage limits, where applicable. To the extent such costs exceed allowable mortgage
limits, they may be passed on to the prospective homebuyer, subject to maximum sales
price limitations (24 CFR 235.320.)
5.2 Affirmative Marketing. The DEVELOPER warrants, covenants and agrees
Nat it shall comply with all affirmative marketing requirements, including without limitation,
Nose set out at 24 CFR 9124 CFR 92.351, In order to provide information and
othervi se attract eligible persons from all racial, ethnic and gender groups in the housing
market in the sale of Project Unifa. DEVELOPER shall be responsible for complying with
the CITY "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 Availability of HOME Funds. The DEVELOPER understands and agrees that
Na availability of HOME Funds is subject to the 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 to the CITY by HUD and the CITY receives
and allocates said Funds. No other funds owned or controlled by the CITY shall be
obligated under this Agreement.
5.4 Compliance with Aareement. 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 this
Agreement, the CITY may suspend or terminate this Agreement and all other agreements
with DEVELOPER without waiver or lim0ation of rightsrremedies otherwise available to the
CITY.
5.5 Conflict of Interest. The DEVELOPER warrants, covenants and agrees that it
LY]
shall comply with the Conflict of Interest requirements of 24 CFR 92.356 including, without
limitation, that no officer, employee, agent or consultant of DEVELOPER may occupy a
Project Unit. DEVELOPER understands and acknowledges that no employee, agent,
consultant, officer 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(1), no owner, developer or sponsor of the Project, or officer, employee, agent or
consultant thereof, may occupy a Project Unit.
5.6 Cgnstructon 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 tlme of issuance of Certification of
Completion. In the absence of a local code for construction, DEVELOPER agrees to
comply with the applicable standards identified in 24 CFR 92.251.
57 Covenants and Restrictions to Run with the Land. The CITY and
DEVELOPER expressly warrent, covenant and agree to ensure that the covenants and
restrictions set forth in this Agreement are recorded and will run with the land, provided,
however, that, consistent with the Loan Documents, CITY may release said covenants and
restrictions only upon recapture of all HOME funding allocated to the Unh(s) by the CITY.
DEVELOPER further warrants, covenants and agrees to ensure that the covenants and
restrictions set forth herein shall run in favor of the CITY.
A. The CITY and DEVELOPER hereby declare their understanding and
intent Nat the covenants and restrictions set forth herein directly benefit the land (a) by
enhancing and increasing the enjoyment and ownership of the proposed Project by certain
LowIncomeFamilies, 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 entitletl 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 enlaled
to enforce any such covenants or restrictions shall in no event be deemed a waiver of the
same, or of the right to enforce the same at any time or from fims to time thereafter, or an
estoppel against the enforcement thereof.
5.6 Displacement of Persons. The DEVELOPER warrants, covenants and agrees
that pursuant to 24 CFR 92.353, it will lake all reasonable steps to minimize the
displacement of any persons (families, individuals, businesses, nonprofit organizations and
13
farms.) The parties acknowledge and agree that the Property is vacant and unimproved.
5.9 Initial Income Certification . The DEVELOPER warrants, covenants and
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 cenificabons from each of the two (2) Affordable Project Uni
Household. DEVELOPER shall make a good farm 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 verification 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 form from the Social Security
Administration and California Department of Social Services if the applicant receives
assistance from e8her of such agencies; (4) obtain an income tax return for the most recent
tax year, or (5) If the applicant is unemployed and has no such tax return, obtain anomer
forth of independent verification. Copies of household income certification and verification
must be available for review and approval by Me 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
certification/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 mat 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
982.401 g), including any amendments thereto, in the Affordable Housing Project. These
requirements apply to all units and common areas in me Affordable Housing Project.
DEVELOPER shall incorporate or cause incorporation of this provision In all contracts and
subcontracts for work Performed on the 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 Mat 8 shall comply with all federal laws and regulations described in Subpart H of 24
CFR Part 92, including, without limitation, any requirement mat DEVEROPER comply with
the CITY's minority outreach program.
5.12 Other Laws and Requisitions. The DEVELOPER warrants, covenants and
agrees that, in addition m complying with the federal laws and regulations already cited in
this Agreement, DEVELOPER has reviewed, and shall comply with. all other federal laws
and regulations that apply to me HOME Program, including, without limitation, requirements
of 24 CFR 58.6 and the Flood Disaster Protection AIX of 1973, as amended (42 U.S.G.
40014128) 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 the Project as pan of ds acquisition
anchor construction of this Project.
B. The Protect is not located in a had identified by me Federal Emergency
Management Agency as having special flood requirements.
14
C. The Project requirements, Subpart F of 24 CFR Part 92, as applicable
and in accordance with me type of Project assisted, including, but not limited to, the limit on
per-unit subsidy amount at 24 CFR 92.250.
0. The property standards at 24 CFR 92.251.
E. The Project "Labof'requirements, as applicable, of 24 CFR 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276a - 276a-7), as
supplemented by Department of Labor regulations (29 CFR Part 5).
F. The provisions of Section 102 and 107 of the Contract Wolk Hours and
Safety Standards Act (40 U.S.C. 327-333), as supplemented by Department of Labor
Regulations (29 CFR Part 5), in regards to the construction and management of the
proposed Project.
G. The DEVELOPER and its contractors, subcontractors and service
Provides for the Project, shall comply with all applicable local, state and federal
requirements conceming equal employment opportunity, including compliance with E.O.
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 pad 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 States').
I. The provisions of the Clean Air Act (42 U.S.C. 7401 at seq.) and the
Federal Water Pollution Control Act (33 U.S.C. 1251 at seq.), as amended.
J. The provisions of Me Byrd Anti -Lobbying Amendment (31 U.S.C.
1352).
K. The provision of E.O.s 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 90-284.
N. Executive Order 11063 on Equal Opportunity and Housing.
0. Section 3 of Me Housing and Urban Development Ad of 1968.
P. The Housing and Community Development Act of 1974.
15
O. Clean Water Requirements 33 U.S.C. 1251.
R. Civil Rights Requirements, 29 U.S.C. Section 623, 42 U.S.0 Section
2000, 42 U.S.0 Section 6102,42 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 at. seq.
5.13 Religious Omanintions and Fath Based Activities. DEVELOPER warrants,
covenants and agrees that it shall not engage in any prohibited activities described in 24
CFR 92.257.
5.14 Reporting Requirements. The DEVELOPER warrents, covenants and agrees
that it shall submit peAormance reports to the CITY as required hereunder. Furmem ore,
the DEVELOPER agrees to provide, at the sale 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 AN rdbdiN. 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 Deed
of Trust.
5,16 Terminated Proects(s). 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 be 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 Adequate Repair and Maintenance. The DEVELOPER during ds time on title
shall maintain the Projects and Property In compliance with all applicable codes, laws, and
ordinances.
6.2 Affordable Housing. The DEVELOPER covenants and agrees that the two (2)
Project Units shall be sold only to Love -income families to constitute Affordable Housing, as
variously provided at 24 CFR 92.254.
6.3 Compliance With Environmental Lam. The DEVELOPER shall rause the
Project to be in compliance with, and not to cause or permit Me housing project to be in
violation of, any environmental law. rule, 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
16
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 last the eligible Property for such
violation. If a violation is discovered, the DEVELOPER shall pay for the reasonable cost of
Me independent consub ent.
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 am remain solely with the DEVELOPER;
B. Not to transport to or from the proposed project state), or use,
generate, manufacture, produce, store, release, diischarge, or dispose of on. under, or
about the project stte(s), or surrounding real estate, or transport to or from the project
she(s), or surrounding real estate, any hazardous or toxic chemicals, materials, substance,
or wastes or allow any person or entity 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 the CITY of the following:
1. Any proceeding or inquiry by any governmental authority with
respect to the presence of any ha;umdous 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, occuparl transferability, or use of the property under any
environmental law, rule, regulation, ordinance or statute; and
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, penaltties, costs, expenses (including
attorney's fees and expenses), and disputes of any kind whatsoever arising out of or
relating to the DEVELOPER or any other party's use 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 investgation, 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, conform 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
of the DEVELOPER to enable the CITY to comply with, conform to and obey) all federal
statutes, regulations, rules and policies applicable to the Program and the Project. The
CITY 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 funds need not contain a provision requiring the payment of the wages prevailing in
the locality as predetermined by the Secretary of Labor pursuant to the Davis -Bacon Ad (40
U.S.C. 276a -276a-5), to all laborers and mechanics employed in the development of any
pad of the housing, or Me overtime provisions, as applicable, of the Contract Work Hours
and Safety Standards Act (40 U.S.C. 327-332), and (ii) pursuant to Cal. Labor Code 1720,
the public participation 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 rale 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. NotwilhstmMing 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 slate 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 W
perform Me acts necessary to carry out the Project.
6.6 Financial Statements and Audita. The DEVELOPER, as a recipient of federal
financial assistance, is required to comply with the provisions of the Single Audit Act of
1984 (31 U.S.C. Sections 7501 et sea.), as amended. Annually, within one hundred and
eighty (180) days following: 1) the end of fiscal years) in which the HOME Funds are
disbursed hereunder, and 2) the end of fiscal years) in which this contrad shall terminate,
and otherwise upon the CITY's, written request during the term of this Agreement,
DEVELOPER, at Its sole cost and expense shall submit to the CITY:
A. Audited annual financial statements that 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 Inspection and Audit of Books. Records and Documents. 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 termination of
this Agreement.
A. The DEVELOPER will maintain books and records for Me Project using
generally accepted accounting principles. The DEVELOPER agrees to maintain books
and records that accurately and Polly show the date, amount, purpose and payee of all
expenditures financed with HOME Funds and to 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 moms must be
kept accurate and current. For purposes of this section, "books, records and documents"
include, without limitation', plans, drawings,specifications, ledgers, journals, statements,
contracls/agreements, funding intonation, 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 to this Agreement at the
CITY's expense, unless such audit shows a significant discrepancy in information reported
by me DEVELOPER in which case the DEVELOPER shall bear the cost of such audit. The
DEVELOPER shall also comply with any applicable audit requirements of 2/ CFR 92.506.
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 relating to the Programs and the Project
that may be performed relative to the performance of this Agreement.
6.6 Inspection of ProberN. 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 Liens. The DEVELOPER shall not create or incur, or suffer to be
created or incurred, or to exist, any additional mortgage, pledge, encumbrance, lien,
charge, or other security interest of any kind on the eligible Property, other than those
related to construction or pre -development loans in relation to the Affordable Housing
Project consistent with the attached Exhibit "D" Project Budget. without the prior written
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, state, and local laws
with regard to illegal discrimination, and Me DEVELOPER shall not illegally discriminate
against any parsons on account of race, religion, sex, family status, age, handicap, or place
of national origin in its performance of this Agreement and me completion of Me 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 Me Property or the Project without the prior written consent of me CITY, which
consent shall not be unreasonably withheld or delayed.
6.12 Payment of Liabilities. The DEVELOPER shall pay and discharge in the
ordinary course of its business all material obligations and liabilities, the nonpayment of
19
which could have a material or adverse impact on its financial condition, business, or assets
or on Me operation of the Project(s), except such obligations and Ilabilities that have been
disclosed to the CITY in writing and are being contested In good faith.
6.13 Report of Events of Def h. 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 warrents, 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 CITYs
obligations shall in no event exceed the HOME Funds amount specified in this Agreement.
7.2 Conditions Precedent to Property Sale. The 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 bath
would constitute an Event of Default.
B. The DEVELOPER, by signing this Agreement, commits to construct
Iwo 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 suthcient to purchase the Unit. If
the CITY determines that 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 coats.
D. The DEVELOPER has acquired insurance coverage and delivered to
the CITY evidence of Insurance as required in Article 10.
E. Upon CITY'a reasonable request, the DEVELOPER has provided Me
CITY copies of Project surety (payment and performance) bonds.
F. The DEVELOPER is current with its compliance of all reporting
requirements set forth in this Agreement.
G. Upon CITY's reasonable request, Me DEVELOPER has delivered a
Ung construction schedule satisfactory to the CITY.
H. The City has received the Certification required by this Article 7 of this
Agreement.
Yid
T3 Request fCredit of HOME Program Funds through E. The
DEVELOPER shall request that the CITY convey the Property through escrow as a form of
disbursement of HOME funs. The DEVELOPER shall only request a maximum of One
Hundred Seventy-Seven Thousand an 00/100 ($777,000.00) in HOME Program
assistance to finance emulation 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 date of the written Request for Disbursement
("Certification ):
A. The representations and warranties contained in or incorporated by
reference in this Agreement continue to be true, complete and accurate;
I The DEVELOPER has carried out all of its obligations and is in
compliance with all the obligations or covenants specked in this Agreement, to the extent
that such oblgatlons or covenants are 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 the 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 property chargeable In
connection with the Project.
ARTICLE 8. DEVELOPMENT AND CONSTRUCTION OF PROJECT
Without waiver of limitation, the parties agree as follows:
8.1 Pre-construction Meetino Regarding HOME Program Processes and
Procedures CITY will schedule, and the DEVELPER shall attend a meeting prior to
construction with the CITY's Housing and Community Development Division Manager for
the purpose of outlining HOME program processes and procedures.
8.2 Commencement and Completion f Pro 'act The DEVELOPER shall
commence and complete construction in accordance wish the Project Description and
Schedule. All Project Construction shall be completed no later than January 30, 2010,
8.3 Contracts and Subcontracts. Consistent with Article 8, all demolition,
hazardous waste abatement, construction wodr 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 Stale of California and the City of Fresno. The
DEVELOPER shall provide the CITY with copies of all agreements with any and all
contractors or subcontractors for this Project. The DEVELOPER shall require that each
contractor and subcontractor agreement contain a provision whereby the party(ies) to the
agreement other than Me DEVELOPER agree to (i) notify the CITY immediately of any
21
event of default by the DEVELOPER thereunder, (it) notify Me CITY immediately of the fli ing
of a mechanic's lien, (iii) notify the CITY immediately of termination or cancellation of the
agreement; and (iv) provide the CITY, upon the CITY's request, an Estoppel Certificate
certifying that me 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), notice of filing of a mechanic's lien, or breach or
default by other party(ies) thereto.
BA Damage to Props M. To the extent consistent with the requirements of any
permitted encumbrance, or as otherwise approved by the CITY, and subject to Article 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 collected for such
damage or destruction shall be applied to the cost of such repairs or restoration and, if such
insurance proceeds shall be insufficient for such purpose, the DEVELOPER shall make up
the deficiency.
8.5 Fees. Taxes and Other Levies, The DEVELOPER shall be responsible for
payment of all lees, assessments, taxes, charges and levies imposed by any public
authonty or utility company with respect to the Property or the Project, and shall pay such
charges prior to delinquency, However, Me DEVELOPER shall not be required to pay and
discharge any such charge so long as; (a) Me legality thereof is being consisted diligently
and in good faith and by appropriate proceedings, and (b) 0 requested by the CITY, the
DEVELOPER deposits with the CITY any funds or other forms of assurances that the CITY,
in good faith, may determine from time to time are appropriate to protect the CRY from the
consequences of the contest being unsuccessful.
6.6 Fin_ ancino. The DEVELOPER shall promptly inform the CITY of any new or
additional financing or funding, and the 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 panyhes) to the agreement other than the DEVELOPER, agree to (i) notify the CITY
immediately of any event of default by the DEVELOPER thereunder; (it) notify the CITY
immediately of termination or cancellation of the agreement; and (iii) provide the CITY, upon
CRYs request, an Estoppel Certificate codifying that the agreement Is in full force and
effect and the DEVELOPER is not in default thereunder. The DEVELOPER agrees M notify
Me CITY immediately of termination or cancellation of any such agreements) or receipt of
nobce of default thereunder. The DEVELOPER shall comply with all obllgabons of any
such agreement(s) with any and all Funding Sources unfit 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.
87 Identification Signage. Before the start of construction, the DEVELOPER
shall place a poster or sign, with a minimum four feel by bur feel in size, Mentifying Me City
of Fresno, Planning and Development Department, Housing and Community Development
22
Division, as a Project participant. The sign shall also include Me CITY'S Housing Logo, as
well as the Equal Housing Opportunity logo, as mandated by HUD. Font size shall be a
minimum of 4 inches. The poster/sign shall be appropriately placed, and shall ba in place
throughout Me 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 jab
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, certifcates and applicable endorsements for
all insurance and bonds required by this Agreement in accordance wit Article 10.
8.10 Mechanic's Lions and Stay Notices, If any claim of lien is fled against the
Property or a stop notice affecting any financing, HOME Program Funds or Funding
Sources for the Project is served on Me CITY of any other third party in connection with the
Project, the DEVELOPER shall, within twenty (20) days of such filing or service, either pay
and fully discharge the lien or slap notice, effect the release of such lien or stop notice by
delivering to the CITY a surety bond in sufficient form and amount, or provide Me 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 satisfy the
CITY with respect to any lien, encumbrance, charge or claim referred to in this Section,
then. in addition to any other right or remedy, the CITY may, but shall not be obligated to,
discharge such lien, encumbrance, charge, or claim at Me DEVELOPER expense.
Alternatively, the CITY may require the DEVELOPER to immediately deposit with the CITY
the amount necessary to satisfy such lien or claim and any costs, Pending resolution
thereat The CITY may use such deposit to satisfy any claim or lien 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 Me CITY may reasonably request, the DEVELOPER,
at its sole cost and expense, shall provide to the CITY copies of any and all Park
approvals and authorizations including plot plan, plat, zoning variances, sewer, building,
and other perils required by governmental authorities other Man Me CITY in pursuft of the
Affordable Housing Project, and for its stated purposes in accordance with all applicable
builtling, environmental, ecological, landmark, subdivision, zoning codes, laws, and
regulations. The DEVELOPER is responsible, at its sole cost and expense, M determine
the location of any utilities on the Property and to negotiate with Me utility companies for
and to relocate the utilities, if any, as necessary to complete Me Project.
8.12 Plans and Specifications. before Commencement of Construction, Me
DEVELOPER shall submit to the CITY, for its review and approval, the final Plans and
Specifications for the Project. The DEVELOPER will construct the homes in full
23
conformance with the Plans and Specifications and modifications thereto approved by the
CITY. The DEVELOPER shall obtain the CITY's prior written approval for any modificar ions
to the Plans and SpecMcabons.
8.13 Protect Responsibilities The DEVELOPER shall be solely responsible for all
aspects of the DEVELOPERS conduct in connection with Me 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 seeing out per diem wage rates is available from Me 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 Me CITU,
and shall not be relied upon by the DEVELOPER or by any third parties as a waranly or
representation by Me 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 Work. The DEVELOPER shall ensure that construction of the
proposed Project, employs building materials of quality suitable for the requirements of
the Project. The DEVELOPER shall cause completion of construction of the proposed
Project on Me Property in full conformance with applicable local, state and federal laws,
statutes, regulations, and building and housing codes.
8.15 Relocation. If and to Me 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 benefits. The DEVELOPER shall be solely responsible for payment
of any relocation benefits to any displaced persons and any other obligations associated
with complying with said relocation laws.
8.15 Reoorting Regurements. The DEVELOPER shall submit to the CITY the
following Project reports:
A. From the date of the Commence of the Project, until issuance of Me
final Certificate of Completion, evidencing the construction of the last Project Unit, the
DEVELOPER shall submit a Quarterly Report, in a form approved by the CITY, which will
include, at a minimum, the following information' progress of the Project and affirmative
marreting elforta (as applicable), The Quarterly Reports are due on each March 31'r, June
300, September 30r , and December 31e, during redid period.
Bi 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 termination of the Agreement, the DEVELOPER shall
submit an Annual Report to Me CITY, in a form approved by the CITY. The Annual Report
shall include, at a minimum, Me follovnng. information: the date the occupancy commenced,
cerfification from an officer of the DEVELOPER that the Project is in compliance with the
24
Affordable Housing Requirements, and such other information the CITY may be required by
law to obtain. The DEVELOPER shall provide any additional information reasonably
requested by Ma CITY.
C. Annually, beginning on the first day of the month following Me CITY's
issuance of the final Certificate of Completion, evidencing the construction of Me last
Project Unit, and continuing unfit the expiration of Me Agreement, DEVELOPER shall
submit proof of insurance as may be required in Article 10.
8.17 Scheduling and Extension of Time Unavoidable Delay -in Performance. It
shall be the responsibility of the DEVELOPER to coordinate and schedule the work to be
Performed so Mat the Commencement of the Project 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 extend
such time in writing at its sole and absolute discretion, and upon written request of Me
DEVELOPER, as follows:
A. The time for pelfonnance of provisions of Me Agreement by either party
shall be extended for a period equal to Me Period of any delay direcify affecting the Project
or this Agreement which is caused by: war, insurrection, strike or offer labor disputes, lock-
outs, nuts, foods, earthquakes, fires, casualties, acts of God, acts of a public enemy.
epidemics, quarantine restrictions, height embargoes, lack of transportation, sults filed by
third parties concerning or arising out of this Agreement, or unseasonable weather
conditions. An extension of time for any of Me above specified causes will be granted only
ff written notice by the party claiming such extension is sent to Me other party within ten (10)
calendar days from the date Me affected path learns of the commencement of Me cause
and the resulting delay and such extension of time is accepted by the other Party in writing.
In any event, the Project must be completed no later than one hundred eighty (1 80)
calendar days after the scheduled completion date speed in this Agreement,
notwithstanding any delay caused by that included in MIS section.
B- Any and all extensions hereunder shall be by mutual written agreement
of the CITYS Housing and Community Development Division Manager and Me
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 certify, in writing. within thirty (30) days, to the CITY
that constmction of the Project 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 casts of construction of each Project Unit. This final
cost-certMcation shall identify costs in line -item format, consistent with the Project Budget.
Upon a determination by the CITY Mat the DEVELOPER is in compliance with all of Me
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 the
DEVELOPER, a recoMable Certificate of Completion for the Project(s) in the form attached
hereto as EXHIBIT "E". The CITY will not unreasonably withhold or delay furnishing Me
Certificate of Completion. If the CITY fails to provide the Certificate of Completion within
the specified time, it shall provide the DEVELOPER with a written statement indicating in
25
what respects the DEVELOPER has failed to complete the Project in conformance with this
Agreement or has otherwise failed to comply with Me terms of this Agreement, and what
measures the DEVELOPER will need to take or what standards it will need to meat in order
to obtain the Certificate of Completion. Upon the DEVELOPER taking the specified
measures and meeting the specified standards, the DEVELOPER will certHy 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 Operation of the Proiect. The DEVELOPER shall operate and/or manage me
Project in full conformity with the terms of this Agreement.
9.2 Occupancy Requirements. Two (2) Project Units) 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 close of escrow vesting We in said homebuyer.
9.3 Fair Marketing Plan. Before marketing any Project Unit and at least sixty (60)
calendar days prior to the Completion of Construction of me first Project Unit, me
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 me
DEVELOPER or its dra gnated management entM1y plans to market the availability of Units
to prospective low-income purchasers and how the DEVELOPER plans to certify me
eligibility of potential buyers. The Final Marketing Plan shall contain detaiiled descriptions of
policies and procedures with respect to buyer selection(s). Topics to be covered in these
procedures shall Include at a minimum the following:
Interviewing procedures for prospective buyers;
Buyer references;
Credit reports and checks;
Deposit amounts, purpose, use and refund policy;
Employmentdncome 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 abide by the terms of this
Final Marketing Plan, approved by the CITY, In marketing, managing and maintaining me
Housing.
9.4 Property Management. With respect to the Project, DEVELOPER shall
comply with me following:
A.
Management Responsibilities.
The DEVELOPER is
specifically
26
responsible for all management functions with respect to Me Project including, without
limitation, construction management, affirmative markelirg, property disposition and initial
certification of household size and income. The DEVELOPER during its time on We 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 d Securiliv. The DEVELOPER shall (i) at Its own expense
maintain the homes In good condition, in goad repair and in decent, safe, sanitary, habitable
and tenantable living conditions for the benefit of the purchasers, hi) 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, cod" 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 the development. consbuetion, use, enjoyment,
occupancy or conveyance of any part of the Affordable Housing Project or Property on the
basis of race, color, ancestry, national origin, religion, sex, age, martial status, family status.
source of income/rental assistance subsidy, physical or mental disability, Acquired Immune
Deficiency Syndrome (AIDS) or AIDS-related conditions (ARC), sexual orientation, or any
other arbitrary basis. The DEVELOPER shall otherwise comply with all applicable local,
state and federal laws concerning nondiscrimination in housing. Neither the DEVELOPER
nor any Person claiming under or through Me DEVELOPER, shall establish or permit any
such practice or practices of illegal discrimination or segregation with reference to Me
selection, location, number, use or occupancy of tenants or vainness 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 the 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, notices and
signs for availability of Units to Me effect Mat Me DEVELOPER is an Equal Housing
Opportunity Provider.
A. Nothing In this section is intended to require Me DEVELOPER to
change Me character, design, use or operation of the Project; or to require the
DEVELOPER to obtain licenses or permits other than those required for the Project.
9.7 Pro ad Home Sale Pd . The initial sale price of each home is the total
amount paid by the homebuyer for Me home conveyance, inclusive of any first liennoan and
exclusive of escrow fees, title insurance costs, brokers commission (if 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 Me median purchase price for the area
as applied under 24 CFR 92.254. The CITY shall approve in advance all homebuyers.
Homebuyer financing shall be based upon buyers ability to pay, consistent With this
Agreement
9.10 Affordable Housino. The purpose of this Agreement is to use HOME Loan
Funds M ensure the affordability of two (2) Project Units to be sok to Low -Income
27
households, The DEVELOPER, and those taking ownership of the Project Property under
or through ithhem, covenant and agree that the Project shall constitute Affordable Housing
by ensuring Nat the homes are sold only to Low -Income householtls, 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
individual(s) who initially purchased the property as Affordable Housing tluring the
Affordability Period, and without waiver or limitation, the entire HOME -Funded Loan
allocated to Unit shall be repaid la/recaptured by the CITYB HOME Program Trust Fund
and thereupon the balance of the Affordability CovenantiPenod shall be released.
R. The DEVELOPER shall require that each home buyer assume the
Loan. Said Trust Deed Note(s) as assumed shall be security for the provision of HOME
Funding for the Project by the CITY. In the event of a failure to comply with the Affordability
Restrictions, in addition to any and all other remedies available to d. 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 the Units in the Project, as the parties
acknowledge that damages are not an adequate remedy at law for such breach.
ARTICLE 10. INDEMNIFCATION AND INSURANCE.
Without waiver of limitation, the parties agree as follows regarding the DEVELOPER'S
Indemnification and Insurance Obligations:
10.1 Indemnfcation 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, tort or
strict liability, including but not limited to personal injury, death at any time and property
damage) incurred by the CITY, the DEVELOPER or any other person, and from any and all
claims, demands and actions in law or equity (including attorneys fees and Ihigation
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 its officers, officials, employees, agents or authorized
volunteers are negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures,
costs or damages caused solely by the grass negligence, or caused by the willful
misconduct, of CITY or any of its vicars, officials, employees, agents or authorized
volunteers.
A. If the DEVELOPER should contract all or any portion of the work to be
performed underthis Agreement, the 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 banns of the preceding
paragraph.
R. This section shall survive termination or expiration of this Agreement.
10.2 Insurance. Throughout the life of this Agreement, the DEVELOPER shall
itself and/or through its consultant(s), assignee(s). n rnmee(s), contrdchns and
subcontractors pay for and maintain in full force and effect all policy(ies) of insurance
required hereunder with (an) insurance companyhes) either (1) admitted by the California
Insurance Commissioner to do business in the State of California and ratetl not less than
"A -VII" in Best's Insurance Rating Guide, or (2) authorized by the CITY'S Risk Manager_
The following policies of insurance are required:
A. Until issuance of Cerifirate(s) of Completion, BUILDERS RISK
(Course of Construction) Insurance in an amount equal to the completed value of the
project with no coinsurance penalty provisions.
B. Following issuance of Certificate(s) 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 loss or damage by
explosion, windstorm, riot, 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 deprecia0on) of the project with no coinsurance
penally provisions. DEVELOPER, or its CITY -approved 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 written 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, the DEVELOPER or IN
contrac[ore/subcontractors, as the case may be, shall furnish City with a new certificate and
applicable endorsements for such policy(ies). In the event the policy is due to expire during
the term of this Agreement, Developer shall provide a new certificate, and applicable
endorsements, a new certificate evidencing renewal of such policy shall be provided not
less Nan fifteen (15) days prior to the expiration date 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 cimb ectors/subcontractors, as the case may be, shall file with the
CITY a cerfified copy of the new or renewal policy and ceNfcates for such policy.
2. The City shall be named as a less payee.
3. If at any time during the life of this Agreement or any extension, the
DEVELOPER fails to maintain the required insurance in full force and effect, all work under
this Agreement shall be discontinued immediately, until notice is received by the CITY Nat
the required Insurance has been restored to full force and effect and that the premiums
therefore have been paid for a period satisfactory to the CITY. Any failure to maintain the
required insurance subject to notes and cure requirements herein, shall be sufficient rause
for the CITY to terminate this Agreement.
10.3 Bonds. The DEVELOPER shall obtain, pay for and deliver or cause to be
obtained, Paid for and delivered good and sufident surety bons from a corporate surety,
4:
admitted by the California Insurance Commissioner to do business in the State of Cal'domia
and Treasury -listed, in a form satisfactory to the CITY and naming the CITY as Co -Obligee.
A. The "FaRhful Performance Bond" shell be at lead squalid 100% of
Owner's estimated construction was to guarantee faithful pedoroance of the Project,
within the time prescribed, in a manner satisfactory to the CITY, and that all materials and
workmanship will be free from original or developed defacts-
B. The "Material and Labor Bond" shall be at least equal to 100% of
Owner's estimated construction costs to satisfy claims of material supplies and of
mechanics and laborers employed for this Project. The bond shall be maintained by
DEVELOPER in full force and effect until the Project is completed and until all claims for
materials and labor are paid, released or tlme barred, and shall otherwise comply with any
applicable provisions of Chapter 7, Tltie 15, Par 4, Division 3 of the California Civil Code.
C. In lieu of the bonds required above. City may accept from Developer an
Irrevocable Standby Letter of Credit issued with Me City named as the sok beneficiary.
The Irevocable Standby Letter of Credit is to be Issued by a bank, and in a form,
acceptable to City. Throughout the life of this Agreement, Developer shall pay for and
maintain in full farce and effect the Irrevocable Standby Letter of Credit in the amounts) of
the bonds required above. This Irrevocable Standby Letter of Credit shall be maintained by
Developer in full force and effect until the 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 casts other than Eligible
Coats or for uses not permitted 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, the failure of Me
DEVELOPER to punctually and properly perform any other covenant or agreement
contained in this Agreement including without limitation the following (1)the
DEVELOPER'S substantial deviation in the Project work specked in the Project Description
as identified in this Agreement, without the CITY's prior written consent, (2) the
DEVELOPER'S use of defective or unauthorized materials or defective workmanship in
pursuit of the Project; (3) Me DEVELOPER'S failure M commence or complete the Project,
as spedfied in this Agreement, unless delay is permittetl under Article 8 of this Agreement;
(4) the cessation of the Project for a period of more than fifteen (15) consecutive days
(other than as provided in Article 8 of this Agreement) prior to submitting to the CITY,
pursuant to Article 8 certification that the Pmject is complete; (5) any material adverse
change in the condition of the DEVELOPER or Me Project that gives the CITY reasonable
muse to believe that the Profect cannot be completed by the scheduled completion date
according fo the terms of this Agreement; (8) the DEVELOPER'S failure to remedy any
30
deficiencies in record keeping or failure to provide records to Me CITY upon Me CITY'S
request; (7) the DEVELOPER'S failure to substantially comply with any federal, state 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:
IT Any representation warranty, or certificate given or furnished by or on
behalf of the DEVELOPER shall prove to be materially false as of the date of which the
representation, warranty, or certification was given, or that Me DEVELOPER concealed or
failed to disclose a material fad to the CITY, provided, however, that if any representation,
warranty, or certification that proves to be materially false is due merely to the
DEVELOPER'S inadvertence, the DEVELOPER shall have a thirty (30) day opportunity
after written notice thereof to cause such representation, warranty, or certification to be true
and complete in every respect;
E, The DEVELOPER shall his, 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 reorganisation, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief, and such petition shall not have been
vacatetl 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 IN
inability to pay its debts as they become 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 Me Project prior
to January 30, 2010,
I. The DEVELOPER'S breach of any other material condition, covenant,
warranty, promise or representation contained in this Agreement not otherwise identified
within this Section; and
J. Any substantial or continuous breach by Me DEVELOPER of any
material obligation owed by the DEVELOPER imposed by any other agreement with
respect to Me financing, development, construction or operation of Me Project, whether or
not the CITY is a party to such agreement.
11.2 Notice of Default and Opportunity to Cure. 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 rise to the default, (2) the action required to cure the deficiency, H any
action to cure is possible, and (3) a date, which shall not be less than the lesser of any time
period provided in this Agreement, anytime period provided for in the notice, or thirty (30)
calendar days from the date of the notice, by which such deficiency must be cured
31
provided that g the spaded deficiency or default cannot reasonably be wred within the
specked 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 Remedies 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
or 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;
B. Bring an action in equitable relief (1) seeking specific performance by
the DEVELOPER of the terms and conditions of this Agreement, andlor (2) enjoining,
abating or preventing any violation of said terms and condNons, amuor (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
Agreement shall be effective unless made In writing and signed by the parties hereto.
12.2 Attorney's Fees. If either parry is required to commence any proceeding or
legal action to enforce or interpret any term, covenant or condition of this Agreement, the
prevailing party will be entitled to recover from the other party its reasonable attorney's fees
and legal expenses.
12.3 Binding All Successors and Assigns. 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 original, and all of which together
will constitute one instrument. The execution of this Agreement by any parry hereto will not
become effective unfil counterparts hereof have been executed by all parties hereto.
12.5 Disclaimer 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 he deemed
32
or construed by any parson to create any relationship of third party beneficiary, or of
principal and agent, of limited or general partnership, or of joint venture.
12.6 Discretionary Govemmectal 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. Nothing in this Agreement obligates the CITY or any
other governmental entity to grant final approval of any matter descnbed herein. Such
actions are legislative, quasyhx icial, or otherwise discretionary in nature. The CITY cannot
take action with respect to such matters befom completing the environmental assessment
of Me Project under NEPA, CEM and any other applicable statutes. The CITY cannot and
does not commit in advance Met 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.
12.7 Effective Date. This Agreement shall be effective upon the date first above
written, upon the partiescomplete execution following City Council approval.
12.6 Entire Agreement This Agreement represents the entire and integrated
agreement of the parties wth 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 Me
reference, incorporated into and made a part of this Agreement.
12.10 Expenses Incurred Upon Event of Default. The DEVELOPER shall reimburse
the CITY for all reasonable expenses and costs of collection and enforcement, including
reasonable attorney's fees, incurred by Me CITY as a result of one or more Events of
Default by the DEVELOPER under this Agreement.
12.11 Govemina law and Venue. Except to the extent preempted by applicable
federal law, the laws of the State of California shall govem 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 Head�in ss. The headings of the articles, sections, and paragraphs used in this
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 Me parties. Any ambiguity will not be construed m favor or against any party, but
rather by construing the terms in accordance with their generally accepted meaning.
12.16 No Assignment or Succession . Except as may be otherwise expressly
provided by this Agreement, neither this Agreement, nor any interest of the DEVELOPER
in, untler, or to this Agreement, or the Project, may be assigned or transferred by the
33
DEVELOPER without the prior written consent of the CITY, which consent shall not be
unreasonably withheld or delayed. Any assignment without consent is null and void.
12.15 No Third -Party Benefc'aw. No contractor, subcontractor, mechanic,
matedalman, laborer, vendor, or other person hired or retained by the DEVELOPER shall
be, nor shall any of them be deemed to be, third -party beneficiaries of this Agreement, but
each such person shall be deemed to have agreed (a) that they shall look to the
DEVELOPER as their sole source of recovery if not paid, and of 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, of
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 Ne 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 exemise of
any other right. No waiver of any provision of this Agreement or consent to 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 authorized officer thereof, and the same shall be effective
only in the specific instance for which it rs given. No notice to or demand on the
DEVELOPER in any case shall entitle the DEVELOPER to any other or further notices or
demands in similar or other circumstances, or constitute a waiver of any of the CITYS right
to take other or further action in any circumstances without notice or demand.
12.17 Nomeliance. 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 ailed on the CITY, it agents, employees or attorneys In entering into this
Agreement.
12.18 Notice. Any notice to be given to either party under the terms of this
Agreement shall be given by certified United States mail, postage prepaid, return 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 Sheet, Room 3070
Fresno, CA 93721-3605
If to DEVELOPER: Habitat of Humanity Fresno Inc.
Attn: Anthony Miranda
2219 San Joaquin
Fresno, CA 93721
12.19 Precedence of Documents. In the event of any conflict between the body of
this Agreement and any exhibit or attachment hereto, Me terms and conditions of the body
of this Agreement will control.
36
12.20 Recortlina of Documents. The DEVELOPER agrees to cooperate withthe
CITY and execute any documents required, promptly upon the CIT's request, the Deed(s)
of Trust, and any other documentsfinstruments that the CRY requires to be recorded, in the
Official Records of Fresno County, California, consistent with this Agreement.
12.21 Remedies Cumulative. 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
Me remaining provisions hereof or thereof.
//
M
35
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:(X: �•.asl Ree r
Andrew T. Souza, CitynaNl ger
(Attach notary certifimte of acknotWedgmeru
Date: SA (4
ATTEST
REBECCA E. KLISCH
City Clerk'
DepIP
Date: glmo9
DEVELOPER
Habitat for Humanity Fresno, Inc.
a California Corporation
B'
Anthony Mirand Exe ufive Director
(Attach notary ovg le of scknowledgmene
Date
Attachments'
APPROVED AS TO FORM'.
JAMES SANCHEZ
City Attorney
By: Q
Robert R. Coyle, Deputy City Attorney
Date: N - L I - e=(
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 F. EXEMPLAR NOTE AND TEMPLATE RIDER TO DEED(S)OF TRUST
W
CALIFORNIA ALL-PURPOSE
CERTIFICATE OF ACKNOWLEDGMENT
State of California
Cnuatynr Fcesno
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capacttyOos), and that bybis/hmJ9leI ognature(d) on the instrument the person(gl, or the entity upon behalf of
which the person($) acted, executed the instrument.
I certify under IIENALT OF PERJURY under thelaws of the State of Calimmia that that foregoing paragraph
is nue and carred.
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EXHIBIT A: PROPERTY DESCRIPTION
Legal Description:
PARCEL 1: 172 North Echo Avenue, Fresno, CA (APN: 459-292-28T)
PARCEL 2: 182 North Echo Avenue. Fresno, CA (APN: 459-292-27T)
Page i of Exhibit A �I
LEM IDESEFtEMON
T1EI.WD NEFENNEDIO HEREIN BELOW N 9nIATED M IHE OWO OF FRESNO, STALE OF
AND IS DEKRBIEO 0.S FFAFL S-
EEy c'Fr sno
All OF LMB and portions d Lds Sand g In dock 1 d GnMM's Seomd AMMBon, aa'dding MMe map Moral
rsnNed h Book I Page 9 d Plans, Friend county Electra, more Vergodaddy described as Mikis:
cornmendrg at Me South dander d sd Lot ); U,ance Pladi along Me West Ilne asap Lot g, a
More d 10.00 feel ma an leis, Ma yldd int saYkn With Me Mal A MWMJ widn and 35.00 Net
NorM an Me Smah Me d let 0 d sant Block 1, sad print ado kMg the True PoUM a Beginning dMk
Mescrlgbn; thence aRNnuing NwMeM ad, the West Lire d said tons ], 6 add 5, a Mhbnce of45AO find,
mom or led, M a line Mat IS darelM wM and 45.00 Rai boM of Me NwM IM Of IM 4 d sad Bled 15; Meare ;
Ea#thernm ee�aallag Ed Said Pmkl Ole, adBMnce d 160.00 Ret, more or ks, MME Fee pre dsad 6i
Wt a ire2lat add W -O fearg Fee Mae Fortind Me South We d said Wt B; OMI ehaw mord aoa'Ma Me
Parallel line a distance d UO.NRY{. more or las, M Me True Poim OF BNhnlrg. H/almgla#zad
APN: 459 -M3 -W
ZI 0
IEGPL OES@IRION
R•r
QyNF Sno
Mid IM 4 and a potion d IM 5 I libtlr I& Griffith's Second Adddbn, accenting W the map thereof
reradm In Beck Page 9 of P6lx Mena GvnW Records, nem paMvkM reWIpJ as fal
lnn2asforpkaaoebalnddOMLots newa
Mal
Beginning at
feel, more ron[6wrMeewIIMaM5.lSSeMofaModiline sw
IM 4; Ment Fasferh along uW palate' fil a c lStamm of t60.W feet, more or ens, to tlx Fuf Ilrc dMW
IM 5; Mens Nodmerly along Me F line d ssGI 5 and 4, a dbdMe Of 45.00 food, more or One W Me
NpMrat comerOF ;a Id lot 4; thence Westerly along [Ice Noft line 0saki tat 4, a distanced 1W.W flet,
rmre ar ass, W Me Pollrt IX Beginning.
AM: 459-292-21
EXHIBIT B: PROJECT DESCRIPTION AND SCHEDULE
I. PROJECT DESCRIPTION:
The Project consists of Property acquisition and the construction of two (2) single family homes
for occupancy by low-income families to be sold at affordable housing cost. The
DEVELOPER, shall pay for on-site and off-site improvements, construct, market, and sell the
homes. Consistent with the allched Budget, the DEVELOPER will 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 hvo (2) affordable homes
shall be sold to me low-income families. Both homes will feature solar panels and Universal
Design features. Both homes will be three-bedroom hyo -bathroom Units.
Maximum HOME funding for the Project is a total of One Hundred Seventy -Seven Thousand
Dollars and 00/100 ($177,000.00), for acquisition of bath parcels which shall be assumable
deed trust notes on me two (2) affordable homes, to be made through the sales escrow or as
othervase directed by CITY for the affordability of the purchase of each home.
II. PROJECT SCHEDULE:
A. Commencement of Construction: Not later than August 1, 2009
B. Completion of Construction. Not later than January 30, 2010
C. Completion of Home Sales: Not later than March 30, 2010
Page 1 of Exhibit B
EXHIBIT C: EXEMPLAR DECLARATION OF RESTRICTIONS
RECORDING REQUESTED BY AND for Me benefit of
Me Cry of Fresno and is exempt nom Me payment of a
recording fee In accordance with Government Core
Sections 6103 and 27303
AND WHEN RECORDED MAIL TO
CITY OF FRESNO
Cry clam a OMce
No Fee -GOO, CWe 6103
2600 Fresno Street Room 2133
Fresno. CA 93721
Tole Order No. Evirow Na.
rax:
DECLARATION OF RESTRICTIONS
THIS DECLARATION OF RESTRICTIONS, ("Declaration"), is executed as of this
by ( 1. ("DectaranC) in favor of Me 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
Caldomia, consisting of APN: which is more particutady described In
Exhibit "A", attached hereto and made a part hereof (the "Property"); and
WHEREAS. Pursuant to a certain HOME Investment Partnerships Agreement dated
2009 incorporated! herein, ('HOME 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, to Declarant for
certain affordable housing (the "Project) upon the Property to be wld and maintained as
affordable to low-income families, subject to the terms and cordi5ons set form in the HOME
Agreement, and
WHEREAS, Me HOME Program regulations promulgated by HUD, including without
limitation 24 CFR Section 92.254, and the HOME Agreement impose certain affordability
requirements upon property benefited thereby, which affordability restrictions shall be
enforceable for a twenty (20) 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 is
Page 1 of Exhibit C L1
held and will be held, transferred, encumbered, used. sold, conveyed and occupied subject to
the covenants, resolutions, and limitations set forts in this Declaration, all of which are
declared! and 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 bidding on all parties having or acquiring any right, title or interest in the
Project home upon the Property or any part thereof, will inure to the benefit of the future
Owners of the home or any part thereof, the United States and Me City, and will be
enforceable by any of them. Any purchaser under a correct 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 Me document subject to, and agrees to
be bound by, any and all restrictions, covenant, and limitations set forth in this Declaration for
Me period of twenty (20) years constituting the Affordability Period.
1. Declarations. Declarant hereby declares that the home upon Me Property is
and shall be subject to Me mvenants and restrictions hereinafter set forth, all of which are
declared to be in furtherance of the Project and Me HOME Agreement Project, and are
established and agreed upon for Me purpose of enhancing and protecting Me value of the
Pmject Property and in consideration for City entering Into Me HOME Agreement with
Declarant. All terns not otherwise defined herein shall have the meaning ascribed to such
term in the HOME Agreement.
2. Restrictions. The following covenants and restrictions on the use and
enjoyment of the Project home upon the Property shall be in addition M 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 comer's 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. Dedaranl for Itself and Its successors) 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. Declarant further agrees to file a
recordable document setting forth the Project Completion Date(s) and Me Affordability Pariotl
when determined! by the City. Unless otherwise provided in Me HOME Agreement, the tens
Affordable Housing shall Include, wiMout limitation, compliance with the fallowing
requirements:
Nondiscrimination. There shall be no discrimination against nor segregation of
any penton or group of persons on amount of race, color, creed, religion. sex. marital 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
the Declarant, establish or permit any practice of discrimination or segregation with reference
to the selection, location, number, use or occupancy of owner: or venders of the Project
Property.
Principal Residence. Each home constituting the Project upon the Property
Page 2 of Exhibit C /I /I
shall be sold only to natural persons, who shall occupy the home as the purchasers principal
residence. The foregoing requirement that the purchaser of each home consti frog the
Project Property occupy the home as the purchasers principal residence does not apply to
persons, other than natural Persons, who acquire the Project Property or portion thereof by
foreclosure or dead 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 to (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 the Fresno Metropolitan
Statistical Area applicable to such household's size.
Recapture Requirements. Should each of the Mro (2) affordable homes upon
the Property 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 Property/home including all
HOME Program Funding assistance shall immediately come 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 it, during the original affordability
period, the owner of record before such termination events obtains an ownership Interest in
the housing. The City shall be possessed of a first right of refusal to purchase the home
before foreclosure to preserve affordability.
Item (a) above is hereinafter referred to as Me 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 them shall be subject to
and shall comply with the Covenant and Res ricfions. The acceptance of a deed of
conveyance to the Project Property shall constitute an agreement that Me Covenant and
Restrictions, as may be amended or supplemented from time to time, are accepted and
ral fietl by such future owners, tenant or occupant, and such Covenant and Restriction shall
be a covenant running with the land and shall bind any person having at any time any interest
or estate in the Project Property, all as though such Covenant and Restriction was recited
and stipulated at length in each and every deed, conveyance, mortgage or lease thereof.
Notwithstanding the foregoing, upon foreclosure by a lender or other transfer in
Page 3 of Exhibit C `] S
lieu of foreclosure. or assignment of an FHA-insured mortgage to HUD, the Affordability
Period shall be terminated a the foreclosure or other transfer in lieu of foreclosure or
assignment recognizes any contractual of legal rights of public agencies, nonprofit sponsors,
or others to take actions that would avoid me 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
forecosure 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 terms.
5. Benefit. This Declaration shall run with and bind the two (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 fight to enforce the same at any time or from time to time thereafter, or an estoppel
against the enforcement thereof.
& 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 uponthe
Property may exempt itself from liability for failure to comply with the Covenant and
Restrictions required in this Declaration.
S. 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 shell be enforceable to the greatest extent permitted by law.
9. Pronouns. Any reference to the masculine, feminine, or neuter gentler herein
shall, unless the contain clearly requires the contrary, be deemed to refer to and include all
genders. Words in the singular shall include and refer to the plural, and vice versa, as
appropriate.
10. Interpretation. The captions and tales of the various articles, sections,
subsections, paragraphs, and subparagraphs of this 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.
11. Amendment. No amendment or modification of Nis Declaration shall be
Page 4 of Exhibit C // /
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
HOME 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 not be read or construed to affect the meaning
or construction of any provision.
IN WITNESS WHEREOF, Declarant has executed this Declaration of Restrictions on
the date first written above.
"DELLA NT"
By: �
Date: /'7 o
Page 5 of Exhibit C ''
EXHIBIT D: BUDGET
Page 1 of Exhibit D 40
otal
HHa I_t
R ry
HOME
Funds
#1
$88500
i0-
$88,500
#2
$88,500
$-0-
$88,500
STS
K
tl Fees
$00000
$30000
S0.
ure and En ineen
$8,000
$8,000
$-0.
$-0.
urance
$1,400
$1 400
S-0.
$10,800
$10800
SE
CaeY
$22],200
550,200
E177,000
HARD COSTS
ene FropiGnaling
S0-ON
Site improvements
o-
SO-
SO -
On Site Improvements
SO-
$-0-
$-o-
Direct Construction
$92,900
$92,800
1 -0 -
Contingencies
$30800
$30.800
$A -
Contractor Overhead
$-0-$-0-
Other
$32800
332,800
3 -0 -
Total Hand Coab
$155200
$158,200
S -0 -
DEVELOPER FEE
CONSTRUCTION
FINANCING FEES
OTHER
SubdivisirMit Cw Wng
Fees8-0-
Marketing and Sales$
-0 -
Total Other Coeb
TOTAL EXPENSES
SUMS 0
$208,400
$1]]000
PROJECTED SALES
PRICE
$280000
3000
$1]]000
PERMANENT FINANCING
$280000
$83000
$1T000
Page 1 of Exhibit D 40
EXHIBIT E: EXEMPLAR CERTIFICATE OF COMPLETION
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RE -URN TO:
City W Fresno
City CIeMs office
No Fee- Goo Code 6103
2600 Fresno street, Roam 2133
Fresno, CA 93721
(SPACE ARGVET113 LINE FOR RECORDERS USE)
This Certificate of Completion is recorded at the request and for the benefit of Me City of
Fresno and is exempt from the payment M a recording fee pursuaM to Government Code
Section 6103.
APN'
City of Fresno
By:
Keith Bergthold, Intemn Director
Planning and Development Department
Page 1 of Exhibit E �1
CERTIFICATE OF COMPLETION
APN
Recitals:
A. By a HOME Investment Partnerships Program Agreement dated 2009,
CHOME Agreement") between the City of Fresno, a municipal corporation (°CITY), and
Habitat for Humanity Fresno, Inc, a California Corporation, ('DEVELOPER'), the
DEVELOPER agreed to develop Nro (2) affordable single-family homes ('Project'), upon the
premises legally described in EXHIBIT "A° attached to the HOME 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 Me terms and conditions of the HOME Agreement and the Loan
Documents and other documentMstruments referenced therein.
B. The HOME Agreement or a memorandum of it was recorded on
2009 as Instrument No. in the Official Records of Fresno County, California.
C. Under the terms of the HOME 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 famish the DEVELOPER with a recordable
Certificate of Completion.
E. The CITY's issuance of this Certificate of Completion is conclusive evidence that Me
DEVELOPER has completed construction the ProjecluProject Unit as set forth in the HOME
Agreement.
NOW THEREFORE'.
1, CITY certifies that the DEVELOPER commenced the construction M the
Project Unit on 2009 and completed the construction work on the
Project Unit on 2010, and has done so in full compliance with the
HOME Agreement.
2. This Certificate of Completion is not evidence of the DEVELOPER
compliance with, or satisfaction of, any obligation m any mortgage or security interest holder,
or any mortgage or security interest insurer, securing money lent to finance work on the
Property or Project, or any part of me 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 HOME
Agreement.
Page 2 of Exhibit E J 0
IN WITNESS WHEREOF, CRY has executed this Certificate of Compiefion as of
this day of , 20_
CITY OF FRESNO
By:
Keith Beigthold, Interim Director
Planning and Development Department
ATTEST:
CITY CLERK
By:
Deputy
Date.
CONSENT OF OWNERIDEVELOPER
APPROVED AS TO FORM:
JAMES C. SANCHEZ
By:
Robert Coyle, Deputy City Attorney
Data
Owner/Developer Name: IHabitat for Humanity Fresno Inc
By signing below, the owners) of the property consent(s) to recording this Certificate of
Completion against the Property described herein.
IAYaoh eamry anmoMa IF11 .hameq ue.a,w.gm 1' n.u.aw.egm..p
Page 3 of Exhibit E
EXHIBIT F: EXEMPLAR NOTE
DO NOT DESTROY THIS NOTE: When paid, this note must be sun antlered to Borrower for
Cancellation.
PROMISSORY NOTE
$88.50 Fresno, California, ai 2009
APN Loss-aga-est
Promise to Pay. For value received, the undersigned, Habitat for Humanity Fresno, Inc., a
California Corporation ('Developer' or'Borrower"), promises to pay to the order of the City of
Fresno, a California municipal corporation, ('Lender'), the sum of Eighty -Eight Thousand Five
Hundred Dollars ($88.500.00) along with Interest on unpaid principal at the rata of 2% per
annum, all due and payable on or before March 30, 20(Ij],(the "Maturity Date') pursuant to
the parties' Disposition and Development and HOME Investment Partnerships Program
Agreement dated, 2009] ("HOME Agreement"). on which date the unpaid pnncipal
balance together with nterest and unpaid penaRies or late charges where 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 then in
default of the Home Agreement, the Developer may at any time prior to the Maturity Data
convey the completed Unit securing the Note to a Low Income buyer through a purchase
escrow that conforms to Me HOME Agreement. In that event there shall be forgiven from
principal due hereunder the sum of Fifty -Three Thousand Dollars ($53,000.00) (provided the
Developer confirms said reduction in a writing noticed to the City in the manner provided in
the HOME Agreement), and the Developer shall be releasetl from any further liability to the
Lender under this Note.
Principal and interest payments in the amount of l$Gy994 sY l is due beginning on
April 1, 2010 and annually thereafter and all principal antl interest outstanding shall be due on
the Maturity Date. Any failure to make a payment required hereunder shall constitute a
default under Nis Note.
Definitions. All capitalized terms used in this Nate, unless otherwise defined, will have the
respective meanings specified in the HOME Agreement.
BusinessDa 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 Nate 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.
Security. This Note, and any extensions or renewals hereof, shall be secured by a Deed of
Trust, Security Agreement and Fixture Filing with Assignment of Rents on real estate in
Page 1 of Exhibit F�
Fresno County, California , that provides for acceleration upon stated events, dated as of the
same date as this Note and executed in favor of the Lender ('Deed of Trust'), 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 Dead of Trust shall be subject to the terms of the
Template Rider to the Dead of Trust attached hereto and such shall automatically be
incorporated in the terms of the Dead of Trust that secures this Note.
Time is of the Essence. It will be a default under this Note d Borrower defaults under the
HOME 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 oe applied first to payment of
any costs, fees or other charges due under this Note or any other Loan Documents men to
the interest and then to principal balance. On me occurrence of a default or on the
occurrence of any other event that under the terms of the Loan Documents give rise to Me
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 presentment, 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 Note or under any of the other Loan Documents and then to the Interest and then to the
principal balance.
All Loan payments are payable In lawful money of me United Slakes 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
Housing and Community Development Division
2600 Fresno Street, Suite 3070
Fresno, CA 93721
Borrower agrees to pay all costs including, without limitation attomey 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 its
rights and remedies underthis Note. All costs incurred by Me holder of this Nota in any
action undertaken to obtain relief from me stay of bankruptcy statutes are specifically
included in Mose costs and expenses to be paid by Borrower. Borrower will pay to Lender all
attorney fees and other costs referred M in this paragraph on demand.
Any notice, demand, or request relating M any matter set form herein shall be in writing and
shall be given as provided in the HOME Agreement.
Page 2 of Exhibit F /-� %
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 demand 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 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 shall provide 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 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, 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 file 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 OF
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 NOW, and the transferee will Men
became 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 irensfered.
Enforceabflty. If any one or more of the provisions in this Note is held to be 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 Me benefit of Borrower, Lender, and their respective
successors and assigns.
Goveming 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 Mat none of ds 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.
In witness whereof, Borrower has caused this Promissory Note to be executed by its
authorized agent as of the date and year first above written.
Page 3 of Exhibit F )U/
Habitat for Humanity Fren
Fresno Inc., Borrower 9
By ri✓x^" f Date:
Name'r
Title: �.c. *t'A
~awn wmnmuaf .aweam..n
Page 4 of Exhibil F
CALIFORNIA Al 1 -PURPOSE ACKNOWLEDGMENT
Slap of Glifomia
Countyaf
Or ApEu 1q, 2009 before
Peaann,nr:+F»Urea laullGt a�—I`IYandrti
�—
Nnwr Pubue.one Sg
Nammrs;,muw
provedtomeon Nebasis ohapafacroryzidencetobe[M
YAg[I�Ia14 yermKey:.he:w oam*foo caul bed to the within
CO W , ttl>AI t and ckaowledged m me that he,ls' -11,1
YmyllOMt 1*Md canted the same in his{bnfMm autbomed
Fw Cuab cepaeny(ime.. and lbalbyhis/hen/Wei gnemre(/l nNe
Cann Nil pis2 vmeL NePm'aoa aecor utdthe shumevt aum
I coldly under PENW OF PERJURY miler Nelaws of
Ne3nteofGlrfomiathat
the foregoing pamgraPhistme
and maser
wITNESi my (fi seal
e4a xmrrrsea�nnme Signature m w
"Nme l
------------OPfYONAL s
meogn snow Ina`pl�h Ode ``km"aeael� mmr M"`e�u wmeaa mveama, t 41" omeaoo,.,m,
qfMIlfbeP. nammt.
neamiPmn ornrcaegam naeamenc
Title or type of Demme nt
DFnrment Date Number of Pagm
Signer(a) DNer Than N amed Ahove:
Cateacity(bad Claimed by Signer(s)
❑ mdmdual
❑ Corporate Officer—'[ItlK+I'
❑Pormer— timitetl Gmeml
❑ ARomeyin Fact
E] Trustee n.rro�es
❑ CFa rd'wnmCnoarvamr
❑Oha
signar la Repncenting:
SonviName:
❑ individual
❑ Corporate Mcc r--Tide(a);
❑ Parreer—❑ dna ❑Gmered
❑Aaornrym Fact
❑ imrtee
❑ Guardian or Gweemtar
❑ other:
Signer O Repmeter p
EXHIBIT F: EXEMPLAR NOTE
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to Borrower for
Cancellation.
PROMISSORY NOTE
$88.50 Fresno, California, 31 2008
APN: `9 -MA -C)
Promise to Pay. For value received, the undersigned, Habitat for Humanity Fresno, Inc., a
Calrfamia Corporation ("Developer" or "Borrower'), promises to pay to the order of the City of
Fresno, a California municipal corporation, ("Lender"), the sum of Eighty -Eight Thousand Five
Hundred Dollars ($88,500.00) along with interest on unpaid principal at the rate of 2% per
annum, all due and payable on or before March 30, 20U,(the "Mahnty Date") pursuant to
the parties' Disposition and Development and HOME Investment Partnerships Program
Agreement dated II EjA , 2009] ("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 attomey'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 Home Agreement, the Developer may at any time prior to the Maturity Date
convey the completed Unit securing the Note to a Low Income buyer through a purchase
escrow that conforms to the HOME Agreement. In that event there shall be forgiven from
principal due hereunder the sum of Fifty -Three Thousand Dollars ($53.000.00) (provided the
Developer confines said reduclian in a writing noticed to the City in the manner provided in
Me HOME Agreement), and the Developer shall be released from any further liability to the
Lender under this Note.
Principal and interest payments in the amount of I$ (e 994 1 is due beginning on
April 1, 2010 and annually thereafter and all principal and Interest outstanding shall be due on
the Maturity Date. Any failure to make a payment required hereunder shall constiMe a
default under this Note.
Definitions. All capitalized terns used in this Note, unless otherwise defined, will have the
respective meanings specified in the HOME Agreement.
Business Da v 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 stated to be due on a day other than a Business Day, that payment
may be made on the next succeeding Business Day. However, g the extension would cause
the payment to be made in a new calendar month, that payment will be made on Me next
preceding Business Day.
Securitv. This Note, and any extensions or renewats hereof, shatl be secured by a Dead of
Trust, Security Agreement and Fixture Filing with Assignment of Rents on real estate in
Page 1 of Exhibit F /) f
Fresno County, California , that provides for acceleration upon stated events, dated as of the
same date as this Note and executed in favor of the Lender ('Deed of TrusP), creating and
insured as a not wome 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 Und on the Property. Said Dead of Trust shall be subject to the terms of the
Template Rider to the Dead of Trust attached hereto and such shall automatically be
incorporated In the terms of the Dead of Trust that secures this Note.
Time is of the Essence. It will be a default under this Note If Borrower defaults under the
HOME 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 Men to
the interest end then to pnnc0al balance. On the occurrenceof a default or on the
occurrence of any other event that under the terms of the Loan Documents give nse to the
right to accelerate the balance of the indebtedness, then, at the option of Lender, this Note or
any nates or other instruments that may be taken in renewal or extension of all or any pan of
the indebtedness will immediately become due without any further presentment, demand,
protest, or notice of any kind.
Terms of Payment The indebtedness evidenced by this Note may, at the option of the
Bon -ower, be prepaid in whole or In part without penalty. Lender will appy all the
prepayments first to the payment of any costs, fees, late charges, or other charges due under
this Note or under any of the other Loan Documents and then to the interest and Men to the
principal balance.
All Loan payments are payable in lawful money of the United States of Amenca at any place
that Lender or the legal holden of this Note may, from time to time, In writing designate, and
in the absence of that designation. to
CM of Fresno
Housing and Community Development Division
2800 Fresno Street, Suite 3070
Fresno, CA 93721
Borrower agrees to pay all costs including, without limitation, attorney fees, incurred by Me
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 undemigned that in anyway affects the exercise by the holder 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 are specifically
included in Mose costs and expenses to be paid by Borrower. Borrower 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 HOME Agreement.
Page 2 of Exhibit F J
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 pantal
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 Lender's rights 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 shall provide 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 provided in the 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 Involurrli
whether by outright sale, deed, installment sale contract, land contract, contract for deed,
leasehold interest with a tens greater than free (3) years, Ieaseaption contract, or by sale,
assignment, or transfer of any beneficial interest in or to any land trust holding bile to the
Property, or by any other method of mnveyance 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 mss 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 Men held by it as security under this Note, and the transferee will then
become vested with all Me powers and rights given to Lentler; and Lender will Man 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 any one or more of the provisions in this Note is held b be 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 anyway be affected or impaired. This
Note will be binding on and inure to Me 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 by the laws of California In all respects, including matters of
construction, validity, and performance, and that none of is terms or provisions may be
waived, altered, modified, or amended except as Lender may consent to in a writing duly
signed by Lender or ifs authorized agents.
In witness whereof. Borrower has mused this Promissory Note to be executed by its
authorized agent as of the data and year first above written.
Page 3 of Exhibit F t,51
Habitat for Humanity Fresno Inc., Borrower ,(
By: Dale Al
'.O
Name: 7
Title: a er
tAs•u .wn �a w. a.weeem.•u
Page 4 of Exhibit F 60
fpi IFORNLIALL-PURPOSE AC O%' DGMEIN I
connnw YYGSN.d cL� Jyg
On Apr,, 1g, C? roeoreme., s'ftt[[u I&Vf 8fgQ$OVI ,Notary Public,
Isema]aU0l; MIGnmr
famously appeared Ah,�G,O WI I JJl Y
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Signers Nameo
D>odihdual
❑ Corporate O hdr--TitINaA
D Partner— D Limbed Ll Gmeal
❑ Ahomey-in Fad OWNER
❑ Tvctee ?^^
❑ Guardian or Cons rvetar
D Other:
Signer Is Representing
SigoeJs Name
❑lnm%idwl
D Corporate (Xffer—Tndds):
❑ Partner—p funded O Ganeal
❑ gtto[vry'In Fnet
❑Trustee
❑ Guvdiso or (naemn[or
❑ O[M1er:
6ignv la gxprasenting;
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and to mo
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title ortype nr Nocommt. Ery, la,,e N„iG
Gpauty(irs) Cleilhgt by $ipael(S)
Signers Nameo
D>odihdual
❑ Corporate O hdr--TitINaA
D Partner— D Limbed Ll Gmeal
❑ Ahomey-in Fad OWNER
❑ Tvctee ?^^
❑ Guardian or Cons rvetar
D Other:
Signer Is Representing
SigoeJs Name
❑lnm%idwl
D Corporate (Xffer—Tndds):
❑ Partner—p funded O Ganeal
❑ gtto[vry'In Fnet
❑Trustee
❑ Guvdiso or (naemn[or
❑ O[M1er:
6ignv la gxprasenting;
ITEMPLATE RIDER TO DEEIRS)OF TROaTI
The Trustor (herein "Borrower") understands and agrees that the NOW 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 Me Borrower from the Borrower's home used as security
for the Note described above, unless having obtained the written consent of the Beneficiary
(herein "Lender'); (2) upon Me sale or transfer, without the Lenders 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, file or interest therein; whether legal, beneficial or
equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale
contract, land contract contract for deed, lease -option contract, or by sake. assignment, or
transfer Of any beneficial interest in or to any land trust holding We to Me Property, or by any
other method of conveyance of land interest.
Borrower also assigns to Lender all rents, issues and profits from mid real property
reserving, however, the right in collect and use the same so long as there is no existing
default hereunder, and does hereby authorize Lender to collect 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 dead of trust, or such lender's assignee or successor in interest,
to exercise its remedies under the deed of Must 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 terms and provisions of the first Deed of Trust
are paramount and controlling, and they supersede any other terms and provisions hereof in
conflict therewith. In the event of a foreclosure or deed in lieu of foreclosure of the first Deed
of Trust. any provisions herein or any provisions in any other collateral agreement restricting
the use of the property to low or moderate income households or otherwise restricting the
Borrowers ability to sell the property shall have no further force 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 Lige to Me property through a
foreclosure or deed in lieu of foreclosure of the first Deed of Trust shall receive title to the
property free and clear from such restrictions.
In the event of a catastrophic occurrence that results in the property having to be sold, the
portion of this existing second mortgage lien that result in the combined loan -to -value ratio
being more than 100% of Me 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 Mat
reduces Me secured debt of the existing second mortgage by the amount of the new
unsecured promissory note.
Period of Affordability: The HOME Investment Partnerships Program sets periods of
affordability as provided in 24 CFR 92 254 based on Me amount of HOME funds provi0ed.
Page 5 of Exhibit F / ,�
The minimum period of affordability for this program is twenty years (20 years.) Year one
shall be the 12 -month period following issuance of the Certificate of Completion of the home
which is the subject hereof, 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 26 CFR 92254(a)(5)(ii), the City of Fresno
requires that HOME funds be recaptured Rthe home tices not continue to be the Borrower's
principal residence or R all or any part of the property or any interest in R is sold 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 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 Me 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 t
homeowner investment
Homeowner investment x Net = amount to homeowner
proceeds
HOME investment t
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(insert)]
Page 6 of Eimibit F 0