HomeMy WebLinkAboutHABITAT FOR HUMANITY OF ORANGE COUNTY (5) A-2024-097
INSURANCE NOT ON FILE
WORK MAY NOT PROCEED
CITY CLERK
DATE: AUG 9 g 79Z4
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CONDITIONAL GRANT AGREEMENT
by and between
CITY OF SANTA ANA,
a California charter city,
and
HABITAT FOR HUMANITY OF ORANGE COUNTY,
a California nonprofit religious corporation.
1921 W. Washington Street (APN 405-101-37)
Dated: July 16, 2024
5 5 3 9 4.00101\4241413 4.1
CONDITIONAL GRANT AGREEMENT
INCLUSIONARY HOUSING PROGRAM
THIS CONDITIONAL GRANT AGREEMENT("Agreement")dated,for identification
purposes only, as of July 16,2024,is made and entered into by and between the City of Santa Ana,
a charter city and municipal corporation ("City"), and Habitat for Humanity of Orange County, a
nonprofit religious organization("Developer") with reference to the following:
RECITALS:
A. The City's Affordable Housing Opportunity and Creation Ordinance("Ordinance")
was originally adopted by the City Council on November 28, 2011 (Ordinance No. NS-2825), and
is codified in Article XVIII.I of the Santa Ana Municipal Code("SAMC"), as amended from time
to time. The Ordinance established standards and procedures to encourage the development of
housing that is affordable to a range of households with varying income levels. Pursuant to SAMC
section 41-1904(c),developers may pay an in-lieu fee in certain instances to satisfy the inclusionary
requirements. These funds are deposited into the Inclusionary Housing Fund, as defined by SAMC
section 41-1901, and are to be used to increase and improve the supply of affordable housing per
SAMC section 41-1909.
B. Developer is the owner of that certain real property located at 1921 W. Washington
Avenue, Santa Ana, California 92701, with Assessor Parcel Number 405-101-37, which is more
particularly described in the legal description attached hereto as Exhibit A(the"Property").
C. The Property previously contained abandoned structures that were uninhabitable.
Developer has demolished the structures and now desires to improve the Property with three duplex
buildings that will provide six new affordable homeownership opportunities for low-income
families who earn no more than eighty percent of the Orange County Area Median Income (the
"Project").
D. Developer responded to a request for proposals from the City regarding the
Inclusionary Housing Fund, and the Project was selected for an award of funds. Consistent with the
Pre-Conunitment Letter from the City dated November 16, 2022, City desires to provide financial
assistance to Developer for the development and construction of the Project by providing a grant to
Developer in an amount not to exceed Two Million Two Hundred Thousand Dollars ($2,200,000)
on terms and conditions set forth in this Agreement("Inclusionary Grant").The Inclusionary Grant
is funded through the City's Inclusionary Housing Fund for the purpose of providing affordable
housing.
E. The amount of the Inclusionary Grant was determined based upon the City's review
of the Developer's proposal, the development Proforma and projected cash flows for the Project
submitted by the Developer to the City ("Proforma"). The City Project Manager has authority to
approve revisions to the Proforma and projected cash flows for the Project, provided that the
Inclusionary Grant is not materially increased or extended.
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F. Developer desires to accept the Inclusionary Grant on the terms and conditions set
forth in this Agreement. Among other things, this Agreement requires a Regulatory Agreement
Imposing Affordable Housing Covenants and Restrictions (Density Bonus) ("Regulatory
Agreement") must be recorded against the Property and other protections to ensure the affordable
housing requirements of this Agreement.
G. The Project is in the best interest of the City and the health, safety and welfare of the
residents of the City,and in accordance with the public purposes and provisions of applicable federal,
state and local laws and requirements.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained, City and Developer agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. All capitalized terms used herein, including, without limitation, in
the Recitals above and in all other Project Documents, unless otherwise expressly defined, are
defined where first used in this Agreement and/or as set forth in this Article 1.
(a) "Building Permit" means the building permit(s) issued by City and
required for the construction.
(b) "Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday on which Santa Ma City Hall is open to the public to conduct City affairs.
(c) "Calendar Year" means each consecutive twelve(12) month period from
January 1 to December 31.
(d) "Certificate of Completion" has the meaning set forth in Article 13.
(e) "City" means the City of Santa Ana, California, a charter city and
municipal corporation.
(1) "City Deed of Trust" shall mean the deed of trust in favor of the City
executed by homebuyers in accordance with the Regulatory Agreement.
(g) "City Project Manager" shall mean the City's Housing Division Manager
and/or his/her designee.
(h) "County" means the County of Orange, California.
(i) "Developer" means Habitat for Humanity of Orange County, a nonprofit
organization.
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(j) "Governmental Authority" means any governmental or quasi-
governmental agency, board, bureau, commission, department, court, administrative tribunal or
other instrumentality or authority, and any public utility.
(lc) "Hazardous Materials" means flammable materials, explosives,
radioactive materials, hazardous wastes, toxic substances and similar substances and materials,
including all substances and materials defined as hazardous or toxic wastes, substances or
materials under any applicable law, including without limitation the Resource Conservation and
Recovery Act, 42 U.S.C. §§ 6901 et seq.,and the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq., as amended. Hazardous
Material shall not include(i) construction products, household cleaners and office materials of the
type and quantity ordinarily used in the normal construction, operation, ownership, occupancy
and maintenance of properties similar to the Project or(ii) small amounts of household mold to
the extent promptly remediated upon discovery.
(1) "HUD" means the United States(U.S.) Department of Housing and Urban
Development, and any successors or assigns thereof
(m) "Improvements" means all improvements and fixtures now and hereafter
comprising any portion of the Property, including, without limitation, landscaping, trees and plant
materials; and offsite improvements, as required through the City of Santa Ana Planning and
Building Agency entitlement process.
(n) "Inclusionary Grant" means a grant in the original principal amount of
up to Two Million Two Hundred Thousand Dollars ($2,200,000)to be made to Developer by the
City to be funded exclusively from the Inclusionary Housing Fund.
(o) "Indemnitees" has the meaning set forth in Section 11.5.
(p) "Laws" means all statutes, laws, ordinances, regulations, orders, writs,
judgments, injunctions, decrees or awards of the United States or any state, county, municipality
or other Governmental Authority.
(q) "Lien" means any lien,mortgage, pledge, security interest, charge or
encumbrance of any kind, including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any lien or security interest.
(r) "Project" means the construction of the Improvements generally described
in the attached Exhibit B upon the Property by Developer pursuant to this Agreement.
(s) "Project Budget" means the line-item budget for the Project attached
hereto as Exhibit C, as modified from time to time in accordance with this Agreement.
(t) "Property" means the property located at 1921 W. Washington Avenue,
Santa Ana, California 92701, with Assessor Parcel Number 405-101-37, which is more
particularly described in the legal description attached hereto as Exhibit A.
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(u) "Regulatory Agreement" means the recorded affordability covenants
required by Section 4.1 and in a form substantially similar to those attached hereto as Exhibit D.
(v) "Scope of Work" means the detailed statement of the work, with a
Schedule of Performance, to be performed by Developer on and to the Property for the Project
pursuant to this Agreement which document is attached hereto as Exhibit B.
(w) "Senior Lender" means a commercial or private financial institution
providing the Senior Loan or any other holder of the Senior Loan Note.
(x) "Senior Loan" means a loan from a Senior Lender for payment of a
portion of the construction costs and is secured by a Senior Loan Deed of Trust, and shall include
any subsequent loan that permanently refinances the initial Senior Loan.
(y) "Senior Loan Deed of Trust" means a deed(s) of trust securing the Senior
Loan by encumbering the Property and having priority over the City Deed of Trust to be recorded
pursuant to the Regulatory Agreement.
(z) "Senior Loan Documents" means, collectively, the loan agreement
governing the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any other
agreement, document or instrument that the Senior Lender requires in connection with the Senior
Loan.
1.2 Singular and Plural Terms.Any defined term used in the plural in this Agreement
shall refer to all members of the relevant class and any defined term used in the singular shall refer
to any number of the members of the relevant class.
1.3 References and Other Terms. Any reference to this Agreement shall include such
document both as originally executed and as it may from time to time be modified. References
herein to Articles, Sections and Exhibits shall be construed as references to this Agreement unless a
different document is named. References to subparagraphs shall be construed as references to the
same Section in which the reference appears. The term "document" is used in its broadest sense and
encompasses agreements, certificates, opinions, consents, instruments and other written material of
every kind. The terms "including" and "include"mean "including(include) without limitation."
1.4 Exhibits Incorporated. All exhibits to this Agreement, as now existing and as the
same may from time to time be modified, are incorporated herein by this reference. The exhibits
attached hereto and incorporated herein include:
Exhibit A— Legal Description
Exhibit B —Project Description, Scope of Work, and Schedule of Performance
Exhibit C—Project Budget
Exhibit D—Regulatory Agreement
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2. SCOPE OF WORK/PROJECT BUDGET
The Project Description and Scope of Work is generally described in Exhibit B, and shall
comprise of the development, construction, and operation of the Property as providing the six(6)
Affordable Housing Units. Any material change to the Scope of Work requested by the Developer
shall be subject to the prior written approval of the City Project Manager. The Scope of Work sets
forth the construction work that shall be performed on the Property for the Project and timeframes
for approvals of such work with a Schedule of Performance.
A line-item budget for the Project, including a summary of statement of sources and uses of
funds, is incorporated into Exhibit C ("Project Budget").
3. CONDITIONAL INCLUSIONARY GRANT
3.1 Developer is not subject to a repayment obligation for the Inclusionary Grant,
except for an Event of Default, as set forth in Section 16. This Agreement shall automatically
terminate when all Affordable Housing Units have been initially transferred to Low Income
Households in accordance with the terms of this Agreement and the Regulatory Agreement. In the
event the Project is not constructed in compliance with the Scope of Work within two (2)years
from the date of the first disbursement of the Inclusionary Grant fiends, the City may terminate
this Agreement and, pursuant to the default remedy provisions of this Agreement set forth in
Section 16, the City shall be entitled to repayment of Inclusionary Grant monies not expended on
the Project or any amounts expended in violation of this Agreement.
3.2 Amount and Purpose. Following complete execution of this Agreement, subject to
the terms and conditions of this Agreement, including the conditions set forth in Section 4, City
agrees to provide the Inclusionary Grant to Developer from the Inclusionary Housing Fund in the
principal amount of up to Two Million Two Hundred Thousand Dollars ($2,200,000), as follows:
an initial disbursement of One Million Nine Hundred Eighty Thousand Dollars ($1,980,000) (the
"Initial Disbursement"), and a final disbursement of Two Hundred Twenty Thousand Dollars
($220,000) (the"Final Disbursement")upon completion of construction of the Project. Developer
represents and warrants that it shall only use the Inclusionary Grant proceeds in accordance with
this Agreement for expenses that are actually and reasonably incurred by Developer for the
Project and approved by City(such approval not to be unreasonably withheld or delayed), and for
no other purpose.
4. CONDITIONS TO DISBURSEMENT OF GRANT PROCEEDS
4.1 Conditions Precedent to Initial Disbursement. City's obligation to make the
Initial Disbursement is subject to the satisfaction of the following conditions precedent:
(a) City Council. Review, approval and execution of this Agreement, the
Regulatory Agreement, and the entitlements for the Project.
(b) Code Compliance. Compliance with California Health and Safety Code and
applicable regulations set forth in Section 34176, if applicable.
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(c) Recordation of Regulatory Agreement. Developer has signed and notarized
the Regulatory Agreement and has recorded it against the Property in the Official Records for
Orange County to impose the affordable housing covenants set forth herein.
(d) Insurance. City shall have received evidence satisfactory to the City
Attorney that all of the policies of insurance required by Section 15 of this Agreement are in full
force and effect.
(e) Representations and Warranties. The representations and warranties of
Developer contained in this Agreement shall be correct in all material respects as of the date of the
Initial Disbursement as though made on and as of that date, and if requested by the City Project
Manager,City shall have received a certificate to that effect signed by Developer's Representative.
(f) No Default. No Event of Default by Developer shall have occurred, and no
event shall have occurred which, with the giving of notice or the passage of time or both, would
constitute an Event of Default by Developer under this Agreement, and if requested by the City
Project Manager, City shall have received a certificate to that effect signed by Developer's
Representative.
(g) Condition of Title. The City Project Manager reasonably believes that no
event has occurred that would give rise to a colorable claim against the Property (e.g., a
mechanic's lien) superior to the claim of City against the Property with respect to the subject
disbursement or the Regulatory Agreement, or if such claim is made, then City Project Manager
shall receive satisfactory evidence that such claim has been bonded over until its resolution.
(h) The City's analysis and approval of the available funding sources and
development and operating costs of the Project and the overall economic feasibility of the Project.
(i) The City's Inclusionary Housing Fund has sufficient monies available for
the Initial Disbursement.
(j) The Project has received all entitlements and discretionary actions to
commence construction, including approval as a"common interest development" as defined in
California Civil Code § 4100.
(lc) All grading permits shall have been issued or the City shall have issued a
letter stating that Building Permits are ready to issue, subject only to payment of fees and the
completion of grading of the Project site.
(1) Developer shall have secured all necessary financing and funding for the
construction and operation of the Project. Such financing and funding shall be sufficient to pay all
Project development costs, as set forth in the final budget consistent with the approved Proforma
(or as otherwise approved by the City), and must comply with the City's Affordable Housing
Funds Policies and Procedures.
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(m) Developer shall have provided construction security, as set forth in Section
8.7, in favor of the City, which may include a completion guarantee from Developer and/or a letter
of credit and/or performance and payment bonds from the general contractor for the Project (or
some combination of these), in an amount sufficient to ensure the Project will be completed and
placed in service within the time set forth in the Project schedule approved by the City.
(n) Developer shall have established a separate account for deposit of all
proceeds from the Inclusionary Grant(the"Project Account").
4.2 Final Disbursement Conditions Precedent. City's obligation to make the Final
Disbursement to Developer is subject to the satisfaction of the following additional conditions
precedent:
(a) Construction complete. The construction of the Project shall be complete.
(b) Certificate of Occupancy Issued. Any portion of the construction work
requiring inspection or certification by any Governmental Authority shall have been inspected and
certified as complete. Developer shall request that the City of Santa Ana Planning and Building
Agency issue a Certificate of Occupancy, or similar document as applicable, a copy of which shall
be delivered to the City Project Manager, in order for the Final Disbursement to occur.
(c) The conditions set forth in the Regulatory Agreement regarding homebuyers
shall have been satisfied, including but not limited to homebuyers must have executed Loan
Documents, as defined in the Regulatory Agreement, with the City and have closed escrow on an
Affordable Unit. The Loan Documents must be recorded on each Affordable Unit in second lien
position to a first deed of trust from a private institutional lender.
(d) Lien Free. At least one of the following shall have occurred:
(i) Thirty-five(35) days shall have passed since the recording of a valid
Notice of Completion as required by Section 8.5 for the construction, and no mechanic's or
materialman's lien shall be outstanding; or
(ii) Ninety-five(95)days shall have passed since actual completion of
the construction, and no mechanic's or materialman's lien shall be outstanding, or Developer shall
have bonded over any such lien to City's reasonable satisfaction.
4.3 Disbursement Procedures for Grant. The Inclusionary Grant proceeds shall be
disbursed to Developer to finance the development and construction of the Project (as evidenced
in the Project Budget, attached as Exhibit C). Upon satisfaction of the required conditions for the
Initial Disbursement or the Final Disbursement, as applicable, the City shall disburse the
Inclusionary Grant within twenty one(21) days. The Inclusionary Grant proceeds shall not be
used for any purpose other than for development and construction costs set forth in the Project
Budget, including Developer fee and soft costs related to the development of the Project. City
may make any disbursement by check or wire transfer payable to Developer.
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4.4 Termination for Failure of Condition. If(a) any of the conditions precedent set
forth herein are not timely satisfied within two (2) years of the date of this Agreement (subject to
applicable notice and cure rights), and(b) City is not in default under this Agreement, City may
terminate this Agreement without any further liability on its part by giving written notice of
termination to Developer. Upon the giving of such notice, the City shall not be obligated to pay to
Developer the Inclusionary Grant, any portion thereof, or any other amounts owing under the
Agreement, and Developer shall return to the City any Inclusionary Grant monies received but not
expended on the Project as of the date of the notice of termination.
4.5 Waiver of Conditions.The conditions set forth pertaining to City's obligation to
make disbursements of the Inclusionary Grant proceeds are for City's benefit only and the City
Project Manager may waive all or any part of such rights by written notice to Developer.
4.6 Waiver of Disbursement Conditions.Unless City otherwise agrees in writing,
the making by City of any disbursement with knowledge that any condition to such disbursement
is not fulfilled shall constitute a waiver of such condition only with respect to the particular
disbursement made, provided that such condition shall be a condition to all further disbursements
until fulfilled.
4.7 Other Terms and Conditions of Grant. , Without limiting any other remedies,
any disbursements of the Inclusionary Grant that have not already been expended for
development and construction of the Project shall become immediately due and payable by
Developer back to City, in the event of any of the following:
(a) Failure to complete the Project within two (2) years of the date of the first
disbursement, unless extended due to Force Majeure delays, as defined in Section 17.2;
(b) Violation of any of the use covenants and restrictions contained in this
Agreement after the expiration of any applicable notice and cure periods; or,
(c) An Event of Default by Developer,which is not timely cured after expiration
of any applicable notice and cure periods pursuant to the terms of this Agreement.
4.8 Costs and Fees. Developer shall pay all recording fees and charges on any
document recorded pursuant to this Agreement.
5. USE AND MAINTENANCE OF THE PROPERTY
5.1 Maintenance of the Property.During all phases of construction, solely at
Developer's expense,Developer agrees to maintain the Property in a clean and orderly condition and
in good condition and repair and keep the Property free from any accumulation of debris and waste
materials, as appropriate and consistent with construction industry standards and all permits and
regulations of any Governmental Authority. If at any time Developer fails to maintain,or cause to be
maintained, the Property as required by this section, and said condition is not corrected after the
expiration of a reasonable period of time not to exceed thirty(30)days from the date of written notice
from the City, unless such condition cannot reasonably be cured within thirty(30) days, in which case
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Developer shall have such additional time as reasonably necessary to complete such cure, the City
may perform the necessary maintenance and Developer shall pay all reasonable costs incurred for
such maintenance. Following the Certificate of Completion for construction of the homes, the
Property maintenance shall be governed by the provisions of the Regulatory Agreement.
5.2 Obligation to Refrain from Discrimination.Developer covenants and agrees for
itself, its successors, its assigns and every successor in interest to the Property or any part thereof,that
there shall be no discrimination against or segregation of any person or group of persons on account of
race, religious creed,color,national origin, ancestry,physical disability,mental disability,
reproductive health decisionmaking,medical condition,genetic information,marital status, sex,
gender, gender identity, gender expression, age, sexual orientation, or veteran or military status, in the
development and construction of the Property nor shall Developer itself or any person claiming under
or through him establish or permit any such practice or practices of discrimination or segregation with
reference to the development and construction of the Property. The foregoing covenants shall run with
the land and shall remain in effect until termination of the Agreement. Following the Certificate of
Completion for construction of the homes,the Developer's obligation to refrain from discrimination
shall be governed by the provisions of the Regulatory Agreement.
(a) In Employment. In construction on the Property, Developer shall not
discriminate against any employee or applicant because of race, religious creed, color, national
origin, ancestry, physical disability, mental disability, reproductive health decisionmaking,
medical condition, genetic information, marital status, sex, gender, gender identity, gender
expression, age, sexual orientation, or veteran or military status . Developer shall take affirmative
action to ensure that applicants are employed, and that employees are treated during employment,
without regard to their race,religious creed, color, national origin, ancestry, physical disability,
mental disability, reproductive health decisionmaking, medical condition, genetic information,
marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or veteran
or military status.
(b) In all Contracts.Developer shall cause the foregoing covenants to be inserted
in all contracts for any work covered by this Agreement so that such provisions will be binding upon
each contractor for die benefit of City,provided that the foregoing covenant shall not apply to contracts
or subcontracts for standard commercial supplies or raw materials.
6. RESERVED
7. GENERAL PROVISIONS AND WARRANTIES
As a material inducement to City to enter into this Agreement, Developer represents and
warrants as follows,which representations and warranties are made solely by Developer and not by
or on behalf of any partner of Developer:
7.1 Formation, Qualification and Compliance. Developer is a nonprofit
organization. Developer is in compliance with all laws applicable to its business and has obtained
all approvals, licenses, exemptions and other authorizations from, and has accomplished all
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filings, registrations and qualifications with, any Governmental Authority that are necessary for
the transaction of its business.
7.2 Execution and Performance of Inclusionary Grant Documents.
(a) Developer has all requisite authority to execute and perform its obligations
under this Agreement.
(b) The execution and delivery by Developer of, and the performance by
Developer of its obligations under, this Agreement that has been authorized by all necessary
action and does not and will not:
(i) require any consent or approval not heretofore obtained of any
person having any interest in Developer;
(ii) violate any provision of, or require any consent or approval not
heretofore obtained under, any articles of incorporation, by-laws or other governing document
applicable to Developer;
(iii) result in or require the creation of any lien, claim, charge or other
right of others of any kind (other than under this Agreement and under the contemplated Senior
Loan Documents)on or with respect to any property now or hereafter owned or leased by
Developer;
(iv) to the best of its knowledge, violate any provision of any law
presently in effect; or
(v) constitute a breach or default under, or permit the acceleration of
obligations owed under, any contract, loan agreement, lease or other agreement or document to
which Developer is a party or by which Developer or any of its property is bound.
(c) Developer is not in default, in any respect that is materially adverse to the
interests of City under this Agreement or that would have any material adverse effect on the
financial condition of Developer or the conduct of its business,under any law, contract, lease or
other agreement or document described in sub-paragraph(iii) or (v) of sub-paragraph(b) of this
Section 7.2.
(d) Except for the development and construction permitting contemplated to
be subsequently obtained under this Agreement, no approval, license, exemption or other
authorization from, or filing, registration or qualification with, any Governmental Authority is
required which has not been previously obtained in connection with the execution by Developer
of, and the performance by Developer of its obligations under, this Agreement.
7.3 Financial and Other Information. To the best of Developer's knowledge, all
financial information furnished to City by the Developer or any affiliate thereof with respect to
Developer in connection with the Inclusionary Grant(a) is complete and correct in all material
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respects as of the date of preparation thereof, (b) accurately presents the financial condition of
Developer, and(c) has been prepared in accordance with generally accepted accounting principles
consistently applied or in accordance with such other principles or methods as are reasonably
acceptable to City. To the best of Developer's knowledge, all other documents and information
furnished to City by the Developer or any affiliate thereof with respect to Developer, in
connection with the Inclusionary Grant, are correct and complete insofar as completeness is
necessary to give the City accurate knowledge of the subject matter. To the best of Developer's
knowledge Developer has no material liability or contingent liability not disclosed to City in
writing and there is no material lien, claim, charge or other right of others of any kinds (including
liens or retained security titles of conditional vendors) on any property of Developer not disclosed
in such financial statements or otherwise disclosed to City in writing.
7.4 No Material Adverse Change.There has been no material adverse change in the
condition, financial or otherwise, of Developer since the dates of the latest financial statements
furnished to City, except for Senior Loan Documents that have been disclosed to the City. Since
those dates,Developer has not entered into any material transaction not disclosed in such financial
statements or otherwise disclosed to City in writing.
7.5 Tax Liability. Developer has filed all required federal, state and local tax returns
and has paid all taxes (including interest and penalties, but subject to lawful extensions disclosed
to City in writing) other than taxes being promptly and actively contested in good faith and by
appropriate proceedings. Developer is maintaining adequate reserves for tax liabilities (including
contested liabilities) in accordance with generally accepted accounting principles or in accordance
with such other principles or methods as are reasonably acceptable to City.
7.6 Governmental Requirements. Except for the development and construction
permitting contemplated to be subsequently obtained under this Agreement, to best of its
knowledge,Developer is in compliance with all laws relating to the Property and all
Governmental Authority approvals, including zoning, land use, planning requirements, and
requirements arising from or relating to the adoption or amendment of, any applicable general
plan, subdivision and parcel map requirement; environmental requirements, including the
requirements of the California Environmental Quality Act and the National Environmental Policy
Act, and the preparation and approval of all required environmental impact statements and
reports; use, occupancy and building permit requirements; and public utilities requirements.
7.7 Rights of Others. Developer is in compliance with all covenants, conditions,
restrictions, easements, rights of way and other rights of third parties relating to the Property as
may be shown on title for the Property.
7.8 Litigation.There are no material actions or proceedings pending or, to the best of
the Developer's knowledge, threatened against or affecting Developer or any property of
Developer before any Governmental Authority, except as disclosed to City in writing prior to the
execution of this Agreement.
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7.9 Bankruptcy. To the best of Developer's knowledge, no attachments, execution
proceedings, assignments for the benefit of creditors, insolvency,bankruptcy, reorganization or
other proceedings are pending or threatened against Developer,nor are any of such proceedings
contemplated by Developer.
7.10 Information Accurate. To the best of Developer's knowledge, all information,
regardless of its form, conveyed by Developer to City,by whatever means, is accurate, and
correct in all material respects and is sufficiently complete to give City true and accurate
knowledge of its subject matter, and does not contain any material misrepresentation or omission.
7.11 Conflicts of Interest.No member, official or employee of the City shall have any
personal interest,direct or indirect, in this Agreement, nor shall any such member, official or
employee participate in any decision relating to this Agreement which affects his/her personal
interests or the interests of any corporation,partnership or association in which he/she has a direct or
indirect financial interest.The Developer warrants that it neither has paid nor given, nor will pay or
give, any third party any money or other consideration for obtaining this Agreement.
7.12 Nonliability of City Officials and Employees.No member, official or employee
of the City shall be personally liable to the Developer in the event of any default or breach by the
City or for any amount which may become due to Developer or on any obligations under the
terms of this Agreement.
7.13 No Assignment.Developer expressly acknowledges and agrees that the City has only
agreed to assist the Developer as a means by which to induce the construction and development of the
Project.Accordingly,Developer further expressly acknowledges and agrees that this Agreement is a
personal right of Developer that is neither negotiable, transferable,nor assignable except as set forth
herein. Developer may assign some or all of its rights under the Agreement only with the prior written
consent of the City Project Manager, except that no prior consent is necessary for an assignment by a
limited partner of Developer to an affiliate, for the inclusion of tax credit investors in the Agreement.
7.14 Applicable Law. This Agreement shall be interpreted, governed and enforced
under federal and California state law with venue in Orange County, California.
7.15 Third Parties.This Agreement is made for the sole benefit of Developer and the City
and their successors and assigns, and no other person or persons shall have any rights or remedies
under or by reason of this Agreement or any right to the exercise of any right or power of the City
hereunder or arising from any default by Developer, nor shall the City owe any duty whatsoever
to any claimant for labor performed or materials furnished in connection with the construction of
the Property.
7.16 City Approval of Senior Loans; Subordination. Developer shall obtain City's
written approval and consent for any Senior Loans. Developer shall provide the City at least
thirty(30) days' notice of any request for subordination of the City Deed of Trust. If the City does
not respond to a request for approval of a Senior Loan or subordination of the City Deed of Trust
within thirty(30) days, then the request shall be deemed disapproved. Developer acknowledges
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and agrees that the Regulatory Agreement shall have priority over, and shall not be subordinated
to, any Senior Loan.
7.17 Use of Project Account. The Project Account shall be used exclusively for the
deposit of proceeds from the Inclusionary Grant and to pay expenses for the Project in accordance
with the Project Budget. No other funds shall be deposited into the Project Account.
8. CONDITIONS FOR CONSTRUCTION
8.1 Permits and Approvals.Developer shall diligently obtain all permits, including
all Building Permits, licenses, approvals, exemptions and other authorizations of Governmental
Agencies required in connection with the construction and conversion of the Property. Developer
shall follow industry-standard, best management practices, as applicable, during construction.
8.2 Commencement and Completion of Construction. The construction of the
Project shall be considered complete for purposes of this Agreement only when(a) all work
described has been completed and fully paid for, and (b) all work requiring inspection or
certification by Governmental Authority has been completed and all requisite certificates,
approvals and other necessary authorizations (including required final certificates of occupancy)
have been obtained.
8.3 Entry and Inspection. At all times prior to completion of the construction,upon
reasonable prior written notice and subject to reasonable job site safety rules, City and its agents
shall have(a) the right of free access to the Property and all sites away from the Property where
materials for the construction are stored, (b) the right to inspect all labor performed and materials
furnished for the construction, and(c) the right to inspect and copy all documents pertaining to
the construction.
8.4 Construction Information. From time to time, as needed, during the course of the
construction, within ten(10) Business Days following City's written demand therefore, Developer
shall furnish requested reports of Project Costs,progress schedules and contractors' costs
breakdowns for the construction, itemized as to trade description and item, showing the name of
the contractor(s) and/or subcontractor(s), and including such indirect costs as real estate taxes,
legal and accounting fees, insurance, architects' and engineers' fees, loan fees, interest during
construction and contractors'overhead.
8.5 Protection Against Liens: Developer shall diligently file a valid Notice of
Completion upon completion of the construction, diligently file a notice of cessation in the event of
a cessation of labor on the construction for a period of thirty(30) days or more, and take all actions
reasonably required to prevent the assertion of claims of lien against the Property. In the event that
any claim of lien is asserted against the property or any stop notice or claim is asserted against the
City by any person furnishing labor or materials to the Property, Developer shall immediately give
written notice of the same to City and shall, promptly and in any event within ten(10) Business
Days after written demand therefor, (a)pay and discharge the same, (b) effect the release thereof
by delivering to City a surety bond complying with the requirement of applicable laws for such
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release, or(c)take such other action as City may require to release City from any obligation or
liability with respect to such stop notice or claim.
8.6 Prevailing Wages.
(a) Developer shall assume any and all responsibility and be solely responsible
for determining whether or not laborers employed relative to the construction or installation of the
project must be paid the prevailing per diem wage rate for their labor classification, as determined
by the State,pursuant to labor code sections 1720, et seq.
(b) Developer, on behalf of itself, its successors, and assigns, waives and
releases the City from any right of action that may be available to any of them pursuant to Labor
Code section 1781. Developer acknowledges the protections of Civil Code section 1542 relative
to the waiver and release contained in this section 8.6, which reads as follows:
A general release does not extend to claims that the creditor or releasing party does
not know or suspect to exist in his or her favor at the time of executing the release
and that, if known by him or her, would have materially affected his or her
settlement with the debtor or released party.
(c) By signing this Agreement, Developer knowingly and voluntarily waives
the provisions of section 1542 solely in connection with the waivers and releases of this section
8.6.
(d) Additionally, Developer shall indemnify,defend and hold harmless the city
against any claims pursuant to Labor Code section 1781 arising from this agreement or the
construction or installation of all or any portion of die project.
(e) Developer represents and warrants that the Project is within the exemption
of California Labor Code § 1720(c)(5)(A) ("the habitat provision")that exempts projects from
being considered a"public works"project if"the project is a self-help housing project in which
no fewer than 500 hours of construction work associated with the homes are to be performed by
the homebuyers."
8.7 Developer's Assurance of Construction Completion. Prior to the Initial
Disbursement and commencement of construction of the Improvements,Developer shall furnish to
City evidence that assures Developer that sufficient monies will be available to complete the
proposed construction(the"Construction Security"). The City Project Manager shall approve or
disapprove the Construction Security, which approval shall not be unreasonably withheld. The
amount of money available from the Construction Security shall be at least the total estimated
construction cost. Subject to approval from the City Project Manager, the Construction Security
may take one of the following forms:
(i) Performance bond and labor and materials bond in a principal sum
equal to the total estimated construction cost supplied by Contractor or subcontractors,provided
said bonds are issued jointly to Developer, City and any Senior Lenders as obligees.
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(ii) Irrevocable letter of credit issued to City from a financial institution
to be in effect until City acknowledges satisfactory Completion of Construction;
(iii) Cash deposited with the City(may be in the form of cashier's check
or money order or may be electronically deposited);
(iv) A completion guaranty, in favor of City from an Affiliate of
Developer, in a form reasonably acceptable to City, coupled with a repayment guaranty in favor
of the Senior construction Lender for its loan;
(v) Any combination of the above.
All bonds and letters of credit must be issued by a company qualified to do business in the
State of California and acceptable to City. All bonds and letters of credit shall insure faithful and
full observance and performance by Developer of all terms, conditions, covenants, and agreements
relating to the construction of improvements within the Property.
Developer shall provide or cause its Contractor to provide payment and/or performance
bonds in connection with the construction of the Project Improvements, and shall name the City as
an additional obligee on, with the right to enforce, any such bonds.
9. PROJECT COVENANTS
9.1 Local Sourcing Plan.Developer agrees to make a good faith effort to encourage
subcontractors and suppliers to hire and procure locally.Prior to issuance of any Building Permit,
Developer shall develop and submit to the City a local sourcing plan for the Project targeting, to
the extent feasible, the hiring of qualified workers, construction contractors, or the purchasing of
goods locally within the City of Santa Ma.
9.2 Lead-Based Paint.Developer shall comply with the requirements, as applicable
of the Lead-Based Paint Poisoning Prevention Act.
9.3 Property Standards. Developer shall cause the Property to meet all applicable
local, state and federal codes and ordinances, including zoning ordinances. Developer shall also
cause the Property to meet the current edition of the Model Energy Code published by the
Council of American Building Officials. No fewer than one (1) unit shall comply with
requirements for mobility features under California Building Code section 11B-233.3, and
communication features that comply with California Building Code section 11B-809.5.
9.4 Alternative Transportation and Energy Source, Resource Conservation,
and LEED Certification. In recognition of the City's desire to optimize the energy efficiency
of the Project, Developer agrees to consult with the Project design team, a CABEC certified
2016 Certified Energy Analyst, a LEED AP Homes (low-rise and mid-rise), LEED AP BD+C
(high rise), National Green Building Standard (NGBS) Green Verifier, or GreenPoint Rater
(one person may meet both of these latter qualifications) early in the Project design process to
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evaluate a building energy model analysis and identify and consider energy efficiency or
generation measures beyond those required by minimum construction standards.
9.5 Maintenance. At all times during the term of this Agreement,Developer shall
cause the Property and the Project to be maintained in a decent, safe and sanitary manner,
regardless of cause of the disrepair. The maintenance obligation shall be commensurate with the
work being done on the Property according to the Scope of Work,provided that at all times the
Property and Project shall be maintained in accordance with all permits, building codes, and any
other requirement imposed by a Governmental Authority.
9.6 RESERVED.
9.7 RESERVED.
9.8 Conflict of Interest. Developer shall comply with and be bound by the conflict of
interest provisions set forth in all applicable state regulations pertaining to conflict of interest.
9.9 Right to Work and Minimum Wage Laws.
(a) Pursuant to the United States of America Fair Labor Standard Act of 1938,
as amended, and State of California Labor Code, Section 1178.5, Developer shall pay no less than
the greater of the Federal or California Minimum Wage to all its employees that directly or
indirectly service the Property, in any manner whatsoever. Developer shall require and verify that
all its subcontractors or other persons servicing the Property on behalf of the Developer also pay
their employees no less than the greater of the Federal or California Minimum Wage.
(b) Developer shall comply and verify that its subcontractors comply with all
other Federal and State of California laws for minimum wage, overtime pay,record keeping, and
child labor standards pursuant to the servicing of the Property or terms and conditions of this
Lease.
10. ENVIRONMENTAL MATTERS
10.1 Representation and Warranty. Except as disclosed in writing to the City,
Developer represents that it has no knowledge: (a) of the presence on, under or about the
Property, now or in the past, of any Hazardous Materials, or of the transportation to or from the
Property of any Hazardous Materials; (b) that asbestos or polychlorinated biphenyls(PCBs) are
contained in or stored on the Property; or, (c) that there are any underground storage tanks located
in, on or under the Property.
10.2 Compliance with Environmental Laws.Developer shall: (a)comply with all
environmental laws and environmental permits applicable to the construction of the Property; (b)
immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance;
(c)keep the Property free and clear of any environmental claims or liens imposed pursuant to any
enviromnental law; and, (d) obtain and renew all environmental permits required for ownership or
use of the Property.
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10.3 Presence of Hazardous Materials.Developer shall not, and shall not permit
anyone else to, generate,use, treat, store,handle, release, or dispose of Hazardous Materials on
the Property, or transport or permit the transportation of Hazardous Materials to or from the
Property, except for de minimis quantities used at the Property in compliance with all applicable
environmental laws and required in connection with the construction of the homes and the routine
operation and maintenance of the Property.
10.4 Notice of Environmental Matters. Developer shall immediately advise City in
writing of any of the following: (a)any pending or threatened environmental claim against
Developer or the Property; or(b) any condition or occurrence that: (i) results in noncompliance with
any applicable environmental law; (ii)could reasonably be anticipated to cause the Property to be
subject to any restrictions on the ownership, occupancy, use or transferability of the Property under
any environmental Law; or, (iii) could reasonably be anticipated to form the basis of an
environmental claim against the Property or Developer.
10.5 Environmental Indemnification by the Developer. Developer agrees to defend,
indemnify and hold harmless the City and its respective officers, directors, employees and agents
(collectively the "Indemnitees") from and against any and all obligations (including removal and
remediation), losses, claims (including third party claims), suits,judgments, liabilities, penalties,
damages (including consequential and punitive damages), costs and expenses (including
consultants, and attorneys' fees) of whatever kind or nature whatsoever that may at any time be
incurred by, imposed on, or asserted against the Indemnitees directly or indirectly based on, or
arising or resulting from any Hazardous Materials on the Property, other than resulting from the
gross negligence or willful misconduct of any Indenmitee.
11. OTHER AFFIRMATIVE COVENANTS
The following provisions shall apply, except to the extent that City Project Manager
otherwise consents in writing:
11.1 Existence.The sole member of Developer's managing general partner shall
maintain its existence in good standing under the laws of the State of California.
11.2 Notice of Certain Matters. Developer shall give notice to City, within ten(10)
days of Developer's learning thereof, of each of the following:
(a) any filed litigation or claim affecting or relating to the Property and
involving an amount in excess of$5,000; and any litigation or claim that might subject Developer
or any general partner to liability in excess of$5,000, whether covered by insurance or not;
(b) any dispute between Developer and a Governmental Authority relating to
the Property,the adverse determination of which might materially affect the Property;
(c) any change in Developer's principal place of business;
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(d) any aspect of the Improvements that is not in substantial conformity with
the plans or code;
(e) any event which after the giving of all required notices and the expiration
of all applicable cure periods, would constitute an Event of Default;
(f) any material default by Developer or any other party under any Senior
Loan document, or the receipt by Developer of any notice of default under any Senior Loan
document;
(g) the creation or imposition of any mechanics' or materialmans' lien or other
lien against the Property which might materially affect the Property, which is not bonded over or
released; and/or
(h) any material adverse change in the financial condition of Developer.
11.3 Further Assurances. Developer shall execute and acknowledge(or cause to be
executed and acknowledged) and deliver to City all documents, and take all actions, reasonably
required by City from time to time to conffi,n the rights created or now or hereafter intended to be
created under this Agreement.
12. OTHER COVENANTS
The following provisions shall apply, except to the extent that the City Project Manager
otherwise consents in writing:
12.1 Default on Senior Loan.Developer shall not be in default on any Senior Loan
Documents(as approved by the City),provided however, that Developer shall have such period
as is provided in the Senior Loan Documents during which to effectuate a cure.
12.2 Sale or Lease of Property.Developer shall not sell, lease (other than to qualified
homeowners meeting the requirements set forth in this Agreement), sublease or otherwise transfer
all or any part of the Property or any interest therein without the prior written consent of the City
Project Manager, which consent may be withheld in the City Project Manager's sole discretion. In
connection with the foregoing consent requirements, Developer acknowledges that City relied
upon Developer's particular expertise in entering into this Agreement and continues to rely on
such expertise to ensure the satisfactory completion of the construction.
13. CERTIFICATE OF COMPLETION
Upon satisfactory completion of the construction and upon the request of Developer, or at its
own election, the City shall issue a Certificate of Completion. Such Certificate of Completion shall
be, and shall so state, conclusive determination of satisfactory completion of the construction, The
Certificate of Completion may be issued in the form of the Certificate of Occupancy or Final
Inspection Notice from the City.The City may deny the Certificate of Completion if the Developer
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has not provided the City with an acceptable Property Management Plan, Marketing and Resident
Selection Plan, or other condition specified in the Regulatory Agreement.
If City declines to furnish a Certificate of Completion after written request from Developer,the
City Project Manager shall,within thirty(30)days after receipt of the request,provide Developer with
a written statement of the reasons therefore. The statement shall contain a description of the action
Developer must take to obtain a Certificate of Completion. If the reason therefore is that the Developer
has not completed a minor portion of the construction, City may, in its sole and absolute discretion,
issue the Certificate of Completion upon the posting with City of a bond or other form of security
acceptable to the City Project Manager in the amount of the fair value of the uncompleted work.
A Certificate of Completion is not "notice of completion" referred to in Section 3093 of the
California Civil Code.
14. INDEMNIFICATION
14.1 Nonliability of City. Developer acknowledges and agrees that:
(a) The relationship between Developer and the City is and shall remain solely
that of Developer and grantor. City neither undertakes nor assumes any responsibility to review,
inspect, supervise, approve (other than for aesthetics) or inform Developer of any matter in
connection with the construction, including matters relating to: (i) the performance of the
construction work; (ii) architects, contractors, subcontractors and materialmen, or the
workmanship of or materials used by any of them; or, (iii) the progress of the construction; and
Developer shall rely entirely on its own judgment with respect to such matters and acknowledges
that any review, inspection, supervision, approval or information supplied to Developer by City in
connection with such matters is solely for the protection of City, and that neither Developer nor
any third party is entitled to rely on it;
(b) Notwithstanding any other provision of this Agreement: (i)the City is not a
partner,joint venture, alter-ego, manager, controlling person or other business associate or
participant of any kind of Developer, and City does not intend to ever assume any such status; (ii)
City's activities in connection with the Inclusionary Grant shall not be "outside the scope of the
activities of a lender of money" within the meaning of California Civil Code Section 3434, as
modified or recodified from time to time, and City does not intend to ever assume any
responsibility to any person for the quality or safety of the Property; and, (iii) City shall not be
deemed responsible for or a participant in any acts, omissions or decisions of Developer;
(c) City shall not be directly or indirectly liable or responsible for any loss or
injury of any kind to any person or property resulting from any construction on,or occupancy or use
of, the Property, whether arising from: (i) any defect in any building, grading, landscaping or other
onsite or offsite improvement; (ii) any act or omission of Developer or any of Developer's agents,
employees, independent contractors, licensees or invitees; or (iii) any accident on the Property or
any fire or other casualty or hazard thereon; and,
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(d) By accepting or approving anything required to be performed or given to
City under this Agreement, including any certificate, financial statement, survey, appraisal or
insurance policy, City shall not be deemed to have warranted or represented the sufficiency or legal
effect of the same, and no such acceptance or approval shall constitute a warranty or representation
by City to anyone.
14.2 Indemnity. Developer shall defend (by counsel reasonably satisfactory to City),
indemnify and save and hold harmless the Indenmitees from and against all claims, damages,
demands, actions, losses, liabilities, costs and expenses (including, without limitation, reasonable
attorneys' fees and court costs) arising from or relating to: (i) any act or omission of Developer in
connection with its obligations under this Agreement; (ii) the making of the Inclusionary Grant;
(iii) a claim, demand or cause of action that any person has or asserts against Developer arising
from or related to this Agreement; and (iv) any act or omission of Developer, any contractor,
subcontractor or material supplier, engineer, architect or other person with respect to the Property,
except to the extent any of the foregoing arise from gross negligence or willful misconduct of the
City. Developer's obligations under this Section shall survive the issuance of the Certificate of
Completion, and termination of this Agreement.
14.3 Reimbursement of City.With respect to the indemnification obligations under
this Article 14, Developer shall reimburse City immediately upon written demand for all costs
reasonably incurred by City(including the reasonable fees and expenses of attorneys,
accountants, appraisers and other consultants, whether the same are independent contractors or
employees of City) in connection with the enforcement of this Agreement and all related matters,
including all claims, demands, causes of action, liabilities, losses, commissions and other costs
against which City is indemnified under this Agreement. Such reimbursement obligations shall
bear interest from the date occurring twenty(20) days after City gives written demand to
Developer. Such reimbursement obligations shall survive the issuance of a Certificate of
Completion and termination of this Agreement.
15. INSURANCE, CASUALTY AND CONDEMNATION
15.1 Policies Required; Minimum Coverage. Developer shall procure and maintain
for the duration of the contract, and for five (5) years thereafter, insurance against claims for
injuries to persons or damage to property which may arise from or in connection with the
performance of the work hereunder by the Contractor, its agents, representatives, employees, and
sub-contractors, which meets the following minimum requirements:
(a) Commercial General Liability (CGL). Insurance Services Office (ISO)
Form CG 0001 covering CGL on an "occurrence"basis, including products and completed
operations,property damage,bodily injury and personal&advertising injury with limits no less
than$2,000,000 per occurrence and$2,000,000 in the aggregate.Umbrella and excess insurance
policies can be used to meet the required limits.
(b) Automobile Liability (AL). Insurance Services Office Form CA 0001
covering Code 1(any auto), with combined single limit no less than $2,000,000.
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(c) Workers' Compensation (WC). As required by the State of California,
with statutory limits, and Employers' Liability insurance with a limit of no less than$1,000,000
per accident, policy, employee for bodily injury or disease.
(d) Builder's Risk(Course of Construction) (BR). Utilizing an"All Risk"
(Special Perils) coverage form, with limits equal to the completed value of the project and no co-
insurance penalty provisions.
(e) Surety Bonds as described below.
(f) Professional Liability (PL). With limits no less than$1,000,000 per
occurrence or claim, and $2,000,000 policy aggregate. The Professional Liability coverage may be
obtained by Developer's architect or other design profession, provided that the coverage meets all
other requirements of this Agreement and City consents to the coverage in writing.
(g) Pollution Legal Liability and/or Errors and Omissions (PLL). With
limits no less than $50,000.
These insurance requirements shall not in any way act to reduce coverage that is broader or
includes higher limits than the minimums shown above. If Developer maintains broader coverage
and/or higher limits than the minimums shown above, City shall be entitled to the broader
coverage and/or the higher limits maintained by Developer. Insurance provided under this contract
shall not contain any restrictions or limitations which are inconsistent with City's rights under this
contract.
15.2 Self-Insured Retentions. Self-insured retentions must be declared to and approved
by City. At the option of City, Developer shall cause its insurer(s) to reduce or eliminate such self-
insured retentions as respects City; or Developer shall provide a financial guarantee satisfactory to
City guaranteeing payment of losses and related investigations, claim administration, and defense
expenses.
15.3 Other Insurance Provisions. The insurance policies are to contain, or be endorsed
to contain, the following provisions:
(a) City of Santa Ana, its City Council, officers, officials, employees, agents,
and volunteers are to be covered as additional insureds on Contractor's CGL and AL policies with
respect to liability arising out of work operations performed by or on behalf of Developer
including materials,parts, and equipment furnished in connection with such work or operations
and automobiles owned, leased, hired, or borrowed by or on behalf of Developer. Additional
insured status can be provided in the form of an endorsement to Developer's insurance.
(b) For any claims related to this project, Developer's insurance coverage shall
be primary insurance coverage as respects City of Santa Ana, its City Council, officers, officials,
employees, agents, and volunteers. Any insurance or self-insurance maintained by City of Santa
Ana, its City Council, officers, officials, employees, agents, or volunteers shall not contribute with
it.
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(c) A severability of interest provision must apply for all the additional
insureds, ensuring that Developer's insurance shall apply separately to each insured against whom
a claim is made or suit is brought, except with respect to the insurer's limits of liability.
(d) Developer hereby grants to City a waiver of subrogation which any insurer
of said Developer may acquire against City of Santa Ma, its City Council, officers, officials,
employees, agents and volunteers"by virtue of the payment of any loss under such insurance.
Developer agrees to obtain any endorsement(s)that may be necessary to affect this waiver of
subrogation, but this provision applies regardless of whether or not City has received a waiver of
subrogation endorsement from any insurer(s).
(e) Each insurance policy required by this clause shall provide that coverage
shall not be canceled, suspended, voided, reduced in scope or in limits,non-renewed by the carrier,
or materially changed except after thirty (30) days prior written notice has been given to City and
ten (10) days prior written notice of policy cancellation or non-renewal due to non-payment.
(f) Certificate Holder on each Evidence of Insurance certificate shall be: City
of Santa Ma,Attention: (Name of Department Staff Responsible for Agreement), 20 Civic Center
Plaza M-26 (Housing Division), Santa Ma, CA 92701. The name and location of project must be
indicated in the Description of Operations section of each certificate.
(g) If any of the insurance required under this Agreement is not commercially
available, not applicable to the Project, or imposes an undue cost burden on the Project, the City
may, in its sole and absolute discretion, agree to reduce the coverage or waive the coverage;
provided, however, that if such coverage does become available or applicable to the Project, and
securing the insurance would not impose an undue burden on the Project, the City may require the
insurance to be procured within thirty(30) days of written notice.
15.4 Builder's Risk(Course of Construction)Insurance. Developer may submit
evidence of Builder's Risk insurance in the form of Course of Construction coverage. Such
coverage shall name City of Santa Ma as a loss payee as its interest may appear. If the project
does not involve new or major reconstruction, at the option of City, an Installation Floater may be
acceptable. For such projects, a Property Installation Floater shall be obtained that provides for the
improvement, remodel, modification, alteration, conversion or adjustment to existing buildings,
structures, processes, machinery and equipment. The Property Installation Floater shall provide
property damage coverage for any building, structure, machinery or equipment damaged, impaired,
broken, or destroyed during the performance of the Work, including during transit, installation, and
testing at Project site.
15.5 Claims Made Policies. If any coverage required is written on a claims-made
coverage form:
(a) The retroactive date must be shown, and this date must be before the
execution date of the contract.
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(b) Insurance must be maintained and evidence of insurance must be provided
for at least five (5) years after completion of work.
(c) If coverage is cancelled or non-renewed, and not replaced with another
claims-made policy form with a retroactive date prior to the contract effective, or start of work
date, Developer must purchase extended reporting period coverage for a minimum of five(5) years
after completion of work.
(d) A copy of the claims reporting requirements must be submitted to City.
15.6 Acceptability of Insurers. Insurance is to be placed with insurers authorized to
conduct business in the state of California with a current A.M. Best rating of no less than A:VII,
unless otherwise acceptable to City.
15.7 Waiver of Subrogation. Developer hereby agrees to waive rights of subrogation
which any insurer of Developer may acquire from Developer by virtue of the payment of any loss.
Developer agrees to obtain any endorsement that maybe necessary to affect this waiver of
subrogation. The Workers' Compensation policy shall be endorsed with a waiver of subrogation in
favor of City for all work performed by Developer, its employees, agents, contractors and sub-
contractors.
15.8 Verification of Coverage. Developer shall famish City with original Certificates
of Insurance including all required amendatory endorsements (or copies of the applicable policy
language effecting coverage required by this clause). A statement on a Certificate(s)/Evidence of
Insurance will not be accepted in lieu of the actual endorsements required herein. Failure to obtain
the required documents prior to the work beginning shall not waive Developer's obligation to
provide them. City reserves the right to require complete, certified copies of all required insurance
policies, including endorsements, required by these specifications, at any time.
15.9 Sub-Contractors. Developer shall require and verify that all sub-contractors
maintain insurance meeting all requirements stated herein, and Developer shall ensure that City is
an additional insured on insurance required from sub-contractors. For CGL coverage, sub-
contractors shall provide coverage with a form at least as broad as CG 20 38 04 13.
15.10 Surety Bonds.Developer shall provide the following Surety Bonds:
(a) Bid Bond
(b) Performance Bond
(c) Payment Bond
(d) Maintenance Bond
The Payment Bond and the Performance Bond shall be in a sum equal to the contract price.
If the Performance Bond provides for a one-year warranty a separate Maintenance Bond is not
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necessary. If the warranty period specified in the contract is for longer than one year a
Maintenance Bond equal to 10% of the contract price is required. Bonds shall be duly executed by
a responsible corporate surety, authorized to issue such bonds in the State of California and
secured through an authorized agent with an office in California.
15.11 Claims and Proceedings.Developer shall give City immediate notice of any
material casualty to any portion of the Property, whether or not covered by insurance, and of the
initiation or threatened initiation of any proceeding for the condemnation or other taking for
public or quasi-public use of any portion of the Property(collectively, "Condemnation"), and shall
provide City with copies of all documents which pertain to any such casualty or Condemnation.
Developer shall take all action reasonably required by City in connection therewith to protect the
interests of Developer and/or City, and City shall be entitled (without regard to the adequacy of its
security) to participate in any action, claim, adjustment or proceeding and to be represented therein
by counsel of its choice. Developer shall not settle, adjust, or compromise any claim, action,
adjustment or proceeding without prior written approval, which approval shall not be unreasonably
withheld or delayed.
15.12 Delivery of Proceeds to City. In the event that, notwithstanding the "lender's loss
payable endorsement" requirement set forth above, the proceeds of any casualty insurance policy
described herein are paid to Developer, Developer shall, subject to any superior rights of the
Senior Lender, deliver such proceeds to the City immediately upon receipt.
15.13 Application of Casualty Insurance Proceeds. Subject to any superior rights of a
Senior Lender, any proceeds collected (the "Proceeds") under any casualty insurance policy
described in this Agreement shall be disbursed to Developer as provided below, but only upon
fulfillment of each of the following conditions (the "Restoration Conditions") within ninety (90)
days (unless extended by mutual agreement of Developer and City) following the occurrence of
the receipt of the Proceeds:
(a) Developer shall demonstrate to City's reasonable satisfaction that the
Proceeds (together with amounts deposited by Developer pursuant to subparagraph(b)) will be
adequate to repair the Improvements and to restore the fair market value of the Property,within a
time period reasonably determined by City, to at least the value it had immediately prior to
sustaining the damage. Such demonstration shall include delivery to City of: (i)plans and
specifications reasonably satisfactory to City; and, (ii) a construction contract in form and content,
and with a contractor, reasonably satisfactory to City;
(b) Developer shall execute such documents as City reasonably requires to
evidence and secure Developer's obligation to use all amounts disbursed for the diligent
restoration of the Property; and,
(c) No Event of Defauh shall remain uncured; provided, however, if an Event
of Default has occurred, then Developer shall assign to the City an amount of the Proceeds equal
to the disbursements received from the City for the Inclusionary Grant and such amount shall be
paid to City prior to any disbursement of the Proceeds to Developer.
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55394.00101\42414 E34.1
15.14 Method of Disbursement and Undisbursed Funds. Any Proceeds to be
disbursed to Developer shall be held by the Senior Lender if a Senior Loan is outstanding, and
disbursed in accordance with the Senior Loan Documents or, if no Senior Loan, then held by the
City and disbursed in accordance with the City's then customary disbursement procedures and
related provisions. Any amounts remaining undisbursed following completion of such restoration
shall be returned to Developer, and any other amounts remaining shall either be paid to Developer
or applied by the Senior Lender, or the City in the absence of a Senior Loan, as the case may be
against any obligations that are secured by a lien on the Property, as they elect in their sole and
absolute discretion.
15.15 Failure to Satisfy Conditions. In the event that Developer fails to fulfill the
Restoration Conditions within one hundred and eighty(180) days (unless extended pursuant to
Section 15.4) following the date Proceeds are received, the Proceeds shall be applied by City
against any obligations to City that are secured by a lien on the Property, and the selection of
which such obligations to apply the Proceeds against shall be made by City in its sole and
absolute discretion.
15.16 Restoration.Nothing in this Article 15 shall be construed to excuse Developer
from repairing and restoring all damage to the Property in accordance with other obligations of
this Agreement.
15.17 Condemnation; Treatment of Compensation.
(a) Subject to any superior rights of Senior Lender,Developer hereby assigns
to the City, as security for all obligations to City secured by a lien on the Property, all amounts
payable to Developer in connection with any Condemnation, and any proceeds of any related
settlement (collectively, "Compensation"). Subject to any superior rights of Senior Lender,
Developer shall deliver such remaining Compensation to City immediately upon receipt. If the
taking results in a loss of the Property to an extent that, in the reasonable opinion of City, renders
or is likely to render the Property not economically viable or if, in City's reasonable judgment
Developer's security is otherwise impaired, City may apply the Compensation received due to
judgment or settlement in connection with any condemnation or other taking to repay the
Inclusionary Grant. If so applied, any award in excess of the Inclusionary Grant repayment and
other sums due to City shall be paid to Developer or Developer's assignee. City shall have no
obligation to take any action in connection with any actual or threatened condemnation or other
proceeding.
(b) Notwithstanding the foregoing, as long as the value of City's liens are not
impaired, any condemnation proceeds may be used by the Developer for repair and/or restoration
of the Project.
16. DEFAULTS AND REMEDIES
16.1 Events of Default. Failure or delay by either party to perform any material term or
provision of this Agreement within the time periods provided herein for such performance
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constitutes a default under the Agreement. If any party defaults in performance of its material
obligations, covenants or agreements hereunder, the defaulting party shall be entitled to cure the
default in accordance with this section. The injured party shall give written notice of default to the
party in default, specifying die default complained of by the injured party. Delay in giving such
notice shall not constitute a waiver of any default nor shall it change the time of default. Unless a
specific time to cure is set forth below,the defaulting party must, within thirty(30) days following
service of said written notice, commence to cure,correct or remedy such failure or delay and shall
complete such cure, correction, or remedy with reasonable diligence,provided that any cure must
occur within ninety(90) days,or such shorter time specified below.Without limitation, the
occurrence of any of the following, whatever the reason therefore which is not cured, shall
constitute an Event of Default by Developer:
(a) Developer fails to perform any obligation for the payment of money under
this Agreement, and such failure is not cured within ten(10) Business Days after Developer's
receipt of written notice that such obligation was not performed when due;
(b) Any representation or warranty in this Agreement proves to have been
incorrect in any material respect when made;
(c) The Property is materially damaged or destroyed by fire or other casualty
unless Developer fulfills the Restoration Conditions set forth in the insurance provisions of this
Agreement within one hundred eighty(180) days and thereafter diligently restores the Property in
accordance with this Agreement;
(d) Work on the construction ceases for thirty(30) consecutive days for any
reason (other than Force Majeure delays, as defined in Section 17.2);
(e) Developer is enjoined or otherwise prohibited by any Governmental
Authority from constructing and/or occupying the Improvements and such injunction or
prohibition continues unstayed for sixty(60) days or more for any reason;
(f) Construction of the Project has not commenced within thirty(30) days of
the Initial Disbursement.
(g) Construction of the Project in accordance with the Scope of Work is not
complete within two (2) years from the Initial Disbursement.
(h) Developer has not conveyed the Affordable Units to Eligible Homebuyers in
accordance with the Regulatory Agreement within eighteen(18)months from completion of
construction, provided, however, that Developer shall have not less than ninety(90) days from
written notice by the City to cure said default, or such longer time as reasonably necessary so long
as Developer diligently pursues curing the default.
(i) Developer is dissolved, liquidated or terminated, or all or substantially all
of the assets of Developer are sold or otherwise transferred without the City Project Manager's
prior written consent; or,
26
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(j) Developer is the subject of an order for relief by a bankruptcy court, or is
unable or admits its inability to pay its debts as they mature,or makes an assignment for the benefit
of creditors; or Developer applies for or consents to the appointment of any receiver,trustee,
custodian,conservator, liquidator,rehabilitator or similar officer for it or any part of its property; or
any receiver, trustee,custodian,conservator, liquidator,rehabilitator or similar officer is appointed
without the application or consent of Developer and the appointment continues undischarged or
unstayed for ninety(90)days; or Developer institutes or consents to any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt,dissolution, custodianship,conservatorship,
liquidation, construction or similar proceeding relating to it or any part of its property; or any similar
proceeding is instituted without the consent of Developer and continues undismissed or unstayed for
ninety(90)days;or any judgment,writ,warrant of attachment or execution,or similar process is
issued or levied against any property of Developer and is not released, vacated or fully bonded within
ninety(90)days after its issue or levy.
16.2 Remedies Upon Default.Upon the occurrence of any Event of Default, City may,
at its option and in its absolute discretion, do any or all of the following:
(a) Terminate this Agreement by giving written notice to Developer and obtain
restitution for the Inclusionary Grant in the amount of unexpended portions of any amounts the
City has disbursed to Developer for the Inclusionary Grant, or any expenditures of the
Inclusionary Grant in violation of this Agreement. Upon written notice of termination and
demand from the City, Developer shall repay to the City those amounts expended in violation of
this Agreement or any unexpended portions of the Inclusionary Grant and assign to the City all
rights to pursue any contractor, subcontractor and/or materials supplier who has been paid by
Developer with Inclusionary Grant funds but has not provided work or materials paid for.
(b) In its own right or by a court-appointed receiver, take possession of the
Property, enter into contracts for and otherwise proceed with the completion of the construction
by expenditure of its own funds, and operate the Project in accordance with the Regulatory
Agreement.
(c) Exercise any of its rights under this Agreement,the Regulatory Agreement,and
any rights provided by law, including, without limitation,the right to seek specific performance and the
right to foreclose on any security and exercise any other rights with respect to any security,inclusive of
the Construction Security, all in such order and manner as City elects in its sole and absolute discretion.
(d) Suspend or terminate the award of City funds if Developer fails to comply
with any term of such award.
16.3 Cumulative Remedies: No Waiver. City's rights and remedies under this
Agreement are cumulative and in addition to all rights and remedies provided by law. The
exercise by City of any right or remedy shall not constitute a cure or waiver of any default, nor
invalidate any notice of default or any act done pursuant to any such notice, nor prejudice the City
in the exercise of any other right or remedy.No waiver of any default shall be implied from any
omission by City to take action on account of such default if such default persists or is repeated.
27
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No waiver of any default shall affect any default other than the default expressly waived, and any
such waiver shall be operative only for the time and to the extent stated.No waiver of any
provision of this Agreement or related agreement shall be construed as a waiver of any
subsequent breach of the same provision. City's consent to or-approval of any act by Developer
requiring further consent or approval shall not be deemed to waive or render unnecessary City's
consent to or approval of any subsequent act. The City's acceptance of the late performance of any
obligation shall not constitute a waiver by City of the right to require prompt performance of all
further obligations; City's acceptance of any performance following the sending or filing of any
notice of default shall not constitute a waiver of either party's right to proceed with the exercise of
its remedies for-any unfulfilled obligations; and City's acceptance of any partial performance shall
not constitute a waiver by City of any rights.
16.4 Limitation of Developer Remedies. In the event that the City is liable for
damages to Developer, such liability shall not exceed costs incurred by the Developer in the
performance of this Agreement and shall not extend to compensation for loss of future income,
profits or assets.
16.5 Liability. Developer shall have liability under this Agreement for any judgment,
decree or order for the payment of money obtained in any action to enforce the obligation of
Developer to repay the Inclusionary Grant,
16.6 Cure Rights. Notwithstanding anything to the contrary contained herein, City
hereby agrees that any cure of any default made or tendered under this Agreement by an entity on
behalf of Developer shall be deemed to be a cure by Developer and shall be accepted or rejected
on the same basis as if made or tendered by Developer.
17. MISCELLANEOUS
17.1 Obligations Unconditional and Independent.Notwithstanding the existence at
any time of any obligation or liability of City to Developer, or any other claim by developer against
City, in connection with the Inclusionary Grant or otherwise, Developer hereby waives any right it
might otherwise have: (a) to offset any such obligation,liability or claim against Developer's
obligations under this Agreement; or, (b) to claim that the existence of any such outstanding
obligation, liability or claim excuses the nonperformance by Developer of any of its obligations
under this Agreement.
17.2 Notices. All notices, demands, approvals and other communications provided for
in this Agreement shall be in writing and be delivered to the appropriate party by personal service
or U.S. mail at its address as follows:
28
55394.00101142414134.I
If to Developer: FIabitat for Humanity of Orange County
2200 S. Ritchey Street
Santa Ana, CA 92705
Attention: Executive Director or Chief Executive Officer
If to City: Community Development Agency of the City of Santa Ana
Housing Division Manager
20 Civic Center Plaza(M-26)
P.O. Box 1988
With a copy to: Santa Ana, California 92702
Office of the City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor(M-29)
Santa Ana, California 92702
Addresses for notice may be changed as required by written notice to all other parties. All
notices personally served shall be effective when actually received. All notices mailed shall be
effective three (3) days after deposit in the U.S. Mail, postage prepaid. The foregoing
notwithstanding, the non-receipt of any notice as the result of a change of address of which the
sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt
of such notice.
17.3 Survival of Representations and Warranties. All representations and warranties
in this Agreement shall survive the making of the Inclusionary Grant(s) described herein until the
City determination of Completion of Construction and have been or will be relied on by City
notwithstanding any investigation made by either party.
17.4 No Third Parties Benefited. This Agreement is made for the purpose of setting
forth rights and obligations of Developer and the City, and no other person shall have any rights
hereunder or by reason hereof.
17.5 Binding Effect; Assignment of Obligations. This Agreement shall bind, and shall
inure to the benefit of,Developer and City and their respective successors and assigns. Other than
as expressly provided to the contrary in this Agreement, Developer shall not assign any of its
rights or obligations under this Agreement without the prior written consent of City, which
consent may be withheld in City's sole and absolute discretion. Any such assignment without such
consent shall, at City's option, be void.
17.6 Prior Agreements; Amendments; Consents. This Agreement contains the entire
agreement between the City and Developer with respect to the Inclusionary Grant, and all prior
negotiations, understandings and agreements are superseded by this Agreement.No modification
of this Agreement (including waivers of rights and conditions) shall be effective unless in writing
and signed by the party against whom enforcement of such modification is sought, and then only
in the specific instance and for the specific purpose given.
29
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17.7 Governing Law.This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California. Developer irrevocably and
unconditionally submits to the jurisdiction of the Superior Court of the State of California for the
County of Orange or the United States District Court of the Central District of California, as City
may deem appropriate, in connection with any legal action or proceeding arising out of or relating
to this Agreement. Assuming proper service of process,Developer also waives any objection
regarding personal or in rem jurisdiction or venue.
17.8 Severability of Provisions.No provision of this Agreement that is held to be
unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of
this Agreement are hereby declared to be severable.
17.9 Headings.Article and section headings are included in this Agreement for
convenience of reference only and shall not be used in construing this Agreement.
17.10 Conflicts. In the event of any conflict between the provisions of this Agreement and
those of the Regulatory Agreement, this Agreement, unless otherwise expressly provided, shall
prevail; provided however that, with respect to any matter addressed in the other such documents,
the fact that one document provides for greater, lesser or different rights or obligations than the
others shall not be deemed a conflict unless the applicable provisions are inconsistent and could not
be simultaneously enforced or performed.
17.11 Time of the Essence. Time is of the essence under this Agreement and in the
performance of every term, covenant, and obligation contained herein.
17.12 Force Majeure. Neither Party shall be deemed to be in default where failure or
delay in performance of any of its obligations under this Agreement is caused by floods,
earthquakes, other Acts of God, fires, pandemics as declared by federal, state, or local emergency
resolution, wars, riots or similar hostilities, strikes and other labor difficulties beyond the Party's
control (including the Party's employment force), court actions (such as restraining orders or
injunctions), or other causes beyond the Party's control, including delays by any governmental
entity(although the City may not benefit from this provision for a delay that results from City's
failure to perform its obligations under this Agreement), or an insurance company of either party.
If any such events shall occur, the term of this Agreement and the time for performance by either
Party of any of its obligations hereunder may be extended by the written agreement of the Parties
for the period of time that such events prevented such performance.
17.13 Conflict of Interest. No member, official or employee of the City shall have any
direct or indirect interest in this Agreement, nor participate in any decision relating to the
Agreement, which is prohibited by law.
17.14 Warranty Against Payment of Consideration. Developer warrants that it has not
paid or given, and will not pay or give, any third person any money or other consideration for
obtaining this Agreement.
30
5 53 94.00101\42414134.I
17.15 Plans and Data.Where Developer does not proceed with the work and construction
of the Project, and when this Agreement is terminated with respect thereto for any reason,
Developer shall deliver to City any and all plans and data concerning the Property, and City or any
person or entity designated by City shall have the right to use such plans and data without
compensation to Developer. Such right of City shall be subject to any right of the preparer of the
plans to their use.
17.16 Authority to Enter Agreement. Each undersigned represents and warrants that its
signature herein below has the power, authority and right to bind their respective parties to each of
the terms of this Agreement, and shall indemnify the City fully, including reasonable costs and
attomey's fees, for any injuries or damages to City in the event that such authority or power is not,
in fact, held by the signatory or is withdrawn.
{Signatures on following page}
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55394.00101\42414134.1
IN WITNESS WHEREOF,the parties hereto have caused this Conditional Grant Agreement to
be executed on the date set forth at the beginning of this Agreement.
DEVELOPER:
HABITAT FOR HUMANITY OF 0 GE COUNTY
a California nonprofit religi us co ration.
By:
Name: Michael Valentine
Title: President& CEO
32
55394.00101342414134.1
ATTEST: CITY OF ANTA A
ennifer H Alvaro Nunez
City rk Acting City a ager
rl if U♦
Dated: 'r Dated: 11 Li ` Z
APPROVED AS TO FORM:
SONIA R. CARVALHO, City Attorney
Matthew Cody
Best,Best&Krieger
Special Counsel for the City
Dated: June 25, 2024
RECOMMENDED FOR APPROVAL:
Michael L. Garcia
Executive Director
Community Development Agency
Dated: 77 72
33
55394.00101\42414134.1
EXHIBITS
Exhibit A—Legal Description
Exhibit B—Project Description, Scope of Work, and Schedule of Performance
Exhibit C—Project Budget
Exhibit D—Regulatory Agreement
34
55394.00101\42414134.1
EXHIBIT A
LEGAL DESCRIPTION
Real property in the City of Santa Ma, County of Orange, State of California, described
as follows:
LOT 4 IN BLOCK A OF TRACT NO. 451, IN THE CITY OF SANTA ANA, AS PER MAP
RECORDED IN BOOK
16, PAGE 41 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID ORANGE
COUNTY.
EXCEPTING THEREFROM THE WEST 7 FEET AND THE EAST 3 FEET.
ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE CITY OF
SANTA ANA AS DESCRIBED
IN DOCUMENT RECORDED FEBRUARY 25, 1983 AS INSTRUMENT NO. 83-84912
OF OFFICIAL RECORDS.
APN: 405-101-37
EXHIBIT B
W Habitat for Humanity® Project Description
of Orange County 1921 West Washington Avenue
Santa Ana, CA
Overview
The proposed project will be developed at the vacant lot located at 1921 West Washington Avenue,
Santa Ana CA, and includes the construction of three new duplex buildings that accommodate six
100-percent affordable, for-sale residential units.
Floor Plan and Unit Amenities
The front two duplex buildings (Units 1-4,closest to Washington Avenue) are designed with a similar floor
plan, and each contain the same square footage of approximately 1,859-square-feet (net floor area) for
each unit.
The rear duplex building (Units 5 & 6)will consist of 3,446 square-feet of floor area. In total, all new floor
area onsite will be 10,882 square-feet. Units 1-4 each will consist of three bedrooms, two and a half
restrooms, a kitchen, living room, and in-unit laundry facilities. Unit 5 will consist of 1,165 square-feet with
three bedrooms, two restrooms, a living room, a dining room, a kitchen, and a balcony. Unit 6 will consist
of one 1,168-square-foot ADA compliant unit with three bedrooms, two restrooms, a dining room, living
room, kitchen, and in-unit laundry facilities.
Design Description
The project architecture features a traditional farmhouse style. The overall design, massing, features, and
materials of the new construction will be compatible with and complement the variation of styles within
the neighborhood.The farmhouse architectural style would include exterior horizontal and vertical board
siding, exterior wood finishes, vinyl frame hung windows, wood eave brackets, wood trellises, decorative
light fixtures, an enhanced frontage-facing porch area for Unit 1 and porticos for the remaining units.
Moreover, the structure is designed to fully screen all mechanical equipment with the
inclusion of walls or enhanced landscaping screens. Overall, the project will include a design and quality
construction materials that will ensure that the project ages well for the duration of the building's lifetime.
Landscaping
The landscaping concept consists of drought-tolerant and native plants where feasible that complements
the Project's architecture and is consistent with the overall landscaping of the surrounding neighborhood.
Parking
Onsite there will be a total of 15 parking stalls, which consist of two garage stalls per unit (tandem spaces
for Unit 5) and three guest surface spaces (one ADA compliant space).
Homeowners Association (HOA)
The maintenance of Habitat developments is handled by a Homeowners Association (HOA)that is formed
and incorporated by Habitat during the construction phase of the development.The HOA will maintain the
property in a safe, decent,and sanitary manner and ensure the projects are maintained in accordance with
all permits, building codes and other requirements imposed by a Governmental Authority.
EXHIBIT B
It Habitat for Humanity Scope of Work
of Orange County 1921 West Washington Avenue
Santa Ana, CA
The scope of work for this Project shall include the processing of permits, all necessary site work for the
construction of three duplex buildings and construction completion, performing maintenance obligations
through the term up to the date that is forty-five (45) years after the City issues the last certificate of
occupancy for the Affordable Units in this project.
Compliance with All Entitlements and Approvals for the Prolect
The Project will be developed in adherence to the entitlements approved by the City and in conformance
to the terms in the Regulatory Agreement and the Conditional Grant Agreement during construction, home
sales, and enforcement required during the duration of the affordability restrictions through the term up
to the date that is forty-five (45) years after the City issues the last certificate of occupancy for the
Affordable Units in this project
Performing Maintenance Obligations
The maintenance of Habitat developments Is handled by a Homeowners Association (HOA)that is formed
and incorporated by Habitat during the construction phase of the development. During this time, a
property manager is hired, so the HOA gets off to a strong start.
Habitat OC reviews the details of the development with the budget preparer with a preference to include
maintenance details including costs of maintenance, repair, and improvements in HOA responsibility,
rather than that of the homeowner, to ensure completion on a regular schedule. The HOA's responsibility
covers the common area including improvements and landscaping in a manner consistent with community
standards and in accordance with the Santa Ana Municipal Code.
The HOA will maintain the property in a safe, decent, and sanitary manner and ensure the projects are
maintained in accordance with all permits, building codes and other requirements imposed by a
Governmental Authority. In addition, all exterior,painted surfaces of any structures located on the Property
will be maintained at all times in a clean and good condition.
City, and any of its employees, agents, contractors, or designees shall have the right to enter upon the
Property at reasonable times and in a reasonable manner to inspect the Project, after providing notice as
follows: (i) at least a 24-hour notice to Developer and Tenants / Homebuyer of the Affordable Unit which
will be inspected, or(ii)at least 48 hours' notice to Developer.
Operational Requirements Related to Sale of the Affordable Units
Affordability: The Developer will conduct marketing and outreach to reach low-income households
(households whose income does not exceed eighty(80%)of the area median income for the Orange County,
California PMSA).
Homebuyer Local Preference and Priority:
Subject to applicable laws and regulations governing nondiscrimination and preferences in housing
occupancy required by the State of California, the Developer shall give a local preference in selecting
Homebuyers of the Affordable Units. The Developer will adhere to the City's requirement to provide first
priority to persons who have been permanently displaced or who face permanent displacement from
housing in the City as a result of any of the following: (i) for projects funded by the Low-Moderate Income
EXHIBIT B
Housing Asset Fund, a redevelopment project undertaken pursuant to California's Community
Redevelopment Law (Health & Safety Code Sections 33000, et seq.); (ii) Ellis Act, owner-occupancy, or
removal permit eviction;(iii) earthquake,fire,flood, or other natural disaster; (iv)cancellation of a Housing
Choice Voucher HAP Contract by property owner; or(v)governmental action, such as Code Enforcement.
Second, the Developer will provide priority to persons who are either: (i) residents of Santa Ana, (ii)
individuals working in the City at least thirty two (32) hours per work for at least six(6) months prior to the
occupancy, (Hi) persons who seek to reside in the City as an accommodation to a mental or physical
disability, or(iv) households with students who attend public school in the City.
Homebuyer Selection: Developer shall select Homebuyers in accordance with their Homebuyer Selection
Process set forth in the City's Administrative Procedures Manual referenced in the Regulatory agreement.
Income Verification and Certification: Developer shall verify income of prospective Homebuyers and certify
the verification to the City in compliance with the procedures set forth in the Administrative Procedures
Manual.
EXHIBIT B
Habitat for Humanity Schedule of Performance
of Orange County 1921 West Washington Avenue
Santa Ana, CA
CONSTRUCTION ACTIVITY DURATION START FINISH
1921 West Washington Ave 473 days Fri 9/1/23 Mon 6/23/25
Pre Development Review ' 247 days Fri 9/1/23 Fri 8/9/24
Site Permits 155 days Wed 2/14/24 Mon 9/16/24
Building Permit 185 days I, Fri 2/2/24 Wed 10/16/24
Grading 22 days Tue 9/17/24 Wed 10/16/24
Wet Utilities 15 days Thu 10/17/24 Wed 11/6/24
Dry Utilities 254 days Thu 6/13/24 Mon 6/2/25
Foundation 26 days Thu 11/7/24 Thu 12/12/24
Framing 25 days Fri 12/13/24 Thu 1/16/25
Dry In 68 days Tue 1/14/25 Thu 4/17/25
Exterior Finishes 14 days Wed 1/22/25 Mon 2/10/25
Utility Rough-Ins and Complete Concrete 23 days Thu 1/16/25 Mon 2/17/25
Interior Finishes 108 days Tue 1/14/25 Thu 6/12/25
Landscaping and Grounds Work : 26 days Mon 4/28/25 Mon 6/2/25
Final Acceptance I 15 days Tue 6/3/25 Mon 6/23/25
Total estimate timeline from City Processing / Permits to House Construction Completion is
estimated to be 16 months.
HOME SALE ACTIVITY START FINISH
Outreach and Program Orientations 07/01/24 ' 09/30/24
Initial Needs Assessment, Eligibility Evaluation and Homebuyer 08/01/24 10/31/24
Selection
Board Approval of Selected Homebuyer 11/01/24 11/30/24
City Approval of Selected Homebuyer 11/01/24 11/30/24
Homebuyer Pre-Qualification 12/01/24 12/31/24
Homebuyer Onboarding and Sweat Equity Hours 12/01/24 06/15/25
Sales Purchase Agreement Executed and Escrow Opened 04/01/25 06/27/25
Homebuyer Loan Approval 04/01/25 04/30/25
Home Sales Complete 06/25/25 06/27/25
Dedication Day& Homebuyer Receives Keys 06/28/25 06/28/25
EXHIBIT C
Mr Habitat for Humanity.
of Orange County
Project: 1921 West Washington Avenue
Units 6 Low Income
Average SF: 1,430
Average Sales Price: $225,400
LAND COSTS: Total Per Unit
Land Cost 580,000 96,667
Site Improvements 737,000 122,833
Impact Fees 50,000 8,333
Finished Land Costs 1,367,000 227,833
HOUSE COSTS:
Directs 1,287,000 214,500
Indirects 680,000 113,333
Plan Check/Permit Fees 22,000 3,667
Property Taxes 21,000 3,500
Insurance 78,000 13,000
Bonds 55,000 9,167
Finance 113,000 18,833
Marketing/Broker Coop 67,620 11,270
Overhead/Management 280,000 46,667
Warranty 43,000 7,167
Total Housing Costs 2,646,620 441,103
Project Contingency 477,762 79,627
Total Costsg �'3.}. .�e§?4,491,382 748,564 Y�
u�naa%:101.+'s:Aie�z�t.lf: a&.tFe_ ..a'3��t`U: € �*r. ' itatfif,t0„c
Total Per Unit
Unit Sales 1,352,400 225,400
City Subsidy 2,200,000 366,667
Habitat Fundraising 938,982 156,497
4,491,382 748,564
Total Per Unit
City Subsidy 2,200000 366,667
Construction Loan 2,252,000 375,333
Habitat Fundraising 39,382 6,564
4,491,382 u'' 7448,564
mri;aCa ji? .. A� 9S 5 k.. ±: 1016 ,mob' .
Total Per Unit
Land Costs 1,367,000 227,833
House Costs 2,646,620 441,103
Contingency 477,762 79,627
4,491,382 748,564
* Sales price based on quarterly affordable sales price calculations for 2nd Quarter 2024 prepared by
Keyser Marsont Associate,Inc.
EXHIBIT D
RECORDING REQUESTED BY:
AND WHEN RECORDED MAIL TO:
City of Santa Ana
Clerk of the Council
20 Civic Center Plaza(M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: City Clerk
Free Recording pursuant to
Government Code 27383
REGULATORY AGREEMENT
IMPOSING AFFORDABLE HOUSING COVENANTS AND RESTRICTIONS
(DENSITY BONUS)
(1921 W. Washington, Santa Ana, California; APN: 405-101-37)
This REGULATORY AGREEMENT IMPOSING AFFORDABLE HOUSING
COVENANTS AND RESTRICTIONS (DENSITY BONUS) ("Regulatory Agreement"), made
and entered into this_day of ,2024("Effective Date"),by and between the
City of Santa Ana,a charter city and municipal corporation of the State of California("City"), and
Habitat for Humanity of Orange County, a California nonprofit religious corporation
("Developer"). City and Developer are sometimes referred to collectively as the "Parties" and
individually as a"Party."
RECITALS
A. Developer is the owner of that certain property located within the City of Santa
Ana, County of Orange, State of California, commonly known as 1921 W.
Washington Avenue, Santa Ana, California, (APN 405-101-37), with the legal
description set forth in Exhibit A attached hereto and incorporated herein by this
reference("Property").
B. City and Developer have entered into a Conditional Grant Agreement,pursuant to
which, City agreed to provide a grant (the "Inclusionary Grant") in an amount up
to Two Million Two Hundred Thousand Dollars ($2,200,000) to Developer for a
residential homeownership project that involves construction of six (6) affordable
housing units restricted for sale to low income households, which will be provided
within three (3) duplex buildings, and include related amenities, including but not
limited to: parking, landscaping, lighting, signage, and other amenities, and all
other on-site and off-site improvements required for operation of the Property (the
"Project").
C. As a condition of receiving the Inclusionary Grant, Developer agrees that this
Regulatory Agreement shall be recorded against the Property prior to disbursement
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of any portion of the Inclusionary Grant and that the Property and the Project shall
be subject to the covenants and restrictions set forth herein.
D. In addition, in connection with the Project, Developer seeks a density bonus under
California Government Code § 65915, et seq. ("State Density Bonus Law") and
Santa Ana Municipal Code sections 41-1600, et seq. ("City Density Bonus
Ordinance"). Based on the Property size of 0.37 acres, and the City's allowable
density for the Property of seven (7) dwelling units per acre, without the density
bonus,the existing density for the Property would allow only two(2)dwelling units
on the Property (rounded down from 2.59). Thus, the City also enters into this
Agreement to fulfill requirements of the State Density Bonus Law and City Density
Bonus Ordinance.
E. In light of the purpose of the State Density Bonus Law and City Density Bonus
Ordinance, City has determined to approve Developer's application for four (4)
concessions/incentives and one(1) waiver.
F. Based upon the foregoing, on the terms and conditions set forth below, this
Agreement, and the exhibits attached hereto and incorporated herein by reference,
are intended to (1) implement and fulfill obligations set forth in the Conditional
Grant Agreement, and (2) implement the Project's requirement to provide
affordable housing units in exchange for receiving the density bonus, concession
and waivers set forth herein.
NOW,THEREFORE, in consideration of the above recitals,which are incorporated herein
by this reference, and of the mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. DEFINITIONS AND EXHIBITS
1.1 Definitions. In addition to the terms that may be defined elsewhere in this
Agreement, the following terms when used in this Agreement shall be defined as follows:
1.1.1 "Adjusted for family size appropriate to the unit" shall have the
meaning set forth by California Health and Safety Code Section 50052.5(h).
1.1.2 "Administrative Procedures Manual" shall mean the City's
Administrative Procedures Manual: Ownership Housing Development, setting forth rules and
regulations for the City's homeownership program.
1.1.3 "Affordable Housing Cost" means the total housing costs paid by a
qualifying Low Income Household in accordance with California Health and Safety Code Section
50052.5.
1.1.4 "Affordable Housing Resale Restrictions" means the restrictions
imposed on each Affordable Unit that restrict sales to qualified Eligible Households pursuant to a
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local preference for families who live or work in the City of Santa Ana at an Affordable Sales
Price as set forth in Section 4.6.3, in accordance with Homebuyer Loan Agreement.
1.1.5 "Affordable Sales Price" means the maximum sales price that can be
charged for an Affordable Unit as set forth in Section 3.3.2.
1.1.6 "Affordable Unit(s)" means the six (6) individual dwelling units, which
shall be constructed within three (3) duplex buildings, and each restricted for occupancy to Low
Income FIouseholds.
1.1.7 "Area Median Income" or "AMI" shall mean the area median income
published by HCD in accordance with California Health and Safety Code § 50093.
1.1.8 "Benchmark Down Payment" is a component of the Affordable Sales
Price calculations. For the purposes of this Agreement, the Benchmark Down Payment is set at
5% of the total Affordable Sales Price. The Benchmark Down Payment is used solely as a
component for determining the Affordable Sales Price for an Affordable Unit.It does not represent
a cap on the down payment amount that can be contributed by a Homebuyer.
1.1.9 "Certificate of Occupancy" shall mean a certificate of occupancy issued
by the City after completion of construction and a dwelling unit has been certified by the City has
available for occupancy.
1.1.10 "City" means the City of Santa Ana, California
1.1.11 "City Council" means the City Council of the City of Santa Ana.
1.1.12 "City Attorney" means the City Attorney for the City of Santa Ana.
1.1.13 "City Manager" means the City Manager for the City of Santa Ma.
1.1.14 "City's Planning Commission" means the Planning Commission for the
City of Santa Ma.
1.1.15 "City Deed of Trust" means a deed of trust, in the form attached hereto as
Exhibit C, executed by Homebuyer in favor of the City that secures the performance of the
Affordable Housing Resale Restrictions, the City and Homebuyer Loan Agreement, and the City
Promissory Note, and which is recorded against each Affordable Unit as required under this
Agreement.
1.1.16 "City Promissory Note" shall mean a promissory note, in the form
attached hereto as Exhibit D, executed by Homebuyer evidencing an agreement to pay to City the
amount owed pursuant to the City and Homebuyer Loan Agreement.
1.1.17 "Density Bonus Application" shall mean the Density Bonus Application
No. for the Project.
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1.1.18 "Developer" means Habitat for Humanity of Orange County, a California
nonprofit religious corporation, and its permitted successors and assigns to all or any part of the
Property,Project or this Agreement.
1.1.19 "Effective Date" means the date the Developer and the City shall record or
cause to be recorded in the Official Records for Orange County, California, an executed original
of this Agreement,pursuant to section 4.1 herein.
1.1.20 "Eligible Household" means a Household whose income does not exceed
the qualifying limit for a Low Income Household, as defined herein.
1.1.21 "Gross Household Income"means all income from whatever source from
all adult Household members, which is anticipated to be received during the 12-month period
following the date of the determination of Gross Household Income. The applicable sources of
income are defined in California Code of Regulations Title 25 Housing and Community
Development Section 6914. The definition includes the following specific requirements:
(a) Except as provided in subdivision(b), all payments from all sources
received by the head of Household(even if temporarily absent) and each additional member of the
Household who is not a minor shall be included in the annual income of a Household. Gross
Household Income shall include, but not be limited to:
(i) The gross amount,before any payroll deductions, of wages
and salaries, overtime pay, commissions, fees, tips and bonuses;
(ii) The net income from operation of a business or profession
or from rental or real or personal property(for this purpose, expenditures for business expansion
or amortization of capital indebtedness shall not be deducted to determine the net income from a
business);
(iii) Interest and dividends;
(iv) The full amount of periodic payments received from social
security, annuities, insurance policies,retirement funds, pensions, disability or death benefits and
other similar types of periodic receipts (but see subdivision(2)(c));
(v) Payments in lieu of earnings, such as unemployment and
disability compensation, worker's compensation and severance pay;
(vi) Public Assistance. If the public assistance payment includes
an amount specifically designated for shelter and utilities which is subject to adjustment by the
public assistance agency in accordance with the actual cost of shelter and utilities, the amount of
public assistance income to be included as income shall consist of:
(1) The amount of the allowance or grant exclusive of
the amount specifically designated for shelter and utilities, plus
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(2) The maximum amount which the public assistance
agency could in fact allow for the Household for shelter and utilities.
(vii) Periodic and determinable allowances such as alimony and
child support payments, and regular contributions or gifts received from persons not residing in
the dwelling;
(viii) All regular pay, special pay and allowances of a member of
the Armed Forces (whether or not living in the dwelling) who is head of the Household or spouse
or domestic partner(but see subdivision(b)(v));
(ix) Where a Household has net assets in excess of$5,000,
income shall include the actual amount of income, if any, derived from all of the net Household
assets or 10 percent of the value of all such assets,whichever is greater. For purposes of this
section,net Household assets means value of equity in real property other than the Household's
full-time residence, savings, stocks, bonds, and other forms of capital investment.The value of
necessary items such as furniture and automobiles shall be excluded.
(b) The following items shall not be considered as income:
(i) Casual, sporadic or irregular gifts;
(ii) Amounts which are specifically for or in reimbursement of
the cost of medical expenses;
(iii) Lump-sum additions to Household assets, such as
inheritances, insurance payments (including payments under health and accident insurance and
worker's compensation), capital gains and settlement for personal or property losses;
(iv) Amounts of educational scholarships paid directly to the
student or to the educational institution, and amounts paid by the government to a veteran for use
in meeting the costs of tuition, fees, books and equipment. Any amounts of such scholarships, or
payments to veterans not used for the above purposes of which are available for subsistence are
to be included in income;
(v) The special pay to a serviceman head of a Household away
from home and exposed to hostile fire;
(vi) Relocation payments made pursuant to federal, state, or
local relocation law;
(vii) Foster child care payments;
(viii) The value of coupon allotments for the purchase of food
pursuant to the Food Stamp Act of 1964 which is in excess of the amount actually charged the
eligible Household;
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(ix) Payments received pursuant to participation in the
following volunteer programs under the ACTION Agency:
(1) National Volunteer Antipoverty Programs which
include VISTA, Service Learning Programs and Special Volunteer Programs.
(2) National Older American Volunteer Programs for
persons aged 60 and over which include Retired Senior Volunteer Programs, Foster Grandparent
Program, Older American Community Services Program, and National Volunteer Program to
Assist Small Business Experience, Service Corps of Retired Executive(SCORE) and Active
Corps of Executives(ACE).
1.1.22 "HCD" means the California Department of Housing and Community
Development.
1.1.23 "Homebuyer" means an Eligible Household that has an executed
agreement to purchase an Affordable Unit.
1.1.24 "Homebuyer Loan Agreement" means the loan agreement entered into
between Homebuyer and City prior to transfer of an Affordable Unit, as referenced in Section 3.5
and 4.6 of this Agreement.
1.1.25 "Household" all the persons who will occupy the Affordable Unit as their
primary residence. The size of a prospective Household must be compatible with the size of the
Affordable Unit to be purchased. The minimum number of occupants is three(3). The maximum
number of occupants is eight (8). A child who is subject to a legally-binding shared-custody
agreement, in which the child resides with the Household at least 50% of the time, is counted as a
member of the Household. For the purpose of calculating the Household income and not the
number of occupants,excluded from the definition of Household are live-in caregivers/caretakers,
foster children, unborn children and children being pursued for legal custody or adoption that are
not currently living with the Household.
1.1.26 "Housing Cost" means and includes all of the following costs associated
with ownership of an Inclusionary Unit as defined in Title 25 of the California Code of Regulations
Section 6920:
(a) Principal and interest on a mortgage loan at the defined interest rate;
(b) Property tax and assessments;
(c) Fire and casualty insurance covering replacement value of property
improvements;
(d) Property maintenance and repairs;
(e) A reasonable utility allowance, as determined by the City; and
(f) Homeowner Association assessments and dues.
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1.1.27 "Low Income Household" means a Household whose income does not
exceed eighty percent(80%)of the area median income for the Orange County, California PMSA,
adjusted for actual household size, as published by HCD, and in accordance with the definition of
"low-income household" set forth in SAMC § 41-1901 and California Health and Safety Code §
50079.5.
1.1.28 "Notice of Affordability Restrictions" means the notice of affordability
restrictions to prospective buyers, which shall have a term of at least forty-five (45) years, in the
form attached hereto as Exhibit E.
1.1.29 "Program Director" has the day-to-day authority for making
determinations related to the Administrative Procedures Manual. The Program Director will be
appointed by the Executive Director for the City's Community Development Agency.
1.1.30 "Project" means that certain affordable residential development as more
particularly described in Recital B and Section 2 of this Agreement.
1.1.31 "Property" means that certain real property more particularly described in
the legal description in Exhibit A and improvements thereon, including each Affordable Unit.
1.1.32 "Regulatory Agreement"means this Affordable Housing Agreement and
Declaration of Covenants and Restrictions.
1.1.33 "State Density Bonus Law" means Government Code sections 65915, et
seq., as they exist on the Effective Date.
1.1.34 "Supportable Mortgage" means the mortgage amount that can be
supported by a Low Income Household based on the Affordable Housing Cost calculations. The
mortgage calculation is based on the prevailing market interest rate for a 30-year fully amortizing
mortgage with a fixed interest rate. The Supportable Mortgage shall be determined in accordance
with the City's Administrative Procedures Manual, provided that it should be determined for a
Low Income Household consistent with the requirements of this Agreement and State Density
Bonus Law.
1.1.35 "Unit" means a residential dwelling unit within the Project to be
constructed or caused to be constructed by Developer pursuant to this Agreement.
1.2 Exhibits. The following documents are attached to, and by this reference made a
part of, this Agreement:
1.2.1 Exhibit A: Legal Description of the Property
1.2.2 Exhibit B: Affordable Housing Resale Restrictions
1.2.3 Exhibit C: City Deed of Trust
1.2.4 Exhibit D: City Promissory Note
1.2.5 Exhibit E: Notice of Affordability Restrictions
1.2.6 Exhibit F: Income Verification Form
1.2.7 Exhibit G: Certification of Continued Occupancy
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2. DEVELOPMENT OF THE PROPERTY
2.1 Project. Developer shall develop, operate, and maintain,or cause the development,
operation and maintenance of, the Property, to provide the Affordable Units required by this
Agreement.
2.2 Density Bonus. Developer understands and agrees that,for purposes of calculating
the density bonus in accordance with the State Density Bonus Law, the base density for the
Property is three (3) dwelling units (fractional units are rounded up) and therefore the Project will
receive a density bonus to develop a total of six (6) dwelling units that will be restricted as
Affordable Units under this Agreement. Developer shall not construct or develop, or otherwise
claim a right to construct or develop any additional dwelling units on the Property. Developer
agrees that the Project is eligible for a density bonus based upon compliance with the requirement
to develop the Project as a common interest development, in accordance with California
Government Code § 65915(i).
2.3 Development Concessions, Incentives, and Waivers. As set forth in the City
entitlements,Developer petitioned for and is hereby granted the following concessions, incentives,
and waivers as part of the approval of Density Bonus Application:
2.3.1 Concession. In accordance with Government Code Section 65915(d)(1),
Developer is granted the following concession(s):
(a) The setback at the north end of the parcel shall be reduced from ten
feet (10') to six feet (6'), and the setback at the west side of the parcel shall be reduced to seven
feet (7') (provided that the Project provides a minimum of 1,200 square feet of open space per
unit).
(b) The building separation shall be reduced from fifteen feet (15') to
nine to ten feet (9-10').
(c) The open space requirement for a private balcony for unit five, as
identified on the Project entitlements, shall be reduced from one hundred (100) square feet to
ninety one(91)square feet,provided that the unit is also provided with four hundred twelve(412)
square feet of private yard space.
(d) The private yard fencing encroaclunent into the front-yard area for
unit one, as identified on the Project entitlements, shall be allowed to exceed the height restriction
of three feet (3') but shall not exceed six feet (6'), as necessary to allow for the screening of the
air conditioner.
2.3.2 Waivers. In accordance with Government Code Section 65915(e)(1),
Developer is granted the following waiver(s): The drive aisle area by the trash enclosures shall be
reduced by eight inches (8") to a total of eighteen feet ten inches (18'10") to accommodate PWA
trash pickup requirements.
2.4 Parking Requirements. Onsite parking shall be provided in compliance with
Government Code Sections 65915 (p)(1)(A) and 65915 (p)(1)(B). All units will have a private
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two-car garage with direct access to each unit (residents shall be required to park vehicles in the
garages and not use garages only for storage). The Project must also provide short-term
overflow/guest parking spots as follows: two (2) standards parking spots and one (1) accessible
parking spot.
2.5 No Further Concessions, Incentives, or Waivers. Developer acknowledges and
agrees that the concessions, incentives, and waivers set forth in section 2.3, and the parking
requirements set forth in section 2.4, above fully satisfies any duty City may have under the City
Density Bonus Ordinance, the Density Bonus Law, or any other law or regulation to provide any
density bonus incentive or to waive any building, zoning, or other requirement in connection with
a density bonus. By this Agreement, Developer releases any and all claims Developer may have
against City in any way relating to or arising from City's obligation to waive requirements of or
provide development incentives pursuant to the City Density Bonus Ordinance and the Density
Bonus Law applicable to the Project.
2.6 Affordable Units. The Project, for purposes of this Agreement, shall have no less
than six (6) Affordable Units, restricted for homeownership opportunities to Low Income
Households, pursuant to the terms and conditions of this Agreement. Each Affordable Unit shall
be consistent with all City approvals, and meet the following requirements:
2.6.1 Each unit shall have three (3) bedrooms and a minimum of two (2)
bathrooms;
2.6.2 Each unit shall have a private two-car garage with direct access to the
interior living space;
2.6.3 The interior living space of each unit shall range from a minimum of 1,100
square feet to 1,430 square feet;
2.6.4 Each unit shall have a private yard; and,
2.6.5 One unit shall be constructed as an accessible unit with mobility and
communication features in compliance with the California Building Code.
2.7 Permits and Processing; Compliance with Laws. Developer, at its sole cost and
expense, or as otherwise set forth in a separate written agreement, shall secure or cause to be
secured any and all permits that may be required for development of the Project by City or any
other federal, state, or local governmental entity having or claiming jurisdiction over the Property
or Project. Upon securing any and all permits, and all necessary financing and property interests,
Developer shall carry out and perform the development, operation, and maintenance of the Project
or cause the performance of the development, operation, and maintenance of the Project, in
conformity with all applicable federal, state, and local laws and regulations, and all conditions of
approval issued by the City Council and City's Planning Commission for the Project. Any changes
to the Project shall be reviewed by the City to determine compliance with this Agreement. If any
changes to the Project shall materially alter the ability of Developer to comply with any terms of
this Agreement in City's sole determination, then City and Developer shall meet and confer to
address amendments and revisions to this Agreement as necessary.
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2.8 Common Interest Development. The Project shall be operated as a "common
interest development" as defined in California Civil Code § 4100 and operated in accordance with
all state laws regarding common interest developments.
2.9 Mechanic's Liens; Indemnification. Developer shall take all actions reasonably
necessary to remove any future mechanic's liens or other similar liens (including design
professional liens) against the Property or Project, or any part thereof, by reason of work, labor,
services, or materials supplied or claimed to have been supplied to Developer or caused by, at the
direction of, or on behalf of Developer. Prior to the recording of this Agreement(or memorandum
thereof)pursuant to Section 4.1 below, Developer shall provide evidence from the Title Company
of any new recordings against the Property or Project.City hereby reserves all rights to post notices
of non-responsibility and any other notices as may be appropriate upon a filing of a mechanic's
lien. In addition to any other indemnity provided by Developer under this Agreement, Developer
shall indemnify,defend(with counsel of City's choosing and the consent of Developer,which shall
not be unreasonably withheld, conditioned or delayed and which may be joint defense counsel
upon City's and Developer's consent), and hold harmless City and all of its officials, officers,
employees,representatives,volunteers and agents from any and all alleged or actual claims,causes
of action, liabilities, and damages from any third party by reason of a mechanic's lien or work,
labor, services, or materials supplied or claimed to have been supplied to Developer or caused by,
at the direction of, or on behalf of Developer.
3. AFFORDABILITY
3.1 Total Affordability Term. Each Affordable Unit shall be restricted for sale to an
Eligible Household for a total period of no less than forty-five (45) years ("Total Affordability
Term"). The Total Affordability Term for an Affordable Unit shall commence on the date that the
Affordable Unit receives all required occupancy permits from the City and a Certificate of
Occupancy.
3.2 Memorializing Commencement of Total Affordability Term. Developer shall keep
or cause to be kept detailed records of the commencement date of the Total Affordability Term for
each Affordable Unit. City shall have the right to review and verify said records without a fee from
City to Developer to ensure that the commencement date specified by Developer for an Affordable
Unit coincides with the date that the initial Affordable Unit received all permits from City required
for occupancy of the Unit. In the event that a conflict exists between the date specified by
Developer for the commencement of the Total Affordability Term for an Affordable Unit and the
date specified by City's issuance of all required permits for occupancy of the Unit, the date
specified by City's issuance of all required permits for occupancy of the Unit shall control.
3.3 Affordability Covenants and Restrictions.
3.3.1 Affordable Homeownership. Developer covenants that, during the Total
Affordability Term, each Affordable Unit shall be sold to, or held vacant for sale to, an Eligible
Household for an Affordable Sales Price.
3.3.2 Affordable Sales Price. The Affordable Sales Price is equal to the sum of
the Supportable Mortgage plus, if applicable, the Benchmark Down Payment. Prior to the sale of
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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.
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(ii) Developer shall recapture its"initial subsidy,"in
accordance with Government Code Section 65915(c)(2)(C)(v), in an amount equal to the fair
market value of the Affordable Unit at the time of the initial sale from Developer to the
Homebuyer, minus the Affordable Sales Price,plus any down payment assistance or mortgage
assistance.
(iii) Developer shall recapture its "proportionate share of
appreciation," in accordance with Government Code Section 65915(c)(2)(C)(v), in an amount
equal to: (A) the ratio of the City's initial subsidy to the fair market value of the home at the time
of the initial sale multiplied by(B) the fair market value of the Affordable Unit at the time of the
sale from the Homebuyer to a new Eligible Household.
(iv) The proceeds of the sale of an Affordable Unit from a
Homebuyer to a new Eligible Household shall be disbursed in the following priority: first, to
satisfy a first deed of trust from a primary lender, as approved by City at the time of the initial
sale, or subsequent approval in the event of a refinance event; second, to the Developer for the
equity share determined in accordance with this Section 3.6.1; and, third, the remainder to the
selling Homebuyer.
(v) Developer shall use one hundred percent(100%) of the
proceeds to promote homeownership for lower income households as defined by Section
50079.5 of the Health and Safety Code within the jurisdiction of the City. By way of example,
and without approval from the City or limiting any the eligible uses, these uses may include:
financing a silent second for a homeownership program, neighborhood improvements and
revitalization; outreach and qualification of new homebuyers; financial education and
counseling; advocacy and policy work; and, homeowner support networks. Developer is solely
responsible for determining compliance with requirements of state law for using proceeds
referenced herein.
3.6.2 To determine the fair market value of the Affordable Unit for purposes of
this Section 3.6, Developer shall require an appraisal by a qualified appraisal at the time of the
initial sale to an Eligible Household and for the initial re-sale by a Homebuyer. If a Homebuyer
disputes the appraised value, the Homebuyer may pay for the costs of a second appraisal and, if
there is still disagreement, the average of the two appraisals shall be used to determine the fair
market value.
4. OPERATION OF THE PROJECT BY DEVELOPER
4.1 Recording of Documents.
4.1.1 Prior to issuance of a building permit for the Project,Developer and the City
shall record or cause to be recorded in the Official Records for Orange County, California, an
executed original of this Agreement. City shall cooperate with Developer in promptly executing
in recordable form this Agreement. The date of recording of the Agreement shall be the Effective
Date of the Agreement. Upon the date of recording, the terms and conditions of this Agreement
shall be binding upon and run with the Property and each Affordable Unit for the Total
Affordability Term. It is the express intent and agreement between the Parties that this Agreement
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shall remain binding and enforceable against the Property, the Project, and the Affordable Units
to ensure compliance with the Conditional Grant Agreement, the State Density Bonus Law and
City Density Bonus Ordinance, and to ensure the continued supply of Affordable Units in the
Project, except as expressly set forth in this Agreement.
4.1.2 Prior to the sale of an individual Affordable Unit to a Homebuyer,
Developer shall cause each Eligible Household purchasing an Affordable Unit to sign the
Affordable Housing Resale Restrictions and, as required by Section 3, the City Deed of Trust, as
approved by the City pursuant to Section 4.5, below, and Developer shall record them or cause
them to be recorded in the Official Records for Orange County, California.
4.2 Occupancy Levels. Subject to state or federal laws and regulations, the number of
persons permitted to occupy each three-bedroom Affordable Unit shall not exceed eight (8)
occupants.
4.3 Use of the Property. All uses conducted on the Property by Developer, including,
without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall
conform to all applicable provisions of the Santa Ana Municipal Code and other applicable federal,
state, and local laws, rules, and regulations.
4.4 Maintenance. Developer shall,at all times during the term of this Agreement,cause
the Property and the Project to be maintained in a decent, safe and sanitary manner, regardless of
cause of the disrepair. Developer and each Homebuyer shall be fully and solely responsible for
costs of maintenance, repair, addition and improvements. City, and any of its employees, agents,
contractors or designees shall have the right to enter upon the Property at reasonable times and in
a reasonable manner to inspect the Project, after providing notice as follows: (i) at least a 24-hour
notice to Developer and Tenants/ Homebuyer of the Affordable Unit which will be inspected, or
(ii) at least 48 hours' notice to Developer, which shall promptly give notice to Tenants /Owners
of the Affordable Unit to be inspected.
4.5 Preparation and Recordation of Transfer Documents. Developer shall prepare and
obtain City's approval,which approval shall not be unreasonably withheld,conditioned or delayed,
of the City Loan Documents for each Affordable Unit to Eligible Households required by Section
3.5 of this Agreement. Developer shall not sell an Affordable Unit unless and until the City has
reviewed and approved the Homebuyer as an Eligible Household for the purchase of the
Affordable Unit, and the Homebuyer has executed and submitted to the Program Director, in
recordable form, the Homebuyer Loan Agreement, the Affordable Housing Resale Restrictions,
the City Promissory Note,the City Deed of Trust, the Notice of Affordability Restrictions, and the
approved financing for the Homebuyer.
4.6 Selection of Homebuyers.
4.6.1 The Developer shall, at its sole cost and expense, conduct all procedures
and comply with all requirements as set forth in this Agreement and the Administrative Procedures
Manual in selecting Eligible Homebuyers for each Affordable Unit. Specific procedures are set
forth in Attachment C in the Administrative Procedures Manual.
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4.6.2 Developer shall be responsible for the selection of Eligible Homebuyers for
the Affordable Units in compliance with lawful and reasonable criteria and the requirements of
this Agreement. Prior to marketing any Affordable Units, Developer shall submit to the City for
review and approval a proposed form purchase and sale agreement ("Form PSA") to be used for
transferring the Affordable Units to Homebuyers. The Form PSA must contain all disclosures
required by the Administrative Procedures Manual, and copy of the Affordable Housing Resale
Restrictions, the City Promissory Note and the City Deed of Trust.
4.6.3 Subject to applicable laws and regulations governing nondiscrimination and
preferences in housing occupancy required by the State of California, the Developer shall give a
local preference in selecting Homebuyers of the Affordable Units in the following order of priority:
(a) First priority shall be given to persons who have been permanently
displaced or who face permanent displacement from housing in the City as a result of any of the
following: (i) for projects funded by the Low-Moderate Income Housing Asset Fund, a
redevelopment project undertaken pursuant to California's Community Redevelopment Law
(Health&Safety Code Sections 33000,et seq.);(ii)Ellis Act,owner-occupancy,or removal permit
eviction; (iii) earthquake, fire, flood, or other natural disaster; (iv) cancellation of a Housing
Choice Voucher HAP Contract by property owner; or (v) governmental action, such as Code
Enforcement.
(b) Second priority shall be given to persons who are either: (i)residents
of Santa Ana, (ii)individuals working in the City at least thirty two(32)hours per work for at least
six (6) months prior to the occupancy, (iii) persons who seek to reside in the City as an
accommodation to a mental or physical disability, or (iv) households with students who attend
public school in the City.
4.6.4 The initial Homebuyer for each Affordable Unit shall have provided at least
five hundred(500)hours of sweat equity pursuant to a written program implemented by Developer,
with written documentation of the requisite number of hours.
4.6.5 Developer shall select Homebuyers in accordance with their Homebuyer
Selection Process, which shall be provided to City upon request.
4.6.6 If a prospective Homebuyer qualifies as an Eligible Household, as defined
herein, the Homebuyer shall be required to execute the Developer's Form PSA for the purchase
and sale of an Affordable Unit. The Developer shall seek and obtain all approvals required from
the City pursuant to the Form PSA and the Administrative Procedures Manual, and shall provide
the City with all documentation required pursuant to this Agreement and the Administrative
Procedures Manual. The Developer must submit a copy of the executed Form PSA for the
purchase and sale of the Affordable Unit. The Program Director shall have not less than thirty
(30) days to review the agreement to verify the total purchase price and the Homebuyer down
payment amount to determine whether the terms are consistent with the requirements of this
Agreement. The City has approval rights over any material amendments to the Form PSA made
after it has been reviewed and approved by the Program Director.
4.7 Income Verification and Certification.
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4.7.1 Developer shall verify income of prospective Homebuyers and certify the
verification to the City. In evaluating prospective Homebuyers, Developer shall consider the
following sources of income in order of preference: (i) employment income; (ii)business income;
(iii) income from Social Security, Supplemental Security Income (SSI), welfare, disability, or
pension payments; and (iv) alimony or child support. To verify income, Developer shall comply
with the procedures set forth in Section A-3 of the Administrative Procedures Manual. Subject to
the foregoing preferences, Developer shall consider Gross Household Income from all adult
Household members,which is anticipated to be received during the 12-month period following the
date of the determination of Gross Household Income. Within fifteen(15) days of delivery of the
executed Form PSA for a prospective Homebuyer to the City, Developer shall provide City with
the Income Verification Form set forth in Exhibit F.
4.8 RESERVED
4.9 Notice of Affordability Restrictions on Transfer of Property. For each sale of an
Affordable Unit,Developer and the proposed buyer shall execute and deposit into escrow,a Notice
of Affordability Restrictions, in a form substantially similar to Exhibit E,which is attached hereto
and must be executed by the parties prior to any transfer of the Property.
4.10 Property Management Plan. Prior to issuance of a Certificate of Completion,
Developer shall submit, for the reasonable approval of the City, a "Management Plan" that sets
forth in detail Developer's property management duties to operate the Project in accordance with
this Agreement, including but not limited to the rules and regulations for the Property and manner
of enforcement, an operating budget, the identity and emergency contact information of the
professional property manager who will provide property management services for the Property,
and other matters relevant to the management of the Property. The Management Plan may include,
or be submitted in coordination with,the Emergency Evacuation Plan required under Section 4.11,
the Crime Free Housing Plan required by Section 4.12, the Onsite Parking Management Plan
required by Section 4.13, and the Marketing and Resident Selection Plan required by Section 4.14.
4.11 Emergency Evacuation Plan. Developer shall submit and obtain approval of an
Emergency Evacuation Plan (the EEP) from City Police and Fire Protection agencies prior to
issuance of a Certificate of Occupancy. Up-to-date 24-hour emergency contact information for
the on-site personnel shall be provided to the City on an ongoing basis and the approved EEP shall
be kept onsite and also be submitted to the following City Agencies:
(a) Police Department
(b) Fire Department
(c) Planning and Building Agency
(d) Community Development Agency
4.12 Crime Free Housing. Developer shall submit a crime-free housing policy,
procedure, and design plan(the "CFH Plan"), which includes the following provisions:
(a) Require parking areas to contain security cameras;
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(b) Require routine unit inspections; and
(c) Have policies in place to ensure that common use areas such as trash
enclosures are maintained in good condition and repair(e.g., well-lit, kept clean, etc.).
Developer shall submit and obtain approval from the City's Planning and Building
Agency ("PBA") that the CFH Plan meets the requirements of this Subsection 4.12 prior to
issuance of the Certificate of Occupancy. The approved CFH Plan shall be implemented and
administered by Developer or its designated property manager, subject to all legal requirements,
prohibitions against discrimination or unlawful housing practices.
4.13 Onsite Parking Management Plan. Developer shall provide onsite parking for
residents and visitors of the Project and actively monitor the parking demand of the Project site.
Developer shall continually monitor and take the following measures to manage the parking
demand of the Project site to mitigate the use of offsite parking spaces on private or public
properties and/or right-of-way.
(a) Require onsite parking permits (such as stickers or hang-tags) for
any parlting in the short-term overflow/guest parking spots;
(b) Policies for maximum time vehicles may be parked in the short-term
overflow/guest parking spots; and
(c) Policies for towing unauthorized vehicles, vehicles parked in
unauthorized locations (such as fire lanes), vehicles parking in short-term overflow/guest parking
spots without a sticker, hang-tag, or other identifiers, and vehicles parked longer than any
maximum guest parking timeframes allowed.
Prior to issuance of the Certificate of Occupancy,Developer shall submit and obtain
approval from the PBA a Parking Management Plan(the"PMP")including those measures above.
The approved PMP shall be adhered to and be enforced by the Project at all times.
4.14 Marketing and Resident Selection Plan.
4.14.1 Prior to Certificate of Occupancy,Developer shall prepare and obtain City's
approval of a marketing program and resident selection plan for the sale of the Affordable Units
at the Project ("Marketing Program"). The sale of the Affordable Units shall thereafter be
marketed in accordance with the Marketing Program as the same may be amended from time to
time with City's prior written approval. Upon request,Developer shall provide City with periodic
reports with respect to the sale of the Affordable Units.
4.14.2 The Marketing Program shall include, but is not limited to, marketing and
community outreach activities, proposed homebuyer selection criteria, occupancy standards,
income requirements, timeline and details for outreach and marketing, data collection, record
keeping and monitoring, procedures for complaints, and compliance assessment. Components of
the resident selection plan shall include, but are not limited to, the application process, interview
procedure, Affordable Unit offer and assignment for selected homeowners, rejected applications,
and wait list management. The resident selection process shall contain the Local Preference set
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forth in Section 4.6.3. All requirements set forth herein shall be incorporated in the Marketing
Program.
4.15 Non-Discrimination in Housing. Developer, and any successors in interest, shall
not discriminate any person or group of persons on account of race, color, religion, sex, gender,
gender identity, gender expression, sexual orientation, marital status, national origin, ancestry,
familial or marital status, disability, veteran or military status, genetic information, political
affiliation or opinion, medical condition, pregnancy or pregnancy-related condition, or condition
of physical or mental disability or other handicap, age, or source of income or status with regard
to public assistance in the transfer, use, occupancy, tenure or enjoyment of the Property or the
Affordable Units, and the Developer,or any person claiming under or through it,shall not establish
or permit any such practice of discrimination or segregation with reference to the selection,
location,number,use or occupancy of any Homebuyer or resident of the Property or the Affordable
Units.
5. TERM OF THIS AGREEMENT
5.1 Term. The term of this Agreement shall commence on the Effective Date and shall
continue until the date that is forty-five (45) years after the City issues the last certificate of
occupancy for the building in which the Affordable Units are located.
6. DEFAULT AND TERMINATION; INDEMNIFICATION
6.1 Default. Failure or delay by any Party to perform any term or provision of this
Agreement, which is not cured within thirty(30) days after receipt of notice from the other Party
specifying the default (or such other period specifically provided herein), constitutes a default
under this Agreement;provided,however,if such default is of the nature requiring more than thirty
(30)days to cure,the defaulting Party shall avoid default hereunder by commencing to cure within
such thirty (30) day period, and thereafter diligently pursuing such cure to completion within an
additional sixty (60) days following the conclusion of such thirty (30) day period (for a total of
ninety (90) days). Except as required to protect against further damages, the injured Party may
not institute proceedings against the Party in default until the time for cure has expired. Failure or
delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time
of default.
6.2 Rights and Remedies Cumulative.
6.2.1 The rights and remedies of the Parties are cumulative, and the exercise by
either Party of one or more of its rights or remedies shall not preclude the exercise by it, at the
same or different times, of any other rights or remedies for the same default or any other default
by the other Party. City's rights and remedies to enforce this Agreement include any and all civil,
administrative, or criminal remedies as set forth in local, state, or federal law. Notwithstanding
anything to the contrary contained in this Agreement, in no event shall either Party be liable for
speculative, consequential, punitive or other indirect damages, and each Party waives any right to
collect speculative, consequential, punitive or other indirect damages against the other Party.
6.2.2 The City's actions and remedies may include, but are not limited to, the
following:
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(a) Actions for specific performance of this Agreement or to enjoin any
actions by the Developer or any other person in violation of this Agreement, the Conditional Grant
Agreement, or the requirements of the Administrative Procedures Manual;
(b) Actions to disapprove, revoke or suspend any permit, including a
building permit, Certificate of Occupancy or other discretionary approval;
(c) Actions for civil damages,restitution, or other monetary relief;
(d) Injunctive relief and damages; or
(e) Civil citations with monetary penalties.
6.2.3 If the Developer sells any of the Affordable Units in violation of this
Agreement, as restitution to the City, the Developer shall forfeit all monetary amounts obtained
through the sale of the Affordable Units.
6.2.4 All such restitution shall be made to the City. Any funds received by the
City under this provision of this Agreement shall be placed in the City's Inclusionary Housing
Fund.
6.3 Indemnification. In addition to any other indemnity specifically provided in this
Agreement, Developer agrees to defend (with counsel of City's choosing and the consent of
Developer, which shall not be unreasonably withheld, conditioned or delayed and which may be
joint defense counsel upon City's and Developer's consent)indemnify and hold harmless City and
its respective officers, officials, agents, employees, representatives, and volunteers (collectively,
"Indemnitees") from and against any loss, liability, claim, or judgment arising from any act or
omission of Developer in carrying out its obligations under this Agreement, except to the extent
caused by the negligence or willful misconduct of Indemnitees.
7. ASSIGNMENT; COVENANTS RUN WITH THE LAND
7.1 Assignment by Developer.
7.1.1 Prohibited Transfers or Assignments. Developer shall not sell, transfer, or
assign the Property or Project in whole or in part, or transfer or assign Developer's rights and
obligations in this Agreement,in whole or in part,unless the sale,transfer,or assignment complies
with this section("Permitted Transfer"). If Developer seeks to sell, transfer or assign the Property
or Project, or any rights and obligations in this Agreement, in a manner that does not constitute a
Permitted Transfer, Developer shall request City's written consent, and City shall respond within
thirty(30)days with a written approval or denial, which City may determine in its sole and absolute
discretion. If City approves such a request, then prior to any such sale, transfer or assignment,
Developer shall pay City's reasonable fees as compensation for the City's review of the request.
City's failure to respond to the request within thirty(30) days shall be deemed an approval.
7.1.2 Sale of Property. Developer agrees and declares that the Property and the
Project shall be held, conveyed, mortgaged, encumbered, used, occupied, operated, sold, and
approved subject to all obligations set forth or incorporated in this Agreement, all of which are for
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the purpose of enhancing and protecting the value and attractiveness of the Property and the
Project. All of the obligations set forth or incorporated in this Agreement shall constitute
covenants which run with the land and shall be binding on Owner and its successors and assigns,
and all parties having or acquiring any right, title or interest in, or to any part of the Property or
Project. Owner further understands and agrees that the Density Bonus permit approvals received
for this Project have been made on the condition that Owner and all subsequent owners, or other
successors and assigns of the Property and/or Project sell the Affordable Units in accordance with
the terms, conditions, covenants, and restrictions of this Agreement for the Total Affordability
Term.
7.1.3 Subsequent Assignment. As used in this Agreement, the term "Developer"
shall be deemed to include any such transferee or assignee after the date such sale, transfer, or
assignment occurs in compliance with this Agreement.
7.1.4 Unpermitted Assignments Void. Any sale, transfer, or assignment made in
violation of this Agreement shall be null and void, and City shall have the right to pursue any right
or remedy at law or in equity to enforce the provisions of the restriction against unpennitted sales,
transfers, or assignments.
7.2 Covenants Run with the Land. The Property shall be used,occupied and improved
subject to the covenants, conditions, and restrictions set forth herein. The covenants, conditions,
restrictions, reservations, equitable servitudes, liens and charges set forth in this Agreement shall
run with the Property and shall be binding upon Developer and all persons having any right, title
or interest in the Property,or any part thereof, their heirs, and successive owners and assigns, shall
inure to the benefit of City and its successors and assigns, and may be enforced by City and its
successors and assigns. The covenants established in this Agreement shall, without regard to
technical classification and designation, be binding for the benefit and in favor of City and its
successors and assigns, and the parties hereto expressly agree that this Agreement and the
covenants herein shall run in favor of City. City is deemed the beneficiary of the terms and
provisions of this Agreement and of the covenants running with the land, for and in its own right
and for the purposes of protecting the interests of the community and other parties, public or
private, in whose favor and for whose benefit this Agreement and the covenants running with the
land have been provided. Developer hereby declares its understanding and intent that the burden
of the covenants set forth herein touch and concern the land and that the Developer's interest in the
Property is rendered less valuable thereby. Developer hereby further declares its understanding
and intent that the agreement provides a public benefit in furtherance of benefit of such covenants
touch and concern the land by enhancing and increasing the enjoyment and use of the Property by
the citizens of City and by furthering the health, safety, and welfare of the residents of City.
8. MISCELLANEOUS
8.1 Entire Agreement. This Agreement and all of its exhibits and attachments set forth
and contain the entire understanding and agreement of the parties with respect to the matters set
forth herein,and there are no oral or written representations,understandings or ancillary covenants,
undertakings or agreements which are not contained or expressly referred to herein. No testimony
or evidence of any such representations, understandings or covenants shall be admissible in any
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proceeding of any kind or nature to interpret or determine the terms or conditions of this
Agreement.
8.2 Amendment. Any alteration, change or modification of or to this Agreement, in
order to become effective, shall be made in writing and in each instance approved by the City
Council, and signed on behalf of each party. Any requested alteration, change or modification of
the Agreement by Developer shall require the payment of fees or deposit by Developer to City, as
applicable, for the City's review of the request. Each alteration, change, or modification to this
Agreement shall be recorded against the Property in the Official Records of Orange County,
California.
8.3 Notices.
8.3.1 Delivery. As used in this Agreement, "notice" includes, but is not limited
to, the communication of notice, request, demand, approval, statement, report, acceptance,
consent,waiver,appointment or other communication required or permitted hereunder. All notices
shall be in writing and shall be considered given either: (i)when delivered in person to the recipient
named below; or(ii)on the date of delivery shown on the return receipt,after deposit in the United
States mail in a sealed envelope as either registered or certified mail with return receipt requested,
and postage and postal charges prepaid, and addressed to the recipient named below; or(iii) two
(2) days after deposit in the United States mail in a sealed envelope, first class mail and postage
prepaid,and addressed to the recipient named below;or(iv)one(1)day after deposit with a known
and reliable next-day docwnent delivery service (such as Federal Express), charges prepaid and
delivery scheduled next-day to the recipient named below,provided that the sending party receives
a confirmation of delivery from the delivery service provider; or (v) the first business day
following the date of transmittal of any facsimile,provided confirmation of successful transmittal
is retained by the sending Party; or(vi) upon transmission thereof(as evidenced by the recipient's
reply to such notice or other competent evidence of actual receipt) if transmitted by electronic
transmission (email), provided that a copy of such notice is concurrently sent by first-class mail
postage prepaid. All notices shall be addressed as follows:
If to City: City of Santa Ana
Community Development Agency
20 Civic Center Plaza(M-26)
P.O. Box 1988
Santa Ana, California 92702
Attention: Housing Manager
With a copy to: Office of the City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor(M-29)
Santa Ana, California 92702
If to Developer: Habitat for Hwnanity of Orange County
2200 S. Ritchey Street
Santa Ana, CA 92705
Attn: Executive Director
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8.3.2 Change of Address. Either Party may, by notice given at any time,require
subsequent notices to be given to another person or entity, whether a party or an officer or
representative of a party, or to a different address, or both. Notices given before actual receipt of
notice of change shall not be invalidated by the change.
8.4 Severability. If any term,provision, covenant or condition of this Agreement shall
be determined invalid,void or unenforceable,the remainder of this Agreement shall not be affected
thereby to the extent such remaining provisions are not rendered impractical to perform, taking
into consideration the purposes of this Agreement.
8.5 Interpretation and Governing Law. This Agreement and any dispute hereunder
shall be governed and interpreted in accordance with the laws of the State of California without
regard to conflict of law principles. This Agreement shall be construed as a whole according to
its fair language and common meaning to achieve the objectives and purposes of the Parties hereto,
and the rule of construction to the effect that ambiguities are to be resolved against the drafting
Party shall not be employed in interpreting this Agreement, all Parties having been represented by
counsel in the negotiation and preparation hereof.
8.6 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this Agreement.
8.7 Singular and Plural. As used herein, the singular of any word includes the plural,
and vice versa, as context so dictates. Masculine, feminine, and neuter forms of any word include
the other as context so dictates.
8.8 Joint and Several Obligations. If at any time during the term of this Agreement the
Property and/or Project is owned, in whole or in part, by more than one Developer, all obligations
of such Developer under this Agreement shall be joint and several, and the default of any such
Developer shall be the default of all such Developers.
8.9 Time of Essence. Time is of the essence in the performance of the provisions of
this Agreement as to which time is an element.
8.10 Computation of Days. Unless otherwise specified in this Agreement or any Exhibit
attached hereto,use of the term"days" shall mean calendar days. For purposes of this Agreement
and all Exhibits attached hereto, "business days" shall mean every day of the week except
Saturdays, Sundays, official State holidays as recognized in Government Code Section 19853(a)
or successor statute, and any days in which Santa Ana City Hall is closed for business.
8.11 Waiver. Failure by a Party to insist upon the strict performance of any of the
provisions of this Agreement by the other Party, or the failure by a Party to exercise its rights upon
the default of the other Party, shall not constitute a waiver of such Party's right to insist and demand
strict compliance by the other Party with the terms of this Agreement thereafter.
8.12 Non-Discrimination in Employment. In performing its obligations under this
Agreement, Developer shall not discriminate because of race, religious creed, color, national
origin, ancestry, physical disability, mental disability, reproductive health decisionmaking,
medical condition, genetic information, marital status, sex, gender, gender identity, gender
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expression, age, sexual orientation, or veteran or military status, as defined and prohibited by
applicable law, in the recruitment, selection, training, utilization, promotion, termination or other
related activities. Developer affums that it is an equal opportunity employer and shall comply with
all applicable federal, state and local laws and regulations.
8.13 Third Party Beneficiaries. No person or entity, other than City and Developer shall
have any right of action based upon any provision of this Agreement.
8.14 Force Majeure. Neither Party shall be deemed to be in default where failure or
delay in performance of any of its obligations under this Agreement is caused by floods,
earthquakes, other Acts of God, fires,pandemics as declared by federal, state, or local emergency
resolution, wars, riots or similar hostilities, strikes and other labor difficulties beyond the Party's
control (including the Party's employment force), court actions (such as restraining orders or
injunctions), or other causes beyond the Party's control, including delays by any governmental
entity (although the City may not benefit from this provision for a delay that results from City's
failure to perform its obligations under this Agreement), or an insurance company of either party.
If any such events shall occur, the term of this Agreement and the time for performance by either
Party of any of its obligations hereunder may be extended by the written agreement of the Parties
for the period of time that such events prevented such performance.
8.15 Mutual Covenants. The covenants contained herein are mutual covenants and also
constitute conditions to the concurrent or subsequent performance by the Party benefited thereby
of the covenants to be performed hereunder by such benefited Party.
8.16 Successors in Interest. The burdens of this Agreement shall be binding upon, and
the benefits of this Agreement shall inure to, all permitted successors in interest to the Parties to
this Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and
constitute covenants running with the land. Each covenant to do or refrain from doing some act
hereunder with regard to development of the Property: (a)is for the benefit of and is a burden upon
every portion of the Property; (b)runs with the Property and each portion thereof;and(c)is binding
upon each Party and each successor in interest approved pursuant to this Agreement during
ownership of the Property or any portion thereof
8.17 Counterparts. This Agreement may be executed by the Parties in counterparts,
which counterparts shall be construed together and have the same effect as if all of the Parties had
executed the same instrument.
8.18 Jurisdiction and Venue. Any action at law or in equity under this Agreement or
brought by a Party hereto for the purpose of enforcing, construing or determining the validity of
any provision of this Agreement shall be filed and tried in the Superior Court of the County of
Orange, State of California, and the Parties hereto waive all provisions of law providing for the
filing, removal or change of venue to any other court.
8.19 Project as a Public-Private Undertaking. It is specifically understood and agreed
by and between the Parties hereto that the development of the Project is a public-private
development, that neither Party is acting as the agent of the other in any respect hereunder, and
that each Party is an independent contracting entity with respect to the terms, covenants and
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conditions contained in this Agreement. No partnership,joint venture or other association of any
kind is formed by this Agreement. The only relationship between City and Developer is that of a
government entity regulating the development of public-private property and the Developer of
such property.
8.20 Further Actions and Instruments. Each of the Parties shall cooperate with and
provide reasonable assistance to the other to the extent contemplated hereunder in the performance
of all obligations under this Agreement and in the satisfaction of the Project and conditions of this
Agreement. Upon the request of either Party at any time, the other Party shall promptly execute,
with acknowledgment or affidavit if reasonably required, and file or record such required
instruments and writings and take any actions as may be reasonably necessary under the terms of
this Agreement to carry out the intent and to fulfill the provisions of this Agreement or the Project
or to evidence or consummate the transactions contemplated by this Agreement. City hereby
authorizes City Manager to take such other actions and negotiate and execute any additional
agreements or amendments to this agreement as may be reasonably necessary or proper to fulfill
the City's obligations under this Agreement. The City Manager may delegate her or his powers
and duties under this Agreement to an authorized management level employee of the City.
8.21 Estoppel Certificate, Within ten(10)business days following a written request by
any of the Parties, the other Party shall execute and deliver to the requesting Party a statement
certifying that (i) either this Agreement is unmodified and in full force and effect or there have
been specified (date and nature) modifications to the Agreement, but it remains in full force and
effect as modified; and (ii) either there are no known current uncured defaults under this
Agreement or that the responding Party alleges that specified (date and nature) defaults exist. The
statement shall also provide any other reasonable information requested. The failure to timely
deliver this statement shall constitute a conclusive presumption that this Agreement is in full force
and effect without modification, except'as may be represented by the requesting Party, and that
there are no uncured defaults in the performance of the requesting Party, except as may be
represented by the requesting Party.
8.22 No Subordination. City's approval of the necessary land use entitlements that
authorize Developer to develop, operate, and maintain the Project was based upon Developer's
obligation to provide the Affordable Units pursuant to the State Density Bonus Law,City Density
Bonus Ordinance, and the terms and conditions of this Agreement. For the Total Affordability
Term, this Agreement shall have priority over any and all mortgages, deeds of trust, and other
similar forms of secured financing recorded against the Property or any portion thereof. Developer
expressly understands and acknowledges that state law requires preservation of affordability
covenants in connection with the approval of this density bonus project.
8.22.1 Furthermore, the City will require each Homebuyer purchasing an
Affordable Unit to execute an Affordable Housing Resale Restrictions and Notice of Affordability
on Transfer of Property. The Affordable Housing Resale Restrictions and Notice of Affordability
on Transfer of Property shall have priority over any and all mortgages, deeds of trust, and other
similar forms of secured financing recorded against the Property or any portion thereof.
8.23 Attorneys' Fees and Costs. If either Party to this Agreement commences an action
against the other Party to this Agreement arising out of or in connection with this Agreement, the
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prevailing Party shall be entitled to recover reasonable attorneys' fees, expert witness fees, costs
of investigation, and costs of suit from the losing Party.
8.24 Authority to Execute. The person or persons executing this Agreement on behalf
of each Party warrants and represents that he or she/they have the authority to execute this
Agreement on behalf of his or her/their corporation, partnership or business entity and warrants
and represents that he or she/they has/have the authority to bind the Party to the performance of its
obligations hereunder.
(Signatures on following page}
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EXHIBIT D
IN WITNESS WHEREOF, the parties hereto have caused this Affordable Housing
Regulatory Agreement and Declaration of Covenants and Restrictions to be executed on the date
set forth at the beginning of this Agreement.
DEVELOPER
HABITAT FOR HUMANITY OF ORANGE COUNTY
a California nonprofit religious corporation.
By:
Name:
Title:
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55394.00101\42405923.1
EXHIBIT D
ATTEST: CITY OF SANTA ANA
Jennifer L. Hall Alvaro Nunez
City Clerk Acting City Manager
Dated: Dated:
APPROVED AS TO FORM:
SONIA R. CARVALHO, City Attorney
Matthew Cody
Best, Best&Krieger
Special Counsel for the City
Dated:
RECOMMENDED FOR APPROVAL:
Michael L. Garcia
Executive Director
Community Development Agency
Dated:
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EXHIBIT D
EXHIBITS
Exhibit A: Legal Description of the Property
Exhibit B: Affordable Housing Resale Restrictions
Exhibit C: City Deed of Trust
Exhibit D: City Promissory Note
Exhibit E: Notice of Affordability Restrictions
Exhibit F: Income Verification Form
Exhibit G: Certification of Continued Occupancy
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55394.00101\42405923.1
EXHIBIT D
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
55394.00I01\42347096.1
EXHIBIT D
LEGAL DESCRIPTION
Real property in the City of Santa Ana, County of Orange, State of California, described
as follows:
LOT 4 IN BLOCK A OF TRACT NO. 451, IN THE CITY OF SANTA ANA, AS PER MAP
RECORDED IN BOOK
16, PAGE 41 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID ORANGE
COUNTY.
EXCEPTING THEREFROM THE WEST 7 FEET AND THE EAST 3 FEET.
ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE CITY OF
SANTA ANA AS DESCRIBED
IN DOCUMENT RECORDED FEBRUARY 25, 1983 AS INSTRUMENT NO. 83-84912
OF OFFICIAL RECORDS.
APN: 405-101-37
EXHIBIT 0
EXHIBIT B
AFFORDABLE HOUSING RESALE RESTRICTIONS
55394.00101\42347096.1
EXHIBIT D
RECORDING REQUESTED BY, )
AND WHEN RECORDED MAIL TO: )
)
City of Santa Ana )
20 Civic Center Plaza(M-37) )
Santa Ana, California 92702 )
Attn: Housing Manager )
This document is exempt from payment of a recording fee
pursuant to Government Code Sections 27383 and 6103.
AFFORDABLE HOUSING RESALE RESTRICTION
(Conditions, Covenants, and Restrictions Affecting Real Property and the Resale,
Ownership, Occupancy,Maintenance, and Other Matters Related to Real Property)
This AFFORDABLE HOUSING RESALE RESTRICTION ("Restriction") is made
as of , by ("Homebuyer") in favor of the CITY OF SANTA
ANA, a charter city and municipal corporation("City").
RECITALS
A. Homebuyer has purchased a single family house located at
Santa Ana, California 9270, as such real property is more particularly described in "Exhibit A"
attached hereto and incorporated herein ("Property").
B. Homebuyer and City have entered into that certain Homebuyer Loan Agreement
("Loan Agreement") dated of even date herewith, which is incorporated herein by reference and
a copy of which is on file with City at its offices and is a public record, pursuant to which City
has agreed for the Property to be sold to Homebuyer at an Affordable Sales Price by providing
certain financial assistance for the Project, which benefits the Homebuyer ("Homebuyer Loan")
and Homebuyer has agreed to subject the Property to certain conditions, covenants and
restrictions. Capitalized terms used herein and not otherwise defined shall have the same
meaning as set forth in the Loan Agreement.
C. Homebuyer and City desire and intend to restrict the Property and the
improvements thereon in accordance with this Restriction to preserve its value for the benefit of
Homebuyer, its successors and the surrounding neighborhood. Homebuyer agrees and
acknowledges that these Restrictions are intended to implement and further the intent of the
Regulatory Agreement Imposing Affordable Housing Covenants and Restrictions (Density
Bonus) (hereafter, the "Regulatory Agreement"), entered into between City and Developer of the
Property, which was recorded against the Affordable Unit to impose the conditions, covenants,
and restrictions as set forth herein. These Restrictions shall be construed in accordance with the
Regulatory Agreement and, in the event of a conflict, the provisions of the Regulatory
Agreement shall control.
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EXHIBIT D
D. Homebuyer is a Low Income Household, as that term is defined in this
Restriction.
E. Homebuyer has represented to City that Homebuyer and Homebuyer's household
intend to reside in the Property as Homebuyer's principal residence at all times during
Homebuyer's ownership of the Property.
NOW,THEREFORE, for good and valuable consideration, the parties agree as follows:
1. Definitions
"Affordability Period" means that period of time commencing upon the Date of this
Restriction and terminating on the forty-fifth(45th) anniversary of such date.
"Affordable Housing Cost" means the purchase price for Moderate Income Households
pursuant to California Health & Safety Code Section 50052.5, the implementing regulations of
Sections 6920, 6924 and 6930 of Title 25 of the California Code of Regulations for Moderate
Income Households
Notwithstanding the provisions of this Restriction, if the Property is sold during the
Affordability Period by Homebuyer to a Low Income Household, and the Sales Price does not
exceed an "Affordable Housing Cost" to such Buyer, then so long as the Maker is not in default
(either Ownership Default or Maintenance Default) of the Agreement, the Note may be assumed
by the eligible Buyer by an assignment and assumption agreement that is reasonably acceptable
to City. Upon the effective date of such assignment and assumption, the assigning Homebuyer
shall no longer be liable for any further obligations under the Loan Agreement or this Restriction
that accrue after the date of such assignment and assumption. In order to verify the Buyer's
status as a Low Income Household, Homebuyer shall submit to the City the identity of the
proposed Buyer and adequate information evidencing the income and household size of the
proposed Buyer. Said income information shall be submitted together with the notice of
proposed sale pursuant to Section 2 of the Loan Agreement not less than thirty(30) days prior to
opening of escrow for the proposed sale and shall include original or true copies of pay stubs,
income tax records or other financial documents in order that the City may determine and verify
the household income of the proposed Buyer to determine whether the Buyer is a Low Income
Household, and whether the Property is being transferred to such Buyer at an Affordable
Housing Cost. If the City is unable to verify the Buyer's income as provided herein prior to the
proposed sale, then the Buyer's income shall be deemed to exceed the maximum allowable
income limit for Eligible Persons and Families.
"City"means the City of Santa Ana, California, a California municipal corporation, and
the City's successors and assigns.
"County"means the County of Orange, California.
"Date of this Restriction"means the date in the first paragraph of this Restriction.
"Default" means the failure of a party to perform any action or covenant required by this
Restriction within the time periods provided herein following notice and opportunity to cure.
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The term default also includes an Ownership Default and a Maintenance Default as more fully
defined and described herein. Notwithstanding the foregoing for purposes of acceleration of the
Homebuyer Loan, or initiation of foreclosure proceedings there shall be a distinction between the
types of default hereunder, including an "Ownership Default" and a "Maintenance Default." The
term "Ownership Default" means the failure of Homebuyer to perform any action or covenant
required by the Affordable Housing Resale Restriction related to ownership, owner-occupancy,
lien priority, and restrictions on sale and resale of the Property subject to the notice and
opportunity to cure provisions set forth herein. A default of any obligation secured by the First
Lien shall be a cross-default and also constitute an Ownership Default. The term "Maintenance
Default" means the failure of Homebuyer to perform any action or covenant required by
Restriction relating to a "Maintenance Deficiency," including the ongoing upkeep, maintenance,
and use of the Property in decent, safe, sanitary, clean, and neighborly manner, subject to the
notice and opportunity to cure provisions set forth herein(and expressly excluding an Ownership
Default).
"Developer" means Habitat for Humanity of Orange County, a non-profit public benefit
corporation.
"First Lien" means the lien of the institution making the purchase money mortgage loan
to Homebuyer for the purchase of the Property.
"Homebuyer" means the person or persons set forth in the first paragraph of this
Restriction, and their successors and assigns.
"Legal Description"means the legal description of the Property which is attached hereto
as Exhibit A and incorporated herein.
"Low Income" and "Low Income Households" means low income households as
defined in Health & Safety Code Section 50079.5.
"Notice of Intent to Transfer" means the Notice of Intent to Transfer attached hereto as
Exhibit B and incorporated herein by reference.
"Permitted Transfer" means any Transfer which is permitted pursuant to Section 4
hereof.
"Prohibited Transfer" means any Transfer which is not permitted pursuant to Section 4
hereof.
"Property" means that certain real property located at the street address set forth in
Recital A and legally described in the Legal Description.
"Purchase Agreement"means that certain agreement pursuant to which Homebuyer has
agreed to purchase the Property from the Developer.
"Request for Approval of Proposed Transferee" means the Request for Approval of
Proposed Transferee attached hereto as Exhibit B and incorporated herein.
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EXHIBIT D
"Request for Notice"means the Request for Notice of Default attached hereto as Exhibit
C and incorporated herein.
"Restriction"means this Affordable Housing Resale Restriction.
"Sales Price"means the sum to be paid by a Transferee for the Transfer of the Property.
"Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or
involuntary, of any interest in the Property. Without limiting the generality of the foregoing,
Transfer shall include (i) a transfer by devise, inheritance or intestacy to a party who does not
meet the definition of a Low or Moderate Income Household; (ii) a life estate; (iii) creation of a
joint tenancy interest; (iv) a gift of all or any portion of the Property; or (v) any voluntary
conveyance of the Property. Transfer shall not include transfer to a spouse in a dissolution
proceeding.
"Transferee" shall mean any natural person or entity who obtains ownership or
possessory rights in the Property pursuant to a Transfer.
2. Restrictions on Sale of Property. Homebuyer covenants and agrees that during
the Affordability Period, each subsequent resale of the Property by the then-owner thereof shall
be to a Low Income Household at an Affordable Housing Cost.
3. Homebuyer's Representations and Warranties as to the Sale of the Property
to Homebuyer. Homebuyer represents and warrants to City that the financial and other
information which Homebuyer has provided to City with respect to Homebuyer's income and the
purchase price of the Property was true and correct at the time such information was provided,
and remains true and correct as of the Date of this Restriction.
4. Permitted Sales of the Property. City hereby permits sales of the Property to
proposed Transferees who are Low Income Households, and are approved in accordance with
this Section 4, provided the Sales Price does not exceed an Affordable Housing Cost to such
proposed Transferee ("Permitted Transfers"). In the event that Homebuyer desires to Transfer
the Property during the Affordability Period, prior to the Transfer the owner shall notify City by
delivering a Notice of Intent to Transfer to City, which shall indicate the identity of the proposed
Transferee who desires to purchase the Property, whether the purchaser is a Low Income
Household, and whether the sales price is at an Affordable Housing Cost. In addition to
Homebuyer's and the proposed Transferee's delivery of the Notice of Intent to Transfer, the
following procedure shall apply:
a. Notice to City. Homebuyer shall send the Notice of Intent to Transfer to
City at the address set forth in Section 24.
b. Qualification of Proposed Transferee. The proposed Transferee shall
provide City with sufficient information in the form provided by City including without
limitation, a certification as to the income and family size of the proposed Transferee, for City to
determine if the proposed Transferee is a Low or Moderate Income Household, and the purchase
price is at an Affordable Housing Cost.
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EXHIBIT D
c. Certificates from Parties. Homebuyer and proposed Transferee each
shall certify in writing, in a form acceptable to City, that the Transfer shall be closed in
accordance with, and only with, the terms of the sales contract and other documents submitted to
and approved by City and that all consideration delivered by the proposed Transferee to owner
has been fully disclosed to City. The written certificate shall also include a provision that in the
event a Transfer is made in violation of the terms of this Restriction or false or misleading
statements are made in any documents or certificate submitted to City for its approval of the
Transfer, City shall have the right to file an action at law or in equity to make the parties
terminate and/or rescind the sales contract and/or declare the sale void notwithstanding the fact
that the Transfer may have closed and become final as between Homebuyer and Transferee.
d. Written Consent of City Required Before Transfer. During the
Affordability Period, the Property, and any interest therein, shall not be conveyed by any
Transfer except with the express written consent of City, which consent shall be given only if the
Transfer is in accordance with the provisions of this Restriction. This provision shall not
prohibit the encumbering of title for the sole purpose of securing financing of the purchase price
of the Property.
e. Notice of Prohibited Transfer. Within twenty (20) days after receiving
notification of a proposed Transfer in accordance with Section 4a., City shall determine and give
notice to Fomebuyer as to whether the proposed Transfer is a Permitted Transfer or Prohibited
Transfer, or whether the Transfer would cause an acceleration of the Note. In the event that the
proposed Transfer is a Prohibited Transfer, such notice to Homebuyer shall specify the nature of
the Prohibited Transfer. If the violation is not corrected to the satisfaction of City within ten(10)
days after the date of the notice, or within such further time as City determines is necessary to
correct the violation, City may declare a Default under this Restriction. Upon the declaration of
a Default, City may apply to a court of competent jurisdiction for specific performance of this
Restriction, for an injunction prohibiting a proposed sale or Transfer in violation of this
Restriction, for a declaration that the Prohibited Transfer is void, or for any such other relief as
may be appropriate.
1. Delivery of Documents. Upon the close of the proposed Transfer,
Homebuyer and Transferee, as applicable, shall provide the City with a copy of the final sales
contract, settlement statement, escrow instructions, all certificates required by this Section 4 and
any other documents City may request.
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EXHIBIT D
5. Encumbrances,
a. Subordination. Except as provided otherwise herein, the provisions of
the Loan Agreement, this Restriction, the Notice of Affordability Restrictions and the City Deed
of Trust and Rider, the obligations herein and therein, shall be subordinate only to the First Lien
on the Property and, if applicable, other loan(s) as approved by the Executive Director, including
lien instruments that secure other Homebuyer purchase money and/or down payment assistance,
including without limitation City, State of California, or federal affordable housing programs,
which liens shall not impair the rights under the First Lien in the event of default under the First
Lien by Homebuyer. Such remedies under the First Lien include the right of foreclosure or
acceptance of a deed or assignment in lieu of foreclosure. If title to the Property is transferred by
foreclosure or acceptance of a deed in lieu of foreclosure, or assignment of the First Lien to the
Secretary of the Department of Housing and Urban Development, the Loan Agreement, this
Restriction, and City Deed of Trust shall be automatically terminated and shall have no further
effect as to the Property or any Transferee thereafter. However, in no event shall the Loan
Agreement, the City Deed of Trust, and this Affordable Housing Resale Restriction, be
subordinate to any First Lien on the Property securing a loan with provisions which allow
negative amortization, or to refinancing of the lien of the First Lien for a loan amount in excess
of the sum of the then current loan balance secured by the First Lien and loan closing costs.
b. Request for Notice of Default. City may cause a Request for Notice to
be recorded on the Property subsequent to the recordation of the First Lien deed of trust or
mortgage requesting a statutory notice of default as set forth in California Civil Code Section
2924b. A form of a Request for Notice is attached hereto as Exhibit C and incorporated herein.
c. Further Encumbrances. Homebuyer agrees that it shall not record or
cause the recordation of any deed of trust ("Further Encumbrance") securing a note having an
original principal sum which, when added to the sum of the principal amount(s) of any notes
secured by any deeds of trust against the Property as of the date of recordation of the Further
Encumbrance, exceeds one hundred percent(100%) of the fair market value of the Property.
6. Reserved.
7. Uses. Homebuyer covenants and agrees to devote, use and maintain the Property
in accordance with this Restriction. All uses conducted on the Property, including, without
limitation, all activities undertaken by Homebuyer pursuant to this Restriction, shall conform to
all applicable provisions of the Santa Ana Municipal Code, and the recorded documents
pertaining to and running with the Property.
8. Nondiscrimination Covenants. Homebuyer covenants by and for itself, its
successors and assigns, and all persons claiming under or through them that there shall be no
discrimination against or segregation of, any person or group of persons on account of any basis
listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of
Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the
grantee or any person claiming under or through him or her, establish or permit any practice or
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practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein
conveyed. The foregoing covenants shall run with the land. All deeds, leases or contracts
relating to the Property, or any part thereof, shall contain or be subject to substantially the
following non-discrimination or non-segregation clauses:
(a) In deeds: "The grantee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any person
or group of persons on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy,
tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person
claiming under or through him or her, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein
conveyed. The foregoing covenants shall run with the land."
(b) In leases: "The lessee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions: "That there shall be no discrimination against or segregation of any person or
group of persons, on account of any basis listed in subdivision (a)or(d) of Section 12955
of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy,
tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself,
or any person claiming under or through him or her, establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the
premises herein leased."
(c) In contracts: "There shall be no discrimination against or segregation of;
any person or group of persons on account of any basis listed in subdivision(a) or (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and
Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises which are the subject of this Agreement,
nor shall the grantee or any person claiming under or through him or her, establish or
permit any practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees,
or vendees in the premises herein conveyed. The foregoing covenants shall run with the
land."
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EXHIBIT D
The covenants established in this Section 8 shall, without regard to technical
classification and designation, be binding for the benefit and in favor of City and its successors
and assigns, and shall remain in effect in perpetuity.
9. Maintenance of Property. Homebuyer shall maintain the improvements and
landscaping on the Property in a manner consistent with community standards which will uphold
the value of the Property, in accordance with the Santa Ana Municipal Code. Homebuyer also
agrees to comply with all applicable federal, state and local laws.
a. Exterior Maintenance. Except as to be maintained by the homeowners
association, as applicable, all exterior, painted surfaces of any structures located on the Property
shall be maintained at all times in a clean and good condition. Any defacing marks shall be
cleaned or removed within a reasonable period of time.
b. Front and Side Exteriors. Except as to be maintained by the
homeowners association, as applicable, Homebuyer shall at all times maintain the front exterior,
any visible side exteriors, and yards, if any, in a clean,safe and presentable manner.
c. Graffiti Removal. All graffiti and defacement of any type, including but
not limited to marks, words and pictures, shall be promptly removed from the Property within
two (2) days of the time they were made and any necessary painting or repair completed in a
timely and expeditious manner after notice thereof, whichever is less.
d. No Nuisance. Homebuyer shall not maintain, cause to be maintained, or
allow to be maintained on or about the Property any public or private nuisance, including without
limitation, the conduct of criminal activities set forth in the nuisance abatement provisions of the
Uniform Controlled Substances Act (Health & Safety Code Sections 11570, et seq.) or the Street
Terrorism Enforcement and Prevention Act (Penal Code Sections 186.22 et seq.), or any
successor statute or law.
10. Occupancy Standards. The Property shall be used as the principal personal
residence of Homebuyer and Homebuyer's immediate family/household and for no other
purpose. Homebuyer shall not enter into an agreement for the rental or lease of all or any part of
the Property. Homebuyer shall not rent out a room or rooms at the Property. Homebuyer may
request a temporary waiver of the foregoing requirement in the event of extreme hardship
requiring Homebuyer to move to another geographical area or to less expensive housing,
including, for example and without limitation, transfer of job location, loss of job, or unexpected
major expenses. City may approve or disapprove such request in its sole discretion, and may
require as a condition of approval that Homebuyer only rent the Property to Eligible Low Income
Households at an affordable rent (as defined in Section 50052.5 and 50053 of the California
Health& Safety Code.) Subject to applicable state or federal law, the standard occupancy for the
Property shall be consistent with the Regulatory Agreement. Homebuyer shall, upon demand by
City, submit to City an affidavit of occupancy verifying I-lomebuyer's compliance with this
Section 10. Such affidavit maybe required by City on an annual basis.
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11. Effect of Violation of the Terms and Provisions of this Restriction.
a. In General. The covenants established in this Restriction shall, without
regard to technical classification and designation, be binding for the benefit and in favor of City,
its successors and assigns, as to those covenants which are for its benefit. The covenants
contained in this Restriction shall remain in effect for the periods of time specified herein. The
covenants against discrimination shall remain in effect in perpetuity. City is deemed the
beneficiary of the terms and provisions of this Restriction and of the covenants running with the
land, for and in its own rights and for the purposes of protecting the interests of the community
and other parties, public or private, in whose favor and for whose benefit this Restriction and the
covenants running with the land have been provided. This Restriction and the covenants herein
shall run in favor of City, without regard to whether City has been, remains or is an owner of any
land or interest therein in the Property or in the Project Area. City shall have the right, if the
Restriction or covenants are breached, to exercise all rights and remedies, and to maintain any
actions or suits at law or in equity or other proper proceedings to enforce the curing of such
breaches to which it or any other beneficiaries of this Restriction and covenants may be entitled.
b. Acceleration. The whole of the Note Amount (as defined in
Section 1.2.b. of the Loan Agreement) and all other payments due under the Homebuyer Loan
shall become due and immediately payable to City by Homebuyer upon the occurrence of any
one of the following events of acceleration:
(i) Homebuyer, in Homebuyer's sole discretion, elects to Transfer the
Property for a price in excess of an Affordable Housing Cost, and Transfers the Property;
(ii) Homebuyer makes a Prohibited Transfer of title to or any interest
in the Property in violation of this Restriction;
(iii) Homebuyer refinances any lien or encumbrance to which City
Deed of Trust is subordinate (each such lien, a "First Lien") for a loan amount in excess of the
then current loan balance secured by such lien or encumbrance and loan closing costs;
(iv) Homebuyer fails to occupy the Property as Ilomebuyer's principal
residence pursuant to Section 7 of the Regulatory Agreement or is in Default of any other
obligation under the Loan Agreement;
(v) Homebuyer has an Ownership Default violating any affordable
housing terms or provisions of this Restriction.
12. Hardship. At the request of Homebuyer, and for a specific occasion, City may,
in its sole and absolute discretion, in writing waive the requirements of Section 11, subparagraph
(b) and defer repayment and/or extend the term of the Note. Any waiver or deferment shall be
on a case-by-case basis, and no future rights for waiver or deferment shall arise or be implied.
Notwithstanding the foregoing, Homebuyer may, upon written approval by City, refinance any
First Lien with a fixed rate loan for a loan amount equal to or less than the then current loan
balance secured by such First Lien with no reduction in term.
13. Reserved.
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14. Compliance with Laws; Governing Law. Homebuyer hereby agrees to comply
with all applicable ordinances, rules, and regulations of City. Nothing herein is intended to be,
nor shall it be deemed to be, a waiver of any City ordinance, rule, or regulation. This Restriction
shall be governed by the laws of the State of California. Any legal action brought under this
declaration must be instituted in the Superior Court of the County of Orange, State of California,
or in the Federal District Court in the Central District, Santa Ana Division.
15. Indemnification. Homebuyer shall pay for, defend, indemnify and hold harmless
City and the City and their respective officers, officials, agents, employees, representatives, and
volunteers from and against any loss, liability, claim, or judgment relating in any manner to
Homebuyer's use of the Property or Homebuyer's violation of this Restriction. Homebuyer shall
remain fully obligated for the payment of taxes, liens and assessments related to the Property.
There shall be no reduction in taxes for Homebuyer, nor any transfer of responsibility to City to
make such payments,by virtue of this Restriction.
16. Insurance. Homebuyer shall maintain, during the term of this Restriction, an
all-risk property insurance policy insuring the Property in an amount equal to the full
replacement value of the structures on the Property. The policy shall contain a statement of
obligation on behalf of the carrier to notify the City of any material change, cancellation or
termination of coverage at least thirty (30) days in advance of the effective date of such material
change, cancellation or termination. Homebuyer shall transmit a copy of the certificate of
insurance to City within thirty (30) days of the effective date of this Restriction, and Homebuyer
shall annually transmit to City a copy of the certificate of insurance, signed by an authorized
agent of the insurance carrier setting forth the general provisions of coverage. The copy of the
certificate of insurance shall be transmitted to City at the address set forth in Section 24 hereof.
The form, content and issuer of any certificate of insurance approved by City.
17. Defaults. Failure or delay by either party to perform any term or provision of this
Restriction which is not cured within thirty (30) days after receipt of notice from the other party
constitutes a default under this Restriction; provided, however, that if such default is of the
nature requiring more than thirty (30) days to cure, the defaulting party shall avoid default
hereunder by commencing to cure within such thirty (30) day period, and thereafter diligently
pursuing such cure to completion. The party who so fails or delays must immediately commence
to cure, correct or remedy such failure or delay, and shall complete such cure, correction or
remedy with diligence. The injured party shall give written notice of default to the party in
default, specifying the default complained of by the injured party. Except as required to protect
against further damages, the injured party may not institute proceedings against the party in
default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall
not constitute a waiver of any default, nor shall it change the time of default.
18. Non-Waiver. Failure to exercise any right City may have or be entitled to, in the
event of default hereunder, shall not constitute a waiver of such right or any other right in the
event of a subsequent default.
19. Further Assurances. Homebuyer shall execute any further documents consistent
with the terms of this Restriction, including documents in recordable form, as City shall from
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time to time find necessary or appropriate to effectuate its purposes in entering into this
Restriction.
20. Governing Law. Homebuyer hereby agrees to comply with all ordinances, rules
and regulations of City and the City. Nothing in this Restriction is intended to be, nor shall it be
deemed to be, a waiver of any City ordinance, rule or regulation. This Restriction shall be
governed by the laws of the State of California. Any legal action brought under this Restriction
must be instituted in the Superior Court of the County of Orange, State of California, or in the
Federal District Court in the Central District of California, Santa Ana Division.
21. Amendment of Restriction. No modification, rescission, waiver, release or
amendment of any provision of this Restriction shall be made except by a written agreement
executed by Homebuyer and City.
22. City May Assign. City may, at its option, assign its rights hereunder without
obtaining the consent of Homebuyer.
23. Homebuyer Assignment Prohibited. In no event shall Homebuyer assign or
transfer any portion of this Restriction without the prior express written consent of City, which
consent shall be given by City only in the event that City determines that the assignee or
transferee is a Low or Moderate Income Household, that the assignee's or transferee's monthly
housing payments are at an Affordable Housing Cost, and that the assignee or transferee has
expressly assumed this Restriction by execution of a written assignment document to be
provided by City. This section shall not affect or diminish City's right to assign all or any
portion of its rights hereunder.
24. Notices. Any notices, requests or approvals given under this Restriction from one
party to another may be personally delivered or deposited with the United States Postal Service
for mailing, postage prepaid, registered or certified mail, return receipt requested to the following
address:
To Homebuyer:
Santa Ana, CA 92704
To City: Housing City
City of Santa Ana
20 Civic Center Plaza (M-37)
Santa Ma, California 92701
Attn: Housing Manager
Either party may change its address for notice by giving written notice thereof to die
other party.
11
EXHIBIT B
EXHIBIT D
25. Attorneys' Fees and Costs. In the event that any action is instituted to enforce
payment or performance under this Restriction, the parties agree the non-prevailing party shall be
responsible for and shall pay all costs and all attorneys' fees incurred by such prevailing party in
enforcing this Restriction.
26. Entire Agreement. This Restriction, together with the Loan Agreement and all
attachments thereto and hereto, constitutes the entire understanding and agreement of the parties.
This Restriction integrates all of the terms and conditions mentioned herein or incidental thereto,
and supersedes all prior negotiations, discussions and previous agreements between the City and
Homebuyer concerning all or any part of the subject matter of this Restriction.
[Signature block begins on follow page.]
12
EXHIBIT B
EXHIBIT D
IN WITNESS WHEREOF, the parties have executed this Restriction as of the date set
forth above.
HOMEBUYER:
By:
By:
CITY:
ATTEST: CITY OF SANTA ANA
By: By:
City Clerk City Manager
Dated: Dated:
APPROVED AS TO FORM:
City Attorney
By:
Dated:
RECOMMENDED FOR APPROVAL:
By:
Executive Director
Community Development Agency
13
EXHIBIT B
EXHIBIT D
Exhibit A
Legal Description
14
EXHIBIT B
EXHIBIT D
EXHIBIT C
CITY DEED OF TRUST
55394.00101\42347096.1
EXHIBIT D
DEED OF TRUST WITH ASSIGNMENT OF RENTS
RECORDING REQUESTED BY, )
AND WHEN RECORDED MAIL TO: )
)
City of Santa Ana )
20 Civic Center Plaza(M-37) )
Santa Ana,California 92702 )
Attn: Housing Manager )
This document is exempt from payment of a recording fee
pursuant to Government Code Sections 27383 and 6103.
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(SHORT FORM)
This DEED OF TRUST is made as of between
herein called TRUSTOR, whose address is
, herein called TRUSTEE, and the CITY OF SANTA ANA, a charter city and
municipal corporation, herein called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property
in the City of Santa Ma, County of Orange, State of California, described as:
SEE EXHIBIT 1 ATTACHED HERETO AND MADE A PART HEREOF.
together with the rents, issues and profits thereof, subject, however, to the right, power and
authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents,
issues and profits for the purpose of securing (1) that Promissory Note dated concurrently
herewith, made by Trustor in favor of Beneficiary, and extensions or renewals thereof, in the
principal sum of $ , with the balance of the indebtedness, due and payable on
occurrence of an event of acceleration as defined in the Promissory Note, (2) the performance of
each agreement of Trustor incorporated by reference or contained herein, and (3) payment of
additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors
or assigns, when evidenced by a promissory note or notes reciting that they are secured by this
Deed of Trust.
To protect the security of this Deed of Trust, and with respect to the property above
described, Trustor expressly makes each and all of the agreements, and adopts and agrees to
perform and be bound by each and all of the terms and provisions set forth in subdivision A, and
it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of
the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties
August 18, 1964, in the book and at the page of Official Records in the office of the county
recorder of the county where said property is located, noted below opposite the name of such
county, namely:
1
Exhibit C
EXHIBIT D
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187
Alpine 3 130-31 Lake 437 110 Plumes 166 1307 Siskiyou 506 762
Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621
Butte 1330 513 Los Angeles T3878 874 Sacramento 5039 124 Sonoma 2067 427
Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56
Colusa 323 391 Marin 1849 122 8,Bernardino 6213 768 Sutter 655 585
Contra Costa 4684 1 Mariposa 90 453 S,Francisco A-804 596 Tshama 457 183
Del Norte 101 549 Mendocino 667 99 S.Joaquin 2855 283 Trinity 108 595
El Dorado 704 635 Merced 1660 753 S.Luis Obispo 1311 137 Tulare 2530 108
Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160
Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237
Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16
Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693
Inyo 165 672 Nevada 363 94 Shasta 800 633
Kern 3756 690 Orange 7182 18 San Diego 1964 149774
Series 5
shall inure to and bind the parties hereto, with respect to the property above described. Said
agreements, terms and provisions contained in said subdivisions A and B, (identical in all
counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated
herein and made a part of this Deed of Trust for all purposes as fully as set forth at length herein,
and Beneficiary may charge for a statement regarding the obligation secured hereby, provided
the charge therefor does not exceed the maximum allowed by law.
The undersigned Trustor also agrees to all terms set forth in Exhibit 2, 3 and 4, attached
hereto and incorporated herein by reference.
The undersigned Trustor, requests that a copy of any notice of default and any notice of
sale hereunder be mailed to him/her at the address hereinbefore set forth.
TRUSTOR:
Exhibit C
EXHIBIT D
EXHIBIT 1 TO DEED OF TRUST
LEGAL DESCRIPTION
Address:
Exhibit C
EXHIBIT D
EXHIBIT 2 TO DEED OF TRUST
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded
in each county in California as stated in the foregoing Deed of Trust and incorporated by
reference in said Deed of Trust as being a part thereof as if set forth at length therein.
A. To protect the security of this Deed of Trust, Trustor agrees:
(1) To keep said property in good condition and repair; not to remove or
demolish any building thereon; to complete or restore promptly and in good and workmanlike
manner any building which may be constructed, damaged or destroyed thereon and to pay when
due all claims for labor performed and materials furnished therefor; to comply with all laws
affecting said property or requiring any alterations or improvements to be made thereon; not to
commit or permit waste thereof; not to commit, suffer or permit any act upon said property in
violation of law; to cultivate irrigate, fertilize, fumigate, prune and do all other acts which from
the character or use of said property may be reasonably necessary, the specific enumerations
herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory
to and with loss payable to Beneficiary. The amount collected under any fire or other insurance
policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary, the entire amount so collected or any
part thereof may be released to Trustor. Such application or release shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and
expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such
action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by
Beneficiary to foreclose this Deed.
(4) to pay: at least ten days before delinquency all taxes and assessments
affecting said property, including assessments on appurtenant water stock; when due, all
encumbrances, charges and liens, with interest, on said property or any part thereof, which
appear to be prior or superior hereto; all costs, fees and expenses of this trust.
Should Trustor fail to make any payment or to do any act as herein provided, then
Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon
Trustor and without releasing Trustor from any obligation thereof, may: make or do the same in
such manner and to such extent as either may deem necessary to protect the security hereof,
Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in
and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance,
charge or lien which in the judgment of either appears to be prior or superior hereto; and, in
exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable
fees.
Exhibit C
EXHIBIT D
(5) To Pay immediately and without demand all sums so expended by
Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in
effect at the date hereof, and to pay for any statement provided for by law in effect at the date
hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
(1) That any award of damages in connection with any condemnation for
public use of or injury to said property or any part thereof is hereby assigned and shall be paid to
Beneficiary who may apply or release such monies received by him in the same manner and with
the same effect as above provided for disposition of proceeds of fire or other insurance.
(2) That by accepting payment of any sum secured hereby after its due date,
Beneficiary does not waive his right either to require prompt payment when due of all other sums
so secured or to declare default for failure so to pay.
(3) That at any time or from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this Deed and said note
for endorsement, and without affecting the personal liability of any person for payment of the
indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the
making of any map or plat thereof; join in granting any easement thereon; or join in any
extension agreement or any agreement subordinating the lien or charge hereof.
(4) That upon written request of Beneficiary stating that all sums secured
hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation
and retention or other disposition as Trustee in its sole discretion may choose and upon payment
of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The
recitals in such reconveyance or any matters or facts shall be conclusive proof of the truthfulness
thereof. The Grantee in such reconveyance may be described as "the person or persons legally
entitled thereto."
(5) That as additional security, Trustor hereby gives to and confers upon
Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the
rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance of any agreement
hereunder, to collect and retain such rents, issues and profits as they become due and payable.
Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or
by a receiver to be appointed by a court, and without regard to the adequacy of any security for
the indebtedness hereby secured, enter upon and take possession of said property or any part
thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including
those past due and unpaid, and apply the same, less costs and expenses of operation and
collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in
such order as Beneficiary may determine. The entering upon and taking possession of said
property, the collection of such rents, issues and profits and the application thereof as aforesaid,
shall not cure or waive any default or notice of default hereunder or invalidate any act done
pursuant to such notice.
Exhibit C
EXHIBIT D
(6) That upon default Trustor in payment of any indebtedness secured hereby
or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby
immediately due and payable by delivery to Trustee of written declaration of default and demand
for sale and of written notice of default and of election to cause to be sold said property, which
notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this
Deed, said note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of
said notice of default, and notice of sale having been given as then required by law, Trustee,
without demand on Trustor, shall sell said property at the time and place fixed by it in said notice
of sale, either as a whole or in separate parcels, and in such order as it may determine, at public
auction to the highest bidder for cash in lawful money of the United States, payable at time of
sale. Trustee may postpone sale of all or any portion of said property by public announcement at
such time and place of sale, and from time to time thereafter may postpone such sale by public
announcement at the time fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any covenant or warranty, express
or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter
defined,may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of
evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of:
all sums expended under the terms hereof, not then repaid, with accrued interest at the amount
allowed by law in effect at the date hereof; all other sums then secured hereby; and the
remainder, if any, to the person or persons legally entitled thereto.
(7) Beneficiary, or any successor in ownership of any indebtedness secured
hereby, may from time to time, by instrument in writing, substitute a successor or successors to
any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary
and duly acknowledged and recorded in the office of the recorder of the county or counties
where said property is situated, shall be conclusive proof of proper substitution of such successor
Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all
its title, estate, rights, powers and duties. Said instrument must contain the name of the original
Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and
the name and address of the new Trustee.
(8) That this Deed applies to, inures to the benefit of, and binds all parties
hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The
term Beneficiary shall mean the owner and holder, including pledgees, of the note secured
hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so
requires, the masculine gender includes the feminine and/or neuter, and the singular number
includes the plural.
(9) That Trustee accepts this Trust when this Deed, duly executed and
acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any
party hereto of pending sale under any other Deed of Trust or of any action or proceeding in
which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
Exhibit C
EXHIBIT D
EXHIBIT 3
DO NOT RECORD
REQUEST FOR FULL RECONVEYANCE
TO , TRUSTEE
The undersigned is the legal owner and holder of the note or notes, and of all other
indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other
indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are
hereby requested and directed on payment to you of any sums owning owing to you under the
terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other
evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with
the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms
of said Deed of Trust, all the estate now held by you under the same.
Dated:
Please mail Deed of Trust,
Note and Reconveyance to
Do not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be
delivered to the Trustee for cancellation before reconveyance will be made.
DEED OF TRUST
with power of sale
TRUSTEE
Exhibit C
EXHIBIT D
EXHIBIT 4
RIDER TO DEED OF TRUST
This RIDER TO DEED OF TRUST is made and delivered pursuant to and in
implementation of the Homebuyer Loan Agreement entered by and between the Trustor and the
Beneficiary dated concurrently herewith ("Agreement"), a copy of which is on file as a public
record with the Beneficiary at 20 Civic Center Plaza, Santa Ana, California 92701 and is
incorporated herein by reference. Unless definitions of terms have been expressly set out at
length herein, each term shall have the same definition as set forth in the Agreement. Trustor
and Beneficiary further covenant and agree as follows:
1. Acceleration of Payment. The whole of the Note Amount and all other
payments due hereunder and under the Agreement shall become due and be immediately payable
to the Beneficiary by the Trustor upon the occurrence of any one of the following events of
acceleration:
(a) the sale or transfer of the Property (or any part thereof) by any means,
including, without limitation, the lease, exchange or other disposition of the Property or any
interest therein, whether voluntary or involuntary, except (A) a sale of the Property to a qualified
Low Income Household at an Affordable Housing Cost with the Beneficiary's prior written
approval accomplished in strict conformity with Section 4 of the Agreement, or (B) the transfer
of the Property solely as a result of the marriage, divorce, incompetence or death of one or more
individuals constituting the Trustor, so long as the transferee(s) give written notice supported by
reasonable evidence of such event to the Beneficiary within thirty(30) days of its occurrence and
the transferee(s) assume(s) the Trustor's obligations under the Agreement, by execution of an
assignment and assumption agreement to be provided by the Beneficiary, or(C) a sale or transfer
which under federal law would not, by itself; permit the Beneficiary to exercise a due on sale or
due on encumbrance clause;
(b) the Trustor refinances any purchase money lien or encumbrance to which
the Authority Deed of Trust is subordinate (each such lien, a "First Lien") for a loan amount in
excess of the then current loan balance secured by such lien or encumbrance and loan closing
costs; and/or
(c) the Trustor fails to own and occupy the Property as their principal
residence pursuant to Section 7 of the Agreement or is in Ownership Default as defined in
Section 18 of the Agreement.
At the request of the Trustor, and for a specific occasion, the Beneficiary may, in
its sole and absolute discretion, in writing waive the requirements of these subparagraphs. Any
waiver or deferment shall be on a case by case basis, and no future rights for waiver or deferment
shall arise or be implied. Notwithstanding the foregoing, the Trustor may, upon prior written
approval by the Beneficiary, refinance any First Lien for a loan amount equal to or less than the
then current loan balance secured by such First Lien.
2. Reserved.
Exhibit C
EXHIBIT D
3. Sale to Low Income Household. During the Affordability Period, the Note
Amount will not become due and payable, if Trustor sells or otherwise conveys the Property to a
Low Income Household at an Affordable Sales Price (an "Eligible Household"), and the
purchaser assumes the Note and the Agreement by an assignment and assumption agreement
which is reasonably acceptable to the Beneficiary.
For the purposes of this Authority Deed of Trust, the Note, and the Agreement, "Low
Income" and "Low Income Households" means low income households as defined in Health &
Safety Code Section 50079.5.
3.1 Affordable Sales Price and Affordable Housing Cost — Low Income
Household.
"Affordable Housing Cost" shall be as defined in Health & Safety Code Section 50052.5
(or its successor statute) and the implementing regulations thereto promulgated by the Housing
and Community Development Department of the State of California.
Notwithstanding the provisions of this Section 3, if the Property is sold during the
Affordability Period by the Trustor to a Low Income Household and the Affordable Sales Price
does not exceed an "Affordable Housing Cost" to such Buyer, then so long as the Trustor is not
in default (either Ownership Default or Maintenance Default) of the Agreement, this Note may
be assumed by the eligible Buyer by an assignment and assumption agreement which is
reasonably acceptable to the Beneficiary. Upon the effective date of such assignment and
assumption, the assigning Trustor shall no longer be liable for any further obligations under the
Agreement, the Note or the City Deed of Trust that accrue after the date of such assignment and
assumption. In order to verify the Buyer's status as a Low Income Household, the Trustor shall
submit to the Beneficiary the identity of the proposed Buyer and adequate information
evidencing the income and household size of the proposed Buyer. Said income information shall
be submitted together with the notice of proposed sale pursuant the Agreement not less than
thirty(30) days prior to opening of escrow for the proposed sale and shall include original or true
copies of pay stubs, income tax records or other financial documents in order that the Holder
may determine and verify the household income of the proposed Buyer to determine whether the
Buyer is a Low Income Household, and whether the Property is being transferred to such Buyer
at an Affordable Housing Cost. If the Holder is unable to verify the Buyer's income as provided
herein prior to the proposed sale, then the Buyer's income shall be deemed to exceed the
maximum allowable income limit for Eligible Persons and Families.
4. Subordination. Except as provided otherwise herein, the provisions of the
Agreement, the Notice of Affordability Restrictions, this Rider and Deed of Trust, and the
Affordable Housing Resale Restriction, and the obligations therein, shall be subordinate only to
the First Lien on the Property held by the Lender and, if applicable, other loan(s) as approved by
the Executive Director, including lien instruments that secure other homebuyer purchase money
and/or downpayment assistance, including without limitation City, State of California, or federal
affordable housing programs, which liens shall not impair the rights of Lender, or Lender's
assignee or successor in interest or the City, if applicable, to exercise their remedies under the
First Lien in the event of default under the First Lien by the Homebuyer. Such remedies under
the First Lien include the right of foreclosure or acceptance of a deed or assignment in lieu of
Exhibit C
EXHIBIT D
foreclosure. If title to the Property is transferred by foreclosure or acceptance of a deed in lieu of
foreclosure, or assignment of the First Lien to the Secretary of the Department of Housing and
Urban Development, this Agreement and the Authority Deed of Trust shall be automatically
terminated and shall have no further effect as to the Property or any transferee thereafter.
However, in no event shall this Agreement, the Deed of Trust, and the Affordable Housing
Resale Restriction, be subordinate to any First Lien on the Property securing a loan with
provisions which allow negative amortization, or to refinancing of the lien of the First Lien for a
loan amount in excess of the sum of the then current loan balance secured by the First Lien and
loan closing costs.
Trustor agrees it shall instruct the Escrow Agent for the acquisition of the
Property by Trustor that the order of recording in the escrow for the purchase of the Property by
Trustor shall occur as follows: (1) the Grant Deed, (2) the First Lien; (3) other affordable
housing loan(s), if applicable; (4) the Affordable Housing Resale Restriction; (5) the Notice of
Affordability Restrictions and (6) the Deed of Trust. City shall cause a Request for Notice of
Default to be recorded on the Property subsequent to the recordation of the First Lien deed of
trust or mortgage requesting a statutory notice of default as set forth in the California Civil Code
Section 2924b, and shall cause a request for Notice of Delinquency to be recorded on the
Property subsequent to the recordation of the First Lien deed of trust or mortgage.
IN WITNESS WHEREOF, Trustor has executed this Rider to Deed of Trust as of the
date set forth below.
TRUSTOR/HOMEBUYER:
By:
By:
Exhibit C
EXHIBIT D
EXHIBIT D
CITY PROMISSORY NOTE
55394.00101\42347096.1
EXHIBIT D
PROMISSORY NOTE SECURED BY DEED OF TRUST
$ Santa Ana, California
Date:
Property Address: Street, Santa Ana, CA 9270
FOR VALUE RECEIVED, the undersigned , (the "Maker" or
"Homebuyer") promises to pay to the CITY OF SANTA ANA, a public body, corporate and
politic (the "Holder") at 20 Civic Center Plaza, Santa Ana, California 92701, or at such other
address as the Holder may direct from time to time in writing, the sums specified in the terms
and provisions of this Promissory Note as the "Note Amount".
1. Loan Agreement. This Promissory Note Secured by Deed of Trust (this "Note")
is made and delivered pursuant to and in implementation of the Homebuyer Loan Agreement
entered into by and between the Holder and the Maker dated concurrently herewith
("Agreement"), a copy of which is on file as a public record with the Holder. The Agreement is
incorporated herein by this reference. The Maker acknowledges that but for the execution of this
Note, the Holder would not enter into the Agreement or make the loan contemplated therein.
Unless definitions of terms have been expressly set out at length herein, each term shall have the
same definition as set forth in the Agreement.
2. Term. The term of the Note shall be forty-five (45) years from the Homebuyer
Loan Date ("Term").
3. Note Amount. The sums due and payable pursuant to the terms and provisions of
this Note consists of the Homebuyer Loan Amount (the "Note Amount"). Maker shall pay to the
City the principal amount of Dollars ($ ) (the "Homebuyer Loan
Amount"), with zero percent (0%) interest thereon. [The Homebuyer Loan Amount shall be
determined as the difference between the Affordable Sales Price and the fair market value of the
Property, as determined in accordance with the Homebuyer Loan Agreement and the Regulatory
Agreement Imposing Affordable Housing Covenants and Restrictions (Density Bonus), which
restricts the sale and resale of Affordable Units.]
4. Homebuyer Loan Amount; Interest Deferred Until Acceleration. The
Homebuyer Assistance Loan Amount shall accrue zero percent (0%) interest unless and until an
event of acceleration occurs as set forth in Section 6.
5. Homebuyer Loan Amount; Time of Payment. In the event that the Homebuyer
Loan Amount does not become due and payable prior to the forty-fifth (45th) Anniversary
("Maturity Date") as set forth below in Section 6, the full amount of the Promissory Note shall
be considered mature and the obligation to pay shall be extinguished as of the Maturity Date.
6. Acceleration. The whole of the Note Amount and all other payments due
hereunder and under the Agreement shall become due and be immediately payable to the Holder
by the Maker upon the occurrence of any one of the following events of acceleration:
1
Exhibit D
EXHIBIT D
(a) the sale or transfer of the Property (or any part thereof) by any means,
including, without limitation, the lease, exchange or other disposition of the Property or any
interest therein, whether voluntary or involuntary, except (i) a sale of the Property to a qualified
Low Income Household at an Affordable Housing Cost with the City's prior written approval
accomplished in strict conformity with [Section 4] of the Agreement, or (ii) the transfer of the
Property solely as a result of the marriage, divorce, incompetence or death of one or more
individuals constituting the Homebuyer, so long as the transferee(s) give written notice
supported by reasonable evidence of such event to the Authority within thirty (30) days of its
occurrence and the transferee(s) assume(s) the Homebuyer's obligations under the Agreement,
by execution of an assignment and assumption agreement to be provided by the Authority, or
(iii) a sale or transfer which under federal law would not, by itself, permit the City to exercise a
due on sale or due on encumbrance clause;
(b) the Maker refinances any purchase money lien or encumbrance to which
the City Deed of Trust is subordinate (each such lien, a"First Lien") for a loan amount in excess
of the then current loan balance secured by such lien or encumbrance and loan closing costs;
and/or
(c) the Maker (and all co-signors and co-mortgagors, if any) fails to own and
occupy the Property as their principal residence pursuant to [Section 7] of the Agreement or is in
Ownership Default as defined in [Section 18] of the Agreement.
At the request of the Maker, and for a specific occasion, the Holder may, in its
sole and absolute discretion, in writing waive the requirements of these subparagraphs and defer
repayment and/or extend the term of this Note. Any waiver or deferment shall be on a case by
case basis, and no future rights for waiver or deferment shall arise or be implied.
Notwithstanding the foregoing, the Maker may, upon prior written approval by the Holder,
refmance any First Lien for a loan amount equal to or less than the then current loan balance
secured by such First Lien.
7. Reserved.
8. Right of First Refusal. Homebuyer shall notify the Holder of any desire to sell
the Property immediately. Homebuyer shall also immediately notify Developer (Habitat for
Humanity of Orange County) as required by the terms of the Agreement and documents executed
between Homebuyer and Developer provide Developer an option and the right of first refusal to
purchase the Property.
9. Sale to Low Income Household at Affordable Housing Cost. During the
Affordability Period, the Note will not become due and payable in connection with such sale, if
the Maker sells or otherwise conveys the Property to an Eligible Household, and the purchaser
assumes this Note and the Agreement by an assignment and assumption agreement which is
reasonably acceptable to the Holder.
9.1 Affordable Housing Cost— Low Income Household. The Ivlaker has qualified
as and each eligible and qualified successor-in-interest to the Maker shall be a Low Income
Household. The term "Affordable Housing Cost" as used herein and for each Homebuyer (and
2
Exhibit D
EXHIBIT D
all successors thereto during the Affordability Period) shall be as defined in Health & Safety
Code Section 50079.5 (or its successor statute) and the implementing regulations thereto
promulgated by the Housing and Community Development Depaihuent of the State of
California; provided, however, that the term Affordable Housing Cost shall include Monthly
Housing Cost as defined in Section 6924 of Title 25 of the Regulations.
Notwithstanding the provisions of this Section 9.1, if the Property is sold during
the Affordability Period by the Maker to an Eligible Household, and the Sales Price does not
exceed an "Affordable Housing Cost" to such Buyer, then so long as the Maker is not in default
(either Ownership Default and/or Maintenance Default) of the Agreement, this Note may be
assumed by the Eligible Household by an assignment and assumption agreement which is
reasonably acceptable to the Holder. Upon the effective date of such assignment and
assumption, the assigning Maker shall no longer be liable for any further obligations under the
Agreement or this Note that accrue after the date of such assignment and assumption. In order to
verify the Buyer's status as a Low Income Household, the Maker shall submit to the Holder the
identity of the proposed Buyer and adequate information evidencing the income and household
size of the proposed Buyer. Said income information shall be submitted together with the notice
of proposed sale pursuant to Section 2 of the Agreement not less than thirty (30) days prior to
opening of escrow for the proposed sale and shall include original or true copies of pay stubs,
income tax records or other financial documents in order that the Holder may verify the
household income of the proposed Buyer to determine whether the Buyer is a Low Income
Household, and whether the Property is being transferred to such Buyer at an Affordable
Housing Cost. If the Holder is unable to verify the Buyer's income as provided herein prior to
the proposed sale, then the Buyer's income shall be deemed to exceed the maximum allowable
income limit for an Eligible Household.
10. Security for Note. This Note shall be secured by a subordinate deed of trust and
rider thereto of even date herewith encumbering the Property (the "City Deed of Trust"),
executed by the Maker, as Trustor, in favor of the Holder, as beneficiary.
11. Prepayment of Note. The Maker may prepay this Note to the Holder, provided
that any prepayment must be in full and not in part. Prepayment shall be treated in the same
manner as refinancing of the Property. In any event, the Affordable Housing Resale Restrictions
shall continue in full force and effect, notwithstanding such prepayment.
12. Holder May Assign. The Holder may, at its option, assign its right to receive
payment under this Note without necessity of obtaining the consent of the Maker.
13. Maker Assignment Prohibited. In no event shall the Maker assign or transfer
any portion of this Note, the Note Amount and/or the Agreement without the prior express
written consent of the Holder, as provided in Section 9.
14. Joint and Several. The undersigned, if more than one, shall be jointly and
severally liable hereunder.
15. Attorneys' Fees and Costs. In the event that any action is instituted to enforce
payment under this Note, the parties agree the non-prevailing party shall be responsible for and
3
Exhibit D
EXHIBIT D
shall pay to the prevailing party all court costs and all attorneys' fees incurred in enforcing this
Note.
16. Amendments. This Note may not be modified or amended except by an
instrument in writing expressing such intention executed by the parties sought to be bound
thereby, which writing must be so firmly attached to this Note so as to become a permanent part
thereof.
17. Maker's Waivers. The Maker waives any rights to require the Holder to:
(a)demand payment of amounts due (known as "presentment"), (b) give notice that amounts due
have not been paid (known as "notice of dishonor"), and (c) obtain an official certification of
nonpayment(known as "protest").
18. Notice. Any notice that must be given to the Maker under this Note shall be
given by personal delivery or by mailing it by certified mail addressed to the Maker at the
Property address above or such other address, as Maker shall direct from time to time in writing.
Failure or delay in giving any notice required hereunder shall not constitute a waiver of any
default or late payment, nor shall it change the time for any default or payment. Any notice to
the Holder shall be given by certified mail at the address stated above.
19. Successors Bound. This Note shall be binding upon the parties hereto and their
respective heirs, successors and assigns.
20. Effect of Foreclosure. If title to the Property is transferred by foreclosure or
acceptance of a deed in lieu of foreclosure, or assignment of the First Lien to the Secretary of the
Depai twent of Housing and Urban Development, the Agreement, the Affordable Housing Resale
Restriction executed pursuant to the Agreement, Notice of Affordability Restrictions and the
Authority Deed of trust shall be automatically terminated and shall have no further effect as to
the Property or any transferee thereafter.
IN WITNESS WHEREOF, Maker has executed this Note as of the date set forth below.
MAKER and HOMEBUYER:
By:
By:
4
Exhibit D
EXHIBIT D
EXHIBIT E
NOTICE OF AFFORDABILITY RESTRICTIONS
55394.00101\42347096.1
EXHIBIT D
RECORDING REQUESTED BY, )
AND WHEN RECORDED MAIL TO: )
)
City of Santa Ana )
20 Civic Center Plaza (M-37) )
Santa Ana, California 92702 )
Attn: Housing Manager )
This document is exempt from
payment of a recording fee
pursuant to Government Code
Sections 27383 and 6103.
NOTICE OF AFFORDABILITY RESTRICTIONS ON
TRANSFER OF PROPERTY
This Notice of Affordability Restrictions on Transfer of Property (or "Notice
of Affordability Restrictions") is executed and recorded pursuant to the Regulatory
Agreement Imposing Affordable Housing Covenants and Restrictions (Density
Bonus), recorded on or about , 2024, in the Official Records of San
Orange County, against that certain real property generally located
at , in the City of Santa Ana, California ("City") as legally
described in Exhibit A hereto ("Property"). The City of Santa Ana, a charter city
and municipal corporation ("City"), and
(collectively "Homebuyer") have entered into
that certain Homebuyer Loan Agreement dated concurrently herewith
("Homebuyer Loan Agreement").
1. The Homebuyer Loan Agreement provides for affordability
restrictions and restrictions on the transfer of the Property, as more particularly set
forth in the Homebuyer Loan Agreement. A copy of the Homebuyer Loan
Agreement is on file with City as a public record and is deemed incorporated
herein. Reference is made to the Homebuyer Loan Agreement with regard to the
complete text of the provisions of such agreement and all defined teens therein,
which provides for affordability restrictions and restrictions on the transfer of the
Property.
2. The Homebuyer Loan Agreement generally provides for City to lend
to Homebuyer and for Homebuyer to borrow from City a loan in order to assist
1
EXHIBIT E
EXHIBIT D
Homebuyer's purchase of the Property pursuant to the Program and subject to the
terms and conditions set forth herein. For a period commencing upon the date on
which Homebuyer acquires fee title to the Property and terminating on the forty-
fifth (45th) anniversary thereof, the Property may only be transferred to another
eligible, qualified Low Income Household at an Affordable Housing Cost; such
restrictions are set forth at greater length in a document entitled Affordable
Housing Resale Restriction (Conditions, Covenants, and Restrictions Affecting
Real Property and the Resale, Ownership, Occupancy, Maintenance, and Other
Matters Related to Real Property), substantially in the form of Exhibit "D" to the
Homebuyer Loan Agreement ("Affordable Housing Resale Restriction"), which
has been entered into by and between City and Homebuyer, and which is expected
to be recorded substantially concurrently herewith among the Official Records of
Orange County, California. The Affordable Housing Resale Restriction and the
Homebuyer Loan Agreement are deemed to be incorporated herein by reference.
3. Section 4 of the Affordable Housing Resale Restriction provides as
follows:
"4. Permitted Sales of the Property. City hereby permits sales of
the Property to proposed Transferees who are Low Income Households, and are
approved in accordance with this Section 4, provided the Sales Price does not
exceed an Affordable Housing Cost to such proposed Transferee ("Permitted
Transfers"). In the event that Homebuyer desires to Transfer the Property during
the Affordability Period, prior to the Transfer the owner shall notify City by
delivering a Notice of Intent to Transfer to City, which shall indicate the identity of
the proposed Transferee who desires to purchase the Property, whether the
purchaser is a Low or Moderate Income Household, and whether the sales price is
at an Affordable Housing Cost. In addition to Homebuyer's and the proposed
Transferee's delivery of the Notice of Intent to Transfer, the following procedure
shall apply:
a. Notice to City. Homebuyer shall send the Notice of Intent to
Transfer to City at the address set forth in [Section 28] of the Loan Agreement.
b. Qualification of Proposed Transferee. The proposed
Transferee shall provide City with sufficient information in the foina provided by
City including without limitation, a certification as to the income and family size
of the proposed Transferee, for City to determine if the proposed Transferee is a
Low Income Household, and the purchase price is at an Affordable Housing Cost.
2
EXHIBIT E
EXHIBIT D
c. Certificates from Parties. Homebuyer and proposed
Transferee each shall certify in writing, in a form acceptable to City, that the
Transfer shall be closed in accordance with, and only with, the terms of the sales
contract and other documents submitted to and approved by City and that all
consideration delivered by the proposed Transferee to owner has been fully
disclosed to City. The written certificate shall also include a provision that in the
event a Transfer is made in violation of the terms of this Restriction or false or
misleading statements are made in any documents or certificate submitted to City
for its approval of the Transfer, City shall have the right to file an action at law or
in equity to make the parties terminate and/or rescind the sales contract and/or
declare the sale void notwithstanding the fact that the Transfer may have closed
and become final as between Homebuyer and Transferee.
d. Written Consent of City Required Before Transfer. During
the Affordability Period, the Property, and any interest therein, shall not be
conveyed by any Transfer except with the express written consent of City, which
consent shall be given only if the Transfer is in accordance with the provisions of
this Restriction. This provision shall not prohibit the encumbering of title for the
sole purpose of securing financing of the purchase price of the Property.
e. Notice of Prohibited Transfer. Within twenty (20) days after
receiving notification of a proposed Transfer in accordance with Section 4a., City
shall determine and give notice to Homebuyer as to whether the proposed Transfer
is a Permitted Transfer or Prohibited Transfer, or whether the Transfer would cause
an acceleration under the Note under Section l.f. of the Agreement, in which case,
upon Homebuyer's payment of the Contingent Equity Participation Amount as set
forth in Section 3 of the Agreement such Transfer would be deemed a Permitted
Transfer. In the event that the proposed Transfer is a Prohibited Transfer, such
notice to Homebuyer shall specify the nature of the Prohibited Transfer. If the
violation is not corrected to the satisfaction of City within ten (10) days after the
date of the notice, or within such further time as City determines is necessary to
correct the violation, City may declare a Default under this Restriction. Upon the
declaration of a Default, City may apply to a court of competent jurisdiction for
specific performance of this Restriction, for an injunction prohibiting a proposed
sale or Transfer in violation of this Restriction, for a declaration that the Prohibited
Transfer is void, or for any such other relief as may be appropriate.
f. Delivery of Documents. Upon the close of the proposed
Transfer, Homebuyer and Transferee, as applicable, shall provide the City with a
copy of the final sales contract, settlement statement, escrow instructions, all
certificates required by this Section 4 and any other documents City may request."
3
EXHIBIT E
EXHIBIT D
4. The restrictions contained in the Affordable Housing Resale
Restriction commence upon the date on which Homebuyer acquires fee title to the
Property and terminate on the forty-fifth (45th) anniversary thereof.
5. The commonly known address for the Property is
Street, Santa Ana, California 92701.
6. The assessor's parcel number for the Property is APN
7. The legal description of the Property is attached hereto as Exhibit A,
and is incorporated herein by reference.
8. The Affordable Housing Resale Restriction, which includes the
affordability restrictions referenced above, is expected to be submitted for
recordation in the Office of the Orange County Recorder contemporaneously with
this Notice of Affordability Restrictions.
9. The Homebuyer Loan Agreement and the Affordable Housing Resale
Restriction both remain in full force and effect and are not amended or altered in
any manner whatsoever by this Notice of Affordability Restrictions.
10. Capitalized terms shall have the meaning established under the
Homebuyer Loan Agreement (including all Attachments thereto) excepting only to
the extent as otherwise expressly provided under this Notice of Affordability
Restrictions.
11. Persons having questions regarding this Notice of Affordability
Restrictions, the Homebuyer Loan Agreement or the Attachments thereto
(including the Affordable Housing Resale Restriction) should contact City at its
offices (20 Civic Center Plaza, Santa Ana, California 92701, or such other address
as may be designated by City from time to time).
IIOMEBUYER:
By:
By:
4
EXHIBIT E
EXHIBIT D
CITY:
ATTEST: CITY OF SANTA ANA
By: By:
City Clerk City Manager
Dated: Dated:
APPROVED AS TO FORM:
City Attorney
By:
Dated:
RECOMMENDED FOR APPROVAL:
By:
Executive Director
Community Development Agency
5
EXHIBIT E
EXHIBIT D
EXHIBIT F
INCOME VERIFICATION FORM
55394.00101\42347096.1
EXHIBIT D
EXHIBIT "F"
INCOME VERIFICATION FORM
Inclusionary Unit Address:
Head of Household (Print Name):
Current Address (if
different from above):
Telephone Number: Home: Work: Cell:
Email address:
Date of Birth: Social Security# or TIN:
Household Composition
List All Household Members Living in the Inclusionary Unit
Dependent Social Security#
Name Sex Age (YIN) or Taxpayer ID#
List additional household members on a separate sheet of paper.
Income Verification Form Page 1
Santa Ana, California
EXHIBIT
EXHIBIT "F"
INCOME VERIFICATION FORM
Monthly Gross Income *
List All Sources of Income of All Household Members Living in the Inclusionary Unit
Part 1: Earned Income
Other
Head of Household
Household Members Total
1. Gross wages, before payroll deductions and $ $ $
including overtime pay, commissions, fees, tips
and bonuses.
2. Net income from self employment, independent $ $ $
contractor work or a business.
3. Social security and any payments from annuities, $ $ $
insurance policies, pension/retirement funds,
disability or death benefits received periodically.
4. Payment in lieu of earnings, such as $ $ $
unemployment, disability compensation, worker's
compensation and severance pay.
5. Public assistance, welfare payments $ $ $
6. Alimony, child support, other periodic allowances $ $ $
7. Regular pay, special pay and allowances of $ $ $
members of the Armed Forces
8. Other $ $ $
Subtotal: Monthly Earned Income $
Total Monthly Earned Income x 12 = $ Total Annual Household Gross Earned Income
Income Verification Form Page 2
Santa Ma, California
EXHIBIT D
EXHIBIT "F"
INCOME VERIFICATION FORM
Monthly Gross Income *
List All Sources of Income of All Household Members Living in the Inclusionary Unit
Part 2: Investment Income
Total
Other Adult Household
Head of Household Investment
Household Members Income
1. Interest paid on Bank and Savings accounts $ $ $
2. Dividends and other payments from stocks and $ $ $
bonds
3. Income from real property (i.e. rental property) $ $ $
4. Other(describe) $ $ $
Subtotal: Monthly Investment Income: $
Total Monthly Investment Income x 12 = $ Total Annual Household Investment Income
*Note: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in
reimbursement of medical expenses; lump sum payments such as inheritances, insurance payments, capital
gains and settlement for personal or property losses; educational scholarships paid directly to the student or
educational institution; special pay to a serviceman head of family away from home and under hostile fire;
relocation payments under federal, state or local law; foster child care payments; value of coupon allotments
for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible
household; payments received pursuant to participation in the following programs: VISTA, Service Learning
Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster
Grandparent Program, Older American Community Services Program, and National Volunteer Program to
Assist Small Business Experience.
Income Verification Form Page 3
Santa Ana,California
EXHIBIT D
EXHIBIT "F"
INCOME VERIFICATION FORM
Assets **
List the Current Value of All Assets of All Household Members Living in the Inclusionary Unit
If the Asset generates income, that income must be specified In Part 2 above
Other Adult
Head of Household
Household Members Total Value of
Value Value Assets
1. Bank and Savings accounts $ $ $
2. Stocks and bonds $ $ $
3. Real property(i.e. rental property) $ $ $
4. Other(describe) $ $ $
Total Asset Value $
**Note: Necessary items, such as furniture and automobiles, used for personal use are excluded from
household assets. Collections of items for hobby, investment or business purposes must be included in
household assets. If the total value of household assets exceeds $5,000, the calculation of the household's
annual income shall include the greater of the actual amount of income, if any, derived from all of the
household assets; or 10% of the total value of the assets.
Income Verification Form Page 4
Santa Ana,California
EXHIBIT D
EXHIBIT "F"
INCOME VERIFICATION FORM
If the total asset value exceeds $5,000, perform the calculations in the following table. If the total asset value
is less than $5,000, the amount of investment income to be included in annual household income is $0.
Calculation of Investment Income to be Included in Annual Household Income
1. Total Annual Household Investment Income $
2. Total Asset Value $ x 10% $
The Greater of#1 or#2 = Investment Income to be Included in Annual Household Income $
Calculation of the Household's Total Annual Income
Total Annual Household Gross Earned Income $
Total Investment Income to be Included in Annual Household Income $
Total Household Income $
Documentation
Attach True Copies of the Relevant Documents Listed Below
Paycheck stubs from three most recent
pay periods Bank/Savings account verification
Employment verification Self-employment verification
Three years Income tax returns for Title
Holders Unemployment verification
Social security verification Welfare verification
Alimony/child support verification Disability income verification
Other(Describe)
Income Verification Form Page 5
Santa Ana, California
EXHIBIT D
EXHIBIT"F"
AFFIDAVIT
This Affidavit is made with the knowledge that it will be relied upon by and the City of Santa
Ana to determine maximum income for eligibility to purchase the Inclusionary Unit listed above. (I/we)warrant
that all information set forth in this document is true, correct and complete and based upon information (I/we)
deem reliable and based upon such investigation as (I/we) deemed necessary.
(I/We) acknowledge that(I/we) have been advised that the making of any misrepresentation or misstatement in
this affidavit will constitute a material breach of(my/our) purchase agreement and will additionally enable the
seller to terminate the purchase contract and sell the Inclusionary Unit to another party.
(I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct and that
this affidavit has been executed as of the date specified below by each adult member of the household which
intends to occupy an Inclusionary Unit located at ,Santa Ana, California.
Signature Date
Printed Name
Executed at , Santa Ana, California
Signature Date
Printed Name
Executed at , Santa Ana, California
Affidavit Page 6
Santa Ana,California
EXHIBIT D
EXHIBIT G
CERTIFICATION OF CONTINUED OCCUPANCY
55394.00101\42347096.1
E ItiIT D
CERTIFICATION OF CONTINUED OCCUPANCY
Date:
Owner(s)Name:
Address: Santa Ana,CA
We are the Owners of an Inclusionary Unit that was produced under the requirements of the City of Santa Ana
Inclusionary Housing Ordinance. We understand and agree that the Inclusionary Unit must be used as our Primary
Residence and for no other purpose.
By this Certification,we declare under penalty of perjury that:
1. We currently occupy the Inclusionary Unit; and
2. We have occupied the Inclusionary Unit for at least ten(10)out of the past twelve(12)months; and
3, We have not used the Inclusionary Unit for any other purpose than as our Primary Residence;and
4. We are not renting or leasing any part of the Inclusionary Unit to another party.
We have attached true and accurate copies of two utility bills or other documentation evidencing our continued
occupancy of the Inclusionary Unit.
We acknowledge that any intentional or negligent misrepresentation in this Certification may result in civil liability
and/or criminal penalties including, but not limited to,fine or imprisonment, or both,and liability for monetary
damages under the provisions of Title 18, United States Code, Section 100.1, et seq.
1
EIi3IT D
SIGNATURE PAGE
TO
OCCUPANCY RECERTIFICATION FORM
OWNER: CO.OWNER:
Signature: Signature:
Print Name: Print Name:
Date: Date: