HomeMy WebLinkAbout20- Economic & Housing Development Department 20.a
Consent Calendar
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City of San Bernardino
Request for Council Action a
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Date: June 21, 2017 E
To: Honorable Mayor and City Council Members 6.
From: Mark Scott, City Manager
By: Edward Flores, Housing Consultant
Diane Cotto, CDBG Coordinator V
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Subject: HOME Investment Partnerships Program
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Recommendation
Adopt a Resolution of the Mayor and City Council of the City of San Bernardino,
California authorizing the execution of a HOME Investment Partnerships Program 2
(HOME) Loan Agreement with Neighborhood Partnership Housing Services (NPHS) to =
implement the Modular Housing Component of the Infill Housing Program.
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Background LO
On September 19, 2016, the Mayor and City Council approved the Infill Housing
Program that committed $625,000 in HOME funds to the Infill Housing Program and a
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allowed the City to enter into a Developer agreement with Housing Partners I (HPI), a
local non-profit Community Housing Development Organization (CHDO).
The purpose of the Infill Housing Program is to develop quality affordable housing for 0
low-and/or moderate-income household. To achieve this goal, the City will utilize real
property assets from the Successor Agency and Successor Housing Agency as well as r
other real property purchased with federal or Low Mod Housing funds to subsidize the
creation of these affordable housing units.
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The housing units will further be made affordable with costs savings to the future
homeowner by reducing the utility costs through the installation of solar panels, energy E
efficient appliances and systems, and drought tolerant landscaping.
Discussion W
Infill Housing Program o
A major emphasis of the City's Consolidated Plan and Housing Element, approved by =
the Mayor and City Council on April 6, 2015, is to ensure that persons of all walks of life
have opportunities to find suitable and affordable housing in San Bernardino. The Infill E
Housing Program will allow the City to take blighted and/or underutilized residential r
properties within the City and turn them into quality and energy efficient housing for a
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qualified low- and moderate-income households.
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Affordable housing units will be constructed in one of two ways: 1) Conventional
Housing Construction or 2) Modular Housing Construction. The most common type of
housing construction is Conventional Housing Construction wherein the entire house is a
constructed on the site. This process offers the most flexibility for house design. For the
Infill Housing Program, Conventional Housing Construction will be carried out by HPI. J
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The second method of house construction is Modular House Construction. Modular
houses are factory built modules that come in various configurations and dimensions. 0-
The modules are finished to the extent that the drywall, plumbing, light fixtures, floor N
coverings, cabinets, etc. are already installed. Benefits of Modular House Construction t
include a higher quality product due to constructing the component in a controlled
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environment and some time savings. C
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As parcel size and other related factors may differ from lot to lot, both methods of
housing construction are important to the effectiveness of the Infill Housing Program. E
NPHS will enhance the Infill Housing Program by providing the modular housing
construction component. Once finished, these modules will blend into the existing
residential area. New modular construction methods and details have made these types W
of units attractive and affordable compared to traditional construction. o
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Modular homes are known for having lower costs, speedy construction, excellent o
craftsmanship, and quality building products because they are all done in a controlled LO
setting. These types of homes are built in a factory in programmed stages from flooring
to finished product and then set in place at a proposed site. Floor treatments, framing, a
insulation, drywall, roofing, windows, siding, cabinetry, plumbing, and lighting fixtures
are all installed and completed by skilled craftsmen utilizing state-of-the-art production
technology. The home is then shipped, 90 percent complete, to the building site and R
assembled on a foundation. Modular homes are built to meet or exceed the same c
standards as a home built on site and legally the state of California considers a modular a`
home, known legally as "Factory Built Housing," to be fundamentally the same as a
home built on site. These modular homes still follow the City's Development Code and
will not detract from the existing neighborhoods design and appeal.
The Developers a
NPHS is an experienced developer founded in 1991. NPHS partners with local
governments to redevelop neighborhoods by renovating and greening blighted U)
properties and transforming them into homes for qualified first time home buyers. To
date, NPHS has redeveloped 978 properties. w
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The City is required to set aside at least 15 percent (15%) of its HOME funds for specific =
activities to be undertaken by a CHDOs, NPHS is a qualified CHDO which means that it
meets certain regulatory requirements that allows NPHS to use these set aside funds E
for the development of affordable housing for the community it serves.
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Additionally, NPHS is also a Community Development Financial Institution (CDFI),
which is a community—based specialized financial institution that serves low income
people or work in economically distressed community that may be underserved by
traditional financial institutions. Under NPHS's CDFI certification, services they provide
include community wealth building, homeownership financing, and realty program and a
services.
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The Agreement E
If approved, the City would enter into a $650,000 HOME Developer Agreement with
NPHS to provide the modular housing component of the Infill Housing Program. HOME 0
funds will be deposited into an escrow construction account. The disbursement of all a
construction payouts, which are made to the general contractor, subcontractors, and r
material suppliers will be released upon the approval of the City as work is completed.
These homes will then be sold to a qualified homebuyer whose annual income does not a
exceed eighty percent (80%) of the Area Median Income, and meets all of the
requirements for purchasing an Eligible Property. E
NPHS will also be responsible for the marketing and identifying qualified homebuyers
who will occupy these homes as their primary residence. The City will be responsible for LU
approving all home purchases. _
Environmental Compliance o
This project is subject to environmental review under Sections 15192 and 15194 of the
California Environmental Quality Act (CEQA) and 24 CFR 58.36 of the National
Environmental Protection Act. a
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Fiscal Impact
There is no fiscal impact to the General Fund. HOME funds, provided by the U.S.
Department of Housing and Urban Development, will be used to fund infill housing 0
development activities. Upon the approval of this agenda report, a total of $1,275,000 a
in HOME funds will be dedicated to the Infill Housing Program. �-
Conclusion
An adequate supply of affordable housing promotes homeownership. Homeownership a
increases stability for families and communities and provides long-term community .
benefits. The approval of this proposed infill housing development project with NPHS E
will have an impact in stabilizing our neighborhoods and expanding home ownership
opportunities for low and moderate income qualified homebuyers.
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Attachments 0
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Attachment 1 — Resolution =
Exhibit A — HOME Agreement
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Ward: E
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Synopsis of Previous Council Actions: c�
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September 19, 2016 - Resolution of the Mayor and Common Council of the City of San c
Bernardino, California Approving the Execution of HOME Loan Agreement with Housing i
Partners I (HPI) for the Implementation of the Infill Housing Development Program M
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April 6, 2015 — Resolution of the Mayor and Common Council of the City of San a
Bernardino Approving the 2015-2020 Consolidated Plan and 2015-2016 Action Plan for a
Federal Community Development Block Grant (CDBG), Home Investment Partnership n
(HOME) Interagency Agreement, Neighborhood Stabilization Program (NSP), Emergency
Solutions Grant (ESG) Entitlement Grant Programs and Approving Substantial a
Amendment#5 to the 2014-2015 Action Plan. (#3732) _
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1 RESOLUTION NO. E
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RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN rn
3 BERNARDINO, CALIFORNIA AUTHORIZING THE EXECUTION OF A HOME
INVESTMENT PARTNERSHIPS PROGRAM (HOME) LOAN AGREEMENT WITH J
4 NEIGHBORHOOD PARTNERSHIP HOUSING SERVICES (NPHS) TO E
IMPLEMENT THE MODULAR HOUSING COMPONENT TO THE INFILL
5 HOUSING PROGRAM o
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WHEREAS, the City of San Bernardino (City) has received HOME Investment
7 Partnerships Act (HOME) funds from the United States Department of Housing and Urban d
8 Development ("HUD") pursuant to the Cranston-Gonzales National Housing Act of 1990,
which must be used by the City in accordance with 24 C.F.R. Part 92; and a
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WHEREAS, the HOME Program is designed exclusively to create affordable housing E
10 for low-income households and may be used to fund a wide range of activities including
building, purchasing, and/or rehabilitating affordable housing for rent or homeownership or 'e
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providing direct rental assistance to low-income people; and
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WHEREAS, the City seeks to engage nonprofit developers certified as Community
13 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 W)
14 ("Eligible Properties") and selling these Eligible Properties to households whose income does
15 not exceed 80%of the Area Median Income ("Qualified Homebuyers"); and z
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16 WHEREAS, on September 19, 2016, the Mayor and City Council approved the Infill v
Housing Program that committed $625,000 in HOME funds to the Infill Housing Program and
17 allowed the City to enter into a Developer agreement with HPI, a local non-profit Community a
18 Housing Development Organization(CHDO); and
19 WHEREAS, the City will develop these homes using one of two home construction 0
methods: 1) Conventional Home Construction and 2) Modular Home Construction; and N
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21 WHEREAS, HPI will utilize the conventional home construction method and
Neighborhood Partnership Housing Solutions (NPHS) will utilize the modular home
22 construction method to create affordable housing in the City of San Bernardino; and n
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23 WHEREAS, NPHS, is an experienced developer and qualified CHDO dedicated to E
24 developing, rehabilitating, owning, and managing affordable housing, and provide housing
counseling services to low and moderate income people in the County of San Bernardino; and c
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WHEREAS, NPHS desires to utilize Six Hundred Fifty Thousand Dollars ($650,000) 0
26 of HOME Funds for the construction or reconstruction of up to three (3) modular homes; and =
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27 WHEREAS, sufficient funding exists for the program; and s
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1 WHEREAS,these HOME funds will be placed in a construction escrow account to be
release by the Title Company to ensure payment is made for completed work; and
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WHEREAS, NPHS will deliver to the City among other items, a "Site Agreement", a rn
3 "Deed of Trust", a "Promissory Note", and a "Housing Affordability Covenant", as defined in =
4 the HOME Agreement each time that NPHS requests HOME financing to construct or o
reconstruct "Eligible Properties"; and -J
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WHEREAS, the City desires to provide HOME Funds to NPHS, on the terms and 0
6 conditions set forth in the HOME Agreement; and a
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7 WHEREAS, this project is subject to environmental review under Sections 15192 and 12
8 15194 of the California Environmental Quality Act (CEQA) and 24 CFR 58.36 of the
National Environmental Protection Act. a
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NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY E
10 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: d
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SECTION 1. The Mayor and City Council do hereby authorize the City Manager or w
12 his designee to enter into a HOME Agreement with Neighborhood Partnership Housing p
Solutions for the implementation of the Modular Housing Component of the Infill Housing =
13 Development Program. Said agreement is attached hereto as Exhibit "A" and incorporated
14 herein.
15 SECTION 2. The Mayor and City Council do hereby allocate $650,000 in HOME Z
funds for the construction of up to three modular homes to be placed on properties in San g
16 Bernardino to accommodate Qualified Buyers. v
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SECTION 3. The City Manager or his designee is hereby authorized to make non-
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on-1g substantive modifications to the written agreement, as necessary, to effectively implement the
Infill Housing Program.
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RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN c
1 BERNARDINO, CALIFORNIA, AUTHORIZING THE EXECUTION OF A HOME E
2 INVESTMENT PARTNERSHIPS PROGRAM (HOME) LOAN AGREEMENT WITH
NEIGHBORHOOD PARTNERSHIP HOUSING SERVICES (NPHS) TO a
3 IMPLEMENT THE MODULAR HOUSING COMPONENT TO THE INFILL
4 HOUSING PROGRAM 0
5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor o
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6 6 and City Council of the City of San Bernardino at a
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meeting thereof, held on the day of , 2017, by the following vote,
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to wit: a
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10 Council Members: AYES NAYS ABSTAIN ABSENT a
11 MARQUEZ W
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BARRIOS
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VALDIVIA
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15 SHORETT w
16 NICKEL v
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17 RICHARD a
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MULVIHILL a,
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21 Georgeann Hanna, CMC, City Clerk
22 The foregoing Resolution is hereby approved this day of , 2017. a
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24 R. Carey Davis, Mayor
25 City of San Bernardino W
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Approved as to form:
27 Gary D. Saenz, City Attorney
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28 By:
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HOME Investment Partnerships Program (HOME) o
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INFILL HOUSING DEVELOPMENT a
MASTER AGREEMENT
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by and between
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City of San Bernardino =
a municipal corporation
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Neighborhood Partnership Housing Solutions, Inc,
a California 501(c)(3)public benefit corporation i
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for a loan in the principal amount =°
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not to exceed $650,000.00 in HOME Funds
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June 25, 2017 O
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City of San Bernardino
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HOME INVESTMENT PARTNERSHIPS (HOME) PROGRAM R
INFILL HOUSING DEVELOPMENT MASTER AGREEMENT a,
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'This HOME Investment Partnerships Program (HOME) Infill Housing Development Master N
.Agreement (the "Agreement") is dated June 25, 2017 (the "Effective Date"), and is between the
City of San Bernardino, a municipal corporation (the "City"), and Neighborhood Partnership
Housing Solutions, Inc., a California 501 (c) (3)public benefit corporation (the "Developer"). a
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RECITALS E
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WHEREAS, the City has received Home Investment Partnerships Act funds from the United
States Department of Housing and Urban Development ("HUD") pursuant to the Cranston- W
Gonzales National Housing Act of 1990 ("HOME Funds"). The HOME Funds must be used by =
the City in accordance with 24 C.F.R. Part 92; and
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WHEREAS, the 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 E
Properties") and selling these Eligible Properties to households whose income does not exceed
80% of the Area Median Income("Qualified Homebuyers"); and a
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WHEREAS, Developer is a CHDO with capacity and expertise to carry out infill housing
development; and y
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WHEREAS, Developer desires to utilize City HOME funds in an amount not to exceed SIX Z
HUNDRED FIFTY THOUSAND DOLLARS ($650,000.00) for the purpose of constructing E�
and/or reconstructing eligible properties for the purpose of developing affordable housing units
that will be sold to qualified homebuyers; and o
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WHEREAS, Developer will deliver to the City among other items, a "Site Agreement", a "Deed N
of Trust", a "Promissory Note", and a "Housing Affordability Covenant", as defined below, each c
time that Developer requests HOME Funds to construct or reconstruct "Eligible Properties;" and =
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WHEREAS, defined terms used but not defined in these recitals are defined in Section 2 of this
Agreement; and E
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WHEREAS, the City desires to provide HOME Funds to Developer, on the terms and c
conditions set forth herein. w
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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: r
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AGREEMENT 0
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SECTION 1. Incorporation of Recitals.
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The Recitals set forth above are true and correct and are incorporated into this Agreement. 0
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SECTION 2. Definitions.
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In addition to the meaning ascribed to certain words and phrases as set forth in the Recitals of a
this Agreement or in other sections of this Agreement, including any of the Attachments to this c
Agreement, other words and phrases shall have the meanings described below: E
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■ "Affirmative Marketing Plan" has the meaning set forth in Attachment"I". 'c
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■ "Affordable Housing Cost" means a purchase price determined using the criteria set p
forth in 24 CFR Part 92.254(a)(2), i.e., not exceeding 95 percent of the median
purchase price for the area.
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■ "Affordability Period" means theperiod of time during which an Eligible Property r
has occupancy restrictions. The length of affordability period depends on the amount of d
HOME assistance to the project, as specified in the table below. It is anticipated that infill E
housing projects will require more than $40,000 in HOME assistance. Therefore, the
anticipated affordability period for Eligible Properties is 15 years. However, each project Q
will be evaluated to verify the length of affordability that will apply.
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HOME Assistance Length of the
per Unit -Affordability Period =
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Less than$15,000 5 years Z
$15,000- $40,000 10 years
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More than$40,000 15 vears
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■ "Agreement" means this HOME Investment Partnerships Program (HOME) Infill =
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Housing Development Master Agreement. 'o
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■ "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. E
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■ "City" means the City of San Bernardino, a municipal corporation. >
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■ "Construction Escrow" means an account set up with a title company who oversees 2
the disbursement of all construction payouts, which are made to the general O
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contractor, subcontractors, and material suppliers as work is completed. c
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■ "Deed of Trust" means the Deed of Trust which encumbers the Eligible Property as
security for repayment of the HOME Loan. The general form of the Deed of Trust is J
included as Attachment "D". E
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■ "Developer" means Neighborhood Partnership Housing Solutions, Inc., a 501(c)(3) c
public benefit corporation. U)
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■ "Effective Date" means the date this Agreement was fully executed by Developer N
and the City, which shall be not later than June 30, 2017.
■ "Eligible Property" means the infill housing constructed or reconstructed by the
Developer, including the blighted or underutilized sites acquired and the single family
dwellings constructed or reconstructed on the sites. U)
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■ "Escrow Agent" means the escrow agent mutually acceptable to the Developer and w
the City. The Escrow Agent shall administer the Construction Escrow Account. 0
■ "Event of Default" has the meaning set forth in Section 14 of the Agreement.
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■ "First Time Homebuyer" means an individual who meets one of the following
criteria: 1) An individual who has had no ownership interest in a principal residence
during a 3-year period. 2) A single parent who has only owned a home with a former E
spouse, while married. 3) An individual who is a displaced homemaker and has only
owned a home with a spouse. 4) An individual who has only owned a principal a
residence that is not permanently affixed to a permanent foundation, which is
considered personal property in accordance with applicable regulations.
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■ "Hazardous Materials" has the meaning set forth in Section 37 of the Agreement. a
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■ "HOME" means the HOME Investment Partnerships Act Program pursuant to the E�
Cranston-Gonzales National Affordable Housing Act of 1990 (42 U.S.C. 12701 et 2-
sec.), as amended. o
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■ "HOME Loans" means the loans to be originated by the City in favor of the c
Developer to construct or reconstruct Eligible Properties in an aggregate amount not c
to exceed Six Hundred Fifty Thousand Dollars ($650,000.00). The provisions of the x
HOME Loans are set forth in Section 16. The HOME Loans shall be evidenced by a ;
Note in the form of Attachment "C", and shall be secured by a Deed of Trust in the E
form of Attachment"D", and other loan documents.
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■ "HOME Loan Documents" means collectively all of the documents executed by the
Developer in favor of the City that evidence the HOME Loans or provide security for
the repayment of the HOME Loans, including without limitation the Note, Deed of g
Trust, and Housing Affordability Covenants. _
■ "Housing Affordability Covenant" means the HOME Program Housing
Affordability Covenants and Restrictions by and between the Developer and the City
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affecting the Eligible Properties, and the repayment of the HOME Loans. The form c
of the Housing Affordability Covenant is Attachment "E". 0
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■ "HUD" means the U.S. Department of Housing and Urban Development.
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■ "Low-income Households" means the persons and households whose income does a.
not exceed 80% of the Area Median Income, adjusted for family size, as set forth in Q-
the definition of"low-income families" in 24 CFR Part 92.2.
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■ "Note" means the Promissory Note that evidences Developer's obligation to repay the
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HOME Loans. The form of the Note is attached as Exhibit"C".
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■ "Notice of Completion" means the Notice of Completion executed by Developer in E
the form specified in California Civil Code Section 8182. >
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■ 'Project" means the acquisition of blighted or underutilized residential lots,
construction or reconstruction of infill housing, and resale of these Eligible Properties =
to Qualified Homebuyers.
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■ "Qualified Homebuyer" means to a household whose annual income does not
exceed eighty percent (80%) of the Area Median Income, and meets all of the
requirements for purchasing an Eligible Property. E
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■ "Sale Escrow" means the property transfer transaction account by and among the Q
Escrow Agent, the Qualified Homebuyer, the Developer, and the City. ,
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■ "Term" has the meaning set forth in Section 5 of this Agreement.
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■ "Total Development Cost" means the total cost to acquire, construct/reconstruct and Z
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 R
Development Cost Pro Forma in the form of Attachment "F". c
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SECTION 3. Parties to the Agreement.
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A. The parties to this Agreement are the Developer and the City. _
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B. The Developer is as identified above. The principal office of the Developer for purposes =
of this Agreement is located at 9551 Pittsburgh Avenue, San Bernardino, CA 92408. E
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C. Prior to the Effective Date, the Developer has provided the City with satisfactory 'c
evidence of the legal formation and the good standing of the Developer to transact w
business within the State. 0
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D. Developer meets the legal and organizational characteristics described in 24 CFR 92.2
and has been and continues to be certified as a CHDO by the City during the Term of this 0
Agreement. E
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SECTION 4. Entire Agreement. a.
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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 a
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. E
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B. Included as an integral part of this Agreement are the Attachments as listed below for 'c
reference purposes. All Attachments as set forth below and as attached to this Agreement W
are incorporated herein by reference regardless of the prior reference of any or all of said o
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 o
requires to the contrary, all references to this Agreement shall include each and every --
Attachment as set forth below and as attached hereto. Attachments identified as forms or
templates may be modified by the City as necessary to adapt the documents for use in E
connection with particular transactions. d
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List of Attachments:
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Attachment"A" Scope of Services
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Attachment"B" Site Agreement form Z
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Attachment"C" Promissory Note form R
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Attachment"D" Deed of Trust form 0-
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Attachment"E" Housing Affordability Covenants form c
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Attachment"F" Total Development Cost Pro Forma template ;
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Attachment"G" Project Timeline template
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Attachment"H" Sources and Uses Schedule template >
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Attachment"I" Affirmative Marketing Requirements o
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Attachment"J" CHDO Designation Letter and Certificate
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Attachment"K" HOME Guide for Review of Homebuyer Projects
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SECTION 5. Term of Agreement. E
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A. The Term of this Agreement shall commence on the date that it is fully executed by 0
Developer and the City, and will terminate one (1) year after the Effective Date, unless a.
earlier terminated as provided in this Agreement. The City will have the option to extend c.
the term of this Agreement for two (2) additional one-year terms, with the consent of the N
Developer. In any event, the term of this Agreement shall not extend beyond September
30, 2019.
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B. This Agreement may be terminated by either party for any reason by giving the other =
party thirty (30) calendar day's prior written notice. The City shall pay the Developer E
for all work authorized by the City prior to the date of such notice, and completed v,
thereafter prior to the effective date of termination. c
C. In the event of termination of this Agreement, the Developer shall provide all documents, W
notes, maps, reports, data, and all other work product developed in performance of the 0
Scope of Services, within ten (10) calendar days after the effective date of such z
termination, without additional charge to the City.
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SECTION 6. Scope of Developer Services. _
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A. The 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 a
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 "K".
B. Developer shall provide documentation indicating Developer's financial strength and a
capacity to provide start-up operations and working capital to develop Eligible Properties. Z
Such documentation should include Developer's most recent certified financial statements i
with a statement in writing, signed by a duly authorized representative, stating that the E
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. a.
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SECTION 7. Budget. o
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The City has allocated an amount not to exceed Six Hundred Fifty Thousand Dollars
($650,000.00) of HOME Funds for the construction or reconstruction of Eligible Properties. ,
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SECTION 8. Payment for Services Performed by Developer. E
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The amount to be paid by the City to Developer for the services to be performed by '_
Developer pursuant to this Agreement (the "Developer Fee") will be negotiated and W
established prior to the commencement of each Project, as reflected in the Total 0
Development Cost Pro Forma that the Developer is required to submit for each Eligible =
Property. The City must approve the Developer Fee prior to the construction 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.
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SECTION 9. HOME Program Requirements. o
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A. Developer shall comply with all applicable laws and regulations governing the use of the
HOME Loan funds as set forth in 24 C.F.R. Part 92, including the requirements of the c
Housing Affordability Covenant. In the event of any conflict between this Agreement L-
and applicable laws and regulations governing the use of the HOME Funds, the a
applicable laws and regulations govern. The laws and regulations governing the use of s
the HOME Funds include (but are not limited to)the following:
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(i) Eligible Project Costs. Restrictions on funding only eligible project costs as a
set forth in 24 C.F.R. 92.206.
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u Environmental and Historic Preservation. 24 C.F.R. Part 50 and 24 C.F.R.
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Part 58, which prescribe procedures for compliance with the National c
Environmental Policy Act of 1969 (42 U.S.C. §§ 4321-4370), and the W
additional laws and authorities listed at 24 C.F.R. 58.5. o
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(iii) Applicability of OMB Circulars. The applicable policies, guidelines, and
requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110, A-122, o
and A-133.
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(iv) Debarred, Suspended or Ineligible Contractors. The prohibition on the use of E
debarred, suspended, or ineligible contractors set forth in 24 C.F.R. Part 24.
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(v) Civil Rights, Housing and Community Development, and Age ;
Discrimination Acts. The Fair Housing Act (42 U.S.C. 3601 et secl.) 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 a
amended; Section 104(b) and Section 109 of Title I of the Housing and Z
Community Development Act of 1974 as amended; Section 504 of the E�
Construction Rehabilitation Act of 1973 (29 USC § 794, et seq.); the Age
Discrimination Act of 1975 (42 USC § 6 10 1, et SeMc.); Executive Order 11063 �
as amended by Executive Order 12259 and implementing regulations at 24 a,
C.F.R. Part 107; Executive Order 11246 as amended by Executive Orders =
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11375, 12086, 11478, 12107; Executive Order 11625 as amended by c
Executive Order 12007; Executive Order 12432; Executive Order 12138 as x
amended by Executive Order 12608.
(vi) Discrimination against the Disabled. The requirements of the Fair Housing
_
Act (42 U.S.C. 3601 et seq.) and implementing regulations at 24 C.F.R. Part d
100; Section 504 of the Construction Rehabilitation Act of 1973 (29 U.S.C. § c
794), and federal regulations issued pursuant thereto, which prohibit W
discrimination against the disabled in any federally assisted program, the 2
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requirements of the Architectural Barriers Act of 1968 (42 U.S.C. 4151- x
4157) and the applicable requirements of Title II and/or Title III of the
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Americans with Disabilities Act of 1990 (42 U.S.C. 12131 et seq.), and =
federal regulations issued pursuant thereto. 0
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(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 0
et seq., and the regulations of the Council on Environmental Quality with a.
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respect thereto, at 40 C.F.R. Part 1500, as amended from time to time. E
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(viii) Uniform Administrative Requirements. The provisions of 24 C.F.R. 92.505
regarding cost and auditing requirements. a
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(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 y
rules and regulations (40 U.S.C. 3141-3148); the Copeland "Anti-Kickback" c
Act (40 U.S.C. § 3145) which requires that workers be paid at least once a W
week without any deductions or rebates except permissible deductions; the o
Contract Work Hours and Safety Standards Act — CWHSSA (40 U.S.C. §§ x
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; and Title 29, Code of Federal Regulations,
Subtitle A, Parts 1, 3 and 5 are the regulations and procedures issued by the
Secretary of Labor for the administration and enforcement of the Davis-
Bacon Act, as amended. a,
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(x) Drug Free Workplace. The requirements of the Drug Free Workplace Act of y
1988 (P.L. 100-690), 41 U.S.C. Chapter 81, and implementing regulations at
2 C.F.R. Part 2429. v�
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(xii) Anti-Lobbying; Disclosure Requirements. The disclosure requirements and Z
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prohibitions of 31 U.S.C. § 1352 and implementing regulations at 24 C.F.R. E
Part 87.
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(xiii) Historic Preservation. The historic preservation requirements set forth in the
National Historic Preservation Act of 1966, as amended (Division A of =
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Subtitle III of 54 U.S.C.) and the procedures set forth in 36 C.F.R. Part 800. 0
If archeological, cultural, or historic period resources are discovered during =
construction, all construction work must come to a halt and Developer shall
immediately notify the City. Developer shall not shall alter or move the
discovered material(s) until all appropriate procedures for "post-review E
discoveries" set forth in the National Historic Preservation Act at 54 U.S.C. § U)
300101 et seq. have taken place, which include, but are not limited to, 'c
consultation with the California State Historic Preservation Officer and W
evaluation of the discovered material(s) by a qualified professional 0
archeologist. _
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(xiv) Flood Disaster Protection. The requirements of the Flood Disaster Protection
Act of 1973 (P.L. 93-234, 42 U.S.C. § 4001) (the "Flood Act"). No portion 0
of the assistance provided under this Agreement is approved for acquisition E
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 o.
flood insurance program pursuant to Section 201(d) of the Flood Act. The r
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 a.
flood insurance requirements of Section 102(a) of the Flood Act. If the
Property is located in an area identified by HUD as having special flood E
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 c
et seq., the property owner and its successors or assigns must obtain and W
maintain, during the ownership of the 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 are
required notwithstanding the fact that the construction on the Property is not LO
itself funded with assistance provided under this Agreement.
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(xv) Project Requirements. The project requirements set forth in Subpart F of 24
CFR Part 92. Q
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(xvi) Property Standards. The housing must meet the property standards in 24
CFR § 92.251,upon project completion.
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(xvii) Fees. As required by 24 CFR Part 92.504(c)(3)(xi), the Developer shall not a.
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charge servicing, origination, processing, inspection, or other fees for the i
costs of providing homeownership assistance. E
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(xviii) HUD Regulations. Any other HUD regulations present or as may be a
amended, added, or waived in the future pertaining to the HOME Funds. c
SECTION 10. Records Retention.
Records, field notes, inspections documents, and other supporting documents pertaining to the c
use of HOME funds disbursed to the Developer, shall be retained by the Developer with a
corresponding copy provided to the City. All records should be made available to the City, HUD, E
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 'c
inspection during the Developer's regular business hours. In the event of litigation or audit W
relating to this Agreement, such records shall be retained by the Developer until all such =
litigation or audit has been resolved.
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SECTION 11. Indemnification. o
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The Developer shall defend, indemnify and hold harmless the City and its officers, employees,
representatives, and agents from and against any and all actions, suits, proceedings, claims, o
demands, losses, costs and expenses, including legal costs and attorneys' fees, for injury or y
damage of any type claimed as a result of the acts or omissions of the Developer, its officers, r
employees, subcontractors and agents, arising from or related to performance by the Developer
of the work required under this Agreement, except that arising from the sole negligence or
willful misconduct of the City. a
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SECTION 12. Insurance. E
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A. The Developer shall maintain insurance, as set forth below, throughout the term of this
Agreement. The Developer shall remain liable to the City pursuant to Section 11 above W
to the extent the Developer is not covered by applicable insurance for all losses and 2
damages incurred by the City that are caused directly or indirectly through the actions or =
inactions, willful misconduct or negligence of the Developer in the performance of the
duties incurred by the Developer pursuant to this Agreement. c
B. The 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: 2.
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i. Automobile Insurance. The Developer and each of its subcontractors shall
maintain comprehensive automobile liability insurance of not less than v)
$1,000,000.00 combined single limit per occurrence for each vehicle leased a.
or owned by the Developer or its subcontractors and used in performing work Zf
under this Agreement. E
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ii. Worker's Compensation Insurance. The Developer and each of its a
subcontractors shall maintain worker's compensation coverage in accordance =
with California workers' compensation laws for all workers under the
Developer's and/or subcontractor's employment performing work under this i
Agreement. _
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iii.Liability Insurance. The City requires comprehensive liability insurance,
including coverage for personal injury, death, property damage and E
contractual liability, with a limit of at least One Million Dollars ($1,000,000), d
including products and completed operations coverage. Said insurance shall 'c
be primary insurance with respect to the City. The Developer shall require
and ensure that all general liability insurance policies covering work at the O
Eligible Property, whether obtained by the Developer or the Developer's =
contractors, include the City and its officers, employees, representatives, and
agents as additional insured. If required by the City from time to time, the E
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Developer shall increase the limits of the Developer's liability insurance to v
reasonable amounts customary for owners of improvements similar to the 0
Project. The policy shall contain a waiver of subrogation for the benefit of E
the City. a,
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iv.Builders' Risk/Property Insurance. Builders' Risk insurance during the N
course of construction, and upon completion of construction, property t
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 a.
to the City, naming the City as a Loss Payee, as its interests may appear.
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v. Flood Insurance. Flood insurance must be obtained if required by applicable 0
federal regulations.
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C. Concurrent with the execution of this Agreement and prior to the commencement of any p
work by the Developer, the Developer shall deliver to the 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 the Developer purchases in satisfaction of the
insurance requirements of this Agreement shall be endorsed naming the City and its
officers, employees, representatives, and agents as additional insured and shall provide E
that the policy may not be cancelled, terminated or modified, except upon thirty (30)
days' prior written notice to the City. 2.
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D. Failure on the part of the Developer to procure or maintain the insurance coverage N
required herein for fifteen (15) days or longer shall constitute a material breach of this
Agreement pursuant to which the City may exercise all rights and remedies set forth N
herein and, at its sole discretion, and without waiving such default or limiting the rights a
or remedies of the City, procure or renew such insurance and pay any and all premiums Z
in connection therewith and all monies so paid by the City shall be reimbursed by the
Developer upon demand including interest thereon at the rate of ten percent (10%) per
annum compounded annually from the date paid by the City to the date reimbursed by the c
Developer. The City shall have the right, at its election, to participate in and control any a.
insurance claim adjustment or dispute with the insurance carrier. The Developer's failure c
to assert or delay in asserting any claim shall not diminish or impair the rights of the City N
against the Developer or the insurance carrier. 'o
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SECTION 13. Press Releases.
Press or news releases, including photographs or public announcements, or confirmation of the E
same related to the work to be performed by the Developer under this Agreement shall be made d
by the Developer only with the prior written consent of the City. Press or news releases shall 'c
include language identifying the Project as a City-funded project, and include the City seal. w
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SECTION 14. Defaults and Remedies. _
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A. Events of Default. The occurrence of any of the following shall, after the giving of any E
notice and the expiration of any applicable cure period, constitute a default by Developer
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hereunder("Event of Default"): _
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i. The failure of Developer to pay or perform any monetary covenant or J
obligation hereunder or under any of the documents executed in connection
herewith, without curing such failure within ten (10) calendar days after c
receipt of written notice of such default from the City (or from any party n.
authorized by the City to deliver such notice as identified by the City in °-
writing to Developer).
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ii. The failure of Developer to perform any nonmonetary covenant or obligation a
hereunder or under any of the documents executed in connection herewith,
without curing such failure within thirty (30) calendar days after receipt of E
written notice of such default from the City (or from any party authorized by
the City to deliver such notice as identified by the City in writing to =
Developer) specifying the nature of the event or deficiency giving rise to the w
default and the action required to cure such deficiency; provided, however, 0
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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.
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Notwithstanding anything herein to the contrary, the herein described notice requirements d
and cure periods shall not apply to any Event of Default described in Sections iii through a
vi below:
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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. a
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iv.Developer or any constituent member or partner, or majority shareholder, of R
Developer shall (a) apply for or consent to the appointment of a receiver, c
trustee, liquidator or custodian or the like of its property, (b) fail to pay or a`
admit in writing its inability to pay its debts generally as they become due, c
(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 x0
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 E
advantage of any insolvency law or file an answer admitting the material E
allegations of a petition filed against it in any bankruptcy or insolvency >
proceeding. c
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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 majority shareholder, of Developer, for an order for relief or an
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adjudication in bankruptcy, a composition or arrangement with creditors, a
readjustment of debts, the appointment of a trustee, receiver, liquidator or J
custodian or the like of Developer or of all or any substantial part of E
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, 0-
the same shall (a) result in the entry of an order for relief or any such U)
adjudication or appointment, or (b) continue undismissed, or pending and t
unstayed, for any period of ninety (90) consecutive calendar days.
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vi.Voluntary cessation of the operation of a Project for a continuous period of a
more than thirty (30) calendar days or the involuntary cessation of the
operation of the Project in accordance with this Agreement for a continuous E
period of more than sixty(60) calendar days.
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vii. A mechanic's lien or any other type of encumbrance on any Eligible Property w
resulting from the Developer's failure to fulfill its financial or other z
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 the City. Lo
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B. City Remedies. Upon the occurrence of an Event of Default hereunder, the City may, in E
its sole discretion, take any one or more of the following actions: d
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i. By notice to Developer declare the entire then unpaid principal balance of a
any HOME Loans immediately due and payable, and the same shall become
due and payable without further demand, protest or further notice of any
kind, all of which are expressly waived. Upon such declaration, outstanding =
principal and (to the extent permitted by law) interest and any other sums z
outstanding in connection with the HOME Loans shall thereafter bear interest i
at the Default Rate (as defined in Section 16.C., below), payable from the
date of such declaration until paid in full. c
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ii. Subject to any nonrecourse provisions in this Agreement, take any and all c
actions and do any and all things which are allowed, permitted or provided
by law, in equity or by statute, in the sole discretion of the City, to collect the X
amounts then due and thereafter to become due hereunder and under the w
HOME Loans, to exercise its rights under any outstanding Deeds of Trust,
and to enforce performance and observance of any obligation, agreement or d
covenant of the Developer under this Agreement or under any other E
document executed in connection herewith.
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iii. Cease making any payment of fees or reimbursement of eligible expenses to 2
the Developer unless and until the Event of Default(if curable) is cured. _
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iv. Demand reimbursement from the Developer for any payments made to it by c
the City for which the contracted work product was not satisfactorily 0
delivered by the Developer. E
v. Confiscate any material or other work product purchased or produced by the
Developer for the Project.
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vi.Upon the occurrence of an Event of Default which is occasioned by r
Developer's failure under this Agreement to pay money, the City may, but
shall not be obligated to, make such payment. If such payment is made by
the City, the Developer shall deposit with the City, upon written demand a
therefore, such sum plus interest at the rate of ten percent (10%) per annum c
compounded annually. The Event of Default with respect to which any such E
payment has been made by the City shall not be deemed cured until such
repayment(as the case may be) has been made by the Developer. 'c
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vii.Upon the occurrence of an Event of Default described in Section 14.A.(iv) or O
14.A.(v) hereof, the City shall be entitled and empowered by intervention in
such proceedings or otherwise to file and prove a claim for any amount
owing to the City under this Agreement and unpaid and, in the case of Ln
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 E
of the City and its counsel to protect the interests of the City and to collect
and receive any monies or other property in satisfaction of its claim.
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C. City Default and Developer Remedies. Upon failure of the 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 N
of the event or deficiency giving rise to the default and the action required to cure such CL
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deficiency, Developer may, as its sole and exclusive remedies:
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i. Bring an action in equitable relief seeking the specific performance by the
City of the terms and conditions of this Agreement or seeking to enjoin any a
act by the City which is prohibited hereunder; and/or a,
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ii. Bring an action for declaratory relief seeking judicial determination of the o
meaning of any provision of this Agreement. Without limiting the generality =
of the foregoing, Developer shall in no event be entitled to, and hereby c
waives, any right to seek indirect or consequential damages of any kind or =
nature from the City arising out of or in connection with this Agreement, and E
in connection with such waiver Developer is familiar with and hereby waives
the provisions of Section 1542 of the California Civil Code which provides 'c
as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS w
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST 0
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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 E
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DEBTOR." Developer further waives the benefit of any other statute, rule,
regulation, or common law principle to the same or similar effect. 0
Initials of Developer:
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SECTION 15. Termination. a.
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A. This Agreement may be terminated by either party for any reason by giving the other N
party thirty(30) calendar days' prior written notice. The City shall pay the Developer for
all work authorized by the City prior to the date of such notice and completed thereafter t
prior to the effective termination date. a.
B. In the event of a termination of this Agreement, the Developer shall provide all
documents, notes,maps, reports, data or other work product developed in performance of
the Scope of Services of this Agreement to the City, within ten (10) calendar days after ;
the effective date of such termination and without additional charge to the City. r_
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SECTION 16. HOME Loans. 0
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A. Subject to the terms and conditions of this Agreement, the City shall make affordable
housing development loans for the purpose of paying for the construction or !
reconstruction of Eligible Properties on said lots. and soft costs involved in the
development of Eligible Properties (the "HOME Loans") to the Developer. The City E
shall commit the aggregate principal amount not to exceed Six Hundred Fifty Thousand a
Dollars ($650,000.00) to funding the HOME Loans. The principal amount of each a,
individual HOME Loan shall be negotiated by the City and the Developer based on the a
total development costs for each Eligible Property as shown on the Total Development
Cost Pro Forma to be submitted by Developer prior to the acquisition of any Eligible
Property. Proceeds from the HOME Loans shall not be used by Developer for any off-
site costs, such as utility installations outside the boundaries of the Eligible Property. i
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B. Disbursements made from the HOME Loans will only be made for reimbursement of i
expenditures incurred. An exception is made for construction/reconstruction work E
performed on the Eligible Property, in which case disbursements will be allowed for o
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" a.,
means predevelopment, indirect, financing and sales closing costs and the Developer Fee. 6
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C. Notwithstanding any other provision of the Note to the contrary,the outstanding principal w.
balance of the Note and all accrued and unpaid interest thereunder shall be due and
payable upon the earliest of the Maturity Date of the Note or the close of the SalesCD
Escrow for the Eligible Property. In the event that the Developer has completed all of the E
construction/reconstruction work within the time frame specified in the Project Timeline
and the Eligible Property has been sold to a Qualified Homebuyer at an Affordable =
Housing Cost prior to the Maturity Date of the Note, the principal and any accrued and W
unpaid interest shall be forgiven. The net proceeds derived from the sale of the Eligible 2
Property to the Qualified Homebuyer shall be collected by the City upon the close of the =
Sales Escrow. No net proceeds other than those approved by the City shall be paid to the
Developer. 0
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D. The City hereby acknowledges that the Note is a non-recourse obligation of the =
Developer and shall contain substantially the following text: c
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"The sole recourse of the Holder to recover any sum under the Note shall be to the
Eligible Property subject to the Deed of Trust, except in the event of: 1) fraud by the o
Developer (or its assignee), 2) any material misrepresentation made by the Developer to a
the City under the Agreement, 3) misappropriation by the Developer (or its assignee) of �-
any tax collection amounts or insurance or condemnation awards resulting from
ownership of the Eligible Property, 4) commission of bad faith waste by the Developer
(or its assignee) or 5) the presence of"Hazardous Substances" on the site of the Eligible a
Property, as this term is defined in the Deed of Trust." _
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SECTION 17. Closing Conditions. >
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A. Acquisition and Construction Financing. Except to the extent the City Manager or his 2
designee directs in writing that some or all of the disbursement and/or deliveries shall =
occur outside of escrow, disbursement of HOME Loans to Developer for the purpose of
acquiring blighted lots to construct/reconstruct Eligible Properties, delivery of the c
executed loan documents (as specified in Sections i and ii below), and recordation of the
appropriate documents (as specified in Sections i and ii below) to be recorded shall be
carried out through an escrow account ("Construction Escrow") to be established by the E
Parties with a title or escrow company("Escrow Agent") specifically approved in writing d
by the City. Developer shall obtain the City's approval of an Escrow Agent prior to the a,
opening of the Construction Escrow. The Parties may execute supplemental instructions Q
to Escrow Agent consistent with the terms of this Agreement, but in the event of a r
conflict between the terms of this Agreement and any supplemental escrow instructions, tv
the terms of this Agreement shall control. Except as otherwise expressly provided herein,
any fees and costs incurred by Escrow Agent in the performance of its duties hereunder =
and agreed to be paid by the Parties shall be paid exclusively by the Developer. Z
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i. Disbursements made by the City for the purpose of R
constructing/reconstructing Eligible Properties under the HOME Loans and
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subject to this Agreement shall be expressly subject to satisfaction of all of a`
the following conditions (collectively, the Closing Conditions) on or before =
the date ("Closing Deadline") which is thirty (30) calendar days following 3
the execution date of a Site Agreement initially entered into by the City and =
Developer for the purposes of developing an Eligible Property in accordance ;
with the conditions set forth in this Agreement.
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(a) Execution of the Agreement and delivery of a fully executed copy of the E
Site Agreement in the form attached hereto as Attachment "B" to the
Escrow Agent.
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(b) Developer's due execution and deposit into the Construction Escrow of 0
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a certified copy of the Note, in the form attached hereto as Attachment :.,
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(c) Developer's due execution (with notary acknowledgment) and deposit
into the Construct Escrow of the Deed of Trust, in the form attached 0
hereto as Attachment"D". E
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(d) Developer's due execution (with notary acknowledgment) and deposit
into the Acquisition Escrow of the Housing Affordability Covenants in y
the form attached hereto as Attachment "E", recorded against the
ownership interest of the Developer in the Eligible Property, prior to the 2
start of construction.
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(e) Receipt by the City from Developer of such other documents,
certifications and authorizations as are reasonably required by the City, E
in form and substance satisfactory to the City, evidencing that (i) the d
HOME Loan Documents have been duly and validly executed by 'c
Developer and constitute the valid and enforceable obligation of W
Developer pursuant to their respective terms, and (ii) the execution and
delivery of the HOME Loan Documents, and the performances
thereunder by Developer, will not breach or violate any applicable law
or governmental regulation to which Developer is subject nor constitute '
a breach of or default under any instrument or agreement to which =
Developer may be a party. E
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(f) Lawyers Title Company or other title company approved by the City Q
("Title Company") shall have assured the City in writing that upon
recordation of the Deed of Trust there will be provided to the City, at
Developer's sole expense, a lender's policy of title insurance issued by
the Title Company in the amount of the HOME Loan, insuring the City's a
interest in the Property as beneficiary under the Deed of Trust, and z
specifically insuring that the lien of the Deed of Trust and the Housing
Affordability Covenants against the Property are subject only to any
exceptions to title which were expressly approved in writing by the City, o
(the "Permitted Encumbrances"). Standard lender's title insurance a
coverage(without the need for a survey) will be accepted by the City. w
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(g) No Event of Default shall exist under this Agreement, the Site =
Agreement or under any agreement or instrument relating to any junior c
or other financing obtained by the Developer for the purpose of
acquiring or constructing/reconstructing an Eligible Property. _
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(h) Developer shall have provided to the City, in a form satisfactory to the c
City, certified copies of (i) Developer's governing partnership W
agreement, operating agreement, or articles and bylaws, together with a o
certification by the managing member, managing general partner, or =
president that such agreement or articles and bylaws has not been
amended or modified except as described in the certification (ii) a good E
standing certificate from the California Secretary of State, certifying that
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Developer is duly qualified and in good standing, and (iii) all other c
documents necessary to evidence to the City's satisfaction that the J
individuals and entities executing this Agreement and the HOME Loan E
Documents, and other entities on whose behalf such documents are
executed, are fully authorized to do so and to bind the respective entities, 0-
including
including Developer, to the terms hereof and thereof. N
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(i) Developer shall have furnished the City with evidence satisfactory to the a
City that the insurance coverage required by Section 12 of this
Agreement have been obtained. a
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0) Developer shall have commenced or be ready to commence E
construction/reconstruction of the Eligible Property, and shall have (1)
furnished the City with copies of a contract for the 'c
construction/reconstruction work and materials ("Construction W
Contract") entered into with a general contractor ("General Contractor") O
previously approved in writing by the City; and (2) submitted to the City
and received the City's approval of any design plans or other design
documents requested by the City, if any.
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(k) Not as a Closing Condition, but at least thirty (30) calendar days prior to E
occupancy and prior to the commencement of homebuyer selection for
the Eligible Property, Developer shall have obtained the City's written
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approval of an Affirmative Marketing Plan 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 2
the event that there are multiple homebuyers qualified to purchase the a
Eligible Property. z
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ii. When, and only when, Escrow Agent has confirmed that Closing Conditions
(a), (b), (c), (d) and (f) of Section 17.A(i) above have been satisfied, and has o
received written certification from the City Manager, or his designee, that all a
other Closing Conditions have been timely satisfied or waived, then Escrow S
Agent shall carry out the close of the Acquisition Escrow by: c
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(a) Causing the Deed of Trust and the Housing Affordability Covenants to ;
be recorded in the Official Records of San Bernardino County, r
California. d
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(b) Delivering the executed original Note to the City.
(c) Causing the Title Policy to be issued to the City in the form and w
amount specified above. i
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(d) Promptly following recordation, delivering conformed copies of the
recorded documents to the City and Developer. t
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B. Sale of Eligible Properties. The Developer shall initiate the sale of an Eligible Property to 0
a Qualified Homebuyer by submitting to the City a purchase/sale agreement executed by E
the prospective homebuyer, verifying documentation from the prospective homebuyer
with respect to residency, income and the property condition as the City, or its designee, c
may reasonably request (collectively, "Homebuyer Application"). The Homebuyer `a
Application shall consist of the following information in the form approved by the City: Q.
i. A California Association of Realtors California Residential Purchase d
Agreement fully executed by the prospective homebuyer.
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ii. Application Affidavit — Completely filled out and signed by the prospective
homebuyer. E
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iii.Income documentation in accordance with HOME's Part 5 Definition of
Income, pursuant to 24 CFR §§ 5.609 and 92.203(b), for all household 2
members who are 18 years of age and older. _
iv.Copy of Employment Verification for each Homebuyer.
v. Two Months of Current Bank Statements.
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vi. Three-Year Housing History.
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vii.Income Certification Form.
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viii. Homebuyer Education Certificate from a HUD Certified Housing Counseling N
Agency. a
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ix.Proof of legal residency in the United States for all members of the EccI
household who are applying for consideration as the Qualified Homebuyer.
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x. Evidence of terms for purchase money loan, including loan amount, interest
rate, and monthly payment. w
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Within seven (7) calendar days after the receipt of the Homebuyer Application, the City =
will notify the 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, the
Developer shall open an escrow account (the "Sale Escrow") with First American Title 'c
Company or another City approved escrow company (the "Sale Escrow Agent'). The LU
City shall furnish the Sale Escrow Agent with executed escrow instructions. The 0
Developer shall not permit any escrow to close for the sale of an Eligible Property until =
and unless the escrow instructions executed by the City have been submitted to the Sale
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Escrow Agent. As provided in the escrow instructions, the Sales Escrow shall also not =
close unless and until: J
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i. The Sale Escrow Agent holds the following documents: (1) the Housing
Affordability Covenants Acknowledgement executed by the Qualified
Homebuyer in favor of the City; (2) The City Notice of Affordability N
executed by the Qualified Homebuyer; and (3) a grant deed with respect to
the Eligible Property.
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ii. Proof of hazard insurance for the full replacement cost of the Eligible a
Property is provided to the City naming the City as additionally insured; and c
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iii.Construction/Reconstruction of the Eligible Property is completed in d
accordance with this Agreement and with all applicable City permits and 'c
ordinances, and the City has issued a final certificate of occupancy for the W
Eligible Property. p
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No Event of Default shall exist under this Agreement or under any agreement or
instrument relating to any financing for the Eligible Property.
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SECTION 18. Use of the Eligible Property. E
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A. Developer hereby covenants and agrees, for itself and its successors and assigns, that the
Eligible Property shall be developed and sold to a household whose total annual income a
is at or below eighty percent(80%) of Area Median Income ("AMI"). y
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B. Developer covenants and agrees that it shall not devote the Eligible Property to uses
inconsistent with either this Agreement or the Housing Affordability Covenants. a
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SECTION 19. Discrimination Prohibited.
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A. Except as provided in the Housing Affordability Covenants with respect to the a
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 U)
account of race, color, creed, religion, sex, marital status, familial status, physical or 'o
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
Covenants shall remain in effect in perpetuity. d
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B. The Developer shall not discriminate against any person on the basis of race, color, creed, d
religion, national origin, ancestry, sex, marital status or physical handicap in the
performance of the Scope of Services of this Agreement. Without limitation, the w
Developer hereby certifies that it will not discriminate against any employee or applicant o
for employment because of race, color, religion, sex, marital status or national origin. _
Further, the Developer shall promote affirmative action in its hiring practices and
employee policies for minorities and other designated classes in accordance with federal, E
state and local laws. Such action shall include, but not be limited to, the following: _
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recruitment and recruitment advertising, employment, upgrading and promotion. In =
addition, the Developer shall comply with all State and Federal laws prohibiting the 0
exclusion from participation under this Agreement of any employee or applicant for E
employment on the basis of age,handicap or religion. `
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SECTION 20. Effect of Covenants. Q
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The City is the beneficiary of the terms and provisions of this Agreement and of the restrictions
and affordable housing covenants running with the land,whether or not appearing in the Housing
Affordability Covenants, for and in its own right and for the purposes of protecting the interests 0-
of
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 the City shall run without regard to E
whether the City has been, remains or is an owner of any interest in the Eligible Property, and
shall be effective as both covenants and equitable servitudes against the Eligible Property. If any =
of the affordable housing covenants set forth in this Agreement are breached, the City shall have 11'
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 enforce the curing of such breaches to which it may be
entitled.
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SECTION 21. Notices. E
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A. Notices, demands, and communications between the City and Developer shall be a
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:
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If to the City: City of San Bernardino a
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City Manager's Office—Housing Division i
290 North"D" Street, Third Floor E
San Bernardino, CA 92401 0
Phone: (909) 384-5122 `a
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If to Developer: Neighborhood Partnership Housing Solutions, Inc. x0
Attn: Clemente Mojica, Executive Director =
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9551 Pittsburgh Avenue =
Rancho Cucamonga,CA 91730 d
Phone: (909) 988-5274 E
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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 W
p.m., notice shall be deemed received on the next business day); the earlier of(i)three(3) p
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
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notice shall be sent pursuant to this Note. _
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SECTION 22. Compliance with Laws. _J
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The Developer shall comply with all Applicable Governmental Restrictions. As used herein, 0-
"Applicable
"Applicable Governmental Restrictions" shall mean and include any and all laws, statutes, .
ordinances, codes, rules, regulations, directives, writs, injunctions, orders, decrees, rulings, Q-
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 a
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 E
laws per the Davis-Bacon Act 40 U.S.C. 3141-3148, and any other applicable federal, state and V)
local law. The Developer shall maintain all necessary licenses and registrations for the lawful
performance of the work required of the Developer under this Agreement. The Developer shall w
indemnify, defend and hold the City harmless for any suit, cost, attorneys' fees, claim, p
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, :3
including, without limitation, the nonpayment of any prevailing wages required to be paid in Lo
connection with the Project, as applicable. Developer is solely responsible for determining the =
applicability of laws, and shall not rely on statements by the City as to the existence, effect, or E
applicability of such laws. d
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SECTION 23. Developer and each Subcontractor are Independent Contractors.
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The 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 the Developer nor any of its =
subcontractors shall at any time or in any manner represent that it or any of its employees are Z
employees of the City. The 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 the
Developer or its subcontractors to perform any item of work described in the Scope of Services. c
The Developer is entirely responsible for the immediate payment of all subcontractor liens. CLL_
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SECTION 24. Severability.
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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 E
Agreement, or the application of such term or provision to circumstances other than those to y
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. _
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SECTION 25. Amendment or Modification.
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This Agreement may only be modified or amended by written instrument duly approved and 0
executed by each of the Parties hereto. Any such modification or amendment shall be valid, E
I binding and legally enforceable only if in written form and executed by each of the Parties
hereto, following all necessary approvals and authorizations for such execution. 0-
SECTION 26. Governing Law. r
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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 a`.
California in and for the County of San Bernardino.
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SECTION 27. Non-waiver.
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Failure of either party to enforce any provision of this Agreement shall not constitute a waiver of W
the right to compel enforcement of the same provision or any remaining provisions of this
Agreement.
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SECTION 28. Assignment.
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This Agreement shall be assignable by Developer only with the prior express written consent of
the City, which consent may be withheld by the City in its sole discretion. Notwithstanding
anything to the contrary in this Agreement, no purported assignment of this Agreement shall be a
effective if not approved by the City, and/or, if such assignment would violate any Applicable `m
Governmental Restrictions. The City's consent to such assignment shall be expressly
conditioned upon (i) the assignee's execution of such documents as required by the City in its
sole discretion, including, without limitation, any and all documents deemed necessary by the a
City to provide for said assignee's assumption of all of the obligations of Developer hereunder z
and under any documents executed by Developer in connection herewith, and (ii) the City's EI
approval of the financial and credit-worthiness of such proposed assignee and the assignee's
ability to perform all of the Developer's obligations under this Agreement and all documents o
executed in connection herewith, as may be determined by the City in its sole discretion. a.
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SECTION 29. Representations of Persons Executing this Agreement. c
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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. m
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SECTION 30. Execution in Counterparts. c
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This Agreement may be executed in one (1) or more counterparts, each of which will constitute 20
an original. _
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SECTION 31. Effectiveness of This Agreement as to the City.
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This Agreement shall not be binding on the City until signed by an authorized representative of J
the Developer, and executed by the City Manager or his designee. E
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SECTION 32. Conflicts of Interest.
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The Developer hereby represents that it has no interests adverse to the City at the time of
execution of this Agreement. The Developer hereby agrees that, during the term of this
Agreement, the Developer shall not enter into any agreement or acquire any interests detrimental
or adverse to the City. Additionally, the Developer hereby represents and warrants to the City a
that the Developer and any partnerships, individual persons or any other party or parties c
comprising the Developer, together with each subcontractor who may hereafter be designated to E
perform services pursuant to this Agreement, do not have and, during the term of this d
Agreement, shall not acquire any property ownership interest, business interests, professional 'c
employment relationships, contractual relationships of any nature or any other financial W
arrangements relating to the City, property over which the City has jurisdiction or any members O
or staff of the City that have not been previously disclosed in writing to the 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 the Developer to perform the services to the City as set forth in this
Agreement. E
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SECTION 33. Non-Exclusivity. H
This Agreement shall not create an exclusive relationship between the City and the Developer for z
the Scope of Services as set forth in Attachment "A" or any similar or related services. The City z
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 the cc
Developer under this Agreement. The City reserves the discretion and the right to determine the o
amount of services to be performed by the Developer for the City under this Agreement, a
including not requesting any services at all. This Agreement only sets forth the terms upon =
which any such services will be provided to the City by the Developer, if such services are c
requested by the City, as set forth in this Agreement. _
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SECTION 34. Consequential Damages and Limitation of Liability. w
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The City and the Developer agree that except as otherwise provided in this Section 34, in no H
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event will either party be liable to the other under this Agreement for any damages, including, c
but not limited to, special damages, loss of revenue, loss of profit, operating costs or business w
interruption losses, regardless of cause, including breach of contract, negligence, strict liability or o
otherwise. The limitations and exclusions of liability set forth in this Section 34 shall apply x
regardless of fault, breach of contract, tort, strict liability or otherwise of the Developer and the
City, their employees, contractors, agents, subcontractors, or officials. E
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SECTION 35. Business Registration Certificate. @
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The Developer warrants that it possesses, or shall obtain immediately after the execution and E
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 the City of San Bernardino 0-
Municipal Code, together with any and all other licenses, permits, qualifications, insurance and a
approvals of whatever nature that are legally required to be maintained by the Developer to
conduct its business activities within the City.
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SECTION 36. Enforced Delays; Extension of Time for Performance. a
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A. Neither party shall be deemed to be in default where delays or defaults in its performance E
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, w
quarantine restrictions, government imposed moratorium legislation, freight embargoes, M
lack of transportation, weather-caused delays, inability to secure necessary labor, _
materials or tools, delays of any contractor, subcontractor or supplier that are not
attributable to the fault of the party claiming an extension of time, that suspend the
commencement of construction of the Project, or, if after such construction is LO
commenced, suspends 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 a
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.
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B. The failure of the City to provide any necessary approval relating to the development of Z
the Project or the inability of the Developer to satisfy any other condition of this i
Agreement relating to the design, financing or development of the Project shall not be E
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 o
acknowledge and agree that changes in either general economic conditions or the a
economic assumptions of either of them that provided a basis for entering into this c
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. c
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SECTION 37. Hazardous Materials. E
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 a�
deposit or permit the deposit of Hazardous Materials in or upon the Eligible Property. t
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Developer further covenants to remove or remediate, at its expense (subject to any r_
reimbursement it may be able to obtain from third parties) any Hazardous Materials c
located in or upon the Eligible Property as of the date hereof or which are deposited in or J
upon the Eligible Property from and after the date hereof and during Developer's R
ownership of the Eligible Property, including any asbestos, lead-based paint and any c
other Hazardous Materials located in the Project, to the extent required by and in
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accordance with the requirements of all Applicable Governmental Restrictions, including, v,
without limitation, all applicable environmental laws. The foregoing shall not be
construed or understood to prohibit Developer from allowing Hazardous Materials to be
brought upon the Project so long as they are materials which are customary to the normal
course of business in the operation of a well-designed housing facility and so long as R
such materials are used, stored and disposed of in accordance with all Applicable a
Governmental Restrictions. Except with respect to any claims solely caused by the City,
Developer shall indemnify, defend and hold the City and its members, directors, agents, E
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, 'c
existing as of the date hereof or deposited (or claimed to have been deposited) in, on or w
upon the Eligible Property from and after the date hereof and during Developer's 2
ownership of the Eligible Property, 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 c
the Eligible Property, as required above. Except with respect to any claims solely caused
by the City, Developer hereby releases and forever discharges the City and its agents,
officials and representatives from all present and future claims demands, suits legal and
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administrative proceedings and from all losses and liabilities arising out of or in any way
connected with Developer's ownership of the Eligible Property, or any condition of a
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 N
Property, and in connection with such 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 i
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR Z
HER FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN i
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER R
SETTLEMENT WITH THE DEBTOR."
Initials of Developer: °
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B. For purposes of this Agreement, the term "Hazardous Materials" means, without S
limitation, gasoline, petroleum products, explosives, radioactive materials, hazardous c
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 E
amended by the Superfund 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 c
seq.), (iii) the Clean Air Act (42 U.S.C. Section 7401 et seq.), (iv) the Resource w
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 a)
Account Act (CA Health & Safety Code Section 25300-25395.45), (viii) the Hazardous z
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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 J
Drinking Water and Toxic Enforcement Act of 1986 (CA Health & Safety Code Section E
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 c
Health & Safety Code Section 39000 et seq.), or (xiii) in any of the regulations adopted a`
and publications promulgated pursuant to the foregoing. a
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SECTION 38. Labor Provisions—California Law.
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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 E
trainees shall apply.
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SECTION 39. Section 3 of the Housing and Community Development Act of 1968, W
2
as Amended. 0
(1) 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. 170lu
(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, E
to the greatest extent feasible, be directed to low- and very low-income persons, particularly
persons who are recipients of HUD assistance for housing. a
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(2) The parties to this Agreement agree to comply with HUD's regulations in 24 CFR
Part 135, which implement Section 3. As evidenced by their execution of this Agreement, the
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parties to this Agreement certify that they are under no contractual or other impediment that nz
would prevent them from complying with the Part 135 regulations. Z
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(3) The Developer agrees to send to each labor organization or representative of
workers with which the Developer has a collective bargaining agreement or other understanding, o
if any, a notice advising the labor organization or workers' representative of the Developer's .
commitments under this Section 3 clause, and will post copies of the notice in conspicuous =_
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places at the work site where both employees and applicants for training and employment o
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.
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(4) The Developer agrees to include this Section 3 clause in every subcontract subject
to compliance with regulations in 24 CFR Part 135, and agrees to take appropriate action, as W
provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding M
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that the subcontractor is in violation of the regulations in 24 CFR Part 135. The Developer will =
not subcontract with any subcontractor where the Developer has notice or knowledge that the
subcontractor has been found in violation of the regulations in 24 CFR Part 135. E
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(5) The Developer will certify that any vacant employment positions, including 0
training positions, that are filled (1) after the Developer is selected but before the Agreement is E
executed, and (2) with persons other than those to whom the regulations of 24 CFR part 135
require employment opportunities to be directed, were not filled to circumvent the Developer's o
obligations under 24 CFR Part 135. N
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(6) Noncompliance with HUD's regulations in 24 CFR Part 135 may result in
sanctions, termination of this Agreement for default, and debarment or suspension from future C
HUD assisted contracts.
(7) With respect to work performed in connection with Section 3 covered Indian E
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) c
requires that to the greatest extent feasible (i) preference and opportunities for training and w
employment shall be given to Indians, and (ii) preference in the award of contracts and p
subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. x
Parties to this Agreement that are subject to the provisions of Section 3 and section 7(b) agree to
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section 7(b). w
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IN WITNESS WHEREOF the City and Developer have each executed this Agreement as of the
date first written above. 0
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CITY OF SAN BERNARDINO �,
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Approved as to Form: E
Gary D. Saenz, City Attorney
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Neighborhood Partnership Housing Solutions, Inc. E
a California 501(c)(3)public benefit corporation i
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Date: By:
Clemente Mojica, Executive Director
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Legal Counsel for Developer c
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Attachment "A" to Master Agreement c
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Scope of Services E
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A. Introduction 0
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The Infill Housing Program was established by the City of San Bernardino (the "City")to .2
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 (L
the Infill Housing Development Master Agreement between the Developer and the City c
(the"Agreement"). E
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The Developer will furnish all labor, materials, supplies, equipment, and services >
necessary (hereinafter collectively referred to as "Services") to design, permit, construct, W
market and sell the Eligible Properties to qualified low-income households, and O
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.
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B. Budget
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The approved budget is Six Hundred Fifty Thousand Dollars ($650,000.00), to
construct/reconstruct up to three (3) Eligible Properties, subject to the Maximum Per Unit
Subsidy Limits established by HUD. Proceeds will be utilized for future developments. 2
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C. Program Delivery z
1. General Requirements.
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a. As part of the Services, Developer agrees that it will make available a primary CL
staffperson on an as needed basis within close proximity to the project sites in =
order to successfully complete program activities. c
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b. As part of the Services, Developer will provide or cause to be provided and w
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will enter into agreements for construction manager services, property
management, property acquisition and relocation consultant services, as
applicable. E
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c. Developer will utilize realtors, appraisal services, escrow services and title w
companies as approved by the City. If such services have not been identified 0
by the City within a pool of City pre-approved service providers, Developer x
will utilize businesses located within the City and if they are deemed to be
unavailable, then utilize businesses in the County of San Bernardino. E
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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 0
pursuant to the Agreement and as stated in this Scope of Services. E
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e. Developer will document performance on a Quarterly Report, which report 0.
will be in a form satisfactory to the City. The Quarterly Report will be due by a
the 15th day of the month following the end of the quarter, as follows:
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Reporting Period Report Due
October- December January 15th °'
January- March April 15th
April -June July 15th
July-September October 15th >
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Progress reports will be used by the City in evaluating time extensions z
requests, if any.
f. Developer will provide notification to the City of any audits or investigations Lo
including results, findings and/or liens within ten (10) calendar days after c
Developer has obtained information regarding such audits or investigations E
and the results, findings and/or liens.
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2. Infill Housing Development. 2
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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. a
The City will facilitate the sale or transfer of City-owned parcels to the z
Developer for development of Eligible Properties. The Developer may also
acquire privately owned blighted, vacant lots.
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For privately-owned vacant parcels, the Developer will negotiate purchase and a
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sale agreements, to be approved by the City prior to the execution of such 9
purchase and sale agreement by Developer. No property will be purchased c
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 m
and conform to all pertinent HOME regulations. w
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In addition, Eligible Properties must be in such condition that the total cost to w
acquire, construct/reconstruct and resell them does not exceed the maximum 2
sales price limit for the County of San Bernardino established per HOME x
Final Rule 24 CFR Part 92.254. c
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Once Developer has selected a site, a request for environmental review and c
approval must be submitted to the City, including: J
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i. Photographs of the site
ii. Property profile cover sheet Q
iii. Estimated value using comparable sales(when site is privately-owned) a
iv. Total Development Cost Pro Forma s
v. Project Timeline
vi. Sources and Use Schedule / Financing plan that demonstrates that
sufficient funds are available for the acquisition of the property, and a
payment for the labor, materials and other services required to complete
the project. E
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The City will review the Developer's request to make the following >c
determinations: w
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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 E
environment and the property site itself will not have an adverse
environmental or health effect. aM
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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. U)
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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 o
Uniform Relocation Act set forth at 49 CFR 24.103. a
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c. Other than those liens approved by the City, Developer will ensure that title to 0
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, E
security interest, charge or claim upon or against said property. N
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d. Construction/Reconstruction of Eligible Properties acquired by Developer w
pursuant to this Agreement will be completed, and said properties will be o
ready for sale as evidenced by a Certificate of Occupancy issued by the City x
and/or a recorded Notice of Completion, by the date of completion stipulated
on the approved Project Timeline. E
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e. Developer will construct/reconstruct Eligible Properties in accordance with the
California Building Code, the City's Development Code for residential 0
properties,pursuant to the terms of this Agreement, and in accordance with the E
plans and specifications approved by the City's Planning and Building & aD
Safety Divisions. a
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f. As part of the Developer's process for each Eligible Property, Developer will
prepare and/or provide the following:
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i. Budget Estimate — for the total development cost of the Eligible Property a
and a budget estimate for construction/reconstruction costs.
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ii. Project Timeline— for the completion of the various steps involved in the
acquisition, construction/reconstruction and sale of the Eligible Property. >>
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iii. Property Security — upon acquisition of title to an Eligible Property, O
Developer will provide locked fencing on the perimeter of the site to
preclude unauthorized entry upon an Eligible Property.
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iv. Property Maintenance — Developer must maintain property during the =
holding period, including utilities services, and interior and exterior E
appearance of the property.
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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 a
and materials, conducting weekly on-site project inspections, managing z
relationships with all sub-contractors, verifying permits and City
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compliance, administering both conditional and unconditional lien
releases. The Developer is responsible for closely monitoring the various o
phases of development, conducting and documenting inspections, and a.
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resolving problems that may be encountered during construction. E
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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 "I" such as copies of advertisements E
published in local and community newspapers, etc.
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vii. Environmental — Developer must comply with Lead-Based Paint w
requirements, and implement all lead-based paint, asbestos, mold or any 2
other environmental mitigation measures required, and provide proof of z
completion of these mitigation measures.
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3. Marketing and Sale of Eligible Property.
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a. Marketing— Developer will market the Eligible Property through advertising, E
published promotional materials and community outreach, in accordance with a�
the Affirmative Marketing Guidelines as described in Attachment"I". 0
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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.
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c. Sale to Qualified Homebuyer — Eligible properties must be sold to Qualified c
Homebuyers and/or First Time Homebuyers, and who will use the Eligible E
Property as a primary place of residence. The Developer is responsible for the d
following process: c
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i. Identify Homebuyer — Developer must identify prospective Qualified o
Homebuyers, facilitate adequate homebuyer education training and pre-
qualify the homebuyer using HOME's Part 5 definition (24 CFR Part
5.603) 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: E
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■ Last three (3) years tax returns (State and Federal) (1040's) Q
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 18 years of age and older and will reside in the Eligible z
Property, including 2 months of source documentation for all
income sources such as paystubs, bank statements, 2
employment verification, verification of income from assets, o
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A California Association of Realtors California Residential
Purchase Agreement fully executed by the prospective c
homebuyer. x
■ Application Affidavit — Completely filled out and signed by w
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 w
amount, fixed rate, and monthly payment amount. Non- 2
traditional mortgages, such as negative amortization loans, x
interest-only loans, or loans with balloon payments, are not
allowed. E
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■ Proof of legal residency in the United States for all members
of the household who are applying for consideration as the 0
Qualified Homebuyer. E
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ii. Income Eligibility - In determining whether a prospective homebuyer is a
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 r
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 (80%) a
of AMI as established by HUD. It is the Developer's responsibility to
properly determine income eligibility by examining source documentation E
evidencing anticipated annual income, and applying the correct income
limits.
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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. Ln
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e. Escrow—Developer will work with the selected title company and manage the E
escrow process through closing on behalf of the Qualified Homebuyer, and
ensure that all the HOME Loan Documents and property documents are a
executed, notarized and recorded as needed. r
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4. Construction Requirements.
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a. Developer will cause the construction/reconstruction work to proceed z
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 R
date approved in the Project timeline. "Completion of the Project" shall be o
deemed to have occurred when the City has received satisfactory evidence a
that the City has executed the final inspection for the particular Eligible a�
Property and has authorized the unconditional provision of utilities to the o
Eligible Property. _
b. Developer shall provide evidence that the construction/reconstruction work on
the Eligible Property has been completed in compliance with this Agreement, E
and that all final permits and certificates necessary for the sale of the Eligible U)
Property have been obtained, including, without limitation, the following, c
each of which is subject to the City's review and approval: (1) a minimum 5- w
year warranty from the general contractor, in a form reasonably acceptable to 0
the City, with respect to the construction work performed and all components z
and systems constructed or installed upon the Eligible Property; (2) a
certificate of occupancy or Notice of Completion, as may be warranted, and E
other final permits and licenses necessary to permit the use and occupancy of
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Packet Pg. 381
20.c
the Eligible Property for its intended purposes, which have been issued by =
proper governmental agencies; and (3) evidence satisfactory to the City that 0
the Eligible Property is free from any mechanics' liens. E
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5. Relocation Requirements. c
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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 a
the event that acquired properties require relocation assistance Developer shall be c
responsible for funding and compliance with all relocation requirements as governed by E
federal relocation laws and regulations for projects funded in whole or in part with U)
HOME funding, including the Federal Uniform Relocation Assistance and Real Property >c
Acquisition Policies Act (42 U.S.C. §§ 4601, et seq., as amended), Federal Relocation W
Regulations (49 CFR Part 24), and the HUD Tenant Assistance, Relocation and Real O
Property Acquisition Handbook(1378.0).
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Attachment "B" to Master Agreement C
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SITE AGREEMENT c
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THIS SITE AGREEMENT ("Agreement") is made as of the day of , 201 , by
and between the City , a municipal corporation ("the City"), and HOUSING PARTNERS 1 0
INC., a California 501(c)(3) public benefit corporation ("Developer"), for the purpose of 0
acquiring blighted vacant lots, constructing/reconstructing infill housing and selling the .2-
property,
property, whose address is indicated below ("Project"), in accordance with the terms of that
certain Master Agreement dated entered into between Developer and the City (the
"Master Agreement"). a.
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The City agrees, subject to the terms and conditions of the Master Agreement and this E
Agreement and in consideration of the representations, covenants and obligations of Developer
contained in the Master Agreement and this Agreement, to make a Loan to Developer in the 'c
amount not to exceed ($ ) (the "Loan") for the purpose of providing acquisition and W
construction/reconstruction financing for a detached, single-family home located at , San O
Bernardino, CA (the "Eligible Property"), which Eligible Property will be reserved for a
household whose income is less than or equal to 80% of Area Median Income ("AMI") as
defined in the Master Agreement, and whose legal description is attached herewith as Exhibit
"A", to be used solely for the purposes described herein and secured by the Deed of Trust. The
City's source of funding for the Loan is provided from the HOME Investment Partnerships E
Program, 24 CFR Part 92, (hereinafter referred to as "HOME") administered and funded by the L
United States Department of Housing and Urban Development ("HUD"). No other sources of a
financing are anticipated for the Project.
Developer will deliver to the City, among other items, the "Deed of Trust", "Note" and the
"Housing Affordability Covenants", in the respective forms attached as Exhibits "E", "F", and i
"G", herewith to, respectively, secure repayment of the Loan by Developer as provided herein Z
and to ensure that the affordability and habitability of the Project is maintained in accordance
with the terms of those instruments, the Master Agreement and this Agreement. cc
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Developer will further attach to this Agreement: (i) a completed version of Exhibit "B", the a`
Development Pro Forma, attached herewith, for the above described Eligible Property and c
Project; (ii) a project timeline in the format of Exhibit"C" for completion of the Project, attached
herewith; and (iii) a completed version of Exhibit "D", the Sources and Uses Schedule, attached x0
herewith. 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 E
Project agreed upon by the Developer and the City. d
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By the execution and submittal of this Site Agreement, and upon acceptance hereof by the City, >
the Developer shall apply all requirements of the HOME program as required by federal law, w
rules and regulations in addition to all other requirements contained in the Master Agreement. 20
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IN WITNESS WHEREOF, the undersigned have executed this Site Agreement as of the date r-
first above written. °
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DEVELOPER:
HOUSING PARTNERS 1, INC., a
a California 501(c)(3)public benefit corporation
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Date: By:
Clemente Mojica, Executive Director a
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CITY OF SAN BERNARDINO
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EXHIBIT "A" TO SITE AGREEMENT =
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Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
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EXHIBIT "C" TO SITE AGREEMENT
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EXHIBIT "D" TO SITE AGREEMENT
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EXHIBIT "E" TO SITE AGREEMENT
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HOME INVESTMENT PARTNERSHIPS PROGRAM =
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PROMISSORY NOTE J
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Site Address: , San Bernardino, CA
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Total Not to Exceed$
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Date: m
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For value received, the undersigned, NEIGHBORHOOD PARTNERSHIP HOUSING >
SOLUTIONS, INC., a California 501(c)(3) public benefit corporation (`Borrower"), whose W
principal address is set forth herein below, promises to pay to the order of THE CITY OF SAN 2
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BERNARDINO ("the City") at 201 North "E" Street, Suite 301, San Bernardino, California =
92401 (or to such designee and/or at such other address as the City may from time to time
designate in writing), the principal sum not to exceed DOLLARS ($ ) with interest
to accrue from and after the date of each disbursement (the "Loan"), or such amount as may be
advanced hereunder, plus accrued and unpaid interest as provided herein below, and all other E
charges due hereunder, in accordance with the terms and conditions of that certain Master d
Agreement dated as of entered into between Borrower and the City (the "Master
Agreement') and that certain Site Agreement dated as of entered into between Borrower 2.
and the City (the "Site Agreement'), and the terms and conditions of this Promissory Note (this U)
"Note"). As set forth in greater detail in the Site Agreement, the purpose of the Loan is to
provide Borrower with acquisition and construction/reconstruction financing in connection with y
an affordable infill housing project ("Project") on a site more particularly described in the Site a
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Agreement and the legal description attached herewith as Exhibit"A" ("Eligible Property"). i
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1. Interest. a�
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A. Basic Interest. Except as provided in Section 1.4 below, the disbursed and unpaid c
principal balance of the Loan shall bear interest commencing on the date on which the Loan U)
proceeds are first disbursed for the account of Borrower at the rate of three percent (3%) per =
annum, simple interest ("Basic Rate"). Interest shall be computed on the basis of actual number ;
of days elapsed. The Loan shall stop bearing interest on the date paid or on the date that the =
conditions for forgiving the Loan have been met by the Borrower, as specified in Section I.D. d
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B. Term. The term of the Loan expires on the "Maturity Date" which is one (1) year
from the date when the Acquisition Escrow (as is defined in the Master Agreement) for the =
Eligible Property is closed and the Escrow Agent (as is defined in the Master Agreement) g
disburses the proceeds of the Loan to the Borrower for any acquisition, predevelopment or =
construction/reconstruction costs associated with the development of the Eligible Property. The
City shall have the option of extending the term of any Loan in its sole discretion. a)
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C. Time and Amount of Payment. The entire outstanding principal balance of the
Loan together with any outstanding interest and any other sums payable under this Note shall be .0
due and payable in full on the first to occur of the following dates (the "Due Date"): (i) the date E
of the first Sale or Transfer of the Property; (ii) the date on which the City accelerates all sums
due under this Note as a result of a "default" by Borrower under Section 9 hereof and the a
expiration of any applicable cure periods; and (iii) the Maturity Date of the Loan. If no Due a
Date has occurred, then the entire principal of the Loan and any accrued and unpaid interest shall s
be forgiven when the conditions stipulated in Section 1.4 below have been met by the Borrower.
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D. Loan Forgiveness. In the event that the Borrower has completed all of the work a.
required for the construction/reconstruction of the Eligible Property pursuant to the Master
Agreement, the Eligible Property has been sold to a Qualified Homebuyer at an Affordable E
Housing Cost prior to the Maturity Date of the Loan, and the Borrower is not in default under
any of the provisions in the Master Agreement and this Note, the entire principal of the Loan and 'c
any accrued and unpaid interest shall be forgiven. The net proceeds derived from the sale of the W
Eligible Property ("Sale Proceeds") shall be due to the City upon the close of the Sales Escrow.
No net proceeds shall accrue to the Borrower unless approved by the City.
E. Calculation of Sale Proceeds. Borrower shall provide to the City for inspection
and copying any records, receipts, account books, ledgers, checks, or other documents or other =
evidence requested by the City for the purpose of verifying Borrower's calculation of the Sale E
Proceeds, and shall promptly pay to the City any further amount due but not paid as a result of L
any miscalculation by Borrower. In no event shall any Loan payment attributable to an Event of
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Default(as hereafter defined)or acceleration be deferred.
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F. Default Rate. Any amounts (including but not limited to amounts of principal and
interest on the Loan) which Borrower does not pay when due under the terms of this Note shall =
bear interest at the rate of ten percent (10%) per annum, simple interest ("Default Rate"), from i
the date due until the date paid.
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2. Acceleration. o
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Notwithstanding the payment terms set forth in Section 1 above, upon the occurrence of any c
"Event of Default" as set forth in Section 9 below, the entire outstanding principal balance of this c
Note, together with any outstanding interest and other amounts payable hereunder, shall, at the x
election of the City and upon notice to Borrower thereof become immediately due and payable
without presentment, demand, protest or other notices of any kind, all of which are hereby
waived by Borrower.
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3. Prepayment; Application of Payments. c
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At any time after the disbursement of the Loan proceeds, Borrower may prepay all or a portion 2
of the unpaid principal amount of the Loan and accrued interest and any other sums outstanding =
without penalty. All payments, including any prepayments or funds received upon acceleration
pursuant to Section 2 above, shall be applied first toward any outstanding costs of collection or E
other amounts (excluding Loan principal or interest thereon) due under this Note or the Master
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Agreement or the Site Agreement, then toward outstanding interest accrued at the Default Rate, 0
if any, then toward outstanding interest accrued at the Basic Rate, if any, and finally toward the E
remaining principal balance under the Note.
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4. Security and Source of Payment. a.
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Borrower's obligations under this Note and the Site Agreement shall, at all times during which
any amount remains outstanding, be secured by the deed of trust ("Deed of Trust") of even date
herewith, and of which the City is the beneficiary, recorded against Borrower's interest in the a
Eligible Property.. The security interest in the Eligible Property granted to the City pursuant to
the Deed of Trust shall be subordinate only to the exceptions to title shown in the title report for E
the Eligible Property which are approved in writing by the City. Except to the extent any Event
of Default hereunder results directly or indirectly from any willful misconduct, fraud or 'c
intentional and material misrepresentation by Borrower in connection with this Note, the Master W
Agreement, the Site Agreement or the Loan, the Loan is a nonrecourse obligation of Borrower O
and, in the event of the occurrence of an Event of Default, the City's only recourse under the
Loan Documents shall be against the Eligible Property, the proceeds thereof, the rents and other
income arising from its use and occupancy as provided in the Deed of Trust, and any other
collateral given to the City as security for repayment of the Loan. _
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5. Obligation of Borrower Unconditional.
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The obligation of Borrower to repay the Loan and all accrued interest thereon and all other sums d
due thereunder shall be absolute and unconditional, and until such time as all of the outstanding
principal of, interest on and all other sums due under, this Note shall have been fully paid,
Borrower agrees that it: (a)will use the funds solely for the purposes set forth herein; and (b)will z
not terminate or suspend any payment or obligations under this Note, the Master Agreement, the z
Site Agreement or any other document executed hereunder or in connection herewith for any
cause, including without limitation, any acts or circumstances that may constitute failure of Ta
consideration, commercial frustration of purpose, or any duty, liability or obligation arising out o
of or in connection with this Note, the Master Agreement, the Site Agreement or any document a
executed hereunder or in connection herewith. c
6. Purpose of Loan. x0
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The Loan proceeds shall be used by Borrower only to provide acquisition and
construction/reconstruction financing for the infill housing development described in the Site
Agreement. In no event shall Borrower use or otherwise invest the proceeds of the Loan except H
as expressly provided in this Note. >
7. Covenants of Borrower. z
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As additional consideration for the making of the Loan by the City, Borrower covenants as
follows:
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A. Compliance with the Master Agreement, the Site Agreement and the Deed of 0
Trust. Borrower shall comply with all of its obligations under the Master Agreement, the Site E
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Agreement and the Deed of Trust. Any amounts payable by Borrower under the Deed of Trust
(other than amounts also payable hereunder) shall be deemed added to the principal amount of
the Loan payable hereunder. a
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8. Assignment of this Note.
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This Note shall be assignable by Borrower only if Borrower obtains the prior express written a.
consent of the City, which consent may be withheld by the City in its sole discretion.
Notwithstanding anything to the contrary in this Note, no purported assignment of this Note and E
the Loan shall be effective if such assignment would violate the terms, conditions and d
restrictions of any Applicable Governmental Restrictions. The City's consent to such assignment c
shall be expressly conditioned upon (i) the assignee's execution of such documents as required W
by the City in its sole discretion, including, without limitation, any and all documents deemed
necessary by the City to provide for said assignee's assumption of all of the obligations of
Borrower hereunder and under Loan Documents, and (ii) The City's approval of the financial and
credit worthiness of such proposed assignee and the assignee's ability to perform all of the
Borrower's covenants under this Note, the Master Agreement, the Site Agreement and any of the
other Loan Documents. E
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9. Events of Default and Remedies. Q
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A. Borrower Events of Default. The occurrence of any of the following shall, after R
the giving of any notice and the expiration of any applicable cure period described therein,
constitute an event of default by Borrower hereunder("Event of Default"): a
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i. The failure of Borrower to pay or perform any monetary covenant or
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obligation hereunder or under the terms of this Note or the Deed of Trust, the Master Agreement
or the Site Agreement, without curing such failure within ten(10) calendar days after the date o
such payment is due. Notwithstanding anything herein to the contrary, the herein described cure n.
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period shall not apply to a failure by Borrower to timely repay the Loan at the Maturity Date of9
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this Note; _
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ii. The failure of Borrower to perform any nonmonetary covenant or
obligation hereunder or under the terms of this Note, the Deed of Trust, the Master Agreement or
the Site Agreement, without curing such failure within thirty(30) calendar days after receipt of a)
written notice of such default from the City (or from any party authorized by the City to deliver y
such notice as identified by the City in writing to Borrower) specifying the nature of the event or
deficiency giving rise to the default and the action required to cure such deficiency; provided, w
however, that if any default with respect to a nonmonetary obligation is such that it cannot be 0
cured within a thirty day period, it shall be deemed cured if Borrower commences the cure =
within said thirty day period and diligently prosecutes such cure to completion thereafter with the
cure completed in any event within 180 calendar days after the notice. Notwithstanding anything E
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herein to the contrary, the herein described notice cure periods shall not apply to any Event of J
Default described in Sections 9(A)(3)through 9(A)(7)below; E
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iii. The material falsity of any representation or breach of any warranty or o
covenant made by Borrower under the terms of this Note, the Master Agreement, the Site y
Agreement or the Deed of Trust; .9-
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iv. Borrower 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 a.
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 E
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 or answer seeking an 'c
arrangement with creditors or an order for relief or seeking to take advantage of any insolvency LU
law or file an answer admitting the material allegations of a petition filed against it in any o
bankruptcy or insolvency proceeding;
V. If without the application, approval or consent of Borrower, a proceeding
shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in
respect of Borrower or any constituent member or partner or majority shareholder of Borrower, E
for an order for relief or an adjudication in bankruptcy, a composition or arrangement with L
creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian a
or the like of Borrower or of all or any substantial part of Borrower's assets, or other like relief in
respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being U)
contested by Borrower, 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, a
for any period of ninety(90) consecutive calendar days; z
vi. 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 o
of the operation of the Project during the construction phase in accordance with this Note for a °-
continuous period of more than sixty(60) calendar days;
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vii. Borrower shall be in default under the Housing Affordability Covenant, _
unless the default is cured within the cure period, if any, applicable thereto under the terms of the
obligation which is in default.
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B. City Remedies. Upon the occurrence of an Event of Default hereunder, the City N
may, in its sole discretion, take any one or more of the following actions: c
i. By notice to Borrower, declare the entire then unpaid principal balance of 0
the Loan immediately due and payable, and the same shall become due and payable without x
further demand, protest or further notice of any kind, all of which are hereby expressly waived
by Borrower. Upon such declaration, outstanding principal and (to the extent permitted by law) E
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interest and any other sums outstanding in connection with the Loan shall thereafter bear interest J
at the Default Rate,payable from the date of such declaration until paid in full; E
ii. Subject to the nonrecourse provisions of Section 4 above, take any and all
actions and do any and all things which are allowed, permitted or provided by law, in equity or N
by statute, in the sole discretion of the City, to collect the amounts then due and thereafter to
become due hereunder, to exercise its rights under the Deed of Trust, and to enforce performance
and observance of any obligation, agreement or covenant of the Borrower under this Note or
under any other document executed in connection herewith; a.
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iii. Subject to the nonrecourse provisions of Section 4 above, upon the E
occurrence of an Event of Default, which is occasioned by Borrower's failure to pay money,
whether under this Note, the Master Agreement or the Site Agreement, the City may, but shall c
not be obligated to, make such payment. If such payment is made by the City, Borrower shall w
deposit with the City, upon written demand therefor, such sum plus interest at the Default Rate.
The Event of Default with respect to which any such payment has been made by the City shall
not be deemed cured until such repayment has been made by Borrower. Until repaid, such
amounts shall have the security afforded disbursements under this Note;
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Subject to the nonrecourse provisions of Section 3 above, upon the occurrence of an Event of E
Default described in Section 9(A)(3) or 9(A)(4) hereof, the City shall be entitled and empowered L
by intervention in such proceedings or otherwise to file and prove a claim for the whole amount a
owing and unpaid on the Loan and, in the case of commencement of any judicial proceedings, to d
file such proof of claim and other papers or documents as may be necessary or advisable in the
judgment of the City and its counsel to protect the interests of the City and to collect and receive
any monies or other property in satisfaction of its claim. a
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C. No Remedy Exclusive. No remedy herein conferred upon or reserved to the City
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is intended to be exclusive of any other available remedy or remedies, but each such remedy
shall be cumulative and shall be in addition to every other remedy given under this Note or now o
or hereafter existing at law or in equity or by statute; and may be exercised in such number, at a.
such times and in such order as the City may determine in its sole discretion. No delay or =
omission to exercise any right or power upon the occurrence of any Event of Default hereunder c
shall impair any such right or power or shall be construed to be a waiver thereof, but any such =
right and power may be exercised from time to time and as often as may be deemed expedient by
the City. In order to entitle the City to exercise any right or remedy reserved to it under this Note,
no notice shall be required except as expressly provided herein. E
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D. City Default and Borrower Remedies. Upon fault or failure of the City to meet
any of its obligations under this Note without curing such failure within thirty (30) calendar days w
after receipt of written notice of such failure from Borrower specifying the nature of the event or 2
deficiency giving rise to the default and the action required to cure such deficiency, Borrower =
may, as its sole and exclusive remedies:
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i. Demand and obtain payment from the City of any sums due to or for the J
benefit of Borrower pursuant to the express terms of this Note; E
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ii. Bring an action in equitable relief seeking the specific performance by the o
City of the terms and conditions of this Note or seeking to enjoin any act by the City which is N
prohibited hereunder; or r
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iii. Bring an action for declaratory relief seeking judicial determination of the
meaning of any provision of this Note. a
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Without limiting the generality of the foregoing, Borrower shall in no event be E
entitled to, and hereby waives, any right to seek indirect or consequential damages of any kind or d
nature from the City arising out of or in connection with this Note, and in connection with such c
waiver Borrower is familiar with and hereby waives the provisions of Section 1542 of the LU
California Civil Code which provides as follows: "A GENERAL RELEASE DOES NOT O
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR."
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10. Agreement to Pay Attorneys' Fees and Expenses.
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In the event that either party hereto brings any action or files any proceeding in connection with 2
the enforcement of its respective rights under this Note or any of the other Loan Documents as a a
consequence of any breach by the other party of its obligations hereunder or thereunder, the z
prevailing party in such action or proceeding shall be entitled to have its reasonable attorneys' EI
fees and out-of-pocket expenditures paid by the losing party. The attorneys' fees so recovered cc
shall include fees for prosecuting or defending any appeal and shall be awarded for any 0-
supplemental
supplemental proceedings until the final judgment is satisfied in full. In addition to the foregoing 0-
award
award of attorneys' fees, the prevailing party in any lawsuit on this Note or any other Loan =
Document shall also be entitled to its attorneys' fees incurred in any post judgment proceedings c
to collect or enforce the judgment. In addition to the foregoing, Borrower agrees to pay or =
reimburse the City, upon demand by the City, for all costs incurred by the City in connection
with the enforcement of this Note, and any other Loan Document, including without limitation,
reasonable attorneys' fees and costs, if there shall be filed by or against Borrower any E
proceedings under any federal or state bankruptcy or insolvency laws, whether the City is a
creditor in such proceeding or otherwise. >
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11. Conflict of Interest; No Individual Liability. °
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No official or employee of the City shall have any personal interest, direct or indirect, in this
Note, nor shall any official or employee of the City participate in any decision relating to this 0
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Note that affects such official's or employee's pecuniary interest in any corporation, partnership U)
or association in which such official or employee is directly or indirectly interested. No official
or employee of the City shall be personally liable in the event of a breach of this Note or any
other Loan Document by the City.
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12. Amendments, Changes and Modifications.
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This Note may not be amended, changed, modified, or altered without the prior written consent
of the parties hereto.
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13. Notices. O
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All notices, demands, requests, elections, approvals, disapprovals, consents or other
communications given under this Note shall be in writing and shall be given by personal
delivery, facsimile, certified mail (return receipt requested), or overnight guaranteed delivery
service and faxed or addressed as follows: E
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If to the City: City of San Bernardino a
City Manager's Office- Housing Division d
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300 N. "D" St., Sixth Floor
San Bernardino, California 92418
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If to Borrower: Neighborhood Partnership Housing Solutions, Inc.
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Attention: Clemente Mojica, Executive Director
9551 Pittsburgh Avenue 0
Rancho Cucamonga, CA 91730 a
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Notices shall be effective upon receipt, if given by personal delivery; upon receipt, if faxed, c
provided there is written confirmation of receipt (except that if received after 5 p.m., notice shall x
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, E
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 Note. c
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14. Severability.
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The invalidity or unenforceability of any one or more provisions of this Note will in no way
affect any other provision. E
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15. Interpretation. o
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Whenever the context requires, all words used in the singular will be construed to have been
used in the plural, and vice versa, and each gender will include any other gender. The captions o
of the paragraphs of this Note are for convenience only and do not define or limit any terms or H
provisions. Time is of the essence in the performance of this Note by Borrower. Each Party has s
been represented by counsel in the negotiation of this Note, and it shall not be interpreted in
favor of or against any Party on account of relative responsibilities in drafting. Notwithstanding
any other provision of this Note, nothing herein or in this Note shall be deemed to require a
Borrower to pay interest in the amount of any applicable usury law or other legal limitation on c
interest, and the terms hereof and of this Note shall be interpreted to require in each instance the E
lesser of(i) the amount stated in this Note; and (ii)the maximum applicable legal limit. Defined
terms not otherwise defined herein shall have the meaning assigned to them by the Master 'c
Agreement. W
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16. No Waiver; Consents.
Any waiver by the City must be in writing and will not be construed as a continuing waiver. No LO
waiver will be implied from any delay or failure by the City to take action on account of any
default of Borrower. Consent by the City to any act or omission by Borrower will not be E
construed as consent to any other or subsequent act or omission or to waive the requirement for
the City's consent to be obtained in any future or other instance.
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17. Governing Law.
This Note shall be governed by the laws of the State of California. U)
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18. Representations, Warranties and Additional Covenants of Borrower.
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Borrower hereby represents, warrants and covenants to the City that: c
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A. Organization and Standing. Borrower is a California legal entity as described in
the Agreement, duly formed, qualified to operate in California and validly existing and in good c
standing under all applicable laws, and has all requisite power and authority to enter into and =
perform its obligations under this Note, the Master Agreement, the Site Agreement, the Deed of
Trust, the Housing Affordability Covenant and all other documents executed in connection r
herewith. a
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B. Enforceability. This Note and all other instruments to be executed by Borrower in c
connection with the Loan constitute the legal, valid and binding obligation of Borrower, without w
joinder of any other party. o
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C. Authorization and Consents. The execution, delivery and performance of this c
Note and all other instruments to be executed in connection herewith is consistent with the E
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operating agreement, partnership agreement or articles and bylaws governing Borrower and have
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been duly authorized by all necessary action of Borrower's members, partners, directors, officers 0
and shareholders. E
D. Due and Valid Execution. This Note and all other instruments to be executed in a
connection herewith, will, as of the date of their execution, have been duly and validly executed a
by Borrower. t
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E. Licenses. Borrower will obtain and maintain all material licenses, permits,
consents and approvals required by all applicable governmental authorities to own and operate a
the Project.
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F. Litigation and Compliance. There are no suits, other proceedings or
investigations pending or threatened against, or affecting the business or the properties of 'c
Borrower(other than those as have been previously disclosed in writing to the City) which could W
impair its ability to perform its obligations under this Note, nor is Borrower in violation of any z
laws or ordinances which could materially impair Borrower's ability to perform its obligations
under this Note.
G. Default. There are no facts now in existence which would, with the giving of =
notice or the lapse of time, or both, constitute an "Event of Default" hereunder, as described in E
Section 9.
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H. No Violations. The execution and delivery of this Note and all other documents
executed or given thereunder, and the performances hereunder and thereunder by Borrower, ascc
applicable, will not constitute a breach of or default under any instrument or agreement to which
Borrower may be a party nor will the same constitute a breach of or violate any law or a
governmental regulation. Z
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19. Approvals.
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Except with respect to those matters set forth hereinabove providing for the City's approval, a.
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consent or determination to be at the City's "sole discretion" or "sole and absolute discretion," the =
City hereby agrees to act reasonably with regard to any approval, consent, or other determination o
given by the City hereunder. The City agrees to give Borrower written notice of its approval or =
disapproval following submission of items to the City for approval, including, in the case of any
disapproved item, the reasons for such disapproval.
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An review or approval of an matter b the Cit or an Cit official or employee under this E
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Note shall be solely for the benefit of the City, and neither Borrower nor any other person shall c
rely upon such review or approval as an indication of the wisdom, soundness, safety, w
appropriateness, or presence or absence of any matter. Without limiting the generality of the 0
foregoing, Borrower and not the City shall be solely responsible for assuring compliance with x
laws, the suitability of the Eligible Property Project, the adequacy of the plans, and the safety of
the Project construction site, the completed Project, and the operation thereof. E
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Any consent to a Transfer given by the City under this Note, the Deed of Trust, the Master 0
Agreement, the Site Agreement, or any of the other documents executed in connection therewith, E
may be given by the City Manager without action by City Council unless the City Manager a�
selects to refer the matter to City Council. o
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20. Good Faith and Fair Dealing.
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The City and Borrower agree to perform all of their obligations and the actions required of each
hereunder in good faith and in accordance with fair dealing. a
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21. Waiver. E
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Borrower agrees that it will still be liable for repayment of this Note, subject to the nonrecourse >c
provision of Section 4 above, even if the holder hereof does not follow the procedures of
presentment, protest, demand, diligence, notice of dishonor and of nonpayment, which =
requirements are hereby waived. Failure of the City or other holder hereof to exercise any right
or remedy hereunder shall not constitute a waiver of any future or other default. No acceptance
of a past due installment or indulgence granted from time to time shall be construed to be a
waiver of, or to preclude the exercise of, the right to insist upon prompt payment thereafter or to =
impose late charges retroactively or prospectively, or to waive or preclude the exercise of any E
other rights which the City may have.
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IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first
above written.
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BORROWER: 2
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NEIGHBORHOOD PARTNERSHIP HOUSING a
SOLUTIONS,INC., a California 501(c)(3)public a'
benefit corporation c
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By:
Clemente Mojica, Executive Director
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EXHIBIT "A" TO PROMISSORY NOTE 0
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LEGAL DESCRIPTION
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Real property in the City of San Bernardino, County of San Bernardino, State of California,
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Attachment "D" to Master Agreement 0
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Deed of Trust Form
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Recording Requested by and JO
When Recorded Mail To: E
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CITY OF SAN BERNARDINO °
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201 North"E" Street, Suite 301
San Bernardino, CA 92401
Attn.: Housing Division
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Above Space For Recorder's Use Only
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Document entitled to free recording per
Govt. Code Section 6103 'c
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DEED OF TRUST, ASSIGNMENT OF RENTS, _
SECURITY AGREEMENT AND FIXTURE FILING
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THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING ("Deed of Trust") is made as of by and between E
NEIGHBORHOOD PARTNERSHIP HOUSING SOLUTIONS, INC., a California 501(c)(3)
public benefit corporation ("Trustor"), Chicago Title Company ("Trustee"); and THE CITY OF a
SAN BERNARDINO, INC., a municipal corporation(`Beneficiary") ("the City"). ,
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RECITALS
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A. The City is making a loan to Trustor in the original principal amount of z
DOLLARS ($ ) (the "Loan") pursuant to that certain Master Agreement (the "Master E�
Agreement") entered into by Trustor and Beneficiary and dated as of and that certain Site
Agreement (the "Site Agreement") entered into by Trustor and Beneficiary and dated as of o
The Loan is evidenced by a promissory note of even date herewith executed by Trustor a
(the"Note") in the principal amount of the Loan. _
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B. Trustor intends to use the Loan proceeds for the purpose of providing financing =
for the housing development described in the Site Agreement (the "Project"). The Project will E:
be developed on a site legally described on Attachment "1" to this Deed of Trust (the "Eligible
Property").
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NOW THEREFORE, in consideration of the Loan, Trustor hereby irrevocably grants, c
conveys, transfers and assigns to Trustee, its successors and assigns, in trust, with power of sale w
and right of entry and possession as provided below all of its present and future estate, right, title 2
and interest in and to the Eligible Property, together with all right, title and interest of Trustor x
therein and in and to, and grants to Beneficiary a security interest in, the following:
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(A) All development rights, air rights, water, water rights, and water stock relating to the J
Eligible Property. E
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(B) All present and future structures, buildings, improvements, appurtenances and o
fixtures of any kind on the Eligible Property, including but not limited to all apparatus, attached N
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, a
furnaces, pipes, plumbing, vacuum systems, brushes, blowers, cleaning, call and sprinkler c
systems, fire extinguishing apparatus and equipment, water tanks heating, ventilating, air d
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conditioning and air cooling equipment, and gas and electric machinery and equipment, it being d
intended and agreed that all such items will be conclusively considered to be a part of the 'c
Eligible Property conveyed by this Deed of Trust, whether or not attached or affixed to the
Eligible Property. 0
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(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. LO
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(D) All of the rents, royalties, profits and income related to the Eligible Property, to the E
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extent not prohibited by any applicable law.
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(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.
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(F) All existing and future goods, inventory, equipment and all other personal property z
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 cc
any construction on the Eligible Property but which are not effectively made real property under o
Clause (B) above, including but not limited to all appliances, furniture and furnishings, building a
service equipment, and building materials, supplies, equipment, machinery, plumbing and =
plumbing material and supplies, concrete, lumber, hardware, electrical wiring and electrical c
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, y
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 w
Property and/or the use thereof or any improvements thereto, including without limitation: (i) all 0
rights to the payment of money, including escrow proceeds arising out of the sale or other x
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 E
of the Eligible Property and/or any construction thereon; (iii) all use permits, licenses, occupancy U
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permits, construction and building permits, and all other permits and approvals required by any J
governmental or quasi-governmental authority in connection with the development, construction, E
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 a`0
Trustor and any contractor, subcontractor, project manager or supervisor, architect, engineer, y
laborer or supplier of materials; (v) all lease or rental agreements; (vi) all names under which the r
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 a
relating to the Eligible Property and/or the development, construction, use, occupancy or d
operation thereof, (ix) all reserves, deferred payments, deposits, refunds, cost savings, bonds, E
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; 'c
(xi) all funds deposited with Beneficiary by Trustor, and all accounts of Trustor with w
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. �
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(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 E
with all deposits or other payments made in connection therewith.
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(I) All of the right, title and interest of Trustor in and to any construction contracts, plans
and specifications, building permits, and all other documents necessary for completion of the
improvements to the construction of the Eligible Property.
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(J) All water stock relating to the Eligible Property, all shares of stock or other z
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 owner's or members' association or similar
group having responsibility for managing or operating any part of the Eligible Property. L-
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Trustor does hereby covenant with Trustee and Beneficiary, that Trustor has good right to E
bargain, sell and convey Trustor's interest in the Eligible Property in manner and form as above o
written; and Trustor warrants and will defend same to Beneficiary, forever, against all lawful =
claims and demands whatsoever except as stated above.
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THIS DEED OF TRUST IS FOR THE PURPOSE OF SECURING:
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(1) performance of each agreement of Trustor herein contained or incorporated herein c
by reference; W
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(2) payment of the indebtedness (including, without limitation, interest thereon) z
evidenced by the Note, and any extension or renewal or modification thereof;
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(3) performance of each agreement of Trustor contained in the Master Agreement, the 0
Site Agreement or any of the other "HOME Loan Documents" (as defined in the Master E
Agreement), and any extension, renewal or modification of such other HOME Loan Documents;
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TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY N
COVENANTS AND AGREES AS FOLLOWS:
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1. Payment of Secured Obligations. To pay when due (a) the principal of,
and the interest on, the indebtedness evidenced by the Note, (b) charges, fees and all other sums a
as provided in the Agreement, and (c) the principal of, and interest on, any future advances c
secured by this Deed of Trust. E
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2. Maintenance, Repair, Alterations. To keep the Eligible Property in good c
condition and repair; to complete promptly and in a good and workmanlike manner all W
improvements to be constructed on the Eligible Property, including specifically all improvements o
described in the Master 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 E
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 a)
act to be done in or upon the Eligible Property in violation of any law, ordinance or regulation. U)
3. Insurance. To provide, maintain at its expense and deliver to Beneficiary =
at all times until payment in full of all obligations secured hereby, insurance as required by the z
Master Agreement, the Site Agreement or the Note. 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 o
hereby agree to cooperate in making any adjustment and compromise of any loss covered by the a
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 c
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
Note or any future notes secured hereby, or in any other agreement with or for the benefit of the
Beneficiary in connection with any indebtedness secured hereby, the proceeds of such insurance c
shall be used for the repair or restoration of the Eligible Property and will be disbursed in accor-
dance with such protective terms and conditions as Beneficiary may reasonably impose. 0
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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 E
whether such insurance was required to be maintained under the HOME Loan Documents. Any
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and all unexpired insurance shall inure to the benefit of and pass to the purchaser of the Eligible 0
Property at any foreclosure sale, or any Trustee's sale held pursuant hereto. E
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Further, Beneficiary may at the time in its sole discretion require Trustor to a
submit satisfactory evidence of insurance policies obtained pursuant to this Paragraph 3 and of
Trustor's compliance with all the provisions of said policies.
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4. Lawsuits. To appear in and defend, or otherwise take such action therein C
as the Beneficiary and Trustee or either of them may deem advisable with respect to, any action a.
or proceeding affecting the security for the HOME Loan in which Beneficiary or Trustee may d
appear. E
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5. Beneficiary Statement. To pay all charges for all court costs and expenses 'c
which Beneficiary may elect to advance in order to keep unimpaired, protect, and preserve the w
title thereto; 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. That all judgments, awards of damages and settlements, c
hereafter made as a result of or in lieu of any condemnation or other proceedings for public use E
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 a
cured with the proceeds from the foregoing), and (ii) the taking is a partial taking, all proceeds
thereof 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, nz.
or(iii) the taking is a partial taking and Beneficiary has reasonably determined that restoration of z
the Eligible Property is not practicable, the proceeds shall be paid to Beneficiary to the extent of
those monies due and owing under the Note, this Deed of Trust, future notes or future deeds of
trust, and Beneficiary is hereby authorized to receive such monies. Trustor agrees to execute o
such further assignments of any such award,judgment or settlement which may be received by a.
Trustor. Beneficiary may apply any and all such sums to the indebtedness secured hereby in
such manner as it elects or, at its option, the entire amount so received by it or any part thereof o
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. That without affecting the liability of any E
person, including Trustor (other than any person released pursuant hereto), for the payment of m
any indebtedness secured hereby, Beneficiary is authorized and empowered as follows: 'c
Beneficiary may at any time, and from time to time, either before or after the maturity of the w
obligations secured hereby, and without notice (a) release any person liable for the payment of o
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, d
or(d) release any property, real or personal, securing the indebtedness. E
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8. Reconveyance of Eligible Property. That upon written request of J
Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this E
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 a
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 r
entitled thereto."
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9. Default and Trustee's Sale. That upon the occurrence of an "Event of a
Default" under this Deed of Trust (as defined in Section 18 below) Beneficiary may declare all
principal remaining unpaid, all interest then earned and remaining unpaid, and all sums other E
than principal or interest secured hereby, immediately due and payable (and thenceforth at the d
option of the Beneficiary and except as otherwise prohibited by law, the entire balance of the c
unpaid principal shall thereafter bear interest at the Default Rate of interest per annum set forth W
in the Note until paid) and may proceed to exercise the power of sale granted by this Deed of o
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,
the Note and all documents evidencing expenditures secured hereby. _
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After the lapse of such time as may then be required by law following the
recordation of said notice of default, and notice of sale having been given as then required by t
law, 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 a
Property by public announcement at such time and place of sale, and from time to time thereafter z
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. The recitals in such deed of o
any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including a
Trustor, Trustee or Beneficiary, may purchase at such sale. c
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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 w
sums expended by the Beneficiary under the terms hereof or under the Note, not then repaid,
with accrued interest at the Deferral Rate, as defined in the Note; second, all other sums then £
secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
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10. Substitute Trustees. Beneficiary, or any successor in ownership of any w
indebtedness secured hereby, may from time to time, by instrument in writing, substitute a 0
successor or successors to any Trustee named herein or acting hereunder, which instrument, x
executed by the Beneficiary and duly acknowledged and recorded in the Office of the Recorder
of the County of San Bernardino, and by otherwise complying with the provisions of California E
Civil Code Section 2934a, or any successor section, shall be conclusive proof of proper
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substitution of such successor Trustee or Trustees, who shall, without conveyance from the J
Trustee predecessor, succeed to all its title, estate, right, powers and duties. Said instrument E
must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and L
page where this Deed of Trust is recorded and the name and address of the new Trustee. a
11. Successors Bound. That this Deed of Trust applies to, inures to the benefit r
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 C
requires, the masculine gender includes the feminine and/or neuter, and the singular number a.
includes the plural. d
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12. Evidence of Title. That 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 w
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 at the Deferral Rate. Beneficiary is further authorized to
require an appraisal of the Eligible Property at any time that Beneficiary may reasonably request. Lo
13. Intentionally Omitted. E
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14. Statute of Limitations. That the pleading of any statute of limitations as a a
defense to any and all obligations secured by this Deed of Trust is hereby waived by the Trustor,
to the full extent permissible by law.
15. Severability. That the invalidity of any one or more covenants, phrases, a
clauses, sentences, paragraphs or sections of this Deed of Trust shall not affect the remaining z
portions of this Deed of Trust or any part hereof and this Deed of Trust shall be constructed as if
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such invalid covenants, phrases, sentences, paragraphs or sections, if any, had not been inserted
herein. o
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16. Order of Application. That if the indebtedness secured hereby is now or
hereafter becomes further secured by a security agreement, deed of trust, pledge, contract of c
guaranty or other additional securities, 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 indebtedness secured hereby without affecting the status of, or waiving any E
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 c
in any such other security. W
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17. Covenants of Trustor. i
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a. Audit by State and Federal A eg ncies. In the event the HOME E
Loan is subjected to audit, monitoring or other inspections by appropriate state and federal
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agencies, Trustor shall comply with such inspections and pay, on behalf of itself and Beneficiary, c
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the full amount of the cost to the inspecting agency of such inspections (unless such inspection E
and any resulting liability arises solely from the gross negligence or willful misconduct of a�
Beneficiary). a
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b. Program Evaluation and Review Trustor shall allow Beneficiary's 32-
authorized
authorized personnel to inspect and monitor its facilities and program operations as they relate to
the Project or the Eligible Property, including the interview of Trustor's staff and other program C
participants, as reasonably required by Beneficiary during the term of the HOME Loan. a.
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18. Default. The Trustor shall be in default under this Deed of Trust upon any E
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of the following events which, if not cured within the applicable cure period provided, if any, d
shall constitute an event of default hereunder("Event of Default"): c
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a. The failure of Trustor to pay or perform any monetary covenant or O
obligation hereunder or under the terms of the Note, the Master Agreement, the Site Agreement
or any other documents executed in connection therewith, without curing such failure within ten
(10) calendar days the date such payment is due. Notwithstanding anything herein to the
contrary, the herein described cure period shall not apply to a failure by Trustor to timely repay C
the HOME Loan at the Maturity Date of the Note; E
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b. The failure of Trustor to perform any nonmonetary covenant or a
obligation hereunder or under the terms of the Master Agreement, the Site Agreement, the Note
or any other documents 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 2
any party authorized by Beneficiary to deliver such notice as identified by Beneficiary in writing a
to Trustor) specifying the nature of the event or deficiency giving rise to the default and the z
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
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cured if Trustor commences the cure within said 30-day period and diligently prosecutes such o
cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein a.
described notice requirements and cure periods shall not apply to any Event of Default described
in Sections 18(c) through 18(g)below; c
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C. The material falsity of any representation or breach of any
warranty or covenant made by Trustor under the terms of this Deed of Trust, the Note, the
Master Agreement, the Site Agreement or any other document executed in connection therewith; E
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d. Trustor or any constituent member or partner, or majority c
shareholder, of Trustor shall (a) apply for or consent to the appointment of a receiver, trustee, w
liquidator or custodian or the like of its property, (b) fail to pay or admit in writing its inability to 2
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 c
Federal bankruptcy laws of the United States of America or file a voluntary petition that is not E
withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with
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creditors or an order for relief or seeking to take advantage of any insolvency law or file an 0
answer admitting the material allegations of a petition filed against it in any bankruptcy or E
insolvency proceeding; i
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e. If without the application, approval or consent of Trustor, a 0
proceeding shall be instituted in any court of competent jurisdiction, under any law relating to R
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 a
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 E
contested by Trustor, 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 'c
any period of ninety(90) consecutive days; w
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f. Trustor shall suffer or attempt to effect a "Transfer" (as defined in
Section 33 below) other than in full compliance with the terms of this Deed of Trust.
g. Trustor shall not be in default under the Housing Affordability
Covenant, unless the default is cured or waived within the cure period, if any, applicable thereto E
under the terms of the obligation which is in default; or
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h. Voluntary cessation of the operation of the Project during the d
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; a
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19. Acceleration. The entire principal and all accrued and unpaid interest on
the Note shall be due and payable as therein set forth; provided, however, that the entire balance
of the outstanding principal and all accrued and unpaid interest on the Note, together with any o
outstanding interest and other amounts payable thereunder, shall, at the election of Beneficiary a
and upon notice to Trustor thereof(except in the case of default described in Section 18 (c) or =_
(d), in which case no notice shall be required), become immediately due and payable upon any o
Event of Default as set forth in the Note, without presentment, demand, protest or other notice of =
any kind, all of which are hereby waived by Trustor.
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20. 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 U)
of Trust or to make any payment or to do any act as provided in this Deed of Trust, then c
Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon W
Trustor and without releasing Trustor from any obligation hereof, may make or do the same in 0
such manner and to such extent as either in its sole judgment may deem necessary to protect the x
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 E
charges and rates, and all or any part of the unpaid taxes, assessments, and reassessments, if in its
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judgment the same are just and valid; to pay the cost of appraisals, reappraisals, and extensions 0
of title; to enter or have its agents enter upon the Eligible Property whenever reasonably E
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, o
without thereby becoming liable as a trespasser or mortgagee or beneficiary in possession, and to N
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 a
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 E
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 that Beneficiary shall have a lien upon the Eligible Property for the sums so W
expended and such interest thereon. o
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21. Security Agreement. That all property covered by this Deed of Trust be
deemed to constitute real property or interests in real property to the maximum extent permitted LO
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 E
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"Security a
Agreement"). Beneficiary shall be entitled to all of the rights and remedies in respect of any d
personal property included in the Eligible Property covered by this Deed of Trust 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 a
statements signed by Trustor in form satisfactory to Beneficiary. Trustor acknowledges and z
agrees that thirty (30) days' notice as to the time, place and date of any proposed sale of any E�
personal property shall be deemed reasonable for all purposes. Trustor agrees that the Security W
Agreement created hereby shall survive the termination or reconveyance of this Deed of Trust o
unless Beneficiary executes documentation expressly terminating the Security Agreement. a
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22. Assumption of Liability. Except as provided in Section 33, the c
assumption of liability for the payment of the indebtedness hereby secured, by any successor in =
interest to Trustor in the Eligible Property (in the event Beneficiary elects not to accelerate the
repayment of the HOME Loan pursuant to any transfer or disposition of the Eligible Property by
operation of law or otherwise) shall not release Trustor from any liability Trustor has hereunder
or under the other HOME Loan Documents for the payment of such indebtedness or any sums
advanced under and secured by this Deed of Trust. Any forbearance or indulgence of c
Beneficiary, or extensions of time for the payment of all or any part of the indebtedness secured w
hereby, or the release of a part of the Eligible Property from the lien of this Deed of Trust, for, or 2
without, payment of a consideration, shall not in any manner diminish or reduce the liability of x
Trustor(subject to the nonrecourse provisions of Section 27) for the payment of the indebtedness
now or hereafter secured hereby; and that any payments made upon the said indebtedness shall E
be deemed to have been made on behalf and for the benefit of all parties obligated to pay the
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same. The acceptance of payments in excess of the installments provided to be paid upon the 0
Note or the consideration paid for any such release shall not alter or diminish the obligation of E
Trustor to thereafter make payments in the amounts and on the dates provided therein, until the
same are fully paid. °
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23. Future Advances. That upon the request of the Trustor or its successor in
ownership of the Eligible Property, Beneficiary may, at its option, at any time before full
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payment of the Note secured hereby, make further advances to the Trustor or its successors in
ownership, and the same, with interest and late charges as permitted by law, shall be secured by (L
this Deed of Trust; and provided further that if Beneficiary, at its option, shall make a further
advance or advances as aforesaid, the Trustor or its successors in ownership agree to execute and E
deliver to Beneficiary a note to evidence the same, payable on or before the maturity of the U)
indebtedness under the Note secured hereby and bearing such other terms as Beneficiary shall
require. W
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Trustor further acknowledges and agrees: that this Deed of Trust is intended to,
and shall, secure not only the original indebtedness under the Note, but any and all future
advances made directly by the City to Trustor; that this Deed of Trust shall secure any unpaid
balances of advances made with respect to the Eligible Property; that Beneficiary shall have the
benefit of all statutes now existing or henceforth enacted to assure repayment of any such future E
advances plus interest thereon; that to secure the payment of said original indebtedness and
future advances Beneficiary shall also have a lien upon all other personal property and securities a
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 R
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 a
and seniority of any prior lien paid or released by reason of the application thereon of any of the z
proceeds hereof, and that each and all of the covenants, agreements, and provisions hereof shall
bind 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 0-
Eligible
Eligible Property, or to this Deed of Trust and the indebtedness secured hereby. a
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24. Captions. That the captions of the sections of this Deed of Trust are for c
convenience only and shall not be considered in resolving questions of interpretation or =
construction.
25. Estoppel Certificates. That 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 c
certificate the unpaid principal balance and accrued interest on the Note and stating that Trustor W
is not in default hereunder (or describing any default), and stating that Trustor has no defense, 2
right of set off or counterclaim in the payment of the indebtedness, or any part thereof, or the x
observance or performance of any obligation (or describing any such defense, set off or
counterclaim). Any purchaser or assignee of the Note or this Deed of Trust or any interest E
therein may rely on such certificate.
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26. Obligation Nonrecourse. Except to the extent any Event of Default E
hereunder results directly or indirectly from any fraud or intentional and material 2
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misrepresentation by Borrower in connection with the HOME Loan, the HOME Loan is a a0`
nonrecourse obligation of Trustor and in the event of the occurrence of an Event of Default, U)
Beneficiary's only recourse under this Deed of Trust shall be against the Eligible Property, the r
proceeds thereof, the rents and other income arising from its use and occupancy as provided in
the Deed of Trust, and any other collateral given to Beneficiary as security for repayment of the
HOME Loan. a
27. Fixture Filing. This Deed of Trust is also a fixture filing with respect to E
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the personal property which is or is to become fixtures on the Eligible Property, and is to be d
recorded in the real property records of San Bernardino County, California. 'c
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28. Assignment of Rents. All of the existing and future rents, royalties, O
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, E
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" Q
of the Eligible Property, unless Beneficiary personally or by agent enters into actual possession d
of the Eligible Property. Possession by a court-appointed receiver will not be considered U)
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 a
costs of operation and management of the Eligible Property, and then to the payment of the z
indebtedness 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 pro- 0-
vide,
vide, in a manner approved by Beneficiary, that the tenant will recognize as its lessor any person 0-
succeeding
succeeding to the interest of Trustor upon any foreclosure of this Deed of Trust. The expenses E
(including receivers' fees, if any, compensation to any agent appointed by Beneficiary, counsel c
fees, costs and compensation to any agent appointed by Beneficiary, and disbursements) incurred =
in taking possession and making such collection, shall be deemed a portion of the expense of this
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 c
right to exercise any such remedies again or for the first time in the future. The foregoing shall w
be subject to the provisions of applicable law.
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29. Applicable Law. This Deed of Trust shall be governed by, and construed
in accordance with, the laws of the State of California. E
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30. Approvals. Except with respect to those matters set forth hereinabove 0
providing for the Beneficiary's approval, consent or determination to be at the Beneficiary's E
"sole discretion" or "sole and absolute discretion," the Beneficiary hereby agrees to act L
reasonably with regard to any approval, consent, or other determination given by the Beneficiary a
hereunder. The Beneficiary agrees to give Trustor written notice of its approval or disapproval N
following submission of items to the Beneficiary for approval, including, in the case of any
disapproved item, the reasons for such disapproval. Any consent to a transfer under Section 33
of this Deed of Trust, and any other consent or approval by Beneficiary under this Deed of Trust
or any of the other HOME Loan Documents, may be given by Beneficiary's Chief Executive a
Officer or his designee without action of Beneficiary's governing board unless the Chief
Executive Officer, or his designee, in his or her sole discretion elects to refer the matter to the E
board.
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31. Good Faith and Fair Dealing. The Beneficiary and Trustor agree to W
perform all of their obligations and the actions required of each hereunder in good faith and in
accordance with fair dealing.
32. Assignment of Interest.
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a. Without the prior written approval of the Beneficiary, which E
approval the Beneficiary may withhold in its sole and absolute discretion, Trustor shall not (i) i
sell, encumber, assign or otherwise transfer (collectively, "Transfer") all or any portion of its Q
interest in the Eligible Property or the Project, (ii) permit the Transfer of any portion of its ,
ownership and/or control, (iii) Transfer any of its rights or obligations under the HOME Loan
Documents. Trustor hereby agrees that any purported Transfer not approved by the Beneficiary
as required herein shall be ipso facto null and void, and no voluntary or involuntary successor to
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any interest of Trustor under such a proscribed Transfer shall acquire any rights pursuant to the z
Master Agreement, the Site Agreement or this Deed of Trust.
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b. At any time Trustor desires to effect a Transfer hereunder, Trustor o
shall notify the Beneficiary in writing(the"Transfer Notice") and shall submit to the Beneficiary a
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for its prior written approval (i) all proposed agreements and documents (collectively, the
"Transfer Documents") memorializing, facilitating, evidencing and/or relating to the o
circumstances surrounding such proposed Transfer, and (ii) a certificate setting forth =
representations and warranties by Trustor and the proposed transferee to the Beneficiary
sufficient to establish and ensure that all requirements of this Section 33 have been and will be
met. No Transfer Documents shall be approved by the Beneficiary unless they expressly provide
for the assumption by the proposed transferee of all of Trustor's obligations under the HOME
Loan Documents. The Transfer Notice shall include a request that the Beneficiary consent to the >
proposed Transfer and shall also include a request that Trustor be released from further W
obligations under the HOME Loan Documents. The Beneficiary agrees to make its decision on o
Trustor's request for consent to such Transfer, as promptly as possible, and, in any event, not =
later than thirty(30)calendar days after the Beneficiary receives the last of the items required by
this Section 33. In the event the Beneficiary consents to a proposed Transfer, then such Transfer E
shall not be effective unless and until the Beneficiary receives copies of all executed and binding
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Transfer Documents which Transfer Documents shall conform with the proposed Transfer 0
Documents originally submitted by Trustor to the Beneficiary. From and after the effective date E
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of any such Transfer, Trustor shall be released from its obligations under this Deed of Trust and
the other HOME Loan Documents accruing subsequent to such effective date.
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C. Notwithstanding anything in this Deed of Trust to the contrary, .2
Trustor agrees that it shall not be permitted to make any Transfer, whether or not the Beneficiary
consent is required therefor and even if the 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 the a
Beneficiary or at any time thereafter until such Transfer is to be effective. c
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d. The provisions of this Section 33 shall apply to each successive d
Transfer and proposed transferee in the same manner as initially applicable to Trustor under the c
terms set forth herein. W
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IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the 0
date first above written. E
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TRUSTOR:
NEIGHBORHOOD PARTNERSHIP HOUSING 0
SOLUTIONS,INC., a California 501(c)(3)public benefit EL
corporation,
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Date: By: c
Clemente Mojica, Executive Director E
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CITY OF SAN BERNARDINO
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Date: By: L
Mark Scott, City Manager Q
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ATTACHMENT 1 TO THE DEED OF TRUST 0
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Legal Description c
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Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows: a
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Address: , San Bernardino, CA
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Attachment "E" to Master Agreement 0
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Housing Affordability Covenant Form
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RECORDING REQUESTED BY 0
AND WHEN RECORDED MAIL TO: E
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City of San Bernardino N
201 North "E" Street, Suite 301
San Bernardino, CA 92401
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Attn: Housing Division
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(Space Above Line Reserved For Use By Recorder) C
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Recordation of this Instrument is exempt
from all fees and taxes pursuant to =
Government Code Section 6103 W
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HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS
FOR THE CITY OF SAN BERNARDINO
INFILL HOUSING DEVELOPMENT PROGRAM
HOME FUNDS c
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THIS AGREEMENT CONTAINING COVENANTS, CONDITIONS AND L
RESTRICTIONS (the "Affordable Housing Covenant") is made and entered into as of, a
by and between the CITY OF SAN BERNARDINO, a municipal corporation("the ,
City"), and NEIGHBORHOOD PARTNERSHIP HOUSING SOLUTIONS, INC., a California
501(c)(3) public benefit corporation ("Owner"), as this Affordable Housing Covenant relates to
the following facts set forth in Recitals: a
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--- RECITALS ---
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The City and the Owner are parties to the Master Agreement("Master Agreement") dated
and the Site Agreement ("Site Agreement") dated on the
terms and conditions of which Owner shall borrow from the City, and the City shall lend Owner c
from HOME Investment Partnerships Program, 24 CFR Part 92 ("HOME") funds an amount not =
to exceed DOLLARS ($ ) for the purpose of -
providing financing for the housing development described in the Site Agreement (the
"Project"). The Project will be developed on a site legally described on Exhibit "A" to this m
Agreement(the "Eligible Property"). y
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NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND W
UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE 2
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY =
ACKNOWLEDGED, THE CITY AND THE OWNER DO HEREBY COVENANT AND c
AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS, AS FOLLOWS: E
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Section 1. Definitions of Certain Terms. As used in this Affordable Housing 0
Covenant, the following words and terms shall have the meaning as provided in this Section 1 E
unless the specific context of usage of a particular word or term may otherwise require:
0
Adjusted Family Income. The words "Adjusted Family Income" means and refers to N
the "annual income" as this term is defined in HOME Final Rule 24CFR Part 92.203 for .2-
the
the total annual income of each individual or household residing or treated as residing in
the Eligible Property.
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Affordable Housing Cost. The words "Affordable Housing Cost" means a purchase
price that would result in a monthly housing cost with a Front End Ratio of not less than E
twenty percent (20%) and not more than thirty-one percent (31%) of the monthly Gross
Household Income for such household; and a Back End Ratio of not greater than forty- 'c
three percent (43%) of the Gross Household Income. If compensating factors and W
extenuating circumstances exist, all as determined by the City at its sole discretion, O
Homebuyer may qualify with a higher ratio.
Affordable Housing Covenant. The words "Affordable Housing Covenant" mean and
refer to these Affordability Covenants and Restrictions by the City pertaining to the
Eligible Property. E
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Sale Agreement. The words "Sale Agreement" mean and refer to the standard California a
Association of Realtors California Residential Purchase Agreement and Joint Escrow
Instructions ("CAR Agreement") as modified by any Addendums attached to this CAR
Agreement required by the City, by and between Owner, as seller, and the Qualified
Homebuyer, as purchaser of the Eligible Property, as amended from time to time. The a
City is the beneficiary of such Sale Agreement. z
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Code. The word "Code"means the Internal Revenue Code of 1986, as amended, and any
regulation, rulings or procedures with respect thereto. o
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Delivery Date. The words "Delivery Date"mean and refer to the date of delivery of title c_
and possession of the Eligible Property to the Qualified Homebuyer at the close of the c
Sale Escrow. _
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Eligible Property. The words "Eligible Property" means the infill housing constructed
or reconstructed by the Developer, including the blighted or underutilized sites acquired
and the single family dwellings constructed or reconstructed on the site, as that term is
defined within the Master Agreement, and which conform to all of the other requirements c
stipulated in the Master Agreement. W
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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 E
time.
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HOME Funds. Funds derived from HOME Investment Partnerships Program, 24 CFR E
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Part 92 ("HOME") funds, for the purpose of acquiring, constructing and selling the
Eligible Property to a Qualified Homebuyer. 0.
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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 ("AMI"), adjusted for household size, as set forth in HOME Final Rule 24 CFR
Part 92.2 a.
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Notice of Affordability Restrictions. The words "Notice of Affordability Restrictions" E
means and refers to the Notice of Affordability Restrictions on sale, conveyance, transfer d
or assignment of the Eligible Property executed and notarized by the Qualified >_
Homebuyer and by the City in connection with the Sale Agreement. The Notice of w
Affordability Restrictions shall be recorded in the Official Records of the County O
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 c
Qualified Successor-In-Interest of the Qualified Homebuyer satisfies all of the Adjusted E
Family Income and other requirements of this Affordable Housing Covenant for
ownership and occupancy of the Eligible Property by the Qualified Successor-In-Interest a
at any time during the Qualified Residence Period. d
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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 a
Property, as amended from time to time. z
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Qualified Homebuyer. The words "Qualified Homebuyer" mean the purchaser of the M
Eligible Property (e.g.: all persons identified as having a property ownership interest o
vested in the Eligible Property at the close of the Sale Escrow). At the close of the Sale 0-
Escrow,
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 c
Household under HOME Final Rule 24 CFR 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.. U)
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Qualified Residence Period. The words "Qualified Residence Period" mean and refer w
to the period of time beginning on the Delivery Date and ending on the date which is 0
fifteen(15) years after the Delivery Date. x
Qualified Successor-In-Interest. The words "Qualified Successor-In-Interest" mean E
and refer to the person or household which may acquire the Eligible Property from the
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Qualified Homebuyer at any time during the Qualified Residence Period by purchase, 0
assignment, transfer or otherwise. The Qualified Successor-In-Interest shall have an E
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 a
Qualified Successor-In-Interest shall agree to own and occupy the Eligible Property as its W
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 this
Affordable Housing Covenant.
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Sale Escrow. The words "Sale Escrow" mean and refer to the real estate conveyance
transaction or escrow by and between the Qualified Homebuyer and the Owner. The E
transfer of the Eligible Property to the Qualified Homebuyer shall be accomplished upon d
the close of the Sale Escrow.
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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 any of the terms or provisions hereof.
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Section2. Use of the Eligible Property c
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The Eligible Property shall be used as a single-family detached home, , to be occupied a
and owned by persons or households whose income is equal to or below 80% AMI and that meet a
all of the other requirements to be a Qualified Homebuyer or as a Qualified Successor-in- d
Interest as those terms are defined in Section 1.
Section 3. Covenants of the Qualified Homebuyer. a
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(a) During the term of the Qualified Residence Period the Eligible Property shall be
owned, used and occupied by the Qualified Homebuyer as its principal residence, and the
Eligible Property shall be reserved for sale, use and occupancy by the Qualified Homebuyer o
and/or for another Low-Income Household as a Qualified Successor-In-Interest at an Affordable °-
Housing Cost. In addition, during the term of the Qualified Residence Period the Qualified S
Homebuyer and any subsequent heirs, successors and/or assigns shall permit the City, as its right c
and duty as provided in this Section 3, to verify that each proposed Qualified Successor-In- _
Interest of the Qualified Homebuyer in the Eligible Property satisfies the income requirements
and Affordable Housing Cost limitations of a Low-Income Household (based upon the Adjusted r
Family Income of each household) and that the completion of any resale or transfer of the =
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Eligible Property to a Qualified Successor-In-Interest shall be subject to the recordation of the y
"Notice of Concurrence" as provided in Section 3(g). c
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(b) The Qualified Homebuyer agrees to provide the City with the following items of 0
information for inspection by the City or its contracted designee, promptly upon written request =
of the City:
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(i) State and federal income tax returns filed by all persons who reside in the Eligible 0
Property for the calendar year preceding the close of the Sale Escrow for E
inspection of such state and federal income tax returns; as
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(ii) Current wage, income and salary statements for all persons residing in the y
Eligible Property at the close of the Sale Escrow; E
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(c) The Qualified Homebuyer shall abide by and comply with all Project CC&Rs,
and, at the request of the City, shall assign to the City the right to enforce the Project CC&Rs on a
behalf of the Qualified Homebuyer, during the Qualified Residence Period; c
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(d) The Qualified Homebuyer shall enforce all Project CC&Rs against all individuals
and entities, including, without limitation, against all non-complying members of a homeowner's 'c
association, who are subject to, bound by and obligated to perform and comply with the Project W
CC&Rs, during the Qualified Residence Period, at the sole cost and expense of the Qualified o
Homebuyer;
(e) During the term of Qualified Residence Period, each Qualified Homebuyer LO
accepting title to the Eligible Property, for itself, its heirs, its successors and assigns, shall not =
sell, transfer or otherwise dispose of the Eligible Property (or any interest therein) to a Qualified E
Successor-In-Interest without first giving written notice to the City and without first obtaining
the written concurrence of the City as provided herein. At least sixty (60) calendar days prior to a
the date on which the Qualified Homebuyer proposes to transfer title in the Eligible Property to a
Qualified Successor-In-Interest, the Qualified Homebuyer shall send a written notice to the City, )
as provided in Section 17, of the intention of the Qualified Homebuyer to sell the Eligible
Property to a Qualified Successor-In-Interest which includes the following true and correct a
information: z
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(i) Name of the proposed Qualified Successor-In-Interest (including the identity of M
all persons in the household of the Qualified Successor-In-Interest, proposing to 0
reside in the Eligible Property) together with a completed Qualified Homebuyer a
Application Affidavit, as applicable, executed by the proposed Qualified =
Successor-In-Interest; c
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(ii) Copies of state and federal income tax returns for the Qualified Successor-In-
Interest for the calendar year preceding the year in which the notice of intention to
sell the Eligible Property is given to the City;
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(iii) Resale price of the Eligible Property payable by the Qualified Successor-In- c
Interest, including the terms of all purchase money mortgage financing to be w
assumed, provided or obtained by the Qualified Successor-In-Interest, escrow 2
costs and charges, realtor broker fees and all other resale costs or charges payable x
by either the Qualified Homebuyer or the Qualified Successor-In-Interest; c
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(iv) Name, address, and telephone number of the escrow company which shall 0
coordinate the transfer of the Eligible Property from the Qualified Homebuyer to E
the Qualified Successor-In-Interest;
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(v) Appropriate mortgage credit reference for the Qualified Successor-In-Interest a
with a written authorization signed by the Qualified Successor-In-Interest r
authorizing the City to contact each such reference; and such other relevant
information as the City may reasonably request, as provided in Section 3(b).
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(f) Within thirty (30) calendar days following receipt of the notice of intention4.1
described in Section 3(e), the City shall provide the Qualified Homebuyer with either a E
preliminary confirmation of approval or a preliminary rejection in writing of the income and d
household occupancy qualifications of the Qualified Successor-In-Interest. the City shall not 'c
unreasonably withhold approval of any proposed sale of the Eligible Property to a Qualified W
Successor-In-Interest who satisfies the Adjusted Family Income and the Affordable Housing
Cost requirements for occupancy of the Eligible Property and for whom the other information as
described in Section 2(b) has been provided to the City. In the event that the City may request
additional information relating to the confirmation of the matters described in Section 3(b), the
Qualified Homebuyer shall provide such information to the City as promptly as feasible. _
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(g) Upon its final confirmation of approval of the Adjusted Family Income and
Affordable Housing Cost eligibility of the Qualified Successor-In-Interest to acquire the Eligible a
Property, the City shall deliver a written acknowledgment and approval Notice of Concurrence d
of the resale of the Eligible Property to the seller of the Eligible Property, regardless of whether
the seller is the initial Qualified Homebuyer or a Qualified Successor-In-Interest selling the
house subsequently, in recordable form to the escrow holder referenced in Section 3(e)(iv) a
above, and thereafter the Qualified Successor-In-Interest may acquire the Eligible Property z
subject to the satisfaction of the following conditions:
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(i) The recordation of the Notice of Concurrence executed by the City verifying that o
the Qualified Homebuyer, or the Qualified Successor-In-Interest of a subsequent a
sale complied with the resale requirements of the Affordable Housing Covenant at c
the close of the resale escrow; and c
(ii) The escrow holder shall have provided the City with a copy of the customary
form of the final escrow closing statement of the Qualified Homebuyer and the E
final escrow closing statement for the Qualified Successor-In-Interest; and E
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(iii) The other conditions of the resale escrow as established by the Qualified c
Homebuyer and Qualified Successor-In-Interest shall have been satisfied. w
(h) During the Qualified Residence Period, the Qualified Homebuyer and any heirs, _
successors and/or assigns shall abide by and comply with all Project CC&Rs, to the extent that c
they are applicable to the Eligible Property, and, at the request of the City, shall assign to the E
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City on behalf of the Qualified Homebuyer the right to enforce the Project CC&Rs on behalf of J
the Qualified Homebuyer. E
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(i) During the Qualified Residence Period, the Qualified Homebuyer and any heirs, a
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 r
other unforeseen circumstance as may be expressly approved in writing by the City subject to
compliance during the temporary rental period with the reasonable temporary rental occupancy
conditions required by the City. The Qualified Homebuyer shall submit a written request to the a
City prior to the commencement of the temporary occupancy, as practicable, but in any event
within not more than sixty (60) calendar days following the commencement of a temporary E
rental 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 c
circumstance has occurred and that a temporary rental occupancy is necessary. W
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Section 4. Acknowledgment of the First Mortgage Lender Financing.
It is expected and acknowledged by the City that concurrently with the Delivery Date, the
Qualified Homebuyer shall obtain certain purchase money mortgage financing for the acquisition
of the Eligible Property from a qualified financial institution the "First Mortgage Lender"). The
Qualified Homebuyer shall provide the 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 a
Date.
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Section 5. Maintenance Condition of the Eligible Property. During the term of the
Qualified Residence Period, the Qualified Homebuyer and any heirs, successors and/or assigns a
shall: z
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(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 0-
and
and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any a
time during the term of the Qualified Residence Period, there is an occurrence of an adverse =
condition on any area of the Eligible Property which is subject to public view in contravention of c
the general maintenance standard described above, (a "Maintenance Deficiency") then the City =
shall notify the Qualified Homebuyer in writing of the Maintenance Deficiency and give the
Qualified Homebuyer thirty (30) calendar days from the date of such notice to cure the �.
Maintenance Deficiency as identified in the notice. The words "Maintenance Deficiency" E
include without limitation the following inadequate or non-confirming property maintenance
conditions and/or breaches of single family dwelling residential property use restrictions: c
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(i) failure to properly maintain the windows, structural elements, and painted 2
exterior surface areas of the dwelling unit in a clean and presentable manner; x
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(ii) failure to keep the front and side yard areas of the property free of E
accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts,
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or free of storage of lumber, building materials or equipment not regularly in use J
on the property; E
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(iii) failure to regularly mow lawn areas or permit grasses planted in lawn 0
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areas to exceed nine inches (9") in height, or failure to otherwise maintain the
landscaping in a reasonable condition free of weeds and debris; r
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(iv) parking of any commercial motor vehicle in excess of 7,000 pounds gross
weight anywhere on the property, or the parking of motor vehicles, boats, camper a
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; E
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(v) the use of the garage area of the dwelling unit for purposes other than the 'c
parking of motor vehicles and the storage of personal possessions and mechanical W
equipment of persons residing in the Eligible Property.
In the event the Qualified Homebuyer fails to cure or commence to cure the Maintenance
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Deficiency within the time allowed, the City may thereafter conduct a public hearing following
transmittal of written notice thereof to the Qualified Homebuyer ten (10) calendar days prior to
the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency E
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exists and whether the Qualified Homebuyer has failed to comply with the provision of this
Section 5(a). If, upon the conclusion of a public hearing, the City makes a finding that a Q
Maintenance Deficiency exists and that there appears to be non-compliance with the general
maintenance standard, as described above, thereafter the City shall have the right to enter thecc
Eligible Property (exterior areas only) and perform all acts necessary to cure the Maintenance 2
Deficiency, or to take other action at law or equity the City may then have to accomplish the a
abatement of the Maintenance Deficiency. Any sum expended by the City for the abatement of a z
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 the City to the Qualified Homebuyer, the City shall have the right to 0
enforce the lien in the manner as provided in Section 4(c). n.
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(b) Graffiti which is visible from any public right-of-way which is adjacent or c
contiguous to the Eligible Property shall be removed by the Qualified Homebuyer 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 graffiti may be removed with solvents, detergents or water as E
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 c
graffiti is not removed within 72 hours following the time of its application, then in such event W
and without notice to the Qualified Homebuyer, the City shall have the right to enter the Eligible 0
Property and remove the graffiti. Notwithstanding any provision of Section 4(a) to the contrary, _
any sum expended by the City for the removal of graffiti from the Eligible Property as authorized
by this Section 4(b) shall become a lien on the Eligible Property. If the amount of the lien is not E
paid within thirty (30) calendar days after written demand for payment by the City to the U
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Qualified Homebuyer, the City shall have the right to enforce its lien in the manner as provided 0
in Section 5(c). E
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(c) The parties hereto further mutually understand and agree that the rights conferred
upon the City under this Section 5 expressly include the power to establish and enforce a lien or N
other encumbrance against the Eligible Property in the manner provided under Civil Code s
Sections 2924, 2924b and 2924c in the amount as 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 the City associated with the a
abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of
the City in connection with such action. In any legal proceeding for enforcing such a lien against E
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 'c
the land for the Qualified Residence Period and shall be enforceable by the City in its discretion, LU
cumulative with any other rights or powers granted by the City under applicable law. Nothing in O
the foregoing provisions of this Section 5 shall be deemed to preclude the Qualified Homebuyer
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 the City and other applicable law.
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Section 6. Foreclosure of Purchase Money Mortgage Loan of the First Mortgage sp
Lender and the City Right of First Refusal. a
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(a) During the Qualified Residence Period, the City shall have the right (but not thee,
obligation) to bid on the purchase of mortgage loan lien of the First Mortgage Lender secured by
the Eligible Property at the time of any trustee foreclosure sale or any judicial foreclosure sale. a
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(b) During the Qualified Residence Period, the City shall have the right of first
refusal to purchase the Eligible Property from the Qualified Homebuyer at fair market value The
City must exercise such a right of first refusal within thirty (30) calendar days following written 0-
notification
notification of the intention of the Qualified Homebuyer to resell the Eligible Property, and if the 0.
City accepts the offer in writing within such time period the City shall be bound to complete the =
purchase of the Eligible Property strictly in accordance with the offer. Thereafter the City shall c
pay fair market value to the Qualified Homebuyer and close an escrow for the transfer of the =
Eligible Property to the City within sixty (60) calendar days following written notification of the
intention of the Qualified Homebuyer to resell the Eligible Property. w
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(c) In the event that the City may purchase the Eligible Property under Section 7(b), N
the City shall cause the Eligible Property to be reserved for sale and occupancy by an income c
qualified purchaser, who is a person or household of Low Income. W
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Section 7. 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 the City and that each E
shall be deemed covenants running with the land and shall pass to and be binding upon the
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Eligible Property for the term provided in Section 10. The Qualified Homebuyer shall assume J
the duty and obligation to perform each of the covenants and to honor each of the reservations E
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 N
covenants, reservations, and restrictions, regardless of whether such covenants, reservations and
restrictions are set forth in such contract, deed or other instrument.
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Section 8. Burden and Benefit. The burden of the covenants set forth herein touch and a
concern the land in that the Qualified Homebuyer's legal interest in the Eligible Property is c
affected by the affordable single family dwelling use and occupancy covenants hereunder. The E
benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment
and use of the Eligible Property by the intended beneficiaries of such covenants, reservations and 'c
restrictions, and by furthering the affordable single family housing development goals and W
objectives of the City and in order to make the Eligible Property available for acquisition and o
occupancy by the Qualified Homebuyer.
Section 9. Term. LO
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(a) All of the other provisions of this Affordable Housing Covenant shall apply to the E
Eligible Property for a term of fifteen(15)years after the Delivery Date. L
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(b) Any provision or section of this Affordable Housing Covenant may be terminated
after the Delivery Date upon the written agreement by the City and the Qualified Homebuyer, if
there shall have been provided to the City an opinion of special legal counsel that such a 2
termination under the terms and conditions approved by the City in its reasonable discretion will a
not adversely affect the affordable single family housing and development goals and obligations z
of the City.
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Section 10. Breach and Default and Enforcement. o
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(a) Failure or delay by the Qualified Homebuyer to honor or perform any material term or G
provision of this Affordable Housing Covenant shall constitute a breach hereunder; provided, o
however, that if the Qualified Homebuyer commences to cure, correct or remedy the alleged =
breach within thirty(30)calendar days after the date of written notice specifying such breach
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and shall diligently complete such cure, correction or remedy, the Qualified Homebuyer shall r
not be deemed to be in default hereunder.
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The City shall give the Qualified Homebuyer written notice of breach specifying the '_
alleged breach which if uncured by the Qualified Homebuyer within thirty (30) calendar days, W
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, the 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 11. z
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Except with respect to rights and remedies expressly declared to be exclusive in this J
Affordable Housing Covenant, the rights and remedies of the City are cumulative with any other E
right or power of the City or other applicable law, and the exercise of one or more of such rights 1
or remedies shall not preclude the exercise by the City at the same or different times, of any a0
other right or remedy for the same breach or event of default. U)
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In the event that a breach of the Qualified Homebuyer may remain 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 a.
Maintenance Deficiency at the Eligible Property, upon the occurrence of any event of default the
City shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings E
as follows:
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(i) by mandamus or other suit, action or proceeding at law or in equity, to require the W
Qualified Homebuyer to perform its obligations and covenants hereunder, or
enjoin any acts or things which may be unlawful or in violation of the rights of the
City; or
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(ii) by other action at law or in equity as necessary or convenient to enforce the
obligations, covenants and agreements of the Qualified Homebuyer to the City. E
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(b) Except as set forth in the next sentence, no third party shall have any right or a
power to enforce any provision of this Affordable Housing Covenant on behalf of the City or to d
compel the City to enforce any provision of this Affordable Housing Covenant against the U)
Qualified Homebuyer or the Eligible Property. The City may assign the right and power to
enforce the provision of this Affordable Housing Covenant against the Qualified Homebuyer of a
the Eligible Property as the successor administration agency of the HOME Investment z
Partnerships Program.
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Section 11. Governing Law. This Affordable Housing Covenant shall be governed by o
the laws of the State of California. a.
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Section 12. Amendment. This Affordable Housing Covenant may be amended after the c
Delivery Date only by a written instrument executed by the Qualified Homebuyer and by the =
City.
Section 13. Attorneys' Fees. In the event that the City brings an action to enforce any
condition or covenant, representation or warranty in this Affordable Housing Covenant or U)
otherwise arising out of this Affordable Housing Covenant, the prevailing party in such action c
shall be entitled to recover from the other party reasonable attorneys' fees to be fixed by the court w
in which a judgment is entered, court costs, as well as all other costs of such suit. For the 2
purposes of this Section 14, the words "reasonable attorneys' fees" in the case of the City include x
the salaries, costs and overhead of lawyers employed in the Office of the City Attorney of the c
City of San Bernardino. E
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Section 14. Severability. If any provision of this Affordable Housing Covenant shall be 0
declared invalid, inoperative or unenforceable by a final judgment or decree of a court of E
competent jurisdiction such invalidity or unenforceability of such provision shall not affect the
remaining parts of this Affordable Housing Covenant which are hereby declared by the parties to 0.
be severable from any other part which is found by a court to be invalid or unenforceable. y
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Section 15. Time is of the Essence. For each provision of this Affordable Housing U)
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. a.
Section 16. Notice. Any notice required to be given under this Affordable Housing E
Covenant shall be given by the City, as applicable, by personal delivery or by First Class United U)
States mail at the addresses specified below or at such other address as may be specified in '_
writing by the parties hereto: W
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If to the City: City of San Bernardino, Inc.
201 North"E" Street, Suite 301 Ln
San Bernardino, CA 92401
Attn: Housing Division E
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If to Owner: Neighborhood Partnership Housing Solutions, Inc.
Attn.: Clemente Mojica, Executive Officer
9551 Pittsburgh Avenue
Rancho Cucamonga, CA 91730 a
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Notice shall be deemed given five (5) calendar days after the date of mailing to the party, or, if 2
personally delivered, when received by the authorized representative of the City, as applicable. 0-
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(Continued on next page)
IN WITNESS WHEREOF, the City has caused this Affordable Housing Covenant to be E
signed, acknowledged and attested on their behalf by duly authorized representatives in
counterpart original copies which shall upon execution by all of the parties be deemed to be one c
original document. w
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City of San Bernardino E
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Date: By: r
Mark Scott, City Manager
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OWNER c
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Neighborhood Partnership Housing Solutions, Inc.,
a California 501(c)(3)public benefit corporation,
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Date: By: E
Clemente Mojica, Executive Officer
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EXHIBIT"A" J
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Legal Description
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Real property in the City of San Bernardino, County of San Bernardino, State of California, described
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Address: San Bernardino, CA d
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Attachment "F" to Master Agreement J
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Total Development Cost Pro Forma Template a
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Total Development Cost Pro Forma 0
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Acquisition Cost a`
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Purchase Price $ - Acquisition-price of property as-is
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Closing Cost $ - Escrow and Title Fees,etc. `
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Appraisal $ - Third party appraisal of the property as-is
Subtotal Acquisition Cost a. $ - a.
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Construction Cost E
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Direct Construction $ - Cost estimated to complete scope of work >
General Conditions $ - Cost of temporary utilities,toilets,fencing,lighting,etc. W
Profit/Overhead $ - General Contractor's Profit and Overhead 2
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Contingency $ - Percentage of Construction,Gen.Conditions,and Profit/OH 2
Subtotal Construction Cost b. $ -
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Indirect Cost =
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Hazard Insurance $ - Insurance coverage for the rehab work preformed 4E)
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Building Fees&Permits $ - Cost of obtaining construction permits etc.
Lead Based Paint Risk Q
Assessment $ - Cost of Lead Based Paint y
Asbestos and Mold Inspection $ - Cost of Asbestos and Mold Report
Security During Construction $ - Intermediary fixed fee per homebuyer N
Property Taxes $ - Taxes for the house incurred during holding period =
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Homebuyer Education Course Fee $ - Cost of enrollment in Homebuyer course for Qualified Homebuyer Z
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Subtotal Indirect Cost c. $ -
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Sales Cost a
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Commissions $ - Brokerage commissions C
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Appraisal $ - Third party appraisal of property after rehab
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Title&Escrow $ - Seller's side escrow and title fees
Subtotal Sales Cost d. $ - _
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Developer Fee e. $ - Developers Fee for managing project(fixed fee) rn
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Total Development Cost f. $ - The sum of a.,b.,c.,d.and e. W
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Final Sale Price g. $ - Estimated market value of home after construction c
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Amount Granted to Project $ - (f.-g.) v
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Project Timeline
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No. Event/Activity Duration Start Date End Date °'
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1 Property Identified c
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2 Open Escrow E
3 Due Diligence Period 4)
4 Review and Execute Sub-agreements
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5 Construction Drawings submitted(if applicable) g
6 Schedule security =
7 Schedule Job Walk
8 Schedule Roof replacement 0
9 Schedule A/C repair
10 Close Acquisition Escrow
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11 Transfer utilities to HPI
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12 Install Security System CM
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13 Lead Paint/Asbestos and Environmental testing
14 Job walk 9:00 AM
15 Bids due 10:00 AM CO
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17 Work begins Z
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18 Punch list E
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19 Construction complete c
20 Marketing of property a
21 Identify Buyer and Qualify for Program Eligibility c
22 Provide Homebuyer Education Certificate
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24 Escrow Period
25 Process and Record Loan Documents on behalf of buyer
26 Close Escrow and Deliver Property to Homebuyer
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Sources and Uses Schedule Template a
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Sources and Uses Schedule Template E
(ADDRESS)
San Bernardino
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Sources: Construction Uses: Construction =
HOME Acq./Construction Loan $ - Acquisition Cost $ - a
Deferred Developer Fee $ - Construction Cost $ -
Other $ - Indirect Cost $
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$ - Sale Cost $ - N
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$ - Developer Fee" $ - >
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$ - Other $ - W
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Total $ - Total $ -
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Sources: Permanent Uses: Permanent
First Mortgage Loan $ - Acquisition Cost $
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Homebuyer Down payment $ - Construction Cost $ -
Down Payment Assistance $ - Indirect Cost $ - t
HOME Loan Write-off $ - Sale Cost $ - a;
Other $ - Developer Fee $ -
$ - Other $ - y
$ - $ - a
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Total $ - $ - I
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Attachment "I" to Master Agreement M
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Affirmative Marketing Requirements
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In accordance with the California Fair Employment and Housing Act and the policy of the City of San 0
Bernardino, the Developer or designees must adhere to the following affirmative marketing guidelines in E
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order to create awareness for the general public and certain community groups as to the availability of
Eligible Properties available for sale to low-income households. a
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APPLICABILITY L
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Developer is required to provide an affirmative marketing plan and procedures for all developments with a
HOME-assisted units. Procedures to be used must identify how persons in the housing market area who
are not likely to apply for the housing without special outreach, shall be informed of available affordable
housing opportunities. The City has identified three groups as least likely to apply without special 0
outreach efforts, namely, African-American, Asian American and Pacific Islanders, and Hispanic 'c
persons. w
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THE AFFIRMATIVE MARKETING PLAN =
The Developer's Affirmative Marketing Plan must consist of a written marketing strategy designed to
provide information and to attract eligible persons in the housing market area to the available units
without regard to race, color, national origin, sex, religion, marital and familial status, disability, medical
condition, sexual orientation, or ancestry. It must describe initial advertising, outreach (community d
contacts) and other marketing activities, which will inform potential buyers of the availability of the Q
units. It shall also outline an outreach program which includes special measures designed to attract those
groups identified as least likely to apply without special outreach efforts, (because of existing
neighborhood racial or ethnic patterns, location of housing or other factors) and other efforts designed to 2
attract persons from the total eligible population. _
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The Property Owner must do the following:
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1. Insert Equal Housing Opportunity logotype, statement or slogan on all written outreach tools c
(i.e. signs, advertisements,brochures, direct mail solicitations,press releases, etc.) `a
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2. In addition to the above, the Affirmative Fair Housing Marketing Plan shall outline:
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a. Commercial and Social Media to be used (i.e., community newspapers and non- w
English language newspapers, radio, television, billboards, religious or local real —`
estate publications, etc.). d
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b. Marketing efforts to be used (i.e., brochures, letters, handouts, direct mail, signs,
etc.) C
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c. Community Contacts to supplement formal communications media for the =
purpose of soliciting group(s) least likely to purchase the available housing
without special outreach efforts. They should be individuals or organizations(i.e., E
service agencies, community organizations, places of worship, etc) that have
direct and frequent contact with those identified as least likely to apply. The y
contacts should also be chosen on the basis of their positions of influence within Q
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the general community and the particular target group. The Property Owner must 0
agree to establish and maintain contact with the identified contacts. E
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d. In accordance with the City's Limited English Proficiency (LEP) Plan, all a
advertising and program information must also be available in Spanish.
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BUYER SELECTION
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1. The Developer must maintain records of all prospective homebuyer applicants, including their a
race, ethnicity and gender,reasons for denial of application,placement on a waiting list, etc.
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2. The Developer must provide for the selection of applicants from a written waiting list in the
chronological order of their application and provide prompt written notification to any rejected c
applicants of the grounds for any rejection. W
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Attachment "J" 0
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CHDO DESIGNATION LETTER AND CERTIFICATE a�
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Attachment "K" 0
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HOME GUIDE FOR REVIEW OF HOMEBUYER PROJECTS 0-
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Exhibit 7-5 6509.2 REQ"-6 CHG-1 0
HOME Program J
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Guide for Review of Homebuyer Projects a,
Participating Jurisdiction (PJ): Subreciplent: n°L
Staff Consulted: Q'
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Owner/Project Address: HOIIE/ADDI Amount: L
IDIS 'Number: c
IDIS Completion Date: R
Name(s)of Date
Reviewers)
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NOTE: All questions that address requirements contain the citation for the source of the requirement aNi
(statute,regulation,NOFA,or grant agreement). If the requirement is not met,HUD must wake
a fording of noncompliance. All other questions(questions that do not contain the citation for W
Ithe requirement)do not address requirements,but are included to assist the reviewer in 2
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."
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Instructions: These questions are to be used to review individual project and unit records for =
both HOME-and ADDI-finded homebuyer projects.Nearly all HOME requirements apply to =
ADDI-funded homebuyer projects(match and Uniform Relocation Act requirements differ),so E
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all of the HOME-related questions in this Exhibit also apply to ADDI-f nded projects. Note, m
however, that additional requirements apply to ADDI; separate ADDI questions are included to a,
cover those requirements. hi reviewing ADDI projects,monitors must keep in mind that,due to a
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limitations within IDIS with respect to designation of ADDI projects, the tunits that a PJ has N
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 N
designated as ADDI units with the ADDI requirements. All other units should be treated as a
HOME units, irrespective of whether HUD has counted them as ADDI units. One Exhibit is to Z
be completed for each individual project reviewed. This Exhibit is divided into nine sections:
Participant Eligibility;Property Eligibility; Recapture/Resale Provisions; Eligible Costs; E
Property Standards; On-Site Inspection; Contactor Selection; Construction Management;and
Project Documentation. If an area or question is not examined, make a note to this effect in the a
"Describe Basis for Conclusion" section of the applicable question. a,
Ouestlons:
A. PARTICIPANT ELIGIBILITY o
Was the applicable definition of income used(e.g., the definition selected
or this homebuyer program)? � � � Z
Yes No N/A
Describe Basis for Conclusion: E
as
2.
Did the PJ correctly apply income inclusions and exclusions for the chosen 2
income definition and was the calculation perfornned correctly? O
No N/A =
[24 CFR 92.203(b)] Yes
Describe Basis for Conclusion:
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6509.2 REV-6 CHG-1 Exhibit 7-5
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HOME Program c
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3. a
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Was household income supported with source doctuuentation? EL
HOME: 24 CFR 92.203(a)(2);ADDI: 24 CFR 92.610(c)] Yes No N/A
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Describe Basis for Conclusion:
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4. E
Was the family's annual income less than or equal to 800 o of the areaEl El El d
nediarn income? Yes No N/A >
[HOME: 24 CFR 92.254(a)(3);ADDI: 24 CFR 92.612(c)] w
Describe Basis for Conclusion: 2
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2
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Was the family's income detennined not more than 6 months before the
HOME or ADDI fiords were conunitted to this homebuyer?
Yes No N/A
[HOME: 24 CFR 92.203(d)(2);ADDI:24 CFR 92.610(c)] _ E
Describe Basis for Conclusion: d
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6. m
If the family is assisted with ADDI fimds,does the family meet the first-
time horuebuyer definition in 24 CFR 92.2?
Yes No N/A =
[24 CTR 92.602(a)(1)]
Describe Basis for Conclusion: Z
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7. a'
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Does the written agreement with the homebuyer specify that the buyer must
use the property as a principal residence throughout the period of Yes No N/A
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ffordabihty? N
HOME: 24 CFR 92.254(a)(3)and 24 CFR 92.504(c)(5)(i): ADDI: 24 CFR 0
)2.612(c)acrd 92.616(e)]
Describe Basis for Conclusion:
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8. E
as the written agreement executed by the PT and the homebuyer before the ❑ ❑ ❑ >
roject was funded in IDIS? (Compare the dated signatures on the written
greement to the Initial Ftundung Date on the View Activity Screen in IDIS). Yes No N/A
[24 CFR 92.502(b)] _
escribe Basis for Conclusion:
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Exhibit 7-5 6509.2 REV-6 C_'HG-1 0
HOME Progra n
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Does the written agreement specify remedies or actions the PJ must take ifEl El El a`
he principal residence requirement is not met for the affordability period? o
HOME: 24 CFR 92.254(a)(5)and 24 CFR 92.504(c)(5)(i);ADDI: 24 CFR Yes No N/A
2.612(c)and 92.616(e)]
Describe Basis for Conclusion: _
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10. �
Was the form of ownership eligible under the HOME or ADDI ProgramsE
i.e., fee simple title;99-year lease; 50-year lease on Indian lands; >
condominium or cooperative, if considered homeownership; or other Yes No N/A =
equivalent form of homeownership approved by HUD)? W
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[HOME: 24 CFR 92.2 and 92.254(c);ADDI: 24 CFR 92.612(c)] O
Describe Basis for Conclusion:
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B. PROPERTY ELIGIBILITY �
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Doe,, the file list the property as a single-family lnonne(1-4 tunits)?
[HCAIE: 24 CFR 92.254(a)(1),24 CFR 92.2;ADDI: 24 CFR 92.602(a)(1)] a
Yes No N/A
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Describe Basis for Conclusion:
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Did the HOME and/or_- DDI iun-estment total at least $1.000 per HOME- 1:1 ❑ 1:1 Z�
assisted unit'? Yes No N/A E
[HOME: 24 CFR 92.205(c): ADDI: 24 CFR 92.612(c)] _
Describe Basis for Conclusion: o
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Was the sales price, or, if applicable, the after-rehabilitation property valtieEl 0 El
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less than 95°,u of the area median single family purchase price? _
[HONM: 24 CFR 92.254(a)(2);ADDI: 24 CFR 612(c) Yes No N/A
Describe Basis for Conclusion:
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14. y
For projects involving rehabilitation,was the after rehabilitation value of the
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property determined twin appropriate methods(e.g., appraisal,tax =
Yes No N/A W
assessments or assessment by qualified staff)? 2
HOME: 24 CFR 92.254(a)(2);ADDI: 24 CFR 92.612(c)] _
Describe Basis for Conclusion:
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6509.2 REV-6 CHG-1 Exhibit 7-5 E
HOl\I--E Program
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15. a`
Was the HOE and/or ADDI investment no greater than the maxiuitun per- El El ❑ 0
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unit subsidy limit established by HUD? N
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HOE: 24 CFR 92.250(a);ADDI: 24 CFR 92.612(x) Yes No N/A
Describe Basis for Conclusion: _
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16.
T ADDI fiuids were used in the project,was the ADDI investment less than ❑ ❑ ❑ E
he greater of either: a)$10.000; or b)60iu of the sales price of tine property? n
Note: This requirement does not apply to FY 2003 ADDI fiunds.) Yes No
N/A c
24 CFR 92.602(e —
escribe Basis for Conclusion: g
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17.
Does the project file include:
a. Relocation notice to seller(if applicable)? (Note: For ADDI. the ❑ ❑ ❑
Unifonu Relocation Act requirements apply only to FY 200? hinds.) Yes No N/A
HOME: 24 CFR 92.353: ADDI: 24 CFR92.614(b)(2)]
b. Relocation notice to tenant(if applicable)?(Note: For ADDI. the ❑ ❑ ❑
Uniform Relocation Act requirements apply only to FY 2003 funds.) a
HONIE: 24 CFR 92.3.53;ADDI: 24 CFR 92.614(b)(2 Yes No N/A Y
c. Lead Hazard Paint notice(if pre-1978 property)?
[HOME: 24 CFR 92.355:ADDI: 24 CFR 92.614(x)(4)] Yes No N/A
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d. Enviromnental review(if applicable)?(If determining compliance with ❑ ❑ ❑ m
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environmental review requirements,the reviewer should use Exhibit 21- z
1 to answer this question. Otherwise,verify the presence of Yes No N/A i
docunnentation indicating that a review was performed.) E
HOME: 24 CFR 92.352;ADDI: 24 CFR 92.614(a)(2)] `M
. Flood insurance protection when assistance was used for acquisition or °
❑ ❑ ❑ a
construction(including rehabilitation)of real property located within the Yes No N/A =
Special Flood Hazard Area(SHFA)? (Use Exhibit 27-1 of this
Handbook,"Garde for Reviov of Flood Insurance Protection.) c
24 CFR 92.352 =
escribe Basis for Conclusion: w
C. RECAPTURE/RESALE PROVISIONS E
18. n
oes the written agreement with the homebuyer include required recapture ❑ ❑ ❑ c
r resale provisions? (Complete Exhibit 7-16,"Ch mer, Developer, Sponsor —
if
'ritten Agreement Exhibit,"if the PJ's standard agreement has not already res No N/A
een reviewed.) O
HOME: 24 CFR 92.504(c)(5);ADDI: 24 CFR 92.616(e)
escribe Basis for Conclusion:
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Exhibit 7-5 6*109.2 REQ"-6 CH(i-1 0
HOME Program E
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Is the resale or recapture provision applied to the project consistent with the El 0 ❑ a
pproved resale or recapture provision in the PJ's annual action plan for the a
Yes No N/A
year in which the assistance was provided? N
HOME: 24 CFR 92.254(a)(5)(i)or(ii);ADDI: 24 CFR 92.612(c)]
Describe Basis for Conclusion: _
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20.
Does the resale or recapture provision comply with the requirements11 El El0
established for such provisions in the HOME regulations? Yes No N/A '_
HOME: 24 CFR 92.254(a)(5)(i)or(ii);ADDI: 24 CFR 92.612(c)] —
Describe Basis for Conclusion: m
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21.
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the property is under resale provisions,was a deed restriction or covenant ❑ ❑ ❑ LO
mining with the land recorded?
Yes No N/A
HOME: 24 CFR 92.254(a)(5)(i)(A);ADDI: 24 CFR 92.612(c)]
Describe Basis for Conclusion:
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22.
If the property was sold before the end of the affordability period,were theEl 1:1
recapture or resale requirements met? N
HOME: 24 CFR 92.254(a)(4).ADDI: 24 CFR 92.612(c)] Yes No N/A =
Describe Basis for Conclusion: a
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23. `m°
'as the correct period of affordability established for the project,based o
pon the total auioimt of HOME and ADDI assistance provided to the a
omebuyer if under a resale provision or the direct subsidy provided with Yes No N/A c
OME and/or ADDI finds, if under a recapture provision?
HOME: 24 CFR 92.254(a)(4);ADDI: 24 CFR 92.612(c) _
Describe Basis for Conclusion: —
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D. ELIGIBLE COSTS E
24.
Was the amount of assistance provided to the hounebuyer reasonable(i.e., _
id not provide a subsidy in excess of what was needed to purchase the unit, w
ased upon a review of individual financial circuuustances)? res No N/w 0O
24 CFR 92.505(x);ON11B Circular A-87,Attachment A, Section C.2] _
Describe Basis for Conclusion: c
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7-5 U; 201? Q
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6509.2 REV-6 CHG-1 Exhibit 7-5
HOME Program E
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If more than one source of public fluids(Federal, State and local)was EI El El a`
provided. did the PJ perform a subsidy layering review to ensure that to
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Yes No N/A
excessive subsidy was not provided? H
[HOME: 24 CFR 92.250(b); ADDI: 24 CFR 92.612(a)]
Describe Basis for Conclusion:
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26. N
f unit was rehabilitated or newly constructed,do the costs appear to be c
reasonable? Yes No N/A W
24 CFR 92.505(a);OMB Circular A-87,Attachment A, Section C.2 m
Describe Basis for Conclusion: O
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27.
. Was the subsidy provided in an eligible foram of investment(i.e.,equity ❑ El El E
investments, interest bearing or non-interest bearing loans or advances,
interest subsidies,deferred payment loans, grants, or loan guarantees)? Yes No N/A
[HOME: 24 CFR 92.205(b);ADDI: 24 CFR 92.602(c)] Q
Describe Basis for Conclusion: N
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b. If the subsidy«as provided in a form not listed above,was that form ❑ ❑ ❑
approved by HUD? m
H(_)1\IE: 24 CFR 92.205(b)(1):ADDI: 24 CFR 92.602(c)] Yes No N/A
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Describe Basis for Conclusion: a..
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E. PROPERTY STANDARDS x°
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If direct homebuyer assistance only was provided(no construction), did theEl El El
property meet applicable property standards at time of transfer to the Yes No N/A E
monmebuyer?
HOME: 24 CFR 92.251(a)(2);ADDI: 24 CFR 92.612(b) c
Describe Basis for Conclusion: W
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Exhibit 7-5 6509.2 REV-6 CHG-1 �
HOME Program E
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29. c
If only direct homebuyer assistance was provided and the homebuyer was to perform aL
ecessary rehabilitation:a.
a
Was the property flee of health and safety violations before occupancy? ❑ ❑ N
[HOME: 24 CFR 92.251(b)(2);ADDI: 24 CFR 92.612(b)] Yes No N/A
b. Does the agreement require completion of rehabilitation within 24El ❑ ❑ �
months or, if ADDI fluids are used for rehabilitation,within one year? a
HOME: 24 CFR 92.251(b)(3).ADDI: 24 CFR 92.602(a)(2)] Yes No N/A
C. Is there evidence that the property met the property standards within the ❑ ❑ ❑ E
required timeframe? )
HOE: 24 CFR 92.508(a (3 (iv): ADDI: 24 CFR 92.616(i Yes No N/A c
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escribe Basis for Conclusion: w
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30.
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
4-1,as appropriate,to answer this question.]
[HOME: 24 CFR 92.355;ADDI: 24 CFR 92.614(a)(4)]
escribe Basis for Conclusion:
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31.
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 El Ela
[24 CFR 92.505(x)and 24 CFR 85.36(f)] Z
Yes No N/A �
b. Doctunentation of initial inspection-" ❑ ❑ ❑ E
[24 CFR 92.505(a)and 24 CFR 85.36(f)] C
Yes No N/A Cn
c.
Documentation of progress inspections? E] a
[24 CFR 92.505(x)and 24 CFR 85.36(b)(2)] Yes No N/A
Describe Basis for Conclusion:
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If the project involved rehabilitation,does the work write-up:
a. include all work noted on the initial inspection report? ❑ ❑ ❑ E
[HOME: 24 CFR 92.251.ADDI: 24 CFR 92.612(b)] Yes No N/A
_
reflect the PJ's written rehabilitation standards? —
[HOME: 24 CFR 92.25l(a).ADDI: 24 CFR 92.612(b)] El ❑ ❑ o
Yes No N/A
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escribe Basis for Conclusion:
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6509.2 REV-6 CHG-1 Exhibit 7-5 �
HOME Program E
33. o
If the project involved rehabilitation,was the work write-up written with ❑ ❑ 1:1
n-
uough detail to enable a contractor to provide a reliable bid? a
24 CFR 92.505(a)and 24 CFR 85.36(c)(3)(i) and 85.36 d 2 i A) Yes No N/A
Describe Basis for Conclusion:
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34. n
If the project included rehabilitation,was the work peifonned in accordance ❑ ❑ ❑
with the PJ's written rehabilitation standards? —
Yes No N/A Ui
[HOME: 24 CFR 92.251(a), ADDI: 24 CFR 92.612(b)] 2
Describe Basis for Conclusion: _
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If the project included rehabilitation,does the final inspection confirm that: 0
a. all contracted work was couipleted'? a
[24 CFR 92.505(a)and 24 CFR 85.36(b)(2)] Yes No N/A N
b. the property met all applicable property standards at completion' ❑ ❑
[HOME: 24 CFR 92.251(a),ADDI: 24 CFR 92.612(b)] Yes No N/A CO
Describe Basis for Conclusion: a
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36. °
If the project involved new constriction of a iurit. does the final inspection a,
onfinn that the property met all applicable property standards at N
Onrpletion? Yes No N/A C
[24 CFR 92.251(x)] _
Describe Basis for Conclusion: r=
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Exhibit 7-5 6509.2 REQ'-6 C'HG-1 0
HONE Program J
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37,
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On-Site Inspection: If this project has been selected for an on-site inspection to examine the a
quality of the rehabilitation work. the HUD reviewer should perforin a walls-through of the N
property with the initial inspection. the work write-up, and the final inspection a
e ort.(Com plete this question only if an onsite inspection was rformed.)
[OS] a. Based upon observable conditions. have the ❑ ❑ ❑ _
deficiencies identified in the initial inspection report
Yes No N/A d
been corrected'?
HOME: 24 CFR 92.251: ADDI: 24 CFR 92.612(b
[OS] b. Is the homebuyer satisfied xvith the rehabilitation? E
N
Yes No N/A 0>
[OS] c. Is the property free of all obvious property standards ❑ ❑ ❑
violations'? W
[HOA 1E: 24 C'FR 92.251. ADDI: 24 C'FR 92.612(b)] Yes No N/A O
[OS] d. Based upon observable conditions. what was the status of the rehabilitation work at
the time of the onsite inspection'? 4
❑ ❑ ElLa
Complete Underwav Not Started
Describe Basis for Conclusion: _
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F. CONTRACTOR SELECTION(if applicable)
38. y
Does the project file include verification of contractor eligibility. e.g., that El
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awards were not made to any party excluded, disqualified or otherwise Yes No N/A 2
ineligible (i.e.. suspension. debarment or limited denial of participation) for a
Federal procurement or rnonprocurement programs? z
HON E: 24 C'FR 92.350(a), ADDI: 24 CFR 92.614(a)(1)]
E
Describe Basis for Conclusion: W
O
L
;9 a
Was the rationale for the selection of the contractor documented`' ❑ ❑ ❑
[24 C'FR 92.505(a)and 24 C'FR 85.36(b)(9)] 3
Yes No N/A O
2
Describe Basis for Conclusion: —
E:
c
40.
If the PJ selected the contractor, was a competitive bid process insed? y
[24 CFR 92.505(x) and 24 CFR 85.36(d): HOME: 24 CFR 92.505(a): ADDI Yes No N/A >
24 CFR 6160 w
Describe Basis for Conclusion: g
O
x
m
E
s
7-9 03!2012
Q
113
Packet Pg.458
zap
6509.2 REV-6 CHG-I Exhibit 7-5 0
HOME Program E
41. c
If the homebuyer solicited the bids. was more than one bid solicited'? a`
N
Yes No N/A Q-
L
Describe Basis for Conclusion:
C
R
n.
C
G. CONSTRUCTION NLANAGEMENT E
42. U)
Did the homebuyer and contractor execute a constriction or rehabilitation >
contract?
[24 CTR 92.505(a)and 24 CFR 85.20(b)(6)] Yes No N/A 2
O
Describe Basis for Conclusion: _
0
U)
4,
Were progress inspections of the project peifonned prior to approving theEl 0 El =
a�
contractor's request for pa«rrent? E
[24 CFR 92.505(a)and 24 CFR 85.36(b)(2)] Yes No N/A L
Describe Basis for Conclusion: a
m
44. v�
Did the owner approve final payment to the contractor'? ❑ 1:1 a
z
Yes No N/A
E
Describe Basis for Conclusion:
rn
0
a
45.
Does the file contain:
0
x
a. Final Lieu Release? 1 ❑ ❑
[24 CFR 92.505(a)and 24 CFR 85.36(b)(2)] C
Yes No N/A =
b. Contractor)i'aiTaiity or Equipment Waranties? E
[24 CFR 92.505(a) and 24 CFR 85.36(b)(2)] 0
Yes No N/A d
C
Describe Basis for Conclusion:
w
2
O
C
m
E
r
v
0
03/2012 7-10 a
114
Packet Pg.459
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20.c
Exhibit 7-5 6509.2 REQ"-6 CHG-1 c
HOME Program -J
E
H. PROJECT D0Ci_TIE\TTATION
46. o
Based upon a review of the project file,is the doctuiientation being maintained sufficient to a
N
emonstrate compliance with the following HOME requirements: EL
a. Income eligibility? ❑ ❑ ❑ L
[HOME: 24 CFR 92.203 and 92.254(a)(3);ADDI: 24 CFR 92.610(c) c
Yes No N/A
and 92.612(c)]
a.
b. Written agreement? El
[HOME: 24 CFR 92.504, ADDI: 24 CFR 92.616(e)] ❑ El
Yes No N/A
c. Principal residency? El ❑ ❑ m
[HOME: 24 CFR 92.254(a)(3).ADDI: 24 CFR 92.612(c)] Yes No N/A >
d. Approved forin of ownership? W
[24 CFR 92.2; HOME: 24 CFR 92.254(c);ADDI 24 CFR 92.612(c)] ❑ ❑ ❑ p
Yes No N/A =
e. Property type(e.g., single family 14)? ❑ ❑ ❑
[HOME: 24 CFR 92.254(a)(1), 24 CFR 92.2; ADDI: 24 CFR Yes No N/A
92.602(a)(1)]
. Property value? ❑ ❑ _
[HOME: 24 CFR 92.254(x)(2);ADDI: 24 CFR 92.612(c)] Yes No N/A E
d
s. Minimtun HOME/ADDI investuient) ❑ ❑ ❑
[HOME: 24 CFR 92.205(c);ADDI: 24 CFR 92.602(e)] Yes No N/A Q
h. Maximum per twit subsidy?
❑ ❑ ❑
�a
[HOME: 24 CFR 92.250(a);ADDI: 24 CFR 92.612(a)] Yes No N/A
i. Maximiun ADDI subsidy? ❑ ❑ ❑ a
[24 CFR 92.602(e)] Yes No N/A Z
Resale/Recapture requirement?
[HOME: 24 CR 92 254(a)(5). ADDI: 24 CFR 92.612(c)] ❑ ❑ ❑ m
Yes No N/A 0
-. Property standards(including lead-based paint)?
❑ ❑ a
❑
[HOME: 24 CFR 92.251;ADDI: 24 CFR 92.612(b)] Yes No N/A =
Eligible costs? ❑ ❑ ❑
[HOME: 24 CFR 92.206.ADDI: 24 CFR 92.602(b)] Yes No N/A =
u. Subsidy layering(if applicable)?
[HOME: 24 CFR 92.250(b); ADDI: 24 CFR 92.612(a)] El El ❑ w.
Yes No N/A =
N
Describe Basis for Conclusion: E
V)
m
c
W
2
O
r
1 =
d
E
t
u
ca
7-11 03/2012 Q
s
115
Packet Pg.460