HomeMy WebLinkAbout2018-0511
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RESOLUTION NO. 2018-51
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING THE EXECUTION OF A HOME
INVESTMENT PARTNERSHIPS PROGRAM (HOME) GRANT AGREEMENT
WITH HOUSING PARTNERS I, (HPI) INC.
WHEREAS, the City has received Home Investment Partnerships Act (HOME) funds
from the United States Department of Housing and Urban Development ("HUD") pursuant to
the Cranston -Gonzalez National Housing Act of 1990. The HOME funds must be used by the
City in accordance with 24 C.F.R. Part 92; and
WHEREAS, the HOME Program is designed exclusively to create affordable housing
for low-income households and may be used to fund a wide range of activities including
building, buying, and/or rehabilitating affordable housing for rent or homeownership or
providing direct rental assistance to low-income people; and
WHEREAS, the City has received the authority to engage nonprofit developers
certified as Community Housing Development Organizations ("CHDO's") subject to the
HOME Final Rule, for the purposes of constructing or reconstructing infill housing on
blighted or underutilized sites ("Eligible Properties") and selling these Eligible Properties to
households whose income does not exceed 80% of the Area Median Income ("Qualified
Homebuyers"); and
WHEREAS, this program is referred to as the Infill Housing Program and was
approved at the September 19, 2016 Mayor and City Council meeting; and
WHEREAS, on September 19, 2016, the Mayor and City Council approved a HOME
agreement in an amount not to exceed SIX HUNDRED TWENTY FIVE THOUSAND
DOLLARS ($625,000) with Housing Partners I (HPI) Inc., an experienced affordable housing
Developer and Community Housing Development Organization, to administer the
conventional housing construction (aka Timber Frame) component of the Infill Housing
Program; and
WHEREAS, HPI, Inc. is an experienced developer and qualified CHDO dedicated to
developing, rehabilitating, owning, and managing affordable housing, and provides housing
counseling services to low and moderate income people in the County of San Bernardino; and
WHEREAS, the City desires to modify the HOME agreement to change the financial
structure from a loan to a grant and ensure that HPI maintains ownership of selected infill
housing property during the development phase of the project; and
WHEREAS, the City and HPI have discussed these revisions to the HOME agreement
and both parties have agreed to these revisions; and
WHEREAS, the City desires to provide HOME Funds to HPI, on the terms and
conditions set forth in the HOME grant agreement; and
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WHEREAS, HPI will deliver to the City among other items, a "Site Agreement", a
"Deed of Trust", and a "Housing Affordability Covenant", as defined the HOME Grant
Agreement, each time that HPI requests HOME financing to construct or reconstruct 'Eligible
Properties"; and
WHEREAS, this project is exempt from environmental review under Section 15332
of the regulations implementing California Environmental Quality Act (CEQA) but is subject
to environmental review under 24 CFR 58.36 of the National Environmental Protection Act.
NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA AS FOLLOWS:
SECTION 1. The Mayor and City Council do hereby authorize the City Manager or
her designee to enter into a HOME Grant Agreement with Housing Partners I (HPI), Inc. for
the implementation of the Infill Housing Development Program, attached hereto as Exhibit
"A" and incorporated herein.
SECTION 2. The Mayor and City Council do hereby authorize the City Manager or
her designee to make non -material changes to the agreement with the concurrence of the City
Attorney and take such actions and execute such other documents as may be necessary to
effectuate the grant agreement and accompanying documents.
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RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING THE EXECUTION OF A HOME
INVESTMENT PARTNERSHIPS PROGRAM (HOME) GRANT AGREEMENT
WITH HOUSING PARTNERS I, (HPI) INC.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and City Council of the City of San Bernardino at a Joint Regular Meeting thereof, held on the
21 St day of February 2018, by the following vote, to wit:
Council Members:
MARQUEZ
BARRIOS
VALDIVIA
SHORETT
NICKEL
RICHARD
MULVIHILL
AYES NAYS
X
x (s)
X C�ti1�
x
x
ABSTAIN ABSENT
k
(jeorgeanuAianna, CM City Clerk
The foregoing Resolution is hereby approved this 21St day of February 2018.
R. Carey Da s, Mayor
City of SarV13 emardino
Approved as to form:
Gary D. Saenz, City Attorney
By: ,
0
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HOME Investment Partnerships Program (HOME)
INFILL HOUSING DEVELOPMENT
GRANT AGREEMENT
by and between
City of San Bernardino
a municipal corporation
and
Housing Partners I, Incorporated,
a California nonprofit corporation
for a grant in the principal amount
not to exceed $625,000.00 in HOME Funds
I ct, 2018
This HOME Investment Partnerships Program (HOME) Infill Housing Development Grant Agreement
("Agreement") is dated , 2018, and is between the City of San Bernardino, a municipal
corporation ("City"), and Housing Partners I, Incorporated, a California nonprofit corporation
("Developer").
RECITALS
WHEREAS, City has received HOME Investment Partnerships Act funds from the United States
Department of Housing and Urban Development ("HUD") pursuant to the Cranston -Gonzalez National
Housing Act of 1990 ("HOME Funds"). The HOME Funds must be used by City in accordance with
24 C.F.R. Part 92, as amended from time to time ("HOME Regulations"); and
WHEREAS, City seeks to engage nonprofit developers certified as Community Housing Development
Organizations ("CHDO's") subject to the HOME Final Rule, for the purposes of constructing or
reconstructing infill housing on blighted or underutilized sites ("Eligible Properties," each individually
an "Eligible Property") and selling these Eligible Properties to households whose income does not
exceed 80 percent of the Area Median Income, as defined below; and
WHEREAS, Developer is a CHDO with capacity and expertise to carry out infill housing
development; and
WHEREAS, Developer desires to utilize City HOME funds in an amount not to exceed Six Hundred
Twenty -Five Thousand Dollars ($625,000.00) for the purpose of acquiring and/or constructing and/or
reconstructing Eligible Properties to develop affordable housing units that will be sold to qualified
homebuyers; and
WHEREAS, Developer will deliver to City, among other items, a "Site Agreement", a "Deed of
Trust", and a "Housing Affordability Covenant", as defined below, each time that Developer requests
HOME Funds to acquire, construct, or reconstruct an Eligible Property; and
WHEREAS, defined terms used but not defined in these recitals are defined in Section 2 of this
Agreement; and
WHEREAS, City desires to provide HOME Funds to Developer, on the terms and conditions set forth
herein.
NOW THEREFORE, in consideration of the above recitals, the mutual covenants and
agreements hereinafter set forth and for other good and valuable consideration, the receipt, legal
sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
SECTION 1. Incorporation of Recitals.
The Recitals set forth above are true and correct and are incorporated into this Agreement.
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SECTION 2. Definitions.
In addition to the meaning ascribed to certain words and phrases as set forth in the Recitals of this
Agreement or in other sections of this Agreement, including any of the Attachments to this Agreement,
other words and phrases shall have the meanings described below:
■ "Acquisition Escrow" means an account set up with an escrow company that will oversee
the transfer of title of an Eligible Property from City or a third parry owner, as the case may
be, to Developer for the purpose of constructing and/or reconstructing affordable housing
units, and the execution and recording of a Deed of Trust and a Housing Affordability
Covenant between City and Developer.
■ "Affirmative Marketing Plan" has the meaning set forth in Attachment "J".
■ "Affordable Housing Cost" means a purchase price determined using the criteria set forth
in 24 C.F.R. Part 92.254(a)(2), i.e., not exceeding 95 percent of the median purchase price
for the area.
■ "Affordability Period" means the period of time during which an Eligible Property has
occupancy restrictions. The length of the affordability period depends on the amount of
HOME assistance to the project, as specified in the table below. It is anticipated that infill
housing projects will require more than $40,000 in HOME assistance for each Eligible
Property. Therefore, the anticipated affordability period for Eligible Properties is 15 years.
However, each project will be evaluated to verify the length of affordability that will apply.
HOME Assistance
per Unit
Length of the
Affordability
Period
Less than $15,000
5 years
$15,000 - $40,000
1 10 years
More than $40,000
1 15 years
■ "Area Median Income (AMI)" means the median income for the Ontario/Riverside/San
Bernardino Metropolitan Statistical Area, adjusted for household size, as defined and
periodically adjusted by HUD.
"Construction Escrow" means an account set up with an escrow company that will
oversee the disbursement of all construction or reconstruction payouts from City to
Developer which are made to advance to Developer or reimburse Developer for payments
made or to be made to general contractors, subcontractors, and material suppliers as
construction or reconstruction work is completed.
■ "Deed of Trust" means the deeds of trust in favor of City as beneficiary that will encumber
the Eligible Property as security for compliance with this Agreement and with the Housing
Affordability Covenants defined below. Developer shall enter into a Deed of- Trust to
secure compliance with this Agreement and with the Developer Housing Affordability
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Covenant ("Developer Deed of Trust"). The Qualified Homebuyers to whom Developer
sells the Eligible Properties shall enter into Deeds of Trust to secure compliance with the
Qualified Homebuyer Housing Affordability Covenants ("Qualified Homebuyer Deed of
Trust"). The general forms of the Developer Deed of Trust and the Qualified Homebuyer
Deed of Trust are included as Attachments "F" and "G", respectively.
• "Effective Date" means the date on which this Agreement shall become effective, which is
agreed to be the earlier of the date this Agreement is fully executed by Developer and City
or 52018.
■ "Escrow Agent" means Lawyers Title Company or another escrow agent mutually
acceptable to Developer and City. One or more Escrow Agents shall administer the
Acquisition Escrow, the Construction Escrow, and the Sale Escrow.
• "Event of Default" has the meaning set forth in Section 14 of this Agreement.
• "Hazardous Materials" has the meaning set forth in Section 37 of this Agreement.
• "HOME" means the HOME Investment Partnerships Act Program established pursuant to
the Cranston -Gonzalez National Affordable Housing Act of 1990 (42 U.S.C. 12701 et sec,.),
as amended from time to time, and the HOME Regulations.
■ "HOME Grants" means the grants to be provided by City to Developer to acquire,
construct or reconstruct Eligible Properties in an aggregate amount not to exceed Six
Hundred Twenty -Five Thousand Dollars ($625,000.00). The provisions of the HOME
Grants are set forth in Section 16. The HOME Grants shall be shall be secured by a Deed
of Trust in the form of Attachment "F", and may also be secured by other documents.
■ "Housing Affordability Covenant" means the HOME Program Housing Affordability
Covenants and Restrictions that will be entered into by and between Developer and City
when an Eligible Property is selected for development ("Developer Housing Affordability
Covenant"), and by and between City and the Qualified Homebuyers to whom the Eligible
Properties are sold following the construction or reconstruction of affordable housing units
on the Eligible Properties ("Qualified Homebuyer Housing Affordability Covenant"). The
form of the Developer Housing Affordability Covenant is Attachment "H". The form of
the Qualified Homebuyer Housing Affordability Covenant is Attachment "I".
■ "Low-income Households" means persons and households whose income does not exceed
80 percent of the Area Median Income, adjusted for family size, as set forth in the
definition of "low-income families" in 24 C.F.R. Part 92.2.
■ "Notice of Completion" means the Notice of Completion to be executed by Developer
upon the completion of the construction or reconstruction of infill housing on an Eligible
Property, in the form specified in California Civil Code Section 8182.
■ "Project" means the acquisition of Eligible Properties, construction or reconstruction of
infill housing on the Eligible Properties, and resale of the Eligible Properties to Qualified
Homebuyers.
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■ "Qualified Homebuyer" means a household whose annual income does not exceed eighty
percent (80%) of the Area Median Income, and which meets all of the requirements for
purchasing an Eligible Property.
■ "Rehabilitation Standards" means standards for the rehabilitation of HOME -assisted
properties adopted from time to time by City as a participating jurisdiction under the
HOME Regulations.
■ "Sale Escrow" means the property transfer transaction account by and among an Escrow
Agent, the Qualified Homebuyer, Developer, and City in connection with the sale of a
completed Eligible Property from Developer to a Qualified Homebuyer, and the execution
and recording of a Deed of Trust and a Housing Affordability Covenant between City and
the Qualified Homebuyer.
■ "Term" has the meaning set forth in Section 5 of this Agreement.
■ "Total Development Cost" means the total cost to Developer to construct/reconstruct and
sell an Eligible Property to a Qualified Homebuyer. The Total Development Cost shall be
determined by the sum total of the cost line items included in the Total Development Cost
Pro Forma in the form of Attachment "C".
SECTION 3. Parties to the Aereement.
A. The parties to this Agreement are Developer and City, referred to at times herein collectively as
the "Parties" and individually as a "Party".
B. The principal office of Developer for purposes of this Agreement is located at 715 East Brier
Drive, San Bernardino, California 92408.
C. Prior to the Effective Date, Developer must have provided City with satisfactory evidence of
the legal formation and the good standing of Developer to transact business within the State.
D. Developer must meet the legal and organizational characteristics described in 24 C.F.R. 92.2,
and must be and continue to be certified as a CHDO by City during the Term of this
Agreement.
SECTION 4. Entire Agreement.
A. This Agreement including all attachments and addenda referenced herein constitutes the entire
agreement between the Parties. This Agreement supersedes all prior negotiations, discussions
and agreements between the Parties concerning the subject matters covered herein. The Parties
intend this Agreement to be the final expression of their agreement with respect to the subjects
covered herein and a complete and exclusive statement of such terms. In particular, but
without limitation, this Agreement supersedes that certain HOME Investment Partnerships
Program (HOME) Infill Housing Development Master Agreement between the Parties dated
September 30, 2016.
B. Included as an integral part of this Agreement are the Attachments listed below for reference
purposes. All Attachments set forth below and attached to this Agreement are incorporated
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herein by reference regardless of the prior reference of any or all of said Attachments in the text
of this Agreement. All Attachments to this Agreement shall have the same force and effect as
though the content of each and every one of said Attachments had been included within the text
of this Agreement. Unless the context requires to the contrary, all references to this Agreement
shall include each and every Attachment set forth below and attached hereto. Attachments
identified as forms or templates may be modified by City as necessary to adapt the documents
for use in connection with particular transactions.
List of Attachments:
Attachment "A" Scope of Services
Attachment `B" Site Agreement form
Attachment "C" Total Development Cost Pro Forma template
Attachment "D" Project Timeline template
Attachment `B" Sources and Uses Schedule template
Attachment "F" Developer Deed of Trust form
Attachment "G" Qualified Homebuyer Deed of Trust form
Attachment "H" Developer Housing Affordability Covenant form
Attachment "I" Qualified Homebuyer Housing Affordability Covenant form
Attachment "J" Affirmative Marketing Requirements
Attachment "K" CHDO Designation Letter and Certificate
Attachment "L" HOME Guide for Review of Homebuyer Projects
SECTION 5. Term of Aureement.
A. The Term of this Agreement shall commence on the Effective Date and will expire one (1)
year after the Effective Date, unless earlier terminated as provided in this Agreement. City will
have the option to extend the term of this Agreement for two (2) additional one-year terms,
with the consent of Developer. The term of this Agreement shall not extend beyond September
30, 2020, except that, notwithstanding any of the foregoing, unless terminated under Section 15
below, this Agreement shall remain in effect at least until completion of the construction or
reconstruction of all of the Eligible Properties to be constructed or reconstructed under this
Agreement, and at least until ownership of each of said Eligible Properties has been transferred
by Developer to a Qualified Homebuyer. Also, notwithstanding the foregoing portion of this
Section 5(A), documents recorded pursuant to this Agreement shall remain effective in
accordance with their terms.
B. Upon the expiration or earlier termination of this Agreement, Developer shall provide City with
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all documents, notes, maps, reports, data, and all other work product developed in performance
of the Scope of Services within ten (10) calendar days after the effective date of such expiration
or termination, without additional charge to City.
SECTION 6. Scope of Developer Services.
A. City hereby retains Developer to provide the professional services set forth in the Scope of
Services attached hereto as Attachment "A" and incorporated herein by this reference.
Developer hereby agrees to perform the work set forth in the Scope of Services, in accordance
with the terms of this Agreement and the guidelines specified in the HOME Guide for Review
of Homebuyer Projects, attached as Attachment "U'.
B. Before commencing any services under this Agreement, Developer shall provide City with
documentation indicating Developer's financial strength and capacity to provide start-up
operations and working capital to develop Eligible Properties. Such documentation shall
include Developer's most recent certified financial statements with a statement in writing,
signed by a duly authorized representative, stating that the present financial condition is
materially the same as that shown on the balance sheet and income statement submitted, or with
an explanation for a material change in the financial situation.
SECTION 7. Budget.
City has allocated an amount not to exceed Six Hundred Twenty -Five Thousand Dollars
($625,000.00) of HOME Funds for the acquisition, construction or reconstruction of Eligible
Properties.
SECTION 8. Payment for Services Performed by Developer.
The amount to be paid by City to Developer for the services to be performed by Developer
pursuant to this Agreement (the "Developer Fee") will be negotiated and established prior to
the commencement of each Project, as reflected in the Total Development Cost Pro Forma that
Developer is required to submit for each Eligible Property. City must approve the Developer
Fee prior to the construction or reconstruction of any Eligible Property. In all cases, the
Developer Fee shall be limited to no more than ten percent (10%) of the Total Development
Cost.
SECTION 9. HOME Program Requirements.
A. Developer shall comply with all applicable laws and regulations governing the use of the
HOME Funds as set forth in 24 C.F.R. Part 92, including the requirements of the Developer
Housing Affordability Covenant. In the event of any conflict between this Agreement and
applicable laws and regulations governing the use of the HOME Funds, the applicable laws and
regulations govern. The laws and regulations governing the use of the HOME Funds include
(but are not limited to) the following:
(i) Eligible Project Costs. Restrictions on funding only eligible project costs as set
forth in 24 C.F.R. 92.206.
(ii) Environmental and Historic Preservation and Review. 24 C.F.R. Part 50 and 24
C.F.R. Part 58, which prescribe procedures for compliance with the National
Environmental Policy Act of 1969 (42 U.S.C. §§ 4321-4370), and the additional
laws and authorities listed at 24 C.F.R. 58.5. Developer acknowledges that
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environmental review by City of the activities to be undertaken under this
Agreement is required, and that Developer may not expend funds, HOME or
otherwise, for such activities until City has notified Developer in writing that the
environmental review is complete.
(iii) Annlicability of OMB Circulars. The applicable policies, guidelines, and
requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110, A-122, and A-
133.
(iv) Debarred, Sus ended or Ineligible Contractors. The prohibition on the use of
debarred, suspended, or ineligible contractors set forth in 24 C.F.R. Part 24.
(v) Civil Rights, Housing and Communit Development, and Age Discrimination
Acts. The Fair Housing Act (42 U.S.C. 3601 et seMc .) and implementing regulations
at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title
VIII of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109
of Title I of the Housing and Community Development Act of 1974 as amended;
Section 504 of the Rehabilitation Act of 1973 (29 USC § 794, et s_y.); the Age
Discrimination Act of 1975 (42 USC § 6101, et seMc .); Executive Order 11063 as
amended by Executive Order 12259 and implementing regulations at 24 C.F.R.
Part 107; Executive Order 11246 as amended by Executive Orders 11375, 12086,
11478, 12107; Executive Order 11625 as amended by Executive Order 12007;
Executive Order 12432; Executive Order 12138 as amended by Executive Order
12608.
(vi) Nondiscrimination against the Disabled. The requirements of the Fair Housing Act
(42 U.S.C. 3601 et seg.) and implementing regulations at 24 C.F.R. Part 100;
Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794), and federal
regulations issued pursuant thereto, which prohibit discrimination against the
disabled in any federally assisted program, the requirements of the Architectural
Barriers Act of 1968 (42 U.S.C. 4151-4157) and the applicable requirements of
Title II and/or Title III of the Americans with Disabilities Act of 1990 (42 U.S.C.
12131 et seg.), and federal regulations issued pursuant thereto.
(vii) Clean Air and Water Acts. The Clean Air Act, as amended, 42 U.S.C. 7401 et seq.,
the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq., and
the regulations of the Council on Environmental Quality with respect thereto, at 40
C.F.R. Part 1500, as amended from time to time.
(viii) Uniform Administrative Reguirements. The provisions of 24 C.F.R. 92.505
regarding cost and auditing requirements.
(ix) Labor Standards. The labor requirements set forth in 24 C.F.R. 92.354; the
prevailing wage requirements of the Davis -Bacon Act and implementing rules and
regulations (40 U.S.C. 3141-3148); the Copeland "Anti -Kickback" Act (40 U.S.C.
§ 3145) which requires that workers be paid at least once a week without any
deductions or rebates except permissible deductions; the Contract Work Hours and
Safety Standards Act — CWHSSA (40 U.S.C. §§ 3701-3708) which requires that
workers receive "overtime" compensation at a rate of 1-1/2 times their regular
hourly wage after they have worked forty (40) hours in one (1) week; Title 29,
Code of Federal Regulations, Subtitle A, Parts 1, 3 and 5, which are the regulations
and procedures issued by the Secretary of Labor for the administration and
enforcement of the Davis -Bacon Act, as amended; the Fair Labor Standards Act of
1938, 29 U.S.C. § 201, et seq.; and all other applicable federal and state labor laws,
the applicability of which Developer assumes full responsibility for determining.
(ix) Drug Free Workplace. The requirements of the Drug Free Workplace Act of 1988
(P.L. 100-690), 41 U.S.C. Chapter 81, and implementing regulations at 2 C.F.R.
Part 2429.
(xii) Anti -Lobbying, Disclosure Requirements. The disclosure requirements and
prohibitions of 31 U.S.C. § 1352 and implementing regulations at 24 C.F.R.
Part 87.
(xiii) Historic Preservation. The historic preservation requirements set forth in the
National Historic Preservation Act of 1966, as amended (Division A of Subtitle III
of 54 U.S.C.) and the procedures set forth in 36 C.F.R. Part 800. If archeological,
cultural, or historic period resources are discovered during construction, all
construction work must come to a halt and Developer shall immediately notify
City. Developer shall not shall alter or move the discovered material(s) until all
appropriate procedures for "post -review discoveries" set forth in the National
Historic Preservation Act at 54 U.S.C. § 300101 et seq. have taken place, which
include, but are not limited to, consultation with the California State Historic
Preservation Officer and evaluation of the discovered material(s) by a qualified
professional archaeologist.
(xiv) Flood Disaster Protection. The requirements of the Flood Disaster Protection Act
of 1973 (P.L. 93-234, 42 U.S.C. § 4001) ("Flood Act"). No portion of the
assistance provided under this Agreement is approved for acquisition or
construction purposes as defined under Section 3(a) of the Flood Act, for use in an
area identified by HUD as having special flood hazards which is not then in
compliance with the requirements for participation in the national flood insurance
program pursuant to Section 201(d) of the Flood Act. The use of any assistance
provided under this Agreement for such acquisition or construction in such
identified areas in communities then participating in the National Flood Insurance
Program is subject to the mandatory purchase of flood insurance requirements of
Section 102(a) of the Flood Act. If an Eligible Property is located in an area
identified by HUD as having special flood hazards and in which the sale of flood
insurance has been made available under the National Flood Insurance Act of 1968,
as amended, 42 U.S.C. 4001 et seq., the property owner and its successors or
assigns must obtain and maintain, during the ownership of the Eligible Property,
such flood insurance as required with respect to financial assistance for acquisition
or construction purposes under Section 102(a) of the Flood Act. Such provisions
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are required notwithstanding the fact that the construction on the Eligible Property
is not itself funded with assistance provided under this Agreement.
(xv) Project Requirements and Other Federal Requirements. The activities funded
under this agreement must comply with the project requirements set forth in
Subpart F of 24 C.F.R. Part 92 and must be carried out in accordance with the other
federal requirements set forth in Subpart H of said Part 92.
(xvi) Property Standards. The housing developed pursuant to this Agreement must
meet the property standards in 24 C.F.R. § 92.251, the lead hazard control
requirements in 24 C.F.R. 92.355, and the Rehabilitation Standards, upon
completion of construction or reconstruction.
(xvii) Religious Organizations. If Developer is a religious organization, as defined by
the HOME requirements, Developer shall comply with all conditions prescribed by
HUD for the use of HOME funds by religious organizations, including the First
Amendment of the United States Constitution regarding church/state principles and
the applicable constitutional prohibitions set forth in 24 C.F.R. 92.257.
(xviii) Relocation. As applicable, the requirements of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601, et
seq.), and implementing regulations at 49 C.F.R. Part 24; 24 C.F.R. 570.606;
Section 104(d) of the Housing and Community Development Act of 1974 and
implementing regulations at 24 C.F.R. 42 et seq.; 24 C.F.R. 92.353; and California
Government Code Section 7260 et seq. and implementing regulations at 25
California Code of Regulations Sections 6000 et seq. If and to the extent that
development of the project results in the permanent or temporary displacement of
residential tenants, homeowners, or businesses, 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, and shall prepare
and submit a relocation plan to City for approval. Developer is solely responsible
for payment of any relocation benefits to any displaced persons and any other
obligations associated with complying with such relocation laws. Developer shall
indemnify and defend City (with counsel selected by City), and hold City harmless
against all claims that arise out of relocation obligations to residential tenants,
homeowners, or businesses permanently or temporarily displaced by the project.
(xix) Other HUD Regulations. Any other HUD regulations now in effect or as may be
amended or added in the future pertaining to the HOME Funds, the existence and
applicability of which Developer assumes full responsibility for determining.
(xx) Fees. As required by 24 C.F.R. Part 92.504(c)(3)(xi), Developer shall not charge
servicing, origination, processing, inspection, or other fees for the costs of
providing homeownership assistance.
SECTION 10. Records Retention.
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Records, field notes, inspection documents, and other supporting documents pertaining to the
use of HOME funds disbursed to Developer shall be retained by Developer with a
corresponding copy provided to City. All records shall be made available to City, HUD, and
other appropriate federal agencies and officials for examination for a period of five (5) years
from the date of expiration or termination of this Agreement. Records shall be available for
inspection during Developer's regular business hours. In the event of litigation or audit relating
to this Agreement, such records shall be retained by Developer until all such litigation or audit
has been resolved.
SECTION 11. Indemnification.
Developer shall defend, with counsel selected by City, indemnify, and hold harmless City and
its officers, employees, representatives, and agents (collectively "Indemnitees") from and
against any and all actions, suits, proceedings, claims, demands, losses, costs and expenses,
including legal costs and attorneys' fees, for injury or damage of any type claimed as a result of
the acts or omissions of Developer, its officers, employees, subcontractors and agents, arising
from or related to performance by Developer of the work required under this Agreement,
except that arising from the sole negligence or willful misconduct of City.
SECTION 12. Insurance.
A. Developer shall maintain insurance, as set forth below, throughout the term of this Agreement.
Developer shall remain liable as stated in Section 11 above for all losses and damages incurred
by any of the Indemnitees that are caused directly or indirectly through the actions or inactions,
willful misconduct or negligence of Developer in the performance of the duties assumed by
Developer pursuant to this Agreement, to the extent such losses and damages are not covered
by insurance maintained by Developer pursuant to this Section 12.
B. Developer shall maintain insurance policies issued by an insurance company or companies
authorized to do business in the State of California and that maintain during the term of the
policy a Financial Strength Rating of at least A and a Financial Size Category designation of at
least V, as set forth in the then most current edition of `Bests Insurance Guide," as follows:
i. Automobile Insurance. Developer and each of its subcontractors shall maintain
comprehensive automobile liability insurance of not less than One Million Dollars
($1,000,000) combined single limit per occurrence for each vehicle leased or
owned by Developer or its subcontractors and used in performing work under this
Agreement.
ii. Worker's Compensation Insurance. Developer and each of its subcontractors shall
maintain worker's compensation coverage in accordance with California workers'
compensation laws for all workers under Developer's and/or its any of its
subcontractors' employment performing work under this Agreement.
iii. Commercial General Liability Insurance. Developer shall maintain commercial
general liability insurance, including coverage for personal injury, death, property
damage and contractual liability, with a limit of at least One Million Dollars
($1,000,000), including products and completed operations coverage.
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iv. Builders' Risk/Property Insurance. Builders' Risk insurance during the course of
construction, and upon completion of construction if requested by City, and
property insurance covering the Project, in form appropriate for the nature of such
property, covering all risks of loss, excluding earthquake, for one hundred percent
(100%) of the replacement value, with deductible, if any, acceptable to City,
naming City as a loss payee, as its interests may appear.
v. Flood Insurance. Flood insurance must be obtained if required by applicable
federal regulations.
All liability insurance obtained by Developer pursuant to the above provisions shall be primary
insurance with respect to City and each policy shall so provide.
If required by City from time to time, Developer shall increase the limits of Developer's
liability insurance policies to reasonable amounts customary for owners of improvements
similar to the Project.
All policies shall be occurrence policies and not claims made policies.
Concurrent with the execution of this Agreement and prior to the commencement of any work
by Developer, Developer shall deliver to City copies of policies or certificates evidencing the
existence of the insurance coverage required herein, which coverage shall remain in full force
and effect continuously throughout the term of this Agreement. Each policy of insurance that
Developer purchases in satisfaction of the insurance requirements of this Agreement, except
workers compensation, shall be endorsed naming City and the other Indemnitees as additional
insureds, and shall provide that, except with respect to the coverage limits, insurance applies to
each named and additional insured as though a separate policy were issued to each. Each
policy shall provide for a waiver of subrogation as against City and the other Indemnitees, and
shall provide that the policy may not be cancelled, terminated or modified, except upon thirty
(30) days' prior written notice to City.
C. Failure on the part of Developer to procure or maintain the insurance coverage required herein
for fifteen (15) days or longer shall constitute a material breach of this Agreement pursuant to
which City may exercise all rights and remedies set forth herein and may at its sole discretion,
without waiving such default or limiting its rights or remedies, procure or renew such insurance
and pay any and all premiums in connection therewith. All monies so paid by City shall be
reimbursed by Developer upon demand, including interest thereon at the rate of ten percent
(10%) per annum compounded annually from the date paid by City to the date reimbursed by
Developer. City shall have the right, at its election, to participate in and control any insurance
claim adjustment or dispute with the insurance carrier. Developer's failure to assert or delay in
asserting any claim shall not diminish or impair the rights of City against Developer or the
insurance carrier.
SECTION 13. Press Releases.
Press or news releases, including photographs or public announcements, or confirmation of the
same related to the work to be performed by Developer under this Agreement shall be made by
Developer only with the prior written consent of City. Press or news releases shall include
language identifying the Project as a City -funded project, and include the City seal.
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SECTION 14. Defaults and Remedies.
A. Events of Default. The occurrence of any of the following shall, after the giving of any notice
and the expiration of any applicable cure period, constitute a default by Developer hereunder
("Event of Default"):
i. The failure of Developer to pay or perform any monetary covenant or obligation
hereunder or under any of the documents executed in connection herewith, without
curing such failure within ten (10) calendar days after receipt of written notice of
such default from City (or from any parry authorized by City to deliver such notice
as identified by City in writing to Developer).
ii. The failure of Developer to perform any nonmonetary covenant or obligation
hereunder or under any of the documents executed in connection herewith, without
curing such failure within thirty (30) calendar days after receipt of written notice of
such default from City (or from any party authorized by City to deliver such notice
as identified by City in writing to Developer) specifying the nature of the event or
deficiency giving rise to the default and the action required to cure such deficiency;
provided, however, that if any default with respect to a nonmonetary obligation is
such that it cannot be cured within a thirty -day period, it shall be deemed cured if
Developer commences the cure within said thirty -day period and diligently
prosecutes such cure to completion thereafter.
Notwithstanding anything herein to the contrary, the herein described notice requirements
and cure periods shall not apply to any Event of Default described in Sections iii through vii
below, each of which shall constitute an immediate default under this Agreement without
regard to any curative action undertaken or completed by Developer:
iii.The material falsity of any representation or the breach of any warranty or covenant
made by Developer under the terms of this Agreement or any documents executed
in connection herewith.
iv.Developer or any constituent member or partner, or majority shareholder, of
Developer shall (a) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian or the like of its property, (b) fail to pay or admit in writing
its inability to pay its debts generally as they become due, (c) make a general
assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent
or (e) commence a voluntary case under the Federal bankruptcy laws of the United
States of America or file a voluntary petition that is not withdrawn within ten (10)
calendar days after the filing thereof seeking an arrangement with creditors or an
order for relief or seeking to take advantage of any insolvency law or file an answer
admitting the material allegations of a petition filed against it in any bankruptcy or
insolvency proceeding.
v. If without the application, approval or consent of Developer, a proceeding shall be
instituted in any court of competent jurisdiction, under any law relating to
bankruptcy, in respect of Developer or any constituent member or partner, or
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majority shareholder, of Developer, for an order for relief or an adjudication in
bankruptcy, a composition or arrangement with creditors, a readjustment of debts,
the appointment of a trustee, receiver, liquidator or custodian or the like of
Developer or of all or any substantial part of Developer's assets, or other like relief
under any bankruptcy or insolvency law, and, if such proceeding is being contested
by Developer, in good faith, the same shall (a) result in the entry of an order for
relief or any such adjudication or appointment, or (b) continue undismissed, or
pending and unstayed, for any period of ninety (90) consecutive calendar days.
vi. Voluntary cessation of the operation of the Project for a continuous period of more
than thirty (30) calendar days or the involuntary cessation of the operation of the
Project for a continuous period of more than sixty (60) calendar days.
vii. A mechanic's lien or any other type of encumbrance on any Eligible Property
resulting from Developer's failure to fulfill its financial or other contractual
obligations with respect to any of its vendors or sub -contractors is not removed
within ten (10) calendar days after receipt of written notice of such default from
City.
B. City Remedies. Upon the occurrence of an Event of Default hereunder, City may, in its sole
discretion, take any one or more of the following actions:
i. Cease making any payment of fees or reimbursement of eligible expenses to
Developer unless and until the Event of Default (if curable) is cured.
ii. Demand reimbursement from Developer for any payments made to it by City for
which the contracted work product was not satisfactorily delivered by Developer.
iii.Take possession of any material or other work product purchased or produced by
Developer for the Project.
iv. Upon the occurrence of an Event of Default which is occasioned by Developer's
failure under this Agreement to pay money to a third party, City may, but shall not
be obligated to, make such payment. If such payment is made by City, Developer
shall deposit with City, upon written demand therefor, such sum plus interest at the
rate of ten percent (10%) per annum compounded annually. The Event of Default
with respect to which any such payment has been made by City shall not be
deemed cured until such repayment (as the case may be) has been made by
Developer.
v. Upon the occurrence of an Event of Default described in Section 14.A.(iv) or
14.A.(v) hereof, City shall be entitled and empowered by intervention in such
proceedings or otherwise to file and prove a claim for any amount owing to City
under this Agreement and unpaid and, in the case of commencement of any judicial
proceedings, to file such proof of claim and other papers or documents as may be
necessary or advisable in the judgment of City and its counsel to protect the
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interests of City and to collect and receive any monies or other property in
satisfaction of its claim.
vi. If the Event of Default consists of the failure of Developer to comply with the
requirement that it transfer each of the Eligible Properties only to a Qualified
Homebuyer, Developer shall be required to repay to City all funds provided by
City to Developer for the acquisition, construction, or reconstruction of the Eligible
Property to which said Event of Default applies.
C. Cily Default and Developer Remedies. Upon failure of City to meet any of its obligations
under this Agreement without curing such failure within thirty (30) calendar days after receipt
of written notice of such failure from Developer specifying the nature of the event or deficiency
giving rise to the default and the action required to cure such deficiency, Developer may, as its
sole and exclusive remedies:
i. Bring an action in equitable relief seeking the specific performance by City of the
terms and conditions of this Agreement or seeking to enjoin any act by City which
is prohibited hereunder; and/or
ii. Bring an action for declaratory relief seeking judicial determination of the meaning
of any provision of this Agreement. Without limiting the generality of the
foregoing, Developer shall in no event be entitled to, and hereby waives, any right
to seek indirect or consequential damages of any kind or nature from City arising
out of or in connection with this Agreement, and in connection with such waiver
Developer is familiar with and hereby waives the provisions of Section 1542 of the
California Civil Code which provides as follows: "A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR." Developer further waives the benefit of any other statute, rule,
regulation, or common law principle to the same or similar effec
Initials of Developer:
SECTION 15. Termination for Convenience.
A. This Agreement may be terminated by City at any time prior to its expiration for any reason by
giving Developer thirty (30) calendar days' prior written notice. If Developer is in compliance
with this Agreement on the date such termination takes effect, City shall pay Developer the
reasonable value of all work authorized by City prior to the date of such notice and completed
thereafter prior to the effective termination date.
B. In the event of a termination of this Agreement pursuant to this Section, Developer shall
comply with Section 5.B of this Agreement.
SECTION 16. HOME Grants.
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A. Subject to the terms and conditions of this Agreement, City shall make HOME Grants to
Developer for the purpose of paying for the acquisition Eligible Properties that are not owned
by City, construction or reconstruction of Eligible Properties, and soft costs involved in the
development of Eligible Properties. City shall commit an aggregate principal amount not to
exceed Six Hundred Fifty Thousand Dollars ($650,000) to funding the HOME Grants. The
principal amount of each individual HOME Grant shall be negotiated by City and Developer
based on the acquisition costs, if any, and the total development costs for each Eligible
Property as shown on the Total Development Cost Pro Forma to be submitted by Developer to
City prior to the development of any Eligible Property. Proceeds from the HOME Grants shall
not be used by Developer for any off-site costs, such as utility installations outside the
boundaries of the Eligible Property.
B. Disbursements from the HOME Grants will only be made for reimbursement of expenditures
incurred. An exception is made for construction or reconstruction work performed on an
Eligible Property, in which case disbursements will be allowed for direct payment of services
rendered or products delivered. Non -construction related costs ("Soft Costs") will only be paid
on a reimbursement basis. As used here "Soft Costs" means predevelopment, indirect,
financing and sales closing costs and Developer Fee.
C. The net proceeds derived from the sale of the Eligible Property to the Qualified Homebuyer
shall be collected by City as program income upon the close of the Sales Escrow. No net
proceeds other than those approved by City shall be paid to Developer. Net proceeds means
sale price minus costs of sale (e.g. broker and escrow fees).
SECTION 17. Acquisition, Develo meat and Sale of Eli 'ble Properties.
A. Selection and Acquisition of E111-ible Properties. The Parties shall agree in writing on the
Eligible Properties to be developed pursuant to this Agreement. City currently owns a number
of properties that are suitable for infill development pursuant to this Agreement and Eligible
Properties may be selected from those properties. Alternatively, Eligible Properties may be
selected from properties owned by third parties. In the case of an Eligible Property owned by
City, City shall transfer the property to Developer by quitclaim deed. In the case of an Eligible
Property owned by a third party, City shall provide Developer with funds sufficient to allow
Developer to acquire the property from the owner at a price agreed upon by the Parties in
writing. In either case, an Acquisition Escrow, as defined in Section 2 of this Agreement, shall
be opened to accomplish the transfer of the Eligible Property to Developer. Transfer of the
Eligible Property to Developer shall occur pursuant to the Acquisition Escrow only upon the
deposit in escrow by Developer of a duly executed and notarized Housing Affordability
Covenant in which Developer covenants that it will sell the Eligible Property only to a
Qualified Homebuyer, and a duly executed and notarized Deed of Trust securing Developer's
faithful performance of the Housing Affordability Covenant and of this Agreement.
B. Construction Financin . Except to the extent the City Manager or his or her designee directs in
writing that some or all of the disbursement and/or deliveries shall occur outside of escrow,
disbursement of HOME Grant funds to Developer for the purpose of
constructing/reconstructing Eligible Properties shall be carried out through a Construction
Escrow, as defined in Section 2 of this Agreement. Disbursements made by City for the
purpose of constructing/reconstructing Eligible Properties using the HOME Grants shall be
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expressly subject to satisfaction of all of the following conditions (collectively, the Closing
Conditions) on or before the date ("Closing Deadline") which is thirty (30) calendar days
following the execution date of a Site Agreement initially entered into by City and Developer
for the purposes of developing an Eligible Property:
(1) Execution of this Agreement and delivery of a fully executed copy of the Site
Agreement in the form attached hereto as Attachment `B" to the Construction Escrow Agent.
(2) Receipt by City from Developer of such other documents, certifications and
authorizations as are reasonably required by City, in form and substance satisfactory to City, to
ensure compliance with all legal requirements for the making of the HOME Grant to be used
for the construction or reconstruction of the Eligible Property.
(3) No Event of Default and no breach shall exist under this Agreement, the Site
Agreement, or under any agreement or instrument relating to any other funding obtained by
Developer for the purpose of constructing or reconstructing the Eligible Property.
(4) Developer shall have provided to City, in a form satisfactory to City, certified
copies of (a) Developer's articles and bylaws, together with a certification by Developer's
president or chief executive officer that such articles and bylaws have not been amended or
modified except as described in the certification; (b) a good standing certificate from the
California Secretary of State, certifying that Developer is duly qualified and in good standing to
conduct business in this state; and (c) all other documents necessary to evidence to City's
satisfaction that the individuals and entities executing this Agreement, and any other entities on
whose behalf this Agreement is executed, are fully authorized to do so and to bind the
respective entities, including Developer, to the terms hereof.
(5) Developer shall have furnished City with evidence satisfactory to City that the
insurance coverage required by Section 12 of this Agreement has been obtained.
(6) Developer shall have commenced or be ready to commence construction or
reconstruction of the Eligible Property, and shall have (a) furnished City with copies of a
contract for the construction/reconstruction work and materials ("Construction Contract")
entered into with a general contractor ("General Contractor") previously approved in writing by
City; and (b) submitted to City and received City's approval of any design plans or other design
documents requested by City.
(7) Not as a Closing Condition, but at least thirty (30) calendar days prior to occupancy
and prior to the commencement of homebuyer selection for the Eligible Property, Developer
shall have obtained City's written approval of an Affirmative Marketing Plan, complying with
the requirements set forth in Attachment 'T' to this Agreement, for the sale of the Eligible
Property, including specifically the procedures to be employed by which the Qualified
Homebuyers of the Eligible Property shall be selected in the event that there are multiple
homebuyers qualified to purchase the Eligible Property.
C. Acquisition and Construction Escrow Terms. In establishing the Acquisition and Construction
Escrows, the Parties may execute supplemental instructions to the Escrow Agent(s) consistent
17
with the terms of this Agreement, but in the event of a conflict between the terms of this
Agreement and any supplemental escrow instructions, the terms of this Agreement shall
control. Except as otherwise expressly provided herein, any fees and costs incurred by the
Escrow Agent(s) in the performance of their duties hereunder and agreed to be paid by the
Parties shall be paid exclusively by Developer.
D. Selection of Qualified Homebuyers. Developer shall initiate the sale of an Eligible Property to
a Qualified Homebuyer by submitting to City a purchase and sale agreement executed by the
prospective homebuyer, with such verifying documentation from the prospective homebuyer
with respect to residency, income and the property condition as City, or its designee, may
reasonably request (collectively, "Homebuyer Application"). The Homebuyer Application
shall consist of the following information in the form approved by City:
(1) A California Association of Realtors California Residential Purchase Agreement or
such other purchase agreement as may be specified by City, fully executed by the prospective
homebuyer.
(2) Application Affidavit — Completely filled out and signed by the prospective
homebuyer.
(3) Income documentation in accordance with HOME's Part 5 Definition of Income,
pursuant to 24 C.F.R. §§ 5.609 and 92.203(b), for all household members who are 18 years of
age and older.
(4) Copy of employment verification for each homebuyer.
(5) Two consecutive months of current bank statements for each homebuyer.
(6) Three-year housing history for each homebuyer.
(7) Income Certification Form.
(8) Homebuyer Education Certificate from a HUD Certified Housing Counseling
Agency.
(9) Proof of legal residency in the United States for all members of the household who
are applying for consideration as the Qualified Homebuyer.
(10) Evidence of terms for purchase money loan, including loan amount, interest rate,
and monthly payment.
E. Sale Escrow. Within seven (7) calendar days after the receipt of the Homebuyer Application,
City will notify Developer of approval or denial of the prospective homebuyer's eligibility and
confirmation of such eligibility by means of a Preliminary Approval. (All preliminary
approvals will be valid for sixty (60) calendar days from the date of certification). Upon
notification of the prospective homebuyer's eligibility, Developer shall open the Sale Escrow
with Lawyers Title Company or another City approved -escrow company (the "Sale Escrow
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Agent"). City shall furnish the Sale Escrow Agent with executed escrow instructions.
Developer shall not permit any escrow to close for the sale of an Eligible Property until and
unless the escrow instructions executed by City have been submitted to the Sale Escrow Agent.
As provided in the escrow instructions, the Sale Escrow shall also not close unless and until:
(1) The Sale Escrow Agent holds the following documents: (a) a Housing Affordability
Covenant executed by the Qualified Homebuyer in favor of City and duly notarized; (b) a Deed
of Trust executed by the Qualified Homebuyer as trustor in favor of City as beneficiary,
securing the Qualified Homebuyer's performance of the Housing Affordability and duly
notarized; (c) a grant deed for the conveyance of the Eligible Property from Developer to the
Qualified Homebuyer, stating that the conveyance is subject to the restrictions of the Housing
Affordability Covenant and the Deed of Trust; and (d) such other documents as the City in its
sole discretion may deem to be required for the purpose of ensuring the affordability of the
Eligible Property for the duration of the Affordability Period.
(2) Proof of hazard insurance for the full replacement cost of the Eligible Property is
provided to City naming City as additional insured; and
(3) Construction or reconstruction of the Eligible Property is completed in accordance
with this Agreement and with all applicable City permits and ordinances, and City has issued a
final certificate of occupancy for the Eligible Property.
The Sale Escrow shall not close while any Event of Default exists under this Agreement or
under any agreement or instrument relating to any financing for the Eligible Property.
SECTION 18. Use of the Eli,2ible Property.
A. Developer hereby covenants and agrees, for itself and its successors and assigns, that the
Eligible Property shall be developed for sale to a household whose total annual income is at or
below eighty percent (80%) of Area Median Income.
B. Developer covenants and agrees that it shall not devote the Eligible Property to uses
inconsistent with either this Agreement or the Housing Affordability Covenant.
SECTION 19. Discrimination Prohibited.
A. Except as provided in the Housing Affordability Covenant with respect to the reservation of the
Eligible Property for occupancy by a Qualified Homebuyer, there shall be no discrimination
against, or segregation of, any persons, or group of persons, on account of race, color, creed,
religion, sex, marital status, familial status, physical or mental disability, ancestry or national
origin in the rental, sale, lease, sublease, transfer, use, occupancy, or enjoyment of the Eligible
Property, or any portion thereof. The nondiscrimination and non -segregation covenants
contained in the Housing Affordability Covenant shall remain in effect in perpetuity.
B. Developer shall not discriminate against any person on the basis of race, color, creed, religion,
national origin, ancestry, sex, marital status or physical handicap in the performance of the
Scope of Services of this Agreement. Without limitation, Developer hereby certifies that it will
not discriminate against any employee or applicant for employment because of race, color,
religion, sex, marital status or national origin. Further, Developer shall promote affirmative
19
action in its hiring practices and employee policies for minorities and other designated classes
in accordance with federal, state and local laws. Such action shall include, but not be limited
to, the following: recruitment and recruitment advertising, employment, upgrading and
promotion. In addition, Developer shall comply with all state and federal laws prohibiting the
exclusion from participation under this Agreement of any employee or applicant for
employment on the basis of age, handicap or religion.
SECTION 20. Effect of Covenants.
City is the beneficiary of the terms and provisions of this Agreement and of the restrictions and
affordable housing covenants running with the land with respect to the Eligible Properties,
whether or not appearing in the Housing Affordability Covenant(s), for and in its own right and
for the purposes of protecting the interests of the community in whose favor and for whose
benefit the covenants running with the land have been provided. The Affordable Housing
Covenants in favor of City shall run without regard to whether City has been, remains or is an
owner of any interest in an Eligible Property, and shall be effective as both covenants and
equitable servitudes against the Eligible Property. If any of the Affordable Housing Covenants
referred to in this Agreement is breached, City shall have the right to exercise all rights and
remedies and to maintain any actions or suits at law or in equity or other proper proceedings to
compel the curing of such breaches to which it may be entitled.
SECTION 21. Notices.
A. Notices, demands, and communications between City and Developer shall be sufficiently given
if personally delivered or delivered by a nationally -recognized courier service or sent by
registered or certified mail, postage prepaid, return receipt requested, to the following
addresses:
If to City: City of San Bernardino
City Manager's Office — Housing Division
290 North "D" Street, Third Floor
San Bernardino, CA 92401
Phone: (909) 384-5122 or
(909) 384-7257
If to Developer: Housing Partners I, Incorporated
715 East Brier Drive
San Bernardino, California 92408
Attn: Mr. Anthony Perez
Phone: (909) 332-6390
B. Notices shall be effective upon receipt, if given by personal delivery; upon receipt, if emailed,
provided there is written confirmation of receipt (except that if received after 5 p.m., notice
shall be deemed received on the next business day); the earlier of (i) three (3) business days
after deposit with United States Mail, or (ii) the date of actual receipt as evidenced by the return
receipt, if delivered by certified mail; or (iii) one (1) day after deposit with the delivery service,
if delivered by overnight guaranteed delivery service. Each party shall promptly notify the
other party of any change(s) of address to which notice shall be sent pursuant to this Section.
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SECTION 22. Compliance with Laws.
Developer shall comply with all Applicable Governmental Restrictions. As used herein,
"Applicable Governmental Restrictions" shall mean and include any and all laws, statutes,
ordinances, codes, rules, regulations, directives, writs, injunctions, orders, decrees, rulings,
conditions of approval, or authorizations, now in force or which may hereafter be in force, of
any governmental entity, agency or political subdivision as they pertain to the performance of
this Agreement or construction/reconstruction of the Project, including specifically but without
limitation all code and other requirements of the jurisdiction in which the Project is located; the
National Environmental Policy Act of 1969, as amended; fair housing laws; prevailing wage
laws per the Davis -Bacon Act 40 U.S.C. 3141-3148; any other applicable federal, state and
local law; and, without limitation, HOME and the HOME Regulations. Developer shall
maintain all necessary licenses and registrations for the lawful performance of the work
required of Developer under this Agreement. Developer shall indemnify, defend with counsel
selected by City, and hold City and the other Indemnitees harmless for any suit, cost, attorneys'
fees, claim, administrative proceeding, damage, wage award, fine, penalty or liability arising
out of or relating to Developer's failure to comply with any Applicable Governmental
Restrictions, including, without limitation, the nonpayment of any prevailing wages required to
be paid in connection with the Project, as applicable. Developer is solely responsible for
determining the applicability of laws, and shall not rely on statements by City as to the
existence, effect, or applicability of such laws.
SECTION 23. Developer and each Subcontractor are Independent Contractors.
Developer shall at all times during the performance of any work described in the Scope of
Services be deemed to be an independent contractor. Neither Developer nor any of its
subcontractors shall at any time or in any manner represent that it or any of its employees are
employees of City. City shall not be requested or ordered to assume any liability or expense for
the direct payment of any salary, wage or benefit to any person employed by Developer or its
subcontractors to perform any item of work described in the Scope of Services. Developer is
entirely responsible for the immediate payment of all subcontractor and material supplier liens.
SECTION 24. Severability.
Each and every section of this Agreement shall be construed as a separate and independent
covenant and agreement. If any term or provision of this Agreement or the application thereof
to certain circumstances shall be declared invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to circumstances other than those to
which it is declared invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
SECTION 25. Amendment or Modification.
This Agreement may only be modified or amended by written instrument duly approved and
executed by each of the Parties hereto, following all necessary approvals and authorizations for
such execution.
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SECTION 26. Governing Law.
This Agreement shall be governed by the laws of the State of California. Any legal action
arising from or related to this Agreement shall be brought in the Superior Court of the State of
California in and for the County of San Bernardino.
SECTION 27. Non -waiver.
Failure of City to enforce any provision of this Agreement shall not constitute a waiver of the
right to compel enforcement of the same provision or any remaining provisions of this
Agreement.
SECTION 28. Assienment.
This Agreement shall be assignable by Developer only with the prior express written consent of
City, which consent may be withheld by City in its sole discretion. Notwithstanding anything
to the contrary in this Agreement, no purported assignment of this Agreement shall be effective
if not approved by City or if such assignment would violate any Applicable Governmental
Restrictions. City's consent to any assignment shall be expressly conditioned upon (i) the
assignee's execution of such documents as required by City in its sole discretion, including,
without limitation, any and all documents deemed necessary by City to provide for said
assignee's assumption of all of the obligations of Developer hereunder and under any
documents executed by Developer in connection herewith, and (ii) City's approval of the
fmancial condition and credit -worthiness of such proposed assignee and the assignee's ability
to perform all of Developer's obligations under this Agreement and all documents executed in
connection herewith, as may be determined by City in its sole discretion.
SECTION 29. Representations of Persons Executin2 this Agreement.
The persons executing this Agreement warrant that they are duly authorized to execute this
Agreement on behalf of and are legally able to bind the respective party that each purports to
represent.
SECTION 30. Execution in Counterparts.
This Agreement may be executed in one (1) or more counterparts, each of which will constitute
an original.
SECTION 31. Effectiveness of This Agreement as to City.
This Agreement shall not be binding on City until approved by the City Council and signed by
an authorized representative of Developer, and executed by the City Manager or his or her
designee.
SECTION 32. Conflicts of Interest.
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A. Developer hereby represents that it has no interests adverse to City at the time of execution of
this Agreement. Developer hereby agrees that, during the term of this Agreement, Developer
shall not enter into any agreement or acquire any interests detrimental or adverse to City.
Additionally, Developer hereby represents and warrants to City that Developer and any
partnerships, individual persons or any other party or parties comprising Developer, together
with each subcontractor who may hereafter be designated to perform services pursuant to this
Agreement, do not have and, during the term of this Agreement, shall not acquire any property
ownership interest, business interests, professional employment relationships, contractual
relationships of any nature or any other financial arrangements relating to City, property over
which City has jurisdiction or any members or staff of City that have not been previously
disclosed in writing to City, and that any such property ownership interests, business interests,
professional employment relationships, contractual relationships of any nature or any other
financial arrangements will not adversely affect the ability of Developer to perform the services
to City as set forth in this Agreement.
B. Developer shall comply with the conflict of interest provisions set forth in 24 C.F.R. §
92.356(f).
SECTION 33. Non -Exclusivity.
This Agreement shall not create an exclusive relationship between City and Developer for the
Scope of Services as set forth in Attachment "A" or any similar or related services. City may,
during the term of this Agreement, contract with other persons or entities for the performance
of the same, similar or related services as those that may be performed by Developer under this
Agreement. City reserves the discretion and the right to determine the amount of services to be
performed by Developer for City under this Agreement, including not requesting any services
at all. This Agreement only sets forth the terms upon which any such services will be provided
to City by Developer, if such services are requested by City, as set forth in this Agreement.
SECTION 34. Conseauential Damaizes and Limitation of Liabili
City and Developer agree that except as otherwise provided in this Agreement, including
without limitation Section 11 hereof, in no event will either Parry be liable to the other under
this Agreement for any damages, including, but not limited to, special damages, loss of
revenue, loss of profit, operating costs or business interruption losses, regardless of cause,
including breach of contract, negligence, strict liability or otherwise. The limitations and
exclusions of liability set forth in this Section 34 shall apply regardless of fault, breach of
contract, tort, strict liability or otherwise of Developer and City, their employees, contractors,
agents, subcontractors, or officials.
SECTION 35. Business Registration Certificate.
Developer warrants that it possesses, or shall obtain immediately after the execution and
delivery of this Agreement, and maintain during the period of time that this Agreement is in
effect, a business registration certificate pursuant to Title 5 of City of San Bernardino
Municipal Code, together with any and all other licenses, permits, qualifications, insurance and
23
approvals of whatever nature that are legally required to be maintained by Developer to
conduct its business activities within City.
SECTION 36. Enforced Delays, Extension of Time for Performance.
A. Neither Party shall be deemed to be in default where delays or defaults in its performance under
this Agreement are due to force majeure events beyond the control of such Party, including,
without limitation, war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires,
casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions,
government imposed moratorium legislation, freight embargoes, lack of transportation,
weather -caused delays, inability to secure necessary labor, materials or tools, or delays of any
contractor, subcontractor or supplier that are not attributable to the fault of the Party claiming
an extension of time, that delay the commencement of construction of the Project or, after such
construction is commenced, suspend the prosecution of the work of improvement of the
Project. An extension of time for any such force majeure cause shall be for the period of the
enforced delay and shall commence to run from the date of occurrence of the delay; provided,
however, that the Party claiming the existence of the delay first provides the other Party with
written notice of the occurrence of the delay, within ten (10) calendar days after the
commencement of such occurrence of a force majeure event and, thereafter, takes prompt and
reasonable action within its control to restore, reconstruct or rebuild any damage to the Project
caused by such force majeure event and resume regular business operation.
B. The failure of City to provide any necessary approval relating to the development of the Project
or the inability of Developer to satisfy any other condition of this Agreement relating to the
design, financing or development of the Project shall not be deemed to be a force majeure event
or otherwise provide grounds for the assertion of the existence of a forced delay under this
Section 36. The Parties each expressly acknowledge and agree that changes in either general
economic conditions or the economic assumptions of either of them that provided a basis for
entering into this Agreement occurring at any time after the execution of this Agreement are
not force majeure events and do not provide either Party with grounds for asserting the
existence of a forced delay in the performance of this Agreement. Each Party expressly
assumes the risk that changes in general economic conditions or changes in their economic
assumptions could impose an inconvenience or hardship on the continued performance by such
Party under this Agreement and that such inconvenience or hardship is not a force majeure
event and does not excuse the performance by such Party of its obligations under this
Agreement.
SECTION 37. Hazardous Materials.
A. Developer represents and warrants that it has not deposited "Hazardous Materials" (as defined
below) in or upon the Eligible Property and Developer covenants that it shall not deposit or
permit the deposit of Hazardous Materials in or upon the Eligible Property. Developer further
covenants to remove or remediate, at its expense (subject to any reimbursement it may be able
to obtain from third parties) any Hazardous Materials located in or upon the Eligible Property
as of the date hereof or which are deposited in or upon the Eligible Property from and after the
date hereof and during Developer's performance of this Agreement, including any asbestos,
lead-based paint and any other Hazardous Materials located in or on the site of the Project, to
the extent required by and in accordance with the requirements of all Applicable Governmental
Restrictions, including, without limitation, all applicable environmental laws.
B. The foregoing shall not be construed or understood to prohibit Developer from allowing
Hazardous Materials to be brought upon the Project site so long as they are materials which are
24
customary to the normal course of business in the operation of a well-designed housing facility
and so long as such materials are used, stored and disposed of in accordance with all
Applicable Governmental Restrictions.
C. Except with respect to any claims arising solely out of the conduct of City, Developer shall
indemnify, defend with counsel selected by to City, and hold City and its members, directors,
agents, officers and employees harmless from and against any claims arising directly or
indirectly out of the presence of Hazardous Materials in, on or upon the Eligible Property,
existing as of the date hereof or deposited (or claimed to have been deposited) in, on or upon
the Eligible Property from and after the date hereof and during Developer's performance of
this Agreement, including without limitation any claims arising out of any deposits of
Hazardous Materials described in Section 37.B. of this Agreement or out of Developer's failure
to remove or remediate all such Hazardous Materials in, on or upon the Eligible Property, as
required above.
D. Except with respect to any claims arising solely out of the conduct of City, Developer hereby
releases and forever discharges City and its agents, officials and representatives from all
present and future claims, demands, suits, legal and administrative proceedings and from all
losses and liabilities arising out of or in any way connected with Developer's performance of
this Agreement or any condition of environmental contamination in, under, upon or around the
Eligible Property, or the existence of Hazardous Materials in any state in, under, upon or
around the Eligible Property. In connection with this release and waiver, Developer is familiar
with and hereby waives the provisions of Section 1542 of the California Civil Code which
provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR
AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR."
Initials of Developer:_
E. For purposes of this Agreement, the term "Hazardous Materials" means, without limitation,
gasoline, petroleum products, explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, polychlorinated biphenyls or related or similar materials,
asbestos or any other substance or material as may now or hereafter be defined as a hazardous
or toxic substance by any federal, state or local environmental law, ordinance, rule or
regulation, including, without limitation, (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superf ind Amendments and
Reauthorization Act (42 U.S.C. Section 9601-9675), (ii) the Federal Water Pollution Control
Act (33 U.S.C. Section 1251 et seq.), (iii) the Clean Air Act (42 U.S.C. Section 7401 et seq.),
(iv) the Resource Conservation and Recovery Act, as amended by the Hazardous and Solid
Waste Amendments of 1984 (42 U.S.C. Section 6901-6992k), (v) the Toxic Substances Control
Act (15 U.S.C. Section 2601-2629), (vi) the Hazardous Materials Transportation Act (49
U.S.C. Section 5101-5128), (vii) the Carpenter -Presley -Tanner Hazardous Substance Account
Act (CA Health & Safety Code Section 25300-25395.45), (viii) the Hazardous Waste Control
Law (CA Health & Safety Code Section 25100 et seq.), (ix) the Porter -Cologne Water Quality
Control Act (CA Water Code Section 13000 et seq.), (x) the Safe Drinking Water and Toxic
Enforcement Act of 1986 (CA Health & Safety Code Section 25249.5 - 25249.13), (xi) the
Hazardous Materials Release Response Plans and Inventory (CA Health & Safety Code
Section 25500-25547.8), (xii) the Air Resources Law (CA Health & Safety Code Section
39000 et seq.), or (xiii) in any of the regulations adopted or publications promulgated pursuant
to the foregoing.
SECTION 38. Labor Provisions — California Law.
25
Unless otherwise exempted pursuant to applicable provisions of California law, the prevailing
wage provisions, including but not limited to those regarding payrolls, records, apprentices and
trainees, shall apply to Developer's performance of services pursuant to this Agreement.
SECTION 39. Section 3 of the Housine and Community Development Act of 1968, as
Amended.
A. The work to be performed under this Agreement is subject to the requirements of Section 3
of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u
(Section 3). The purpose of Section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD -assisted projects covered by Section 3,
shall, to the greatest extent feasible, be directed to low- and very low-income persons,
particularly persons who are recipients of HUD assistance for housing.
B. The Parties to this Agreement agree to comply with HUD's regulations in 24 C.F.R. Part
135, which implement Section 3. As evidenced by their execution of this Agreement, the
Parties to this Agreement certify that they are under no contractual or other impediment that
would prevent them from complying with the Part 135 regulations.
C. Developer agrees to send to each labor organization or representative of workers with
which Developer has a collective bargaining agreement or other understanding, if any, a
notice advising the labor organization or workers' representative of Developer's
commitments under this Section 3 clause, and will post copies of the notice in conspicuous
places at the work site where both employees and applicants for training and employment
positions can see the notice. The notice shall describe the Section 3 preference and set forth
the minimum number and job titles subject to hire; the availability of apprenticeship and
training positions and the qualifications for each; the name and location of the person(s)
taking applications for each of the positions; and the anticipated date the work shall begin.
D. Developer agrees to include this Section 3 clause in every subcontract subject to
compliance with regulations in 24 C.F.R. Part 135, and agrees to take appropriate action, as
provided in an applicable provision of the subcontract or in this Section 3 clause, upon a
finding that the subcontractor is in violation of the regulations in 24 C.F.R. Part 135.
Developer will not subcontract with any subcontractor where Developer has notice or
knowledge that the subcontractor has been found in violation of the regulations in 24 C.F.R.
Part 135.
E. Developer will certify that any vacant employment positions, including training positions,
that are filled (1) after Developer is selected but before the Agreement is executed, and (2)
with persons other than those to whom the regulations of 24 C.F.R. part 135 require
employment opportunities to be directed, were not filled to circumvent Developer's
obligations under 24 C.F.R. Part 135.
F. Noncompliance with HUD's regulations in 24 C.F.R. Part 135 may result in sanctions,
termination of this Agreement for default, and debarment or suspension from future HUD
assisted contracts.
26
G. With respect to work performed in connection with Section 3 covered Indian housing
assistance, section 7(b) of the Indian Self -Determination and Education Assistance Act (25
U.S.C. § 5307) also applies to the work to be performed under this Agreement. Section
7(b) requires that to the greatest extent feasible (i) preference and opportunities for training
and employment shall be given to Indians, and (ii) preference in the award of contracts and
subcontracts shall be given to Indian organizations and Indian -owned Economic
Enterprises. Parties to this Agreement that are subject to the provisions of Section 3 and
section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in
derogation of compliance with section 7(b).
IN WITNESS WHEREOF, City and Developer have each executed this Agreement, to be effective as
of the Effective Date, as defined in this Agreement.
CITY OF SAN BERNARDINO
Date: rr { By: `
Andrea M. Mill er, City Manager
Approved as to Form: ATTEST:
Gary D. Saenz, City Attorney I ,
R
r
By; Georgeann H na, CMC, Ci r ,Clerk
113 Vil DI 0144il
Housing Partners I, Incorporated, a California nonprofit
corpora ion
Date: Z' By:
Approved \0k to Form:
Developer
27
Attachment A to Master Agreement
Scope of Services
Attachment "A" to Master Agreement
Scope of Services
A. Introduction
The Infill Housing Program was established by the City of San Bernardino (the "City")to
increase the availability of affordable homes for low-income households. The Developer
has been retained to carry out infill housing activities in accordance with HOME Program
regulations (24 CFR Part 92), the HOME Guide for Review of Homebuyer Projects, and
the Infill Housing Development Master Agreement between the Developer and the City
(the "Agreement").
The Developer will fiunish all labor, materials, supplies, equipment, and services
necessary (hereinafter collectively referred to as "Services") to design, permit, construct,
market and sell the Eligible Properties to qualified low-income households, and
adequately satisfy requirements set forth in the Agreement.
The Services will be carried out in a manner satisfactory to the City and any standards
required as a condition of providing the HOME Funds.
B. Budget
The approved budget is Six Hundred Twenty Five Thousand Dollars
($625,000.00), to construct/recon_st- ,ct up to three (3) Eligible Properties, subject to the
Maximum Per Unit Subsidy Limits established by HUD. Proceeds will be utilized for
future developments.
C. Program Delivery
1. General R uirements.
a. As part of the Services, Developer agrees that it will make available a primary
staff person on an as needed basis within close proximity to the project sites in
order to successfully complete program activities.
b. As part of the Services, Developer will provide or cause to be provided and
will enter into agreements for construction manager services, property
management, property acquisition and relocation consultant services, as
applicable.
c. Developer will utilize realtors, appraisal services, escrow services and title
companies as approved by the City. If such services have not been identified
by the City within a pool of City pre -approved service providers, Developer
will utilize businesses located within the City and if they are deemed to be
unavailable, then utilize businesses in the County of San Bernardino.
d. Developer warrants that it has the expertise and experience to perform the
Services set forth in the Agreement and that it will perform said Services
pursuant to the Agreement and as stated in this Scope of Services.
e. Developer will document performance on a Quarterly Report, which report
will be in a form satisfactory to the City. The Quarterly Report will be due by
the 15th day of the month following the end of the quarter, as follows:
Reporting Period
Report Due
October- December
January 15th
_
January - March
_
April 15th
April -June
July 15th
July - September October 15th
Progress reports will be used by the City in evaluating time extensions
requests, if any.
£ Developer will provide notification to the City of any audits or investigations
including results, findings and/or liens within ten (10) calendar days after
Developer has obtained information regarding such audits or investigations
and the results, findings and/or liens.
2. Infill Housinq Development.
a. Identifying and Selecting Sites - The Developer is responsible for identifying
lots within the City of San Bernardino that may be suitable for infill housing.
The City will facilitate the sale or transfer of City -owned parcels to the
Developer for development of Eligible Properties. The Developer may also
acquire privately owned blighted, vacant lots.
For privately -owned vacant parcels, the Developer will negotiate purchase and
sale agreements, to be approved by the City prior to the execution of such
purchase and sale agreement by Developer. No property will be purchased
pursuant to this Agreement at a sale price in excess of the current market
appraised value ("Current Market Appraised Value") as further defined in
Section 2.b. below. It will be the responsibility of the Developer to obtain an
appraisal from a qualified appraiser. Appraisal must be approved by the City
and conform to all pertinent HOME regulations.
In addition, Eligible Properties must be in such condition that the total cost to
acquire, construct/reconstruct and resell them does not exceed the maximum
sales price limit for the County of San Bernardino established per HOME
Final Rule 24 CFR Part 92.254.
Once Developer has selected a site, a request for environmental review and
approval must be submitted to the City, including:
i. Photographs of the site
ii. Property profile cover sheet
iii. Estimated value using comparable sales (when site is privately -owned)
iv. Total Development Cost Pro Forma
v. Project Timeline
vi. Sources and Use Schedule / Financing cing plan that demonstrates that
sufficient funds are available for the acquisition of the property, and
payment for the labor, materials and other services required to complete
the project.
The City will review the Developer's request to make the following
determinations.
i. The site is appropriate for the construction/reconstruction of infill
housing.
ii. The proposed project meets HOME requirements, including those
relating to maximum subsidies and maximum resale values.
iii. The proposed project does not negatively impact the surrounding
environment and the property site itself will not have an adverse
environmental or health effect.
The City will issue a Preliminary Property Analysis to the Developer to advise if
the infill site was approved. Once an infill site is approved, the Developer can
initiate the Acquisition Escrow.
b, Prior to the purchase of any .Eligible Property under this Agreement, and in
order to determine the Current Market Appraised Value, Developer will obtain
an appraisal made in conformity with the appraisal requirements of the
Uniform Relocation Act set forth at 49 CFR 24.103.
c. Other than those liens approved by the City, Developer will ensure that title to
the Eligible Property will be and remain free and clear from any and all
security interests, liens or other encumbrances. In carrying out the Services,
Developer promises and agrees that it will not pledge or otherwise encumber
title to the Eligible Property in any manner that would result in any lien,
security interest, charge or claim upon or against said property.
d. Construction/Reconstruction of Eligible Properties acquired by Developer
pursuant to this Agreement will be completed, and said properties will be
ready for sale as evidenced by a Certificate of Occupancy issued by the City
and/or a recorded Notice of Completion, by the date of completion stipulated
on the approved Project Timeline.
e. Developer will construct/reconstruct Eligible Properties in accordance with the
California Building Code, the City's Development Code for residential
properties, pursuant to the terms of this Agreement, and in accordance with the
plans and specifications approved by the City's Planning and Building &
Safety Divisions.
f. As part of the Developer's process for each Eligible Property, Developer will
prepare and/or provide the following:
i. Budget Estimate — for the total development cost of the Eligible Property
and a budget estimate for construction/reconstruction costs.
ii. Project Timeline — for the completion of the various steps involved in the
acquisition, construction/reconstruction and sale of the Eligible Property.
iii. Property Security — upon acquisition of title to an Eligible Property,
Developer will provide locked fencing on the perimeter of the site to
preclude unauthorized entry upon an Eligible Property.
iv. Property Maintenance — Developer must maintain property during the
holding period, including utilities services, and interior and exterior
appearance of the property.
v. Construction Management Services — Developer must provide
construction management services for the construction or reconstruction of
the Eligible Property, which will include but not be limited to: establishing
a scope of work, confirm that the financing is adequate to pay for all labor
and materials, conducting weekly on-site project inspections, managing
relationships with all sub -contractors, verifying permits and City
compliance, administering both conditional and unconditional lien
releases. The Developer is responsible for closely monitoring the various
phases of development, conducting and documenting inspections, and
resolving problems that may be encountered during construction.
vi. File Maintenance — Developer must maintain adequate files for each
property, ensuring compliance with all City requirements, all documents
required to verify compliance with the Affirmative Marketing Guidelines
as attached hereto as Attachment "P' such as copies of advertisements
published in local and community newspapers, etc.
vii. Environmental — Developer must comply with Lead -Based Paint
requirements, and implement all lead-based paint, asbestos, mold or any
other environmental mitigation measures required, and provide proof of
completion of these mitigation measures.
3. Marketin , and Sale of Eliaible Pro erty.
a. Marketing — Developer will market the Eligible Property through advertising,
published promotional materials and community outreach, in accordance with
the Affirmative Marketing Guidelines as described in Attachment "I".
b. Marketing Materials — All marketing materials must include language
identifying the Project as a City -funded project, and include the City seal and
the Fair Housing logo.
c. Sale to Qualified Homebuyer — Eligible properties must be sold to Qualified
Homebuyers and/or First Time Homebuyers, and who will use the Eligible
Property as a primary place of residence. The Developer is responsible for the
following process:
i. Identify Homebuyer — Developer must identify prospective Qualified
Homebuyers, facilitate adequate homebuyer education training and pre -
qualify the homebuyer using HOME's Part 5 definition (24 CFR Part
5.503) of income, to establish eligibility to purchase the Eligible Property.
Developer must submit the following documents for the Qualified
Homebuyer, for City review and certification of income eligibility-
• Last three (3) years tax returns (State and Federal) (I 040's)
signed, with W2's.
• Income Certification form
■ Supporting income documentation as required by HOME's
Part 5 definition of income, for all household members who
are IS years of age and older and will reside in the Eligible
Property, including 2 months of source documentation for all
income sources such as paystubs, bank statements,
employment verification, verification of income from assets,
etc.
• A California Association of Realtors California Residential
Purchase Agreement fully executed by the prospective
homebuyer.
■ Application Affidavit — Completely filled out and signed by
Qualified Homebuyer.
• 3 -year Housing History
Homebuyer Education Certificate from a HUD -approved
Housing Counseling Agency
■ Evidence of loan terms for first mortgage, verifying loan
amount, fixed rate, and monthly payment amount. Non-
traditional mortgages, such as negative amortization loans,
interest -only loans, or loans with balloon payments, are not
allowed.
Proof of legal residency in the United States for all members
of the household who are applying for consideration as the
Qualified Homebuyer.
ii. Income Eligibility - In determining whether a prospective homebuyer is
income eligible, the Developer will adhere to the procedures specified in
24 CFR Part 92.203. The City utilizes HOME's Part 5 definition of
income (24 CFR Part 5), which is the gross amount of income of all adult
household members that is anticipated to be received during the coming
12 -month period. Household income cannot exceed eighty percent (80516)
of AMI as established by HUD. It is the Developer's responsibility to
properly determine income eligibility by examining source documentation
evidencing anticipated annual income, and applying the correct income
limits.
d. Appraisal — Developer must obtain an appraisal from an appraiser approved
by the City to determine the sales price for the Eligible Property, to ensure
that the sales price does not exceed the homeownership sales price limits in
accordance with Section 92.254(a)(2)(iii) of the HOME Final Rule.
e. Escrow — Developer will work with the selected title company and manage the
escrow process through closing on behalf of the Qualified Homebuyer, and
ensure that all the HOME Loan Documents and property documents are
executed, notarized and recorded as needed.
4. Construction Rei uirements.
a. Developer will cause the construction/reconstruction work to proceed
diligently no later than fourteen (14) calendar days following the close of the
Acquisition Escrow. "Completion of the Project" shall occur no later than the
date approved in the Project timeline. "Completion of the Project" shall be
deemed to have occurred when the City has received satisfactory evidence
that the City has executed the final inspection for the particular Eligible
Property and has authorized the unconditional provision of utilities to the
Eligible Property.
b. Developer shall provide evidence that the construction/reconstruction work on
the Eligible Property has been completed in compliance with this Agreement,
and that all final permits and certificates necessary for the sale of the Eligible
Property have been obtained, including, without limitation, the following,
each of which is subject to the City's review and approval: (1) a minimum 5 -
year warranty from the general contractor, in a form reasonably acceptable to
the City, with respect to the construction work performed and all components
and systems constructed or installed upon the Eligible Property; (2) a
certificate of occupancy or Notice of Completion, as may be warranted, and
other final permits and licenses necessary to permit the use and occupancy of
the Eligible Property for its intended purposes, which have been issued by
proper governmental agencies; and (3) evidence satisfactory to the City that
the Eligible Property is free from any mechanics' liens.
5. Relocation. Roo uirements.
In the event relocation is determined to be a requirement for the successful
implementation of the Agreement, the Developer shall be required to submit a relocation
plan to the City for consideration. It is the preference of the City that the Developer
acquire only Eligible Properties that have been non -occupied for 90 days or more, but in
the event that acquired properties require relocation assistance Developer shall be
responsible for funding and compliance with all relocation requirements as governed by
federal relocation laws and regulations for projects funded in whole or in part with
HOME funding, including the Federal Uniform Relocation Assistance and Real Property
Acquisition Policies Act (42 U.S.C. §§ 4601, et seq., as amended), Federal Relocation
Regulations (49 CFR Part 24), and the HUD Tenant Assistance, Relocation and Real
Property Acquisition Handbook (1378.0).
Attachment B to Master Agreement
Site Agreement form
ATTACHMENT "B"
SITE AGREEMENT
THIS SITE AGREEMENT ("Agreement") is made as of the day of ,
2018, by and between the City of San Bernardino, a municipal corporation ("City"), and Housing
Partners I, Incorporated, a California nonprofit corporation ("Developer"), for the purpose of
constructing/reconstructing infill housing upon, and selling to a qualified homebuyer, the
property located at the address indicated below (such construction/reconstruction and sale being
collectively referred to herein as the "Project"), in accordance with the terms of that certain
Grant Agreement dated, 2018 entered into between Developer and the
City ("Grant Agreement").
The City agrees, subject to the terms and conditions of the Grant Agreement and this
Agreement and in consideration of the representations, covenants and obligations of Developer
contained in the Grant Agreement and this Agreement, to: (i) transfer to Developer the
undeveloped real property located at , San Bernardino,
CA, the legal description of which is attached hereto as Exhibit "A" ("Eligible Property"), and
(ii) make a grant to Developer in an amount not to exceed dollars
($ ) ("Grant") for the purpose of providing construction/reconstruction financing for a
detached, single-family home to be erected by Developer on the Eligible Property. The Eligible
Property, when developed, will be reserved for sale by Developer to a household whose income
is less than or equal to 80% of Area Median Income ("AMI") as defined in the Grant
Agreement. The Grant shall be used solely for the purposes described herein and in the Grant
Agreement. The City's source of funding for the Grant is the HOME Investment Partnerships
Program described in 24 CFR Part 92 ("HOME") administered and funded by the United States
Department of Housing and Urban Development ("HUD"). No other sources of financing are
anticipated for the Project.
Concurrently with the execution of this Agreement, Developer will deliver to the City,
among other items, the "Deed of Trust" and the "Housing Affordability Covenant" described
and defined in the Grant Agreement, in the respective forms attached hereto as Exhibits "E" and
"F," to secure performance by Developer of this Agreement and the Grant Agreement and to
ensure that the affordability and habitability of the Project and the Eligible Property are
maintained in accordance with the terms of those instruments, the Grant Agreement and this
Agreement.
Developer shall further attach to this Agreement: (i) a completed version of Exhibit "B,"
the Development Pro Forma attached hereto, for the above described Eligible Property and
Project; (ii) a project timeline in the format of Exhibit "C" attached hereto for completion of the
Project; and (iii) a completed version of Exhibit "D," the Sources and Uses Schedule attached
hereto. Together these documents shall memorialize the Development Budget required to
complete the Project, the Schedule of Performance for the Project, and the Financing Plan for the
Project agreed upon by Developer and the City.
By the execution and submittal of this Site Agreement, and upon acceptance hereof by
the City, Developer certifies that it shall comply with all requirements of the HOME program as
required by federal law, rules and regulations in addition to all other requirements contained in
the Master Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Site Agreement as of the
date first above written.
Date:
APPROVED AS TO FORM:
Gary D. Saenz, City Attorney
CITY OF SAN BERNARDINO
Andrea M. Miller
City Manager
HOUSING PARTNERS I, INCORPORATED
Date: By:
2
Attachment C to Master Agreement
Total Development Cost Pro Forma Template
Attachment "F"
Total Development Cost ProForma
(Address)
San Bernardino
Accmisition Cost
Purchase Price
$
- Acquisition - price of property as -is
Closing Cost
$
- Escrow and Title Fees, etc.
Appraisal
$
- Third party appraisal of the property as -is
Subtotal Acauisition Cost
a. $
-
Rehabilitation Cost
$
Direct Rehabilitation
$
- Cost estimated to complete scope of work
General Conditions
$
- Cost of temporary utilities, toilets, fencing, lighting, etc.
Profit/Overhead
$
- General Contractor's Profit and Overhead (10%)
Contingency
$
- Percentage of Direct Rehab, Gen. Conditions, and Profit/OH (15%)
Subtotal Rehabilitation Cost
b. $
-
Indirect Cost
Hazard Insurance
$
- Insurance coverage for the rehab work preformed
Building Fees & Permits
$
- Cost of obtaining rehabilitation permits etc.
Lead Based Paint Risk Assessment
$
- Cost of Lead Based Paint
Asbestos and Mold Inspection
$
- Cost of Asbestos and Mold Report
Security During Construction
$
- Intermediary fixed fee per homebuyer
Property Taxes
$
- Taxes for the house incurred during holding period
Homebuyer Education Course Fee
$
- Cost of enrollment in Homebuyer course for Qualified Homebuyer
Subtotal Indirect Cost
C.
$
-
Sales Cost
Commissions
$
- Brokerage commissions
Appraisal
$
- Third party appraisal of property after rehab
Title & Escrow
$
- Seller's side escrow and title fees
Subtotal Sales Cost
d.
$
-
Developer Fee
e.
$
- Developers Fee for managing project (fixed fee)
Total Development Cost
f.
$
- The sum of a., b., c., d. and e.
Final Sale Price
g.
$
- Estimated market value of home after rehabilitation
Amount Granted to Project
$
- (f. -g.)
(proposed)
Attachment D to Master Agreement
Project Timeline Template
Task
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Project Timeline
(Address)
San Bernardino
Event/Activit v
Property Identified
Open Escrow
Due Diligence Period
Review and Execute Sub -agreements
Rehab Construction Drawings submitted (if applicable)
Schedule security
Schedule Job Walk
Schedule Roof replacement
Schedule A/C repair
Close Acquisition Escrow
Transfer utilities to HPI
Install Security System
Lead Paint/ Asbestos and Environmental testing
Job walk 9:00 AM
Bids due 10:00 AM
Award bid
Work begins
Punch list
Construction complete
Marketing of property
Identify Buyer and Qualify for Program Eligibility
Provide Homebuyer Education Certificate
Submit Homebuyer Application to Agency
Escrow Period
Process and Record Loan Documents on behalf of buyer
Close Escrow and Deliver Property to Homebuyer
Duration Start Date End Date
Attachment E to Master Agreement
Sources and Uses Schedule template
Attachment "H"
Sources and Uses Schedule
(ADDRESS)
San Bernardino
Sources: Construction
Uses: Construction
HOME Acq./Rehab Loan
$
- Acquisition Cost
Deferred Developer Fee
$
- Rehabilitation Cost
Other
$
- Indirect Cost
$
- Sale Cost
$
- Developer Fee*
$
- Other
Total
$
- Total
Sources: Permanent
Uses: Permanent
First Mortgage Loan
$
- Acquisition Cost
Homebuyer Down payment
$
- Rehabilitation Cost
Down Payment Assistance
$
- Indirect Cost
HOME Loan Write-off
$
- Sale Cost
Other
$
- Developer Fee
$
- Other
Total
$
-
"Note: Equal to 10% of the total Development Cost recognized upon resale.
Attachment F to Master Agreement
Developer Deed of Trust Form
Recording Requested by and
When Recorded Mail To:
CITY OF SAN BERNARDINO
Office of the City Manager
290 North "D" Street, Third Floor
San Bernardino, CA 92401
Attn.: Housing Division
ATTACHMENT "F"
Above Space For Recorder's Use Only
Document entitled to free recording per
Govt. Code Section 6103
DEED OF TRUST ASSIGNMENT OF RENTS
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING ("Deed of Trust") is made as of , by and between HOUSING
PARTNERS I, INCORPORATED, a California nonprofit corporation ("Trustor"),
("Trustee"); and THE CITY OF SAN BERNARDINO, INC., a
municipal corporation (`Beneficiary").
RECITALS
A. Beneficiary is making a grant to Trustor in the original principal amount of
DOLLARS ($ ) ("Grant") pursuant to that certain unrecorded HOME Investment
Partnerships Program (HOME) Infill Housing Development Grant Agreement ("Grant
Agreement") entered into by Trustor and Beneficiary and dated as of and that certain
unrecorded Site Agreement (the "Site Agreement") entered into by Trustor and Beneficiary and
dated as of . Copies of the Grant Agreement and the Site Agreement are on file with
Beneficiary as a public record.
B. Trustor shall use the Grant proceeds to acquire property for the development of,
and/or to develop, affordable housing as further described in the Grant Agreement and the Site
Agreement (the "Project"). The property on which the Project will be developed is legally
described in Attachment "1" to this Deed of Trust (the "Eligible Property").
NOW THEREFORE, in consideration of the Grant, Trustor hereby irrevocably grants,
conveys, transfers and assigns to Trustee and to its successors and assigns, in trust for the benefit
of Beneficiary, with power of foreclosure and right of entry and possession as provided below,
all of its present and future estate, right, title and interest in and to the Eligible Property, and
grants to Beneficiary a security interest in the following:
(A) All development rights, air rights, water, water rights, and water stock relating to the
Eligible Property.
(B) All present and future structures, buildings, improvements, appurtenances and
fixtures of any kind on the Eligible Property, including but not limited to all apparatus, attached
equipment and appliances used in connection with the operation or occupancy of the Eligible
Property, such as heating and air-conditioning systems and facilities used to provide any utility
services, ventilation, vehicular cleaning, storage or other services on the Eligible Property, and
all signage, carpeting and floor coverings, partitions, generators, screens, awnings, boilers,
furnaces, pipes, plumbing, vacuum systems, brushes, blowers, cleaning, call and sprinkler
systems, fire extinguishing apparatus and equipment, water tanks, air cooling equipment, and gas
and electric machinery and equipment, it being intended and agreed that all such items will be
conclusively considered to be a part of the Eligible Property conveyed by this Deed of Trust,
whether or not attached or affixed to the Eligible Property.
(C) All appurtenances of the Eligible Property and all rights of Trustor in and to any
streets, roads or public places, easements or rights of way, relating to the Eligible Property.
(D) All of the rents, royalties, profits and income related to the Eligible Property, to the
extent not prohibited by any applicable law.
(E) All proceeds and claims arising on account of any damage to or taking of the Eligible
Property and all causes of action and recoveries for any loss or diminution in value of the
Eligible Property.
(F) All existing and future goods, inventory, equipment and all other personal property
of any nature whatsoever now or hereafter located on the Eligible Property which are now or in
the future owned by Trustor and used in the operation or occupancy of the Eligible Property or in
any construction on the Eligible Property but which are not effectively made real property under
Paragraph (B) above, including but not limited to all appliances, furniture and furnishings,
building service equipment, and building materials, supplies, equipment, machinery, plumbing
and plumbing material and supplies, concrete, lumber, hardware, electrical wiring and electrical
material and supplies, roofing material and supplies, doors, paint, drywall, insulation, cabinets,
ceramic material and supplies, flooring, attached appliances, fencing, landscaping and all other
materials, supplies and property of every kind and nature.
(G) All present and future accounts, general intangibles, chattel paper, contract rights,
deposit accounts, instruments and documents as those terms are defined in the California
Uniform Commercial Code, now or hereafter relating or arising with respect to the Eligible
Property and/or the use thereof or any improvements thereto, including without limitation: (i) all
rights to the payment of money, including escrow proceeds arising out of the sale or other
disposition of all or any portion of the estate of Trustor upon the Eligible Property now or
hereafter existing thereon; (ii) all plans, specifications and drawings relating to the development
2
of the Eligible Property and/or any construction thereon; (iii) all use permits, licenses, occupancy
permits, construction and building permits, and all other permits and approvals required by any
governmental or quasi -governmental authority in connection with the development, construction,
use, occupancy or operation of the Eligible Property; (iv) any and all agreements relating to the
development, construction, use, occupancy and/or operation of the Eligible Property between
Trustor and any contractor, subcontractor, project manager or supervisor, architect, engineer,
laborer or supplier of materials; (v) all lease or rental agreements; (vi) all names under which the
Eligible Property is now or hereafter operated or known and all rights to carry on business under
any such names or any variant thereof, (vii) all trademarks relating to the Eligible Property
and/or the development, construction, use, occupancy or operation thereof; (viii) all goodwill
relating to the Eligible Property and/or the development, construction, use, occupancy or
operation thereof; (ix) all reserves, deferred payments, deposits, refunds, cost savings, bonds,
insurance policies and payments of any kind relating to the Eligible Property; (x) all loan
commitments issued to Trustor in connection with any sale or financing of the Eligible Property;
(xi) all funds deposited with Beneficiary by Trustor, and all accounts of Trustor with
Beneficiary, including all accounts containing security deposits and prepaid rents paid to Trustor
in connection with any leases of the Eligible Property, and all proceeds thereof; and (xii) all
supplements, modifications and amendments to the foregoing.
(H) All of the right, title and interest of Trustor in and to all sales contracts of any nature
whatsoever now or hereafter executed covering any portion of the Eligible Property, together
with all deposits or other payments made in connection therewith.
(1) All of the right, title and interest of Trustor in and to any construction plans and
specifications, building permits, and all other documents necessary for completion of
improvements to the Eligible Property.
(J) All shares of stock or other evidence of ownership of any part of the Eligible
Property that is owned by Trustor in common with others, and all documents of membership in
any owners' or members' association or similar group having responsibility for managing or
operating any part of the Eligible Property.
Trustor does hereby covenant with Trustee and Beneficiary, that Trustor has good right to
bargain, sell and convey Trustor's interest in the Eligible Property in the manner and form as
above written; and Trustor warrants and will defend said interest for the benefit of Beneficiary
forever, against all lawful claims and demands whatsoever except as stated above.
THIS DEED OF TRUST IS FOR THE PURPOSE OF SECURING:
The performance of each agreement of Trustor made in connection with the Eligible
Property, including without limitation the Grant Agreement, the Site Agreement, that certain
Housing Affordability Covenant entered into by and between Trustor and Beneficiary for the
purpose of ensuring the continued affordability of the Eligible Property, and all other agreements
executed in connection with any of the foregoing agreements (collectively, the "Secured
Agreements").
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY
COVENANTS AND AGREES AS FOLLOWS:
1. Paknent of Secured Obligations. Trustor shall pay when due the principal
of, and the interest on, any and all sums required to be paid by Trustor under the Secured
Agreements.
2. Maintenance, Repair, Alterations. Trustor shall keep the Eligible Property
in good condition and repair; to complete promptly and in a good and workmanlike manner all
improvements to be constructed on the Eligible Property, including specifically all improvements
described in the Grant Agreement and the Site Agreement, and promptly restore in like manner
any structure that may be damaged or destroyed thereon; to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws, ordinances, regulations,
covenants, conditions and restrictions now or hereafter affecting the Eligible Property or any part
thereof or requiring any alterations or improvements thereon; not to commit or permit any waste
or deterioration of the Eligible Property; to keep and maintain abutting grounds, sidewalks,
roads, parking and landscape areas in good and neat order and repair; not to commit, suffer or
permit, to the extent Trustor is able by the exercise of commercially reasonable best efforts, any
act to be done in or upon the Eligible Property in violation of any law, ordinance or regulation.
3. Insurance. Trustor shall provide, maintain at its expense and deliver to
Beneficiary at all times until completion in full of all obligations secured hereby, insurance as
required by the Grant Agreement, the Site Agreement or any of the other Secured Agreements.
In the event of any loss or damage, Trustor shall give immediate notice thereof to Beneficiary,
and Beneficiary may thereupon make proof of such loss or damage, if the same is not promptly
made by Trustor. Trustor and Beneficiary hereby agree to cooperate in making any adjustment
and compromise of any loss covered by the aforementioned insurance policies upon the Eligible
Property, and Trustor authorizes and empowers Beneficiary, at its option, to collect and receive
the proceeds, and endorse checks and drafts issued therefor. Beneficiary agrees that in the event
of any loss covered by insurance policies on the Eligible Property subject to this Deed of Trust,
provided there is not then existing any material default (or such existing default will be cured by
the proceeds of such insurance) in the observance or performance of any of the covenants and
agreements contained herein or in the Secured Agreements, or in any other agreement with or for
the benefit of the Beneficiary in connection with any obligation secured hereby, the proceeds of
such insurance shall be used for the repair or restoration of the Eligible Property and will be
disbursed in accordance with such protective terms and conditions as Beneficiary may
reasonably impose.
Trustor hereby fully assigns to Beneficiary all current and future claims it may
have under any policy of insurance related to the Eligible Property or the Project, regardless of
whether such insurance was required to be maintained under the Secured Agreements. Any and
all unexpired insurance shall inure to the benefit of and pass to the purchaser of the Eligible
Property at any foreclosure sale pursuant hereto.
4
Further, Beneficiary may at any time in its sole discretion require Trustor to
submit satisfactory evidence of insurance policies obtained pursuant to this Paragraph 3 and of
Trustor's compliance with all the provisions of said policies.
4. Lawsuits. Trustor shall appear in and defend, with counsel selected by
Beneficiary, or otherwise take such action therein as Beneficiary and Trustee or either of them
may deem advisable with respect to any action or proceeding affecting the Eligible Property to
which Beneficiary or Trustee may be a party.
5. Beneficiary Statement. Trustor shall pay all charges for all legal fees or
court costs and expenses which Beneficiary may elect to advance in order to keep unimpaired,
protect, and preserve the title to the Eligible Property or the improvements thereon; and to pay
for any statement provided for by law in effect at the date hereof regarding the obligations
secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed
by law at the time when said statement is demanded.
6. Condemnation. All judgments, awards of damages and settlements,
hereafter made as a result of or in lieu of any condemnation or other proceedings for public use
of, or for any damage to, the Eligible Property or the improvements thereon, are hereby assigned
to Beneficiary. If (i) Trustor is not then in material default hereunder (or such default will be
cured with the proceeds from the foregoing), and (ii) the taking is a partial taking, all proceeds
for taking of or damage to the Eligible Property shall be applied to restoring the Eligible
Property, if practicable, as reasonably determined by Beneficiary. In the event (i) Trustor is then
in material default hereunder (and such default will not be cured with the proceeds of the
foregoing), (ii) the taking is a total taking, or (iii) the taking is a partial taking and Beneficiary
has reasonably determined that restoration of the Eligible Property is not practicable, the
proceeds shall be paid to Beneficiary to the extent of those monies due and owing from Trustor
to Beneficiary under any of the Secured Agreements, and Beneficiary is hereby authorized to
receive such monies. Trustor agrees to execute such further assignments of any such award,
judgment or settlement which may be received by Trustor. Beneficiary may apply any and all
such sums to the obligations secured hereby in such manner as it elects or, at its option, the entire
amount so received by it or any part thereof may be released. Neither the application nor the
release of any such sums shall cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
7. Permitted Acts of Beneficiary. Without affecting the liability of any
person, including Trustor (other than any person released pursuant hereto), for the payment of
any indebtedness secured hereby, Beneficiary is authorized and empowered as follows:
Beneficiary may at any time, and from time to time, either before or after the maturity of the
obligations secured hereby, and without notice (a) release any person liable for the payment of
any of the indebtedness, (b) make any agreement extending the time or otherwise altering the
terms of payment of any of the indebtedness, (c) accept additional security therefor of any kind,
or (d) release any property, real or personal, securing the indebtedness.
8. Reconveyance of Eligible Property_. Upon written request of Beneficiary
stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust
and the Note to Trustee for cancellation and retention, and upon payment of its fees, Trustee
shall reconvey, without warranty, the Eligible Property then held hereunder. The recitals in such
reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The
grantee in such reconveyance may be described as "the person or persons legally entitled
thereto."
9. Default and Trustee's Sale. Upon the occurrence of an "Event of Default"
under this Deed of Trust (as defined in Section 17 below) Beneficiary may declare all principal
remaining unpaid, all interest then earned and remaining unpaid, and all sums other than
principal or interest secured hereby, immediately due and payable and may proceed to exercise
the power of sale granted by this Deed of Trust by delivery to Trustee of written declaration of
default and demand for sale and of written notice of default and of election to cause to be sold
said Eligible Property, which notice Trustee shall cause to be filed for record. Beneficiary also
shall deposit with Trustee this Deed of Trust and all documents evidencing expenditures secured
hereby.
After the lapse of such time as may then be required by law following the
recordation of said notice of default, Trustee shall cause a notice of sale to be published, posted,
mailed, and recorded as required by statute. Said notice of sale shall contain the notice:
"NOTICE: THIS PROPERTY IS ENCUMBERED BY AFFORDABILITY COVENANTS";
however, failure to include said notice shall not affect the validity of any publication, posting, or
mailing of said notice of sale or the validity of any sale based thereon. Thereafter, within the
time and in the manner required by statute Trustee, without demand on Trustor, shall sell the
Eligible Property at the time and place fixed by it in said notice of sale, either as a whole or in
separate parcels, and in such order as it may determine, at public auction to the highest bidder for
cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of
all or any portion of the Eligible Property by public announcement at such time and place of sale,
and from time to time thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying
the Eligible Property so sold, but without any covenant or warranty, express or implied. Said
deed shall contain the notice: "NOTICE: THIS PROPERTY IS ENCUMBERED BY
AFFORDABILITY COVENANTS"; however, failure to include said notice shall not affect the
validity of any sale. The recitals in such deed of any matters or facts shall be conclusive proof
of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase
at such sale.
After deducting all costs, fees and expenses of Trustee, including cost of evidence
of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: first, all
sums expended by Beneficiary under the terms hereof or under any of the Secured Agreements
and not then repaid, with accrued interest as specified in said agreements; second, all other sums
then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
10. Substitute Trustees. Beneficiary, or any successor in ownership of any
obligation secured hereby, may from time to time, by instrument in writing, substitute a
successor or successors to any Trustee named herein or acting hereunder, which instrument,
executed by Beneficiary and duly acknowledged and recorded in the Office of the Recorder of
C.
the County of San Bernardino, and otherwise complying with the provisions of California Civil
Code Section 2934a, or any successor section, shall be conclusive proof of proper substitution of
such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor,
succeed to all its title, estate, right, powers and duties. Said instrument must contain the name of
the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of
Trust is recorded, and the name and address of the new Trustee.
11. Successors Bound. This Deed of Trust applies to, inures to the benefit of,
and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors,
assigns, trustees and receivers. In this Deed of Trust, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes the
plural.
12. Evidence of Title. If, because of any default hereunder, or because of the
filing or contemplated filing of any legal proceedings affecting the Eligible Property, Beneficiary
deems it necessary to obtain an additional evidence of title or to cure any defect in title,
Beneficiary may procure such evidence or cure such defect, pay the cost thereof, and shall have
an immediate claim against Trustor therefor, together with a lien upon the Eligible Property for
the amount so paid. Beneficiary is further authorized to require an appraisal of the Eligible
Property at any time that Beneficiary may reasonably request.
13. Statute of Limitations. The pleading of any statute of limitations as a
defense to any and all obligations secured by this Deed of Trust is hereby waived by Trustor, to
the full extent permissible by law.
14. Severability. The invalidity of any one or more covenants, phrases,
clauses, sentences, paragraphs or sections of this Deed of Trust shall not affect the remaining
portions of this Deed of Trust or any part hereof and this Deed of Trust shall be construed as if
such invalid covenants, phrases, sentences, paragraphs or sections, if any, had not been inserted
herein.
14. Order of Application. If any obligation secured hereby is now or hereafter
becomes further secured by a security agreement, deed of trust, pledge, contract of guaranty or
other securities in addition to the security provided to Beneficiary by this Deed of Trust,
Beneficiary may to the full extent allowed by law, at its option, exhaust any one or more of said
securities as well as the security hereunder, either concurrently or independently and in such
order as it may determine, and may apply the proceeds received upon the obligations secured
hereby without affecting the status of, or waiving any right to exhaust, all or any other security
including the security thereunder, and without waiving any breach or default in any right or
power, whether exercised hereunder or contained herein, or in any such other security.
156. Covenants of Trustor.
a. Audit by State and/or Federal Agencies. In the event the Grant
Agreement or any agreement executed in connection therewith is subjected to audit, monitoring
or other inspections by any appropriate state and/or federal agency, Trustor shall comply with
such investigations and pay, on behalf of itself and Beneficiary, any amount of the cost to the
investigating agency of such investigations as may be required by law (unless such investigation
and any resulting liability arise solely from the gross negligence or willful misconduct of
Beneficiary).
b. Pro am Evaluation and Review Trustor shall allow Beneficiary's
authorized personnel to inspect and monitor its facilities and program operations as they relate to
the Project or the Eligible Property, including the interviewing of Trustor's staff and other
program participants, as reasonably required by Beneficiary during the term of the Grant
Agreement or any agreement executed in connection therewith.
167. Default. Trustor shall be in default under this Deed of Trust upon any of
the following events which, if not cured within the applicable cure period provided, if any, shall
constitute an event of default hereunder ("Event of Default"):
a. The failure of Trustor to pay or perform any monetary covenant or
obligation hereunder or under the terms of any of the Secured Agreements or any document
executed in connection therewith, without curing such failure within ten (10) calendar days the
date such payment is due.
b. The failure of Trustor to perform any nonmonetary covenant or
obligation hereunder or under the terms of any of the Secured Agreements or any document
executed in connection therewith, without curing such failure within thirty (30) calendar days
after receipt of written notice of such default from Beneficiary (or from any party authorized by
Beneficiary to deliver such notice as identified by Beneficiary in writing to Trustor) specifying
the nature of the event or deficiency giving rise to the default and the action required to cure such
deficiency; provided, however, that if any default with respect to a nonmonetary obligation is
such that it cannot be cured within a 30 -day period, it shall be deemed cured if Trustor
commences the cure within said 30 -day period and diligently prosecutes such cure to completion
thereafter. Notwithstanding anything herein to the contrary, the herein described notice
requirements and cure periods shall not apply to any Event of Default described in Section 17(c)
through 17(g) below;
C. The material falsity of any representation, or the breach of any
warranty or covenant, made by Trustor under the terms of this Deed of Trust, the Secured
Agreements, or any other document executed in connection therewith;
d. Trustor, or any constituent member or partner or majority
shareholder of Trustor, shall (i) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to
pay its debts generally as they become due, (iii) make a general assignment for the benefit of
creditors, (iv) be adjudicated a bankrupt or insolvent or (v) commence a voluntary case under the
federal bankruptcy laws of the United States of America or file a voluntary petition that is not
withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with
creditors or an order for relief or seeking to take advantage of any insolvency law or file an
E
answer admitting the material allegations of a petition filed against it in any bankruptcy or
insolvency proceeding;
e. If without the application, approval or consent of Trustor, a
proceeding shall be instituted in any court of competent jurisdiction, under any law relating to
bankruptcy, in respect of Trustor or any constituent member or partner or majority shareholder of
Trustor, for an order for relief or an adjudication in bankruptcy, a composition or arrangement
with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or
custodian or the like of Trustor or of all or any substantial part of Trustor's assets, or other like
relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being
contested by Trustor, in good faith, the same shall (i) result in the entry of an order for relief or
any such adjudication or appointment, or (ii) continue undismissed, pending, and unstayed, for
any period of ninety (90) consecutive days;
f. Trustor shall suffer or attempt to effect a "Transfer" (as defined in
Section 30 below) other than in full compliance with the terms of this Deed of Trust.
g. Trustor shall be in default under the Housing Affordability
Covenant, unless the default is cured or waived within the cure period, if any, applicable thereto
under the terms of the obligation which is in default; or
h. Voluntary cessation of the operation of the Project during the
construction phase for a continuous period of more than thirty (30) calendar days or the
involuntary cessation of the operation of the Project during the construction phase in accordance
with this Deed of Trust for a continuous period of more than sixty (60) calendar days.
18. Breach by Trustor. Cure by Beneficiary or Trustee. In the event of
Trustor's failure to comply with any or all of the promises and agreements set forth in this Deed
of Trust and the Secured Agreements or to make any payment or to do any act as provided in this
Deed of Trust or the Secured Agreements, then Beneficiary or Trustee, but without obligation to
do so and without notice to or demand upon Trustor and without releasing Trustor from any such
obligation, may make or do the same in such manner and to such extent as either in its sole
judgment may deem necessary to protect the security hereof (including, without limitation, to
procure insurance and pay the premiums therefor; to pay unpaid water rents, sewer service
charges, and other governmental or municipal charges and rates, and all or any part of the unpaid
taxes, assessments, and reassessments, if in its judgment the same are just and valid; to pay the
cost of appraisals, reappraisals, and extensions of title; to enter or have its agents enter upon the
Eligible Property whenever reasonably necessary for the purpose of inspecting the Eligible
Property or making repairs or installations as it deems necessary to preserve the Eligible Property
or to protect the same from vandalism, without thereby becoming liable as a trespasser or
mortgagee or beneficiary in possession, and to pay for such repairs and installations).
Beneficiary and Trustee are hereby authorized to enter upon the Eligible Property for such
purposes; to appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears to be prior or superior
hereto; and, in exercising any such powers, to pay necessary expenses, employ counsel of its
L
choice, and pay the reasonable fees of such counsel. Trustor agrees to pay immediately and
without demand all sums so expended by Beneficiary or Trustee, with interest from the date of
expenditure at the maximum amount allowed by law in effect at the date hereof, and agrees that
Beneficiary or Trustee, as the case may be, shall have a lien upon the Eligible Property for the
sums so expended and such interest thereon.
179. Personal Property Security Agreement. All property covered by this Deed
of Trust shall be deemed to constitute real property or interests in real property to the maximum
extent permitted under applicable law. To the extent that any tangible property, equipment or
other property covered by this Deed of Trust constitutes personal property, such personal
property shall constitute additional security. This Deed of Trust shall create in Beneficiary a
security interest in such personal property and shall in respect thereof constitute a security
agreement (the "Personal Property Security Agreement"). Beneficiary shall be entitled to all of
the rights and remedies in respect of any personal property included in the Eligible Property
covered by this Deed of Trust that are afforded a secured party under the Uniform Commercial
Code and other applicable law. At Beneficiary's request, Trustor will at any time and from time
to time furnish Beneficiary for filing financing statements signed by Trustor in form satisfactory
to Beneficiary. Trustor acknowledges and agrees that thirty (30) days' notice as to the time,
place and date of any proposed sale of any personal property shall be deemed reasonable for all
purposes. Trustor agrees that the Security Agreement created hereby shall survive the
termination or reconveyance of this Deed of Trust unless Beneficiary executes documentation
expressly terminating the Personal Property Security Agreement.
180. Assumption of Liability. Except as provided in Section 30, the
assumption of liability for the performance of the obligations hereby secured, by any successor
in interest to Trustor in the Eligible Property shall not release Trustor from any liability Trustor
has hereunder or under the other Secured Agreements for the performance of such obligations or
the repayment of any sums advanced under and secured by this Deed of Trust. Any forbearance
or indulgence of Beneficiary, or extensions of time for the performance of all or any part of the
obligations secured hereby, or the release of a part of the Eligible Property from the lien of this
Deed of Trust, for or without consideration, shall not in any manner diminish or reduce the
liability of Trustor (subject to the nonrecourse provisions of Section 24) for the performance of
the obligations now or hereafter secured hereby. Any payment made in satisfaction of any such
obligation shall be deemed to have been made on behalf and for the benefit of all parties
obligated to pay the same.
'191. Future Advances. Upon the request of Trustor or its successor in
ownership of the Eligible Property, Beneficiary may, at its option, advance funds to Trustor or its
successors in ownership, and the sums advanced, with interest as permitted by law, shall be
secured by this Deed of Trust. If Beneficiary, at its option, shall make an advance as aforesaid,
Trustor or its successors in ownership agree to execute and deliver to Beneficiary a note to
evidence the same, payable on such terms as Beneficiary shall require.
Trustor further acknowledges and agrees that to secure the payment of any such
future advances Beneficiary shall also have a lien upon all other personal property and securities
now or hereafter in its possession belonging to Trustor; that all rights, powers and remedies con -
10
ferred upon Beneficiary herein are in addition to each and every other right which Beneficiary
has hereunder; that all rights, powers and remedies conferred upon Beneficiary in equity or by
law may be enforced concurrently therewith; that Beneficiary shall be subrogated to the rights
and seniority of any prior lien paid or released by reason of any such future advances; and that
each and all of the covenants, agreements, and provisions hereof shall bind and inure to the
benefit of the respective heirs, executors, administrators, successors, and assigns of Trustor and
Beneficiary herein, and all others who subsequently acquire any right, title, or interest in the
Eligible Property, or to this Deed of Trust and the indebtedness secured hereby.
20. Cations. The captions of the sections of this Deed of Trust are for
convenience only and shall not be considered in resolving questions of interpretation or
construction.
213. Estoppel Certificates. Trustor shall from time to time at Beneficiary's
request furnish Beneficiary or any person designated by Beneficiary a certified statement in form
reasonably satisfactory to Beneficiary confirming as of the date of the certificate Trustor is not in
default hereunder (or describing any default), and stating that Trustor has no defense, right of
setoff or counterclaim in the payment of any indebtedness, or any part thereof, or the observance
or performance of any obligation (or describing any such defense, set off or counterclaim). Any
purchaser or assignee of any of the Secured Agreements or this Deed of Trust or any interest
therein may rely on such certificate.
24. ObRization Nonrecourse. Except to the extent any Event of Default
hereunder results directly or indirectly from any fraud or intentional and material
misrepresentation by Trustor in connection with the Secured Agreements, the Secured
Agreements are nonrecourse obligations of Trustor and in the event of the occurrence of an
Event of Default, Beneficiary's only recourse under this Deed of Trust shall be against the
Eligible Property, the proceeds thereof, the rents and other income arising from its use and
occupancy as provided in this Deed of Trust, and any other collateral given to Beneficiary as
security for performance of the Secured Agreements.
25. Fixture Filing. This Deed of Trust is also a fixture filing with respect to
the personal property which is or is to become fixtures on the Eligible Property, and is to be
recorded in the real property records of San Bernardino County, California.
26. Assignment of Rents. All of the existing and future rents, royalties,
income, and profits of the Eligible Property that arise from its use or occupancy are hereby
absolutely and presently assigned to Beneficiary. However, until Trustor is in default under this
Deed of Trust, Trustor will have a license to collect and receive those rents, royalties, income
and profits. Upon any Event of Default by Trustor, Beneficiary may terminate Trustor's license
in its discretion, at any time, without notice to Trustor, and may thereafter collect the rents,
royalties, income and profits itself or by an agent or receiver. No action taken by Beneficiary to
collect any rents, royalties, income or profits will make Beneficiary a "mortgagee -in -possession"
of the Eligible Property, unless Beneficiary personally or by agent enters into actual possession
of the Eligible Property. Possession by a court-appointed receiver will not be considered
possession by Beneficiary. All rents, royalties, income and profits collected by Beneficiary or a
11
receiver will be applied first to pay all expenses of collection, and then to the payment of all
costs of operation and management of the Eligible Property, and then to the satisfaction of the
debts and obligations secured by the Deed of Trust in whatever order Beneficiary directs in its
absolute discretion and without regard to the adequacy of its security. If required by Beneficiary,
each lease or occupancy agreement affecting any of the Eligible Property must provide, in a
manner approved by Beneficiary, that the tenant will recognize as its lessor any person
succeeding to the interest of Trustor upon any foreclosure of this Deed of Trust. The expenses
(including any receivers' fees, costs of and compensation to any agent appointed by Beneficiary,
counsel fees, and disbursements) incurred in taking possession and making such collection, shall
be deemed a portion of the obligations secured by this Deed of Trust. The entering upon and
taking possession of the Eligible Property, and/or the collection of such rents, issues and profits
and the application thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice. Beneficiary may exercise any one
or more of the remedies in this section without waiving its right to exercise any such remedies
again or for the first time in the future. The foregoing shall be subject to the provisions of
applicable law.
27. Applicable Law. This Deed of Trust shall be governed by, and construed
in accordance with, the laws of the State of California.
28. Approvals. Except with respect to those matters set forth hereinabove
providing for Beneficiary's approval, consent or determination to be at Beneficiary's "sole
discretion" or "sole and absolute discretion," Beneficiary hereby agrees to act reasonably with
regard to any approval, consent, or other determination given by Beneficiary hereunder.
Beneficiary agrees to give Trustor written notice of its approval or disapproval following
submission of items to Beneficiary for approval, including, in the case of any disapproved item,
the reasons for such disapproval. Any consent to a transfer under Section 30 of this Deed of
Trust, and any other consent or approval by Beneficiary under this Deed of Trust or any of the
Secured Agreements may be given by Beneficiary's City Manager or his or her designee without
action of Beneficiary's governing board unless the City Manager or his or her designee in his or
her sole discretion elects to refer the matter to the board.
29. Good Faith and Fair Dealing. Beneficiary and Trustor agree to perform all
of their obligations and the actions required of each hereunder in good faith and in accordance
with fair dealing.
30. Assignment of Interest.
a. Without the prior written approval of Beneficiary, which approval
Beneficiary may grant or withhold in its sole and absolute discretion, Trustor shall not (i) sell,
encumber, assign or otherwise transfer (collectively, "Transfer") all or any portion of its interest
in the Eligible Property or the Project; (ii) permit the Transfer of any portion of its ownership
and/or control; or (iii) Transfer any of its rights or obligations under the Secured Agreements.
Trustor hereby agrees that any purported Transfer not approved the Beneficiary as required
herein shall be ab initio null and void, and no voluntary or involuntary successor to any interest
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of Trustor under such a proscribed Transfer shall acquire any rights pursuant to the Secured
Agreements or this Deed of Trust.
b. At any time Trustor desires to effect a Transfer hereunder, Trustor
shall notify Beneficiary in writing (the "Transfer Notice") and shall submit to Beneficiary for its
prior written approval (i) all proposed agreements and documents (collectively, the "Transfer
Documents") memorializing, facilitating, evidencing and/or relating to the circumstances sur-
rounding such proposed Transfer, and (ii) a certificate setting forth representations and
warranties by Trustor and the proposed transferee to Beneficiary sufficient to establish and
ensure that all requirements of this Section 30 have been and will be met. No Transfer
Documents shall be approved by Beneficiary unless they expressly provide for the assumption
by the proposed transferee of all of Trustor's obligations under the Secured Agreements and this
Deed of Trust. The Transfer Notice shall include a request that Beneficiary consent to the
proposed Transfer and shall also include a request that Trustor be released from further
obligations under the Secured Agreements and this Deed of Trust. Beneficiary agrees to make
its decision on Trustor's request for consent to such Transfer as promptly as possible, and in any
event not later than thirty (30) calendar days after Beneficiary receives the last of the items
required by this Section 30. In the event Beneficiary consents to a proposed Transfer, then such
Transfer shall not be effective unless and until Beneficiary receives copies of all executed and
binding Transfer Documents, which Transfer Documents shall conform to the proposed Transfer
Documents originally submitted by Trustor to Beneficiary. From and after the effective date of
any such Transfer, Trustor shall be released from its obligations under this Deed of Trust and the
Secured Agreements accruing subsequent to such effective date.
C. Notwithstanding anything in this Deed of Trust to the contrary,
Trustor agrees that it shall not be permitted to make any Transfer, whether or not Beneficiary's
consent is required therefor and even if Beneficiary has consented thereto, if there exists an
Event of Default under this Deed of Trust at the time the Transfer Notice is tendered to
Beneficiary or at any time thereafter until such Transfer is to be effective.
d. The provisions of this Section 30 shall apply to each successive
Transfer and proposed transferee in the same manner as initially applicable to Trustor under the
terms set forth herein.
[Continued on Next Page]
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IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the
date first above written.
Date:
Date:
TRUSTOR:
HOUSING PARTNERS I, INCORPORATED, a California
nonprofit corporation
Clemente Mojica, Executive Director
CITY OF SAN BERNARDINO
Andrea M. Miller, City Manager
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ATTACHMENT 1 TO DEED OF TRUST
Legal Description
Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
APN:
Address: , San Bernardino, CA
15
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed under the foregoing Deed of Trust
from [name of Trustor] to the City of San Bernardino ("City"), a municipal corporation, as to the
following property is hereby accepted:
Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
[legal description]
This acceptance is made by the City Manager of the City on behalf of the City pursuant to
authority conferred by action of the Mayor and City Council by Resolution No. , and the City
as grantee consents to recordation of this Certificate by its duly authorized officer.
CITY OF SAN BERNARDINO
Dated: , 2018 By:
ATTEST:
City Clerk
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City Manager
Attachment G to Master Agreement
Buyer Deed of Trust Form
Recording Requested by and
When Recorded Mail To:
CITY OF SAN BERNARDINO
Office of the City Manager
290 North "D" Street, Third Floor
San Bernardino, CA 92401
Attn.: Housing Division
ATTACHMENT "G"
Above Space For Recorder's Use Only
Document entitled to free recording per
Govt. Code Section 6103
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING ("Deed of Trust") is made as of , by and between
("Trustor"), ("Trustee"); and THE CITY
OF SAN BERNARDINO, INC., a municipal corporation (`Beneficiary").
RECITALS
A. Trustor has acquired or will acquire an affordable single-family dwelling that has
been constructed or reconstructed using funding provided by Beneficiary in the form of a grant
in the original principal amount of DOLLARS ($ ) ("Grant") pursuant to that certain
unrecorded HOME Investment Partnerships Program (HOME) Infill Housing Development
Grant Agreement ("Grant Agreement") entered into between Beneficiary and Housing Partners I,
Incorporated, a California nonprofit corporation ("Developer") and dated as of , and that
certain unrecorded Site Agreement (the "Site Agreement") entered into between Beneficiary and
Developer and dated as of . Copies of the Grant Agreement and the Site Agreement are on
file with Beneficiary as a public record.
B. The property acquired or to be acquired by Trustor is legally described in
Attachment "1" to this Deed of Trust (the "Eligible Property").
C. The Grant funds were provided to Beneficiary by the United States Department of
Housing and Urban Development ("HUD") pursuant to the HOME Investment Partnerships
Program ("HOME"). By virtue of Beneficiary's investment of the Grant funds for the
improvement of the Eligible Property, HOME regulations require that the continued affordability
of the Eligible Property be preserved through HOME Program Housing Affordability Covenants
and Restrictions (collectively referred to herein as the "Affordable Housing Covenant") executed
by Trustor in favor of Beneficiary. The purpose of this Deed of Trust is to secure Trustor's
performance of all agreements between Beneficiary and Trustor, including without limitation the
Affordable Housing Covenant.
NOW THEREFORE, in consideration of the Grant, Trustor hereby irrevocably grants,
conveys, transfers and assigns to Trustee and to its successors and assigns, in trust for the benefit
of Beneficiary, with power of foreclosure and right of entry and possession as provided below,
all of its present and future estate, right, title and interest in and to the Eligible Property, and
grants to Beneficiary a security interest in the following:
(A) All development rights, air rights, water, water rights, and water stock relating to the
Eligible Property.
(B) All present and future structures, buildings, improvements, appurtenances and
fixtures of any kind on the Eligible Property, including but not limited to all apparatus, attached
equipment and appliances used in connection with the operation or occupancy of the Eligible
Property, such as heating and air-conditioning systems and facilities used to provide any utility
services, ventilation, vehicular cleaning, storage or other services on the Eligible Property, and
all signage, carpeting and floor coverings, partitions, generators, screens, awnings, boilers,
furnaces, pipes, plumbing, vacuum systems, brushes, blowers, cleaning, call and sprinkler
systems, fire extinguishing apparatus and equipment, water tanks, air cooling equipment, and gas
and electric machinery and equipment, it being intended and agreed that all such items will be
conclusively considered to be a part of the Eligible Property conveyed by this Deed of Trust,
whether or not attached or affixed to the Eligible Property.
(C) All appurtenances of the Eligible Property and all rights of Trustor in and to any
streets, roads or public places, easements or rights of way, relating to the Eligible Property.
(D) All of the rents, royalties, profits and income related to the Eligible Property, to the
extent not prohibited by any applicable law.
(E) All proceeds and claims arising on account of any damage to or taking of the Eligible
Property and all causes of action and recoveries for any loss or diminution in value of the
Eligible Property.
(F) All existing and future goods, inventory, equipment and all other personal property
of any nature whatsoever now or hereafter located on the Eligible Property which are now or in
the future owned by Trustor and used in the operation or occupancy of the Eligible Property or in
any construction on the Eligible Property but which are not effectively made real property under
Paragraph (B) above, including but not limited to all appliances, furniture and furnishings,
building service equipment, and building materials, supplies, equipment, machinery, plumbing
and plumbing material and supplies, concrete, lumber, hardware, electrical wiring and electrical
material and supplies, roofing material and supplies, doors, paint, drywall, insulation, cabinets,
ceramic material and supplies, flooring, attached appliances, fencing, landscaping and all other
materials, supplies and property of every kind and nature.
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(G) All present and future accounts, general intangibles, chattel paper, contract rights,
deposit accounts, instruments and documents as those terms are defined in the California
Uniform Commercial Code, now or hereafter relating or arising with respect to the Eligible
Property and/or the use thereof or any improvements thereto, including without limitation: (i) all
rights to the payment of money, including escrow proceeds arising out of the sale or other
disposition of all or any portion of the estate of Trustor upon the Eligible Property now or
hereafter existing thereon; (ii) all plans, specifications and drawings relating to the development
of the Eligible Property and/or any construction thereon; (iii) all use permits, licenses, occupancy
permits, construction and building permits, and all other permits and approvals required by any
governmental or quasi -governmental authority in connection with the development, construction,
use, occupancy or operation of the Eligible Property; (iv) any and all agreements relating to the
development, construction, use, occupancy and/or operation of the Eligible Property between
Trustor and any contractor, subcontractor, project manager or supervisor, architect, engineer,
laborer or supplier of materials; (v) all lease or rental agreements; (vi) all names under which the
Eligible Property is now or hereafter operated or known and all rights to carry on business under
any such names or any variant thereof; (vii) all trademarks relating to the Eligible Property
and/or the development, construction, use, occupancy or operation thereof, (viii) all goodwill
relating to the Eligible Property and/or the development, construction, use, occupancy or
operation thereof; (ix) all reserves, deferred payments, deposits, refunds, cost savings, bonds,
insurance policies and payments of any kind relating to the Eligible Property; (x) all loan
commitments issued to Trustor in connection with any sale or financing of the Eligible Property;
(xi) all funds deposited with Beneficiary by Trustor, and all accounts of Trustor with
Beneficiary, including all accounts containing security deposits and prepaid rents paid to Trustor
in connection with any leases of the Eligible Property, and all proceeds thereof, and (xii) all
supplements, modifications and amendments to the foregoing.
(H) All of the right, title and interest of Trustor in and to all sales contracts of any nature
whatsoever now or hereafter executed covering any portion of the Eligible Property, together
with all deposits or other payments made in connection therewith.
(I) All of the right, title and interest of Trustor in and to any construction plans and
specifications, building permits, and all other documents necessary for completion of
improvements to the Eligible Property.
(J) All shares of stock or other evidence of ownership of any part of the Eligible
Property that is owned by Trustor in common with others, and all documents of membership in
any owners' or members' association or similar group having responsibility for managing or
operating any part of the Eligible Property.
Trustor does hereby covenant with Trustee and Beneficiary, that Trustor has good right to
bargain, sell and convey Trustor's interest in the Eligible Property in the manner and form as
above written; and Trustor warrants and will defend said interest for the benefit of Beneficiary
forever, against all lawful claims and demands whatsoever except as stated above.
THIS DEED OF TRUST IS FOR THE PURPOSE OF SECURING:
3
The performance of each agreement of Trustor made in connection with the Eligible
Property, including without limitation the Affordable Housing Covenant entered into by and
between Trustor and Beneficiary for the purpose of ensuring the continued affordability of the
Eligible Property, and all other agreements executed in connection with any of the foregoing
agreements (collectively, the "Secured Agreements").
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY
COVENANTS AND AGREES AS FOLLOWS:
1. Payment of Secured Obligations. Trustor shall pay when due the principal
of, and the interest on, any and all sums required to be paid by Trustor under the Secured
Agreements.
2. Maintenance Repair, Alterations. Trustor shall keep the Eligible Property
in good condition and repair; to complete promptly and in a good and workmanlike manner all
improvements to be constructed on the Eligible Property, including specifically all improvements
described in the Grant Agreement and the Site Agreement, and promptly restore in like manner
any structure that may be damaged or destroyed thereon; to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws, ordinances, regulations,
covenants, conditions and restrictions now or hereafter affecting the Eligible Property or any part
thereof or requiring any alterations or improvements thereon; not to commit or permit any waste
or deterioration of the Eligible Property; to keep and maintain abutting grounds, sidewalks,
roads, parking and landscape areas in good and neat order and repair; not to commit, suffer or
permit, to the extent Trustor is able by the exercise of commercially reasonable best efforts, any
act to be done in or upon the Eligible Property in violation of any law, ordinance or regulation.
3. Insurance. Trustor shall provide, maintain at its expense and deliver to
Beneficiary at all times until completion in full of all obligations secured hereby, property
insurance covering the Eligible Property, in form appropriate for the nature of the property,
covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the
replacement value, with deductible, if any, acceptable to Beneficiary, naming Beneficiary as a
loss payee, as its interests may appear, and such further insurance as may be required by any of
the Secured Agreements. In the event of any loss or damage, Trustor shall give immediate notice
thereof to Beneficiary, and Beneficiary may thereupon make proof of such loss or damage, if the
same is not promptly made by Trustor. Trustor and Beneficiary hereby agree to cooperate in
making any adjustment and compromise of any loss covered by the aforementioned insurance
policies upon the Eligible Property, and Trustor authorizes and empowers Beneficiary, at its
option, to collect and receive the proceeds, and endorse checks and drafts issued therefor.
Beneficiary agrees that in the event of any loss covered by insurance policies on the Eligible
Property subject to this Deed of Trust, provided there is not then existing any material default (or
such existing default will be cured by the proceeds of such insurance) in the observance or
performance of any of the covenants and agreements contained herein or in the Secured
Agreements, or in any other agreement with or for the benefit of the Beneficiary in connection
with any obligation secured hereby, the proceeds of such insurance shall be used for the repair or
4
restoration of the Eligible Property and will be disbursed in accordance with such protective
terms and conditions as Beneficiary may reasonably impose.
Trustor hereby fully assigns to Beneficiary all current and future claims it may
have under any policy of insurance related to the Eligible Property, regardless of whether such
insurance was required to be maintained under the Secured Agreements. Any and all unexpired
insurance shall inure to the benefit of and pass to the purchaser of the Eligible Property at any
foreclosure sale pursuant hereto.
Further, Beneficiary may at any time in its sole discretion require Trustor to
submit satisfactory evidence of insurance policies obtained pursuant to this Paragraph 3 and of
Trustor's compliance with all the provisions of said policies.
4. Lawsuits. Trustor shall appear in and defend, with counsel selected by
Beneficiary, or otherwise take such action therein as Beneficiary and Trustee or either of them
may deem advisable with respect to any action or proceeding affecting the Eligible Property to
which Beneficiary or Trustee may be a party.
5. Beneficiary Statement. Trustor shall pay all charges for all legal fees or
court costs and expenses which Beneficiary may elect to advance in order to keep unimpaired,
protect, and preserve the title to the Eligible Property or the improvements thereon; and to pay
for any statement provided for by law in effect at the date hereof regarding the obligations
secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed
by law at the time when said statement is demanded.
6. Condemnation. All judgments, awards of damages and settlements,
hereafter made as a result of or in lieu of any condemnation or other proceedings for public use
of, or for any damage to, the Eligible Property or the improvements thereon, are hereby assigned
to Beneficiary. If (i) Trustor is not then in material default hereunder (or such default will be
cured with the proceeds from the foregoing), and (ii) the taking is a partial taking, all proceeds
for taking of or damage to the Eligible Property shall be applied to restoring the Eligible
Property, if practicable, as reasonably determined by Beneficiary. In the event (i) Trustor is then
in material default hereunder (and such default will not be cured with the proceeds of the
foregoing), (ii) the taking is a total taking, or (iii) the taking is a partial taking and Beneficiary
has reasonably determined that restoration of the Eligible Property is not practicable, the
proceeds shall be paid to Beneficiary to the extent of those monies due and owing from Trustor
to Beneficiary under any of the Secured Agreements, and Beneficiary is hereby authorized to
receive such monies. Trustor agrees to execute such further assignments of any such award,
judgment or settlement which may be received by Trustor. Beneficiary may apply any and all
such sums to the obligations secured hereby in such manner as it elects or, at its option, the entire
amount so received by it or any part thereof may be released. Neither the application nor the
release of any such sums shall cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
7. Permitted Acts of Beneficiary. Without affecting the liability of any
person, including Trustor (other than any person released pursuant hereto), for the payment of
5
any indebtedness secured hereby, Beneficiary is authorized and empowered as follows:
Beneficiary may at any time, and from time to time, either before or after the maturity of the
obligations secured hereby, and without notice (a) release any person liable for the payment of
any of the indebtedness, (b) make any agreement extending the time or otherwise altering the
terms of payment of any of the indebtedness, (c) accept additional security therefor of any kind,
or (d) release any property, real or personal, securing the indebtedness.
8. Reconveyance of Eligible Property. Upon written request of Beneficiary
stating that all sums secured hereby have been paid and all obligations secured hereby have been
performed, and upon surrender of this Deed of Trust to Trustee for cancellation and retention,
and upon payment of its fees, Trustee shall reconvey, without warranty, the Eligible Property
then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive
proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the
person or persons legally entitled thereto."
9. Default and Trustee's Sale. Upon the occurrence of an "Event of Default"
under this Deed of Trust (as defined in Section 17 below) Beneficiary may declare all principal
remaining unpaid, all interest then earned and remaining unpaid, and all sums other than
principal or interest secured hereby, immediately due and payable, may require immediate
performance of all other obligations secured hereby, and may proceed to exercise the power of
sale granted by this Deed of Trust by delivery to Trustee of written declaration of default and
demand for sale and of written notice of default and of election to cause to be sold said Eligible
Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit
with Trustee this Deed of Trust and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the
recordation of said notice of default, Trustee shall cause a notice of sale to be published, posted,
mailed, and recorded as required by statute. Said notice of sale shall contain the notice:
"NOTICE: THIS PROPERTY IS ENCUMBERED BY AFFORDABILITY COVENANTS";
however, failure to include said notice shall not affect the validity of any publication, posting, or
mailing of said notice of sale or the validity of any sale based thereon. Thereafter, within the
time and in the manner required by statute Trustee, without demand on Trustor, shall sell the
Eligible Property at the time and place fixed by it in said notice of sale, either as a whole or in
separate parcels, and in such order as it may determine, at public auction to the highest bidder for
cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of
all or any portion of the Eligible Property by public announcement at such time and place of sale,
and from time to time thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying
the Eligible Property so sold, but without any covenant or warranty, express or implied. Said
deed shall contain the notice: "NOTICE: THIS PROPERTY IS ENCUMBERED BY
AFFORDABILITY COVENANTS"; however, failure to include said notice shall not affect the
validity of any sale. The recitals in such deed of any matters or facts shall be conclusive proof
of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase
at such sale.
rel
After deducting all costs, fees and expenses of Trustee, including cost of evidence
of title in connection with sale, Trustee shall apply the proceeds of sale to payment of first, all
sums expended by Beneficiary under the terms hereof or under any of the Secured Agreements
and not then repaid, with accrued interest as specified in said agreements; second, all other sums
then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
10. Substitute Trustees. Beneficiary, or any successor in ownership of any
obligation secured hereby, may from time to time, by instrument in writing, substitute a
successor or successors to any Trustee named herein or acting hereunder, which instrument,
executed by Beneficiary and duly acknowledged and recorded in the Office of the Recorder of
the County of San Bernardino, and otherwise complying with the provisions of California Civil
Code Section 2934a, or any successor section, shall be conclusive proof of proper substitution of
such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor,
succeed to all its title, estate, right, powers and duties. Said instrument must contain the name of
the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of
Trust is recorded, and the name and address of the new Trustee.
11. Successors Bound. This Deed of Trust applies to, inures to the benefit of,
and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors,
assigns, trustees and receivers. In this Deed of Trust, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes the
plural.
12. Evidence of Title. If, because of any default hereunder, or because of the
filing or contemplated filing of any legal proceedings affecting the Eligible Property, Beneficiary
deems it necessary to obtain an additional evidence of title or to cure any defect in title,
Beneficiary may procure such evidence or cure such defect, pay the cost thereof, and shall have
an immediate claim against Trustor therefor, together with a lien upon the Eligible Property for
the amount so paid, with interest as permitted by law. Beneficiary is further authorized to
require an appraisal of the Eligible Property at any time that Beneficiary may reasonably request.
13. Statute of Limitations. The pleading of any statute of limitations as a
defense to any and all obligations secured by this Deed of Trust is hereby waived by Trustor, to
the full extent permissible by law.
14. Severability. The invalidity of any one or more covenants, phrases,
clauses, sentences, paragraphs or sections of this Deed of Trust shall not affect the remaining
portions of this Deed of Trust or any part hereof and this Deed of Trust shall be construed as if
such invalid covenants, phrases, sentences, paragraphs or sections, if any, had not been inserted
herein.
14. Order of Application. If any obligation secured hereby is now or hereafter
becomes further secured by a security agreement, deed of trust, pledge, contract of guaranty or
other securities in addition to the security provided to Beneficiary by this Deed of Trust,
Beneficiary may to the full extent allowed by law, at its option, exhaust any one or more of said
securities as well as the security hereunder, either concurrently or independently and in such
7
order as it may determine, and may apply the proceeds received upon the obligations secured
hereby without affecting the status of, or waiving any right to exhaust, all or any other security
including the security thereunder, and without waiving any breach or default in any right or
power, whether exercised hereunder or contained herein, or in any such other security.
156. Covenants of Trustor.
a. Audit by State and/or Federal Agencies. In the event this Deed of
Trust or any agreement executed in connection herewith is subjected to audit, monitoring or
other inspections by any appropriate state and/or federal agency, Trustor shall comply with such
investigations and pay, on behalf of itself and Beneficiary, any amount of the cost to the
investigating agency of such investigations as may be required by law (unless such investigation
and any resulting liability arise solely from the gross negligence or willful misconduct of
Beneficiary).
b. Program Evaluation and Review Trustor shall allow Beneficiary's
authorized personnel to inspect and monitor its facilities and program operations as they relate to
the Eligible Property, including the interviewing of Trustor and other program participants, as
reasonably required by Beneficiary during the term of the Affordable Housing Covenant or any
agreement executed in connection therewith.
167. Default. Trustor shall be in default under this Deed of Trust upon any of
the following events which, if not cured within the applicable cure period provided, if any, shall
constitute an event of default hereunder ("Event of Default"):
a. The failure of Trustor to pay or perform any monetary covenant or
obligation hereunder or under the terms of any of the Secured Agreements or any document
executed in connection therewith, without curing such failure within ten (10) calendar days the
date such payment is due.
b. The failure of Trustor to perform any nonmonetary covenant or
obligation hereunder or under the terms of any of the Secured Agreements or any document
executed in connection therewith, without curing such failure within thirty (30) calendar days
after receipt of written notice of such default from Beneficiary (or from any party authorized by
Beneficiary to deliver such notice as identified by Beneficiary in writing to Trustor) specifying
the nature of the event or deficiency giving rise to the default and the action required to cure such
deficiency; provided, however, that if any default with respect to a nonmonetary obligation is
such that it cannot be cured within a 30 -day period, it shall be deemed cured if Trustor
commences the cure within said 30 -day period and diligently prosecutes such cure to completion
thereafter. Notwithstanding anything herein to the contrary, the herein described notice
requirements and cure periods shall not apply to any Event of Default described in Section 17(c)
through 17(g) below;
C. The material falsity of any representation, or the breach of any
warranty or covenant, made by Trustor under the terms of this Deed of Trust, the Secured
Agreements, or any other document executed in connection therewith;
N.
d. Trustor, or any constituent member or partner or majority
shareholder of Trustor, shall (i) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to
pay its debts generally as they become due, (iii) make a general assignment for the benefit of
creditors, (iv) be adjudicated a bankrupt or insolvent or (v) commence a voluntary case under the
federal bankruptcy laws of the United States of America or file a voluntary petition that is not
withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with
creditors or an order for relief or seeking to take advantage of any insolvency law or file an
answer admitting the material allegations of a petition filed against it in any bankruptcy or
insolvency proceeding;
e. If without the application, approval or consent of Trustor, a
proceeding shall be instituted in any court of competent jurisdiction, under any law relating to
bankruptcy, in respect of Trustor or any constituent member or partner or majority shareholder of
Trustor, for an order for relief or an adjudication in bankruptcy, a composition or arrangement
with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or
custodian or the like of Trustor or of all or any substantial part of Trustor's assets, or other like
relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being
contested by Trustor, in good faith, the same shall (i) result in the entry of an order for relief or
any such adjudication or appointment, or (ii) continue undismissed, pending, and unstayed, for
any period of ninety (90) consecutive days;
f. Trustor shall suffer or attempt to effect a "Transfer" (as defined in
Section 30 below) other than in full compliance with the terms of this Deed of Trust; or
g. Trustor shall be in default under the Affordable Housing Covenant,
unless the default is cured or waived within the cure period, if any, applicable thereto under the
terms of the obligation which is in default.
18. Breach by Trustor, Cure by Beneficiary or Trustee. In the event of
Trustor's failure to comply with any or all of the promises and agreements set forth in this Deed
of Trust and the Secured Agreements or to make any payment or to do any act as provided in this
Deed of Trust or the Secured Agreements, then Beneficiary or Trustee, but without obligation to
do so and without notice to or demand upon Trustor and without releasing Trustor from any such
obligation, may make or do the same in such manner and to such extent as either in its sole
judgment may deem necessary to protect the security hereof (including, without limitation, to
procure insurance and pay the premiums therefor; to pay unpaid water rents, sewer service
charges, and other governmental or municipal charges and rates, and all or any part of the unpaid
taxes, assessments, and reassessments, if in its judgment the same are just and valid; to pay the
cost of appraisals, reappraisals, and extensions of title; to enter or have its agents enter upon the
Eligible Property whenever reasonably necessary for the purpose of inspecting the Eligible
Property or making repairs or installations as it deems necessary to preserve the Eligible Property
or to protect the same from vandalism, without thereby becoming liable as a trespasser or
mortgagee or beneficiary in possession, and to pay for such repairs and installations).
Beneficiary and Trustee are hereby authorized to enter upon the Eligible Property for such
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purposes; to appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears to be prior or superior
hereto; and, in exercising any such powers, to pay necessary expenses, employ counsel of its
choice, and pay the reasonable fees of such counsel. Trustor agrees to pay immediately and
without demand all sums so expended by Beneficiary or Trustee, with interest from the date of
expenditure at the amount allowed by law in effect at the date hereof, and agrees that Beneficiary
or Trustee, as the case may be, shall have a lien upon the Eligible Property for the sums so
expended and such interest thereon.
179. Personal Propelly Securit v A rreement. All property covered by this Deed
of Trust shall be deemed to constitute real property or interests in real property to the maximum
extent permitted under applicable law. To the extent that any tangible property, equipment or
other property covered by this Deed of Trust constitutes personal property, such personal
property shall constitute additional security. This Deed of Trust shall create in Beneficiary a
security interest in such personal property and shall in respect thereof constitute a security
agreement (the "Personal Property Security Agreement"). Beneficiary shall be entitled to all of
the rights and remedies in respect of any personal property included in the Eligible Property
covered by this Deed of Trust that are afforded a secured party under the Uniform Commercial
Code and other applicable law. At Beneficiary's request, Trustor will at any time and from time
to time furnish Beneficiary for filing financing statements signed by Trustor in form satisfactory
to Beneficiary. Trustor acknowledges and agrees that thirty (30) days' notice as to the time,
place and date of any proposed sale of any personal property shall be deemed reasonable for all
purposes. Trustor agrees that the Security Agreement created hereby shall survive the
termination or reconveyance of this Deed of Trust unless Beneficiary executes documentation
expressly terminating the Personal Property Security Agreement.
180. Assumption of Liability. Except as provided in Section 30, the
assumption of liability for the performance of the obligations hereby secured, by any successor
in interest to Trustor in the Eligible Property shall not release Trustor from any liability Trustor
has hereunder or under the other Secured Agreements for the performance of such obligations or
the repayment of any sums advanced under and secured by this Deed of Trust. Any forbearance
or indulgence of Beneficiary, or extensions of time for the performance of all or any part of the
obligations secured hereby, or the release of a part of the Eligible Property from the lien of this
Deed of Trust, for or without consideration, shall not in any manner diminish or reduce the
liability of Trustor (subject to the nonrecourse provisions of Section 24) for the performance of
the obligations now or hereafter secured hereby. Any payment made in satisfaction of any such
obligation shall be deemed to have been made on behalf and for the benefit of all parties
obligated to pay the same.
191. Future Advances. Upon the request of Trustor or its successor in
ownership of the Eligible Property, Beneficiary may, at its option, advance funds to Trustor or its
successors in ownership, and the sums advanced, with interest as permitted by law, shall be
secured by this Deed of Trust. If Beneficiary, at its option, shall make an advance as aforesaid,
Trustor or its successors in ownership agree to execute and deliver to Beneficiary a note to
evidence the same, payable on such terms as Beneficiary shall require.
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Trustor farther acknowledges and agrees that to secure the payment of any such
future advances Beneficiary shall also have a lien upon all other personal property and securities
now or hereafter in its possession belonging to Trustor; that all rights, powers and remedies con-
ferred upon Beneficiary herein are in addition to each and every other right which Beneficiary
has hereunder; that all rights, powers and remedies conferred upon Beneficiary in equity or by
law may be enforced concurrently therewith; that Beneficiary shall be subrogated to the rights
and seniority of any prior lien paid or released by reason of any such future advances; and that
each and all of the covenants, agreements, and provisions hereof shall bind and inure to the
benefit of the respective heirs, executors, administrators, successors, and assigns of Trustor and
Beneficiary herein, and all others who subsequently acquire any right, title, or interest in the
Eligible Property, or to this Deed of Trust and the indebtedness secured hereby.
20. Captions. The captions of the sections of this Deed of Trust are for
convenience only and shall not be considered in resolving questions of interpretation or
construction.
213. Estoppel Certificates. Trustor shall from time to time at Beneficiary's
request furnish Beneficiary or any person designated by Beneficiary a certified statement in form
reasonably satisfactory to Beneficiary confirming as of the date of the certificate Trustor is not in
default hereunder (or describing any default), and stating that Trustor has no defense, right of
setoff or counterclaim in the payment of any indebtedness, or any part thereof, or the observance
or performance of any obligation (or describing any such defense, set off or counterclaim). Any
purchaser or assignee of any of the Secured Agreements or this Deed of Trust or any interest
therein may rely on such certificate.
24. Obligation Nonrecourse. Except to the extent any Event of Default
hereunder results directly or indirectly from any fraud or intentional and material
misrepresentation by Trustor in connection with the Secured Agreements, the Secured
Agreements are nonrecourse obligations of Trustor and in the event of the occurrence of an
Event of Default, Beneficiary's only recourse under this Deed of Trust shall be against the
Eligible Property, the proceeds thereof, the rents and other income arising from its use and
occupancy as provided in this Deed of Trust, and any other collateral given to Beneficiary as
security for performance of the Secured Agreements.
25. Fixture Filing. This Deed of Trust is also a fixture filing with respect to
the personal property which is or is to become fixtures on the Eligible Property, and is to be
recorded in the real property records of San Bernardino County, California.
26. Assignment_ of Rents. All of the existing and future rents, royalties,
income, and profits of the Eligible Property that arise from its use or occupancy are hereby
absolutely and presently assigned to Beneficiary. However, until Trustor is in default under this
Deed of Trust, Trustor will have a license to collect and receive those rents, royalties, income
and profits. Upon any Event of Default by Trustor, Beneficiary may terminate Trustor's license
in its discretion, at any time, without notice to Trustor, and may thereafter collect the rents,
royalties, income and profits itself or by an agent or receiver. No action taken by Beneficiary to
11
collect any rents, royalties, income or profits will make Beneficiary a "mortgagee -in -possession"
of the Eligible Property, unless Beneficiary personally or by agent enters into actual possession
of the Eligible Property. Possession by a court-appointed receiver will not be considered
possession by Beneficiary. All rents, royalties, income and profits collected by Beneficiary or a
receiver will be applied first to pay all expenses of collection, and then to the payment of all
costs of operation and management of the Eligible Property, and then to the satisfaction of the
debts and obligations secured by the Deed of Trust in whatever order Beneficiary directs in its
absolute discretion and without regard to the adequacy of its security. If required by Beneficiary,
each lease or occupancy agreement affecting any of the Eligible Property must provide, in a
manner approved by Beneficiary, that the tenant will recognize as its lessor any person
succeeding to the interest of Trustor upon any foreclosure of this Deed of Trust. The expenses
(including any receivers' fees, costs of and compensation to any agent appointed by Beneficiary,
counsel fees, and disbursements) incurred in taking possession and making such collection, shall
be deemed a portion of the obligations secured by this Deed of Trust. The entering upon and
taking possession of the Eligible Property, and/or the collection of such rents, issues and profits
and the application thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice. Beneficiary may exercise any one
or more of the remedies in this section without waiving its right to exercise any such remedies
again or for the first time in the future. The foregoing shall be subject to the provisions of
applicable law.
27. Applicable Law. This Deed of Trust shall be governed by, and construed
in accordance with, the laws of the State of California.
28. Approvals. Except with respect to those matters set forth hereinabove
providing for Beneficiary's approval, consent or determination to be at Beneficiary's "sole
discretion" or "sole and absolute discretion," Beneficiary hereby agrees to act reasonably with
regard to any approval, consent, or other determination given by Beneficiary hereunder.
Beneficiary agrees to give Trustor written notice of its approval or disapproval following
submission of items to Beneficiary for approval, including, in the case of any disapproved item,
the reasons for such disapproval. Any consent to a transfer under Section 30 of this Deed of
Trust, and any other consent or approval by Beneficiary under this Deed of Trust or any of the
Secured Agreements may be given by Beneficiary's City Manager or his or her designee without
action of Beneficiary's governing board unless the City Manager or his or her designee in his or
her sole discretion elects to refer the matter to the board.
29. Good Faith and Fair Dealin . Beneficiary and Trustor agree to perform all
of their obligations and the actions required of each hereunder in good faith and in accordance
with fair dealing.
30. Assignment of Interest.
a. Without the prior written approval of Beneficiary, which approval
Beneficiary may grant or withhold in its sole and absolute discretion, Trustor shall not (i) sell,
encumber, assign or otherwise transfer (collectively, "Transfer") all or any portion of its interest
in the Eligible Property; (ii) permit the Transfer of any portion of its ownership and/or control; or
12
(iii) Transfer any of its rights or obligations under the Secured Agreements. Trustor hereby
agrees that any purported Transfer not approved the Beneficiary as required herein shall
be ab initio null and void, and no voluntary or involuntary successor to any interest of Trustor
under such a proscribed Transfer shall acquire any rights pursuant to the Secured Agreements or
this Deed of Trust.
b. At any time Trustor desires to effect a Transfer hereunder, Trustor
shall notify Beneficiary in writing (the "Transfer Notice") and shall submit to Beneficiary for its
prior written approval (i) all proposed agreements and documents (collectively, the "Transfer
Documents") memorializing, facilitating, evidencing and/or relating to the circumstances sur-
rounding such proposed Transfer, and (ii) a certificate setting forth representations and
warranties by Trustor and the proposed transferee to Beneficiary sufficient to establish and
ensure that all requirements of this Section 30 have been and will be met. No Transfer
Documents shall be approved by Beneficiary unless they expressly provide for the assumption
by the proposed transferee of all of Trustor's obligations under the Secured Agreements and this
Deed of Trust. The Transfer Notice shall include a request that Beneficiary consent to the
proposed Transfer and shall also include a request that Trustor be released from further
obligations under the Secured Agreements and this Deed of Trust. Beneficiary agrees to make
its decision on Trustor's request for consent to such Transfer as promptly as possible, and in any
event not later than thirty (30) calendar days after Beneficiary receives the last of the items
required by this Section 30. In the event Beneficiary consents to a proposed Transfer, then such
Transfer shall not be effective unless and until Beneficiary receives copies of all executed and
binding Transfer Documents, which Transfer Documents shall conform to the proposed Transfer
Documents originally submitted by Trustor to Beneficiary. From and after the effective date of
any such Transfer, Trustor shall be released from its obligations under this Deed of Trust and the
Secured Agreements accruing subsequent to such effective date.
C. Notwithstanding anything in this Deed of Trust to the contrary,
Trustor agrees that it shall not be permitted to make any Transfer, whether or not Beneficiary's
consent is required therefor and even if Beneficiary has consented thereto, if there exists an
Event of Default under this Deed of Trust at the time the Transfer Notice is tendered to
Beneficiary or at any time thereafter until such Transfer is to be effective.
d. The provisions of this Section 30 shall apply to each successive
Transfer and proposed transferee in the same manner as initially applicable to Trustor under the
terms set forth herein.
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IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the
date first above written.
Date:
Date:
TRUSTOR:
CITY OF SAN BERNARDINO
Andrea M. Miller, City Manager
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ATTACHMENT 1 TO DEED OF TRUST
Legal Description
Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
APN:
Address: , San Bernardino, CA
15
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed under the foregoing Deed of Trust
from [name of Trustor] to the City of San Bernardino ("City"), a municipal corporation, as to the
following property is hereby accepted:
Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
[legal description]
APN:
This acceptance is made by the City Manager of the City on behalf of the City pursuant to
authority conferred by action of the Mayor and City Council by Resolution No. , and the City
as grantee consents to recordation of this Certificate by its duly authorized officer.
Dated:
ATTEST:
City Clerk
CITY OF SAN BERNARDINO
__, 2018 By:
16
City Manager
Attachment H to Master Agreement
Qualified Homebuyer Deed of Trust form
Recording Requested by and
When Recorded Mail To:
CITY OF SAN BERNARDINO
Office of the City Manager
290 North "D" Street, Third Floor
San Bernardino, CA 92401
Attn.: Housing Division
ATTACHMENT "H"
Above Space For Recorder's Use Only
Document entitled to free recording per
Govt. Code Section 6103
DEED OF TRUST ASSIGNMENT OF RENTS
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING ("Deed of Trust") is made as of , by and between
("Trustor"), ("Trustee"); and THE CITY
OF SAN BERNARDINO, INC., a municipal corporation ("Beneficiary").
RECITALS
A. Trustor has acquired or will acquire an affordable single-family dwelling that has
been constructed or reconstructed using funding provided by Beneficiary in the form of a grant
in the original principal amount of DOLLARS ($ ) ("Grant") pursuant to that certain
unrecorded HOME Investment Partnerships Program (HOME) Infill Housing Development
Grant Agreement ("Grant Agreement") entered into between Beneficiary and Housing Partners I,
Incorporated, a California nonprofit corporation ("Developer") and dated as of , and that
certain unrecorded Site Agreement (the "Site Agreement") entered into between Beneficiary and
Developer and dated as of . Copies of the Grant Agreement and the Site Agreement are on
file with Beneficiary as a public record.
B. The property acquired or to be acquired by Trustor is legally described in
Attachment "1" to this Deed of Trust (the "Eligible Property").
C. The Grant funds were provided to Beneficiary by the United States Department of
Housing and Urban Development ("HUD") pursuant to the HOME Investment Partnerships
Program ("HOME"). By virtue of Beneficiary's investment of the Grant funds for the
improvement of the Eligible Property, HOME regulations require that the continued affordability
of the Eligible Property be preserved through HOME Program Housing Affordability Covenants
and Restrictions (collectively referred to herein as the "Affordable Housing Covenant") executed
by Trustor in favor of Beneficiary. The purpose of this Deed of Trust is to secure Trustor's
performance of all agreements between Beneficiary and Trustor, including without limitation the
Affordable Housing Covenant.
NOW THEREFORE, in consideration of the Grant, Trustor hereby irrevocably grants,
conveys, transfers and assigns to Trustee and to its successors and assigns, in trust for the benefit
of Beneficiary, with power of foreclosure and right of entry and possession as provided below,
all of its present and future estate, right, title and interest in and to the Eligible Property, and
grants to Beneficiary a security interest in the following:
(A) All development rights, air rights, water, water rights, and water stock relating to the
Eligible Property.
(B) All present and future structures, buildings, improvements, appurtenances and
fixtures of any kind on the Eligible Property, including but not limited to all apparatus, attached
equipment and appliances used in connection with the operation or occupancy of the Eligible
Property, such as heating and air-conditioning systems and facilities used to provide any utility
services, ventilation, vehicular cleaning, storage or other services on the Eligible Property, and
all signage, carpeting and floor coverings, partitions, generators, screens, awnings, boilers,
furnaces, pipes, plumbing, vacuum systems, brushes, blowers, cleaning, call and sprinkler
systems, fire extinguishing apparatus and equipment, water tanks, air cooling equipment, and gas
and electric machinery and equipment, it being intended and agreed that all such items will be
conclusively considered to be a part of the Eligible Property conveyed by this Deed of Trust,
whether or not attached or affixed to the Eligible Property.
(C) All appurtenances of the Eligible Property and all rights of Trustor in and to any
streets, roads or public places, easements or rights of way, relating to the Eligible Property.
(D) All of the rents, royalties, profits and income related to the Eligible Property, to the
extent not prohibited by any applicable law.
(E) All proceeds and claims arising on account of any damage to or taking of the Eligible
Property and all causes of action and recoveries for any loss or diminution in value of the
Eligible Property.
(F) All existing and future goods, inventory, equipment and all other personal property
of any nature whatsoever now or hereafter located on the Eligible Property which are now or in
the future owned by Trustor and used in the operation or occupancy of the Eligible Property or in
any construction on the Eligible Property but which are not effectively made real property under
Paragraph (B) above, including but not limited to all appliances, furniture and furnishings,
building service equipment, and building materials, supplies, equipment, machinery, plumbing
and plumbing material and supplies, concrete, lumber, hardware, electrical wiring and electrical
material and supplies, roofing material and supplies, doors, paint, drywall, insulation, cabinets,
ceramic material and supplies, flooring, attached appliances, fencing, landscaping and all other
materials, supplies and property of every kind and nature.
2
(G) All present and future accounts, general intangibles, chattel paper, contract rights,
deposit accounts, instruments and documents as those terms are defined in the California
Uniform Commercial Code, now or hereafter relating or arising with respect to the Eligible
Property and/or the use thereof or any improvements thereto, including without limitation: (i) all
rights to the payment of money, including escrow proceeds arising out of the sale or other
disposition of all or any portion of the estate of Trustor upon the Eligible Property now or
hereafter existing thereon; (ii) all plans, specifications and drawings relating to the development
of the Eligible Property and/or any construction thereon; (iii) all use permits, licenses, occupancy
permits, construction and building permits, and all other permits and approvals required by any
governmental or quasi -governmental authority in connection with the development, construction,
use, occupancy or operation of the Eligible Property; (iv) any and all agreements relating to the
development, construction, use, occupancy and/or operation of the Eligible Property between
Trustor and any contractor, subcontractor, project manager or supervisor, architect, engineer,
laborer or supplier of materials; (v) all lease or rental agreements; (vi) all names under which the
Eligible Property is now or hereafter operated or known and all rights to carry on business under
any such names or any variant thereof; (vii) all trademarks relating to the Eligible Property
and/or the development, construction, use, occupancy or operation thereof; (viii) all goodwill
relating to the Eligible Property and/or the development, construction, use, occupancy or
operation thereof; (ix) all reserves, deferred payments, deposits, refunds, cost savings, bonds,
insurance policies and payments of any kind relating to the Eligible Property; (x) all loan
commitments issued to Trustor in connection with any sale or financing of the Eligible Property;
(xi) all funds deposited with Beneficiary by Trustor, and all accounts of Trustor with
Beneficiary, including all accounts containing security deposits and prepaid rents paid to Trustor
in connection with any leases of the Eligible Property, and all proceeds thereof; and (xii) all
supplements, modifications and amendments to the foregoing.
(H) All of the right, title and interest of Trustor in and to all sales contracts of any nature
whatsoever now or hereafter executed covering any portion of the Eligible Property, together
with all deposits or other payments made in connection therewith.
(I) All of the right, title and interest of Trustor in and to any construction plans and
specifications, building permits, and all other documents necessary for completion of
improvements to the Eligible Property.
(J) All shares of stock or other evidence of ownership of any part of the Eligible
Property that is owned by Trustor in common with others, and all documents of membership in
any owners' or members' association or similar group having responsibility for managing or
operating any part of the Eligible Property.
Trustor does hereby covenant with Trustee and Beneficiary, that Trustor has good right to
bargain, sell and convey Trustor's interest in the Eligible Property in the manner and form as
above written; and Trustor warrants and will defend said interest for the benefit of Beneficiary
forever, against all lawful claims and demands whatsoever except as stated above.
THIS DEED OF TRUST IS FOR THE PURPOSE OF SECURING:
The performance of each agreement of Trustor made in connection with the Eligible
Property, including without limitation the Affordable Housing Covenant entered into by and
between Trustor and Beneficiary for the purpose of ensuring the continued affordability of the
Eligible Property, and all other agreements executed in connection with any of the foregoing
agreements (collectively, the "Secured Agreements").
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY
COVENANTS AND AGREES AS FOLLOWS:
1. Pa ment of Secured Obligations. Trustor shall pay when due the principal
of, and the interest on, any and all sums required to be paid by Trustor under the Secured
Agreements.
2. Maintenance, Repair, Alterations. Trustor shall keep the Eligible Property
in good condition and repair; to complete promptly and in a good and workmanlike manner all
improvements to be constructed on the Eligible Property, including specifically all improvements
described in the Grant Agreement and the Site Agreement, and promptly restore in like manner
any structure that may be damaged or destroyed thereon; to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws, ordinances, regulations,
covenants, conditions and restrictions now or hereafter affecting the Eligible Property or any part
thereof or requiring any alterations or improvements thereon; not to commit or permit any waste
or deterioration of the Eligible Property; to keep and maintain abutting grounds, sidewalks,
roads, parking and landscape areas in good and neat order and repair; not to commit, suffer or
permit, to the extent Trustor is able by the exercise of commercially reasonable best efforts, any
act to be done in or upon the Eligible Property in violation of any law, ordinance or regulation.
3. Insurance. Trustor shall provide, maintain at its expense and deliver to
Beneficiary at all times until completion in full of all obligations secured hereby, property
insurance covering the Eligible Property, in form appropriate for the nature of the property,
covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the
replacement value, with deductible, if any, acceptable to Beneficiary, naming Beneficiary as a
loss payee, as its interests may appear, and such further insurance as may be required by any of
the Secured Agreements. In the event of any loss or damage, Trustor shall give immediate notice
thereof to Beneficiary, and Beneficiary may thereupon make proof of such loss or damage, if the
same is not promptly made by Trustor. Trustor and Beneficiary hereby agree to cooperate in
making any adjustment and compromise of any loss covered by the aforementioned insurance
policies upon the Eligible Property, and Trustor authorizes and empowers Beneficiary, at its
option, to collect and receive the proceeds, and endorse checks and drafts issued therefor.
Beneficiary agrees that in the event of any loss covered by insurance policies on the Eligible
Property subject to this Deed of Trust, provided there is not then existing any material default (or
such existing default will be cured by the proceeds of such insurance) in the observance or
performance of any of the covenants and agreements contained herein or in the Secured
Agreements, or in any other agreement with or for the benefit of the Beneficiary in connection
with any obligation secured hereby, the proceeds of such insurance shall be used for the repair or
4
restoration of the Eligible Property and will be disbursed in accordance with such protective
terms and conditions as Beneficiary may reasonably impose.
Trustor hereby fully assigns to Beneficiary all current and future claims it may
have under any policy of insurance related to the Eligible Property, regardless of whether such
insurance was required to be maintained under the Secured Agreements. Any and all unexpired
insurance shall inure to the benefit of and pass to the purchaser of the Eligible Property at any
foreclosure sale pursuant hereto.
Further, Beneficiary may at any time in its sole discretion require Trustor to
submit satisfactory evidence of insurance policies obtained pursuant to this Paragraph 3 and of
Trustor's compliance with all the provisions of said policies.
4. Lawsuits. Trustor shall appear in and defend, with counsel selected by
Beneficiary, or otherwise take such action therein as Beneficiary and Trustee or either of them
may deem advisable with respect to any action or proceeding affecting the Eligible Property to
which Beneficiary or Trustee may be a party.
5. Beneficiary Statement. Trustor shall pay all charges for all legal fees or
court costs and expenses which Beneficiary may elect to advance in order to keep unimpaired,
protect, and preserve the title to the Eligible Property or the improvements thereon; and to pay
for any statement provided for by law in effect at the date hereof regarding the obligations
secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed
by law at the time when said statement is demanded.
6. Condemnation. All judgments, awards of damages and settlements,
hereafter made as a result of or in lieu of any condemnation or other proceedings for public use
of, or for any damage to, the Eligible Property or the improvements thereon, are hereby assigned
to Beneficiary. If (i) Trustor is not then in material default hereunder (or such default will be
cured with the proceeds from the foregoing), and (ii) the taking is a partial taking, all proceeds
for taking of or damage to the Eligible Property shall be applied to restoring the Eligible
Property, if practicable, as reasonably determined by Beneficiary. In the event (i) Trustor is then
in material default hereunder (and such default will not be cured with the proceeds of the
foregoing), (ii) the taking is a total taking, or (iii) the taking is a partial taking and Beneficiary
has reasonably determined that restoration of the Eligible Property is not practicable, the
proceeds shall be paid to Beneficiary to the extent of those monies due and owing from Trustor
to Beneficiary under any of the Secured Agreements, and Beneficiary is hereby authorized to
receive such monies. Trustor agrees to execute such further assignments of any such award,
judgment or settlement which may be received by Trustor. Beneficiary may apply any and all
such sums to the obligations secured hereby in such manner as it elects or, at its option, the entire
amount so received by it or any part thereof may be released. Neither the application nor the
release of any such sums shall cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
7. Permitted Acts of Beneficiary. Without affecting the liability of any
person, including Trustor (other than any person released pursuant hereto), for the payment of
any indebtedness secured hereby, Beneficiary is authorized and empowered as follows:
Beneficiary may at any time, and from time to time, either before or after the maturity of the
obligations secured hereby, and without notice (a) release any person liable for the payment of
any of the indebtedness, (b) make any agreement extending the time or otherwise altering the
terms of payment of any of the indebtedness, (c) accept additional security therefor of any kind,
or (d) release any properly, real or personal, securing the indebtedness.
8. Reconveyance of Eligible Property. Upon written request of Beneficiary
stating that all sums secured hereby have been paid and all obligations secured hereby have been
performed, and upon surrender of this Deed of Trust to Trustee for cancellation and retention,
and upon payment of its fees, Trustee shall reconvey, without warranty, the Eligible Property
then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive
proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the
person or persons legally entitled thereto."
9. Default and Trustee's Sale. Upon the occurrence of an "Event of Default"
under this Deed of Trust (as defined in Section 17 below) Beneficiary may declare all principal
remaining unpaid, all interest then earned and remaining unpaid, and all sums other than
principal or interest secured hereby, immediately due and payable, may require immediate
performance of all other obligations secured hereby, and may proceed to exercise the power of
sale granted by this Deed of Trust by delivery to Trustee of written declaration of default and
demand for sale and of written notice of default and of election to cause to be sold said Eligible
Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit
with Trustee this Deed of Trust and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the
recordation of said notice of default, Trustee shall cause a notice of sale to be published, posted,
mailed, and recorded as required by statute. Said notice of sale shall contain the notice:
"NOTICE: THIS PROPERTY IS ENCUMBERED BY AFFORDABILITY COVENANTS";
however, failure to include said notice shall not affect the validity of any publication, posting, or
mailing of said notice of sale or the validity of any sale based thereon. Thereafter, within the
time and in the manner required by statute Trustee, without demand on Trustor, shall sell the
Eligible Property at the time and place fixed by it in said notice of sale, either as a whole or in
separate parcels, and in such order as it may determine, at public auction to the highest bidder for
cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of
all or any portion of the Eligible Property by public announcement at such time and place of sale,
and from time to time thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying
the Eligible Property so sold, but without any covenant or warranty, express or implied. Said
deed shall contain the notice: "NOTICE: THIS PROPERTY IS ENCUMBERED BY
AFFORDABILITY COVENANTS"; however, failure to include said notice shall not affect the
validity of any sale. The recitals in such deed of any matters or facts shall be conclusive proof
of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase
at such sale.
on
After deducting all costs, fees and expenses of Trustee, including cost of evidence
of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: first, all
sums expended by Beneficiary under the terms hereof or under any of the Secured Agreements
and not then repaid, with accrued interest as specified in said agreements; second, all other sums
then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
10. Substitute Trustees. Beneficiary, or any successor in ownership of any
obligation secured hereby, may from time to time, by instrument in writing, substitute a
successor or successors to any Trustee named herein or acting hereunder, which instrument,
executed by Beneficiary and duly acknowledged and recorded in the Office of the Recorder of
the County of San Bernardino, and otherwise complying with the provisions of California Civil
Code Section 2934a, or any successor section, shall be conclusive proof of proper substitution of
such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor,
succeed to all its title, estate, right, powers and duties. Said instrument must contain the name of
the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of
Trust is recorded, and the name and address of the new Trustee.
11. Successors Bound. This Deed of Trust applies to, inures to the benefit of,
and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors,
assigns, trustees and receivers. In this Deed of Trust, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes the
plural.
12. Evidence of Title. If, because of any default hereunder, or because of the
filing or contemplated filing of any legal proceedings affecting the Eligible Property, Beneficiary
deems it necessary to obtain an additional evidence of title or to cure any defect in title,
Beneficiary may procure such evidence or cure such defect, pay the cost thereof, and shall have
an immediate claim against Trustor therefor, together with a lien upon the Eligible Property for
the amount so paid, with interest as permitted by law. Beneficiary is further authorized to
require an appraisal of the Eligible Property at any time that Beneficiary may reasonably request.
13. Statute of Limitations. The pleading of any statute of limitations as a
defense to any and all obligations secured by this Deed of Trust is hereby waived by Trustor, to
the full extent permissible by law.
14. Severability. The invalidity of any one or more covenants, phrases,
clauses, sentences, paragraphs or sections of this Deed of Trust shall not affect the remaining
portions of this Deed of Trust or any part hereof and this Deed of Trust shall be construed as if
such invalid covenants, phrases, sentences, paragraphs or sections, if any, had not been inserted
herein.
14. Order of Application. If any obligation secured hereby is now or hereafter
becomes further secured by a security agreement, deed of trust, pledge, contract of guaranty or
other securities in addition to the security provided to Beneficiary by this Deed of Trust,
Beneficiary may to the full extent allowed by law, at its option, exhaust any one or more of said
securities as well as the security hereunder, either concurrently or independently and in such
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order as it may determine, and may apply the proceeds received upon the obligations secured
hereby without affecting the status of, or waiving any right to exhaust, all or any other security
including the security thereunder, and without waiving any breach or default in any right or
power, whether exercised hereunder or contained herein, or in any such other security.
156. Covenants of Trustor.
a. Audit by State and/or Federal Agencies. In the event this Deed of
Trust or any agreement executed in connection herewith is subjected to audit, monitoring or
other inspections by any appropriate state and/or federal agency, Trustor shall comply with such
investigations and pay, on behalf of itself and Beneficiary, any amount of the cost to the
investigating agency of such investigations as may be required by law (unless such investigation
and any resulting liability arise solely from the gross negligence or willful misconduct of
Beneficiary).
b. Proeram Evaluation and Review Trustor shall allow Beneficiary's
authorized personnel to inspect and monitor its facilities and program operations as they relate to
the Eligible Property, including the interviewing of Trustor and other program participants, as
reasonably required by Beneficiary during the term of the Affordable Housing Covenant or any
agreement executed in connection therewith.
167. Default. Trustor shall be in default under this Deed of Trust upon any of
the following events which, if not cured within the applicable cure period provided, if any, shall
constitute an event of default hereunder ("Event of Default"):
a. The failure of Trustor to pay or perform any monetary covenant or
obligation hereunder or under the terms of any of the Secured Agreements or any document
executed in connection therewith, without curing such failure within ten (10) calendar days the
date such payment is due.
b. The failure of Trustor to perform any nonmonetary covenant or
obligation hereunder or under the terms of any of the Secured Agreements or any document
executed in connection therewith, without curing such failure within thirty (30) calendar days
after receipt of written notice of such default from Beneficiary (or from any party authorized by
Beneficiary to deliver such notice as identified by Beneficiary in writing to Trustor) specifying
the nature of the event or deficiency giving rise to the default and the action required to cure such
deficiency; provided, however, that if any default with respect to a nonmonetary obligation is
such that it cannot be cured within a 30 -day period, it shall be deemed cured if Trustor
commences the cure within said 30 -day period and diligently prosecutes such cure to completion
thereafter. Notwithstanding anything herein to the contrary, the herein described notice
requirements and cure periods shall not apply to any Event of Default described in Section 17(c)
through 17(g) below;
C. The material falsity of any representation, or the breach of any
warranty or covenant, made by Trustor under the terms of this Deed of Trust, the Secured
Agreements, or any other document executed in connection therewith;
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d. Trustor, or any constituent member or partner or majority
shareholder of Trustor, shall (i) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to
pay its debts generally as they become due, (iii) make a general assignment for the benefit of
creditors, (iv) be adjudicated a bankrupt or insolvent or (v) commence a voluntary case under the
federal bankruptcy laws of the United States of America or file a voluntary petition that is not
withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with
creditors or an order for relief or seeking to take advantage of any insolvency law or file an
answer admitting the material allegations of a petition filed against it in any bankruptcy or
insolvency proceeding;
C. If without the application, approval or consent of Trustor, a
proceeding shall be instituted in any court of competent jurisdiction, under any law relating to
bankruptcy, in respect of Trustor or any constituent member or partner or majority shareholder of
Trustor, for an order for relief or an adjudication in bankruptcy, a composition or arrangement
with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or
custodian or the like of Trustor or of all or any substantial part of Trustor's assets, or other like
relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being
contested by Trustor, in good faith, the same shall (i) result in the entry of an order for relief or
any such adjudication or appointment, or (ii) continue undismissed, pending, and unstayed, for
any period of ninety (90) consecutive days;
f. Trustor shall suffer or attempt to effect a "Transfer" (as defined in
Section 30 below) other than in full compliance with the terms of this Deed of Trust; or
g. Trustor shall be in default under the Affordable Housing Covenant,
unless the default is cured or waived within the cure period, if any, applicable thereto under the
terms of the obligation which is in default.
18. Breach by Trustor, Cure by Beneficiary or Trustee. in the event of
Trustor's failure to comply with any or all of the promises and agreements set forth in this Deed
of Trust and the Secured Agreements or to make any payment or to do any act as provided in this
Deed of Trust or the Secured Agreements, then Beneficiary or Trustee, but without obligation to
do so and without notice to or demand upon Trustor and without releasing Trustor from any such
obligation, may make or do the same in such manner and to such extent as either in its sole
judgment may deem necessary to protect the security hereof (including, without limitation, to
procure insurance and pay the premiums therefor; to pay unpaid water rents, sewer service
charges, and other governmental or municipal charges and rates, and all or any part of the unpaid
taxes, assessments, and reassessments, if in its judgment the same are just and valid; to pay the
cost of appraisals, reappraisals, and extensions of title; to enter or have its agents enter upon the
Eligible Property whenever reasonably necessary for the purpose of inspecting the Eligible
Property or making repairs or installations as it deems necessary to preserve the Eligible Property
or to protect the same from vandalism, without thereby becoming liable as a trespasser or
mortgagee or beneficiary in possession, and to pay for such repairs and installations).
Beneficiary and Trustee are hereby authorized to enter upon the Eligible Property for such
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purposes; to appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears to be prior or superior
hereto; and, in exercising any such powers, to pay necessary expenses, employ counsel of its
choice, and pay the reasonable fees of such counsel. Trustor agrees to pay immediately and
without demand all sums so expended by Beneficiary or Trustee, with interest from the date of
expenditure at the amount allowed by law in effect at the date hereof, and agrees that Beneficiary
or Trustee, as the case may be, shall have a lien upon the Eligible Property for the sums so
expended and such interest thereon.
179. Personal Pro pert N Security A eement. All property covered by this Deed
of Trust shall be deemed to constitute real property or interests in real property to the maximum
extent permitted under applicable law. To the extent that any tangible property, equipment or
other property covered by this Deed of Trust constitutes personal property, such personal
property shall constitute additional security. This Deed of Trust shall create in Beneficiary a
security interest in such personal property and shall in respect thereof constitute a security
agreement (the "Personal Property Security Agreement"). Beneficiary shall be entitled to all of
the rights and remedies in respect of any personal property included in the Eligible Property
covered by this Deed of Trust that are afforded a secured party under the Uniform Commercial
Code and other applicable law. At Beneficiary's request, Trustor will at any time and from time
to time furnish Beneficiary for filing financing statements signed by Trustor in form satisfactory
to Beneficiary. Trustor acknowledges and agrees that thirty (30) days' notice as to the time,
place and date of any proposed sale of any personal property shall be deemed reasonable for all
purposes. Trustor agrees that the Security Agreement created hereby shall survive the
termination or reconveyance of this Deed of Trust unless Beneficiary executes documentation
expressly terminating the Personal Property Security Agreement.
180. Assumption of Liability. Except as provided in Section 30, the
assumption of liability for the performance of the obligations hereby secured, by any successor
in interest to Trustor in the Eligible Property shall not release Trustor from any liability Trustor
has hereunder or under the other Secured Agreements for the performance of such obligations or
the repayment of any sums advanced under and secured by this Deed of Trust. Any forbearance
or indulgence of Beneficiary, or extensions of time for the performance of all or any part of the
obligations secured hereby, or the release of a part of the Eligible Property from the lien of this
Deed of Trust, for or without consideration, shall not in any manner diminish or reduce the
liability of Trustor (subject to the nonrecourse provisions of Section 24) for the performance of
the obligations now or hereafter secured hereby. Any payment made in satisfaction of any such
obligation shall be deemed to have been made on behalf and for the benefit of all parties
obligated to pay the same.
191. Future Advances. Upon the request of Trustor or its successor in
ownership of the Eligible Property, Beneficiary may, at its option, advance funds to Trustor or its
successors in ownership, and the sums advanced, with interest as permitted by law, shall be
secured by this Deed of Trust. If Beneficiary, at its option, shall make an advance as aforesaid,
Trustor or its successors in ownership agree to execute and deliver to Beneficiary a note to
evidence the same, payable on such terms as Beneficiary shall require.
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Trustor further acknowledges and agrees that to secure the payment of any such
future advances Beneficiary shall also have a lien upon all other personal property and securities
now or hereafter in its possession belonging to Trustor; that all rights, powers and remedies con-
ferred upon Beneficiary herein are in addition to each and every other right which Beneficiary
has hereunder; that all rights, powers and remedies conferred upon Beneficiary in equity or by
law may be enforced concurrently therewith; that Beneficiary shall be subrogated to the rights
and seniority of any prior lien paid or released by reason of any such future advances; and that
each and all of the covenants, agreements, and provisions hereof shall bind and inure to the
benefit of the respective heirs, executors, administrators, successors, and assigns of Trustor and
Beneficiary herein, and all others who subsequently acquire any right, title, or interest in the
Eligible Property, or to this Deed of Trust and the indebtedness secured hereby.
20. Cantions. The captions of the sections of this Deed of Trust are for
convenience only and shall not be considered in resolving questions of interpretation or
construction.
213. Estoppel Certificates. Trustor shall from time to time at Beneficiary's
request furnish Beneficiary or any person designated by Beneficiary a certified statement in form
reasonably satisfactory to Beneficiary confirming as of the date of the certificate Trustor is not in
default hereunder (or describing any default), and stating that Trustor has no defense, right of
setoff or counterclaim in the payment of any indebtedness, or any part thereof, or the observance
or performance of any obligation (or describing any such defense, set off or counterclaim). Any
purchaser or assignee of any of the Secured Agreements or this Deed of Trust or any interest
therein may rely on such certificate.
24. Obligation Nonrecourse. Except to the extent any Event of Default
hereunder results directly or indirectly from any fraud or intentional and material
misrepresentation by Trustor in connection with the Secured Agreements, the Secured
Agreements are nonrecourse obligations of Trustor and in the event of the occurrence of an
Event of Default, Beneficiary's only recourse under this Deed of Trust shall be against the
Eligible Property, the proceeds thereof, the rents and other income arising from its use and
occupancy as provided in this Deed of Trust, and any other collateral given to Beneficiary as
security for performance of the Secured Agreements.
25. Fixture Filing. This Deed of Trust is also a fixture filing with respect to
the personal property which is or is to become fixtures on the Eligible Property, and is to be
recorded in the real property records of San Bernardino County, California.
26. Assignment of Rents. All of the existing and future rents, royalties,
income, and profits of the Eligible Property that arise from its use or occupancy are hereby
absolutely and presently assigned to Beneficiary. However, until Trustor is in default under this
Deed of Trust, Trustor will have a license to collect and receive those rents, royalties, income
and profits. Upon any Event of Default by Trustor, Beneficiary may terminate Trustor's license
in its discretion, at any time, without notice to Trustor, and may thereafter collect the rents,
royalties, income and profits itself or by an agent or receiver. No action taken by Beneficiary to
11
collect any rents, royalties, income or profits will make Beneficiary a "mortgagee -in -possession"
of the Eligible Property, unless Beneficiary personally or by agent enters into actual possession
of the Eligible Property. Possession by a court-appointed receiver will not be considered
possession by Beneficiary. All rents, royalties, income and profits collected by Beneficiary or a
receiver will be applied first to pay all expenses of collection, and then to the payment of all
costs of operation and management of the Eligible Property, and then to the satisfaction of the
debts and obligations secured by the Deed of Trust in whatever order Beneficiary directs in its
absolute discretion and without regard to the adequacy of its security. If required by Beneficiary,
each lease or occupancy agreement affecting any of the Eligible Property must provide, in a
manner approved by Beneficiary, that the tenant will recognize as its lessor any person
succeeding to the interest of Trustor upon any foreclosure of this Deed of Trust. The expenses
(including any receivers' fees, costs of and compensation to any agent appointed by Beneficiary,
counsel fees, and disbursements) incurred in taking possession and making such collection, shall
be deemed a portion of the obligations secured by this Deed of Trust. The entering upon and
taking possession of the Eligible Property, and/or the collection of such rents, issues and profits
and the application thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice. Beneficiary may exercise any one
or more of the remedies in this section without waiving its right to exercise any such remedies
again or for the first time in the future. The foregoing shall be subject to the provisions of
applicable law.
27. Applicable Law. This Deed of Trust shall be governed by, and construed
in accordance with, the laws of the State of California.
28. Approvals. Except with respect to those matters set forth hereinabove
providing for Beneficiary's approval, consent or determination to be at Beneficiary's "sole
discretion" or "sole and absolute discretion," Beneficiary hereby agrees to act reasonably with
regard to any approval, consent, or other determination given by Beneficiary hereunder.
Beneficiary agrees to give Trustor written notice of its approval or disapproval following
submission of items to Beneficiary for approval, including, in the case of any disapproved item,
the reasons for such disapproval. Any consent to a transfer under Section 30 of this Deed of
Trust, and any other consent or approval by Beneficiary under this Deed of Trust or any of the
Secured Agreements may be given by Beneficiary's City Manager or his or her designee without
action of Beneficiary's governing board unless the City Manager or his or her designee in his or
her sole discretion elects to refer the matter to the board.
29. Good Faith and Fair Dealing. Beneficiary and Trustor agree to perform all
of their obligations and the actions required of each hereunder in good faith and in accordance
with fair dealing.
30. Assignment of Interest.
a. Without the prior written approval of Beneficiary, which approval
Beneficiary may grant or withhold in its sole and absolute discretion, Trustor shall not (i) sell,
encumber, assign or otherwise transfer (collectively, "Transfer") all or any portion of its interest
in the Eligible Property; (ii) permit the Transfer of any portion of its ownership and/or control; or
12
(iii) Transfer any of its rights or obligations under the Secured Agreements. Trustor hereby
agrees that any purported Transfer not approved the Beneficiary as required herein shall
be ab initio null and void, and no voluntary or involuntary successor to any interest of Trustor
under such a proscribed Transfer shall acquire any rights pursuant to the Secured Agreements or
this Deed of Trust.
b. At any time Trustor desires to effect a Transfer hereunder, Trustor
shall notify Beneficiary in writing (the "Transfer Notice") and shall submit to Beneficiary for its
prior written approval (i) all proposed agreements and documents (collectively, the "Transfer
Documents") memorializing, facilitating, evidencing and/or relating to the circumstances sur-
rounding such proposed Transfer, and (ii) a certificate setting forth representations and
warranties by Trustor and the proposed transferee to Beneficiary sufficient to establish and
ensure that all requirements of this Section 30 have been and will be met. No Transfer
Documents shall be approved by Beneficiary unless they expressly provide for the assumption
by the proposed transferee of all of Trustor's obligations under the Secured Agreements and this
Deed of Trust. The Transfer Notice shall include a request that Beneficiary consent to the
proposed Transfer and shall also include a request that Trustor be released from further
obligations under the Secured Agreements and this Deed of Trust. Beneficiary agrees to make
its decision on Trustor's request for consent to such Transfer as promptly as possible, and in any
event not later than thirty (30) calendar days after Beneficiary receives the last of the items
required by this Section 30. In the event Beneficiary consents to a proposed Transfer, then such
Transfer shall not be effective unless and until Beneficiary receives copies of all executed and
binding Transfer Documents, which Transfer Documents shall conform to the proposed Transfer
Documents originally submitted by Trustor to Beneficiary. From and after the effective date of
any such Transfer, Trustor shall be released from its obligations under this Deed of Trust and the
Secured Agreements accruing subsequent to such effective date.
C. Notwithstanding anything in this Deed of Trust to the contrary,
Trustor agrees that it shall not be permitted to make any Transfer, whether or not Beneficiary's
consent is required therefor and even if Beneficiary has consented thereto, if there exists an
Event of Default under this Deed of Trust at the time the Transfer Notice is tendered to
Beneficiary or at any time thereafter until such Transfer is to be effective.
d. The provisions of this Section 30 shall apply to each successive
Transfer and proposed transferee in the same manner as initially applicable to Trustor under the
terms set forth herein.
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IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the
date first above written.
Date:
TRUSTOR:
CITY OF SAN BERNARDINO
Date: By:
Andrea M. Miller, City Manager
14
ATTACHMENT 1 TO DEED OF TRUST
Legal Description
Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
APN:
Address: , San Bernardino, CA
15
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed under the foregoing Deed of Trust
from [name of Trustor] to the City of San Bernardino ("City"), a municipal corporation, as to the
following property is hereby accepted:
Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
[legal description]
APN:
This acceptance is made by the City Manager of the City on behalf of the City pursuant to
authority conferred by action of the Mayor and City Council by Resolution No. _, and the City
as grantee consents to recordation of this Certificate by its duly authorized officer.
CITY OF SAN BERNARDINO
Dated: , 2018 By:
ATTEST:
City Clerk
16
City Manager
Attachment I to Master Agreement
Qualified Homebuyer Housing Affordability Covenant form
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Bernardino
290 North "D" Street, Third Floor
San Bernardino, CA 92401
Attn: Housing Division
Attachment "I"
(Space Above Line Reserved For Use By Recorder)
Recordation of this Instrument is exempt
from all fees and taxes pursuant to
Government Code Section 6103
HOME PROGRAM HOUSING AFFORDABILITY COVENANTS AND
RESTRICTIONS
City of San Bernardino Infill Housing Development Program — HOME Funds
These HOME Program Housing Affordability Covenants and Restrictions (collectively
referred to herein as this "Affordable Housing Covenant") are made and entered into as of
by and between the City of San Bernardino, a municipal corporation ("City"), and
Housing Partners I, Incorporated, a California nonprofit corporation ("Developer"). This
Affordable Housing Covenant relates to the following facts:
--- RECITALS ---
A. City and Developer are parties to that certain HOME Investment Partnerships
Program (HOME) Infill Housing Development Grant Agreement ("Grant Agreement") dated
, and that certain Site Agreement ("Site Agreement") dated
B. Under the terms and conditions of the Grant Agreement and the Site Agreement,
Developer shall acquire from City, or acquire with funds provided by City pursuant to the
HOME Investment Partnerships Program, 24 C.F.R. Part 92 ("HOME"), in an amount not to
exceed DOLLARS ($ ), property for the
purpose of developing the affordable housing unit described in the Site Agreement (the
"Project"). The Project will be developed on a site legally described on Exhibit "A" to this
Affordable Housing Covenant (the "Eligible Property").
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set
forth herein, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, City and Developer do hereby covenant and agree for themselves,
their successors and assigns, as follows:
Section 1. Definitions of Certain Terms. As used in this Affordable Housing
Covenant, the following words and terms shall have the meaning as provided in this Section 1
unless the specific context of usage of a particular word or term may otherwise require:
Adjusted Family Income. The words "Adjusted Family Income" mean and refer to the
total "annual income," as this term is defined in HOME Final Rule, 24 C.F.R. Part
92.203, for each individual or household residing or treated as residing in an Eligible
Property.
Affordable Housing Cost. The words "Affordable Housing Cost" mean and refer to a
purchase price determined using the criteria set forth in 24 C.F.R. Part 92.254(a)(2), i.e.,
not exceeding 95 percent of the median purchase price for the area.
Code. The word "Code" means the Internal Revenue Code of 1986, as amended, and any
regulation, rulings or procedures with respect thereto.
Delivery Date. The words "Delivery Date" mean and refer to the date of delivery of title
and possession of the Eligible Property to the Qualified Homebuyer at the close of the
Sale Escrow.
Eligible Property. The words "Eligible Property" mean and refer to an infill housing
property constructed or reconstructed by Developer, including the blighted or
underutilized site acquired and the single family dwelling constructed or reconstructed on
the site, as described in the Grant Agreement, and which conforms to all of the other
requirements set forth in the Grant Agreement.
HOME Funds. The words "HOME Funds" mean and refer to funds received by City
from the United States Department of Housing and Urban Development ("HUD") under
the HOME program and provided by City to Developer for the purpose of acquiring,
constructing and selling Eligible Properties to Qualified Homebuyers.
Laws. The word "Laws" means and refers to all federal, state, municipal, local and
governmental authority laws, statutes, codes, ordinances, rules, regulations, and orders,
now or hereafter in effect, and as may be amended, replaced or substituted from time to
time.
Low -Income Household. The words "Low -Income Household" mean and refer to
persons and households whose income does not exceed 80% percent of area median
income ("AMP'), adjusted for household size, as set forth in HOME Final Rule 24 C.F.R.
Part 92.2.
Notice of Affordability Restrictions. The words "Notice of Affordability Restrictions"
mean and refer to the Notice of Affordability Restrictions on sale, conveyance, transfer or
2
assignment of an Eligible Property executed by the Qualified Homebuyer and City in
connection with the Sale Agreement. The Notice of Affordability Restrictions shall be
duly notarized and recorded in the Official Records of the County Recorder's Office for
the County of San Bernardino, State of California.
Notice of Concurrence. The words "Notice of Concurrence" mean and refer to the
acknowledgment in recordable form in which the City confirms that the proposed
Qualified Successor -In -Interest of the Qualified Homebuyer satisfies all of the Adjusted
Family Income and other requirements of this Affordable Housing Covenant for
ownership and occupancy of the Eligible Property by the Qualified Successor -In -Interest
at any time during the Qualified Residence Period.
Project CC&Rs. The words "Project CC&Rs" mean and refer to all covenants,
conditions and restrictions, if any, affecting and applicable to and relating to the Eligible
Property, as amended from time to time.
Qualified Homebuyer. The words "Qualified Homebuyer" mean the purchaser of the
Eligible Property, i.e., all persons identified as having a property ownership interest
vested in the Eligible Property at the close of the Sale Escrow. At the close of the Sale
Escrow, the Qualified Homebuyer shall: (i) have an annual Adjusted Family Income
which does not exceed the household income qualification limits of a Low -Income
Household under HOME Final Rule 24 C.F.R. Part 92.2; and (ii) pay no more than an
Affordable Housing Cost for the Eligible Property pursuant to the terms of the purchase
transaction for the Eligible Property, including all sums payable by the Qualified
Homebuyer for its purchase money mortgage financing, insurance, escrow and other fees
and costs.
Qualified Residence Period. The words "Qualified Residence Period" mean and refer
to the period of time beginning on the Delivery Date and ending on the date which is
fifteen (15) years after the Delivery Date.
Qualified Successor -In -Interest. The words "Qualified Successor -In -Interest" mean
and refer to the person or household which may acquire the Eligible Property from the
Qualified Homebuyer at any time during the Qualified Residence Period by purchase,
assignment, transfer or otherwise. The Qualified Successor -In -Interest shall have an
income level which does not exceed the maximum income level for a Low -Income
Household as applicable to the Qualified Homebuyer under the Sale Agreement, and the
Qualified Successor -In -Interest shall agree to own and occupy the Eligible Property as its
principal residence. Upon acquisition of the Eligible Property, the Qualified Successor -
In -Interest shall be bound by each of the covenants, conditions and restrictions of the
Affordable Housing Covenant to be executed by and between City and the Qualified
Homebuyer with respect to the Eligible Property.
Sale Agreement. The words "Sale Agreement" mean and refer to a standard California
Association of Realtors California Residential Purchase Agreement and Joint Escrow
Instructions, as modified by any addenda required by City, or a substantially equivalent
purchase and sale agreement, by and between Developer as seller and the Qualified
Homebuyer as purchaser of the Eligible Property, as amended from time to time. City
shall be a third -parry beneficiary of such Sale Agreement.
Sale Escrow. The words "Sale Escrow" mean and refer to a real estate conveyance
transaction or escrow by and between Developer as seller and the Qualified Homebuyer
as purchaser of the Eligible Property. The transfer of the Eligible Property to the
Qualified Homebuyer shall be accomplished upon the close of the Sale Escrow.
The titles and headings of the sections of this Affordable Housing Covenant have been
inserted for convenience of reference only and are not to be considered a part hereof and shall
not in any way modify or restrict the meaning of any of the terms or provisions hereof.
Section 2. Use of the Elieible Property
Developer shall construct or reconstruct on the Eligible Property a single-family detached
home, to be occupied and owned by persons or households whose income is equal to or below
80% of AMI and that meet all of the other requirements to be a Qualified Homebuyer or a
Qualified Successor -in -Interest as those terms are defined in Section 1.
Section 3. Covenants of Develo er.
(a) Upon completion of the construction or reconstruction of the Eligible Property,
Developer shall sell the Eligible Property to a Qualified Homebuyer at an Affordable Housing
Cost for use and occupancy as the Qualified Homebuyer's principal residence during the
Qualified Residence Period, to which use and occupancy the Qualified Homebuyer must agree as
a condition of the sale. As a condition of the sale, Developer shall require that that Qualified
Homebuyer agree to execute an Affordable Housing Covenant in favor of City, that the Qualified
Homebuyer shall not sell the Eligible Property during the Qualified Residence Period except to a
Qualified Successor -In -Interest at an Affordable Housing Cost. Developer shall confirm to City,
and shall permit City to verify, that the proposed Qualified Homebuyer satisfies the income
requirements for a Low -Income Household based on Adjusted Family Income, that the proposed
sale price satisfies the Affordable Housing Cost limitations, and that the Qualified Homebuyer
has agreed to the sale conditions set forth in this Section 3.
(b) Developer agrees to provide City with the following items of information for
inspection by City or its contracted designee prior to any sale by Developer of the Eligible
Property, promptly upon written request of City:
(i) State and federal income tax returns for the calendar year preceding the close of
the Sale Escrow, filed by all persons who will reside in the Eligible Property;
(ii) Current wage, income and salary statements for all persons who will reside in the
Eligible Property at the close of the Sale Escrow.
El
(c) While it owns the Eligible Property, Developer shall abide by and comply with all
applicable Project CC&Rs, and, at the request of City, shall assign to City the right to enforce the
Project CC&Rs on behalf of Developer.
(d) Also while it owns the Eligible Property, Developer shall enforce all applicable
Project CC&Rs against all individuals and entities, including, without limitation, against all non-
complying members of a homeowner's association, who are subject to, bound by and obligated
to perform and comply with the Project CC&Rs, at Developer's sole cost and expense.
(e) Developer shall not sell the Eligible Property without first giving written notice to
City and obtaining City's written concurrence as provided in Section 3(g). At least sixty (60)
calendar days prior to the date on which Developer proposes to transfer title to the Eligible
Property to a Qualified Homebuyer, Developer shall send a written notice to City, as provided in
Section 14, of Developer's intention to sell the Eligible Property which includes the following
true and correct information:
(i) Name of the proposed Qualified Homebuyer, including the identity of all persons
in the household of the Qualified Homebuyer who propose to reside in the
Eligible Property, together with a completed Qualified Homebuyer Application
Affidavit, as applicable, executed by the proposed Qualified Homebuyer;
(ii) Sale price of the Eligible Property payable by the Qualified Homebuyer, including
the terms of all purchase money mortgage financing to be assumed, provided or
obtained by the Qualified Homebuyer, escrow costs and charges, realtor/broker
fees, and all other sale costs or charges payable by the Qualified Homebuyer;
(iii) Name, address, and telephone number of the escrow company which shall
coordinate the transfer of the Eligible Property from Developer to the Qualified
Homebuyer;
(iv) Appropriate mortgage credit references for the Qualified Homebuyer with a
written authorization signed by the Qualified Homebuyer authorizing City to
contact each such reference; and
(v) such other relevant information as City may reasonably request.
(f) Within thirty (30) calendar days following receipt of notice of Developer's
intention to sell the Eligible Property as described in Section 3(e), City shall provide Developer
with either a preliminary confirmation of approval or a preliminary rejection in writing of the
income and household occupancy qualifications of the Qualified Homebuyer. City shall not
unreasonably withhold approval of any proposed sale of the Eligible Property to a Qualified
Homebuyer who satisfies the Adjusted Family Income and Affordable Housing Cost
requirements for occupancy of the Eligible Property and for whom the other information
described in Sections 3(b) and 3(e) has been provided to City. In the event that City may request
additional information relating to the confirmation of the matters described in Sections 3(b) and
3(e), Developer shall provide such information to City as promptly as feasible.
5
(g) Upon its final confirmation of approval of the Adjusted Family Income and
Affordable Housing Cost eligibility of the Qualified Homebuyer to acquire the Eligible Property,
City shall deliver a written Notice of Concurrence in the sale of the Eligible Property, in
recordable form, to the escrow holder referenced in Section 3(e)(iii) above. Thereafter, the
Qualified Homebuyer may acquire the Eligible Property subject to the satisfaction of the
following conditions:
(i) The recordation of the Notice of Concurrence executed by City, verifying that
Developer and the Qualified Homebuyer in making the sale and purchase have
complied with the requirements of this Affordable Housing Covenant as of the
close of the Sale Escrow; and
(ii) The escrow holder shall have provided City with a copy of the customary form of
final escrow closing statements for Developer and the Qualified Homebuyer; and
(iii) The other conditions of the Sale Escrow as established by Developer and the
Qualified Homebuyer shall have been satisfied.
(h) Developer shall require in connection with the sale of the Eligible Property to the
Qualified Homebuyer that the Qualified Homebuyer agree that it and all of its heirs, successors
and/or assigns shall abide by and comply with all applicable Project CC&Rs and, at the request
of City, shall assign to City on behalf of the Qualified Homebuyer the right to enforce the Project
CC&Rs on behalf of the Qualified Homebuyer.
(i) Developer also shall require in connection with the sale of the Eligible Property to
the Qualified Homebuyer that the Qualified Homebuyer agree that during the Qualified
Residence Period, the Qualified Homebuyer and any heirs, successors and/or assigns shall not
lease, sublease, or rent the Eligible Property to any third person, except for a temporary period
(not to exceed 3 months) in the event of an emergency or other unforeseen circumstance as may
be expressly approved in writing by City subject to compliance during the temporary rental
period with reasonable temporary rental occupancy conditions required by City. The Qualified
Homebuyer shall submit a written request to City at least ten (10) calendar days prior to the
commencement of the temporary occupancy of the Eligible Property by a third party, which
notice shall set forth the grounds on which the Qualified Homebuyer believes an emergency or
other unforeseen circumstance has occurred and that a temporary rental occupancy is necessary.
0
Section 4. Acknowledgment of First Mortsage Lender Financing.
It is expected and acknowledged by City that concurrently with the Delivery Date, the
Qualified Homebuyer shall obtain purchase money mortgage financing for the acquisition of the
Eligible Property from a qualified financial institution ("First Mortgage Lender'). Developer
shall require in connection with the sale of the Eligible Property to the Qualified Homebuyer that
the Qualified Homebuyer agree to provide City with a true and correct copy of the loan
agreement by and between the First Mortgage Lender and the Qualified Homebuyer, prior to the
Delivery Date.
Section 5. Maintenance Condition of the Eligible Property. While it owns the
Eligible Property, Developer shall:
(a) Maintain the exterior areas of the Eligible Property which are subject to public
view (e.g.: all improvements, paving, walkways, landscaping, and ornamentation) in good repair
and in a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at
any time during Developer's ownership of the Eligible Property there is an occurrence of an
adverse condition on any area of the Eligible Property which is subject to public view in
contravention of the general maintenance standard described above (a "Maintenance
Deficiency"), City shall notify Developer in writing of the Maintenance Deficiency and give
Developer thirty (30) calendar days from the date of such notice to cure the Maintenance
Deficiency as identified in the notice. The words "Maintenance Deficiency" include without
limitation the following inadequate or non -confirming property maintenance conditions and/or
breaches of single family dwelling residential property use restrictions:
(i) failure to properly maintain the windows, structural elements, and painted
exterior surface areas of the dwelling unit in a clean and presentable manner;
(ii) failure to keep the front and side yard areas of the property free of
accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts,
or free of storage of lumber, building materials or equipment not regularly in use
on the property;
(iii) failure to regularly mow lawn areas or permit grasses planted in lawn
areas to exceed nine inches (9") in height, or failure to otherwise maintain the
landscaping in a reasonable condition free of weeds and debris;
(iv) parking of any commercial motor vehicle in excess of 7,000 pounds gross
weight anywhere on the property except construction vehicles being used in
construction or reconstruction on the Eligible Property;
(v) parking of motor vehicles, boats, camper shells, trailers, recreational vehicles
and the like in any side yard or on any other parts of the property which are not
covered by a paved and impermeable surface;
7
(vi) use of the garage area of the dwelling unit for purposes other than the parking
of motor vehicles and the storage of construction equipment.
In the event Developer fails to cure or commence to cure the Maintenance Deficiency
within the time allowed, City may thereafter conduct a public hearing following transmittal of
written notice thereof to Developer ten (10) calendar days prior to the scheduled date of such
public hearing in order to verify whether a Maintenance Deficiency exists and whether
Developer has failed to comply with the provisions of this Section 5(a). If, upon the conclusion
of a public hearing, City makes a finding that a Maintenance Deficiency exists and that there
appears to be non-compliance with the general maintenance standard, as described above,
thereafter City shall have the right to enter the Eligible Property (exterior areas only) and
perform all acts necessary to cure the Maintenance Deficiency, or to take such other action at law
or equity City may then have available to it to accomplish the abatement of the Maintenance
Deficiency. Any sum expended by City for the abatement of a Maintenance Deficiency as
authorized by this Section 5(a) shall become a lien on the Eligible Property. If the amount of the
lien is not paid within thirty (30) calendar days after written demand for payment by City to
Developer, City shall have the right to enforce the lien in the manner as provided in Section 5(c).
(b) Graffiti which is visible from any public right-of-way which is adjacent or
contiguous to the Eligible Property shall be removed by Developer from any exterior surface of a
structure or improvement on the Eligible Property by either painting over the evidence of such
vandalism with a paint which has been color -matched to the surface on which the paint is applied
or by removal with solvents, detergents or water as appropriate. In the event that graffiti is
placed on the Eligible Property (exterior areas only) and such graffiti is visible from an adjacent
or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours
following the time of its application, then in such event and without notice to Developer, City
shall have the right to enter the Eligible Property and remove the graffiti. Notwithstanding any
provision of Section 5(a) to the contrary, any sum expended by City for the removal of graffiti
from the Eligible Property as authorized by this Section 5(b) shall become a lien on the Eligible
Property. If the amount of the lien is not paid within thirty (30) calendar days after written
demand for payment by City to Developer, City shall have the right to enforce its lien in the
manner as provided in Section 5(c).
(c) The parties hereto further mutually understand and agree that the rights conferred
upon City under this Section 5 expressly include the power to establish and enforce a lien or
other encumbrance against the Eligible Property in the manner provided under Civil Code
Sections 2924, 2924b and 2924c in the amount reasonably necessary to restore the Eligible
Property to the maintenance standard required under Section 5(a) or Section 5(b), including,
without limitation, attorneys' fees, court costs and costs of City associated with the abatement of
the Maintenance Deficiency or removal of graffiti and the collection of the costs of City in
connection with such action. In any legal proceeding for enforcing such a lien against the
Eligible Property, the prevailing party shall be entitled to recover its attorneys' fees, court costs
and other costs of suit. The provisions of this Section 5 shall be a covenant running with the land
for the period of Developer's ownership of the Eligible Property and shall be enforceable by City
in its discretion, cumulative with any other rights or powers granted to City under applicable law.
Nothing in the foregoing provisions of this Section 5 shall be deemed to preclude Developer
from making any alterations, additions, or other changes to any structure or improvement or
landscaping on the Eligible Property, provided that such changes comply with the zoning and
development regulations of City and other applicable law.
Section 6. Covenants to Run With the Land. The covenants, reservations and
restrictions set forth herein are part of a plan for the promotion and preservation of affordable
single family housing dwelling units within the territorial jurisdiction of City and each shall be
deemed covenants running with the land and shall pass to and be binding upon the Eligible
Properly for the term provided in Section 8. Developer shall require that the Qualified
Homebuyer assume the duty and obligation to perform each of the covenants and to honor each
of the reservations and restrictions set forth in this Affordable Housing Covenant. Each and
every contract, deed or other instrument hereafter executed covering or conveying the Eligible
Property or any interest therein shall conclusively be held to have been executed, delivered and
accepted subject to such covenants, reservations, and restrictions, regardless of whether such
covenants, reservations and restrictions are set forth in such contract, deed or other instrument.
Section 7. Burden and Benefit. The burden of the covenants set forth herein touches
and concerns the land in that Developer's and the Qualified Homebuyer's legal interests in the
Eligible Property are affected by the affordable single family dwelling use and occupancy
covenants hereunder. The benefit of such covenants touches and concerns the land by enhancing
and increasing the enjoyment and use of the Eligible Property by the intended beneficiaries of
such covenants, reservations and restrictions, by furthering the affordable single family housing
development goals and objectives of City, and by making the Eligible Property available for
acquisition and occupancy by the Qualified Homebuyer.
Section 8. Term.
(a) The provisions of this Affordable Housing Covenant shall apply to the Eligible
Property for the period of Developer's ownership of the Eligible Property, and thereafter for a
term of fifteen (15) years after the Delivery Date.
(b) Any provision or section of this Affordable Housing Covenant may be terminated
after the Delivery Date upon the written agreement of City and the Qualified Homebuyer, if there
shall have been provided to City an opinion of legal counsel that such a termination, under terms
and conditions approved by City in its reasonable discretion, will not adversely affect the
affordable single family housing and development goals and obligations of City.
Section 9. Breach and Default and Enforcement.
(a) Failure or delay by Developer to honor or perform any material term or provision
of this Affordable Housing Covenant shall constitute a breach hereunder; provided, however,
that if Developer commences to cure, correct or remedy the alleged breach within thirty (30)
calendar days after the date of written notice specifying such breach and diligently completes
such cure, correction or remedy, Developer shall not be deemed to be in default hereunder.
OJ
City shall give Developer written notice of breach specifying the alleged breach which if
uncured by Developer within thirty (30) calendar days shall be deemed to be an event of default.
Delay in giving such notice shall not constitute a waiver of any breach or event of default nor
shall it change the time of breach or event of default; provided, however, that City shall not
exercise any remedy for an event of default hereunder without first delivering the written notice
of breach as specified in this Section 9.
Except with respect to rights and remedies expressly declared to be exclusive in this
Affordable Housing Covenant, the rights and remedies of City are cumulative with any other
right or power of City or other applicable law, and the exercise of one or more of such rights or
remedies shall not preclude the exercise by City at the same or different times of any other right
or remedy for the same breach or event of default.
If a breach by Developer remains uncured for more than thirty (30) calendar days
following written notice, as provided above, an event of default shall be deemed to have
occurred. In addition to the remedial provisions of Section 5 as related to a Maintenance
Deficiency at the Eligible Property, upon the occurrence of any event of default City shall be
entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows:
(i) by mandamus or other suit, action or proceeding at law or in equity, to require
Developer to perform its obligations and covenants hereunder, or enjoin any acts
or things which may be unlawful or in violation of the rights of City; or
(ii) by other action at law or in equity as necessary or convenient to enforce the
obligations, covenants and agreements of Developer to City.
(b) Except as set forth in the next sentence, no third party shall have any right or
power to enforce any provision of this Affordable Housing Covenant on behalf of City or to
compel City to enforce any provision of this Affordable Housing Covenant against Developer or
the Eligible Property. However, City may assign the right and power to enforce the provisions of
this Affordable Housing Covenant against Developer or the Eligible Property to a successor
administration agency under the HOME program.
Section 10. Governing. This Affordable Housing Covenant shall be governed by
the laws of the State of California and by federal law relating to the HOME program, as
applicable.
Section 11. Amendment. This Affordable Housing Covenant may be amended only by
a written instrument executed by Developer and City.
Section 12. Severability. If any provision of this Affordable Housing Covenant is
declared invalid, inoperative or unenforceable by a final judgment or decree of a court of
competent jurisdiction, such invalidity or unenforceability shall not affect the remaining parts of
this Affordable Housing Covenant which are hereby declared by the parties to be severable from
any other part which is found by a court to be invalid or unenforceable.
10
Section 13. Time is of the Essence. For each provision of this Affordable Housing
Covenant which states a specific amount of time within which the requirements thereof are to be
satisfied, time shall be deemed to be of the essence.
Section 14. Notice. Any notice required to be given under this Affordable Housing
Covenant shall be given by City, as applicable, by personal delivery or by First Class United
States mail at the addresses specified below or at such other address as may be specified in
writing by the parties hereto:
If to City: City of San Bernardino, Inc.
290 North "D" Street, Third Floor
San Bernardino, CA 92401
Attn: Housing Division
If to Developer: Housing Partners I, Incorporated
715 East Brier Drive
San Bernardino, California 92408
Attn:
Notice shall be deemed given five (5) calendar days after the date of mailing to the party, or, if
personally delivered, when received by the authorized representative of City, as applicable.
Section 15. Deed of Trust. Developer's performance of this Affordable Housing
Covenant is secured by that certain Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing of even date executed by and between Developer and City with respect to the
Eligible Property.
Section 16. Entire Agreement. Except as to matters set forth in the other agreements to
which reference is made herein, this Affordable Housing Covenant is the parties' entire
agreement with respect to the matters set forth herein and supersedes all prior negotiations and
oral or written agreements or expressions of the parties with respect thereto.
IN WITNESS WHEREOF, City has caused this Affordable Housing Covenant to be
signed, acknowledged and attested on its behalf by duly authorized representatives in counterpart
original copies which shall upon execution by all of the parties be deemed to be one original
document.
Date:
City of San Bernardino
LE
Andrea M. Miller, City Manager
11
Housing Partners I, Incorporated
Date: By
12
EXHIBIT "A"
Legal Description
Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
I\_ UZ�
Address: San Bernardino, CA
13
Attachment J to Master Agreement
Affirmative Marketing Requirements
Affirmative Fair Housing
Marketing Guide
City of San Bernardino Department of Housing
TABLE OF CONTENTS
UNDERSTANDING AFFIRMATIVE MARKETING................................................................. 1
OVERVIEWOF THE AFHM PLAN............................................................................................
2
THE AFFIRMATIVE FAIR HOUSING MARKETING PLAN (Form AFHM HUD -935.2B)...
4
PART 1: Description of the Applicant and the Project...............................................................
4
PART2: Type of Marketing Plan...............................................................................................
5
PART 3: Direction of Marketing Activity..................................................................................
5
PART4: The Marketing Program...............................................................................................
6
PART4a: Commercial Media.....................................................................................................
6
PART 4b: Brochures, Signs and the HUD and/or local Fair Housing Poster .............................
7
PART 4c: Community Contacts.................................................................................................. 8
PART 5: Future Marketing (For Rental Units Only).................................................................. 9
PART 6: Staff Experience and Instructions for Fair Housing Training ....................................
10
APPROPRIATENESS OF THE MARKETING PROGRAM .....................................................
11
IMPLEMENTATION OF THE AFFIRMATIVE MARKETING PLAN ....................................
12
AFFIRMATIVE MARKETING POLICY...................................................................................
14
LEGAL BASIS FOR AFFIRMATIVE FAIR HOUSING MARKETING ..................................
16
Appendices
HUD Form AFHM, Affirmative Fair Housing Marketing Plan Single Family Housing
HUD Form AFHM, Affirmative Fair Housing Marketing Plan Multi -Family Housing
UNDERSTANDING AFFIRMATIVE MARKETING
Affirmative Fair Housing Marketing (AFHM) plans and affirmative marketing procedures are
required to be included in applications for City of San Bernardino Housing Funds (including
state and federal funds). All recipients and subrecipients of funds of projects containing five or
more units must comply with the affirmative marketing requirements to receive assistance.
Affirmative marketing procedures must continue throughout the period of affordability. For
single-family homeownership dwellings, the plan remains in effect until all the dwelling units are
sold.
Affirmative marketing is not a separate marketing program. It can be an integral part of the
overall project marketing effort. Affirmative marketing typically consists of a good faith effort to
attract to a project those who are identified as "least likely to apply" or under -represented in a
neighborhood or community.
Today, by law, property sellers or landlords may not refuse to sell or rent to certain people based
on race, color, religion, sex, national origin, familial status, or disability. These laws are based on
the notion that traditional residential marketing practices have conditioned people to view certain
neighborhoods or groups as undesirable.
Through an affirmative marketing plan, a developer indicates what special efforts they will make
to attract racial or ethnic groups who might not normally seek housing in their project.
Affirmative marketing does not limit choices; choices are expanded to include those that might
not otherwise be considered because of past discrimination. Increasingly, communities which
make a long-term commitment to racial and ethnic diversity have found their efforts rewarded by
increasing property values.
Affirmative marketing requires no specific goals or quotas. However, quantitative data and
analysis are essential to planning and monitoring an affirmative marketing program.
Affirmative marketing adds little to the cost of a project. Most of the cost associated with
affirmative marketing is already reflected in the project's broader marketing budget.
These guidelines are to be used assist those who are recipients and sub -recipients receiving
funds; it is not a substitute for obtaining legal advice. It summarizes AFHM plans and
affirmative marketing procedures as required by the City of San Bernardino.
1
OVERVIEW OF THE AFHM PLAN
The AFHM Plan is a marketing strategy designed to attract buyers and renters of all majority and
minority groups, regardless of sex, handicap and familial status to assisted rental units and for
sale dwellings which are being marketed.
In formatting an Affirmative Marketing Program, the applicant must do the following:
1. Targeting: Identify the segments of the eligible population which are least likely to
apply for housing without special outreach efforts.
2. Outreach: Outline an outreach program which includes special measures designed to
attract those groups identified as least likely to apply and other efforts designed to attract
persons from the total population.
3. Indicators: State the indicators to be used to measure the success of the marketing
program. The effectiveness of the marketing program can be determined by noting if the
program effectively attracted buyers or renters who are:
* from the majority and minority groups, regardless of gender, as represented in the
population of the housing market area;
* persons with disabilities and their families; and
* families with children, if applicable.
4. Staff Training: Demonstrate the capacity to provide training and information on fair
housing laws and objectives to sales or rental staff.
Grantees are required to make a good faith effort to carry out the provisions of their approved
plan.
Good Faith Effort
Good faith efforts are recorded activities and documented outreach to those individuals
identified as least likely to apply. Examples of such efforts include:
1. Advertising in print and electronic media that is used and viewed or listened to by those
identified as least likely to apply;
2. Marketing housing to specific community, religious or other organizations frequented by
those least likely to apply;
2
3. Developing a brochure or handout that describes facilities to be used by buyers or
renters, e.g., transportation services, schools, hospitals, industry, and recreational
facilities. The brochure should also describe how the proposed proiect will be accessible
to physically handicapped persons and describe any reasonable accommodations made to
persons with disabilities;
4. Insuring that the sales/management staff has read and understood The Fair Housing
Act, and the purpose and objectives of the AFHM Plan.
5. Developing a referral network with the local fair housing agency.
3
THE AFFIRMATIVE FAIR HOUSING MARKETING PLAN
(Form AFHM HUD -935.211)
This form must be filled out completely and signed by an authorized official of the sponsoring
organization.
PART _1: DescrMflon of the Applicant and the Proiect
The applicant must provide the following information:
1. Name and address of the applicant;
2. Name and address of the proposed project;
3. Type of Application;
4. Number of units;
5. Price or rent range of units;
6. For multifamily rental units only, the household types to be served by the project (e.g.,
elderly, non -elderly, disabled);
7. The approximate starting dates for advertising to target groups and initial occupancy;
8. Advertising and outreach to those organizations and individuals identified as least likely
to apply must begin in accordance with applicable program requirements;
9. County in which the project will be located;
10. Census tract or Enumeration District number in which the project will be located; and
11. Name of managing/sales agent, if identified.
Sponsoring Organization
Authorized Official of Sponsoring Organization
Date
4
PART 2: Type of Marketing Plan
The applicant should indicate in Part 2 of the Form whether the Plan is to be a Project Plan or an
Annual Plan for a scattered site builder.
Project Plan:
1. Project Plan is submitted for a particular multifamily project or subdivision located on a
single site.
2. Annual Plan covers all activity to be performed in the ensuing 12 -month period. The
location and exact number of units are not determined at the time the Plan is submitted.
NOTE: In most instances, the Annual Plan, regardless of type, should cover activities
within a single housing market area. A housing market area can be defined in terms of all
parts of the locality (or county) in which the project is located.
3. Scattered Sites.
Scattered sites should be grouped and marketed according to the racial and ethnic composition of
the census tracts in which they are located.
PART 3: Direction of Marketinp- Activity
The applicant must identify the groups that are least likely to apply for housing. For these
groups, special outreach is required to inform them of the upcoming housing opportunities.
The following are examples of group(s) that might be identified as least likely to apply for the
housing in given situations:
1. Non -minority persons for a project located in a predominantly minority area:
2. Minority groups for a project located in a non -minority area; and
3. Black and Non -Minorities for a project located in a neighborhood which is predominantly
Hispanic.
If the applicant believes that no single group will need special outreach, the applicant must
indicate in the plan and explain the reasons for such determination.
In determining which groups may require special outreach, the applicant should consider the
following factors:
a. Practices or Policies of Discrimination such as exclusionary zoning practices; rental,
sales, advertising, lending, appraisal, and other practices which may have resulted in
discrimination.
5
b. Language Barriers.
c. Racial/Ethnic Composition of defined geographic areas. The applicant should
consider the following:
i. The Neighborhood (Census Tract) in which the project is (or will be) located;
ii. The occupancy profiles and waiting list composition of other projects in the
market area;
iii. Information on the income eligible population of the housing market area,
including racial/ethnic group members, household headed by single persons
(gender of household), persons with disabilities, the elderly, families with
children and those persons identified as expected to reside in the jurisdiction.
Marketing to Individuals with Handicaps. In most instances, individuals with handicaps are not
likely to apply for the housing without special outreach activities, because such persons may not
"apply" for housing units especially reserved for them without special assistance. The AFHM
Plan should include resources that have disabled persons of all racial/ethnic groups on lists of
potential referrals. Such resources include social service agencies, hospitals, or disabled
organizations.
The applicant, in planning its outreach activities to disabled persons, should also consider:
a. Whether the building is a newly constructed one which must conform to the design
provisions of the Fair Housing Act and the accessibility provisions of Section 504 of the
Rehabilitation Act of 1973, as amended;
b. How it plans to explain its policies on permitting reasonable modifications of the unit by
the tenant; and
c. Its policies with respect to reasonable accommodations in rules, policies, practices and
services.
PART 4: The Marketing Program
The applicant must describe the marketing program and outline the methods to be used in
marketing to all segments of the eligible population. The program must include special outreach
steps which will be taken to attract the groups identified as persons least likely to apply for the
housing.
PART 4a: Commercial Media
The applicant must indicate the commercial media to be used to advertise the availability of the
housing, in particular, the commercial media that are customarily used by the applicant,
6
including minority publications, publications targeted toward disabled persons, and other outlets
which are available in the housing market area.
If the applicant does not intend to use commercial media, the Plan should indicate the reasons for
not using such media. All advertising should be consistent with the Fair Housing Advertising
Regulations (24 CFR 109) and the Fair Housing Act Regulations at 24 CFR 100.75.
1. Type of Media. The applicant should indicate the type of media to be used, including:
a. Newspapers of general circulation;
b. Radio and/or television stations; and
c. Other types of media including publications of limited circulation such as
neighborhood -oriented newspapers, religious publications, and publications of local
real estate industry groups.
2. Information Re, arding the Media Selected. For each of the media identified, the
applicant indicates:
a. Name of the media (e.g., Daily Press, 94.7 Wave Radio, Channel 5 TV, etc...).
b. Type (e.g., classified, display) and size of newspaper advertising and the initial date
and frequency of its appearance. Copies of the advertising should be kept on file for
future monitoring.
c. Frequency and length of any radio and/or television advertising.
d. Identity of the racial/ethnic groups within the audience or readership of the
commercial media to be used.
PART 4b: Brochures S' ns and the HUD and/or local Fair Housin Poster
Brochures, signs and the HUD and/or local Fair Housing Poster are to be an integral part of any
successful affirmative marketing effort.
1. Brochures. The applicant should consider using brochures as part of the total marketing
program. Brochures can be tailored to meet the specific housing needs of those persons who
are members of the groups identified as least likely to apply for the housing. The brochure
should communicate the applicant's equal housing opportunity policy. The brochure must be
consistent with the Fair Housing Advertising Guidelines, including display of the Equal
Housing Opportunity Logotype and slogan. The brochure should, where appropriate, contain
information on the applicant's policy toward families with children and whether or not the
project is reserved as "elderly housing."
7
2. Ste. The applicant must indicate the size of any existing or proposed permanent project
site sign. The sign must include the Equal Housing Opportunity Logotype. A picture of the
sign must be placed in the AFHM program file.
3. Poster. Local and/or HUD's Fair Housing Poster must be conspicuously displayed wherever
sales/rentals and showings take place.
PART 4c: Communis N Contacts
Community contacts should be individuals or organizations that have direct and frequent contact
with those groups identified in the Plan as least likely to apply.
1. Examples of suitable community contacts include:
a. Fair housing organizations and local nonprofit housing associations, housing counseling
agencies, regional tenant referral services; \
b. Minority organization, for example, League of United Latin American Citizens
(LULAC), National Association for the Advancement of Colored People (NAACP),
Urban League, women's organizations, civil rights groups, editors of majority owned and
minority-owned newspapers;
c. Organizations which advocate for individual with disabilities or address issues relating to
the housing needs of such individuals; and
d. Organizations which advocate for families with children or address issues relating to
housing needs of such families.
2. The applicant must give the following information about the community contacts:
a. Name of the organization or individual;
b. Protected class identification of the group or individual;
c. Approximate date the group or individuals are to be contacted. This date should be
consistent with the requirements for advance marketing to those persons least likely to
apply, where applicable;
d. Address and telephone number of the person to be contacted;
e. Methods of contact, e.g., community meetings, brochures, radio talk shows, and
f. Specific functions the group will perform.
3. Effectiveness of Community Contacts:
8
To determine the potential effectiveness of the proposed community contacts, the following
questions should be considered:
a. Do the community organizations or individuals identified as community contacts have
frequent contact with the target groups?
b. Are the functions that the community contacts are expected to perform in implementing
the outreach program appropriate to their size and influence in the community?
c. Where applicable, does the applicant utilize organizations which have contact with those
persons identified as expected to reside in the community?
d. In cases where organizations or individuals have previously served as community
contacts, were these groups or individuals effective as such contacts?
PART 5: Future Marketing or Rental Units Only)
The applicant must describe in this part the types of activities to be undertaken after the
completion of initial occupancy of rental units in order to fill vacancies resulting from normal
turnover.
1. AFHM Plan Modifications. The applicant may undertake the same marketing activities
which were performed during the initial occupancy period or may propose modifications to
the Plan.
2. Accessibility. Some applicants are required to bring their older buildings into compliance
with HUD Accessibility Guidelines (24 CFR Part 40) and other programmatic requirements
pertaining to accessibility for individuals with disabilities, e.g., Section 504 of the
Rehabilitation Act of 1973, as amended. Upon completion of such renovations, the applicant
should amend the project's AFHM Plan to reflect the undertaking of special outreach
activities designed to:
a. Inform individuals with disabilities about the accessible units and about all reasonable
accommodations that the applicant either has already made or will make for such
individuals.
b. Encourage such persons to apply for those units.
3. Families with Children. An applicant must implement a policy of nondiscrimination with
respect to families with children and conduct marketing activities intended to attract such
families to the project, if it is not exempt from the provisions of the Fair Housing Act
pertaining to housing for older persons.
E
PART 6: Staff Experience and Instructions for Fair Housine Training
The proposed plan should include the following material on staff training and experience:
1. Experience; The applicant must indicate whether it has had any experience in marketing
housing to the groups identified as least likely to apply.
2. Applicant's Training Responsibilities
a. Applicants are responsible for instructing all employees and agents in writing and orally
concerning nondiscrimination in housing and insure they are trained concerning specific
civil rights laws and Executive Orders.
b. The training should be designed to acquaint participants with the substantive
requirements of the Fair Housing Act relating to financing and advertising, expected real
estate broker conduct, redlining and zoning practices and discriminatory appraisal
practices.
c. A copy of the instructions given to sub -management staff on fair housing concerns such
as federal, state, and local fair housing laws and a copy of the applicant's Affirmative
Fair Housing Marketing Plan should be included in the AFHM Program file for future
monitoring.
10
APPROPRIATENESS OF THE MA1tKETING PROGRAM
The marketing program should include actions which are appropriate for attracting the target
group(s). The following should be considered:
1. Where Blacks, Hispanics, Asian -Americans or other racial/ethnic groups have been identified
as requiring special outreach, and minority media are available in the housing market area,
applicants are encouraged to use minority-owned media as part of their marketing program;
2. Languages other than English should be used in the advertising where it is necessary to
attract target groups, e.g., Hispanics;
3. The advertising should convey an easily understood message that the target groups are
welcome in the area in which the proposed project is located. However, the advertising
should not imply that the project area is restricted to persons of a particular race, color, creed,
sex or national origin, or that families with children and handicapped persons would feel
unwelcome;
4. Both majority and minority models should be used in pictorial advertising and women should
be depicted in non -sex -stereotyped roles;
5. The advertising should convey the message that families with children are encouraged to
apply for the housing;
6. The advertising should feature units that have been made accessible to individuals with
disabilities to convey the message that reasonable accommodations can be made so that
individuals with disabilities can fully enjoy the project's services and facilities on the same
basis as non -disabled individuals; and
7. The Equal Housing Opportunity Logotype and should be displayed on all advertising
materials.
11
IMPLEMENTATION OF THE AFFIRMATIVE MARKETING PLAN
Marketing for Initial Sales or Rental
No later than 90 days prior to the commencement of initial occupancy the grantee should:
1. Pre -Marketing Activities. Prior to initiating general marketing, contact the commercial
media, fair housing groups, civil rights organizations, employment centers and the
community contacts which have been identified in the Plan as resources for attracting
persons who are "least likely to apply" for the housing.
2. Outreach Documentation. Establish a system for documenting outreach activities and for
maintaining records which provide racial, ethnic and gender data on all applicants for the
proposed housing. The system should be consistent with any reporting and record
keeping requirements. It should include all documentation pertaining to:
a. How the groups considered least likely to apply were identified;
b. The special outreach activities undertaken to attract these groups and the general
public to the housing;
c. The training given to the staff on Federal, State and local civil rights laws;
d. The selection of the community contacts who assisted in implementing the AFHM
program;
e. The implementation of the HUD Fair Housing Advertising Regulations stated at 24
CFR Part 109;
f. Race and ethnicity of all applicants for the housing; and
g. Race and ethnicity of all individuals who visited the project in person.
3. Fair Housing Training. During the 90 -day period prior to the commencement of taking
applications or sales, provide training to all management or sales staff in Federal, State
and local fair housing laws, AFHM objectives and the approved AFHM plan.
File Documentation
a. The following materials should be kept in the AFHM file for future monitoring:
i. Copies of advertisements, brochures, leaflets, and letters to community contacts;
12
Photographs of project signs; and
iii. A copy of instructions used to train sales/rental staff on Fair Housing laws.
13
AFFIRMATIVE MARKETING POLICY
Part 1
All state recipients and sub -recipients receiving housing development funds shall adopt policies
and procedures that inform the public, potential tenants, and property owners of its Affirmative
Marketing Policy/Strategy. At a minimum the Affirmative Marketing Policy/Strategy of a
recipient or sub -recipient must:
1. Commit to including the Equal Housing Opportunity logotype in press releases and
solicitations for participation in the program;
2. Have a policy for referrals of housing questions and complaints to its fair housing
provider, agency or organization that can provide advice on the state and federal fair
housing laws; and
3. At least once annually, conduct a public outreach effort that will make available to
the public information on all rental units that have received assistance. Minimally,
this information will include the address of the units and the address and phone
number of the owner.
Part 2
At a minimum, the Affirmative Marketing Policy/Strategy will require that owners of projects
containing 5 or more units receiving assistance will comply with the following:
1. Prior to sales or rental activity, the recipient or sub -recipient shall identify at least 3
groups, organizations, or agencies actively involved with serving low-income persons
who would benefit from special outreach efforts. Annually, the owner shall provide
these groups with information on assisted units throughout the period of affordability.
2. If any units are publicly advertised during the period of affordability, the Equal
Housing Opportunity logo must accompany the advertisement.
3. The owner must display the Equal Housing Opportunity logo and fair housing poster
in an area accessible to the public (e.g., the rental office).
4. The owner will maintain information on the race, sex and ethnicity of applicants and
tenants to demonstrate the results of the owner's affirmative marketing efforts.
14
5. The owner will, for the period of affordability, maintain information demonstrating
compliance with items above, and will make such information available to the local
administrator upon request.
Part 3
Each recipient or sub -recipient shall maintain records indicating compliance with the above
policies, including:
1. Records documenting the recipient's or sub -recipient's annual outreach efforts to
affirmatively market assisted units, including an annual evaluation of the
effectiveness of these efforts. Minimally, this evaluation shall include a discussion
with the organizations or agencies as to the number of referrals made on the basis of
the information provided by the owners of assisted units.
2. Monitoring records (to be maintained by all state recipients or sub -recipients of
Rinds) that indicate the extent to which the owner has complied with the requirements
and remedies to resolve instances of non-compliance.
15
LEGAL BASIS FOR AFFIRMATIVE FAIR HOUSING MARKETING
The Fair Housing Act which prohibits discrimination in the sale, rental, financing, or other
services related to housing on the basis of race, color, religion, sex, handicap, familial status or
national origin. Section 808(e)(5) of this law mandates that HUD administers its programs in a
manner to affirmatively further fair housing. Section 804(f) of this law prohibits discrimination
because of the handicap of individual buyers, renters and persons associated with such buyers or
renters, discrimination in the terms, conditions, privileges and services connected with the sale or
rental of dwelling units; refusal to allow the tenant to make reasonable accommodations of
existing dwellings to enable a handicapped person to enjoy fully the dwelling unit; refusal to
make reasonable accommodations in rules, policies, practices or services, when such
accommodations may be necessary to afford such persons with equal opportunity to use and
enjoy the dwelling; and failure to make covered multifamily dwellings first occupied after March
13, 1991 accessible to disabled persons. The law defines "covered multifamily dwellings" as
buildings consisting of four or more units if such building has one or more elevators; and ground
floor units in other buildings consisting of four or more units.
16
Attachment K to Master Agreement
CHDO Designation Letter and Certificate
January 16, 2018
SWBemardino
Anthony Perez
Housing Partners I, Inc.
715 E. Brier Drive
San Bernardino, CA 92408
Dear Mr. Perez,
We have received your Community Housing Development Organization (CHDO)
application for the City's HOME Investment Partnerships Program (HOME) Infill
Housing Program. It is my pleasure to inform you that your non-profit organization has
met all of the necessary requirements as a CHDO.
This certification is good for a period of one year (January 15, 2019). Should any
changes in your board member composition or management occur before the expiration
date of this certification, please contact the Economic Development and Housing
Department at (909) 384-7265 for further instruction on updating your CHDO status.
Thank you for your application and should you have any questions please do not
hesitate to call me at (909) 384 7257 or email me at Brann_Ka@SBCity.org.
Respectfully,
Kathlvyr,,a nn
Director of Economic Development and Housing Department
290 North D St, San Bernardino, CA 924011 P: 909-384-7272 1 www.SBCity.org
Housing Partners I, Inc.
COMMUNITY HOUSING DEVELOPMENT ORGANIZATION (CHDO)
CERTIFICATION
Background
The National Affordable Housing Act of 1990 created the HOME Investment Partnerships Program
(HOME), which included provisions to promote partnerships between states, local governments,
and nonprofit organizations and to increase the capacity of nonprofit organizations to develop and
manage affordable housing.
HOME requires for the City of San Bernardino (City) to set-aside at least 15% of its HOME funds
allocation for housing that is developed, owned, or sponsored by Community Housing
Development Organizations (CHDOs). CHDOs are private nonprofit, community-based
organizations that have staff with the capacity to develop affordable housing for the community it
serves. In order to qualify for CHDO designation, the organization must meet the requirements
pertaining to their legal status, organizational structure, capacity and experience set forth in 24
CFR 92.2, and be certified by the City.
The purpose of this CHDO certification process is to determine if the City's CHDOs qualify under
the guidelines established by HUD pursuant to Subpart A Section 92.2 of the HOME Final Rule (24
CFR Part 92) and the 2013 HOME Final Rule, which made numerous changes to the HOME
Program. Most significant, to qualify as a CHDO, an organization must now have paid staff and
demonstrate capacity and experience that applies to the specific project for which it is applying for
CHDO status.
CHDO Cgpaci!y Requirements
The 2013 HOME Final Rule emphasizes that the CHDO must have paid key staff who have housing
experience appropriate to the role the CHDO undertakes. Thus, a CHDO in the role of sponsor
must demonstrate ownership and management experience and/or development experience,
depending upon if the CHDO will be an owner and/or developer under the sponsor role. Capacity
is evaluated during the certification process, as well as each time the CHDO applies for funding.
The capacity requirement cannot be met through the use of volunteers or staff donated by an
organization, including the parent organization. The CHDO may hire consultants for the first year
to demonstrate development capacity provided that the following conditions are met:
1. The CHDO and consultant must enter into a written agreement which specifies the
tasks to be performed by the consultant.
2. The consultant must demonstrate sufficient experience to perform the assigned
tasks.
3. The written agreement must include a provision that the consultant will provide
training to CHDO staff.
4. A detailed training plan must be submitted with the certification application. The
plan must specifically state the scope of the training and a timeline for completion
of the training.
CHDO Certification Process
Before committing CHDO set-aside funds to any organization, the City must certify that the
organization:
1. Meets the definition of a CDHO, found in Section 92.2 of the HOME Final Rule.
2. Has a CHDO-eligible project that the organization will own, develop, or sponsor in
accordance with Section 92.300(a) of the HOME Final Rule.
3. Has paid staff with demonstrated experience appropriate to the role the CHDO will
play for the project being funded.
Organizations applying for CHDO certification must complete and submit all the required
documents, and applicable supporting documentation. The CHDO Certification packet includes:
1. Affidavit of Standards for Financial Management
2. Origination Staffing Plan
3. Staff Core Competencies
4. Staff Training Plan, if applicable
5. Audit Findings
6. History of Serving the Community
7. Board Member Certification
8. Certification of Board Status
9. CHDO Board Compliance Certification
10. Prior Certification of CHDO Status, if applicable
11. CHDO Subsidiaries and Affiliates, if applicable
The CHDO certification is valid for one year. The CHDO is responsible for submitting a new
certification application prior to the expiration of the certification, to ensure that the certification
does not lapse. Furthermore, HUD requires the City to conduct a re -certification process each
time CHDO set-aside funding is awarded.
Within ten (10) business days from the receipt of the CHDO application, the City will notify the
applicant in writing if the application is approved or denied, or if corrections or additional
information is required. A CHDO's certification may be rescinded by the City, at any time, if it is
determined that the CHDO no longer meets eligibility requirements.
City of San Bernardino
CHDO CERTIFICATION CHECKLIST
The information contained in this checklist refers to the definition of Community Housing
Development Organization (CHDO) in Subpart A, Section 92.2 of the HOME Final Rule.
Legal Name of Organization: Housing Partners I, Inc.
Mailing Address: 715 E. Brier Drive, San Bernardino CA 92408
Contact Person and Title: Anthony Perez, Executive Director
Contact Phone: 909-332-6390 Email Address: Aperez(a)hpiinc.org
Date of Incorporation: 12/05/1991 Tax ID #: 33-0496692
Project Name: Infill Housing Develoament
Proposed Role of CHDO: ❑ Owner 10 Developer ❑ Sponsor
I. LEGAL STATUS
A. The nonprofit organization is organized under the State of California, as evidenced by:
A Charter
Articles of Incorporation.
B. No part of its net earnings inure to the benefit of any member, founder, contributor, or
individual, as evidenced by:
A Charter
Articles of Incorporation.
C. Has a tax exemption ruling from the Internal Revenue Service (IRS) under Section 501(c)
of the Internal Revenue Code of 1986, as evidenced by:
V A 501(c) Certificate from the IRS.
D. Has among its purposes the provision of decent housing that is affordable to low- and
moderate -income people, as evidenced by a statement in the organization's:
Charter
Articles of Incorporation
A HUD approved audit summary
By-laws
Resolutions.
Legal Name of Organization: Housinq Partners I Inc.
If. CAPACITY
A. Conforms to the financial accountability standards of 24 CFR 84.21, "Standards for Financial
Management Systems," as evidenced by:
Audited Financial Statement
A notarized statement by the president or chief financial officer of the organization
A certification from a Certified Public Accountant
A HUD approved audit summary
B. The organization has paid staff with demonstrated capacity and experience with projects of a
similar size, scope and level of complexity, relevant to its proposed role as Owner, Developer, or
Sponsor.
VResumes and/or statements that describe the experience of key staff members who have
successfully completed projects similar to those to be assisted with HOME funds AND
V Payroll report, W-2 or W-4 OR.
Contract(s) with consulting firms or individuals who have housing experience similar to
projects to be assisted with HOME funds to train appropriate key staff of the organization AND
Training Plan.
C. Has a history of serving the community where housing to be assisted with HOME funds will be
used, as evidenced by:
Statement that documents at least one year of experience in serving the community.
For newly created organizations formed by local churches, service, or community
organizations, a statement that documents that its parent organization has at least one year of
experience in serving the community.
NOTE: The CHDO or, if a new CHDO, its parent organization, must be able to show one year of serving the
community from the date the participating jurisdiction provides HOME funds to the organization. in the
statement, the organization must describe its history (or its parent organization's history) of serving the
community by describing activities which it provided (or its parent organization provided), such as developing
new housing, rehabilitating existing stock, and managing housing stock, or delivering non -housing services that
have had lasting benefits far the community, such as counseling, food relief, or childcare facilities.
Legal Name of Organization: Housing Partners I, Inc.
111. ORGANIZATIONAL STRUCTURE
The CHDO's board must meet all of the applicable requirements set forth below to be eligible for
certification.
A. Maintains at least one-third of its governing board's membership for residents of low-income
neighborhoods, other low-income community residents, or elected representatives of low-income
neighborhood organizations, as evidenced by the organization's:
By -Laws
Charter
Articles of Incorporation
B. Provides a formal process for low-income, program beneficiaries to advise the organization in
all of its decisions regarding the design, development, and management of all HOME -assisted
affordable housing projects, as evidenced by:
The organization's By-laws
Resolutions
A written statement of operating procedures approved by the governing body
C. It provides current information on the governing board's membership, as evidence by:
A completed Governing Board list
Governing Body Self -Certifications from all members
D. A CHDO may be chartered by a State or local government, however, the State or local
government may not appoint: (1) more than one-third of the membership of the organization's
governing body; (2) the board members appointed by the State or local government may not, in
turn, appoint the remaining two-thirds of the board members; and (3) no more than one third of
the overning board members are public officials, as evidenced by the organization's:
By -Laws
Charter
Articles of Incorporation
E. If the CHDO is sponsored or created by a for-profit entity, the for-profit entity may not appoint
more than one-third of the membership of the CHDO's governing body and the board members
appointed by the for-profit entity may not, in turn, appoint the remaining two-thirds of the board
members, as evidenced by the CHDO's:
By -Laws
Charter
Articles of Incorporation
F. If the CHDO is sponsored or created by a religious organization, the CHDO is a separate secular
entity from the religious organization, with membership available to all persons, regardless of
religion or membership criteria, as evidenced by the CHDO's:
By -Laws
Charter
Articles of Incorporation
IV. RELATIONSHIP WITH FOR-PROFIT ENTITIES
A. CHDO is not controlled, nor receives directions from individuals or entities seeking profit from
the organization, as evidenced by:
The organization's By-laws
A Memorandum of Understanding (MOU)
B. A CHDO may be sponsored or created by a for-profit entity, however:
(1) The for-profit entity's primary purpose does not include the development or management of
housing, as evidenced by:
The for-profit organization's By-laws
AND;
(2) The CHDO is free to contract for goods and services from vendor(s) of its own choosing, as
evidenced by the CHDO's:
By -Laws
Charter
Articles of Incorporation
CHDO Review by: - Date: f /11,4
Printed Name & Title: �,.�...e�io A d-ftw 156—A%ie- Atta14cF�
SU Application for CHDO Certification
Affidavit of Standards for Financial Management Systems
APPLICANT (Exact Legal Name of Organization): Housing Partners I Inc.
Applicant certifies that the following statements are true:
1. Signor is the President and/or Chief Financial Officer of the organization that is applying for
certification as a CHDO and is authorized to make this affidavit on behalf of the organization.
2. The organization's financial management systems conform to the financial accountability standards
set forth in 24 CFR 84.21, by providing for and incorporating the following:
a. Accurate, current and complete disclosure of the financial results of each federally -sponsored
project or program;
b. Records that identify adequately the source and application of funds for federally -sponsored
activities. These records shall contain information pertaining to Federal awards, authorizations,
obligations, unobligated balances, assets, outlays, income and interest;
c. Effective control over and accountability for all funds, property and other assets; adequate
safeguards of all such assets shall be adopted to assure that all assets are used solely for
authorized purposes;
d. Comparison of outlays with budget amounts for each award;
e. Written procedures to minimize the time elapsing between the receipt of funds and the issuance
or redemption of checks for program purposes by the organization;
f. Written procedures for determining the reasonableness, allocability, and allowability of costs in
accordance with the provisions Federal cost principles (Circular A-122) and the terms and
conditions of an award;
g. Accounting records, including cost accounting records that are supported by source
documentatio
Signature:
Print Name: Anthony Perez
Title: Executive Director
Date: 01/12/2018
Prepared by Staff HCD and modified for city' use — Rev. June 2014
Page I 1
Application for CHDO Certification
Organization Staffing Plan
Indicate all current staff and proposed future staff.
*Type of staff.' "1"- Current W-2 Employee; "2" - Current IRS 1099 Independent Contractor; 3" - Future W-2 Employee; '4" -
Future IRS 1099 independent Contractor; "S" - Employee of another organization under contract to CHDO (Consultant); "6" -
Future employee of another organization under contract to CHDO (Consultant); identify other types as needed. (Note: Prior to
project funding, the CHDO will be evaluated as to whether their current staff has experience developing projects of the same size,
scope and level of complexity.)
Type of
Staff*
Employee Name
Anthony Perez
Hilda Hernandez
Position Title
Time Base
(Full-
time/Part-
time,
other as
applicable)
% of
Working
Hour that
Perform
Housing
Projects
1
Executive Director
Full-time
100%
1
Executive Assistant
Full-time
100%
2 Gary Lots
Construction Project
Manager
part-time
100%
F7i
*The IRS provides guidance for identifying types of employees at: http:t/www.irs.eovlBusinesses/Small-
Businesses-&-Self-Emolovedllndeoende nt-Contractor-i Self -Emu loyedi-or-Employee%3F
_Prepared by State HCD and modified for City's use— Rev. June 2014
Page 12
Application for CHDO Certification
Ssr � ire
Staff Core Competencies
In order to ensure compliance with HOME Regulation, indicate the core competencies for each staff member by marking the
appropriate competencies with an "x". 'Core competencies" means the particular knowledge, skill, and ability to perform listed
tasks. Applicant must have full-time w-2 and/or 1099 independent Contractors who meet the core competencies listed below*.
[Note: Prior to project funding, the CHDO will be evaluated as to whether their current staff has experience developing projects
of the some size, scope and level of complexity.]
Anthony Perez
Hilda Hernandez Gary Lotz
Executive Director
Executive Assistant Construction Project
Manager
❑ ❑
Core Competencies:
A. Conduct market/needs analyses
✓
and conceptual project design
❑ ❑
B. Choose and negotiate purchase
✓
of a suitable site
C. Select and work with architects
✓
✓
❑
and other consultants
....--..... - — -
D. Understand and comply with local
planning, zoning and building
✓
✓
❑
requirements
E. Create a development pro forma
✓
✓
❑
and operating budget
F. Set rents or sales prices
✓
✓
❑
G. Identify financing sources and
✓
❑
apply for financing
H. Comply with other lender
✓
✓
❑
requirements
1. Deal with community concerns
✓
✓
❑
J. Comply with CEQA and NEPA
✓
✓
❑
requirements
K. Choose and work with
✓
❑
✓
construction contractors
L. Manage the construction process
✓
❑
✓
M. Choose and work with a
✓
✓
❑
management agent
N. Successfully market a project
✓
✓
❑
0. Comply with HOME program
requirements, construction close-
✓
✓
✓
out and long-term obligations
*The IRS provides guidance for identifying types of employees at: htta:i/www.irs.aovlBusinesses/Small-
Businesses-&-Self-EmglovediIndependent-Contractor-I Self-Employed)-or-Employee%3F
Prepared by State HCD and modified for City's use — Rev. June 2014
Page 13
r.
Application for CHDO Certification
Sty If lie
Staff Training Plan
If applicant has executed contract with a consultant experienced in housing development to train the applicant's staff in the core
housing development competencies, please provide a copy of an executed contract with a consultant experienced in housing
development to train each staff member in the core housing development competencies listed below. If applicant has not
executed a contract for staff training, mark this document as 'not applicable". [Note: Prior to project funding, the CHDO will be
evaluated as to whether their current staff has experience developing projects of the some size, scope and level of complexity, i.e.,
staff will need to have received training and gained appropriate experience prior to the time of project funding.]
Per HOME Regulation, the contract shall include a training timetable requiring the training to commence not later than six months
of the date of certification or recertification and requiring the training to be completed not later than two years from the date of
certification or recertification, and which shall identify the names and titles of persons being trained and the specific core
competencies in which they are being trained.
In order to ensure compliance with HOME Regulation, indicate the core competencies for each staff member to be trained by
marking the appropriate competencies for which they will receive training and by which date they will receive the training. Core
competencies" means the particular knowledge, skill, and ability to perform the listed items. A CHDO certified with a training plan
must submit a status report on the progress of such training on the first and second anniversaries of its certification,
Staff Name and Title Staff Name and Title
Staff Name and
Title
Core Competencies:
A. Conduct market/needs analyses
❑
❑
❑
and conceptual project design
B. Choose and negotiate purchase
❑
❑
11of
a suitable site
C. Select and work with architects
❑
❑
and other consultants
D. Understand and comply with local
planning, zoning and building
r__�
13requirements
%%of
❑
13and
E. Create a development pro forma
Bov
operating budget %,
F. Set rents or sales pri WNW❑
_
❑
G. Identify financin sources ad
❑
apply for financin
H. Comply with other I nd❑
V14
❑
❑
requirements
I. Deal with community c ncp ❑
❑
❑
J. Comply with CECtA and NEPA ❑
❑
❑
requirements
K. Choose and work with ❑
❑
❑
construction contractors
L. Manage the construction process ❑
❑
❑
M. Choose and work with a ❑
❑
❑
management agent
N. Successfully market a project ❑
❑
❑
0. Comply with HOME program
requirements, construction close- ❑ ❑
❑
out and long-term obligations
Prepared by State HCD and modified for City's use — Rev. June 2014
Page 14
n ' Application for CHDO Certification
Sa Bma Ile
Audit Findings
Applicant must resolve, to the satisfaction of the City, prior City or federal audit findings for any projects or programs that received
HOME or federal funds.
Complete the chart below. Attach all applicable documentation that identifies the audit finding and indicates that the finding has
been resolved. If there are unresolved audit findings, indicate 'unresolved" in the description of the resolution column of the
chart. If applicant hos no prior HOME or federal findings, mark the chart `not applicable, no prior audit findings".
Name City or
Federal
Agency
i-
Name of
Project or
Program
(or both)
Describe Audit Finding
Describe Resolution of
Finding
Prepared by State HCD and modified for City's use — Rev. June 2014
Page 15
Application for CHDO Certification
History of Serving the Community
Incorporate the organization's history (or its parent organization's history) of serving the geographic area for which CHDO
certification is sought by describing activities which it provided (or its parent organization provided), such as developing new
housing, rehabilitating existing housing stock, or managing housing stock. If organization is newly created, include in the
statement how the organization's parent organization has at least one year of experience in serving the community. Include type
of housing or service, population served, financing sources, and any on-going involvement). Specifically identify under "Location"
column all projects or services that are in the immediate geographic area for which CHDO certification is being sought.
The organization or its parent organization must be able to show at least one year of serving the community for which the
organization is seeking CHDO certification. Parent Organization experience counts for this purpose only if the proposed CHDO
has been in existence for less that a year. Solely engaging in predevelopment activities for a housing project shall not satisfy the
requirement.
Describe Type of Serves Location (Community, County)
Completed Duration of and Population Served
and Type of Homeowners
Development Development Project or Tenants (T) or "Identifies projects/services
or Services i Financing Service (H) in geographic area for which
Provided CHDO certification sought
ed
e�
�r ........... . .....
ea
----------------
-_ Se
Prepared by State HCD and modified for City s use— Rev. June 2014
Page 16
Application for CHDO Certification
Board Member Certification
There arc four specific requkements related to an applicant sxgarwation's board which mutt be -!danced In the organization's
by-laws, charter, or articles of Incorporation. Thane are:
1. No more than one4rd of the board may be represenadvas of the public sector, Including any, employees of the
partiewr%lurtstfich n.
2. At least o+re4ft of the board mast be representoom of the low -Income communtty served by the CHDO.
3. d a CHDO is sponsored by a for-profit entity, the for-profit may not appoint more than onerdrlyd of the board. The board
members appointed by the for-profit may not appoint the remaining two thirds of the board members.
t. States or local governments who charter CHDth may not appOW more tion one-third of the board, and the board
members appointed by the State or local governmerd may not appoint the remaining two-thirds of the board members.
Pahrt 61: PuMftc [9fii�l Wc�(
For the purposes of 24 CFR Part 92, a'pume officlar Is &* nod as any person serving in any of the follow int Upadties (Check
aR thatarcappDable):
13 An *(acted official such as, but not Rmfted to a dty council nhambar, county supervisor, state kgrdator, or school board
repmmnbdkv.
E3 An appDk ted pubik official such as mem6ars of a plawft or zoning commissbn or of any other reprlatory and/or
w Msory commissbns appointed by a public olfidat.
O A pubik amployse such as any employee of the city, county, or State of CaRfomia.
D A persai appointed by a public official to serve on the CHDO board.
Cam:
Chad one of the following-
0
oil wring:fir By srgning and dating this statement, I herebycertify that I fly serve In one of the 'public official' capacities previously
atrltd . End of cer0catbn. W below.
17 Sy signing and stating this statement 1 hereby certify that I dLW serve in any of the 'public of/der apocitiet previously
stateI . Proceed to Part S.
For the purposes at 24 CFR Part 92, & perm vAil don rat itw as a `cubllc official" In any elected or appointed capacity and
who neeb any of the following clraractad ft is recognised u npreserrtfrhgthe bw-inoorna community. By signing and datlang
thts statement, l heresy certify that (check one):
Q I am a low-income resident of, ■ community In the CHWs pxgaphic service arm
fro qua* under this cobvio de board awmbtr meat be a iwvanmme nedenl of a commuahy in the CHM's s*rvfae aura. UNP-
hmmebdgwewhovhhpaC»sono(bosathordWave atorbekwbtrpercentO'dw�mcdAnasdo%WbyHIA)
D I am a residentof a low-income neighborhood in .._ _ _ a community in the CHDIYf sw4ce area.
fro 4w* under qct criterion, Ow board m~ must Ave cit a bw,hhoome nelphborbood Whoa SS ptrtxnt or more of the reardentr art
bw4=me. iheboardm m6ei&OnothaMetobebw4n me.)
O 1 am an elected tepresentatkv of __-.-- _ a low-Inceme neighborhood
organization within a community in the OWS unrke Va.
(ra OWW under pus ahrrkvt the pawn mW be ekMdbt' o bw4v&w nelghipmwd orip mkodon to serve on the came Nowd The
orpaniragon must be composed prima* of erskWO ofe hhw4nwn t nvOhbwt and and Its primary PUMW most he to sow de barest
of bit aelp -hood rmrderm. Such w itm*vDroar; might hxk* bbck Irawm mhObogrood ossocW mM and m*hbw#Wd -stab
A+arp% n e pmup swat be a ndghkdmd aponim9bn and nW sot be rhe CHDO &W. 7 ON bom0 member It reprasWM9 o bw-
Nhcome nd#&xhDod o+paaty# n, pkan attach o apY of the signed reso4rttat from ere nelphlkwhood o pa bW- nown the
Individual as as reprraendrgve w she Ct= board.)
1 further cernem a curs nt rr,e T el' in good ndir' of the CHWs governingw
bni�
Signatures �' __� —_ Deft;
Printed Name:
Precgr d an, Stara MCO and roedmed far CHVS Use– Rev. June 2M4
Page 17
Application for CHDO Certification
Board Member Certification
There are four specific requirements related to an applicant organization's board which must be evidenced in the organization's
by-laws, charter, or articles of incorporation. These are:
1. No more than one-third of the board may be representatives of the public sector, including any employees of the
participating jurisdiction.
2. At least one-third of the board must be representatives of the low-income community served by the CHDO.
3. If a CHDO is sponsored by a for-profit entity, the for-profit may not appoint more than one-third of the board. The board
members appointed by the for-profit may not appoint the remaining two-thirds of the board members.
4. States or local governments who charter CHDOs may not appoint more than one-third of the board, and the board members
appointed by the State or local government may not appoint the remaining two-thirds of the board members.
Part A: Public Official Representation
For the purposes of 24 CFR Part 92, a "public official" is defined as any person serving in any of the following capacities (Check all
that are applicable):
❑ An elected official such as, but not limited to a city council member, county supervisor, state legislator, or school board
representative.
❑ An appointed public official such as members of a planning or zoning commission or of any other regulatory and/or advisory
commissions appointed by a public official.
a -A public employee such as any employee of the city, county, or State of California.
❑ A person appointed by a public official to serve on the CHDO board.
Certification:
Check one of the following:
❑ By signing and dating this statement, I hereby certify that I do serve in one of the "public official" capacities previously stated
(You must check at least one line above). End of certification. Sign below.
❑ By signing and dating this statement, I hereby certify that I do not serve in any of the "public official" capacities previously
stated. Proceed to Part B.
Part B: Low -Income Representation
For the purposes of 24 CFR Part 92, a erson who does not §erv@ a '%ublic official" in any elected or appointed capacity and
who meets any of the following characteristics is recognized as representing the low-income community. By signing and dating
this statement, I hereby certify that (check one):
❑ 1 am a low-income resident of a community in the CHDO's geographic service area.
(To qualify under this criterion, the board member must be o low-income resident of o community in the CHDO's service area. "Low-income"
is defined as having a gross annual household income of or below 80 percent of the area median, as defined by HUD.)
❑ 1 am a resident of a low-income neighborhood in a community in the CHDO's service area.
(To qualify under this criterion, the board member must live in a low-income neighborhood where 51 percent or more of the residents ore
low-income. The board member does not have to be low-income-)
❑ 1 am an elected representative of a low-income neighborhood
organization within a community in the CHDO's service area.
(To qualify under this criterion, the person must be elected by a low-income neighborhood organization to serve on the CHDO Board. The
organization must be composed primarily of residents of o low-income neighborhood and its primary purpose must be to serve the interest
of the neighborhood residents. Such organizations might include block groups, neighborhood associations, and neighborhood watch groups.
The group must be a neighborhood organization and may not be the CHDO itself. If the board member is representing a )ow -income
neighborhood organization, please attach a copy of the signed resolution from the neighborhood organization naming the individual as its
representative on the CHDO Board.)
further certify that I am a current member in good standing of the CHDO's governing board.
Signature: 1 �- i� 4 � Date: i
Printed Name: Maria Razo
Pared by State HCD and modified for City's use - Rev. lune 2014
Page 17
Application for CHDO Certification
SiE E!
Board Member Certification
There are four specific requirements related to an applicant organization's board which must be evidenced in the organization's
by-laws, charter, or articles of incorporation These are
1. No more than one third of the board may be representatives of the public sector, including any employees of the
participating jurisdiction
2 At least one-third of the board must be representatives of the low-income community served by the CHDO
3, if a CHDO is sponsored by a for-profit entity, the for-profit may not appoint more than one-third of the board The board
members appointed by the for-profit may not appoint the remaining two-thirds of the board members.
a States or local governments who charter CHDOs may not appoint more than one-third of the board, and the board members
appointed by the State or local government may not appoint the remaining two-thirds of the board members
Part A: Public Official Representation
For the purposes of 24 CFR Part 92, a "public official" is defined as any person serving in any of the following capacities (Check all
that are applicable)
❑ An elected official such as, but not limited to a city council member, county supervisor, state legislator, or school board
representative
❑ An appointed public official such as members of a planning or zoning commission or of any other regulatory and/or advisory
commissions appointed by a public official
❑ A public employee such as any employee of the city, county, or State of California
❑ A person appointed by a public official to serve on the CHDO board
Certification
C heck one of the following
❑ By signing and dating I his statement. I hereby certify that I do serve in one of the "public official' capacities previously stated
(You must check at least one line above) Fnd of certification. Sign below
L3,
By signing and dating this statement, I hereby certify that I do not serve in any of the "public official' capacities previously
stated Proceed to Part R
Part B: Low -Income Reipresentatior,
For the purposes of 24 CFR Part 92, a person who does not serve as a ",ubhc official" to any elected or appointed capacity ane
who meets any of the following characteristics is recognized as representing the low-income community By signing and dating
this statement, i hereby certify that scheck one)
Q 1 am a low-income resident of _ a community in the CHDO's geographic service afec
raqualr!suodPrthis criterion, meboat dmembermust beplow•mromeres ideirtu/acommuoityintire CHDO °sservecearea "lowrncnmv
dP(med as hoeing o gross anotia! household nit anse at ar bel{>.v ED�qjPr(P�t Oj the ore0 m Bron, as defined by HUD )
' I am a resident of a low-income neighborhood in l`f IG�F+LAr.I r L tK a community in the CHDO's service area
i to ii.oli(y undue this criterion the board member must live in o row Income neighborhood where 51 percent or mare Of the residents are
'ow rntorte the board member does not have robe low uwronre )
am an elected representative o1 a low-mtunte neighborhood
-ngaruzauon within - _. a community in the CHOO's service area.
'o ar,ol,fj• w -del rtas cr.ter,on. rhe penny must be Oerrerd be o Ince mcome neighborhood orgomroven rc Serie or pie CHDO Hoard rhe
vruon,rocton must be composed orimartry of resident; o1 a low. 'anomie neighborhood and a s priniory purpose niust be to serve the interest
.N the ne,ghbdrhood r Psrdents. Such organ,: urlons nagtit intrude blotl groups, tioghbrrh000 associations, and neighborhood watch yroupi
?,roroup most be o neighborhood orgomratron and n•uy not be, the CHDO asell r( the board member n representing a inw Income
•e:gnbo:hand argonrzunan prose ortarh u ropy hl [err signed resndutrnn from the nPiahbr-,hood nrourn:uhnn Hominy the u•d,wducl o, pts
,Presentative on the CHCIO Board)
further y.rtify th • .e . me jo 11ding of the CHDO's governing boa,d
Signature _ _ Date,-
''r•rted Name f mil Marlullo
=rtpared bs Stifle HCUdnd niodrhad lar lune
LQ 14
Page 1 7
Application for CHDO Certification
Board Member Certification
There are four specific m4ulrements related to an applicant ownUation's board which trout be evidenced in the organimlart's
by-laws, charter, or articles of Incorporation. These are:
1. No more than oneAhlyd of the board may be tepresenmves of the public sector, Including any employees of the
pa rildpatf ng Jurisdiction.
2. At least one4hlyd of the board must be repranntO es of the baaincome co munity served by the {TIDO.
3. If a CNDO Is sporaonW by a for-profh entity, the for-profit may not appoint more than one third of the board. The board
members appok ted by the forlwofit may not appolid the remeTNng two-thirds of the board members.
4. St da or local governments who charter CHODs may not appoint more than one-thid of the board, and the board
members appointed by the State or local government may not appolrt the remalning two-thirds of the board members.
Pert & _ arrhik yAd a
For the purposes of 24 CFR Part 92, a public offidar Is detinet as any person servind In any of the following Capacities (check
ad that are applicable):
An elected official such as, but not gmhed to a city council member, county supervisor, slate keglslator, or :drool board
represenptive.
O An appointed public official such as members of a planing or toning commtsston or of any other n%ubtory and/or
odvlwy commissions appointed by a public alfidel.
O A public employee such as my emplane of the dry, county, or State of Californla.
O A person appointed by a public AdN to serve on the CHDO board.
Check one of the following:
0 By aijntrte and dadna this statemant, I hereby army that I da serve In one of the 'pw& of&br capacities pmvlousiy
stated finumust check at least one line above. End of artlfikatbn. Sign below.
0 By signh►g and dathha this statement, I hereby certfry that i ALM serve In any of the'pubiie Officer r a mdttes previously
stated. Proceed to Part B.
For the purposes of 24 CFR Part 92, a oerson win does not terve as a'aubtic affidar in any elected or appointed capacity and
who meets any of the following characteristics is recogrized as representing the low-income community. By signing and dating
this uaatemerrt, l hereby certify that 1 ona�:
0 1 am a iowancome resident of-,, X�W Qds-SL n a , a community in the CHDO's geopgft service area.
fro qua* under hili tsldent Qf a C"AwNly In the 00ft S&ww arae, low.
bwvfim-Itttlr, wdarhaft agnmornWhoeubdifftwoeataraelwra0pirrartoftikeonromedimlasAe4wbymuAI
0 I am a resident ofs low-income nelghborhood In ■ community tithe CHDO s service area.
(To gwo under tfsh crkterim ahs bowdme+nber mm ova In O low, wome nnfphbwbaod where S1 percent or more of ft rewwm ave
bw4heDme. the board member Aces not nave tis 6e be`arconre l
0 I am an elected mep: serntat! of _ a IOvwkteon+e nelghfiorhOod
organIntion within _ a cominuedty in the CHDO's service area.
fro quo* under rib cNtFrkn ahr person mora be akatrd by o bW4WDnre RCVt*orhaod wpankooba to same on she CHOO Doord. the
orpaakWbn mrnr be oompord wb++arNy of teslderr� of o bwlaknme nedghaodwod aur Its 1XIM07PWPO a mart be m serve the Interest
of the nelgrrbortnood msldentx Such aporrtm8aw n*ht batuAe btm* ?coup4 neWalboad ossodafbnt and aftmorhood vmkb
gmwm The pinup muse be o ndgltbarhood orponl:ottarh and may nor be the OW W. ff the board member h repnwn" o bw-
bxeme nelpbaavhoad orponkuh , pL— otter I o copy of 6* signed nsohetlan fiom the nelgbborhaod orW&g = mWng rhe
hrdWldtml as Its repmentat7vt on clot OW board)
I further certify that l am as current member In good standing of the CNDO's governing board. /j�/
Signature: ���E -� N.i l O\ J ' Date: 1�p_b
Printed Name: - -JIL& L4 o AACC ot)
Prepared by state MCD ane modified rax OVA use - Rev. June 2014
Page 17
Application for CHDO Certification
Board Member Certification
There are four spadfrc requirements relrted m an appitrant orgardtadon's board which must be avidem:ed loft oganlzatlon'a
by4ws, charter, or articles of Incorporation. 'Mese are:
L No more than one-third of the board may be repraseMstim of the pubic sector, Including any employees of the
participotfrue Ju risdktlan.
2. At least one-third of the boardmust be representatives of the low -Income community served by the 000.
3. It a CHDO Is sponsored by a for-profit entity, the for-profit may not appoint more than onvAhird of the board. The board
members appointed by the for-proAt may not appoint the remaining t radirdc of the board members.
4. States or coal govemmerrts who charter cHDOs may not appolrt more than one-third of the board, and the hoard
mernbers appointed by the state or focal government may not appoint the remaining two4dirds of the board members.
Part A: PubikOfBdWReoresentetlon
for the purposes of 24 CFA Part 92, a'pubik ofkisr Is defined as any person serving In any of the follo int npactties {check
all that are applicable):
O An elected officW such as, but not limited to a city cowl member, county supervisor, state legislator, or school board
awasentoWe.
O An appointed public offidal such as members of • planning or zoning commission or of any oche regulatory and/or
adrtsory commUslons appointed by a pubic olBcaL
O A pubtk employee such as any employee of the city, county, or State of CalHomla.
O A person appointed by a pubic offidal to sem on the CHDO board.
Hueck one of the fvllourhtg:
❑ By signing and dating cis statemarrt, I hereby certify that I fg serve In one of the 'pttblk officlar capacities pmviousfy
stated fvou must check at least one. Una above!. End of cc, tit am sig► below.
❑ By signing and deft this statement, I hereby certify that I ggjlg sem in array of the *public amdar capacities previously
staged. Proceed to Part B.
pz�" ;,Yi1tSlPlil
For the purposes of 24 CFR Part 92, a person who does card serve as 1'mabllc dfkiar In any elected or appointed capacity and
who meats any of the followhtg ctarattaftes is recognized as representing the low-income community. By stgning and dating
this statement, thereby certify that (check oats):
O 1 am a low -Income resident Of. _ a community in the OWs gnographle seuvbe area,
N gstrr(ly under the er&rrift the board member must be o rawkx9nte resUP I I CIA? tormwadb' in she [FWS serrke area. 'taw•
hm me'!t d*jvd as book D a pmts w mad hoasdW Jaoome of or bebw BG Perone a;ffht weo WV*os dd liWAY HUD -1
13 1 am a residgmt of a low-income ndobodwd In _ _ a community In the cHows service area.
fro 000 wader ft ofberlom, the booTd member must eve b a bhvartaonte eelghborhood where 52 patent or mora of the reWeno am
bw,Yrame. The booed memberdoer mat hour to be bwarcaaK-J
O I am an elected representative of __ �__ a low -Income neighborhood
orgardaation within a community in the CHDO's service arm.
flo gUWO wader this arteyin the person mutt be eketed by a bwtiinmme neldhborhood orponttofkn to Serve on ft C RDO Boas fie
orponhation must be oaapased prtow4y pins! 00 of o bwahcvme r4VA rhoadand ItsOrlrmatYPUFAW mcatbe to serer OW&Ieerest
of tltc $VWbwhm d resldeata. Such Orpanlrtmons mlphf bdude btahr FOup., neohWhoad ossocaatrora, oad rfthborlwd wash
RxMtA The group Must be a newkwhood ownhation and may eat be the am bw a, the board member 8 reArawtkv o tow.
kmw eery 6wboed argaMo !art, phase oust a copy cif the sbaed rrntutlon /roar the melphbwhood OfM►ralbA aar0ty the
WWusf as the represenNOW on the WOO Loord.J
I further cert%- ftt r am a current membgr in good standing of the CHDO's gouernfng board.
SEgnrture: Date: �, .% 1
Printed Name:
Prepared by SMe HCD and modified fa e+Ns use— acv June 2014
Page 17
a� Application for CH DO Certification
Imp
Board Member Certification
There are four specific requirements related to an applicant organization's board which must be evidenced In the organization's
by-laws, charter, or articles of incorporation. These are:
1. No more than one-third of the board may be representatives of the public sector, including any employees of the
participating jurisdiction.
2. At least one-third of the board must be representatives of the low-income community served by the CHDO.
3. If a CHDO is sponsored by a for-profit entity, the for-profit may not appoint more than one-third of the board. The board
members appointed by the for-profit may not appoint the remaining two-thirds of the board members.
4. States or local governments who charter CHDOs may not appoint more than one-third of the board, and the board
members appointed by the State or local government may not appoint the remaining two-thirds of the board members.
Pant A: Public_ Official•Renresentation
For the purposes of 24 CFR Part 92, a "public official" is defined as any person serving in any of the following capacities (Check
all that are applicable):
❑ An elected official such as, but not limited to a city council member, county supervisor, state legislator, or school board
representative.
❑ An appointed public official such as members of a planning or zoning commission or of any other regulatory and/or
advisory commissions appointed by a public official.
❑ A public employee such as any employee of the city, county, or State of California.
❑ A person appointed by a public official to serve on the CHDO board.
Certificati:, n:
Check one of the following:
❑ By signing and dating this statement, I hereby certify that 1 do serve in one of the "public official" capacities previously
stated hrou must check at least one line abn-vej. End of certification. Sign below.
❑ By signing and dating this statement, I hereby certify that I do not serve In any of the "public official" capacities previously
stated. Proceed to Part B.
Part B. Low -Income Representation
For the purposes of 24 CFR Part 92, a person who does not serve as a "?ublic official" in any elected or appointed capacity and
who meets any of the following characteristics is recognized as representing the low-income community. By signing and dating
thJ statement, I hereby certify that eckigej: /7
tr7 I am a low-income resident of__:?�jr'r'rt�Iafl�'Y13 eOAA4e a community in the CHDO's geographic service area.
(To qualify under this criterion, the board member most be a lowdnca resident of a community in the CHDO's service area. "Low-
income" is defined as having a gross annual household Income of or below 80 percent of the area median as defined by HUD.)
13 1 am a resident of a low-income neighborhood in a community in the CHDO's service area.
(To qualify under this criterion, the board member must live In a low -Income neighborhood where 51 percent or more of the residents are
lo%v Income. The board member does not have to be low-income.)
❑ 1 am an elected representative of a low-income neighborhood
organization within ..................... _... a community in the CHDO's service area.
(To qualify under this criterion, the person must be elected by a low-income neighborhood orgonizotion to serve on the CHDO Board. The
organization must be composed primarily of residents of a low-income neighborhood and its primary purpose must be to serve the interest
of the neighborhood residents. Such organizations might Include block groups, neighborhood associations, and neighborhood watch
groups. The group must be a neighborhood organization and may not be the CHDO itself. if the board member is representing a low -
Income neighborhood organization, please ottach a copy of the signed resolution from the neighborhood organization naming the
Individual as Its representative on the CHDO Board.i
I further certify that I am a curren member in ood standing of the CHDO's governing board.
i I l
Signature: L/� �. � .��r.- - Date: _• d/y1/
Printed Name: l�Tx
Prepared by 5tate NCD and modified for QtVs use —Rev. lune 2014
Page 17&
So Eerla lea
Application for CHDO Certification
Certification of Board Status
Please list each Board member by name, then place a check indicating the representation that member brings to the Board.
Please list only current or approved board members. Do no list prospective Board members who have not been approved to join
the Board. Use as many pages as necessary to include all Board members.
I certify that the above listing of c�trrgnt, participati Board memk�rs is accurate.
II f /
Board Chairperson Signature: f� Date:
Prepared by State HCD and modified for City's use — Rev. June 2014
Page 18
Low -Income Public Appointed
For -Profit Appointed
Board Member's Name, Residential Address,
Community Institution
(Appointed by Public by For- Board
Telephone, E-mail, Employer, and Employer City
(Appointed or (Public by For- Board Profit Appointment
Elected from Official or Board Date/Term
Community) Employee) Profit) Member Member
Lee McDougal
_
7031 Via Savino PI., Rancho Cucamonga, CA
91769 ❑
❑
❑
✓
❑
909-223-7709
Leemcdougal86@gmail.com
Fred Shorett
420 Edgerton Dr., San Bernardino CA 92405
✓
❑
13
11909-883-8951
fredshorett(@charter.net
Kathryn McCool
14333 Gateside Ct., Victorville CA 92394
909-633-1765 '�
❑
❑
❑
❑
Emil Marzul10
28446 Carraige Hill Dr., Highland CA 92346
909-844-9254
❑
❑
❑
✓
❑
Emarzu1lo2@gmail.com
Maria Razo
715 East Brier Dr., San Bernardino CA 92408
909-890-0644
❑
`/
❑
❑
❑
mrazoghacsb.com
Caleb Beaver
909-532-9630
Caleb beaver0ayahoo.com
'�
❑
❑
❑
❑
I certify that the above listing of c�trrgnt, participati Board memk�rs is accurate.
II f /
Board Chairperson Signature: f� Date:
Prepared by State HCD and modified for City's use — Rev. June 2014
Page 18
Su -n Application for CHDO Certification
Certification of Board Status (continued)
Please list each Board member by name, then place a check indicating the representation that member brings to the Board.
Please list only current or approved board members. Do no list prospective Board members who have not been approved to join
the Board. Use as many pages as necessary to include all Board members.
�F
Low -Income
PublicI
For -Profit
Appointed Appointed
Board Members Name, Residential Address,
Community
Institution
(Appointed
by For- Board
by Public
Telephone, E-mail, Employer, and Employer City
(Appointed or
; (Public by For-
Board Profit Appointment
Elected from
Official or I
Board Date/Term
Member
Community)
Employee)Profit)
Member
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
❑
I certify that the above listing of current, participating Board members is accurate.
Board Chairperson Signature:
Prepared by State HCD and modified for City's use — Rev_ June 2014
Date:
Page 19
Application for CHDD Certification
6&02"
CHDD Board Compliance Certification
1, . Lee McDougal _ (Chairperson of the Board) certify
that _Housing Partners L Inc. (the CHDO) will at all times
maintain at least one-third of the membership of the Board of Directors for: 1) residents of the
CHDO's geographic service area who are low-income; 2) residents of the CHDO's geographic
service area who live in a low-income neighborhood; or 3) representatives elected by a low-
income neighborhood organization as evidenced by some action by the low-income
neighborhood organization's governing body.
I further certify that, the Board of Directors regarding the investment of HOME funds shall take
no action without one-third low-income representation on the Board.
I further certify that, no more than one-third of the Board membership shall be public officials,
including elected officials, appointed public officials, public employees, and board members
appointed by a public official.
I further certify that, a State or local government has not appointed more than one-third of the
Board membership and that Board members appointed by a State or local government have not
appointed the remaining two-thirds of the Board members.
I further certify that, if my organization is sponsored or created by a for-profit entity, (a) the for-
profit entity has not appointed more that one-third of the membership of the Board membership
and that Board members appointed by a for-profit entity have not appointed the remaining two-
thirds of the Board members and (b) the for-profit entity is not an entity whose primary purpose
is the development or management of housing, such as a builder, developer, or real estate
management firm.
I further certify that, the CHDD is free to contract for goods and services from vendors of its own
choosing.
This certification approval is evidenced by a resolution adopted by the Board of Directors, dated
and signed by the Chairperson of the Board.
Board ChairpersonJ; Si nature: av -- ' Date: d
P,q,ai cow• Sidie HLD and niod,fmd Iur, Gty;'s u>e— Re. LU)L 2014
Page 1 10
Formed in 1991, Housing Partners 1, Inc. (HPI) was tasked to develop, own, and manage affordable housing,
and provide housing counseling services to low and moderate income people in the County of San Bernardino.
As a nonprofit 501 (c)(3), HPI is designated as a Community Housing Development Organization. This allows HPI to apply for and
receive HOME funds from the County of San Bernardino Department of Community Development and Housing and other cities for
the acquisition, development, and rehabilitation of housing units.
HPI is an experienced affordable housing developer and integral part of the County of San Bernardino. HPI has established
successful partners with various agencies, municipalities, financial institutions, and housing developers within the County of San
Bernardino. HPI is also an affiliate of the Housing Authority of the County of San Bernardino (HACSB), who is under contract to
manage HPI's activities.
To date, HPI has 963 housing units as part of its portfolio, but since its inception has developed and acquired over 1,100 units.
Bloomington Phase 1
Currentlyunder construction is the Bloomington Apartments,
a 106 unit senior and family complex with a public library.
HPI is a partner with Related Companies, LaBarge Industries,
PATH Ventures, and HACSB. HACSB is providing 11 -Project
Based Vouchers to support this development.
The project funding sources are outlined in the table. This
project is expected to open in the summer of 2016.
Source
County
Capital grant
Library grant
Loan
MHSA
9% Tax credits
Total
Amount
$ 7,911,817
2,705,000
5,871,000
1,338,315
15,751,880
$33,578,012
HPI is a partner in the Valencia and 9th Street development,
a 75 family unit apartment complex, part of phase 1 of
the Waterman neighborhood revitalization in the City of
San Bernardino. National Community Renaissance is the
developing partner and HACSB is contributing 75 -Project
Based Vouchers to support this development.
The project funding sources are outlined in the table. The
project is currently under construction and the grand opening
is expected to take place Fall of 2015.
ne,
f #�a! ! CES
! ! t'■
Valencia Grove Apartments
HPI is also a partner in the Valencia Grove development;
which was a 70 year old public housing site. The initial phase
of development includes construction of 85 family units, and
subsequent phases will result in a total of 228 units including
39 single family homes for sale; an increase from the previous
115 affordable housing units.
Silver Creek Industries manufactures the factory built
multifamily units off site and transports them to the Redlands
site for installation by U.S. Modular under subcontract to
Perera Construction.
The project funding sources are outlined in the table. Phase 1
of the construction is scheduled to be complete the fall of 2015.
I
Source
4% Tax credit equity (PNC)
Permanent tax exempt Loan (Chase)
Housing Partners I Loan
HACSB Loan
Federal Home Loan Bank AHP grant
Deferred developer fee
10,7[
Amount
$ 13,087,853
10,860,000
6,600,000
1,000,000
672,000
1,847,027
$34,066,880
In partnership with the City of San Bernardino, HPI, received
$1.3 million in Neighborhood Stabilization Program funds to
build 3 infill homes and rehab 2 -duplexes and one 4-plex.
In 90 -days, HPI turned around the ground up construction
of the infill homes, most of which are in escrow now to low-
income first time homeowners. Below is an example of one of
the newly constructed homes.
Before
After New Kitchen
Pictured below is the 4-plex building which after being
foreclosed on had been boarded up and needed major
rehabilitation. This property was purchased by HPI from
the City of San Bernardino in 2014 for rehabilitation and
operation as an affordable housing development. The City
of San Bernardino provided approximately $525,000 in
NSP funding for the complete rehabilitation of the blighted
property. The property is now fully leased since it opened in
September of 2014.
Before
After
Future Projects
HPI has multiple projects in the planning process, including:
second phases of Bloomington, Valencia Grove, Waterman
Gardens, and Horizons at Yucaipa; new project with Bridge
Housing in Chino and the development of veterans housing in
Loma Linda. Stay tuned for updates on these exciting projects.
Partnering with HPI
HPI can work with you to increase affordable housing in
your city, create new vibrant communities, and enhance the
attractiveness of your area's housing. HPI was organized and
operates exclusively for charitable purposes as a 501 (c)(3) entity
to serve the community with affordable housing for families in
San Bernardino County. Contact HPI today at (909) 332-6325.
HOUSING.
PARTNERS I< INC Property Portfolio
Development
City
Vista Del Sol
Redlands
Scattered Sites - Region 1
Loma Linda, Redlands, Yucaipa,
Desert Village
Bloomington, Colton, Fontana,
Kendall Drive Apts.
Rancho Cucamonga
Scattered Sites - Region 2
Ontario, Montclair, Chino
Scattered Sites - Region 3
Adelanto, Apple Valley, Hesperia,
6 Developments
Victorvi'lle, Joshua Tree,
Twentynine Palms, Yucca Valley
48 Developments
Development
City
Acacia Property
Fontana
Chehalis Property
Apple Valley
Desert Village
Victorville
Kendall Drive Apts.
San Bernardino
Kendall Park Apts.
San Bernardino
Robert 0. Townsend
Montclair
6 Developments
Address
1320 Webster Street
Various (16 developments)
Various (14 developments)
Various (17 developments)
Address
9590 Acacia Ave., #1-28
15876 Chehalis Rd., #1-30
14469 Rodeo Dr., #1-46
1416 Kendall Dr., #2-38
2490 Kendall Dr.
9190 Monte Vista., #101-226
Development City Property Owner
v- phase I Redlands Valencia Grove, L.P.
Horizons at Yucaipa Phase I Yucaipa UHC 00539 Yucaipa, L.P.
Bloomington Mixed Bloomington Bloomington I Housing
Generational Partners, L.P.
Val -9 (Waterman Gardens San Bernardino Val 9 Housing Partners, L.P.
Phase I offsite)
Developments
Total Units - All Entities & New Developments
HPI Rale/HPI Ownership Entity
ilii neral. Partner/
II•'I c,rove, LLC
M, t .,--pl Partner/
Housmy Farti,efs 1, Inc.
Co -General. Partner/
HI'I LLC
Co -Class A Limited Partner/
Waterman Affordable I LLC
# of Units
71
97
107
131
406
# of Units
28
30
46
37
52
48
241
# of Units
85
s0
106
75
316
963 Units
07.13.2015
a
A0658155
State of California
Secretary of State
I, DEBRA BOWEN, Secretary of State of the State of
California, hereby certify:
That the attached transcript of I page(s) has been compared
with the record on file in this office, of which it purports to be a copy, and
that it is full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal of the
State of California this day of
HAR 19 2007
in 6�rr. o
DEBRA BOWEN
Secretary of State
Sec/State Form CE -107 (REV 112007) @a ospoe sena
State of California
Secretary of State
CERTIFICATE OF STATUS
ENTITY NAME:
HOUSING PARTNERS I, INCORPORATED
FILE NUMBER: C1811640
FORMATION DATE: 12/05/1991
TYPE: DOMESTIC NONPROFIT CORPORATION
JURISDICTION: CALIFORNIA
STATUS: ACTIVE (GOOD STANDING)
I, ALEX PADILLA, Secretary of State of the State of California,
hereby certify:
The records of this office indicate the entity is authorized to
exercise all of its powers, rights and privileges in the State of
California.
No information is available from this office regarding the financial
condition, business activities or practices of the entity.
IN WITNESS WHEREOF, I execute this certificate
and affix the Great Seal of the State of
California this day of August 03, 2016.
a
ALEX PADILLA
Secretary of State
NP -25 (REV 01/2015) RYM
A0658155
ENDORSED . FILED
fn die office of the secreiaty of SUN the State a Cates
CERTIFICATE OF AMENDMENT OF FEB'O 6 2007
ARTICLES OF INCORPORATION
The undersigned certify that:
1. They are the president and the secretary, respectively, of Housing Partners I,
Incorporated, a California corporation.
2. Article II, B and IV, A of the Articles of Incorporation of this corporation is
amended to read as follows:
The specific purpose of this corporation is to acquire, develop,
rehabilitate, subsidize, rent, own and manage or sell affordable housing
and to develop and provide housing counseling for low and moderate
income persons in the County of San Bernardino and to conduct or
perform any ancillary or related activity in furtherance of the foregoing as
a means of promoting the common good and general welfare of the people
of California.
This corporation is organized and operated exclusively for charitable
purposes within the meaning of Section 501(c) (3) of the Internal Revenue
code of 1986, as amended and shall be permitted to conduct other lawful
activities permitted under the California Nonprofit Public Benefit
Corporation Law.
3. The foregoing amendment of Articles of Incorporation has been duly approved by
the board of directors.
4. The foregoing amendment of Articles of Incorporation has been duly approved by
the required vote of the members.
We further declare under penalty of perjury under the laws of the State of California that
the matters set forth in this certificate are true and correct of our own knowledge.
DATE:_
4�E OF Tye C - /' /
Jo C. ' ath, Pr t
� a ILLI
Daniel J. Nac erman, Secretary
1811640
in the crar�ig of SE3Ee y
ARTICLES OF INCORPORATION OF M,95wee.Caidarni@ ie
HOUSING PARTNERS I, INCORPORATED t
A California Nonprofit Public Benefit Corporation DEC, S 1991 f
I
The name of the corporation is HOUSING PARTNERS I,
INCORPORATED.
II
A. This corporation is a nonprofit public benefit
corporation and is not organized for the private gain of any
person. It is organized under the Nonprofit Public Benefit
Corporation Law for public and charitable purposes.
B. The specific purpose of this corporation is to
acquire, develop, rehabilitate, own and manage affordable
housing for low and moderate income persons in the County of
San Bernardino, State of California, as a means of promoting
the common good and general welfare of'the people of California.
III
The name of the corporation's initial agent for
service of process is%
RAYMOND J. STATON
NOSSAMAN, GUTHNER, KNOX & ELLIOTT
445 South Figueroa Street, 31st Floor
Los Angeles, California 90071-1602
IV
A. This corporation is organized and operated
exclusively for charitable purposes. within the meaning of
Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
B. No substantial part of the activities of this
corporation shall consist of carrying on propaganda, or
at�herw 13e attempting to influence legislation, and the
cdrpokation sha It ndt participate or intervene in any political
'.:caigx ( islk::t13s gblishing or distribution of
tatemx�t;A bFha of arty candidate for public office.
►/
V The property of this corporation is irrevocably
dedicated to charitable purposes and no part of the net income
or assets of this corporation shall ever inure to the benefit
of any director, officer or member thereof or to the benefit of
any private person. Upon the dissolution or winding up of this
corporation., its assets remaining after payment or provision
for payment of all debts and liabilities of this corporation
shall be distributed to a nonprofit fund, foundation or
corporation which is organized and operated exclusively for
charitable purposes and which has established its tax exempt
status under Section 501(c)(3) of the Internal Revenue Code of
1985, as amended.
Dated: December 3, 1991E
Ri576nd J. St on, Incorporator
HOUSING PARTNERS I, INCORPORATED
RESOLUTION NO. 54
WHEREAS, Housing Partners 1, Incorporated (the "Corporation") a
California non-profit public benefit corporation was created with the purpose of
acquiring, developing, and providing affordable housing; and
WHEREAS, Housing Partners 1, Incorporated is desirous of expanding
homeownership opportunities to serve the needs of lower income families; and
WHEREAS, Housing Partners 1, Incorporated has determined that home
ownership programs provide a way to stabilize the housing costs of low and
moderate homes to low and moderate income families in a manner that
permanently preserves the affordability of such homes; and
WHEREAS, to engage in sales of homes to low and moderate income
families in the County, it is advisable for the Corporation to amend its Articles of
Incorporation and Bylaws to specifically expand its charitable purposes and to
notify the Internal Revenue Service and California Franchise Tax Board of its
expanded programs; and
NOW, THEREFORE, BE IT RESOLVED, that Section 11, B. of the Articles
of Incorporation be and hereby amended as follows:
The specific purpose of this corporation is to acquire, develop,
rehabilitate, subsidize, rent, owri and manage or sell affordable
housing and to develop and provide housing counseling for low and
moderate income persons in the County of San Bernardino and to
conduct or perform any ancillary or related activity in furtherance of
the foregoing as a means of promoting the common good and
general welfare of the people of California. Subject to Article IV A of
these articles, this corporation shall be permitted to conduct other
lawful activities permitted under the California Nonprofit Public Benefit
Corporation Law.
BE IT FURTHER RESOLVED, that Article 11, of the Bylaws of Housing
Partners I, Incorporated be and hereby amended as follows:
ARTICLE II — PURPOSE
The specific purpose of this corporation is to acquire, develop,
rehabilitate, subsidize, rent, own and manage or sell affordable
housing and to develop and provide housing counseling
services for low and moderate income persons in the County of
San Bernardino and to conduct or perform any ancillary or
related activity in furtherance of the foregoing as a means of
promoting the common good and general welfare of the people
of California. This corporation shall be permitted to conduct
other lawful activities permitted under the California Nonprofit
Public Benefit Corporation Law
BE IT RESOLVED FURTHER, that the officers of the Corporation, are
hereby authorized and directed to file such documents with the Secretary of
State, the Internal Revenue Service and Franchise Tax Board as may be
necessary or advisable to provide notification of the Corporation's expanded
charitable programs.
PASSED AND ADOPTED by the Board of Directors of Housing Partners I,
Incorporated at their regular meeting held on the 14 day of November 2006,
Signed:
John C. McGrath, esicfent
Attest. _
y -
Daniel J. ckerman, Secretary
C E R T I F I C A T E
I, Daniel J. Nackerman, Secretary/Treasurer of Housing
Partners I, Inc. hereby certify that the attached Resolution,
No. 54, was adopted by the Board of Directors by vote of the
members present as the same appears in the Official. Minutes of
said Commission at a special meeting of November 14, 2006.
November 22, 2006
Date
Daniel J. Nackerman
Secretary/Treasurer
ARTICLES OF INCORPORATION OF
HOUSING PARTNERS I, INCORPORATED
1.8.1640
ENDORSED
=SLED
mthooff= oiftsa mms Stft
Of the smoof cawomla
A California Nonprofit Public Benefit Corporation DEC 5 1991
I
The name of the corporation is HOUSING PARTNERS I,
INCORPORATED.
II
A. This corporation is a nonprofit public benefit
corporation and is not organized for the private gain of any
person. It is organized under the Nonprofit Public Benefit
Corporation Law for public and charitable purposes.
B. The specific purpose of this corporation is to
acquire, develop, rehabilitate, own and manage affordable
housing for low and moderate income persons in the County of
San Bernardino, State of California, as a means of promoting
the common good and general welfare of*the people of California.
III
The name of the corporation's initial agent for
service of process is:
RAYMOND J. STATON
NOSSAMAN, GUTHNER, KNOX & ELLIOTT
445 South Figueroa Street, 31st Floor
Los Angeles, California 90071-1602
IV
A. This corporation is organized and operated
exclusively for charitable purposes within the meaning of
Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
B. No substantial part of the activities of this
corporation shall consist of carrying on propaganda, or
otherwise attempting to influence legislation, and the
corporation shall not participate or intervene in any political
campaign (including the publishing or distribution of
statements) on behalf of any candidate for public office.
V
The property of this corporation is irrevocably
dedicated to charitable purposes and no part of the net income
or assets of this corporation shall ever inure to the benefit
of any director, officer or member thereof or to the benefit of
any private person. Upon the dissolution or winding up of this
corporation, its assets remaining after payment or provision
for payment of all debts and liabilities of this corporation
shall be distributed to a nonprofit fund, foundation or
corporation which is organized and operated exclusively for
charitable purposes and which has established its tax exempt
status under Section 501(c)(3) of the Internal Revenue Code of
1966, as amended.
Dated: December 3, 1991 re_ -t -7n..--
Ra nd J. st on, Incorporator
2.
LA2/RJS:9685-72/03/97
BY-LAWS OF
HOUSING PARTNERS I, INCORPORATED
Adopted on December 5, 1991
Revised -- Resolution No. 3
January 18, 1994
Revised by motion
January 20, 2004
Revised — Resolution No. 54
November 14, 2006
Revised — Resolution No. 65
August 18, 2009
Updated by motion
November 15, 2011
Revised — Resolution No. 78
March 26, 2012
Revised — Resolution No. 79
May 24, 2012
Revised — Resolution No. 81
July 11, 2012
Revised — Resolution No. 95
January 22, 2015
Revised — Resolution No. 102
March 26, 2015
BYLAWS OF
HOUSING PARTNERS I, INCORPORATED
A California Nonprofit Public Benefit Corporation
ARTICLE I
NAME
The name of this corporation is Housing Partners I, Incorporated.
ARTICLE Il
PURPOSE
This corporation is a nonprofit public benefit corporation organized under the
Nonprofit Public Benefit Corporation Law. The specific purpose of this corporation is to acquire,
develop, rehabilitate, subsidize, rent, own and manage or sell affordable housing and to develop and
provide housing counseling services for low and moderate income persons in the County of San
Bernardino and to conduct or perform any ancillary or related activity in furtherance of the foregoing
as a means of promoting the common good and general welfare of the people of California. This
corporation shall be permitted to conduct other lawful activities permitted under the California
Nonproft Public Benefit Corporation Law.
This corporation is organized and operated exclusively for charitable purposes within
the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
ARTICLE III
OFFICES
Section 1. Principal Office. The principal office of the corporation shall be located at
715 East Brier Drive, San Bernardino, California. The Board of Directors may change the principal
office from one location to another. Any change of location of the principal office shall be noted by
the Secretary on these Bylaws opposite this section, or this section may be amended to state the new
location.
Section 2. Branch Offices. The Board of Directors may at anytime establish branch
or subordinate offices at any place or places where the corporation is qualified to conduct its
activities.
ARTICLE IV
DIRECTORS
Section 1. Powers. Subject to the provisions and limitations of the California
Nonprofit Public Benefit Corporation Law and any other applicable laws, the corporation's activities
and affairs shall be managed, and all corporate powers shall be exercised, by or under the direction of
the Board of Directors. Without prejudice to such general powers, but subject to the same
limitations, the directors shall have the power to:
(a) appoint and remove at the pleasure of the Board, all of the corporation's officers,
agents and employees, prescribe powers and duties for them that are consistent with law, the Articles
of Incorporation of the corporation and these Bylaws; and require from them a fidelity bond as
security for faithful performance of their duties;
(b) conduct, manage and control the affairs and business of the corporation, and make
such rules and regulations therefore not inconsistent with law, the Articles of Incorporation or these
Bylaws, as they may deem best;
(c) change the principle office for the transaction of the business of the corporation
from one location to another within the same County as provided in Article I, Section 1 hereof; and
designate any place within the State of California for holding any meeting of the board;
(d) borrow money and incur indebtedness on behalf of the corporation and cause to
be executed and delivered for the corporation's purposes, in the corporate name, promissory notes,
bonds, debentures, deeds of trust, mortgages, pledges, hypothecations and other evidences of debt
and securities; and
(e) create, by resolution adopted by a majority of the directors then in office,
provided a quorum is present, one or more committees to serve at the pleasure of the Board.
Appointments to committees of the Board shall be by majority vote of the authorized numbers of
directors. The Board may appoint one or more directors as alternate members of such committee
who may replace any absent member at any meeting. No committee, regardless of Board resolution,
may:
the Board;
committee;
(1) fill vacancies on the Board or on any committee that has the authority of
(2) fix compensation of the directors for serving on the Board or on any
(3) amend or repeal Bylaws or adopt new Bylaws;
(4) amend or repeal any resolution of the Board that by its express terms is
not so amendable or repealable;
(5) create any other committees of the Board or appoint the members of
committees of the Board; or
(6) approve any contract or transaction to which the corporation is a party.
Meetings and actions of committees of the Board shall be governed by, held and taken
in accordance with the provisions of these Bylaws concerning meetings and other Board actions,
except that the time for regular meetings of such committees and the calling of special meetings of
such committees may be determined either by Board resolution, or, if there is none, by resolution of
the committee of the Board. Minutes of each meeting of any committee of the Board shall be kept
and shall be filed with the corporate records. The Board may adopt rules for the government of any
committee provided they are consistent with these Bylaws or, in the absence of rules adopted by the
Board, the committee may adopt such rules.
Section 2. Number and Qualification of Directors. The authorized number of voting
directors shall be six (6) until changed by amendment of this section of the Bylaws duly adopted by a
unanimous vote of the Board of Directors. In order to meet the Community Housing Development
Organization (CHDO) Board composition requirements, as established by the Department of
Housing and Urban Development (HUD), the Board must maintain the following structure.
(a) Community Directors. Two (2) of said six (6) directors shall be a low-income
resident, a resident of a low-income neighborhood, and/or an elected representative of a low-income
neighborhood organization in the county of San Bernardino hereinafter called "community
directors." No community director may be an officer, employee, agent, or commissioner of the
Housing Authority of the County of San Bernardino.
(b) Additional Directors. Three (3) of said six (6) directors shall be persons
interested and active in providing housing for low income persons in the County of San Bernardino,
hereinafter called "additional directors." No more than one of the additional directors may be an
officer, employee, agent, or commissioner of the Housing Authority of the County of San
Bernardino.
(c) Director. One (1) of said six (6) directors shall be the person holding the
office of the Executive Director of the Housing Authority of the County of San Bernardino who shall
serve as the Secretary and Treasurer of the corporation.
Section 3. Terms.
(a) Community Directors. The Community Directors will be appointed for two-year
terms. Community Directors will thereafter be appointed and their terms will commence at the
annual meeting held in January of odd -numbered years. There are no term limits for Community
Directors, unless such limits come from the neighborhood organization that elects them.
(b) Additional Directors. The Additional Directors will be appointed for two-
year terms. Additional Directors will be appointed and their terms will commence at the annual
meeting held in January of even -numbered years. There are no term limits for Additional Directors
(c ) Housing Authority Appointed Director. The Executive Director of the Housing
Authority of the County of San Bernardino shall become a Director at the time he /she is appointed
to the Executive Director of the Housing Authority position and shall remain a Director until such
time as he or she no longer holds the Executive Director of the Housing Authority position.
(d) Selection of Directors. At the annual meeting held in January of each year, the
Directors then holding office shall select new Directors to fill seats vacated by the expiration of
terms. In odd -numbered years, the Additional Directors and the Housing Authority Appointed
Director shall select the Community Directors (or ratify any elections made by community
organizations). In even -numbered years, the Community Directors and the Housing Authority
Appointed Director shall select the Additional Directors.
Section 4. Removal of Directors. A director may be removed before the end of his or
her term of office by an affirmative vote of the quorum of the Board, or, in the case of Community
Directors, by the neighborhood organization that elected them. A director may only be removed by
the Board for cause, which cause is limited to the following grounds:
(a) Failure to Attend Meetings of the Board. Directors are required to be in
attendance at all meetings of the Board, whether annual, regular, or special. Directors may be
excused from attendance by a vote of the quorum and by previously notifying the corporation's staff
of the excuse for the absence. At any time after a director has missed three (3) meetings and has not
had such absence excused by the quorum present at that meeting, the Board may act to remove the
offending director.
(b) Failure to Meet Community Group Requirements. Community Directors that met
the requirements for selection by the neighborhood organization that elected them at the time of
election but that fall out of compliance with those requirements during a term of office must vacate
the seat. The seat will be filled according to Section 5 of these Bylaws.
(c) Malfeasance of Office. Any director found who is found to have misused his or
her office as a director for his or her personal gain may be removed from office by a vote of the
Board. Such removal requires proof of the malfeasance or misuse of office to be presented at a
meeting of the Board and requires that the director in question be allowed to rebut the evidence
presented. In addition, an affirmative vote of the majority of the entire Board, and not just a majority
of the quorum then present, is required to remove a director under this section.
Section 5. Vacancies. A vacancy in the Board exists whenever any authorized
position of director is not then filled by a duly elected director, whether such vacancy is caused by
death, resignation, removal, change in the authorized number of directors, or otherwise. All directors
shall hold office until their respective successors are selected.
Vacancies in the director positions represented by additional directors shall be filled
by a majority of the remaining directors then in office, whether or not less than a quorum or by a sole
remaining director. The departing director shall have no vote on his successor. Vacancies in the
director positions represented by Community Directors shall be made by the community
organizations that appointed the previous director to the now -vacant position and shall be ratified by
the Additional Directors and Housing Authority Appointed Director.
Section 6. Meetings. Meetings of the Board shall be held at any place within the
county of San Bernardino that has been designated by resolution of the Board or in the notice of the
meeting or, if not so designated, at the principal office of the corporation.
(a) Annual Meeting. The annual meeting of the Board of Directors shall be held at
San Bernardino, California in January of every year. Such meeting will be held for election of
officers and the transaction of business.
(b) Regular Meetings. The regular meetings of the Board of Directors shall be held
on such dates and at such time as the Board shall fix by resolution; provided, however, that if the
date is a legal holiday, then the meeting shall be held at the same time on the next business day.
Notice of regular meetings need not be given.
(c) Special Meetings. Special meetings of the Board of Directors for any purpose or
purposes shall be called at any time by the President, Vice President, Secretary, Assistant Secretary
or Treasurer, or any two directors. Notice of the time, place and purpose of special meetings shall be
given by the person or persons calling the meeting. Such notice must be personally delivered,
communicated by telephone, sent by first class mail or transmitted by telegraph or telecopier at least
24 hours before the time set for the meeting. Special meetings may be conducted by telephone
provided that notice of the time, place and purpose of such special meeting shall have been given to
all directors as provided herein and a number of directors constituting a quorum participate in the
telephone meeting and each director participating is able to hear each other director participating in
the meeting.
(d) Quoru.m. A majority of the authorized number of directors shall be necessary to
constitute a quorum for the transaction of business. Every act or decision done or made by a
majority of the directors present at a meeting duly called, noticed and held at which a quorum is
present shall be regarded as the act of the Board of Directors unless action by a greater proportion is
required by the California Nonprofit Public Benefit Corporation Law. Notwithstanding the
foregoing, no act or decision may be done or made with respect to a contract, agreement, or other
arrangement between the corporation and the Housing Authority of the County of San Bernardino if
the majority of the directors who would be voting on the act or decision that is being considered are
officers, employees, agents, or commissioners of the Housing Authority of the County of San
Bernardino.
(e) Voting. Each Director of the corporation shall be entitled to one vote on each
matter submitted to a vote. There shall be no proxy voting.
(f) Action Without a Meeting. Any action that the Board is required or permitted to
take may be taken without a meeting if all members of the Board consent thereto in writing. Such
action by written consent shall have the same force and effect as any other validly approved action of
the Board. All such consents shall be filed with the minutes of the proceedings of the Board.
Section 7. Compensation. Directors of the Board shall be entitled to receive a
stipend in the amount of seventy-five dollars ($75.00) and reimbursement of mileage at the
applicable rate established by the Internal Revenue Service for attendance at annual, regular, and
special meetings of the Board of Directors.
ARTICLE V
OFFICERS
Section 1. Officers. The officers of the corporation shall be a President, Vice
President, Secretary, Assistant Secretary and Treasurer. One person other than the President may
hold more than one of these offices.
Section 2. Election. The Board of Directors shall elect a President and Vice
President of the corporation annually for terms of one year or until their successors are elected and
qualified.
Section 3. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise may be filled at the time the vacancy occurs or at any time
thereafter by the Board of Directors.
Section 4. Removal and Resi nom. Any officer may be removed, either with or
without cause, by the Board. Any officer may resign at any time by giving written notice to the
President, Vice President or to the Secretary of the corporation.
Section 5. President. The President shall be the chief executive officer of the
corporation and, subject to the control of the Board of Directors, shall have general supervision,
direction and control of the business and affairs of the corporation. He shall preside at all meetings
of the Board of Directors.
Section 6. Vice President. In the absence or disability of the President, the Vice
President shall perform all the duties of the President. The Vice President shall have all powers of
and be subject to all restrictions on the President. The Vice President shall have such other powers
and perform such duties as from time to time may be prescribed by the Board of Directors.
Section 7. Secretary. The Secretary shall keep or cause to be kept, at the
corporation's principle office, a book of minutes of all meetings, proceedings and actions of the
Board. The minutes of meetings shall include the time and place that the meeting was held, whether
the meeting was annual, regular or special and, if special, how authorized, the notice given, the
names of those present at the meeting and the number of members present. The Secretary shall keep
or cause to be kept, at the corporation's principle office, a copy of the Articles of Incorporation and
Bylaws, as amended to date.
The Secretary shall give, or cause to be given, notice of all meetings of the Board.
The Secretary shall have such other powers and perform such other duties as the Board or the Bylaws
may prescribe.
Section 8. Treasurer. The Treasurer shall keep, or cause to be kept, adequate and
correct books and accounts of the corporation's properties and transactions. The Treasurer shall send
or cause to be given to the directors such financial statements and reports as are required to be given
by law, by these Bylaws or by the Board. The books of account shall be open to inspection by any
director at all reasonable times.
The Treasurer shall deposit, or cause to be deposited, all moneys and other valuables
in the name and to the credit of the corporation with such depositories as the Board may designate,
shall disburse the corporation's funds as the Board may order, shall render to the President and the
Board, when requested, an account of all transactions as Treasurer and of the financial condition of
the corporation.
The Treasurer shall have such other powers and perform such other duties as may be
prescribed by the Board of Directors or these Bylaws.
ARTICLE VI
RECORDS AND REPORTS
Section 1. Books and Records. The corporation shall keep:
(a) adequate and correct books and records of account; and
(b) written minutes of the proceedings of the Board and committees of the Board.
Section 2. Inspection. Every director shall have the absolute right at any reasonable
time to inspect the corporation's books, records, documents of every kind, physical properties and the
records of each of its subsidiaries. The inspection may be made in person or by the director's agent
or attorney upon presentation of proper identification and written authorization from the director
requesting such inspection. The right of inspection includes the right to copy and make extracts of
documents. Personnel records of the corporation shall be considered as "confidential."
Section 3. Annual Report. The Board shall cause an annual report to be sent to the
directors within 120 days after the end of the corporation's fiscal year. That report shall contain the
following information, in appropriate detail, for the fiscal year:
the fiscal year•,
(a) the assets and liabilities, including trust funds, of the corporation as of the end of
(b) the principal changes in assets and liabilities, including trust funds;
(c) the revenue or receipts of the corporation, both unrestricted and restricted to
particular purposes; and
(d) the expenses or disbursements of the corporation for both general and restricted
purposes.
This requirement of an annual report shall not apply if the corporation receives less
than $25,000 in gross receipts during the fiscal year, provided, however, that the information
specified above for inclusion in an annual report must be furnished annually to all directors.
Section 4. Certification of Annual Report. The annual report shall be accompanied
by a report of independent accounts or, if there is no such report, by the certificate of an authorized
officer of the corporation that such statements were prepared without audit from the corporation's
books and records.
VII
AMENDMENT OF BYLAWS
These Bylaws may be amended or repealed and new Bylaws may be adopted by the
affirmative vote of a majority of the authorized number of directors. If any provision of these
Bylaws requires the vote of a larger proportion of the Board than is otherwise required by law, that
provision may not be altered, amended or repealed except by that greater vote.
ARTICLE VIII
MISCELLANEOUS
Section 1. Low- Income Input. This organization will be responsible for
providing an opportunity to the low-income community to advise the corporation on the design,
location of sites, development and management of affordable housing. It will discharge this
responsibility in a manner which will bring about the maximum level of effectiveness. Two
weeks prior to the regular and annual meetings, a public notice will be published in the
newspaper with the greatest potential for reaching the beneficiaries of the neighborhood in which
the corporation plans to develop, own, or sponsor housing in.
Section 2. Contracts. The Board of Directors, unless otherwise provided in these
Bylaws, may authorize any officer or officers, or any employee or employees or other agent or
agents, to enter into any contracts or execute any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific instances; and unless so
authorized by the Board of Directors, no officer, agent or employee shall have any power or authority
to bind the corporation by any contract or engagement or to pledge its credit or render it liable for
any purpose or for any amount.
Section 3. Fiscal Year. The fiscal year of the corporation shall begin on the 1 st day
of January and end on the 31st day of December in each year.
Section 4. Members. This organization shall have no members.
Section 5. Construction and Definitions. Unless the context otherwise requires, the
general provisions, rules of construction and definitions contained in the California Nonprofit Public
Benefit Corporation Law shall govern the construction of these Bylaws. Without limiting the
generality of the preceding sentence, the masculine gender includes the feminine and neuter, the
singular includes the plural, the plural includes the singular and the term "person" includes both a
legal entity and a natural person.
Section 6. Filing Statement of Corporate Officers. The Secretary of the corporation,
during the applicable filing period in each year, shall file with the Secretary of State of the State of
California, on the form prescribed therefore, a statement containing the information required by
Section 6210 of the California Corporations Code.
Section 7. Indemnification. To the fullest extent permitted by law, this corporation
shall indemnify its directors, officers, employees and other persons described in Section 5238(a) of
the California Corporations Code, including persons formerly occupying any such position, against
all expenses, judgments, fines, settlements and other amounts actually and reasonably incurred by
them in connection with any "proceeding," as that term is used in that Section, and including an
action by or in the right of the corporation, by reason of the fact that the person is or was a person
described in that Section. "Expenses," as used in this Bylaw, shall have the same meaning as in
Section 5238(a) of the California Corporations Code.
On written request to the Board by any person seeking indemnification under Section
5238(b) or Section 5238(c) of the California Corporations Code, the Board shall promptly determine
under Section 5238(e) of the California Corporations Code whether the applicable standard of
conduct set forth in Section 5238(b) or Section 5238(c) has been met and, if so, the Board shall
authorize indemnification.
To the fullest extent permitted by law and except as otherwise determined by the
Board in a specific instance, expenses incurred by a person seeking indemnification pursuant to these
Bylaws in defending any proceeding covered by those sections shall be advanced by the corporation
before final disposition of the proceeding, on receipt by the corporation of an undertaking by or on
behalf of that person that the advance will be repaid unless it is ultimately determined that the person
is entitled to be indemnified by the corporation for those expenses.
The corporation shall have the right to purchase and maintain insurance to the fullest
extent permitted by law, on behalf of its officers, directors, employees and other agents, against any
liability asserted against or incurred by any officer, director, employee or agent in such capacity or
arising out of the officer's, director's, employee's or agent's status as such.
Section 8. Prohibition A�,ainst Personal Interest in the Corporation. No director or
officer of the corporation shall have at any time any material financial interest in the operations of
the corporation; nor shall any director or officer of the corporation be an "interested" person or
director as those terms are defined in law.
INTEP._IML REVEMM SERVICE
DISTRICT DIRECTOR
2 CUIPANIA CIRCLE
MONTEREY PARK, CA 91754
Date.MAY 0 6 lam
HOUSING PARTNERS I INCORP004TED
1053 NORTH D STREET
SAN BERNARDINO, CA 93410
Dear 7,pplicant:
DEPARTMENT OF THE TRFASURV
suployer identification Number. -
33 -0496692
Contact Person:
JULIN Y CHAN
Contact Telephone Number:
(213) 725-6619
Accounting Period Ending:
December 31
Form 990 Required:
yes
Addendum Applies:
no
Based ou information supplied, and assuming your operations will be an
stated in your application for recognition of eexesptiou, we have determined
you are axwWt from Federal income tax under section S01 tat of the Internal
Revenue Code as an organization described in section 501(c) (3) -
We have further determined that you are not a private foundation within
the meaning of section 509(a) of the Code, because you are an organisation
described in sections 509 (a) (1) and 170 (b) (1) (A) (vi) .
If your sources of support, or your purposes, character, or method of
operation change, please cat us know so we can consider the effect of the
Mange on your exempt status and foundation .statins. in the case of an amend-
ment to your organisational document or bylaws, please wend us a copy of the
amended document or bylaws. Also, you should inform. ens of all c Anges in your
name or address.
As of January 2, 1404, you are liable for taxes under the Federal
Insurance Contributions Acct (social security tsaees) on re eeration of $144
or more you pay to each of your employees during a calendar year. You are
not liable for the tax iaq;H*seed under the Federal Unemployment Tax Act (F[T!'A) .
Since your are not a private foundation, you arae not subject to the excise
taxes under Chapter 43 of the Cede. However, you are not automatically a.xempt
from other Federal excise taxes. If you have any questions about "cine,
employment, or other Federal taxes, please let us knots.
Dansrs may deduct contributions to you as ,provided in section 170 of the
Code. Bequests, legacies., devises, transfers, or gifts to you or for your use
are deductible for Federal estate and gift tax purposes if they moot the
,applicable provisions of Code sections 2055, 21.06, and 25.22.
Contributions deductions are allowable to donors only to the extent that
their contributions are gifts, with no consideration received. Ticket pur-
chases and similar payments in conjunction with fundraising events may not
necessarily qualify as deductible contributions, depending on the circw-
Letter 941 nooltom)
-2-
RMSINg pArMRS I I=RPORATED
stances. See Revenue Ruling 69-246, published in Cumulative Bulletin 1969-2,
on page 104, which sets forth guidelines regarding the deductibility, as chari-
table contributions, of payments made by taxpayers for admission to or other
participation in fundraising activities for charity.
In the heading of this letter we have indicated whether you must file Porm
990, Return of Organization ExMpt Fr= Income Tax. It Yes is indicated, you
are required to file Form P90 only if your gross receipts each year are
normally more than $25,000. However, if you receive a FO= 990 package in the
=ail, please #ilw the return oven if you do not exceed the gross receipts test.
If you am not required to file, simply attach the label provided, check the
box in the heading to indicate that your annual gross receipts are normally
$25,000 car less, and sign the return.
if a return is required, it must be filed by the 15th day of the fifth
inonth after the and of your annual accounting period. A penalty of $10 a day
is charged when a return is filed late, unless there is reasonable cause for
the delay. however, the maximum penalty charged cannot exceed $5,000 or 5 per-
cent of your gross receipts for the year, whichever is less. This penalty may
also be Obarged if a return is apt Mete, so please be sure your return is
Mete before you file it,
'You are not required to file Federal income tax returns unless you are
subject to the tax on unrelated Business income under 'sections 511 of the Code.
It you are subject to thistax, you must file an income tax return on Form
590-T, Rxeupt Organization business Income Tax Return. In this letter we are
vot determining whether any of your present or proposed activities are unre-
lated trade or business as defined in Section S13 of the Code.
You need an eaployer identification amber even if you have no employees.
Tf an employer identification number was not entered on your application, a
Humber will be assigned to you and you will be advised of it. Please use that
UUMbev on all returns you file and in all correspondence with the Internal
Mevenuo service.
2f we have indicated in the heading of this letter that an addendum
applies, the enclosed addendssss is an integral part of this letter.
Because this letter could heap resolve any questions about your exaMt
stratus and foundation status, you should keep it in your permanent records.
Letter 949 (DO/CG)
� r•
. ',3 .
SCODSXNG PARTNERS I INCORPORATED
If you have any questions, please contact the person «hose ane a
telephone number are shown .in the heading of this letter.
Sincerely yours, ,
J4
Nichael J. Quinn
District Director
Letter 947(DO/CG)
F,.: r,, W'9 Request for Taxpayer
(Rev. October 2007) Identification Number and Certification
Department of the Treasury
Internal Revenue Service
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ID
62
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CD
Name (as shown on your income tax return)
Housing Partners I Incorporated
Business name, if different from above
Give form to the
requester. Do not
send to the IRS.
Check appropriate box: ❑ Individual/Sole proprietor ✓❑ Corporation ❑ Partnership
�t❑ Limited liability cornPanY.Enter the tax classification caon (D=diste9arded emitY, C=cotPoratbn, P=PaRnership) ► ._..___❑pa
❑ Other (see instructions) ►
Address (number, street, and apt. or suite no.)
715 E. Brier Drive
City, state, and ZIP code
San Bernardino, CA 92408
List account number(s) here (optional)
Requester's name and address (optional)
Enter your TIN in the appropriate box. The TIN provided must match the name given on Line 1 to avoid f Social security number
backup withholding. For individuals, this is your social security number (SSN). However, for a resident
alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is
your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3. or
Note. If the account is in more than one name, see the chart on page 4 for guidelines on whose Employer Identification number
number to enter. 33 0496692
Certification
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and
2. 1 am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal
Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup withholding, and
3. 1 am a U.S. citizen or other U.S. person (defined below).
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup
withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply.
For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement
arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the Certification, but you must
provide your correct TIN. See the instructions on page 4.
Sign Signature of
Here U.S. nerson ► ! �.
General Instructions
Section references are to the Internal Revenue Code unless
otherwise noted.
Purpose of Form
A person who is required to file an information return with the
IRS must obtain your correct taxpayer identification number (TIN)
to report, for example, income paid to you, real estate
transactions, mortgage interest you paid, acquisition or
abandonment of secured property, cancellation of debt, or
contributions you made to an IRA.
Use Form W-9 only if you are a U.S. person (including a
resident alien), to provide your correct TIN to the person
requesting it (the requester) and, when applicable, to:
1. Certify that the TIN you are giving is correct (or you are
waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S.
exempt payee. If applicable, you are also certifying that as a
U.S. person, your allocable share of any partnership income from
a U.S. trade or business is not subject to the withholding tax on
foreign partners' share of effectively connected income.
Note. If a requester gives you a form other than Form W-9 to
request your TIN, you must use the requester's form if it is
substantially similar to this Form W-9.
Date ► //////,
//J/,
Definition of a U.S. person. For federal tax purposes, you are
considered a U.S. person if you are:
• An individual who is a U.S. citizen or U.S. resident alien,
• A partnership, corporation, company, or association created or
organized in the United States or under the laws of the United
States,
• An estate (other than a foreign estate), or
• A domestic trust (as defined in Regulations section
301.7701-7).
Special rules for partnerships. Partnerships that conduct a
trade or business in the United States are generally required to
pay a withholding tax on any foreign partners' share of income
from such business. Further, in certain cases where a Form W-9
has not been received, a partnership is required to presume that
a partner is a foreign person, and pay the withholding tax.
Therefore, if you are a U.S. person that is a partner in a
partnership conducting a trade or business in the United States,
provide Form W-9 to the partnership to establish your U.S.
status and avoid withholding on your share of partnership
income.
The person who gives Form W-9 to the partnership for
purposes of establishing its U.S. status and avoiding withholding
on its allocable share of net income from the partnership
conducting a trade or business in the United States is in the
following cases:
• The U.S. owner of a disregarded entity and not the entity,
Cat. No. 10231X Form w-9 (Rev. 10-2007)
A REGULAR MEETING OF
HOUSING PARTNERS I, INCORPORATED
TO BE HELD AT
715 E. BRIER DRIVE, SAN BERNARDINO, CALIFORNIA
SEPTEMBER 22, 2016 -1:00 P.M.
TELECONFERENCE LOCATION:
3925 N. Martin Luther King Blvd
Las Vegas, NV 89032
Pursuant to California Government Code section 54953(b) (3), any member of the public wishing to address
the legislative body directly pursuant to California Government Code section 54954.3 to speak in favor of,
or in opposition to, an agenda item may do so at each teleconference location at the time the item is
considered.
AGENDA
Call to Order and Roll Call
2. Additions or deletions to the agenda
Approval of the minutes of the special meeting of July 19, 2016 (pages 1-5)
4. Public Comment
5. MOTION - Ratify an Increase to the Contract with Perera Construction and Design, Inc. for
Construction Manager at Risk Services for Valencia Grove, in the amount of $205,148.95
(pages 6-16)
6. MOTION - Ratify the Contract with Charles R. Gossage in the amount of $551,880 for the
BPI/Valencia Grove lawsuit against Clayton Manufactured Homes (pages 17-31)
7. MOTION - Authorize the Secretar / reasurer to Execute the Contract with the City of San Bernardino
to Receive HOME Program Funding for the Construction and Sale of Single Family
Homes within the City of San Bernardino (pages 32-141)
DISCUSSION- Board Vacancy
9. Other Business ---
10. Adjournment
MEM 0 RAN DU
Date: September 22, 2016
To: Board of Directors, Housing Partners I
From: Sharon Martinez, Real Estate Services Coordinator
RE: MOTION — Authorize the Secretary/Treasurer to Execute the Contract with the City of San
Bernardino to Receive HOME Program Funding for the Construction and Sale of Single Family
Homes within the City of San Bernardino
BACKGROUND:
On March 8, 2011, the City of San Bernardino was awarded HUD Neighborhood Stabilization Program 3
(NSP3) funds for the purpose of redeveloping abandoned and foreclosed homes within the City of San
Bernardino. Affordable Housing Solutions of San Bernardino, Inc. (AHS), a non-profit created by the
City of San Bernardino, was the sub -recipient of the NSP3 funds. Due to several factors at the City of
San Bernardino, the City was unable to expend the funds within the deadline of their agreement with
HUD placing the City in jeopardy of losing this funding.
In order to preserve the funding for the area, HUD and the City of San Bernardino contacted
Housing Partners I, Inc. (HPI) to discuss HPI stepping in to help expedite the expenditure of the
funds. HPI was contacted because of its proven track record of successful project implementation and
prior utilization of both NSP and HOME funds for projects with the City of San Bernardino.
HPI negotiated with AHS and entered into a Special Services Agreement on February 27, 2013 to
rehabilitate 6 sites with atotal of 8 units. The initial funding amount was $1,235,954. The City of San
Bernardino also awarded HPI an additional $1,600,000 in NSP3 funds that also required quick project
completion. HPI utilized the funds to construct three new single family homes for sale to low-income
qualified buyers.
FORWARD:
In August 2016 the City of San Bernardino contacted HPI again to meet and discuss additional single
family construction using HOME Program Income under the CHDO designation. The city proposes
initial funding of $550,000 to construct and sell single-family homes on vacant lots current owned by
the city.
RECOMMENDATION:
Staff recommend the Board of Directors authorize the Secretary/Treasurer to execute the contract with
the City of San Bernardino to receive HOME Program funding for the construction and sale of single family
homes within the City of San Bernardino
Attachment L to Master Agreement
HOME Guide for Review of Homebuyer Projects
Exhibit 7-5
HOME Program
6509.2 REV -6 CHG-1
Guide for Review of Homebuyer Projects
Participating Jurisdiction (PJ):
Subrecipient:
Staff Consulted:
Owner/Project Address:
HOME /ADDI Amount:
IDIS Number:
IDIS Com letion Date:
Name(s) of
Reviewer(s)
Date
NOTE: All questions that address requirements contain the citation for the source of the requirement
(statute, regulation, NOFA, or grant agreement). If the requirement is not met, HUD must make
a finding of noncompliance. All other questions (questions that do not contain the citation for
the requirement) do not address requirements, but are included to assist the reviewer in
understanding the participant's program more fully and/or to identify issues that, if not properly
addressed, could result in deficient performance. Negative conclusions to these questions may
result in a "concern" being raised, but not a "finding."
Instructions: These questions are to be used to review individual project and unit records for
both HOME- and ADDI-funded homebuyer projects. Nearly all HOME requirements apply to
ADDI-funded homebuyer projects (match and Uniform Relocation Act requirements differ), so
all of the HOME -related questions in this Exhibit also apply to ADDI-funded projects. Note,
however, that additional requirements apply to ADDI; separate ADDI questions are included to
cover those requirements. In reviewing ADDI projects, monitors must keep in mind that, due to
limitations within IDIS with respect to designation of ADDI projects, the units that a PJ has
designated as ADDI units may not be the same units that the Department has designated as
ADDI units. Consequently, monitors should only assess the compliance of units that the PJ has
designated as ADDI units with the ADDI requirements. All other units should be treated as
HOME units, irrespective of whether HUD has counted them as ADDI units. One Exhibit is to
be completed for each individual project reviewed. This Exhibit is divided into nine sections:
Participant Eligibility; Property Eligibility; Recapture/Resale Provisions; Eligible Costs;
Property Standards; On -Site Inspection; Contractor Selection; Construction Management; and
Project Documentation. If an area or question is not examined, make a note to this effect in the
"Describe Basis for Conclusion" section of the applicable question.
uestions•
A. PARTICIPANT ELIGIBILITY
1.
2.
s the applicable definition of income used (e.g., the definition selected
this homebuyer program)?
cribe Basis for Conclusion:
❑ ❑ ❑
Yes No N/A
Did the PJ correctly apply income inclusions and exclusions for the chosen
❑ ❑ ❑
income definition and was the calculation performed correctly?
[24 CFR 92.203(b)]
Yes No N/A
Describe Basis for Conclusion:
7-1 03/2012
6509.2 REV -6 CHG-1
3.
4
5.
M
7.
N
Exhibit 7-5
HOME Program
as household income supported with source documentation? ❑ ❑ ❑
[OME: 24 CFR 92.203(x)(2); ADDI: 24 CFR 92.610(c)] Yes No N/A
escribe Basis for Conclusion:
as the family's annual income less than or equal to 80% of the area
-dian income?
"OME: 24 CFR 92.254(a)(3): ADDI: 24 CFR 92.612(c)1
Basis for Conclusion:
'as the family's income determined not more than 6 months before the
OME or ADDI funds were committed to this homebuyer?
-TOMR.• ?4 CFR Q? ?01(d)(?)• AT)nT- ?4 CFR Q? 61 O(c)l
escribe Basis for Conclusion:
Yes No N/A
❑ ❑ ❑
Yes No N/A
I
If the family is assisted with ADDI funds, does the family meet the first- i❑ ❑ ❑
time homebuyer definition in 24 CFR 92.2?
[24 CFR 92.602(a)(1)] Yes No N/A
Describe Basis for Conclusion:
Does the written agreement with the homebuyer specify that the buyer must ❑ ❑ ❑
use the property as a principal residence throughout the period of
affordability? Yes No N/A
[HOME: 24 CFR 92.254(a)(3) and 24 CFR 92.504(c)(5)(i); ADDI: 24 CFR
92.612(c) and 92.616(e)]
Describe Basis for Conclusion:
as the written agreement executed by the PJ and the homebuyer before the ❑ ❑ ❑
project was funded in IDIS? (Compare the dated signatures on the written
agreement to the Initial Funding Date on the View Activity Screen in IDIS). Yes No N/A
[24 CFR 92.502(b)]
escribe Basis for Conclusion:
03/2012 7-2
a
10.
Exhibit 7-5
HOME Program
6509.2 REV -6 CHG-1
)es the written agreement specify remedies or actions the PJ must take if
principal residence requirement is not met for the affordability period?
OME: 24 CFR 92.254(a)(5) and 24 CFR 92.504(c)(5)(i); ADDI: 24 CFR
.612(c) and 92.616(e)] _
!scribe Basis for Conclusion:
as the form of ownership eligible under the HOME or ADDI Programs
e., fee simple title; 99 -year lease; 50 -year lease on Indian lands;
ndominium or cooperative, if considered homeownership; or other
trivalent form of homeownership approved by HUD)?
[OME: 24 CFR 9.2.2 and 92.254(c); ADDI: 24 CFR 92.612(c)]
-scribe Basis for Conclusion:
B. PROPERTY ELIGIBILITY
11.
12.
13.
14.
Yes No N/A
❑ ❑ ❑..
Yes No N/A
Does the file list the property as a single-family home (1- 4 units)? ❑ ❑ ❑
[HOME: 24 CFR 92.254(a)(1), 24 CFR 92.2; ADDI: 24 CFR 92.602(a)(1)]
Yes No N/A
escribe Basis for Conclusion:
Did the HOME and/or ADDI investment total at least $1,000 per HOME- ❑ ❑ ❑
assisted unit?
[HOME: 24 CFR 92.205(c); ADDI: 24 CFR 92.612(c)]
Yes No N/A
escribe Basis for Conclusion:
as the sales price, or, if applicable, the after -rehabilitation property value
01,
❑ ❑
;s than 95% of the area median single family purchase price?
[OME: 24 CFR 92.254(a)(2); ADDI: 24 CFR 612(c)]
Yes No N/A
,,scribe Basis for Conclusion:
or projects involving rehabilitation, was the after rehabilitation value of
roperty determined using appropriate methods (e.g., appraisal, tax
ssessments or assessment by qualified staff)?
EIOME: 24 CFR 92.254(a)(2); ADDI: 24 CFR 92.612(c)]
lescribe Basis for Conclusion:
Yes No N/A
7-3 03/2012
6509.2 REV -6 CHG-1
15.
16.
17.
Exhibit 7-5
HOME Program
Was the HOME and/or ADDI investment no greater than the maximum per-
❑ ❑ ❑
it subsidy limit established by HUD?
Uniform Relocation Act requirements apply only to FY 2003 funds.)
HOME: 24 CFR 92.250(a); ADDI: 24 CFR 92.612(a)]
Yes No N/A
Describe Basis for Conclusion:
ADDI funds were used in the project, was the ADDI investment less than
e greater of either: a) $10,000; or b) 6% of the sales price of the property?
Tote: This requirement does not apply to FY 2003 ADDI funds.)
CFR 92.602(e)]
cribe Basis for Conclusion:
Yes No N/A
Does the project file include:
a. Relocation notice to seller (if applicable)? (Note: For ADDI, the
❑ ❑ ❑
Uniform Relocation Act requirements apply only to FY 2003 funds.)
Written Agreement Exhibit," if the PJ's standard agreement has not already
.Yes
HOME: 24 CFR 92.353; ADDI: 24 CFR92.614 2
No N/A
b. Relocation notice to tenant (if applicable)? (Note: For ADDI, the
❑ ❑ ❑
Uniform Relocation Act requirements apply only to FY 2003 funds.)
Describe Basis for Conclusion:
'Yes
HOME: 24 CFR 92.353; ADDI: 24 CFR 92.614(b)(2)]
No N/A
c. Lead Hazard Paint notice (if pre -1978 property)? ❑ ❑
[HOME: 24 CFR 92.355; ADDI: 24 CFR 92.614(a)(4)] Yes No N/A
d. Environmental review (if applicable)? (If determining compliance with ❑ ❑ ❑
environmental review requirements, the reviewer should use Exhibit 21-
I to answer this question. Otherwise, verify the presence of Yes No N/A
documentation indicating that a review was performed.) ,
HOME: 24 CFR 92.352; ADDI: 24 CFR 92.614(a)(2)]
e. Flood insurance protection when assistance was used for acquisition or
❑ ❑ ❑
construction (including rehabilitation) of real property located within the
Special Flood Hazard Area (SHFA)? (Use Exhibit 27-1 of this
Yes No N/A
Handbook, "Guide for Review of Flood Insurance Protection.)
[24 CFR 92.352]
Describe Basis for Conclusion:
C. RECAPTURE / RESALE PROVISIONS
18.
Does the written agreement with the homebuyer include required recapture
❑ ❑ ❑
r resale provisions? (Complete Exhibit 7-16, "Owner, Developer, Sponsor
Yes No N/A
Written Agreement Exhibit," if the PJ's standard agreement has not already
been reviewed.)
[HOME: 24 CFR 92.504(c)(5); ADDI: 24 CFR 92.616(e)]
Describe Basis for Conclusion:
03/2012 7-4
19.
20.
21.
22.
23.
Exhibit 7-5
HOME Program
6509.2 REV -6 CHG-1
s the resale or recapture provision applied to the project consistent with the
pproved resale or recapture provision in the PJ's annual action plan for the
,ear in which the assistance was provided?
HOME: 24 CFR 92.254(a)(5)(i) or (ii); ADDI: 24 CFR 92.612(c)]
)escribe Basis for Conclusion:
the resale or recapture provision comply with the requirements
ished for such provisions in the HOME regulations?
2E: 24 CFR 92.254(a)(5)(i) or (ii); ADDI: 24 CFR 92.612(c)]
•ibe Basis for Conclusion:
❑ ❑ ❑
Yes No N/A
❑ ❑ ❑
Yes No N/A
the property is under resale provisions, was a deed restriction or covenant ❑
ening with the land recorded?
[OME: 24 CFR 92.254(a)(5)(i)(A); ADDI: 24 CFR 92.612(c)] Yes
ascribe Basis for Conclusion:
f the property was sold before the end of the affordability period, were the
ecapture or resale requirements met?
HOME: 24 CFR 92.254(a)(4); ADDI: 24 CFR 92.612(c)]
)escribe Basis for Conclusion:
❑ ❑
No N/A
❑ ❑ ❑
Yes No N/A
ras the correct period of affordability established for the project, based ❑ ❑ ❑
)on the total amount of HOME and ADDI assistance provided to the
)mebuyer if under a resale provision or the direct subsidy provided with Yes No N/A
OME and/or ADDI funds, if under a recapture provision?
TOME: 24 CFR 92.254(a)(4); ADDI: 24 CFR 92.612(c)]
escribe Basis for Conclusion:
D. ELIGIBLE COSTS
24.
as the amount of assistance provided to the homebuyer reasonable (i.e., I ❑
I not provide a subsidy in excess of what was needed to purchase the unit,
sed upon a review of individual financial circumstances)? Yes
4 CFR 92.505(a): OMB Circular A-87, Attachment A, Section C.21
Basis for Conclusion:
No N/A
7-5 03/2012
6509.2 REV -6 CHG-1 Exhibit 7-5
HOME Program
25.
M
27.
If more than one source of public funds (Federal, State and local) was ❑ ❑ ❑
provided, did the PJ perform a subsidy layering review to ensure that
excessive subsidy was not provided? Yes No N/A
[HOME: 24 CFR 92.250(b); ADDI: 24 CFR 92.612(a)]
Describe Basis for Conclusion:
unit was rehabilitated or newly constructed, do the costs appear to be
CFR 92.505(a); OMB Circular A-87, Attachment A, Section C.2
cribe Basis for Conclusion:
❑ ❑ ❑
Yes No N/A
a. Was the subsidy provided in an eligible form of investment (i.e., equity ❑ ❑ ❑
investments, interest bearing or non-interest bearing loans or advances, Yes No N/A
interest subsidies, deferred payment loans, grants, or loan guarantees)?
[HOME: 24 CFR 92.205(b); ADDI: 24 CFR 92.602(c)]
escribe Basis for Conclusion:
b. If the subsidy was provided in a form not listed above, was that form
❑ ❑ ❑
approved by HUD?
HOME: 24 CFR 92.205(b)(1); ADDI: 24 CFR 92.602(c)]Yes
No N/A
Describe Basis for Conclusion:
E. PROPERTY STANDARDS
If direct homebuyer assistance only was provided (no construction), did the ❑ ❑ ❑
property meet applicable property standards at time of transfer to the Yes No N/A
homebuyer ?
[HOME: 24 CFR 92.251(a)(2); ADDI: 24 CFR 92.612(b)l
Describe Basis for Conclusion:
03/2012 7-6
29.
U9
31.
32.
Exhibit 7-5
HOME Program
6509.2 REV -6 CHG-1
only direct homebuyer assistance was provided and the homebuyer was to perform
cessary rehabilitation:
Was the property free of health and safety violations before occupancy? El ❑
[HOME: 24 CFR 92.251(b)(2); ADDI: 24 CFR 92.612(b)] Yes No
Does the agreement require completion of rehabilitation within 24
months or, if ADDI funds are used for rehabilitation, within one year?
[HOME: 24 CFR 92.251(b)(3); ADDI: 24 CFR 92.602(a)(2)]
Is there evidence that the property met the property standards within the
required timeframe?
[HOME: 24 CFR 92.508(a)(3)(iv); ADDI: 24 CFR 92.616(1)]
escribe Basis for Conclusion:
❑ ❑
Yes No
N/A
71
N/A
❑ ❑ ❑
Yes No N/A
If the project was constructed before 1978, did the PJ comply with lead -safe ❑ ❑ ❑
housing requirements at 24 CFR Part 35? [Complete Lead Hazard Exhibit
Yes No N/A
24-1, as appropriate, to answer this question.]
[HOME: 24 CFR 92.355; ADDI: 24 CFR 92.614(a)(4)]
escribe Basis for Conclusion:
If the project involved rehabilitation, does the project file include the following:
If the project did not involve rehabilitation, skip to question #42.)
a. Work write-up/cost estimate?
❑ El 0
[24 CFR 92.505(a) and 24 CFR 85.36(f)]
Yes No N/A
b. Documentation of initial inspection?
El 0 El
[24 CFR 92.505(a) and 24 CFR 85.36(f)]
Yes No N/A
c. Documentation of progress inspections?
1:1 El ET
[24 CFR 92.505(a) and 24 CFR 85.36(b)(2)]
Yes No N/A
Describe Basis for Conclusion:
If the project involved rehabilitation, does the work write-up:
include all work noted on the initial inspection report?
[HOME: 24 CFR 92.251; ADDI: 24 CFR 92.612(b)]
reflect the PJ's written rehabilitation standards?
[HOME: 24 CFR 92.251(a); ADDI: 24 CFR 92.612(b)]
cribe Basis for Conclusion:
7-7
❑ ❑ ❑
Yes No N/A
❑ ❑ ❑
Yes No N/A
03/2012
6509.2 REV -6 CHG-1 Exhibit 7-5
HOME Program
33.
34.
35
36.
f the project involved rehabilitation, was the work write-up written with ❑ ❑ ❑
:nough detail to enable a contractor to provide a reliable bid?
24 CFR 92.505(a) and 24 CFR 85.36(c)(3)(i) and 85.36(d)(2)(i)(A)] Yes No N/A
)escribe Basis for Conclusion:
If the project included rehabilitation, was the work performed in accordance ❑ 0 ❑
with the PJ's written rehabilitation standards?
[HOME: 24 CFR 92.251 (a); ADDI: 24 CFR 92.612(b) Yes No N/A
Describe Basis for Conclusion:
the project included rehabilitation, does the final inspection confirm that:
all contracted work was completed?
[24 CFR 92.505(a) and 24 CFR 85.36(b)(2)]
the property met all applicable property standards at completion?
[HOME: 24 CFR 92.251(a); ADDI: 24 CFR 92.612(b)]
escribe Basis for Conclusion:
Yes No N/A I
Yes No N/A
f the project involved new construction of a unit, does the final inspection El ❑ ❑
confirm that the property met all applicable property standards at Yes No N/A
24 CFR 92.251(a)]
)escribe Basis for Conclusion:
03/2012 7-8
37.
Exhibit 7-5
HOME Program
6509.2 REV -6 CHG-1
On -Site Inspection: If this project has been selected for an on-site inspection to examine the
quality of the rehabilitation work, the HUD reviewer should perform a walk-through of the
property with the initial inspection, the work write-up, and the final inspection
report. (Com lete this question only if an onsite inspection was rformed.)
[OS] a. Based upon observable conditions, have the
❑ ❑ ❑
deficiencies identified in the initial inspection report
been corrected?
Yes No N/A
[HOME: 24 CFR 92.251; ADDI: 24 CFR 92.612(b)]
[OS] b. Is the homebuyer satisfied with the rehabilitation?
❑ ❑ ❑
Yes No N/A
[OS] c. Is the property free of all obvious property standards
❑ ❑ ❑
violations?
[HOME: 24 CFR 92.251; ADDI: 24 CFR 92.612(b)]
Yes No N/A
[OS] d. Based upon observable conditions, what was the status of the rehabilitation work at
the time of the onsite inspection?
❑ ❑ ❑
Complete Underwa Not Started
Describe Basis for Conclusion:
F. CONTRACTOR SELECTION (if applicable)
38.
9
40,
$oes the project file include verification of contractor eligibility, e.g., that ❑ ❑ ❑
wards were not made to any party excluded, disqualified or otherwise
ieligible (i.e., suspension, debarment or limited denial of participation) for Yes No N/A
ederal procurement or nonprocurement programs? J
EIOME: 24 CFR 92.350(a); ADDI: 24 CFR 92.614(a)(1)]
lescribe Basis for Conclusion:
Was the rationale for the selection of the contractor documented? ❑ ❑ ❑
1[24 CFR 92.505(a) and 24 CFR 85.36(b)(9)] Yes No N/A
cribe Basis for Conclusion:
If the PJ selected the contractor, was a competitive bid process used?
El El ED[24 CFR 92.505(a) and 24 CFR 85.36(d); HOME: 24 CFR 92.505(a); ADDI
4 CFR 616(fll Yes No N/A
escribe Basis for Conclusion:
7-9 03/2012
6509.2 REV -6 CHG-1
41
Exhibit 7-5
HOME Program
f the homebuyer solicited the bids, was more than one bid solicited? ❑ ❑ ❑
Yes No N/A
Describe Basis for Conclusion:
G. CONSTRUCTION MANAGEMENT
42.
Did the homebuyer and contractor execute a construction or rehabilitation ❑ ❑ ❑
contract? Yes No N/A
[24 CFR 92.505(a) and 24 CFR 85.20(b)(6)]
Describe Basis for Conclusion:
43.
Were progress inspections of the project performed prior to approving the ❑ ❑�
contractor's request for payment? Yes No N/A
[24 CFR 92.505(a) and 24 CFR 85.36(b)(2)]
Describe Basis for Conclusion:
44.
Did the owner approve final payment to the contractor? ❑ ❑ ❑
Yes No N/A
— ............. ..............
Describe Basis for Conclusion:
45.
the file contain:
Final Lien Release?
[24 CFR 92.505(a) and 24 CFR 85.36(b)(2)]
Contractor Warranty or Equipment Warranties?
[24 CFR 92.505(a) and 24 CFR 85.36(b)(2)]
Basis for Conclusion:
03/2012 7-10
Yes
No
N/A
❑
❑
❑
Yes
No
N/A
Exhibit 7-5
HOME Program
H. PROJECT DOCUMENTATION
46.
6509.2 REV -6 CHG-1
Based upon a review of the project file, is the documentation being maintained sufficient to
demonstrate compliance with the following HOME requirements:
a. Income eligibility?
f ❑
0
❑
[HOME: 24 CFR 92.203 and 92.254(a)(3); ADDI: 24 CFR 92.610(c)
and 92.612(c)]
Yes
No
N/A
b. Written agreement?
❑
❑
❑
[HOME: 24 CFR 92.504; ADDI: 24 CFR 92.616(e)]
Yes
No
N/A
c. Principal residency?
0
0
0
[HOME: 24 CFR 92.254(a)(3); ADDI: 24 CFR 92.612(c)]
Yes
No
N/A
d. Approved form of ownership?
[24 CFR 92.2; HOME: 24 CFR 92.254(c); ADDI 24 CFR 92.612(c)]
Yes
No
N/A
e. Property type (e.g., single family 1-4)?
0
F
❑
[HOME: 24 CFR 92.254(a)(1), 24 CFR 92.2; ADDI: 24 CFR
92.602(a)(1)]
Yes
No
N/A
f. Property value?
El
7
❑
[HOME: 24 CFR 92.254(a)(2); ADDI: 24 CFR 92.612(c)]
Yes
No
N/A
g. Minimum HOME/ADDI investment?
[HOME: 24 CFR 92.205(c); ADDI: 24 CFR 92.602(e)]
i Yes
No
N/A
Ii. Maximum per unit subsidy?
[HOME: 24 CFR 92.250(a); ADDI: 24 CFR 92.612(a)]
Yes
No
N/A
i. Maximum ADDI subsidy?
❑
❑
[24 CFR 92.602(e)]
Yes
No
N/A
Resale/Recapture requirement?
❑
❑
0
[HOME: 24 CR 92.254(a)(5); ADDI: 24 CFR 92.612(c)]
Yes
No
N/A
k. Property standards (including lead-based paint)?
[HOME: 24 CFR 92.251; ADDI: 24 CFR 92.612(b)]
Y❑
es
No
N/A
1. Eligible costs?
❑
❑
❑
[HOME: 24 CFR 92.206; ADDI: 24 CFR 92.602(b)]
Yes
No
N/A
m. Subsidy layering (if applicable)?
❑
El
❑
[HOME: 24 CFR 92.250(b); ADDI: 24 CFR 92.612(a)]
Yes
No
N/A
Describe Basis for Conclusion:
7-11 03/2012