HABITAT FOR HUMANITY OF ORANGE COUNTY (4)

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any Affordable Unit, Developer shall provide the City with at least thirty (30) days' written notice of the determined amount, and the City shall have ten (10) days to approve or disapprove of the proposed Affordable Sales Price. The Affordable Sales Price for Affordable Units shall be adjusted quarterly until all Affordable Units are sold and, thereafter, determined in connection with each re -sale, as applicable. 3.4 Notice to City. Prior to entering into an agreement for the transfer of an Affordable Unit, Developer shall provide at least thirty (30) days written notice to the City, along with a proposed written agreement setting forth the terms of the sale, including the proposed Affordable Sales Price. For the initial sale of an Affordable Unit from Developer to a Homebuyer, Developer shall also provide a proposed equity share promissory note and a deed of trust. 3.5 Homebuyer Documents. The sale of each Affordable Unit is subject to satisfaction of the following conditions: 3.5.1 City and Homebuyer shall enter into the Homebuyer Loan Agreement, which memorializes a loan from the City to Homebuyer in the amount equal to the difference between (a) the Affordable Sales Price for the Affordable Unit and (b) the fair market value of the Affordable Unit without any restrictions on affordability or resale price as set forth herein, which amount shall be the amount of the City Promissory Note, The Homebuyer Loan Agreement shall also set forth the terms of the Affordable Housing Resale Restrictions, the City Deed of Trust, and the Notice of Affordability Restrictions (collectively, the "City Loan Documents"). The Parties agree and understand that the Homebuyer Loan Agreement does not require the payment of funds from City to Homebuyer, but rather evidences a promise to pay the amount of the City Promissory Note in the event of a breach of the obligations, covenants, and restrictions set forth in the City Loan Documents. 3.5.2 Each Homebuyer shall execute the Affordable Housing Resale Restrictions, the City Deed of Trust, and the Notice of Affordability Restrictions, each of which shall be recorded against the Affordable Unit. 3.5.3 Each Homebuyer of an Affordable Unit shall execute the City Promissory Note, which shall be secured by the City Deed of Trust. 3.6 Equity Sharing Agreement. The Affordable Housing Resale Restrictions for each initial sale from Developer to a Homebuyer shall include an equity sharing agreement in accordance with California Government Code § 65915(c)(2)(A). The City and Developer agree that Developer shall recapture the equity share pursuant to Government Code § 65915(c)(2)(C). the amount of the equity share shall be determined in accordance with this Section 3.6, and shall be evidenced by a promissory note secured by a deed of trust in favor of Developer. 3.6.1 Except in the event of a conflict with requirements of another public funding source, the following provisions of the equity sharing agreement shall be enforced when the initial Homebuyer sells an Affordable Unit: (i) The Homebuyer selling the Affordable Unit shall retain the value of any improvements and the down payment that were paid for by the seller, and the seller's proportionate share of appreciation. 11 5 53 9 4. 00101 \42 40 5 923.1