Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase 2013-0325985 � =� RECOP�ED AT THE REOUEST OF � �� # ��� �.�������
�HICAGO TIT�:COMPANY I fIIIIIII III IIIII IIIII IIIII IIIII IIIII tIIII IIIII IIIII IIIII IIIII IIII IIII
SUBDIVISIJN DEPT.
RECORDING REQUESTL'D PURSUANT MAY 23; 2013 4:49 PM �
� TO GOVERNIv1ENT CODL SCCTION 27383
OFFICIAL RECORDS
�� SAN DIEGO COUNTY RECORDER'S OFFICE
When Recorded Mail To: i Emest J. Dronenburg,Jr., COUNTY RECORDER
/ � � FEES: 0.00 WAYS: Z
n,{�> Poway Housing Authority 1 v� 2� PAC'iES: 35
f��l Poway CA 92064r Drive II��III��III��III��II�III���IIIII�III��III�IIII��III��III��III��III��III��I�I��III��I
Attn: Executive Director
�6�S-99lo-ur z
OCCUPANCY, RGF[NANG[NG, AND RESALE RES7'RICT]ON AGREBMGNT
WITH OPTION TO PURCHASE
(Poway Housing Authority— SHOP Program)
N10D6RATE 1NGOMF HOUSEF[OLD '
Owner: Jason & "Cessa Tagulinao
Address of I-lome: 12964 Metate Lane,
Poway; CA 92064
Affordable Housing Cost of Home: $405,000 .
Median Income on Agreement Date: $75,900
This Occupancy, Refinancing, and Resale Restriction Agreement with Oplion to
Purchase (the "AgreemenC') is entered into as of'this 23�dday of /i'�Ay , 2013, b}� and
between the Poway Housing Authorily (the "Flousing Authoriry") and,Jason Tagulinao and ;
Tessa Tagulinao, Husband and Wife as Joint Tenants (the "Owner"). �
RECITALS �
A. "Che Housing Authority desires to help low and moderate income first-time
homebuyers purchase a home.
, B. "I'o assist low and moderate income households purchase a home, the Housing
Authority has developed a second mortgage program (the "Supporting Home:Ownership in
Poway Prog�am" or "SHOP E'rogram") designed to assist qualified low and moderate income
buyers, by financing the difference between fhe market rate purchase price of the home and fhe
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 (the
"Redevelopment Agency") pursuant to Health and Safety Code Section 333343 and
1
1552\03\565891.6
i •
13426
admini'stered by the Housing Authority in accordance:with",Health and Safety Code Section
33220 and,a Cooperafion Agreement between the Redevelopment Agency and the [-lousing
Authority. 'OnFebruary'1, 2012, the Redevelopment,Agency was dissolved by operation of law.
.
The I-lousing.Authority is'Ihe successor agency to the housing assefs and functions of the .
Redevelopment Agenoy� This Agreement implements�the re_quirements of Elealth:and Safety
Code Section:33334.2 and 333343; which govern the use of Low and Moderate Income Housing
Funds. This Agreement also implements the aPfordable housing production requirements of
Health and Safety Code Section 33413(b)(2).
D. Owner intends to purchase Ihe propeRy located at 12964 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 Agreeinent. The Owner agrees ro
comply with this AgreerrSent 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 tfie�Housin� Aufhority.an option to puichase'the 1-lome at a restricted�price,
given in consideration oftfie economicbenefitsto the Owner resulting from�purchase of�the
Home�at an af�fordable level. THis�Agreement restricts therresale=of�t6e Ho"me and specifies,
among other requirements,that ihe Home may only be transferred to Ntoderate Income
Households (as defined below). This Agreement also requires'that the Owner pay the Housing
Authority Excess Sales Rroceeds (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 bythe Owner is set forth on page
1 of this Agreement (the "Affordable Housing Cost").
G. The Owner is receiving the following loans to purchase Ihe Home:
Name of Lender Amount Date Deed of Trust
Recorded
1. First Nations Home G'inance $296,200 /ha� Z'�i 20/ �
2. CityofPoway (BEGIN) $58,856 May 23� 20�3'
The purchase money loans�listed above are, collectively, the "First Lender-Loan." All lenders•
listed abo��e shall collectively be referred to as the "First Lender." The Pirst Lender Loan is
secured by two 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").
H. The Housing AutHority will provide to.the Owner a second mortgage loan on the
Home in�the ainount of Twenty-Nine Thousand, Six-Hundred Two Dollars ($29,602) (the
°Housing Authority Loan"), using Low and Moderate Income Housing�Funds.
2
1552\03\565891.6 ,
� 1 , � 13427
I: The I°Iousing Authority Loan is:evidenced:by a promissoryaote:in the amount of
the Housing•Autfiority Loan�(the "�(ousingAuthocity Note"). The Housing Authority Note also
evidences^Owner's,o6ligation''to pay Ezcess;Sales Proceeds and:Gxcess Rents: This Agreement
and the klousing,Authority Note shall be securedby a'deed oPtrust'on the Home (the "Housing
Authority Deed of"Crust").
J. 1'his Agreement'and the Housing Authority Deed ofTrust 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 I-Iousing Authority Note by the Owner.
The Deed of Trust shall also remain as an encumbrance on the Home afrer anyprepayment 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 benefitsteceived by the Owner and the
Housing Authority hereunder, the Owner and the Housing Authority agree, as follows:
l. DEFII�'1"CIONS AND EXHIBl1'S
A. The following terms are specially defined for this Agreement and their definitions
can be found in the sections indicated below:
(1) "APfordable Housing CosY' — Recital F �
(2) "Agreement" - First sentence of the Agreement on Page 1
(3) "Eligible Buyer" - Section 12. B.
(4) "Eligible Capital Improvements" - Section 1 l, A. (2)
(5) "Excess Rents" — Section 4
(6) "Excess Sales Proceeds" - Section 13
(7) "Fair Market Value" - Section 1 l. B.
(8) "First Lender" - Recital G
(9) "First Lender Deed of Trust" - Recital G
(10) "Pirst Lender Loan" - Recital G
(11) "First 7'ime Homebuyer Program"- Recital B
(12) "HCD" — Section 11. A. (1)
(13) "E-Iome" —Recital D
3
I552\03\i65891.6
1 � 428
(14) "Housing Authority" - First sentence o£the Agreement on Page 1
(15) "Housing.Authority Deed of Trust" - Recital I
(16) "Housing Authority Loan" —Recital H
(17) "Housin'g Authority Note" — Recifal I
(78) "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 Rrice" - Section 11A
(23) "Inheriting Owner" — Section 6
(24) "Marketirig Period" - Section 12. A.
(25) "Maximum Restricted Resale Price" -�Section 11
(26) "Median:Income" — Section 11. A.
(27) "Moderate�[ncome Household"— Section 12. B.
(28) "Owner" - Pirst sentence of[he Agreement on Page 1
(29) "Owner's Notice of Intent to Transfer" - Section 7 .
(30) "Program Manual" —Section 2
(31) "Proposed Quyer" — Section 12
(32) "SHOP Program" — Recit�l B
(33) "Transfer" - Section 6
B. The following exhibits are attached to this Agreemen[:
(1) Gxhibit A: Legal Description of Home
(2) Lxhi6it B: Form oPOwner Occupancy Ceriification
4
Ii52\031565891.6
.134 �9
(3) EXhibit C:� Form of O�vner's.Notice,of Intent to Transfer
(4) Exhibit D: Porm of Owner Acknowledgement of Housing Authority
Response Notice
(5) ExhibiYE: Eorm of Request for Housing Authority Approval of
Improvements to the Home
(6) Exhibit.F: Form of Owner Request for Housing Authority
Subordinatiomto Refinance First Lender Loan
2. OWNER CERTIFICATIONS; OWNER OCCUPANCY REQUIREMENT
The Owner certifies that (i) the financial and other information previouslyprovid'ed ro
qualify to purchase the Home is true and correct as of the date first written above, (ii) tfie 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 f'rogram 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 Qwner shall occupy the E-lome as the Owner's sole place of,.residence within sixty
(60) days of dose of escrow on {he 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 (1D) months
out oY each calenda� yeaz. On or before February 1 of each calendar year,Ihe Owner shall
provide an annual written ceRification to [he 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 HOM�
"I'he SHOP Program is available for the purchase of a Housing Authority sponsored
newly constructed Hoine; homes with rental units a�e,not eligible forassistance undeT the SHOP
Program. The'Ownershall not Iease the Elome to anothet party. Any lease oPthe Home is
prohibited, and shall=constitute a Delault under this Agreement. The Housing Autfiority may
� themezercise any of the remedies set forth in Section 15 below, including, without lirriitation,
exercise of the Housing Authority Purchase Option upon Default. In the event the Qwner leases
the Home or any part of the Home to a third parly in violation of this Section 4, "Excess Rents"
shall be due and payable to the Housing Authority immediately upon receipt thereofiby the
Owner. Gxcess Rents shall mean al] 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
6y the Housing Authority Note, which the Housing Authority may collect.by legal action against
the Owner and/or by Poreclosure under the Housing Authority Deed of Trust.
5
I 532\03\565891.b
1343'0
5. MAINTENANCE AND INSURANCE REQU[RENIENTS
A. The Owner.shall.maintain the Home, includinglandscaping, in good repair and in
a neat, clean and orderly condition (and as to landscaping, in a'healthy condition) and in
accor8ance witfi all applicable laws, rules, ordinances, orders.and regulations of all federal, state,
county, municipal, and othergovernmental agencies and bodies having or claimingjurisdiction
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 mainCain the Home shall
constitute a Default under this A;reement and the Housing Authority may then exerciseany of
the remedies set forth in Section I5 below, including, without limitation, exercise of the Housing
Authority Nurchase Option upon Default.
B. The Owner shalLmaintain a standard all risk property insurance policy equal to
Ihe current replacement value of the Home adjusted annually fo reflect changes to local building
costs calculated on a per square foot basis (or by appraisal, if Tequested by the Housing
Authority), naming the Housing Authority, the City and their elected and.appointed officers,
official, board members, council members, employees and agents as additional insureds:
Additional insurance requirements are set forth in Section 6 ofithe Housing AuthorityDeed 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 RES.SLE OR TRANSFER OF THE HOME
A. Transfer. Any Transfer of the Home will be subjecY;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 Agreementis prohibited and shall constitute a Default undcr 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) ro 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;
(iv) to an existing spouse or domesticpartner of Owner by devise or inherifance following'the
death of Owner; (v) 6y 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 transPeree shall owner-occupy the Home and affirmatively assume Owner's obligations
6
15�2V03\56589L5
1 �431
under this Agreement,"the Housing Authority Note; and:the-Housing Authority Deed of Trust).
All other Transfers shall reguire wr'ittemnotice to tlie.Housing;Authority,p'ursuant Co Section 7
below and shall be to Eligible Buyers. Consideration received 6y 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 thei�domestic partnership.
Domestic partners may not 6e persons related to each other by blood or adoption such that their
marriage would'be barred in the state of California [=or purposes of tfiis section, an inilividual
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:
(l) 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 Pails to provide required documentation; he or she shall be.
deemed not�to q'ualify as�an Eligilile Buyer: If the Inheriting O�vner 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 Trusl, 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 Infieriting Owner
and:Housing Authority shall'have a forty-five (45)-year term that shall commence upon Ihe
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 ori�inal.purchase pricepaid 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 Ownerfails
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 pursuanf`,to Section 10 6elow; provided, however thaf'the Inheri[ing`Owner
may'own and occupy'the Home Por up to twelve (12) months prior to providing an Owner's
Notice of lntent to Sell to the Housing Authority pursuant to Section 7 below, and provided
further that the Inheriting Owner remains in compliance with the reguirements of this.Agreement
and the Housing Authority Deed of Trust. The Inheriting Owner shall not be required to occupy
the Home during this twelve (12)-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 amounf�that does�not exceed�the Owner's Monthly cosLof principal and`iritecest '
on the First Lender Loan, and property insurance and property tazes associated witfi the Home.
In the event the [nheriting Owner rents the Home in accordance to this section, the lease shall
also be subject to the approval of the Housing Aulhority.
7
I 552\03\565891.6
13432
(2) Lailure ofan Inheriting Owner to.follow"the proce8ures 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; PRGPARATION OP HOME FOR SALE
A. Irrthe 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 fntent
to "Cransfer"), in the form shown in Exhibit C attached [o thi's Agreement. The Owner shall give
the Housing Authority tlie Ownei's Notice of Intent ro 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 O.wner's Notice of Intent to Transfer shall be sent to.the Housing
Authority by certified mail; retum receipt re,quested at the address proyided in'Section,32:of this
Agreement. The Owner's Notice of Intent to Transfer shall include the.information necessary=for.
the 1-Iousing Authority to determine the Maximum Restricted Resale Price of the Home,.
including the following inFormation:
(1) the address�ofthe Home;
(2) the date of purchase of the 1-lome 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) ir Owner has made Eligible Capital Improvements to the Home that he/she
wishes to include in the calculation of Indexed Price, a descr�ption of the impro"vements, the date
the improvements weTC'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 ro vacate�Home;
(7) the date the Home will be placed on the market; and
(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 areal
estate broker to sell the Home un[il the Owner has received the.Housin Authority Resnonse
Notice pursuant to Section 8.A below 'as the services oY a brokerwill not be required if the
Housing Authoritv exercises the Housina Authority Option to purchase the Home pursuant to
8
1552\03\565891.6
13433
Sections 8.A and 10 below and in such event no brokerage commission will be paid to a third
partX.
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 oPthe 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 byalicensed structural pest control operator;
(2) within the.sooner of(a) sixty(60) days from the date of delivery of the
Owner's No[ice 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 1 pest con&ol work in order
to repairall damage.noted in the nest report including damage caused by infestation or infection
by wood-destroying pests (provided, however, that in the event Owner does not cause.the work
ro be performed in accordance with this subsection the cost of such work shall be considered
deferred maintenance and reflected as a downward adjustment irrthe 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 allowlhe Housing Authority, or its designee, to inspect the Home to
determine its physical condition, and, if-requested by the Housing Authority, followingsuch
inspection, the Owner shall obtain and deliver to the Housing Authority a home inspection report
prepared by a licensed home inspector.
(9) 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 final walk-through of[he Home by the Housing Authority, or the Housing Authority's
designee, in the final three (3) days prior to close of escrow on the T�ansfer.
8. HOUSING AUTHORITY RGSPONSE TO OWNER'S NOTICE OF INTENDED
TRANSFER
Tlie Housing Authority shall respond in writing (the "Housing Authority Response
Notice") to the Ownei 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 coritrol
xepoR and home inspection report (,if any) required pursuant to Section 7C above. The Housing
Authority Response Notice shall inform fhe Owner of the Housing Authority's election to
proceed underone of the following two alternatives:
A. HousinR Authority Exercise of Housing Authority. Purchase Option, The Housing
Authority Response Notice inay 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
9
1552\03\565891.6
� 1 � 434
Eligible Buyer the Housing.Authority's righYto purchase the Home, as g�anted in Section 10
below, and shall include the Housing Authority's calculation of tfie-Maxirrium Restricted Resale
Price to be,paid by tlie Housing,Authority (or its:assignee) pursuantto Section 11 below and the
Transaction Fee`to be paid by the Owner pursuanPto Section 10 below.
Owner Sale at Restricted Sale Price to Eligible Buyer�. Alternatively, the Housing
fluthority 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 thaYthe Owner may'proceed to
sell the Home to an EligibleBuyer;at a price not to exceed lhe 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: (I)'tfie inaximum qualiFying
income for an Eligible Buyer; (2j tfie ceitifications 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.l'1 below; (4) if available;�a,lis[ of potentially�qualified
SHOP home buyers.
9. OWNER ACKNOWLEDGMENT OF HOUSING AUTHORITY RESPONSEIVOTICE
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 A�reement, that he/she has received the Idousing AuthoriCy Response
Notice and still'intend`s to Transfec the Home.
10. HOUSING AUTHORITY PURCHASE OPTION
1'he 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 pu�chasing the Home
itself, assign its right to�purchase the Iiome pursuant to the l-Iousing.Authoniry 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.1-[ousing Authority Option
as-set forth in this Agreement. The Owner may be required to pay the Housing Authority a
transaction fee equai to the Housing Authority's reasonable costs associated with the exercise of
the Option iFthe Housing Authority (or its assignee) exercises the Housing Au(hority Option and
purchases the Home; provided, however that such transaction fee sliall 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 Flousing Au[hority Response Noticey as described in
Sectiott 8A above, to be sent by the Housing Authority to the Owner within thiriy (30) days of
the I-Iousing Authority's receipt of a'complete Owner's Notice of l�tent to�Transfer. If the.
Housing Authority Response Notice notifies the Owner thal 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 dear 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
� 10
1552\03\565891.6
1 �435
Home by the Housing Authority or its assignee in the�final three (3) days prior to close of escrow
on Ihe Transfer.
11. DETERMINATION,OP MAXIMUM RESTRICTED:RESALL PRICEFOR FIOUSING
AU.THORITY PURCHASL OR RESTRICTED SALE
A. If the Housing Authority (or its assignee) exercises theliousing Authority Option,
or if'the Owner sells to an Eligible Buyer, the:maximum sales price (the "Maximum Restricted
Resale Price")that the Owner §hall receive from the Housing Authority (or its assignee) or [he
Eligible Buyer for purchase of the Home shall be the LESSER of the Indexed Price or the Fair
Market Value. Indexed Price.
(1) The Indexed Price of the Home means: (a) the Aff'ordable Housing Cost of
the Home at the time of purchase by the Ownet inereased 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 ro the date of receipt by the Housing Authority of the O�yner's Notice of]ntent to
Transfer, and,where applicable; adjusted pursuant to subsection„(2) below to reflect the value of
capital improvements ar the cost,of deferred maintenance; plus(b)the outstanding balance of the
Housing Authority Loan. "Ivle$ian Income" shall refer to the.rriedian'yearly income, adjusted for
a household size of four, in San Diego County, as published by the Califomia 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 (]8) months,
the [-lousing Authority may use or develop such other reasonable:method as it may choose in
order to determine the median yearly income in San Diego Counfy.
(2) Where applicable, the I�dexed Price shall include an upward adjustment
reflecting the value of any substantial structural or permanent fixed improvements which Ihe
Owner has made to the Home with the Housing Aulhority's prior`written approval afrer Owner's
purchase of the Home. No such'adjustment shall be made except for improvements: (a) made oi-
installed.bythe 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.rece�pt oPa building permit. A form'for use in requesting Housing
nuthority approval.of a tiome'rimprovement isattached to this Agreement as Exhibit G.
Improvements meeting the above requirements are referred to in this Agreement as "Gligi6le
Capital Improvements." 7'he'adjustment to Ihe Indexed Price for such Gligible Capital
Improvements shall be limite8 to appraised increases in value to the Homeas a result of the
improvements(pursuant to an appraisal performed as described in Section 1.1 B below.), including
any depreciation in value of tfie capital improvements since the time of installation, and not the
cosYOf construction of the iinprovements to the Home. The [ndexed Price shall3:include a
downward adjustment, where applicable, in an amount necessary to repairany 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". [tems 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
11
� I552\03\565891.6
� 1 �43s
structural, mechanical, electrical, plumbing and fixed appliance repairs and other deferred
maintenance-repai rs.
B. Fai� Market Value. [n certain circumstances it may be necessary to determine the
fair market value of th�e Hoine-�vithout taking account of the:.resale restrictions imposed by this
Agreement (the "Fair Market Value"). These circumstancesinclude: (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 l A; and (3) where the Owner wishes to refinance the First Lender Loan as
described in Section 2� below, and iFis 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
ceRified 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:appioved in
advance by the 1-Iousing Authority pursuant to Section 1 1 A of this Agreement) which have
inereased the value of the Home or iEdamage or deferred maintenance has occurred while the
Owner owned the Home which has decreased the value of the Home, the appraisal shall
specifically ascribe a value to these adjustment factors and state what the fair ma'rkeT'value of the
Flome would be without such adjustments by utilizing the procedures outlined in Section 11 A
above for calculating the Indexed.Price. Nothing in this section shall preclude the Owner and the
HousingAuthority from establishing the Fair Market Value of the Home by mutual agreement irc
lieu of an appraisal pursuant ro tliis section.
12. SALE OF HOME BY OWNGR IF HOUSING AUTHORITY DOES NOT LXERGISE
HOUSING AUTHORITY OPT[ON TO PURCHASE
In the event the.Housing Authority Response Notice notifies�the Ownei to proceed to sell
the Home to an Eligible Buyer at:a price not exceeding the Nlaximum`Restricted Resale Price,
Ihe Owner may proceed to sell the 1-Iome in compliance with the following requirements:
A. Marketin�. The Owner shall use bona fide good faith ePforts to sell'the Home to
an Gligible Buyer in compliance with this Section 12, including listing the Home on thelMultiple
Lisfing Service, keeping the Home in an orderly condition, making the Home available to show
to agents and prospective buye�s; and providing buyers with.Eligible`$uyer 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 Ownerbelieves will qualify as an Eligible Buyer shallbe referred to the Housing
, Authority or its designee for an eligibility determination.
B. Eli�ible Buyer. A Proposed Buyer shall qualify as an."Eligible;Buyer" if he or
she meets the following,requirements, as determined by the Housing Aulhority or its designee:
12
1552103156589L6
I ? 437
(1) Intenf to Owner Occupv. The Proposed Buyer shal I certify that he or she
will occupy the Home as his or her sole place of residence+throughout-his or her ownership.
(2) Aereement to Si�n Resale Restriction Aereement.and to Cooperate with
Housin�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�Idousing Authoriry in promptly�providing all information
requested by the Plousing Authority to assishthe Elousing Authority in monitoring the Proposed
Buyer's compliance with the>occupancy, refinancing, and resale restriction agreement with
option to purchase.
(3) Income.Eli ig bility. The combined gross income for all household
members of the Proposed Buyer, as determined by the 1-Iousing,Authority, does not"exceed the
qualifying limit for Moderate�Income households as established�'ancl�amended from time`to time
pursuant to Section 8 ofthe United States Housing Act of 1937("Moderate Income•Household").
(4) First Time Homebuver. 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 xHe�Owner to the�Eligible;Buyer�sfiall�not exceed the Maximum.Restrieted�Resal'e:Price
calculated by the Housing Authority pursuant to Section l 1 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 �uthority:
(1) The name, address and telephone number in wri[ing of the Proposed
Buyer.
(2) A signed.financial statement oP the Proposed Buyer in a form acceptable
to the Housing Authority and any other suppoRing documentation requested by the Housing
Authority. The financial information shall be used by ihe Housing Authority to determine the
income eligibility oP 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 forthe
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 swom statement, from the Owner and tlie Proposed Buyer in a form
acceptabl'e to the Housing Authority, that the sale shall be dosed 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 thal the Proposed Buyer or any other party has not paid and will
13
Ii52\03\i6589I.6
1343'8
not pay to the Owner,.and the Owner has not recei��ed and.will not receiye from the Proposed
Buyer or any other,party, money;orpther consideration,.including pe�sonal proper[y, in addition
to what.is set-forth inthe sales contract and documents"submitted to�fhe Housing Authority. The
sworn statement shall also include a provision that in the event a'Transfer is made in violation of
the termsofthis Agreement or false or misleading statements are made in any documents or
certification,subinitted to the Housing Authority, the Housing Authoriry 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 orobligations incurred by the Owner and tfie Proposed I3uyer for the return
of any�moneys paid or received':in violation�of this Agreement or for�any�of�the Ovvner's ancl/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 fhe
Housing Authority's and its designee's expenses, legal f'ees and-costs for any action'they
reasonably take in good Paith in enforcing the terms of'this Agreement.
(5) An executed.buyer's occupancy, refinancing, and resale restriction
agreement with option to purchase; deed oPtrust; promissory note; notice of affordability
restrictions on transfer of properly; and borrower's disclosure statement; from the Proposed
' 6uyer in forms provided by the'1-lousing Authority. 'rhe recordation of the new deed ot'trust;
buyer's occupancy, refinancing, and resale restriction agreement with option to purchase; an
executed Notice of Affordability ResVictions on transfer of propeRy; and any other•documents
thenrequired by the Housing Authority; shall be a condition of the Hous�ng Authority's approval
of the proposed sale.
(6) the name of the title company escrow holder for the sale of the Home; fhe
escrow number, and name, address, and phone number of the escrow officer.
(7) Upon the,close of the proposed sal'e,�ce'rtlfied�copi'es��of the recordei3
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 coniract,
settlement statement, escrow'in'structions, and any other documents which the f-Iousing Authority
may reasonably request.
13. TRANSFCR IN V[OLAT[ON OF AGREEMENT; PAYM�NT TO HOUSING
AUTHORITY O� EXCESS SALES PROCEL'DS
If the Owner makes a Transfer in violation of this Agreement, the Owner:shall pay'tHe
Excess Sales:Proceeds-to the HousingAuthority as set foRh in this section. For purposes of this
Agreement, "Lxcess Sa]es Proceeds" shall mean one hundred ten percent(110%) of the amount
by which the gross sales proceeds received by the Ownerfrom the:`new buyer exceed the
Maximum,Restricted Resale Price for the Home (in the amountthaf 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 securedby the
Housing Authority Deed of Trust. 1'he Owner acknowledges thaYffie Housing Authority shall
have no obligation to cause reconveyance of this Agreement or of the }►ousing Authority Deed
of Trust until [he Excess Sales.Proceeds are paid to the Housing,Authority. 1�he.I-Iousing
Authority shall�utilize the Excess Sales Proceeds for Housing Authority affordable�housing
14
1552103156589L6
13439
programs and to pay for adminisfrative fees resulting from the Transfer in violation of this
Agreement. The Owner and the Housing Authority acknowled'ge that the formula for calculation
of the amounYof Excess Sales Proceeds`due from the Ownerto tHe,Housing Authority is
intended to cause the Owner to receive the same nel sales proceeds (following payment by
Owner of a standard broker's commission) from sale of the Home at,an unrestricted price to a
third paRy as the Owner would receive fromsale of the f-lome to the f-[ousing Authoriry or to an
Eligible BuyeraYthe 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 againsYthe Gligible Buyer's
purchase price so long as the Eligible•Buyer executes a new resale;agreement (with a new foRy-
five (45)-year term), promissory note, Notice of Affordabiliry R'estrictions on Transfer oF
Property, and deed of trust in the then-curient form of these docuinenfs ro be provided by the
Housing Authority. Upon any other Transfer of Ihe Flome, 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. DEFAUL"LS
� A. The following events shall constitute a Default by the Ownerunder this
Agreement: ,
(1) The Housing Authoriry determines that'the Owner has made a
misrepresentation to obtain the benefits of purchase of the Home orin connection with its
obligations under this Agreement;
(2) The Owner fails to occupy the Home, as requiTed pursuant to Section 3
above.
(3) The Owner leases the Home to a third party, as prohibited by'Section 4
above.
(4) The Owner makes a Transfer in violation of this Agreement;
(5) The Owner otherwise fails to comply wi�tfi�the requirements of this.
Agreement, the Housing Authority Note, or the I-lousing Authority Deed of Trust and such
violation is not corrected to the satisfaction of the Housing Autfiorify �vithin thirty (30) days after
the date of written notice by the Iiousing Authority to the Owner ofsuch violation;
(6) A notice of default is issued under the First Lender Loan; or
l5
1552\03\56589L6
1�440
(7) A lien is recorded against the Home otherthan'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 Authocity under this Agreement,
the Housing Authoiity may:
(1) Declare the Flous_ing Authority Loan and all Excess Sales Proceeds and/or
Excess Rents immediately due and payable without furtherdemand, 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 competentjurisdiction for such relief�atlaw�or in
equity as may be appropriate;
(3) Declare a Default under the I-Iousing Authority Note and Housing
Authority Deed of Trust and pursue all Housing Authority remedies under the Housing Authority
Deed of Trust; and
(4) Gxercise [he HousingAuthority Purchase Option Upon Default as
described in Section�l 8 below.
16. N07'ICE OF DEFAUL"C AND FORECLOSURE
A request for notice of default and any notice of sale under any deed of trust or mortgage
withpowerof sale encumbering the Home shall be recorded by the Housing Authority in the
Offce ofthe Recorder of the Counfy 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 Sec[ions I S and 18.
In the event of defauli;and,foreclosure, the Housing Authority shall haye the same:right
as the Owner�to cure�defaults and redeem�the I-lome 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 fime 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 sfiall commence from the date-a notice of defaulhis,giyen
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
Authoricy may give written notice to the Owner specifying the nature�of the�violation. If the
16
Ii52\03\56589L6
13441
violation is not corrected to the satisfaction of I-lousing fluthority'within a reasonable period of
time, not longer than thirty (30) days afrer 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 Authoiity. shall notify ihe First Lenderat•the address provided by the First
Lender to the Housing Autfiority in the manner set for[h in Section 32 of this Agreement, if Ihe
Housing Authority has declared a default under this Agreement•or under the Housing Authority
Note or the Housing Authoriry�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 heeeby grants to�tfie.Housing�Authority (or its assignee) the.option to�purchase,[he,
Flome upon the declaration of a Default by the Housing Authority pursuant to Section 15. This
option topurchase is given in consideration of the economic benefits received by the Owner
resulting from purchase and ownership of the 1-lome.
The Housing Authority (or its assignee) shall have thirty (30).days after a Defauh 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 afrer 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 Hogsing Authority shall purchase the Home for the Maximum Restricted
Resale Price calculated irrthe manner set forth in Section 11.
19. NONLIABILITY OP THE HOUSING AUTHORITY AND CITY
A. No 061ieation 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
Authority become in any way liable orbbligated 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 apy 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. Nonliabilitv for Ne�ligence, Loss, or Dama�e. Owneracknowledges,
understands and agreea that the relationship between Owner and the Housing Authority is sole]'y
that of a borrower and lender, and that the Housing Authority does not undertake or assume any
responsibiliry for or duty to Owner to select, review, inspect, supervise, pass judgment on, or
inform Owner of the quality, adeguacy or suitability oFthe,�lome or`any other matter. The
Housing Authority and City owe no duty of care to protect Owner against negligent, faulty,
inadequate or defective bui(ding or construction or any condition of the 1-lome and Owner agrees
that neither Owner, or Owner's heirs, successors or assigns shall ever claim; have or asseri any
right or action against the Housing Authority or City for any loss, damage or other matter arising
17
I552\03\565A91.6
13.442
out oPor�resulting from.any condition of�the Hoine and wil6hold tfie;Housing Authority and City
harmless from any liability,,loss or damage for these things.
C. Indemnitv. Owner agrees to defend, indemnify, and hold the Housing Authority
and the City of Poway,and their respective elected and appointed'officers, officials, board
members; empioyees and agents harmless from all losses, damages, liabilities, claims, actions,
judgments, costs, and reasonable attomeys' fees that the Flousing Authority, the City of Poway,
or such persons may incur as'a direct or indirect consequence oE (I) Owner's default,
performance, or failure to perform,any o6ligations as and when;required by this �lgreement or
the FIousing;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 PROCEGDS
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 MaximumRestricted Resale Price. "1'he Owner shall instruct fhe 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), ia consideration of the benefits received by the Ownei through purchase of the
Home.
21. RL'STRICTION ON INSURANCE PROC�GDS
If the Home is damaged o� ilestroyed, the Owner has an bbligation to rebuild orrepair the
Home pursuant to Section 6 ol'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 ro 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 Secfion 11 above.
18
I552\0315G5891.6
13443
22. TERM OF AGREEIVIENT
' AlPthe prodisions;of�this Agreement, including tlie benefifs:�and 6urdens, run with the
Home and t_His 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
Authbrity and its successors, until the�earlier of(i) foity-five (45) yeazs from the date of this �
Agreement, or(ii) tfie date oFTransfer 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 o£a,new forty-five (45)-year
affordability�restriction.
23. SUPERIORITY OF AGRGEMENT
The Owner covenants that�heror she has not, and will not; execute any'othei agreement
with provisions contradictory, to,or in opposition to the prodisions lieieof, and that, in.any event,
this Agieement'is controlling as'to the,rights and obligations between and among the Owner,;the
Housing Authority'and their7espzctive successors.
24. SUBORDINATION
Notwithstanding;any`other provision hereof, the provisions of fhis Agreement.shall be
subordinate'to the lien of the First,Lender Loan and shall not impai;the rights of the First
Lender, or t_he First Lender's,successor or assign, to exercise:'its�remedies under the First LenBei .,
Deed of Trust in;,the event of defauh 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 accepCance of a
deed or assignment in lieu of foreclosure. Afrer such foreclosure or acceptance of a deed in lieu
offoreclosure,this Agreement shall be forever terminaYed and shall'have no further effect as to
the Home or any transferee ihereafrer; provided, however, if.the'holder of such Fiist.Lerider
Deed of Trust acquired title to the.Home pursuant to a deed or;assigrunent iri lieu of foieclosure
and no notice of default was recorded against the Home by such holder'in connection;therewith,
� this Agreernent and shall�automatically terminate upon such acquisition_of title,�only if(i) the
Housin� Authority has been given•written notice of default under such-First LenderDeed o,f
Trust with a sixty (60)-day.cure period (which requirement shall be:satisfied,byYecordation of a
notice of default under California Civil Code Section 2924), and (ii)`the;Housing?:uthorify shall
nothave 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 LENDGR LOAN; JLJNIOR LOAN
A. Refinance. The:Owner covenants and agrees not to place any additionalimortgage
or deed of trust, including any line of credit,�on the I-Iome without obtaining�p�ior yVritten�consent
of the Housing AuthoriYy.
B. Permitted Encumbrance Amount. At no time shall the total principal amount of
all debt secured by the Home exceed the "Permitted Encumbiance Amount." which is defined as
19
I Si2V03\565891.b
� 13444
the greater of: (i)'ninety"percent (90%) of the Maximum Restricted Resale Price calculated
pursuant to Section 1.1 as�of the date of the Owner's request.to the Housing Authority of approval
of the Owner's�ref�nance��(the "Refinance Request Notice"�); or (iij the outstanding balance of�the�
existing First Lencler 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 noYclose on the refinance within one hundred twenty (120}days of the date of the
Refinance Request Notice, the Housing Authority shall have the righ4<to recalculate the
Permitted Encumbrance Amount. Owner shall not be in Defauh'hereunder at the time of initial
purchase oCthe�Home by the Owner�;if, at that time, the initial debt�secured by the Home
exceeds the Permitted Encumbrance,Amount and Owner does nof further encumber the Home
until the Permitted Encuinbrance Amount complies with this paragraph.
C. Refinance ofFirst Mort�a e.� Loan. 'Che Housing-Authority shall permit and
approve a prepayment and refinance'of the existing First Lender Loan and sfiall provide for the
subordination of this Agreement, the Housing Authority Deed of Trust, and the Notice of
Affordability Restrictions on Transfer oFProperty to the refinanced'First Lender Loan only if
such refinance does not cause the:tofal debt secured by the Home, including'junior mortgage
loans and equity lines of credit, to exceed the Permitted Encumb�ance 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.andEquitv Lines oP Credit. Mortgage loans or equity lineg of credit
junior in lien priority to this Agreement, the Housing Authority Deed of Trust and Notice of
Affordability Restrictions.on Transfer oP 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 wil] not cause the total of all debt secured by the
hlome (calculated asswning a maximum permitted draw onany equity line of credit) to exceed
the Permitted Encumbrance Amount. The Housing Authority will not approve any moRgage
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, moRgage loans from other
public agencies designed to increase affordable homeownership, that are compatible with the
SHOP Ptogram and thaYdo noC cause fhe Owner's to[al housing.costs to exceed a,housing;cost
thaf isaffordable•to Moderate income Households as determined 6y the Housing Authorityin
accordance with Communitg Redevelopment Law (California Flealth and Safety Code Sections
33000 et;se�c.), are permitted.
F. Request of Notice of Default tlny time an OwneT enters into a new morlgage
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 f'or notice of defaulfunder
such loan to be delivered to the Housing Authority.
G. Pumose 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 I-lome to Owner and to minimize the risk of loss of the Home by
20
1552103\565891.6
I3445
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;Authofity"s opfion upon default pursuant
to Section,l0'above. A form for use by the Owner in r.equesting Housing Authority
subordinafion to a refinanced first mortgage loan is attached.as Exhibit E to this Agreement.
H. Eligible Capital Improvements. In,the event (i) the OwneT refinances the First
Lender Loan in accordance with subsection C, or (ii) the Owner bonows a junior loan or takes an
equity line of credit in accordance with'subsection D and the funds from such rePinance, loan, or
line of credit shall be used''for Eligi6le Capital [mprovements, 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 consfruction 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 rePrain
from restricting the rental, sale or lease•of the Home on any basis listed in subdivision (a�)�or (b)
of Section 12955 oP tfie Government'Code, as those bases are defined im Section 12926, 12926:t,
subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and Section 12955'.2 of
the Govemment 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 Gobemment Code. With respect to familial status, nottiing'in
paragraph A of this section'shall 6e construed to affect Sections 51.2, �13, 51.4, 51.10, 51_1 1
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 ofthe
Government Code shall apply to paragraph A of this section. The foregoing covenant shall run
with the land.
27. RIGHTS OF BENEFICIAR[ES UNDGR DGEDS OF TRUSTS
This Agreement shall:not diminish or affect the rights of the Housing Authority under the
Housing Aiatfiority 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 U�ban
Development ("HUD") or the'Veterans Administration ("VA") under'the First,Lender Deed of
Trusf 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
1 �446
acquired by HUD or VA or anothe� party upon'foreclosure of a deed of trust insured by HUD or
guaranteed by VA.
28. HUD FORBEARANCE RGLIEF
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
[P any one or more of the provisions contained in this Agreement shall for any reasonbe
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 Galifornia.
The venue for any legal action peRaining to this Agreement shall be San Diego County,
California. Owner hereby waives any right to remove any such action from San Diego County
as is otherwise permitted by Califomia��Code of Civil Procedure section 394.
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 [o enforce the provisions of the Agreement. The Housing Authority shal] 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. NOT[CES
All notices required herein shall be sent by certified mail, return receipt requested,
express delivery service with a delivery receipt, or persona] 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:
22
1552\03\565891.6
I3447
To the Owner:
At the address of the Home..
To the F[ousing Authority:
Poway Housing Authority
13325 CivicCenter Drive
Poway, CA 92064
Attn: Executive Director
To the First�Lender:
First Nations Flome Finance
7330 Gngineer Road, Suite A
San Diego, CA 92111
The paRies may subsequently change addresses by providing written notice of the change in
address ro 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 thaYits sales price and mortgage payment remain affordable
to Moderate [ncome Households.
34. EXHIBITS
Any exhibits referred to in this Agreement are incorporated in thisAgreement by such
reference.
35. MONITORING AND INSPECTION BY HOUSING AUTHORITY
A. The Housing Authority (or its designee) mayenterthe 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 foraperiod of not lessthan five (5)years, and shal] make suchrecords available
to the Housing Authority oc,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.
23
I Si2\03\565891.6
1 �448
36. COVENANTS RiJNNING WITH THE LAND
A. Owner hereby subjects the Home to the covenants and restrictions set farth 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 interesYin 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
held to have been executed, delivered and accepted subject to this Agreement;regardless of
whether the other party orparties 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 constiued as
covenants running with the land pursuant to Califomia Civil Code Section 1468 and not as
conditions which might result in forfeiture of title by Owner; (ii) the burden of the covenarits and
restrictions set foRh in this Agreement touch and concern the Home in that the�Owner's legal.
interest in the Home may be ren8e�ed less valuable [hereby; and (iii) the 6enefit of the codenants
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 wvenants and resVictions shall be in force and
effect, withoutregard to whether the Housing Authority is an owner of.any land or interest
there'in to whic& such covenants and restrictions relate.
37. ENFORCEMENT
Notwithstanding any:other provision of the law, all covenants and restrictions contained
herein whi'ch implement Heal�th and Safety Code 333343 and/or 33413(c),(3), or"successor
provisions, shall run with the land and shall be enforceable by the Housing Authority and the
City of Poway and any of the parties listed in Health and Safety Code Section 333343(6)(Z.), so
long as such`provision or successor provision remains in effect.
38. DA1'A[3ASG
Owner hereby acknowledges and agrees that Health and Safety Code Section 33418(c)
requires that [he Home be listed in a database that shall be made available to the public on the
internet and which will indude the street address, assessor's parcel number, and other
information about the home.
24
1552\03\565891.6
I �449
39. OWNER'S ACKNOWLEDGEMGNT OF RESALE:RESTRICTION
Owner hereby acknowledges and agrees that:
A. Owner hereby subjects the Home to certain restrictions, and limits the price Por
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 Agreeinent, restricts the full
benefits of owning the Home. OwneYmay not enjoy the same economic or other benefits from
owning the Home that Owner would enjoy if this Agreement did not exist.
B. Absent the provisions of this Agreement, and the Housing Authority L'oan, the
Home could not be made available to Eligible Buyers at an affordable price, including Owner.
C. Owner understands all of Ihe provisions of this Agreement. [n ;ecognition 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 reinain in full force
and effect as to the Home following any Transfer of the Home�tliroughout the term ofthis
Agreement.
D. OWNER UNDERST.ANDS THAT THE DETERMINAI'ION 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 INCOMG ANp OTHER,PACTORS THAT
CANNOT BE ACCURATGLY°PREDICTED AND THAT THE;SALES PRICE PERMITTED
I-IEREUNDER MAY NOT INGREASE OR DECREASE IN THE SAME MANNER AS
OTHER SIMILAR RGAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS
AGREEMENT. OWNER FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN
SET"CING THE SALES PRICE OF TI-IE HOME 7'HC PRIMARY OBJECTIVE OF TFIL
I-IOUSING AU'CHORITY AND THIS AGREEMENT IS TO PRQVIDG HOUSING "I'O
ELIGIBLE BUY�RS AT AFFORDABLE HOUSING COST. THE MAXIMUM
RESTRICTED RESALE PRICE'WILL ALMOST CERTAINI;Y BE LGSS THAN OTHER
SIMILAR PROPERTIES THAT HAVE NO RESTRICTIONS.
J'r �� [Initialed by Owner(s)]
25
1552\03\565891.6
IN WITNESS WHEREOF, the paRies have executed this Agreement on or as of the date
first written above. I, 3 45 0
POWAY HOUSING AUTHORITY:
By:
Penny Riley, Cxecu ive irec •
OWNER(s):
By: °' " ° By, o _
Jaso Tn agulinao T ssa Ta in
STA7'E OF CALIFORNIA )
)
COUNTY OF SAN DIEGO )
On�IL z7�20/.� , before me,�fIYL UI�{�WN Notary Public,
personally appeared ,/A�ONT(�GtL/n/s��� ES.SATA�U /NfID> 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#hat he/she/they executed the same in his/her/their
authorized capacity(ies); and that by ISis/hedtheir signature(s) on the instrument the person(s), or
the entity upon behalf of which theperson(s) acted, ezecuted the instrument.
I certify UNDER PENALTY O� PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
� PNYIII NINN � �_�,,�%/��
Commleslon I 1958215
Nohry PuDlk-CaBromla Notar u �c
San Olepo Caunry
Comm.E lroe Nov 9,2015
26
1552103\S6i891.6
STATE OF CALIFORNIA � 13 d 51
�
COUNTY OF SAN DIEGO )
On fS � o1Q/ r�vl 3 , before me, CQ./ts ( S • ��� , Notary Public,
personally appeared GdAH Qi �LvV , pro ed to me on the basis
of satisfactory evidence to be t e person( whose name(� is/a�e su6scribed to the within
instrument and acknowledged to me that k�/she/tkSy executed the same in�tis/hedtlrt�'rr
authorized capacity(iss), and that by lris/her/tt�ir signature(�) on the instrument the person(�, or
the entity upon behalf of which the person(�j acted, executed the instrument.
1 certify UNDER PENALTY'OF'PERJURY under the laws of the State of California thaf the
foregoing paragraph is t�ue and correct.
WITNESS my hand and official seal.
CAROL S. LEGG
Commission # 1934186
_ -s Natary PuDlic-Califomia D
San Diego Couniy �� � Q�
My comm.exv�res nPrze,zoi s! Notary Public
STATE OF CALIFORNIA )
)
COUNTY OF SAN D1GG0 )
On , before me, , Notary Public,
personally appeared , proved to me on`the basis
of satisfactory evidence to be ttie person(s) whose name(s) is/aresubscribed to fhe within
instrument and acknowledged to.me that he/she/they executed the same in.his/hedtheir
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 oFthe State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
I S52V03\565891.i
EXHIBIT A 1 �4 5 2
�
Legal Description
LOT 24 OF CI'PY OF POWAY TRACT NO. OG-06 THE MEADOWS, IN Tf� CiTY OF POWAY,
COUNTY 0P SAN DIEGO, STATE OF CALIFORNfA, .ACCORDING TO MAI? TH&REOF NO.
157A3,FIL�D IN THE OFFICE OF THE COUNTY RECORDER Or'SAN DIEGO CQUNTY M.4RCH
5, 2009.
i
A-1
I 552103\i65891.5
EXHIBIT`B
1 �4' S3
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, 1 [insert name or names of OwnerJ hereby
certify to the Poway Housing Authority under penalty oY perjury that I/we occupy the home
located at �insert;addressJ (the "Home") as
my/our primary and sole place of residence and that 1/we have occupied the Home for
(__) [insert numberJ;months of the calendar year �insert
previous calendar year]. Attached to this letter is a copy of �insert utility bill or
driver's IicenseJ showing my place of residence.
This Owner Occupancy Certification is signed on _, 20_, under penalty of
perjury.
f3y:
Owner �type name]
sy:
Owner �type nameJ
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\5658915
EXHIB[T C
1 �454
Form of Owner's Notice of Intent to Transfer
To: The Poway'Housing Authority ("Housing Authority")
From: (name of owner(s)J ("Owner(s)")
Address of Home: (°Home")
Date:
Please be notified pursuant to SBction 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. AfPordable Housing Cost paid by Owner when Home was purchased:
4. Date Owner infends to vacate Home:
5. Date Home will be placed on market:
6. Name and phonenumber 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:
1. Copy of HUD-1 Settlement S[atement from Owner's purchase of the property
2. If Owner has made Eligible Capital Improvements to the F►ome that Owner
wishes to include in the Housing Authority's calculation of Indexed Price, check box below
G1
1552\03\565891.5
T �45�
� Yes, I have made Eligi6le Capital Improvements pursuant to Section 1 1 o1'the Resale
Agreement. They are
(describe improvementsJ
and were completed on [insert date�.
[ 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 a real
estate broker or financial institution I agree to prepare the Home-for sale by:
1. Obtaining a pest contro] 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 thiRy
(30) days of this no[ice;
4. If iequested 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 Ihrough by the 1-lousing Authority prior to close of escrow or
the transfer;
7. Contact Housing Authority to obtain, if available, a list of potentia] SHOP home
buyers.
G2
1552\03\5658915
This Owner's Notice of.Intent to Transfer.is certified by'Owner to be true and correct and
is signed on �inscrt date� under penalty of perjury. � � A c c
�iJV
By:
oWneT
By:
Owner
C-3
I 552\03\565891.5
�XHIBIT'D 1�4��
Form of Owner Acknowledgement of Housing Autho�ity Response Notice
Name:
Add�ess 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:
�-�
1552\03\565891.5
� EXHIBIT E
1 �458
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:
7'he 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"Cwo Tfiousand 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.
G-I
. 1552\03\56589L5
EXHIBIT F
Form of Owner Request for Housing Authority Subordination 1 �4 5 9
�
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 oPthe
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 ofexiting �irst LenderLoanc $
3. Interest Rate oPExisfing Fi�st 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 lathe 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 dateJ.
By:
' Owner
By:
Owner
F-1
1552V03\565891.5