Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase 2011-0297049►�► TH Rd T of DO 2011-0297049
HICA!tip TITLE C NY
SUBDIVISION DEPT. I IIIIIiII III IIIII I VIII IIIII VIII IIIII VIII IIIII VIII 11111 IN IN
RECORDING REQUESTED PURSUANT JUN 10, 2011 1:011 PM
TO GOVERNMENT CODE SECTION 27383
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
When Recorded Mail To: Ernest J. Dronenburg, Jr., COUNTY RECORDER
FEES: 0.00 WAYS: 2
Poway Housing Authority 7154 PAGES: 36
13 325 Civic Center Drive I IIIIN IIIII IIIII IIIII IIIII IIIII INN IIIII IIIII IIIII Hill pill IIIII pill IIIN IIII IIII
Poway, CA 92064
Attn: Executive Director --
OCCUPANCY, REFINANCING, AND RESALE RESTRICTION AGREEMENT
WITH OPTION TO PURCHASE
(Poway Housing Authority — SHOP Program)
MODERATE INCOME HOUSEHOLD
Owner: Calvin Tran
Address of Home: 12988 Metate Lane, Poway, CA 92064
Affordable Housing Cost of Home: $370,398
( "Owner's Base Price ")
Median Income on Agreement Date: $75,500
This Occupancy, Refinancing, and Resale Restriction Agreement with Option to
Purchase (the "Agreement ") is entered into as of this 10 day of U , 2011, by and
between the Poway Housing Authority (the "Housing Authority ") and Calvin Tran (the
"Owner").
RECITALS
A. The Housing Authority desires to help low and moderate income first -time
homebuyers purchase a home.
B. To assist low and moderate income households purchase a home, the Housing
Authority has developed a second mortgage program (the "Supporting Home Ownership in
Poway Program" or "SHOP Program ") designed to assist qualified low and moderate income
buyers, by financing the difference between the market rate purchase price of the home and the
amount affordable to the qualified buyer.
C. The Housing Authority is financing the SHOP Program from the Low and
Moderate Income Housing Fund established by the Poway Redevelopment Agency
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( "Redevelopment Agency ") pursuant to Health and Safety Code Section 33334.3 and
administered by the Housing Authority in accordance with Health and Safety Code Section
33220 and a Cooperation Agreement between the Redevelopment Agency and the Housing
Authority. This Agreement implements the requirements of Health and Safety Code Section
33334.2 and 33334.3, which govern the use of Low and Moderate Income Housing Funds. This
Agreement also implements the affordable housing production requirements of Health and
Safety Code Section 33413(b)(2).
D. Owner intends to purchase the property located at 12988 Metate Lane, in the
City of Poway and more particularly described in Exhibit A (the "Home "). As a condition to the
Housing Authority's Loan, the Owner must execute this Agreement. The Owner agrees to
comply with this Agreement in consideration of the Housing Authority loan to Owner which
permits Owner to purchase the Home at an affordable housing cost to Owner.
E. The purpose of this Agreement is to control the resale of the Home. This
Agreement provides the Housing Authority an option to purchase the Home at a restricted price,
given in consideration of the economic benefits to the Owner resulting from purchase of the
Home at an affordable level. This Agreement restricts the resale of the Home and specifies,
among other requirements, that the Home may only be transferred to Moderate Income
Households (as defined below). This Agreement also requires that the Owner pay the Housing
Authority Excess Sales Proceeds (as defined below) in the event the Owner sells the Home in
violation of this Agreement.
F. The Affordable Housing Cost of the Home paid by the Owner is set forth on page
1 of this Agreement (the "Affordable Housing Cost ").
G. The Owner is receiving the following loans to purchase the Home:
Name of Lender Amount Date Deed of Trust Recorded
i . Bank of America $211,500 d 10— GD' 2-011
2. City of Poway $58,856 Q b` to- -2-0 f 1
3. $
4. $
The purchase money loans listed above are, collectively, the "First Lender Loan." All lenders
listed above shall collectively be referred to as the "First Lender." The First Lender Loan is
secured by 2 deeds of trust executed by the Owner in favor of the First Lender and recorded in
the County of San Diego concurrently with this Agreement (collectively, the "First Lender Deed
of Trust").
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H. The Housing Authority will provide to the Owner a second mortgage loan on the
Home in the amount of twenty -nine thousand six hundred two dollars ($29,602) (the
"Housing Authority Loan "), using Low and Moderate Income Housing Funds.
I. The Housing Authority Loan is evidenced by a promissory note in the amount of
the Housing Authority Loan (the "Housing Authority Note "). The Housing Authority Note also
evidences Owner's obligation to pay Excess Sales Proceeds and Excess Rents. This Agreement
and the Housing Authority Note shall be secured by a deed of trust on the Home (the "Housing
Authority Deed of Trust ").
J. This Agreement and the Housing Authority Deed of Trust shall be subordinate to
the lien of the First Lender Deed of Trust. This Agreement will remain in full effect as an
encumbrance on the Home after any prepayment of the Housing Authority Note by the Owner.
The Deed of Trust shall also remain as an encumbrance on the Home after any prepayment of the
Housing Authority Note by the Owner to secure compliance with the provisions of this
Agreement and payment of Excess Sales Proceeds or Excess Rents (as defined below).
NOW, THEREFORE, in consideration of the benefits received by the Owner and the
Housing Authority hereunder, the Owner and the Housing Authority agree, as follows:
1. DEFINITIONS AND EXHIBITS
A. The following terms are specially defined for this Agreement and their definitions
can be found in the sections indicated below:
(1) "Affordable Housing Cost" — Recital F
(2) "Agreement" - First sentence of the Agreement on Page 1
(3) "Eligible Buyer" - Section 12. B.
(4) "Eligible Capital Improvements" - Section 11. A. (2)
(5) "Excess Rents" — Section 4
(6) "Excess Sales Proceeds" - Section 13
(7) "Fair Market Value" Section 11. B.
(8) "First Lender" - Recital G
(9) "First Lender Deed of Trust" - Recital G
(10) "First Lender Loan" - Recital G
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(11)
"First Time Homebuyer Program " - Recital B
(12)
"HCD" - Section 11. A. (1)
(13)
"Home" — Recital D
(14)
"Housing Authority" - First sentence of the Agreement on Page 1
(15)
"Housing Authority Deed of Trust" - Recital I
(16)
"Housing Authority Loan" — Recital H
(17)
"Housing Authority Note" — Recital I
(18)
"Housing Authority Option" - Section 10
(19)
"Housing Authority Response Notice" - Section 8
(20)
"HUD" — Section 27
(21)
"Income Qualified Household" — Section 12. B.
(22)
"Indexed Price" - Section 11A
(23)
"Inheriting Owner" — Section 6
(24)
"Marketing Period" - Section 12. A.
(25)
"Maximum Restricted Resale Price" - Section 11
(26)
"Median Income" - Section 11. A.
(27)
"Moderate Income Household" — Section 12. B.
(28)
"Owner" - First sentence of the Agreement on Page 1
(29)
"Owner's Notice of Intent to Transfer" - Section 7
(30)
"Program Manual" — Section 2
(31)
"Proposed Buyer" — Section 12
(32)
"SHOP Program" - Recital B
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(33) "Transfer" - Section 6
B. The following ext.
(1) Exhibit A:
(2) Exhibit B:
(3) Exhibit C:
(4) Exhibit D:
7.58
obits are attached to this Agreement:
Legal Description of Home
Form of Owner Occupancy Certification
Form of Owner's Notice of Intent to Transfer
Form of Owner Acknowledgement of Housing Authority
Response Notice
(5) Exhibit E: Form of Request for Housing Authority Approval of
Improvements to the Home
(6) Exhibit F: Form of Owner Request for Housing Authority
Subordination to Refinance First Lender Loan
2. OWNER CERTIFICATIONS; OWNER OCCUPANCY REQUIREMENT
The Owner certifies that (i) the financial and other information previously provided to
qualify to purchase the Home is true and correct as of the date first written above, (ii) the Owner
shall occupy the Home as the Owner's primary and sole place of residence (iii) the Owner is a
first time homebuyer or displaced homemaker as described in the SHOP Program Manual (the
"Program Manual ") for the Program; and (iv) the Owner will fully cooperate with the Housing
Authority in monitoring Owner's Compliance with this Agreement.
3. OCCUPANCY OF HOME
The Owner shall occupy the Home as the Owner's sole place of residence within sixty
(60) days of close of escrow on the purchase of the Home by the Owner. The Owner shall be
considered as occupying the Home if the Owner is living in the unit for at least ten (10) months
out of each calendar year. On or before February 1 of each calendar year, the Owner shall
provide an annual written certification to the Housing Authority, in the form shown in the
attached Exhibit B, that the Owner is occupying the Home as his or her primary and sole place of
residence.
4. LEASING OF HOME
The SHOP Program is available for the purchase of a Housing Authority sponsored
newly constructed Home; homes with rental units are not eligible for assistance under the SHOP
Program. The Owner shall not lease the Home to another party. Any lease of the Home is
prohibited, and shall constitute a Default under this Agreement. The Housing Authority may
then exercise any of the remedies set forth in Section 15 below, including, without limitation,
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exercise of the Housing Authority Purchase Option upon Default. In the event the Owner leases
the Home or any part of the Home to a third parry in violation of this Section 4, "Excess Rents"
shall be due and payable to the Housing Authority immediately upon receipt thereof by the
Owner. Excess Rents shall mean all rents Owner receives from the third party. Such Excess
Rents shall be considered a recourse debt of the Owner to the Housing Authority, as evidenced
by the Housing Authority Note, which the Housing Authority may collect by legal action against
the Owner and/or by foreclosure under the Housing Authority Deed of Trust.
5. MAINTENANCE AND INSURANCE REQUIREMENTS
A. The Owner shall maintain the Home, including landscaping, in good repair and in
a peat, clean and orderly condition (and as to landscaping, in a healthy condition) and in
accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state,
county, municipal, and other governmental agencies and bodies having or claiming jurisdiction
and all their respective departments, bureaus, and officials, and with all applicable 'covenants
conditions and restrictions and homeowner's association rules. Owner will not commit waste or
permit deterioration of the Home, and shall make all repairs and replacements necessary to keep
the Home in good condition and repair. Failure by the Owner to maintain the Home shall
constitute a Default under this Agreement and the Housing Authority may then exercise any of
the remedies set forth in Section 15 below, including, without limitation, exercise of the Housing
Authority Purchase Option upon Default.
B. The Owner shall maintain a standard all risk property insurance policy equal to
the current replacement value of the Home adjusted annually to reflect changes to local building
costs calculated on a per square foot basis (or by appraisal, if requested by the Housing
Authority), naming the Housing Authority, the City and their employees, agents, officers, board
members and /or council members as additional insureds. Additional insurance requirements are
set forth in Section 6 of the Housing Authority Deed of Trust. The policy shall be adjusted
annually to reflect changes to local building costs calculated on a per square foot basis (or by
appraisal, if requested by the Housing Authority).The Housing Authority has the right, but not
the obligation, to inform Owner of the then - current replacement value of the Home.
6. RESTRICTIONS ON RESALE OR TRANSFER OF THE HOME
A. Transfer. Any Transfer of the Home will be subject to the provisions of this
Agreement including, without limitation, the Housing Authority Option described in Section 10
below. Transfer means any sale, assignment or transfer, voluntary or involuntary, of any interest
in the Home, including, but not limited to, a fee simple interest, a joint tenancy interest, a life
estate, a leasehold interest, an interest evidenced by a land contract by which possession of the
Home is transferred and Owner retains title, or a deed of trust. Any Transfer without satisfaction
of the provisions of this Agreement is prohibited and shall constitute a Default under this
Agreement and the Housing Authority may then exercise any of the remedies set forth in Section
15 below, including, without limitation, exercise of the Housing Authority Purchase Option upon
Default. A Transfer shall not include a transfer: (i) to an existing spouse or domestic partner;
(ii) by a Owner to a spouse or domestic partner where the spouse or domestic partner becomes
the co- owner of the Home; (iii) between spouses as part of a marriage dissolution proceeding;
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(iv) to an existing spouse or domestic partner of Owner by devise or inheritance following the
death of Owner; (v) by Owner into an inter vivos revocable trust in which Owner is the
beneficiary; or (vi) refinance of the First Lender Loan meeting the requirements of Section 25 of
the Agreement; provided, however, that Owner shall provide written notice of all such transfers
to Housing Authority; and Owner shall continue to occupy the Home as his or her principal place
of residence (except where the transfer occurs pursuant to subsection (iii) or (iv) above, in which
event the transferee shall owner - occupy the Home and affirmatively assume Owner's obligations
under this Agreement, the Housing Authority Note, and the Housing Authority Deed of Trust).
All other Transfers shall require written notice to the Housing Authority pursuant to Section 7
below and shall be to Eligible Buyers. Consideration received by the Owner for such Transfer
shall not exceed the Maximum Restricted Resale Price defined in Section 11 below. For
purposes of this section, "domestic partner" shall mean two unmarried people, at least eighteen
(18) years of age, who have lived together continuously for at least one (1) year and who are
jointly responsible for basic living expenses incurred during their domestic partnership.
Domestic partners may not be persons related to each other by blood or adoption such that their
marriage would be barred in the state of California. For purposes of this section, an individual
shall be considered a domestic partner of Owner upon presentation of an affidavit or other
acceptable evidence by Owner to the Housing Authority.
B. Inheritance. In the event a Transfer occurs by devise or inheritance due to death
of the Owner, the administrator of the Owner's estate, the trustee of Owner's trust, or the person
inheriting the Home shall provide written notice to the Housing Authority of the Owner's death
within thirty (30) days of the date of death and the following procedures shall apply:
(1) The person inheriting the Home (the "Inheriting Owner ") shall provide the
Housing Authority with income and other information, to be verified by the Housing Authority,
so that the Housing Authority may determine if the Inheriting Owner qualifies as an Eligible
Buyer. If the Inheriting Owner fails to provide required documentation, he or she shall be
deemed not to qualify as an Eligible Buyer. If the Inheriting Owner is a Moderate Income
Household, he or she shall succeed to the Owner's interest and obligations under this Agreement,
the Housing Authority Note, and the Housing Authority Deed of Trust, new documents shall be
executed between the Inheriting Owner and the Housing Authority and recorded against the
Home. The new resale restriction agreement and option to purchase between Inheriting Owner
and Housing Authority shall have a forty -five (45) -year term that shall commence upon the
recordation of such new agreement. In addition, the new promissory note shall provide that the
original purchase price in the new note is equal to the original purchase price paid by the Owner
and identified in Owner's note, should it become due from the Inheriting Owner, shall be
calculated based on the original purchase price paid by the Owner. If the Inheriting Owner fails
to qualify as an Eligible Buyer, he or she shall be required to Transfer the Home to an Eligible
Buyer at a price not exceeding the Maximum Restricted Resale Price, pursuant to the procedures
set forth in Sections 7 through 13 below and the Housing Authority may exercise the Housing
Authority Option pursuant to Section 10 below; provided, however that the Inheriting Owner
may own and occupy the Home for up to twelve (12) months prior to providing an Owner's
Notice of Intent to Sell to the Housing Authority pursuant to Section 7 below, and provided
further that the Inheriting Owner remains in compliance with the requirements of this Agreement
and the Housing Authority Deed of Trust. The Inheriting Owner shall not be required to occupy
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the Home during this twelve (i2) -month time period, but may rent the Home only upon approval
from the Housing Authority to low or moderate income tenants approved by the Housing
Authority for an amount that does not exceed the Owner's Monthly cost of principal and interest
on the First Lender Loan, and property insurance and property taxes associated with the Home.
In the event the Inheriting Owner rents the Home in accordance to this section, the lease shall
also be subject to the approval of the Housing Authority.
(2) Failure of an Inheriting Owner to follow the procedures and file the
notices described in this Section 6 shall constitute a Default under this Agreement and the
Housing Authority may then exercise any of the remedies set forth in Section 15 below,
including, without limitation, exercise of the Housing Authority Purchase Option upon Default.
7. NOTICE OF INTENDED TRANSFER; PREPARATION OF HOME FOR SALE
A. In the event the Owner intends to Transfer or vacate the Home, the Owner shall
promptly give the Housing Authority written notice of such intent (the "Owner's Notice of Intent
to Transfer "), in the form shown in Exhibit C attached to this Agreement. The Owner shall give
the Housing Authority the Owner's Notice of Intent to Transfer prior to notifying real estate
brokers or lenders of Owner's intent to Transfer the Home and prior to listing of the Home on the
Multiple Listing Service. The Owner's Notice of Intent to Transfer shall be sent to the Housing
Authority by certified mail, return receipt requested at the address provided in Section 32 of this
Agreement. The Owner's Notice of Intent to Transfer shall include the information necessary for
the Housing Authority to determine the Maximum Restricted Resale Price of the Home,
including the following information:
(1) the address of the Home;
(2) the date of purchase of the Home by the Owner;
(3) the purchase price of the Home paid by the Owner at the time of his/her
purchase;
(4) a copy of the HUD -1 Settlement Statement or equivalent document from
the close of escrow on the Owner's purchase of the Home;
(5) if Owner has made Eligible Capital Improvements to the Home that he /she
wishes to include in the calculation of Indexed Price, a description of the improvements, the date
the improvements were made, a copy of the letter granting prior Housing Authority approval of
the improvements, evidence of cost of the improvements, and an appraisal of the value added to
the Home by the Eligible Capital Improvements;
(6) the date on which Owner intends to vacate Home;
(7) the date the Home will be placed on the market; and
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(8) the name and phone number of the person to contact to schedule
inspection of the Home by the Housing Authority.
B. NOTICE: The Owner should consider not entering into a contract with a real
estate broker to sell the Home until the Owner has received the Housing Authoritv Response
Notice pursuant to Section 8.A. below, as the services of a broker will not be required if the
Housing Authority exercises the Housing Authority Option to purchase the Home pursuant to
Sections 8.A. and 10 below and in such event no brokerage commission will be paid to a third
WAY. -
C. Following delivery to the Housing Authority of the Owner's Notice of Intent to
Transfer, the Owner shall prepare the Home for sale, as follows:
(1) within thirty (30) days of delivery of the Owner's Notice of Intent to
Transfer, the Owner shall obtain and deliver to the Housing Authority a current written report of
inspection of the Home by a licensed structural pest control operator;
(2) within the sooner of (a) sixty (60) days from the date of delivery of the
Owner's Notice of Intent to Transfer, or (b) prior to two (2) weeks before close of escrow on the
Transfer, the Owner shall perform or cause to be performed Section l pest control work in order
to repair all damage noted in the pest report including damage caused by infestation or infection
by wood - destroying pests (provided, however, that in the event Owner does not cause the work
to be performed in accordance with this subsection the cost of such work shall be considered
deferred maintenance and reflected as a downward adjustment in the Maximum Restricted
Resale Price pursuant to Section 11);
(3) within thirty (30) days of the date of the Owner's Notice of Intent to
Transfer, the Owner shall allow the Housing Authority, or its designee, to inspect the Home to
determine its physical condition, and, if requested by the Housing Authority, following such
inspection, the Owner shall obtain and deliver to the Housing Authority a home inspection report
prepared by a licensed home inspector.
(4) if the Home is vacant, the Owner shall maintain utility connections until
the close of escrow on the Transfer;
(5) in the event of Housing Authority purchase of the Home, the Owner shall
permit a fmal walk- through of the Home by the Housing Authority, or the Housing Authority's
designee, in the final three (3) days prior to close of escrow on the Transfer.
8. HOUSING AUTHORITY RESPONSE TO OWNER'S NOTICE OF INTENDED
TRANSFER
The Housing Authority shall respond in writing (the "Housing Authority Response
Notice ") to the Owner's Notice of Intent to Transfer within sixty (60) days of. Housing
Authority receipt of a complete Owner's Notice of Intent to Transfer that includes all
information required under Section 7, including Housing Authority receipt of the pest control
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report and home inspection report (if any) required pursuant to Section 7C above. The Housing
Authority Response Notice shall inform the Owner of the Housing Authority's election to
proceed under one of the following two alternatives:
A. Housiniz Authority Exercise of Housing Authority Purchase Option. The Housing
Authority Response Notice may notify the Owner that the Housing Authority elects to exercise
the Housing Authority Option, or assign to another public agency or non -profit organization or
Eligible Buyer the Housing Authority's right to purchase the Home, as granted in Section 10
below, and shall include the Housing Authority's calculation of the Maximum Restricted Resale
Price to be paid by the Housing Authority (or its assignee) pursuant to Section 11 below and the
Transaction Fee to be paid by the Owner pursuant to Section 10 below.
B. Owner Sale at Restricted Sale Price to Eligible Buyer. Alternatively, the Housing
Authority Response Notice may notify the Owner that the Housing Authority will not at this time
exercise the Housing Authority Option to purchase the Home and that the Owner may proceed to
sell the Home to an Eligible Buyer at a price not to exceed the Maximum Restricted Resale'
Price, pursuant to the procedure set forth in Section 12 below. In this event, the Housing
Authority Response Notice shall include the following information: (1) the maximum qualifying
income for an Eligible Buyer; (2) the certifications required of an Eligible Buyer; (3)the
Maximum Restricted Resale Price the Owner may receive for the Home, calculated by the
Housing Authority pursuant to Section 11 below; (4) if available, a list of potentially qualified
SHOP home buyers.
9. OWNER ACKNOWLEDGMENT OF HOUSING AUTHORITY RESPONSE NOTICE
No later than seven (7) days following the date of the Housing Authority Response
Notice, the Owner shall acknowledge in writing to the Housing Authority, in the form shown in
Exhibit D attached to this Agreement, that he /she has received the Housing Authority Response
Notice and still intends to Transfer the Home.
10. HOUSING AUTHORITY PURCHASE OPTION
The Owner agrees that the Housing Authority shall have the option to purchase the Home
(the "Housing Authority Option ") for the Maximum Restricted Resale Price, calculated pursuant
to Section 11 of this Agreement. The Housing Authority may, instead of purchasing the Home
itself, assign its right to purchase the Home pursuant to the Housing Authority Option to another
public agency, a nonprofit corporation, or to an Eligible Buyer. If the Housing Authority assigns
its purchase option, the assignee shall sign the Housing Authority Response Notice and shall
thereby be bound to purchase the Home pursuant to the terms of the Housing Authority Option
as set forth in this Agreement. The Owner may be required to pay the Housing Authority a
transaction fee equal to the Housing Authority's reasonable costs associated with the exercise of
the Option if the Housing Authority (or its assignee) exercises the Housing Authority Option and
purchases the Home; provided, however that such transaction fee shall not exceed six percent
(6 %) of the sales price of the home. The Housing Authority Option may be exercised by the
Housing Authority or its assignee in the Housing Authority Response Notice, as described in
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Section 8A above, to be sent by the Housing Authority to the Owner within thirty (30) days of
the Housing Authority's receipt of a complete Owner's Notice of Intent to Transfer. If the
Housing Authority Response Notice notifies the Owner that the Housing Authority or its
assignee will exercise the Housing Authority Option to purchase, the Housing Authority or its
assignee shall purchase the Home within ninety (90) days of the date of the Housing Authority
Response Notice and title shall be delivered by the Owner to the Housing Authority by grant
deed, free and clear of any mortgage or other liens, unless approved in writing by the Housing
Authority. In the event of exercise of the Housing Authority Option and purchase of the Home
by the Housing Authority or its assignee, the Owner shall permit a final walk- through of the
Home by the Housing Authority or its assignee in the final three (3) days prior to close of escrow
on the Transfer.
11. DETERMINATION OF MAXIMUM RESTRICTED RESALE PRICE FOR HOUSING
AUTHORITY PURCHASE OR RESTRICTED SALE
If the Housing Authority (or its assignee) exercises the Housing Authority Option, or if
the Owner sells to an Eligible Buyer, the maximum sales price (the "Maximum Restricted Resale
Price ") that the Owner shall receive from the Housing Authority (or its assignee) or the Eligible
Buyer for purchase of the Home shall be the LESSER of the Indexed .Price or the Fair Market
Value.
A. Indexed Price.
(1) The Indexed Price of the Home means: (a) the Affordable Housing Cost of
the Home at the time of purchase by the Owner increased by the percentage of increase in the
San Diego Area Median Income from the date of the original purchase of the Home by the
Owner to the date of receipt by the Housing Authority of the Owner's Notice of Intent to
Transfer, and, where applicable, adjusted pursuant to subsection (2) below to reflect the value of
capital improvements or the cost of deferred maintenance; plus (b) the outstanding balance of the
Housing Authority Loan. "Median Income" shall refer to the median yearly income, adjusted for
a household size of four, in San Diego County, as published by the California Department of
Housing and Community Development ( "HCD "). In the event such income determination is no
longer published by HCD, or has not been updated for a period of at least eighteen (18) months,
the Housing Authority may use or develop such other reasonable method as it may choose in
order to determine the median yearly income in San Diego County.
(2) Where applicable, the Indexed Price shall include an upward adjustment
reflecting the value of any substantial structural or permanent fixed improvements which the
Owner has made to the Home with the Housing Authority's prior written approval after Owner's
purchase of the Home. No such adjustment shall be made except for improvements: (a) made or
installed by the Owner or Owner's contractor which conformed with applicable building codes at
the time of installation; (b) which extends the useful life or improves the functionality of the
Home; (c) approved in writing in advance by the Housing Authority or its designee; and (d)
whose initial costs exceed Two Thousand Dollars ($2,000). All approvals for such improvements
shall be subject to Owner's receipt of a building permit. A form for use in requesting Housing
Authority approval of a Home improvement is attached to this Agreement as Exhibit E.
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Improvements meeting the above requirements are referred to in this Agreement as "Eligible
Capital Improvements." The adjustment to the Indexed Price for such Eligible Capital
Improvements shall be limited to appraised increases in value to the Home as a result of the
improvements (pursuant to an appraisal performed as described in Section 11 B below), including
any depreciation in value of the capital improvements since the time of installation, and not the
cost of construction of the improvements to the Home. The Indexed Price shall include a
downward adjustment, where applicable, in an amount necessary to repair any violations of
applicable building, plumbing, electric, fire or housing codes or any other provisions of the
Poway Building Code, as well as any other repairs needed to put the Home into a "sellable
condition Items necessary to put a Home into sellable condition shall be determined by the
Housing Authority or its designee, and may include cleaning, painting and making needed
structural, mechanical, electrical, plumbing and fixed appliance repairs and other deferred
maintenance repairs.
B. Fair Market Value. In certain circumstances it may be necessary to determine the
fair market value of the Home without taking account of the resale restrictions imposed by this
Agreement (the "Fair Market Value "). These circumstances include: (1) where the parties wish
to determine if the Indexed Price exceeds the Fair Market Value in order to determine the
Maximum Restricted Resale Price pursuant to Section 11; (2) where the parties wish to
determine the value of Eligible Capital Improvements in order to calculate the Indexed Price
pursuant to Section 1 IA; and (3) where the Owner wishes to refinance the First Lender Loan as
described in Section 25 below, and it is necessary to determine the Maximum Restricted Resale
Price in order to calculate the maximum principal amount of the refinanced First Lender Loan.
If it is necessary to determine the Fair Market Value of the Home, it shall be determined by a
certified MAI or other qualified real estate appraiser approved in advance by the Housing
Authority. If possible, the appraisal shall be based upon the sales prices of comparable
properties sold in the market area during the preceding three (3) -month period. The cost of the
appraisal shall be paid by the Owner, unless the appraisal is obtained from a new buyer. In the
event that the Owner has made capital improvements to the Home (which have been approved in
advance by the Housing Authority pursuant to Section 1 IA of this Agreement) which have
increased the value of the Home or if damage or deferred maintenance has occurred while the
Owner owned the Home which has decreased the value of the Horne, the appraisal shall
specifically ascribe a value to these adjustment factors and state what the fair market value of the
Home would be without such adjustments by utilizing the procedures outlined in Section 11A
above for calculating the Indexed Price. Nothing in this section shall preclude the Owner and the
Housing Authority from establishing the Fair Market Value of the Home by mutual agreement in
lieu of an appraisal pursuant to this section.
12. SALE OF HOME BY OWNER IF HOUSING AUTHORITY DOES NOT EXERCISE
HOUSING AUTHORITY OPTION TO PURCHASE
In the event the Housing Authority Response Notice notifies the Owner to proceed to sell
the Home to an Eligible Buyer at a price not exceeding the Maximum Restricted Resale Price,
the Owner may proceed to sell the Home in compliance with the following requirements:
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A. Marketing. The Owner shall use bona fide good faith efforts to sell the Home to
an Eligible Buyer in compliance with this Section 12, including listing the Home on the Multiple
Listing Service, keeping the Home in an orderly condition, making the Home available to show
to agents and prospective buyers, and providing buyers with Eligible Buyer requirements,
including income qualifications and the Housing Authority's form of disclosure statement
summarizing the terms of the buyer's resale agreement. A proposed buyer ( "Proposed Buyer ")
who the Owner believes will qualify as an Eligible Buyer shall be referred to the Housing
Authority or its designee for an eligibility determination.
B. Eligible Buffer. A Proposed Buyer shall qualify as an "Eligible Buyer" if he or
she meets the following requirements, as determined by the Housing Authority or its designee:
(1) Intent to Owner Occuny. The Proposed Buyer shall certify that he or she
will occupy the Home as his or her sole place of residence throughout his or her ownership.
(2) Agreement to Sign Resale Restriction Agreement and to Cooperate with
Housing Authority. The Proposed Buyer shall agree to sign an occupancy, refinancing, and
resale restriction agreement with option to purchase restricting future resale of the Home and
shall agree to cooperate fully with the Housing Authority in promptly providing all information
requested by the Housing Authority to assist the Housing Authority in monitoring the Proposed
Buyer's compliance with the occupancy, refinancing, and resale restriction agreement with
option to purchase.
(3) Income Eligibility. The combined gross income for all household
members of the Proposed Buyer, as determined by the Housing Authority, does not exceed the
qualifying limit for Moderate Income:households as established and amended from time to time
pursuant to Section 8 of the United States Housing Act of 1937 ( "Moderate Income Household ").
(4) First Time Homebuyer. The Proposed Buyer shall be a first time
homebuyer or a displaced homemaker as defined in the Program Guidelines.
C. Maximum Restricted Resale Price. The purchase price for the sale of the Home
by the Owner to the Eligible Buyer shall not exceed the Maximum Restricted Resale Price
calculated by the Housing Authority pursuant to Section 11 above, as set forth in the Housing
Authority Response Notice.
D. Disclosure and Submittals. The Owner and the Proposed Buyer shall provide the
following information and documents to the Housing Authority:
(1) The name, address and telephone number in writing of the Proposed
Buyer.
(2) A signed financial statement of the Proposed Buyer in a form acceptable
to the Housing Authority and any other supporting documentation requested by the Housing
Authority. The financial information shall be used by the Housing Authority to determine the
13
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7166
• • 7167
income eligibility of the Proposed Buyer and the amount of any second mortgage assistance to
be provided by the Housing Authority.
(3) The proposed sales contract and all other related documents which shall
set forth all the terms of the sale of the Home. Said documents shall include at least the
following terms: (a) the sales price; and (b) the price to be paid by the Proposed Buyer for the
Owner's personal property, if any, for the services of the Owner, if any, and any credits,
allowances or other consideration, if any.
(4) A sworn statement, from the Owner and the Proposed Buyer in a form
acceptable to the Housing Authority, that the sale shall be closed in accordance with the terms of
the sales contract and other documents submitted to and approved by the Housing Authority.
The statement shall also provide that the Proposed Buyer or any other party has not paid and will
not pay to the Owner, and the Owner has not received and will not receive from the Proposed
Buyer or any other party, money or other consideration, including personal property, in addition
to what is set forth in the sales contract and documents submitted to the Housing Authority. The
sworn statement shall also include a provision that in the event a Transfer is made in violation of
the terms of this Agreement or false or misleading statements are made in any documents or
certification submitted to the Housing Authority, the Housing Authority shall have the right to
foreclose on the Home or file an action at law or in equity as may be appropriate. In any event,
any costs, liabilities or obligations incurred by the Owner and the Proposed Buyer for the return
of any moneys paid or received in violation of this Agreement or for any of the Owner's and/or
the Proposed Buyer's costs and legal expenses, shall be borne by the Owner and/or the Proposed
Buyer and they shall hold the Housing Authority and its designee harmless and reimburse the
Housing Authority's and its designee's expenses, legal fees and costs for any action they
reasonably take in good faith in enforcing the terms of this Agreement.
(5) An executed buyer's occupancy, refinancing, and resale restriction
agreement with option to purchase; deed of trust; promissory note; notice of affordability
restrictions on transfer of property; and borrower's disclosure statement; from the Proposed
Buyer in forms provided by the Housing Authority. The recordation of the new deed of trust;
buyer's occupancy, refinancing, and resale restriction agreement with option to purchase; an
executed Notice of Affordability Restrictions on transfer of property; and any other documents
then required by the Housing Authority; shall be a condition of the Housing Authority's approval
of the proposed sale.
(6) the name of the title company escrow holder for the sale of the Home, the
escrow number, and name, address, and phone number of the escrow officer.
(7) Upon the close of the proposed sale, certified copies of the recorded
Housing Authority deed of trust, buyer's resale agreement, notice of affordability restrictions on
transfer of property and borrower's disclosure statement, a copy of the final sales contract,
settlement statement, escrow instructions, and any other documents which the Housing Authority
may reasonably request.
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• 0
13. TRANSFER IN VIOLATION OF AGREEMENT; PAYMENT TO HOUSING 7168
AUTHORITY OF EXCESS SALES PROCEEDS
If the Owner makes a Transfer in violation of this Agreement, the Owner shall pay the
Excess Sales Proceeds to the Housing Authority as set forth in this section. For purposes of this
Agreement, "Excess Sales Proceeds" shall mean one hundred ten percent (110 %) of the amount
by which the gross sales proceeds received by the Owner from the new buyer exceed the
Maximum Restricted Resale Price for the Home (in the amount that was stated in the Housing
Authority Response Notice). This amount shall be a debt of the Owner to the Housing
Authority, evidenced by this Agreement and the Housing Authority Note, and secured by the
Housing Authority Deed of Trust. The Owner acknowledges that the Housing Authority shall
have no obligation to cause reconveyance of this Agreement or of the Housing Authority Deed
of Trust until the Excess Sales Proceeds are paid to the Housing Authority. The Housing
Authority shall utilize the Excess Sales Proceeds for Housing Authority affordable housing
programs and to pay for administrative fees resulting from the Transfer in violation of this
Agreement. The Owner and the Housing Authority acknowledge that the formula for calculation
of the amount of Excess Sales Proceeds due from the Owner to the Housing Authority is
intended to cause the Owner to receive the same net sales proceeds (following payment by
Owner of a standard broker's commission) from sale of the Home at an unrestricted price to a
third party as the Owner would receive from sale of the Home to the Housing Authority or to an
Eligible Buyer at the Maximum Restricted Resale Price.
14. REPAYMENT OF HOUSING AUTHORITY NOTE
Upon the Housing Authority's exercise of the Housing Authority Option pursuant to
Section 10, the amount of Housing Authority Loan shall be credited toward the purchase price.
Upon Transfer to an Eligible Buyer, the Eligible Buyer may assume the Housing Authority Loan
and the amount of Housing Authority Loan shall be credited against the Eligible Buyer's
purchase price so long as the Eligible Buyer executes a new resale agreement (with a new forty -
five (45) -year term), promissory note, Notice of Affordability Restrictions on Transfer of
Property, and deed of trust in the then - current form of these documents to be provided by the
Housing Authority. Upon any other Transfer of the Horne, the outstanding principal and interest
due under the Housing Authority Note shall be repaid pursuant to the Housing Authority Note
and shall not be credited against the purchase price. Repayment of the Housing Authority Note
shall not affect Owner's obligation to comply with this Agreement, which shall remain in full
force and effect following any repayment of the Housing Authority Note.
15. DEFAULTS
A. The following events shall constitute a Default by the Owner under this
Agreement:
(1) The Housing Authority determines that the Owner has made a
misrepresentation to obtain the benefits of purchase of the Home or in connection with its
obligations under this Agreement;
15
1552 \03 \565891.6
(2)
above.
(3)
above.
•
0
The Owner fails to occupy the Home, as required pursuant to Section 3
The Owner leases the Home to a third party, as prohibited by Section 4
(4) The Owner makes a Transfer in violation of this Agreement;
(5) The Owner otherwise fails to comply with the requirements of this
Agreement, the Housing Authority Note, or the Housing Authority Deed of Trust and such
violation is not corrected to the satisfaction of the Housing Authority within thirty (30) days after
the date of written notice by the Housing Authority to the Owner of such violation;
(6) A notice of default is issued under the First Lender Loan; or
(7) A lien is recorded against the Home other than the lien of a bona fide first
mortgage loan or a junior loan approved by the Housing Authority in accordance with Section
25B.
B. Upon a declaration of Default by the Housing Authority under this Agreement,
the Housing Authority may:
(1) Declare the Housing Authority Loan and all Excess Sales Proceeds and/or
Excess Rents immediately due and payable without further demand, declare a default under the
Housing Authority Note, and may invoke the power of sale under the Housing Authority Deed of
Trust;
(2) Apply to a court of competent jurisdiction for such relief at law or in
equity as may be appropriate;
(3) Declare a Default under the Housing Authority Note and Housing
Authority Deed of Trust and pursue all Housing Authority remedies under the Housing Authority
Deed of Trust; and
(4) Exercise the Housing Authority Purchase Option Upon Default as
described in Section 18 below.
16. NOTICE OF DEFAULT AND FORECLOSURE
A request for notice of default and any notice of sale under any deed of trust or mortgage
with power of sale encumbering the Home shall be recorded by the Housing Authority in the
Office of the Recorder of the County of San Diego for the benefit of the Housing Authority. The
Housing Authority may declare a Default under this Agreement upon receipt of any notice given
to the Housing Authority pursuant to Civil Code Section 2924b, and may exercise its rights as
provided in Sections 15 and 18.
16
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7169
7170
In the event of default and foreclosure, the Housing Authority shall have the same right
as the Owner to cure defaults and redeem the Home prior to the foreclosure sale. Nothing herein
shall be construed as creating any obligation of the Housing Authority to cure any such default,
nor shall this right to cure and redeem operate to extend any time limitations in the default
provisions of the underlying deed of trust or mortgage.
If the Housing Authority failed to file the request for notice of default, the Housing
Authority's right to purchase the Home shall commence from the date a notice of default is given
by the Housing Authority to the Owner.
17. NOTICE AND CURE
Upon Default or a violation of any of the provisions of this Agreement, the Housing
Authority may give written notice to the Owner specifying the nature of the violation. If the
violation is not corrected to the satisfaction of Housing Authority within a reasonable period of
time, not longer than thirty (30) days after the date the notice is mailed, or within such further
time as the Housing Authority determines is necessary to correct the violation, or if the Owner is
in default under any other mortgage loan on the Home, the Housing Authority may declare a
Default under this Agreement.
The Housing Authority shall notify the First Lender at the address provided by the First
Lender to the Housing Authority in the manner set forth in Section 32 of this Agreement, if the
Housing Authority has declared a default under this Agreement or under the Housing Authority
Note or the Housing Authority Deed of Trust.
18. PURCHASE OPTION UPON DEFAULT
Notwithstanding, and in addition to, the remedies provided the Housing Authority in
Section 15, and the Housing Authority Option provided to the Housing Authority in Section 10,
the Owner hereby grants to the Housing Authority (or its assignee) the option to purchase the
Home upon the declaration of a Default by the Housing Authority pursuant to Section 15. This
option to purchase is given in consideration of the economic benefits received by the Owner
resulting from purchase and ownership of the Home.
The Housing Authority (or its assignee) shall have thirty (30) days after a Default is
declared to notify the Owner and the First Lender of its decision to exercise its option to
purchase under this Section 18. Not later than ninety (90) days after the notice is given by the
Housing Authority to the Owner of the Housing Authority's intent to exercise its option under
this Section 18, the Housing Authority shall purchase the Home for the Maximum Restricted
Resale Price calculated in the manner set forth in Section 11.
19. NONLIABILITY OF THE HOUSING AUTHORITY REDEVELOPMENT AGENCY
AND CITY
A. No Oblitzation to Exercise Option. The Housing Authority shall have no
obligation to exercise any option granted it under this Agreement. In no event shall the Housing
17
1552 \03\565891.6
7171
Authority become in any way liable or obligated to the Owner or any successor -in- interest to the
Owner by reason of its option to purchase under Sections 10 and 18 nor shall the Housing
Authority be in any way obligated or liable to the Owner or any successor -in- interest to the
Owner for any failure to exercise its option to purchase.
B. Nonliabiiity for Negli ence Loss or Damage. Owner acknowledges,
understands and agrees that the relationship between Owner and the Housing Authority is solely
that of a borrower and lender, and that the Housing Authority does not undertake or assume any
responsibility for or duty to Owner to select, review, inspect, supervise, pass judgment on, or
inform Owner of the quality, adequacy or suitability of the Home or any other matter. The
Housing Authority, Redevelopment Agency and City owe no duty of care to protect Owner
against negligent, faulty, inadequate or defective building or construction or any condition of the
Home and Owner agrees that neither Owner, or Owner's heirs, successors or assigns shall ever
claim, have or assert any right or action against the Housing Authority, Redevelopment Agency
or City for any loss, damage or other matter arising out of or resulting from any condition of the
Home and will hold the Housing Authority, Redevelopment Agency and City harmless from any
liability, loss or damage for these things.
C. Indemnity. Owner agrees to defend, indemnify, and hold the Housing Authority,
Redevelopment Agency and the City of Poway, and their respective elected officials, board
members, officers, employees and agents harmless from all losses, damages, liabilities, claims,
actions, judgments, costs, and reasonable attorneys fees that the Housing Authority,
Redevelopment Agency, City of Poway, or such persons may incur as a director indirect
consequence of. (1) Owner's default, performance, or failure to perform any obligations as and
when required by this Agreement or the Housing Authority Deed of Trust; or (2) the failure at
any time of any of Owner's representations to the Housing Authority to be true and correct.
20. RESTRICTIONS ON FORECLOSURE PROCEEDS
If a creditor acquires title to the Home through a deed in lieu of foreclosure, a trustee's
deed upon sale, or otherwise, the Owner shall not be entitled to the proceeds of sale to the extent
that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited
to the creditor exceed the Maximum Restricted Resale Price. The Owner shall instruct the holder
of such excess proceeds to pay such proceeds to the Housing Authority (in addition to any other
amounts due the Housing Authority from the Owner pursuant to the Housing Authority Note or
this Agreement), in consideration of the benefits received by the Owner through purchase of the
Home.
21. RESTRICTION ON INSURANCE PROCEEDS
If the Home is damaged or destroyed, the Owner has an obligation to rebuild or repair the
Home pursuant to Section 6 of the Deed of Trust. If the Owner does not rebuild or repair the
Home pursuant to Section 6 of the Deed of Trust, the Owner shall, subject to the rights of the
First Lender, repay the Housing Authority Loan and pay the Housing Authority the portion of
any insurance proceeds received by the Owner for such destruction or damage which is in excess
of the Maximum Restricted Resale Price calculated pursuant to Section 11 above.
18
1552 \03\565891.6
7172
22. TERM OF AGREEMENT
All the provisions of this Agreement, including the benefits and burdens, run with the
Home and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her
heirs, legal representatives, executors, successors in interest and assigns, and to the Housing
Authority and its successors, until the earlier of (i) forty -five (45) years from the date of this
Agreement, or (ii) the date of Transfer of the Home to the Housing Authority or another buyer in
compliance with this Agreement (including execution by the buyer of a new copy of this
Agreement), which Transfer shall cause the commencement of a new forty -five (45) -year
affordability restriction.
23. SUPERIORITY OF AGREEMENT
The Owner covenants that he or she has not, and will not, execute any other agreement
with provisions contradictory to or in opposition to the provisions hereof, and that, in any event,
this Agreement is controlling as to the rights and obligations between and among the Owner, the
Housing Authority and their respective successors.
24. SUBORDINATION
Notwithstanding any other provision hereof, the provisions of this Agreement shall be
subordinate to the lien of the First Lender Loan and shall not impair the rights of the First
Lender, or the First Lender's successor or assign, to exercise its remedies under the First Lender
Deed of Trust in the event of default under this First Lender Deed of Trust by the Owner. Such
remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a
deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu
of foreclosure, this Agreement shall be forever terminated and shall have no further effect as to
the Home or any transferee thereafter; provided, however, if the holder of such First Lender
Deed of Trust acquired title to the Home pursuant to a deed or assignment in lieu of foreclosure
and no notice of default was recorded against the Home by such holder in connection therewith,
this Agreement and shall automatically terminate upon such acquisition of title, only if (i) the
Housing Authority has been given written notice of default under such First Lender Deed of
Trust with a sixty (60) -day cure period (which requirement shall be satisfied by recordation of a
notice of default under California Civil Code Section 2924), and (ii) the Housing Authority shall
not have cured the default within such sixty (60) -day period. Owner agrees to record any
necessary documents to effect such termination, if applicable.
25. REFINANCE OF FIRST LENDER LOAN; JUNIOR LOAN
A. Refinance. The Owner covenants and agrees not to place any additional mortgage
or deed of trust, including any line of credit, on the Home without obtaining prior written consent
of the Housing Authority.
B. Permitted Encumbrance Amount. At no time shall the total principal amount of
all debt secured by the Home exceed the "Permitted Encumbrance Amount ", which is defined as
19
1552 \03 \565891.6
0
r 7173
the greater of. (i) ninety percent (90 %) of the Maximum Restricted Resale Price calculated
pursuant to Section 11 as of the date of the Owner's request to the Housing Authority of approval
of the Owner's refinance (the "Refinance Request Notice "); or (ii) the outstanding balance of the
existing First Lender Loan as of the date of the Refinance Request Notice. Mortgage loans
which include negative amortization and adjustable rate mortgages are prohibited. If escrow
does not close on the refinance within one hundred twenty (120) days of the date of the
Refinance Request Notice, the Housing Authority shall have the right to recalculate the
Permitted Encumbrance Amount. Owner shall not be in Default hereunder at the time of initial
purchase of the Home by the Owner, if, at that time, the initial debt secured by the Home
exceeds the Permitted Encumbrance Amount and Owner does not further encumber the Home
until the Permitted Encumbrance Amount complies with this paragraph.
C. Refinance of First Mortgage Loan. The Housing Authority shall permit and
approve a prepayment and refinance of the existing First Lender Loan and shall provide for the
subordination of this Agreement, the Housing Authority Deed of Trust, and the Notice of
Affordability Restrictions on Transfer of Property to the refinanced First Lender Loan only if
such refinance does not cause the total debt secured by the Home, including junior mortgage
loans and equity lines of credit, to exceed the Permitted Encumbrance Amount: The Housing
Authority will not approve any mortgage loan which includes negative amortization, nor will the
Housing Authority approve any adjustable rate mortgages.
D.. Junior Loans and Equity Lines of Credit. Mortgage loans or equity lines of credit
junior in lien priority to this Agreement, the Housing Authority Deed of Trust and Notice of
Affordability Restrictions on Transfer of Property are not permitted, except when expressly
approved by the Housing Authority in writing. The Housing Authority shall only approve junior
mortgage loans or equity lines of credit which will not cause the total of all debt secured by the
Home (calculated assuming a maximum permitted draw on any equity line of credit) to exceed
the Permitted Encumbrance Amount. The Housing Authority will not approve any mortgage
loan or equity line of credit which includes negative amortization, nor will the Housing
Authority approve any adjustable rate mortgages.
E. Notwithstanding the provisions of this subsection D, mortgage, loans from other
public agencies designed to increase affordable homeownership, that are compatible with the
SHOP Program and that do not cause the Owner's total housing costs to exceed a housing cost
that is affordable to Moderate Income Households as determined by the Housing Authority in
accordance with Community Redevelopment Law (California Health and Safety Code Sections
33000 et sue), are permitted.
F. Request of Notice of Default. Any time an Owner enters into a new mortgage
loan, including junior mortgage loans and equity lines of credit, the Owner shall cause to be
recorded against the Home a request for notice of default, providing for notice of default under
such loan to be delivered to the Housing Authority.
G. PMose of Restrictions on Refinance and Junior Loans. The Housing Authority
and the Owner agree that the requirements of this Section 25 are necessary to ensure the
continued affordability of the Home to Owner and to minimize the risk of loss of the Home by
20
1552 \031565891.6
Owner through default and foreclosure of mortgage loans. Owner further acknowledges that
violation of the provisions of this Section 25 shall constitute a Default under this Agreement, for
which the Housing Authority may exercise the Housing Authority's option upon default pursuant
to Section 10 above. A form for use by the Owner in requesting Housing Authority
subordination to a refinanced first mortgage loan is attached as Exhibit F to this Agreement.
H. Eligible Capital Improvements. In the event (i) the Owner refinances the First
Lender Loan in accordance with subsection C, or (ii) the Owner borrows a junior loan or takes an
equity line of credit in accordance with subsection D and the funds from such refinance, loan, or
line of credit shall be used for Eligible Capital Improvements, Owner shall provide evidence to
Housing Authority, in a form acceptable to Housing Authority in its sole and absolute discretion,
that any amount of funds received by Owner for such Eligible Capital Improvements shall be and
are used for the construction of such Eligible Capital Improvements, which shall be subject to
Housing Authority's prior written approval.
26. NONDISCRIMINATION
A.The Owner covenants by and for itself and its successors and assigns to refrain from
restricting the rental, sale or lease of the Home on any basis listed in subdivision (a) or (b) of
Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926. 1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the Government Code.
B. Notwithstanding paragraph A. of this section, with respect to familial status,
paragraph A. of this section shall not be construed to apply to housing for older persons, as
defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in
paragraph A. of this section shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11
and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51
and Section 1360 of the Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the
Government Code shall apply to paragraph A. of this section. The foregoing covenant shall run
with the land.
27. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUSTS
This Agreement shall not diminish or affect the rights of the Housing Authority under the
Housing Authority Deed of Trust.
Notwithstanding any other provision in this Agreement to the contrary, this Agreement
shall not diminish or affect the rights of the United States Department of Housing and Urban
Development ( "HUD ") or the Veterans Administration ( "VA ") under the First Lender Deed of
Trust or any subsequent First Lender deeds of trust hereafter recorded against the Home in
compliance with Section 25 above.
Notwithstanding any other provisions in this Agreement to the contrary, all of the
provisions of this Agreement shall terminate and have no further force in the event title is
21
1552 \03\565891.6
• • 71 7
75 a
acquired by HUD or VA or another party upon foreclosure of a deed of trust insured by HUD or
guaranteed by VA.
28. HUD FORBEARANCE RELIEF
Notwithstanding other provisions of this Agreement, the Housing Authority Option on
Default pursuant to Section 18 above shall not be exercised by the Housing Authority when a
deed of trust insured by HUD is secured by the Home; and: (i) the owner is undergoing
consideration by HUD for assignment forbearance relief; or (ii) the owner is undergoing
consideration for relief under HUD's Temporary Mortgage Assistance Payment (TMAP)
program.
29. INVALID PROVISIONS
If any one or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall
be deemed severable from the remaining provisions contained in this Agreement, and this
Agreement shall be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
30. CONTROLLING LAW
The terms of this Agreement shall be interpreted under the laws of the State of California.
The venue for any legal action pertaining to this Agreement shall be San Diego County,
California.
31. NO WAIVER
No delay or omission in the exercise of any right or remedy of Housing Authority upon
any default by Owner shall impair such right or remedy or be construed as a waiver. The
Housing Authority's failure to insist in any one or more instance upon the strict observance of the
terms of this Agreement shall not be considered a waiver of the Housing Authority's right
thereafter to enforce the provisions of the Agreement. The Housing Authority shall not waive its
rights to enforce any provision of this Agreement unless it does so in writing, signed by an
authorized agent of the Housing Authority.
32. NOTICES
All notices required herein shall be sent by certified mail, return receipt requested,
express delivery service with a delivery receipt, or personal delivery with a delivery receipt and
shall be deemed to be effective as of the date received, the date delivery was refused, or the date
returned as undeliverable as indicated on the return receipt as follows:
To the Owner:
At the address of the Home.
22
1552 \03\565891.6
7176'
To the Housing Authority:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attn: Executive Director
To the First Lender:
Bank of America
The parties may subsequently change addresses by providing written notice of the change in
address to the other parties in accordance with this Section.
33. INTERPRETATION OF AGREEMENT
The terms of this Agreement shall be interpreted so as to avoid speculation on the Home
and to insure to the extent possible that its sales price and mortgage payment remain affordable
to Moderate Income Households.
34. EXHIBITS
Any exhibits referred to in this Agreement are incorporated in this Agreement by such
reference.
35. MONITORING AND INSPECTION BY HOUSING AUTHORITY
A. The Housing Authority (or its designee) may enter the Home for inspection
following two (2) business days advance written notice.
B. The Owner shall retain all records related to compliance with obligations under
this Agreement for a period of not less than five (5) years, and shall make such records available
to the Housing Authority or its designee for inspection and copying upon five (5) business days
advance written notice.
C. The Housing Authority shall monitor Owner's compliance with the requirements
of this Agreement on an annual basis. Owner shall cooperate with Housing Authority
monitoring and provide required certifications and other information required by the Housing
Authority to determine compliance within ten (10) days of receipt of a written request by the
Housing Authority.
36. COVENANTS RUNNING WITH THE LAND
A. Owner hereby subjects the Home to the covenants and restrictions set forth in this
Agreement. Owner hereby declares its express intent that the covenants and restrictions set forth
herein shall be deemed covenants running with the land and shall pass to and be binding upon all
parties having any interest in the Home throughout the term of this Agreement set forth in
Section 22. Each and every contract, deed, lease or other instrument covering, conveying or
otherwise transferring the Home or any interest therein, as the case may be, shall conclusively be
23
1552 \03 \565891.6
7177
held to have been executed, delivered and accepted subject to this Agreement regardless of
whether the other party or parties to such contract have actual knowledge of this Agreement.
B. The Owner and the Housing Authority hereby declare their understanding and
intent that: (i) the covenants and restrictions contained in this Agreement shall be construed as
covenants running with the land pursuant to California Civil Code Section 1468 and not as
conditions which might result in forfeiture of title by Owner; (ii) the burden of the covenants and
restrictions set forth in this Agreement touch and concern the Home in that the Owner's legal
interest in the Home may be rendered less valuable thereby; and (iii) the benefit of the covenants
and restrictions set forth in this Agreement touch and concern the land by enhancing and
increasing the enjoyment and use of the Home by Eligible Buyers, the intended beneficiaries of
such covenants and restrictions.
C. All covenants and restrictions contained herein without regard to technical
classification or designation shall be binding upon Owner for the benefit of the Housing
Authority and Eligible Buyers and such covenants and restrictions shall run in favor of such
parties for the entire period during which such covenants and restrictions shall be in force and
effect, without regard to whether the Housing Authority is an owner of any land or interest
therein to which such covenants and restrictions relate.
37. ENFORCEMENT
Notwithstanding any other provision of the law, all covenants and restrictions contained
herein which implement Health and Safety Code 33334.3 and/or 33413(c)(3), or successor
provisions, shall run with the land and shall be enforceable by the Housing Authority, the
Redevelopment Agency and the City of Poway and any of the parties listed in Health and Safety
Code Section 33334.3(b)(7), so long as such provision or successor provision remains in effect.
38. DATABASE
Owner hereby acknowledges and agrees that Health and Safety Code Section 33418(c)
requires that the Home be listed in a database that shall be made available to the public on the
internet and which will include the street address, assessor's parcel number, and other
information about the home.
39. OWNER'S ACKNOWLEDGEMENT OF RESALE RESTRICTION
Owner hereby acknowledges and agrees that:
A. Owner hereby subjects the Home to certain restrictions, and limits the price for
which Owner may sell the Home and the persons to whom Owner may sell the Home. The
resale price limitation, and other provisions contained in this Agreement, restrict the full benefits
of owning the Home. Owner may not enjoy the same economic or other benefits from owning
the Home that Owner would enjoy if this Agreement did not exist.
24
1552 \03\565891.6
0 •
B. Absent the provisions of this Agreement, and the Housing Authority Loan, the
Home could not be made available to Eligible Buyers at an affordable price, including Owner.
C. Owner understands all of the provisions of this Agreement. In recognition of the
acknowledgments and agreements stated in this Section 39, Owner accepts and agrees to the
provisions of this Agreement with the understanding that this Agreement will remain in full force
and effect as to the Home following any Transfer of the Home throughout the term of this
Agreement.
D. OWNER UNDERSTANDS THAT THE DETERMINATION OF THE
MAXIMUM RESTRICTED RESALE PRICE OF THE HOME TO AN ELIGIBLE BUYER
CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO
CONSIDERATION INCREASES IN MEDIAN INCOME AND OTHER FACTORS THAT
CANNOT BE ACCURATELY PREDICTED AND THAT THE SALES PRICE PERMITTED
HEREUNDER MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS
OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS
AGREEMENT. OWNER FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN
SETTING THE SALES PRICE OF THE HOME THE PRIMARY OBJECTIVE OF THE
HOUSING AUTHORITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO
ELIGIBLE BUYERS AT AFFORDABLE HOUSING COST. THE MAXIMUM
RESTRICTED RESALE PRICE WILL ALMOST CERTAINLY BE LESS THAN OTHER
SIMILAR PROPERTIES THAT HAVE NO RESTRICTIONS.
[Initialed by Owner(s)]
IN WITNESS WHEREOF, the parties have executed this Agreement on or as of the date
first written above.
HOUSING AUTHORITY: OWNER:
Po y Housi Authority
By. 0
enn Riley
Title:
Exec tive Director (Type Name)
(Type Name)
25
1552 \03\565891.6
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On June 6, 2011, before me, Carol S. Legg, Notary Public, personally appeared Penny
Riley, who proved to me on the basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that she executed the same in
her authorized capacity, and that by her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Mswl►tilNo= Carol S. Legg, Notary'Publi
iM� i'#tMa �Ir,
OPTIONAL
Title or type of document Occupancy, Refinancing, and Resale Restriction Agreement with
Option to Purchase. Poway SHOP Program, Moderate Income Household. 12988 Metate Lane,
Poway, CA 92064.
Number of Pages: 25
Signers Other Than Named Above: There is a signature space for "OWNER"
Note: Date in first paragraph is left blank. Luisa Tumini says this is normal and that the Escrow
Company will fill it in.
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On Defore
Notary Public,
personally appeared 1A.. proved to me on the basis
of satisfactory evidence to be the person(s )whose nam `/ & subscribed to the within
instrument and acknowledged to m;06e&r/t /their a hi
he /they executed the same ' s er /their
authorized capacity(ies), and that b signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
On , before me, , Notary Public,
personally appeared , proved to me on the basis
of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within
instrument and acknowledged to me that he /she /they executed the same in his/her /their
authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
1552 \03\565891.5
1552 \03\565891.5
7181
EXHIBIT A
Legal Description of the Home
1
LEGAL DESCRIPTION 7182
LOT 28 OF CITY OF POWAY TRACT NO. 06 -06 THE MEADOWS, IN THE CITY OF POWAY,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO.
15743, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY MARCH
5, 2009.
END OF LEGAL DESCRIPTION
/183
EXHIBIT B
Form of Owner Occupancy Certification
To: The Poway Housing Authority ( "Housing Authority ")
From: [name of owner(s)] ( "Owner(s)")
Address of Home: ( "Home ")
Date:
By signature below, I [insert name or names of Owner] hereby
certify to the Poway Housing Authority under penalty of perjury that I/we occupy the home
located at [insert address] (the "Home ") as
my /our primary and sole place of residence and that Uwe have occupied the Home for
U [insert number] months of the calendar year [insert
previous calendar year]. Attached to this letter is a copy of [insert utility bill or
driver's license] showing my place of residence.
This Owner Occupancy Certification is signed on _, 2Q__, under penalty of
penury.
By:
Owner [type name]
By:
Owner [type name]
Due Date: February 1 of each calendar year.
Attach copy of utility bill or driver's license showing address of Home.
B -1
1552 \03\565891.5
• 0
EXHIBIT C
Form of Owner's Notice of Intent to Transfer
7184 .
To: The Poway Housing Authority ( "Housing Authority")
From: [name of owner(s)] ( "Owner(s)")
Address of Home: ( "Home ")
Date:
Please be notified pursuant to Section 7 of the Resale Restriction Agreement and Option to
Purchase between Owner and Housing Authority dated , that the Owner intends
to transfer the Home listed above.
A. The following information is provided to the Housing Authority pursuant to Section 7 of
the Resale Agreement:
1. Address of Home:
2. Date Owner purchased Home:
3. Affordable Housing Cost paid by Owner when Home was purchased:
4. Date Owner intends to vacate Home:
5. Date Home will be placed on market:
6. Name and phone number of person for Housing Authority to contact to schedule
inspection: and
(name) (phone number)
B. As required by Section 7 of the Resale Agreement, the following documents are attached
to this Notice:
I. Copy of HUD -1 Settlement Statement from Owner's purchase of the property.
2. If Owner has made Eligible Capital Improvements to the Home that Owner
wishes to include in the Housing Authority's calculation of Indexed Price, check box below
C -1
1552 \03 \56891.5
Yes, I have made Eligible Capital Improvements pursuant to Section 11 of the Resale
Agreement. They are
[describe improvements]
and were completed on [insert date].
I attach the following documents to this letter:
a. copy of Housing Authority letter granting prior approval of these
improvements;
b. evidence of cost of these improvements;
C. appraisal showing value added to Home by the improvements.
C. I have not yet listed the Home for sale with a multiple listing service, or contacted areal
estate broker or financial institution. I agree to prepare the Home for sale by:
1. obtaining a pest control report within thirty (30) days of the date of this notice,
2. repairing all damage noted in the pest report within the sooner of (i) sixty (60)
days from the date of this notice, or (ii) two (2) weeks prior to close of escrow or the transfer of
the Home,
3. allowing the Housing Authority or its designee to inspect the Home within thirty
(30) days of this notice,
4. if requested by the Housing Authority following the Housing Authority's
inspection, I will obtain a home inspection report from a licensed home inspector,
5. maintaining utility connections until the Home is transferred,
6., permitting a walk through by the Housing Authority prior to close of escrow or
the transfer.
7. contact Housing Authority to obtain, if available, a list of potential SHOP home
buyers.
C -2
1552 \03\565891.5
` 1$s
This Owner's Notice of Intent to Transfer is certified by Owner to be true and correct and
is signed on [insert date] under penalty of perjury.
By:
Owner
By:
Owner
C -3
1552 \03 \565891.5
7187
EXHIBIT D
Form of Owner Acknowledgement of Housing Authority Response Notice
Name:
Address of Home:
Date:
I, (insert name) hereby acknowledge that I received the Housing
Authority Response Notice (as described in Section 8 of the Resale Agreement on
(insert date).
By:
D -1
1552 \03 \565891.5
s
EXHIBIT E
Form of Request for Housing Authority Approval of lmprovements to the Home
To: Poway Housing Authority ( "Housing Authority ")
From: ( "Owner ")
Home Address: ( "Home ")
Date:
I hereby request Housing Authority approval of the following capital improvements I intend to
make to my Home:
Description of Improvements:
Estimated Cost:
Original Affordable Housing Cost:
The Housing Authority will respond in writing to this request.
NOTE: Owner should retain copies of contracts, invoices, and receipts for all completed
capital improvements. These documents will be necessary to establish the resale restricted
price of the Home upon subsequent transfer.
*Notice: Proposed Improvements must cost at least Two Thousand Dollars ($2,000) or one
percent (1 %) of the original purchase price (whichever is greater) and must be approved by the
Housing Authority in writing prior to construction.
1552 \03\565891.5
E -1
7188' I
•
7189 '
EXHIBIT F
Form of Owner Request for Housing Authority Subordination
to Refinanced First Lender Loan
To:. The Poway Housing Authority ( "Housing Authority ")
From: ( "Owner ")
Home Address: ( "Home ")
Date:
The Owner hereby requests the Housing Authority to approve the Owner's refinance of the
existing first mortgage on the Home. The Owner provides the following information which it
certifies to be true and correct:
1. Original Affordable Housing Cost of Home: $
2. Original Principal Balance of existing First Lender Loan: $
3. Interest Rate of Existing First Lender Loan: $
4. Principal Amount of Proposed New First Lender Loan: $
5. Interest Rate of Proposed New First Lender Loan: $
6. A copy of all loan documents related to the refinancing of the First Lender Loan.
The Owner hereby certifies the above information is true and correct and this Owner Request is
executed under penalty of perjury on [insert date].
By:
Owner
By:
Owner
F -1
1552 \03 \565891.5