HomeMy WebLinkAboutsa031516AGENDA OF A REGULAR MEETING - SUCCESSOR AGENCY TO THE
COMMUNITY DEVELOPMENT COMMISSION AS THE NATIONAL CITY
REDEVELOPMENT AGENCY
COUNCIL CHAMBERS
Nj;► CIVIC CENTER
1243 National City Blvd.
c .4e National City, California
TUESDAY, MARCH 15, 2016 — 6:00 PM
ORDER OF BUSINESS: Public sessions of all Regular Meetings of the
Successor Agency to the Community Development Commission as the
RONMORRISON National City Redevelopment Agency begin at 6:00 p.m. on the first
Chairman and third Tuesday of each month. Public hearings begin at 6:00 p.m.
unless otherwise noted. Closed Sessions begin at 5:00 p.m. or such
✓ERRYCANO other time as noted on the agenda. If a workshop is scheduled, the
Boardmember subject and time of the workshop will appear on the agenda.
ALBEIv1z
Boardmemmemberber REPORTS: All regular meeting agenda items and reports as well as all
documents and writings distributed to the Board less than 72 hours
MONARIOS prior to the meeting, are available for review at the entry to the Council
Boardmember Chambers. Regular Meetings of the Board are webcast and archived
on the City's website www.nationalcityca.gov.
ALEJANDBA SOTELO-SOLIS
Boardmember PUBLIC COMMENTS: Prior to the Business portion of the agenda, the
Board will receive public comments regarding any matters within the
jurisdiction of the Successor Agency to the Community Development
Commission as the National City Redevelopment Agency. Members of
the public may also address any item on the agenda at the time the
item is considered by the Board. Persons who wish to address the
Board are requested to fill out a `Request to Speak" form available at
the entrance to the City Council Chambers, and turn in the completed
form to the City Clerk. The Chairperson will separately call for
testimony of those persons who have turned in a `Request to Speak"
form. If you wish to speak, please step to the podium at the appropriate
time and state your name and address (optional) for the record. The
time limit established for public testimony is three minutes per speaker
unless a different time limit is announced. Speakers are encouraged to
1243 National City Blvd be brief. The Chairperson may limit the length of comments due to the
National City number of persons wishing to speak or if comments become
619-336-4240 repetitious or irrelevant.
WRITTEN AGENDA: With limited exceptions, the Board may take
action only upon items appearing on the written agenda. Items not
Meeting agendas and appearing on the agenda must be brought back on a subsequent
minutes available on web agenda unless they are of a demonstrated emergency or urgent
nature, and the need to take action on such items arose after the
wwW.NATIONALCITYCA.GOV agenda was posted.
CONSENT AGENDA: Consent calendar items involve matters which
are of a routine or noncontroversial nature. All consent items are
adopted by approval of a single motion by the City Council. Prior to
such approval, any item may be removed from the consent portion of
the agenda and separately considered, upon request of a
Councilmember, a staff member, or a member of the public.
Successor Agency Agenda
03/15/2016 — Page 2
Upon request, this agenda can be made available in appropriate alternative formats to persons with a
disability in compliance with the Americans with Disabilities Act. Please contact the City Clerk's Office at
(619) 336-4228 to request a disability -related modification or accommodation. Notification 24-hours prior
to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this
meeting.
Spanish audio interpretation is provided during Board Meetings. Audio headphones are available in the
lobby at the beginning of the meeting.
Audio interpretaci6n en espanol se proporciona durante sesiones del Consejo Municipal. Los audi6fonos
est6n disponibles en el pasillo al principio de la junta.
THE BOARD REQUESTS THAT ALL CELL PHONES AND PAGERS BE TURNED OFF DURING
BOARD MEETINGS.
Successor Agency Agenda
03/15/2016 — Page 3
OPEN TO THE PUBLIC
SUCCESSOR AGENCY AGENDA
CALL TO ORDER
ROLL CALL
PUBLIC COMMENTS (THREE -MINUTE TIME LIMIT)
:KoL 1.14 .11 IEN_14 4 . I U_1 N
1. Approval of the Minutes of the Regular Meeting of the Successor Agency
to the Community Development Commission as the National City
Redevelopment Agency of . (City Clerk)
2. Successor Agency Warrant Register #32 for the period of 02/03/16
through 02/09/16 in the amount of $0.00. (Finance)
3.
III M • .. mK1YafDoff [:Ililiio - . u . n, . sswicir/
4. Resolution of the Citv Council of adootino the First -Time Homebuver
Program Manual and authorizing the Mayor to execute a subrecipient
agreement between the City of National City and Springboard CDFI to
administer the First -Time Homebuyer Program. (Housing, Grants, and
Asset Management)
PUBLIC HEARINGS
NON CONSENT RESOLUTIONS
01AT17A=11RI101**-1
1.1IF_1a0N4a@]:4&1
JA14JA1-14:aN21191AK
CLOSED SESSION REPORT
ADJOURNMENT
Regular Meeting - Successor Agency to the Community Development
Commission as the National City Redevelopment Agency Meeting -
Tuesday - April 5, 2016 - 6:00 p.m. - Council Chambers - National City,
California.
Successor Agency Agenda
03/15/2016 — Page 4
BUDGET SCHEDULE - FISCAL YEAR 2017
Budget Workshop - April 26, 2016 - 6:00 pm
Budget Hearing - June 7, 2016 - 6:00 pm
2016 CITY COUNCIL SUMMER LEGISLATIVE RECESS
July 5 - Regular Successor Agency to the Community Development
Commission as the National Redevelopment Agency Meeting -
Suspended
July 19 - Regular Successor Agency to the Community Development
Commission as the National Redevelopment Agency Meeting -
Suspended
Successor Agency Agenda
03/15/2016 — Page 5
The following page(s) contain the backup material for Agenda Item: Successor Agency
Warrant Register #32 for the period of 02/03/16 through 02/09/16 in the amount of $0.00.
(Finance)
SUCCESSOR AGENCY TO
THE COMMUNITY DEVELOPMENT COMMISSION
AS THE NATIONAL CITY REDEVELOPMENT AGENCY
AGENDA STATEMENT
MEETING DATE: March 15, 2016
AGENDA ITEM NO.
ITEM TITLE:
Successor Agency Warrant Register #32 for the period of 02/03/16 through 02/09/16 in the amount of
$0.00. (Finance)
PREPARED BY: K. Apalategui DL-PAR MENt° Finance
PHONE: 619-336-4572
EXPLANATION:
Pursuant to ABX1 26, all redevelopment agencies in the State of California were dissolved as of
February 1, 2012. Upon dissolution of the City of National City's Redevelopment Agency, the City
assumed the role of Successor Agency to the Community Development Commission as the National
City Redevelopment Agency ("Successor Agency').
In order to streamline the payment process, the City pays all expenses of the Successor Agency. The
Successor Agency then reimburses the City.
No Successor Agency Warrants issued for the period of 02/03/16 02/09/2016.
FINANCIAL STATEMENT: APPROVED: Finance
ACCOUNT NO. APPROVED: MIS
Reimbursement total $0.00.
ENVIRONMENTAL REVIEW:
This is not a project and, therefore, not subject to environmental review.
ORDINANCE: INTRODUCTION: I I FINAL
STAFF RECOMMENDATION:
Ratification of reimbursement in the amount of $0.00.
N/A
ATTACHMENTS:
Successor Agency Warrant Register #32
PAYEE
SUCCESSOR AGENCY
WARRANT REGISTER #32
2/9/2016
DESCRIPTION
NO CHARGES TO SUCCESSOR AGENCY FOR
THE WEEK OF 213/16 - 2/9/16
CHK NO DATE AMOUNT
A/P Total $
GRAND TOTAL $
Successor Agency Agenda
03/15/2016 — Page 8
The following page(s) contain the backup material for Agenda Item: Successor Agency
Warrant Register #33 for the period of 02/10/16 through 02/16/16 in the amount of
$1,737.35. (Finance)
SUCCESSOR AGENCY TO
THE COMMUNITY DEVELOPMENT COMMISSION
AS THE NATIONAL CITY REDEVELOPMENT AGENCY
AGENDA STATEMENT
MEETING DATE: March 15, 2016 AGENDA ITEM NO.
ITEM TITLE:
Successor Agency Warrant Register #33 for the period of 02/10/16 through 02/16/16 in the amount of
$1,737.35.(Finance)
PREPARED BY: K. Apalategui DEPARTMENT: Finance
PHONE: 619-336-4572 J
APPROVED BY: f
EXPLANATION:
Pursuant to ABX1 26, all redevelopment agencies in the State of California were dissolved as of
February 1, 2012. Upon dissolution of the City of National City's Redevelopment Agency, the City
assumed the role of Successor Agency to the Community Development Commission as the National
City Redevelopment Agency ("Successor Agency").
In order to streamline the payment process, all check -paid expenses of the Successor Agency are paid
by the City. l he Successor Agency then reimburses the City. Successor Agency wires are paid directly
from the Successor Agency account.
Attached is a detailed listing of all Successor Agency expenses for the period, which total $1,737.35.
Staff requests approval of payments of Successor Agency expenses.
FINANCIAL STATEMENT:
ACCOUNT NO.
Reimbursement total $1.737.35
ENVIRONMENTAL REVIEW:
APPROVED: -7/// Finance
APPROVED: MIS
This is not a project and, therefore, not subject to environmental review.
ORDINANCE: INTRODUCTION:I I FINAL
STAFF RECOMMENDATION:
Ratification of reimbursement in the amount of $1,737.35
BOARD / COMMISSION RECOMMENDATION:
N/A
ATTACHMENTS:
Successor Agency Warrant Register #33
PAYEE
CHECKS
GEOSYNTEC CONSULTANTS INC
OPPER & VARCO LLP
SDG&E
SUCCESSOR AGENCY
WARRANT REGISTER #33
2/16/2016
DESCRIPTION
EDUCATION VILLAGE / CONSULTANT SVCS
LEGAL / WI TOD / S A
GAS AND ELECTRIC UTILITIES / S A
CHK NO
DATE
AMOUNT
321946
2/16/16
1,178.06
322000
2/16/16
195.00
322001
2/16/16
364.29
AIP Sub -Total $ 1,737.35
Total disbursements paid with City's Funds $ 1,737.35
GRAND TOTAL $ 1,737.35
Successor Agency Agenda
03/15/2016 — Page 11
The following page(s) contain the backup material for Agenda Item: Resolution of the
City Council of adopting the First -Time Homebuyer Program Manual and authorizing the
Mayor to execute a subrecipient agreement between the City of National City and
Springboard CDFI to administer the First -Time Homebuyer Program. (Housin
Attachment No. 1 Subrecipient Agreement
AGREEMENT
BY AND BETWEEN
THE CITY OF NATIONAL CITY
AND SPRINGBOARD CDFI
This agreement ("Agreement"), is entered into this 15th day of March, 2016, by and
between the City of National City, a municipal corporation (the "City"), and Springboard CDFI,
a 501(c)3 non-profit public benefit corporation (the "Subrecipient").
RECITALS
WHEREAS, the City receives an annual allocation of Home Investment
Partnerships ("HOME") program funds from the U.S. Department of Housing and Urban
Development ("HUD") and has made an allocation of funds to continue the established first time
homebuyer down payment and closing cost assistance program ("Program"); and
WHEREAS, the City has appropriated $200,000.00 in Fiscal Year 2015-2016 to
assist low-income First Time Homebuyers at or under 80% of Area Median Income by providing
assistance in the form of a silent second mortgage loan of up to $70,000; and
WHEREAS, the Subrecipient responded to the City's HOME notice of funding
availability (NOFA) to continue to deliver the City's first time homebuyer down payment and
closing cost assistance program; and
WHEREAS, the Subrecipient has extensive knowledge and experience in
managing the delivery of HOME -funded down payment assistance programs; and
WHEREAS, the City has determined that the Subrecipient has the experience,
adequate staff capacity, and ability to deliver the services desired by the City in a professional
and timely manner, and the Subrecipient is willing to perform such services.
NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS
FOLLOWS:
1. ENGAGEMENT OF SUBRECIPIENT. The City hereby agrees to engage
the Subrecipient and the Subrecipient hereby agrees to perform the services hereinafter set forth
in accordance with all terms and conditions contained herein. The Subrecipient represents that
all services required hereunder will be performed directly by the Subrecipient or under direct
supervision of the Subrecipient.
2. SCOPE OF SERVICES. The express purpose of this Contract is for the
City to provide the Subrecipient with TWO HUNDRED THOUSAND AND NO/100 DOLLARS
($200,000.00) of HOME Program funds. Funds shall be used by Subrecipient to assist low-income
homebuyers purchase a home through the provision of a second mortgage loan.
The Subrecipient will perform services as set forth in the attached Exhibit "A"
entitled Scope of Work and the National City First Time Homebuyer Assistance Program Manual,
Exhibit "B", that provides a detailed description of the use of HOME funds under this Agreement
including a description of the project, roles and responsibilities, performance standards,
affordability, project requirements, and property standards.
Attachment No. 1 Subrecipient Agreement
The Subrecipient shall be responsible for all research and reviews related to the
work and shall not rely on personnel of the City for such services, except as authorized in advance
by the City. The Subrecipient shall appear at Program related meetings and provide reports as
cited in Exhibit "A" to keep staff and City Council advised of the progress on the Program.
The City may unilaterally, or upon request from the Subrecipient, from time to time
reduce or increase the Scope of Services to be performed by the Subrecipient under this
Agreement.
3. PROJECT COORDINATION AND SUPERVISION.
Angelita Marchante, Community Development Specialist I, is hereby designated
as the Program Coordinator for the City and will monitor the progress and execution of this
Agreement. The Subrecipient shall assign a single Program Director to provide supervision and
have overall responsibility for the progress and execution of this Agreement for the Subrecipient.
Dian Sodano, Vice President of Lending is hereby designated as the Program Director for the
Subrecipient.
4. COMPENSATION AND PAYMENT. The compensation for the
Subrecipient shall be based on quarterly billings covering actual work performed. Billings shall
include labor classifications, respective rates, hours worked and materials, if any. The total cost
for all work described in Exhibit "A" shall not exceed the schedule given in Exhibit "A" without prior
written authorization from the City's Housing, Grants, and Assement Management Community
Development Manager. Quarterly invoices will be processed for payment and remitted within
thirty (30) days from receipt of invoice, provided that work is accomplished consistent with Exhibit
"A" as determined by the City.
The Subrecipient shall maintain all books, documents, papers, employee time
sheets, accounting records, and other evidence pertaining to costs incurred and shall make such
materials available at its office at all reasonable times during the term of this Agreement and for
five (5) years from the date of final payment under this Agreement, for inspection by the City and
for furnishing of copies to the City, if requested.
5. ACCEPTABILITY OF WORK. The City shall decide any and all questions
which may arise as to the quality or acceptability of the services performed and the manner of
performance, the acceptable completion of this Agreement and the amount of compensation due.
In the event the Subrecipient and the City cannot agree to the quality or acceptability of the work,
the manner of performance and/or the compensation payable to the Subrecipient in this
Agreement, the City or the Subrecipient shall give to the other written notice. Within ten (10)
business days, the Subrecipient and the City shall each prepare a report which supports their
position and file the same with the other party. The City shall, with reasonable diligence,
determine the quality or acceptability of the work, the manner of performance and/or the
compensation payable to the Subrecipient.
6. LENGTH OF AGREEMENT. This contract begins on the date that it is
executed, with all funds being committed within twenty-two (22) months of the execution date. All
loans are to be funded within twenty-four (24) months of the execution date of this Contract.
Attachment No. 1 Subrecipient Agreement
7. DISPOSITION AND OWNERSHIP OF DOCUMENTS. All reports, studies,
information, data, statistics, forms, designs, plans, and procedures, systems and any other
materials or properties produced under this agreement shall be the sole and exclusive property
of the City. No such materials or properties produced in whole or in part under this Agreement
shall be subject to private use, copyrights, or patent rights by the Subrecipient in the United States
or in any other country without the express consent of the City. City shall have unrestricted
authority to publish, disclose (except as may be limited by the provisions of the Public Records
Act), distribute, and otherwise use, copyright or patent, in whole or in part, any such reports,
studies, data, statistics, forms or other materials or properties produced under this Agreement.
8. INDEPENDENT CONTRACTOR. Both parties hereto in the performance
of this Agreement will be acting in an independent capacity and not as agents, employees,
partners or joint ventures with one another. Neither the Subrecipient nor the Subrecipient's
employees are employee of the City and are not entitled to any of the rights, benefits, or privileges
of the City's employees, including but not limited to retirement, medical, unemployment, or
workers' compensation insurance.
This Agreement contemplates the personal services of the Subrecipient and the
Subrecipient's employees, and it is recognized by the parties that a substantial inducement to the
City for entering into this Agreement was, and is, the professional reputation and competence of
the Subrecipient and its employees. Neither this Agreement nor any interest herein may be
assigned by the Subrecipient without the prior written consent of the City. Nothing herein
contained is intended to prevent the Subrecipient from employing or hiring as many employees,
or subcontractors, as the Subrecipient may deem necessary for the proper and efficient
performance of this Agreement. All agreements by Subrecipient with its subcontractor(s) shall
require the subcontractor to adhere to the applicable terms of this Agreement.
9. CONTROL. Neither the City nor its officers, agents or employees shall
have any control over the conduct of the Subrecipient or any of the Subrecipient's employees
except as herein set forth, and the Subrecipient expressly agrees not to represent that the
Subrecipient or the Subrecipient's agents, servants, or employees are in any manner agents,
servants or employees of the City, it being understood that the Subrecipient, its agents, servants,
and employees are as to the City wholly independent contractors and that the Subrecipient's
obligations to the City are solely such as are prescribed by this Agreement.
10. COMPLIANCE WITH APPLICABLE LAW. The Subrecipient, in the
performance of the services to be provided herein, shall comply with all applicable State and
Federal statutes and regulations, and all applicable ordinances, rules and regulations of the City
of National City, whether now in force or subsequently enacted. The Subrecipient, and each of
its subcontractors, shall obtain and maintain a current City of National City business license prior
to and during performance of any work pursuant to this Agreement.
11. LICENSES, PERMITS, ETC. The Subrecipient represents and covenants
that it has all licenses, permits, qualifications, and approvals of whatever nature that are legally
required to practice its profession. The Subrecipient represents and covenants that the
Subrecipient shall, at its sole cost and expense, keep in effect at all times during the term of this
Agreement, any license, permit, or approval which is legally required for the Subrecipient to
practice its profession.
Attachment No. 1 Subrecipient Agreement
12. STANDARD OF CARE.
A. The Subrecipient, in performing any services under this Agreement,
shall perform in a manner consistent with that level of care and skill ordinarily exercised by
members of the Subrecipient's trade or profession currently practicing under similar conditions
and in similar locations. The Subrecipient shall take all special precautions necessary to protect
the Subrecipient's employees and members of the public from risk of harm arising out of the
nature of the work and/or the conditions of the work site.
B. Unless disclosed in writing prior to the date of this agreement, the
Subrecipient warrants to the City that it is not now, nor has it for the five (5) years preceding, been
debarred by a governmental agency or involved in debarment, arbitration or litigation proceedings
concerning the Subrecipient's professional performance or the furnishing of materials or services
relating thereto.
C. The Subrecipient is responsible for identifying any unique products,
treatments, processes or materials whose availability is critical to the success of the project the
Subrecipient has been retained to perform, within the time requirements of the City, or, when no
time is specified, then within a commercially reasonable time. Accordingly, unless the
Subrecipient has notified the City otherwise, the Subrecipient warrants that all products, materials,
processes or treatments identified in the project documents prepared for the City are reasonably
commercially available. Any failure by the Subrecipient to use due diligence under this sub-
paragraph will render the Subrecipient liable to the City for any increased costs that result from
the City's later inability to obtain the specified items or any reasonable substitute within a price
range that allows for project completion in the time frame specified or, when not specified, then
within a commercially reasonable time.
13. NON-DISCRIMINATION PROVISIONS. The Subrecipient shall not
discriminate against any employee or applicant for employment because of age, race, color,
ancestry, religion, sex, sexual orientation, marital status, national origin, physical handicap, or
medical condition. The Subrecipient will take positive action to insure that applicants are
employed without regard to their age, race, color, ancestry, religion, sex, sexual orientation,
marital status, national origin, physical handicap, or medical condition. Such action shall include
but not be limited to the following: employment, upgrading, demotion, transfer, recruitment or
recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and
selection for training, including apprenticeship. The Subrecipient agrees to post in conspicuous
places available to employees and applicants for employment any notices provided by the City
setting forth the provisions of this non-discrimination clause.
14. CONFIDENTIAL INFORMATION. The City may from time to time
communicate to the Subrecipient certain confidential information to enable the Subrecipient to
effectively perform the services to be provided herein. The Subrecipient shall treat all such
information as confidential and shall not disclose any part thereof without the prior written consent
of the City. The Subrecipient shall limit the use and circulation of such information, even within
its own organization, to the extent necessary to perform the services to be provided herein. The
foregoing obligation of this Section 13, however, shall not apply to any part of the information that
(i) has been disclosed in publicly available sources of information; (ii) is, through no fault of the
Subrecipient, hereafter disclosed in publicly available sources of information; (iii) is already in the
possession of the Subrecipient without any obligation of confidentiality; or (iv) has been or is
hereafter rightfully disclosed to the Subrecipient by a third party, but only to the extent that the
use or disclosure thereof has been or is rightfully authorized by that third party.
Attachment No. 1 Subrecipient Agreement
The Subrecipient shall not disclose any reports, recommendations, conclusions or
other results of the services or the existence of the subject matter of this Agreement without the
prior written consent of the City. In its performance hereunder, the Subrecipient shall comply with
all legal obligations it may now or hereafter have respecting the information or other property of
any other person, firm or corporation.
Subrecipient shall be liable to City for any damages caused by breach of this
condition, pursuant to the provisions of Section 14.
15. INDEMNIFICATION AND HOLD HARMLESS. The Subrecipient agrees to
defend, indemnify, and hold harmless the City of National City, its officers and employees, against
and from any and all liability, loss, damages to property, injuries to, or death of any person or
persons, and all claims, demands, suits, actions, proceedings, reasonable attorneys' fees, and
defense costs, of any kind or nature, including workers' compensation claims, of or by anyone
whomsoever, resulting from or arising out of the Subrecipient's negligent performance of this
Agreement.
16. WORKERS' COMPENSATION. The Subrecipient shall comply with all of
the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California,
the applicable provisions of Division 4 and 5 of the California Government Code and all
amendments thereto; and all similar state or Federal acts or laws applicable; and shall indemnify,
and hold harmless the City and its officers, and employees from and against all claims, demands,
payments, suits, actions, proceedings and judgments of every nature and description, including
reasonable attorney's fees and defense costs presented, brought or recovered against the City
or its officers, employees, or volunteers, for or on account of any liability under any of said acts
which may be incurred by reason of any work to be performed by the Subrecipient under this
Agreement.
17. INSURANCE. The Subrecipient, at its sole cost and expense, shall
purchase and maintain, and shall require its subrecipient(s), when applicable, to purchase and
maintain throughout the term of this Agreement, the following checked insurance policies:
A. ❑ If checked, Professional Liability Insurance (errors and
omissions) with minimum limits of $1,000,000 per occurrence.
B. Automobile Insurance covering all bodily injury and property damage
incurred during the performance of this Agreement, with a minimum coverage of $1,000,000
combined single limit per accident. Such automobile insurance shall include owned, non -owned,
and hired vehicles ("any auto"). The policy shall name the CITY and its officers, agents and
employees as additional insureds, and a separate additional insured endorsement shall be
provided.
C. Commercial General Liability Insurance, with minimum limits of
$2,000,000 per occurrence and $4,000,000 aggregate, covering all bodily injury and property
damage arising out of its operations under this Agreement. The policy shall name the CITY and
its officers, agents and employees as additional insureds, and a separate additional insured
endorsement shall be provided. The general aggregate limit must apply solely to this "project" or
"location".
Attachment No. 1 Subrecipient Agreement
D. Workers' Compensation Insurance in an amount sufficient to meet
statutory requirements covering all of Subrecipient's employees and employers' liability insurance
with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a
waiver of subrogation in favor of the City. Said endorsement shall be provided prior to
commencement of work under this Agreement.
If Subrecipient has no employees subject to the California Workers'
Compensation and Labor laws, Subrecipient shall execute a Declaration to that effect. Said
Declaration shall be provided to Subrecipient by City.
E. The aforesaid policies shall constitute primary insurance as to the City, its
officers, employees, and volunteers, so that any other policies held by the City shall not contribute
to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice
to the City of cancellation or material change.
F. If required insurance coverage is provided on a "claims made" rather than
"occurrence" form, the Subrecipient shall maintain such insurance coverage for three years after
expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must
be on or before the date of this Agreement.
G. Insurance shall be written with only California admitted companies that hold
a current policy holder's alphabetic and financial size category rating of not less than A VIII
according to the current Best's Key Rating Guide, or a company equal financial stability that is
approved by the City's Risk Manager. In the event coverage is provided by non -admitted "surplus
lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines
Insurers (LESLI list) and otherwise meet rating requirements.
H. This Agreement shall not take effect until certificate(s) or other sufficient
proof that these insurance provisions have been complied with, are filed with and approved by
the CITY'S Risk Manager. If the Subrecipient does not keep all of such insurance policies in full
force and effect at all times during the terms of this Agreement, the CITY may elect to treat the
failure to maintain the requisite insurance as a breach of this Agreement and terminate the
Agreement as provided herein.
I. All deductibles and self -insured retentions in excess of $10,000 must be
disclosed to and approved by the City.
18. LEGAL FEES. If any party brings a suit or action against the other party
arising from any breach of any of the covenants or agreements or any inaccuracies in any of the
representations and warranties on the part of the other party arising out of this Agreement, then
in that event, the prevailing party in such action or dispute, whether by final judgment or out -of -
court settlement, shall be entitled to have and recover of and from the other party all costs and
expenses of suit, including attorneys' fees.
For purposes of determining who is to be considered the prevailing party, it is
stipulated that attorney's fees incurred in the prosecution or defense of the action or suit shall not
be considered in determining the amount of the judgment or award. Attorney's fees to the
prevailing party if other than the City shall, in addition, be limited to the amount of attorney's fees
incurred by the City in its prosecution or defense of the action, irrespective of the actual amount
of attorney's fees incurred by the prevailing party.
19. MEDIATION/ARBITRATION. If a dispute arises out of or relates to this
Agreement, or the breach thereof, the parties agree first to try, in good faith, to settle the dispute
by mediation in San Diego, California, in accordance with the Commercial Mediation Rules of the
American Arbitration Association (the "AAA") before resorting to arbitration. The costs of
Attachment No. 1 Subrecipient Agreement
mediation shall be borne equally by the parties. Any controversy or claim arising out of, or relating
to, this Agreement, or breach thereof, which is not resolved by mediation shall be settled by
arbitration in San Diego, California, in accordance with the Commercial Arbitration Rules of the
AAA then existing. Any award rendered shall be final and conclusive upon the parties, and a
judgment thereon may be entered in any court having jurisdiction over the subject matter of the
controversy. The expenses of the arbitration shall be borne equally by the parties to the
arbitration, provided that each party shall pay for and bear the costs of its own experts, evidence
and attorneys' fees, except that the arbitrator may assess such expenses or any part thereof
against a specified party as part of the arbitration award.
20. TERMINATION. A. This Agreement may be terminated with or without
cause by the City. Termination without cause shall be effective only upon 60-day's written notice
to the Subrecipient. During said 60-day period the Subrecipient shall perform all services in
accordance with this Agreement.
B. This Agreement may also be terminated immediately by the City for cause
in the event of a material breach of this Agreement, misrepresentation by the Subrecipient in
connection with the formation of this Agreement or the performance of services, or the failure to
perform services as directed by the City.
C. Termination with or without cause shall be effected by delivery of written
Notice of Termination to the Subrecipient as provided for herein.
D. In the event of termination, all finished or unfinished Memoranda Reports,
Maps, Drawings, Plans, Specifications and other documents prepared by the Subrecipient,
whether paper or electronic, shall immediately become the property of and be delivered to the
City, and the Subrecipient shall be entitled to receive just and equitable compensation for any
work satisfactorily completed on such documents and other materials up to the effective date of
the Notice of Termination, not to exceed the amounts payable hereunder, and less any damages
caused the City by the Subrecipient's breach, if any. Thereafter, ownership of said written material
shall vest in the City all rights set forth in Section 6.
E. The City further reserves the right to immediately terminate this Agreement
upon: (1) the filing of a petition in bankruptcy affecting the Subrecipient; (2) a reorganization of
the Subrecipient for the benefit of creditors; or (3) a business reorganization, change in business
name or change in business status of the Subrecipient.
21. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing, and shall be personally delivered; or sent by overnight mail (Federal
Express or the like); or sent by registered or certified mail, postage prepaid, return receipt
requested; or sent by ordinary mail, postage prepaid; or telegraphed or cabled; or delivered or
sent by telex, telecopy, facsimile or fax; and shall be deemed received upon the earlier of (i) if
personally delivered, the date of delivery to the address of the person to receive such notice, (ii)
if sent by overnight mail, the business day following its deposit in such overnight mail facility, (iii)
if mailed by registered, certified or ordinary mail, five (5) days (ten (10) days if the address is
outside the State of California) after the date of deposit in a post office, mailbox, mail chute, or
other like facility regularly maintained by the United States Postal Service, (iv) if given by telegraph
or cable, when delivered to the telegraph company with charges prepaid, or (v) if given by telex,
telecopy, facsimile or fax, when sent. Any notice, request, demand, direction or other
communication delivered or sent as specified above shall be directed to the following persons:
To the City: Carlos Aguirre
Attachment No. 1 Subrecipient Agreement
Community Development Manager
City of National City
1243 National City Boulevard
National City, CA 91950-4301
To the Subrecipient: Dian Sodano
Vice President
4010 Fairmount Aveune
San Diego, CA 92105
Notice of change of address shall be given by written notice in the manner specified
in this Section. Rejection or other refusal to accept or the inability to deliver because of changed
address of which no notice was given shall be deemed to constitute receipt of the notice, demand,
request or communication sent. Any notice, request, demand, direction or other communication
sent by cable, telex, telecopy, facsimile or fax must be confirmed within forty-eight (48) hours by
letter mailed or delivered as specified in this Section.
22. CONFLICT OF INTEREST AND POLITICAL REFORM ACT
OBLIGATIONS. During the term of this Agreement, the Subrecipient shall not perform services
of any kind for any person or entity whose interests conflict in any way with those of the City of
National City. The Subrecipient also agrees not to specify any product, treatment, process or
material for the project in which the Subrecipient has a material financial interest, either direct or
indirect, without first notifying the City of that fact. The Subrecipient shall at all times comply with
the terms of the Political Reform Act and the National City Conflict of Interest Code. The
Subrecipient shall immediately disqualify itself and shall not use its official position to influence in
any way any matter coming before the City in which the Subrecipient has a financial interest as
defined in Government Code Section 87103. The Subrecipient represents that it has no
knowledge of any financial interests that would require it to disqualify itself from any matter on
which it might perform services for the City.
M If checked, the Subrecipient shall comply with all of the reporting require-
ments of the Political Reform Act and the National City Conflict of Interest Code. Specifically, the
Subrecipient shall file a Statement of Economic Interests with the City Clerk of the City of National
City in a timely manner on forms which the Subrecipient shall obtain from the City Clerk.
The Subrecipient shall be strictly liable to the City for all damages, costs or
expenses the City may suffer by virtue of any violation of this Paragraph 22 by the Subrecipient.
23. HOME PROGRAM SUBRECIPIENT PROVISIONS.
A. Use of HOME Funds. The HOME funds will be used to deliver a loan
assistance program that will assist approximately 15-20 First-time Homebuyers and more as
additional funds are made available for the Program. Exhibit "A" and the National City First Time
Homebuyer Program Guidelines, Exhibit "B" provide a detailed description of the use of HOME
funds under this Agreement.
Attachment No. 1 Subrecipient Agreement
B. Affordability Period and Recapture.. The entire amount of direct HOME
subsidy will be recaptured from the homebuyer during the required affordability period under CFR
§ 92.254(a)(3)(E)(4) if the property is transferred or sold during the applicable affordability period.
C. Affirmative Marketing Procedures. The Subrecipient shall adopt affirmative
marketing procedures and requirements for all HOME assisted housing in compliance with 24
CFR § 92.351, as well as City's affirmative marketing responsibilities. Affirmative marketing steps
consists, at a minimum, of actions to provide information and otherwise attract eligible persons
from all racial, ethnic, and gender groups in the housing market area to the available housing
assistance program The procedures and requirements must include methods for informing the
public and owners about fair housing laws and policies so as to ensure that all individuals, without
regard to race, color, national origin, religion, or sex are given an equal opportunity to participate
in the program. The Subrecipient shall be solely responsible for the effective marketing
responsibilities necessary to achieve Subrecipient's production goals set forth in Paragraph 2.
D. Environmental Review. The City has assessed the activities carried out
under this agreement in accordance with the provisions of the National Environmental Policy Act
of 1969 (NEPA) and the related authorities listed in HUD's implementing regulations at 24 CFR
parts 50 and 58. The City has determined that the activities described in the Scope of Work are
exempt from environmental review as described at 24 CFR part 58.35(b)5.
D. Displacement, Relocation, and Acquisition. The City will not provide
financial assistance to any housing unit that is tenant occupied. To insure compliance with 24
CFR § 92.353, the Subrecipient and seller, and buyer will certify that any real property selected
for HOME assistance is either owner -occupied or vacant three months before an offer to purchase
is accepted by the seller.
E. Procurement. Unless specified otherwise within this agreement, the
Subrecipient shall procure all materials, property, or services in accordance with the requirements
of 24 CFR 84.40-48. The Subrecipient will follow their written policy for procurement.
F. HOME Program Conflict of Interest. No member, officer or employee of
County or its designees or agents; no member of the governing body of the locality in which the
Program is situated; and no other public official of such locality or localities, who exercises any
functions or responsibilities with respect to the program funded hereunder during their tenure or
for one year thereafter, shall have any interest, direct or indirect, in any Contract or subcontract,
or the proceeds thereof, for work to be performed hereunder. Subrecipient agrees to incorporate,
or cause to be incorporated, like language prohibiting such interest in all contracts and
subcontracts hereunder. No officer, employee, member or program participant of Subrecipient its
contractors or its subcontractors shall have a financial interest, direct or indirect, in this Contract
or the monies transferred hereunder or be financially interested, directly or indirectly, in the sale
to Subrecipient of any land, materials, supplies or services purchased with any funds transferred
hereunder, except on behalf of Subrecipient, as an officer, employee, member or program
participant. Any willful violation of this paragraph with the knowledge, expressed or implied, of
Subrecipient or its subcontractors shall render this Contract voidable by County.
G. Lead -Based Paint Hazards. The Subrecipient agrees that any residential
structures with assistance provided under this Agreement shall be subject to HUD Lead -Based
Paint Regulations at 24 CFR Part 92.355. Such regulations pertain to all HOME -assisted housing
Attachment No. 1 Subrecipient Agreement
and require that all owners, prospective owners, and tenants of properties constructed prior to
1978 be properly notified that such properties may include lead -based paint. Such notification
shall point out the hazards of lead -based paint and explain the symptoms, treatment and
precautions that should be taken when dealing with lead -based paint poisoning and the
advisability and availability of blood lead level screening for children under seven. The notice
should also point out that if lead -based paint is found on the property, abatement measures may
be undertaken. The regulations further require that a visual assessment, risk assessment and
potentially paint stabilization be conducted as required by 24 CFR Part 35 Subpart J.
H. Flood Disaster Protection. In accordance with the requirements of the
Flood Disaster Protection Act of 1973 (42 U.S.C. 4001), the Subrecipient shall assure that for
activities located in an area identified by the Federal Emergency Management Agency (FEMA)
as having special flood hazards, flood insurance under the National Flood Insurance Program is
obtained and maintained as a condition of financial assistance for acquisition or construction
purposes (including rehabilitation).
I. Use and Reversion of Assets. If any assets purchased with HOME funds
are sold, the proceeds will be considered as program income and will be used for eligible activities.
J. Program Income. Any program income or recaptured funds under this
Contract Agreement obtained by the Subrecipient shall be returned within 5 business days to the
City by the Subrecipient.
K. Program Monitoring. The City may monitor client eligibility for each
assisted project. Each review shall also include, but not be limited to on -site inspections to
determine compliance with all applicable property codes and standards.
Subrecipient shall fully cooperate with the City in monitoring the effectiveness and work performed
by the Subrecipient in compliance with the terms of the Agreement. City shall have access at a
reasonable hour to all offices and records (dealing with the use of funds that are the basis of this
Agreement) of Subrecipient, it officers, directors, agents, employees, and subcontractors for the
purposes of such monitoring. City shall give Subrecipient reasonable notice for accessing offices
and records.
L. Uniform Administrative Requirements. Subrecipient agrees to comply with
the HOME requirements 24 CFR § 92.505 and the requirements and standards of OMB Circular
A-122, "Cost Principles for Non -Profit Organizations" and with the following Attachments to OMB
Circular No. A-110 and any changes to either Circulars. It is understood that all items below may
not be applicable to Subrecipient's operations:
Attachment A, "Cash Depositories," except for Paragraph 4 concerning deposit
insurance;
2. Attachment B, "Bonding and Insurance";
3. Attachment C, "Retention and Custodial Requirements for Records";
4. Attachment F, "Standards for Financial Management Systems";
Attachment No. 1 Subrecipient Agreement
5. Attachment H, "Monitoring and Reporting Program Performance," paragraph 2;
6. Attachment N, "Property Management Standards," except for paragraph 3
concerning the standards;
7. Attachment 0, "Procurement Standards"; and
8. Attachment P, "Audit Requirements."
Audits must be conducted in accordance with 24 CFR Part 44 and OMB Circular
A-133.
M. Retention of Records. Subrecipient agrees to keep or cause to be kept an
accurate record of all actions taken and all funds expended, with source documents, in the pursuit
of the objectives of the performance of this Agreement. Such records shall be kept for a minimum
of five (5) years beyond the close of this Contract. Subrecipient also agrees to obtain and keep
on file and available for inspection by City the following information on each household assisted
under this Agreement:
A. annual income and size of the household;
B. ethnic group of the client;
C. whether the head of household is male or female;
D. additional statistical information as may be required by HUD regulations and
any amendments thereto;
E. proof the subject property meets the applicable property standards;
F. the total per unit amount of HOME dollars invested;
G. the compliance with the affirmative marketing requirements and existence of
acceptable procedures;
H. compliance with relocation requirements;
minority and female -owned business data, and affirmative fair housing
actions;
compliance with lead based paint regulations and guidelines;
J. compliance with conflict of interest rules; and
evidence the income targeting requirements are met.
N. Enforcement of the Agreement. If assisted housing does not meet the
applicable requirements under 24 CFR § 92.254 the funds provided to the assisted project must
be repaid to the Subrecipient within 30 days of failure to comply. Specific property recapture
provisions to maintain the principal residency period must be stated in the HOME agreement
between the homebuyer and the Subrecipient and filed of public record at the close of escrow.
Attachment No. 1 Subrecipient Agreement
O. Hatch Act. The Subrecipient agrees that no funds provided, nor personnel
employed under this Agreement, shall be in any way or to any extent engaged in the conduct of
political activities in violation of Chapter 15 of Title V of the U.S.C.
P. Conflict of Interest. The Subrecipient agrees to abide by the provisions of
24 CFR 84.42 and 570.611, which include (but are not limited to) the following:
a. The Subrecipient shall maintain a written code or standards of conduct that
shall govern the performance of its officers, employees or agents engaged
in the award and administration of contracts supported by Federal funds.
b. No employee, officer or agent of the Subrecipient shall participate in the
selection, or in the award, or administration of, a contract supported by
Federal funds if a conflict of interest, real or apparent, would be involved.
c. No covered persons who exercise or have exercised any functions or
responsibilities with respect to CDBG-assisted activities, or who are in a
position to participate in a decision -making process or gain inside
information with regard to such activities, may obtain a financial interest in
any contract, or have a financial interest in any contract, subcontract, or
agreement with respect to the CDBG-assisted activity, or with respect to
the proceeds from the CDBG-assisted activity, either for themselves or
those with whom they have business or immediate family ties, during their
tenure or for a period of one (1) year thereafter. For purposes of this
paragraph, a "covered person" includes any person who is an employee,
agent, consultant, officer, or elected or appointed official of the Grantee,
the Subrecipient, or any designated public agency.
Q. Lobbying. The Subrecipient hereby certifies that:
a. No Federal appropriated funds have been paid or will be paid, by or on
behalf of it, to any person for influencing or attempting to influence an
officer or employee of any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into of any
cooperative agreement, and the extension, continuation, renewal,
amendment, or modification of any Federal contract, grant, loan, or
cooperative agreement;
b. If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer
or employee of any agency, a Member of Congress, an officer or employee
of Congress, or an employee of a Member of Congress in connection with
this Federal contract, grant, loan, or cooperative agreement, it will complete
and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in
accordance with its instructions; and
Attachment No. 1 Subrecipient Agreement
c. It will require that the language of paragraph (d) of this certification be
included in the award documents for all sub awards at all tiers (including
subcontracts, sub grants, and contracts under grants, loans, and
cooperative agreements) and that all Subrecipients shall certify and
disclose accordingly:
d. This certification is a material representation of fact upon which reliance
was placed when this transaction was made or entered into. Submission of
this certification is a prerequisite for making or entering into this transaction
imposed by section 1352, title 31, U.S.C. Any person who fails to file the
required certification shall be subject to a civil penalty of not less than
$10,000 and not more than $100,000 for each such failure.
R. Conditions for Religious Organizations. If applicable, the Subrecipient
must meet the conditions in 24 CFR Part 92.257 regarding the use of HOME funds involving a
primarily religious entity.
S. Closeout. HOME funds will be closed out in accordance with procedures
established by HUD.
23. MISCELLANEOUS PROVISIONS.
A. Computation of Time Periods. If any date or time period provided for in this
Agreement is or ends on a Saturday, Sunday or federal, state or legal holiday, then such date
shall automatically be extended until 5:00 p.m. Pacific Time of the next day which is not a
Saturday, Sunday or federal, state or legal holiday.
B. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which, together, shall constitute but one and
the same instrument.
C. Captions. Any captions to, or headings of, the sections or subsections of
this Agreement are solely for the convenience of the parties hereto, are not a part of this
Agreement, and shall not be used for the interpretation or determination of the validity of this
Agreement or any provision hereof.
D. No Obligations to Third Parties. Except as otherwise expressly provided
herein, the execution and delivery of this Agreement shall not be deemed to confer any rights
upon, or obligate any of the parties hereto, to any person or entity other than the parties hereto.
E. Exhibits and Schedules. The Exhibits and Schedules attached hereto are
hereby incorporated herein by this reference for all purposes.
F. Amendment to this Agreement. The terms of this Agreement may not be
modified or amended except by an instrument in writing executed by each of the parties hereto.
G. Waiver. The waiver or failure to enforce any provision of this Agreement
shall not operate as a waiver of any future breach of any such provision or any other provision
hereof.
H. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
I. Entire Agreement. This Agreement supersedes any prior agreements,
negotiations and communications, oral or written, and contains the entire agreement between the
parties as to the subject matter hereof. No subsequent agreement, representation, or promise
made by either party hereto, or by or to an employee, officer, agent or representative of any party
hereto shall be of any effect unless it is in writing and executed by the party to be bound thereby.
Attachment No. 1 Subrecipient Agreement
J. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the parties hereto.
K. Construction. The parties acknowledge and agree that (i) each party is of
equal bargaining strength, (ii) each party has actively participated in the drafting, preparation and
negotiation of this Agreement, (iii) each such party has consulted with or has had the opportunity
to consult with its own, independent counsel and such other professional advisors as such party
has deemed appropriate, relative to any and all matters contemplated under this Agreement, (iv)
each party and such party's counsel and advisors have reviewed this Agreement, (v) each party
has agreed to enter into this Agreement following such review and the rendering of such advice,
and (vi) any rule or construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in the interpretation of this Agreement, or any portions hereof, or any
amendments hereto.
24. ATTACHMENTS TO THE SUBRECIPIENT AGREEMENT
Exhibit A: Scope of Work
Exhibit B: National City First Time Homebuyer Assistance Program Manual
Exhibit C: Subrecipient Insurance
Attachment No. 1 Subrecipient Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date and year first above written.
CITY OF NATIONAL CITY
M
Leslie Deese, City Manager
APPROVED AS TO FORM:
Claudia G. Silva
City Attorney
SPRINGBOARD CDFI.
By:
Gabe del Rio
President
By:
Dian Sodano
Vice President
Exhibit A
SCOPE OF WORK
Program Design and Scope for the National City First -Time Homebuyer Program
Springboard CDFI will provide a unique and experienced system, called full -cycle -lending, that
will promote, educate, counsel and assist first-time homebuyers (FTHB) through the entire
process. For new buyers, mortgage banking is unfamiliar and often complicated. In the
traditional environment, FTHBs are often shuffled around and present as easy targets to be taken
advantage of Our comprehensive first time home buyer program ensures that these vulnerable
new buyers are educated, prepared, and qualified to purchase a new home.
With the surge of Foreclosures and Notices of Default, Springboard CDFI has strengthened our
Post Purchase counseling services with 16 new FT positions and link to a national hotline for
triage services for our clients. Springboard CDFI's staff, whether from Counseling to Loan
Servicing, are highly trained and certified in their fields. Springboard CDFI is consistently
recognized on a national level for our expertise and best practices.
The approach to the National City First -Time Homebuyer Program in meeting the lending needs
of FTHBs through a uniquely enhanced service delivery model is outlined below:
• Outreach: Springboard CDFI will provide neighborhood outreach via flyers and
brochures in various locations of high civic traffic in the City of National City on a
quarterly basis. All of our County -wide marketing materials, event participation and
orientation seminars will include the information on the National City First -Time
Homebuyer Program.
• Education: Springboard CDFI will continue to provide our 8+hour HUD Certified Home
Buyer Education in English and Spanish for interested residents of National City First -
Time Homebuyer Program, with an increase of at least two classes per year in a National
City location. Classes are also held in our City Heights office, just a 10 minute drive from
National City almost every Saturday all year long. We welcome the City to refer any
interested agencies and organizations to Springboard CDFI to co -brand or organize a
class in National City. (First -Time Homebuyer Program specific reports provided
quarterly.)
• Counseling: Springboard CDFI will continue to provide Pre and Post -Purchase
Counseling to residents of National City First -Time Homebuyer Program at no charge.
With the addition of this contract, Springboard CDFI will monitor all National City First -
Time Homebuyer Program loan program portfolio clients and provide specialized
outreach for loss mitigation and homeownership preservation.
• Lending: Springboard CDFI will administer the National City First -Time Homebuyer
Program homeownership loan program according to the program guidelines provided.
This will include taking applications for the program, underwriting, loan document
preparation and loan closing. Springboard CDFI will provide one-on-one in person client
intake and applications for the National City First -Time Homebuyer Program applicants,
while leveraging the City's funds by pre -qualifying the client for any and all other
assistance possible through Springboard CDFI if available and if necessary. Pre -
qualification group appointments will be made after a client has graduated any 8-hour
HUD certified Home Buyer Education course offered by most HUD approved agencies.
Exhibit A
o National City may choose to retain the funds until loan closing and billing from
Springboard CDFI for reimbursement and payment, OR National City may
choose to forward the loan funds to Springboard CDFI for restricted-use/investor
account management.
o Enumeration to Springboard CDFI for lending, counseling, education and all
other services provided to clients by Springboard CDFI will be paid by the City of
National City First -Time Homebuyer Program at such a time and rate as $4,900.
per closed loan. (Billed within 30 days of loan closing)
CLIENT FLOW:
1. Client calls for
information and is referred
to take Springboard CDFI
or any other HUD certified
HBE and/or Financial
Fitness training.
2. Client schedules a
Group or individual Pre -
qualification Counseling
appointment with
Springboard CDFI for a
Pre -Purchase Counseling
session and Pre -
Qualification.
3. Mortgage -ready
applicants are offered
choices for 1st mortgage
Lenders and the Loan
Application Process begins.
4. Springboard CDFI
underwrites all applications
to program guidelines,
taking all approved
transactions through
closine.
Exhibit A
Objective
Activities
Timeline / Reports
Staff
& Billing
1) Quarterly distribution of flyers
Provide outreach materials
and brochures highlighting the
0 Quarterly
0 HOC Assistant
and offers for orientation
program and upcoming
0 Production
0 Home Buyer
sessions throughout high-
events/opportunities in locations
Report
Education Team
civic traffic locations in
around C.V. such as; Housing Dept,
Quarterly
National City First -Time
Libraries, Bill Payment, Municipal
Homebuyer Program in
Bldgs.
both English and Spanish.
2) Provide Orientations Seminars to
all interested groups in the area
3) Participate in all appropriate
fairs and community events
Provide Home Buyer Education
Educate National City
classes and subsequent pre-
0 Ongoing (3-
0 Home Buyer
First -Time Homebuyer
qualification rallies each week in
5/month)
Education Team
Program families on the
City Heights and alternating off-
0 Production
0 Director of
process of homeownership
sites through the County. At least 2
Report
Education and
through our HUD certified
classes per year will be held in
Quarterly
Counseling
Home Buyer Education in
National City First -Time
0 Client Services
English and Spanish.
Homebuyer Program
Coordinator
1) Pre -Purchase counseling
Provide both Pre and Post
provided to all HBE graduates.
0 Ongoing
0 AVP of Education
Purchase Counseling to
2) Post -purchase counseling
0 Production
and Counseling
residents of National City
provided to National City First-
Report
0 Senior Client
First -Time Homebuyer
Time Homebuyer Program
Quarterly
Services Coordinator
Program in both English
homeowners with targeted efforts to
and Spanish.
National City First -Time
Homebuyer Program loan portfolio
clients
1) Applications taken through pre -
Administer FTHB-HOME
qualification sessions in
0 Ongoing
0 AVP Lending
Down -payment Assistance
Springboard CDFI office offered by
Production
0 Loan
Loan Programs according
appointment to HUD -certified
Report
Coordinator/Closer
to guidelines.
graduates of Home Buyer Ed.
Quarterly
0 Loan Underwriter
2) Underwriting, closing and
0 Billing upon
funding provided by Springboard
loan closing
CDFI.
1) Priority given for face-to-face
Special Post -Purchase
counseling sessions for National
■ Ongoing
0 AVP Lending
Foreclosure Prevention
City First -Time Homebuyer
■ Quarterly
0 HOC Assistant
Efforts for National City
Program residents.
reporting
0 Client Services
First -Time Homebuyer
2) Special outreach using Ad
Coordinator
Program.
Council campaign for National City
0 AVP of Education
First -Time Homebuyer Program
and Counseling
residents.
3) Joint outreach efforts with city
billing departments.
Exhibit A
Program Budget
■ $4,900.00 fee per closed loan to Springboard CDFI for all counseling, education and
financing services associated with that loan and client.
The above referenced $4,900.00 fee per closed loan will also encompass the program set
up, marketing, and management of the Springboard CDFI / National City First -Time
Homebuyer Program, guidelines and lender training, Special Post Purchase Program for
National City First -Time Homebuyer Program, Education, Counseling, and Quarterly
Outreach Materials throughout National City First -Time Homebuyer Program (No annual
Fee is charged).
■ Initial capital for lending National City First -Time Homebuyer Program funds program or a
$35 per loan fee (wiring fee) if Springboard CDFI provides initial funds for loan with a
"net 30" due after funding of total loan amount extended by Springboard CDFI.
Reporting
Quarterly Production and Activity Reports for all of National City First -Time
Homebuyer Program on:
o General Outreach (including locations)
o Home Buyer Education Graduates
o Pre -Purchase Counseled Clientele
o Post -Purchase Counseled Clientele
o National City Homebuyer First -Time Homebuyer Program Funds Pipeline
Report
o Special Foreclosure Prevention Program Updates
Annual or Quarterly Loan Servicing Report for National City First -Time Homebuyer
Program
Portfolio (if option chosen)
■ Billing sent monthly along with quarterly reporting and backup.
Exhibit B
First -Time Home Buyer Program Manual
Effective March 2016 (Subject to periodic updates)
HOME Investment Partnership
r-
U.S. Department of Housing & Urban Development
a
B �
I
EQUAL HOUSING
OPPORTUNITY (!50
Lead Agency: City of National City, Housing, Grants, & Asset Management Department
140 E. 12`^ Street, National City, CA 91950
Exhibit B
Exhibit B
Table of Contents
PURPOSE OF THE PROGRAM MANUAL.........................................................................................................1
GENERAL DEFINITIONS..................................................................................................................................1
SECTION I: BORROWER ELIGIBILITY REQUIREMENTS..................................................................................4
A. ELIGIBLE BORROWERS......................................................................................................................4
B. INCOME CRITERIA.............................................................................................................................
6
C. HOUSEHOLD ELIGIBILITY REQUIREMENTS........................................................................................8
D. CREDITWORTHINESS ........................................................................................................................8
E. ELIGIBLE PROPERTIES........................................................................................................................9
F. MAXIMUM PURCHASE PRICE............................................................................................................9
G. LOAN PROCEDURES AND TERMS......................................................................................................9
SECTION II: PROGRAM ADMINISTRATION AND PROCEDURES..................................................................12
A. LENDER ELIGIBILITY.........................................................................................................................
12
B. LOAN ORIGINATION AND PROGRAM APPLICATION.......................................................................13
C. CITY APPLICATION PACKET..............................................................................................................14
D. CITY PROCESSING............................................................................................................................
15
E. PROPERTY SELECTION.....................................................................................................................16
F. PROPERTY INSPECTION...................................................................................................................
17
G. LOAN CLOSING................................................................................................................................19
H. CANCELLATION AND COMMITMENT EXPIRATIONS........................................................................20
SECTION III: CHANGES PRIOR TO CLOSING................................................................................................21
APPENDIX A -"APPLICATION, AFFIDAVIT, & RELEASE OF INFORMATION"
APPENDIX B-INCOME CALCULATIONS
APPENDIX C-SUBSIDY LAYERING ANALYSIS
APPENDIX D-SEQUENCE OF LOAN PROCESS
APPENDIX E-CITY LOAN QUALITY COMMITMENT POLICY
APPENDIX F-CODE AND PROPERTY STANDARDS (PS)
APPENDIX G--CODE/PS INSPECTION" FORM
APPENDIX H-SAMPLE "HOME FIRST-TIME HOMEBUYER REGULATORY AGREEMENT"
APPENDIX ]-SAMPLE "DEED OF TRUST"
APPENDIX J-SAMPLE "PROMISSORY NOTE"
APPENDIX K-CITY LOAN DISCLOSURE
APPENDIX L-ERROR AND OMISSIONS/COMPLIANCE AGREEMENT
Exhibit B
PURPOSE OF THE PROGRAM MANUAL
The purpose of this Program Manual is to describe the program in accordance with 24 CFR Part
92. This document contains a description of the City of National City HOME First -Time
Homebuyer (FTHB) Program requirements, processing procedures and program administration.
Loan processing forms are contained in a separate document. The City may revise these
guidelines from time to time, terminate and/or place the program on hold at the City's sole
discretion.
The City encourages all eligible homebuyers to apply. Participating lenders are expected to be
well informed about all the restrictions contained in this manual so that both applicants and
sellers are aware of these restrictions before the application is accepted. The Program Manual
serves as a guide, all final approvals and interpretation of the regulations are at the discretion
of the City's Housing, Grants, and Asset Management Department. The City is currently funding
the First -Time Homebuyer Program using the U.S. Department of Housing and Urban
Development (HUD) HOME program. Lenders are also expected to be informed of HUD's
Technical Guide for Determining Income and Allowances to determine income. The Program
Administrator/City will reject those applications where the information submitted indicates
that the applicant does not qualify for the program.
GENERAL DEFINITIONS
AFFIDAVIT: A deposition filed in connection with the program made under oath and subject to
penalties of perjury.
AFFORDABILITY PERIOD: The use of National City First -Time Homebuyer Program require that
the property remain affordable for a period no less than fifteen (15) years as recorded through
the HOME Promissory Note, Deed of Trust, and Regulatory Agreement or at time of sale or
transfer, as approved by the City of National City. However, the loan term for repayment is 30-
years.
APPLICANT: Any person within the household whom applies for City loan assistance.
ARMS LENGTH TRANSACTION: A transaction in which the buyers and sellers of a product act
independently and have no relationship to each other. The concept of an arm's length
transaction is to ensure that both parties in the deal are acting in their own self-interest and are
not subject to any pressure or duress from the other party.
ASSETS: Cash or a non -cash item that can be converted to cash. Assets exclude necessary
personal property.
BORROWER: Any person meeting the criteria as set forth in this manual.
HOME First -Time Homebuyer Program Manual P a g e I 1
Exhibit B
CITY: The City of National City Housing, Grants, and Asset Management Department.
COMMITMENT: A document which is originated by the Program Administrator once a purchase
contract has been approved and shall be valid for 60 days.
ELIGIBLE DWELLING: Real property located within the City of National City. The unit must be
designed as a residence for one household and must meet property standards and criteria as
set forth in this manual with no outstanding civil penalties against the property.
HOME PROGRAM (Home): The City's First -Time Homebuyer Program utilizes HOME program
regulations. HOME regulations under the U.S. Department of Housing and Urban Development
(HUD), are under 24 CFR Part 92, as amended.
HOMEOWNER INVESTMENT: Homeowner's initial down payment.
HOUSEHOLD: All persons whom will reside in the residence and function as a cohesive unit.
INCOME: The gross amount of all income for all mortgagors and adult household members that
is anticipated to be received during the coming twelve (12) months, as defined in 24 CFR Part 5.
All income derived from any source, including income from wages (gross pay), overtime,
pensions, veteran's compensation, bonuses, public assistance, alimony, income, dividends and
interest, etc. must be included.
ISSUER: City of City National through the Housing, Grants, and Asset Management Department.
LENDER: A financial institution, whether broker, retail, or wholesale, licensed to provide
mortgage loans in the State of California. The institution must meet all the requirements
established by the City in order to participate as a lender in the City program.
LOAN: An extension of credit provided to an Eligible Borrower to finance the purchase of an
Eligible Dwelling.
LOW-INCOME: A household with income not greater than 80% of the median income as
established by the U.S. Department of Housing and Urban Development (HUD). Every 12-18
months, these figures are updated by HUD.
LIQUID ASSETS: The total amount of funds that are in the form of cash or can quickly be
converted to cash. These include (1) cash; (2) demand deposits; (3) time and savings deposits;
and (4) investments (i.e. most stocks, money market instruments and government bonds)
capable of being quickly converted into cash without significant loss, either through their sale
or through the scheduled return of principal at the end of a short time remaining to maturity.
NET PROCEEDS: Sales price minus loan repayment and closing costs.
Home First -Time Homebuyer Program Manual P a g e 12
Exhibit B
OWNERSHIP INTEREST: Any of the following interests in residential property: fee simple
interest; joint tenancy; tenancy in common; interest of a tenant -shareholder in a cooperative;
life estate; interest held in trust for the Applicant that would constitute a present ownership
interest if held by the Applicant. Ownership interest may not exceed 1/12th interest.
PRE -COMMITMENT: A document which is originated by the City of National City and issued
through the Program Administrator based on preliminary review of the application package and
lender's certification that the requirements necessary for issuance of a City loan have been
met. A pre -commitment of funds will be valid for 60 days. An extension of an additional 30
days may be granted under extenuating circumstances at the sole discretion of the City.
PRINCIPAL RESIDENCE: Residence must be occupied as the primary home of the buyer and be
defined as one of the following types of residences: 1) single-family house; 2) condominium
unit, 3) town home unit.
PROHIBITED MORTGAGE: Second mortgages and any liens superior to the City First -Time
Homebuyer loan(s), other than the new first Trust Deed.
PROGRAM ADMINISTRATOR: The City of National City Housing, Grants, and Asset Management
Department administers the City's First -Time Homebuyer Program, including but not limited to
review of all income documentation, eligibility determinations, set-up, underwriting, and
servicing of the City's second loan. The Program Administrator has authority to request any
additional required documentation to ensure program compliance.
PROPERTY STANDARDS: Minimum performance standards a property must meet for program
eligibility.
PROPERTY VALUE: The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and seller each acting
prudently and knowledgeably, and assuming the price is not affected by undue stimulus.
Property/market value must be identified through an appraisal and provide to the Program
Administrator prior to the City's Voluntary Acquisition issuance.
PURCHASE PRICE: Cost of acquiring the residence, excluding usual and reasonable settlement
or finance costs, and the value of services performed by mortgagor in completing the
acquisition.
RELATED PERSON: Allied by nature, origin, kinship, marriage, etc.
RESIDENTIAL PROPERTY: Property which is zoned for single-family homes, multi -family
apartments, townhouses, and/or condominiums. Interest in residential property may not
exceed 1/12th for time share arrangements.
SINGLE-FAMILY RESIDENCE: Housing unit intended and used for occupancy by one household.
Home First -Time Homebuyer Program Manual P a g e 13
Exhibit B
VOLUNTARY ACQUISITION: A requirement of Home funds is to provide notification to the seller
of their rights as described in compliance with federal regulations.
SECTION I: BORROWER ELIGIBILITY REQUIREMENTS
Both federal and state law sets borrower eligibility requirements. Income guidelines are
modified based on federal and state directives every twelve to eighteen months. The City will
notify the Lenders when those changes take place, including the effective date of each change.
In an attempt to assure that all requirements are clear, the First -Time Homebuyer Application
and Affidavit are required to be signed by each Applicant and must be included in the
Application Package submitted to the Program Administrator, reference Appendix A.
A. ELIGIBLE BORROWERS
1. Qualified applicants must be first-time homebuyers. The Applicant may not have held an
ownership interest (that exceeds 1/12") in Residential Property within the past three
years. This timeframe includes those 36 months previous to the date the mortgage is
executed. In the case of a married couple, both parties must meet this requirement.
The buyer, spouse and any other parties who will reside in the property must meet this
requirement. The Lender must verify this through his/her examination of the
Applicant's federal tax returns for the preceding three years, credit reports, and other
relevant documentation. The Applicant(s) cannot have claimed a deduction for
mortgage interest or taxes on real property.
2. To demonstrate compliance with this requirement, Applicants must complete and sign
the First-time Homebuyer Application and Affidavit and provide copies of their last
three (3) years signed federal tax returns (or acceptable alternative exhibits).
a) The Applicant(s) can provide the signed 1040A, 1040EZ, or 1040 federal income
tax forms for the preceding years, including all schedules. These forms shall be
submitted to the Lender and forwarded to the City with the completed loan
application. The tax returns must be signed and dated in ink by the Applicants.
b) If the Applicant(s) has/have filed the short form, 1040A or 1040EZ for the last
three (3) years, completes and signs the required affidavits, but is unable to
produce copies of the signed returns, the City will accept a completed copy of
IRS Letter Form 1722 in lieu of actual returns. The Applicant may request this
letter, free of charge, from the local IRS Office. The Letter 1722 must include the
signature of a representative of the IRS. Letter Form 1722 should include the
following information:
Home First -Time Homebuyer Program Manual P a g e 14
Exhibit B
i. Name and social security number
ii. Type of return filed
iii. Marital status
iv. Tax shown on return
v. Adjusted gross income
vi. Taxable income
vii. Self-employment tax
viii. Number of exemptions
c) In the event the Applicant(s) or any adult household member (excluding
dependents listed on another household member's Tax Return) was not
obligated to file federal income tax returns for any of the preceding three (3)
years, it will be necessary for the Lender to obtain a completed and signed IRS
Form 4506-T from the Applicant or any adult household member, which is
required in place of the above. This document is to be forwarded to the City
with the application package.
d) If neither copies of the required tax returns or the 1722 Form can be obtained,
the Lender may be able to help the Applicant establish first-time homebuyer
status with copies of utility bills and a signed and notarized statement from the
Applicants landlords for the previous three years.
e) When the Commitment is issued during the period between January 1 and
February 15 and the Applicant has not yet filed his/her/their Federal Income Tax
Return for the preceding year, the City may rely on an affidavit. The affidavit
must affirm that the Applicant is not entitled to claim deductions for taxes or
interest on a principal residence for the preceding year. After February 15, a tax
return will be required.
3. Any Applicant with the marital status of "divorced" or "separated" must provide legal
documentation that specifies:
a) They no longer have ownership interest in any real property;
b) Will not be residing mutually; and
c) If claiming a child under the age of 18 as part of the household, legal custody of
at least 50% and claim any related child support and/or income.
4. Upon close of escrow, the buyer must occupy the home as their Principal Residence.
5. Applicant(s) must be a U.S. citizen or eligible immigrants. Legal resident aliens are
eligible to apply but must show proof of status.
6. Priority is given to current residents of the City of National City and households who are
employed in businesses within the City of National City at the time of application.
7. City of National City employees (except for certain employees of the Housing, Grants,
and Asset Management Department) are eligible to participate and may require HCD
approval.
Home First -Time Homebuyer Program Manual P a g e 15
Exhibit B
B. INCOME CRITERIA
1. Income must be below 80% of the currently published San Diego County median
income, adjusted for household size. Income limits have been established by the U.S.
Department of Housing and Urban Development (HUD) and published by HUD, and are
adjusted annually. In accordance with this requirement, applicants may not obtain
"stated income" loans. The true income must be a qualifying factor in loan approval.
Household Size
60% - 80%
Annual Income
1 person
$34,050-$45,400
2 people
$38,900-$51,850
3 people
$43,750-$58,350
4 people
$48,600-$64,800
5 people
$52,500-$70,000
6 people
$56,400-$75,200
7 people
$60,300-$80,400
8 people
$64,200-$85,500
Effective: June 1, 2015
2. Gross income is calculated by taking the Applicant's anticipated adjusted gross monthly
income, at the time of application, and multiplying it by twelve. Adjusted gross income
includes the gross amount of all taxable income, before payroll deductions of: wages,
salaries, commissions, fees, tips and bonuses, alimony, public assistance, etc. The
adjusted gross income also includes the income earned on assets, such as dividends
earned on stock, winnings, and interest earned on savings and checking. The adjusted
gross income qualification is pursuant to the 24 CFR 92.203(b)(3) for reporting under the
IRS Form 1040 series for individual federal annual income tax purposes. Gross income
includes the combined taxable adjusted gross income of all mortgagors and all other
adult members of the household.
a) Self -Employed or Seasonal Employees: The formula that the Lender uses to
determine the anticipated gross monthly income of self-employed and/or
seasonal workers is acceptable provided that all income as described in this
manual is included in the calculation.
b) Co-Borrower/Co-Mortgagor/Household: All household income must be
included in determining eligibility for the program. The IRS regulation states
"income to be taken into account in determining gross income is income of the
mortgagor(s) and any other person who is expected to both live in the residence
being financed and to be secondarily liable on the mortgage."
Home First -Time Homebuyer Program Manual P a g e 16
Exhibit B
c) Spouses: Married couples are treated as co -applicants, whether: 1) they are
separated; 2) either spouse is applying for the loan; or 3) either spouse plans to
be named on title.
d) Computing Income
i. Program Computation vs. Mortgage Underwriter's Computation: The City
loan figure represents ANTICIPATED income, while the Lender's figure
represents income AVERAGED over the last few years and the City program
requires that every source of taxable and non-taxable income be listed on
the Income Computation Worksheet, however, non-taxable income should
be bracketed and not added into the maximum annual family income
calculation. The household income is calculated using HUD's Technical Guide
for Determine Income and Allowance under the HOME Program.
http://portal.hud.gov/hudportal/HUD?src=/program offices/comm plannin
g/affordablehousing/libra ry/modelguides/2005/1780
ii. Income Parameters: See Appendix a of this manual for examples of sources
of income, which must be considered in computing buyer income.
iii. Military Pay: See Appendix 8 of this manual for Military Pay explanations.
iv. Self -Employed: Year-to-date profit and loss statement and three prior year's
tax returns are required.
V. Other Income: Sources of income other than wages must be documented by
third party verifications. In cases where the third party fails to respond,
acceptable alternative sources of documentation can be determined on a
case -by -case basis and should follow standard FNMA income verification
guidelines.
vi. Documentation: In cases where the Applicant is employed, acceptable
sources of documentation used to verify income include a recent pay stub
with year-to-date earnings and an employer Verification of Earnings
statement (VOE). If the application is taking place during the first four
months of the year, a year-to-date total may be insufficient. The Lender
must supplement the pay stub information with the prior year W-2
statement and/or tax returns. On some pay stubs, the year-to-date earnings
include pay from the last part of the prior year. If this is determined to be
the case, request that the employer submit a signed statement of verification
of exact year-to-date income. Miscalculation can result in the determination
of excess income and disqualification of the buyer.
vii. Income Verification: The Lender bears the burden of proving that the Buyer's
income is within the program guidelines. The computation should be clear,
complete, and documented by third party verifications, to the greatest
extent possible.
viii. No Income: Adult members, 18 years and older, of the household who have
no income must complete and sign the Declaration of No Income form.
ix. Part or Full Time Students: Adult members (18 and older) enrolled in a
vocational, community college or university must provide evidence of current
Home First -Time Homebuyer Program Manual P a g e 17
Exhibit B
enrollment status and a copy of their Financial Aid Award letter. See
Appendix a of this manual for student income explanations.
X. Dependants: Any persons claimed on federal tax returns within the past
three years and not identified as a member of the applying household must
provide a Declaration of Household size and affidavit that those person(s)
will not be residing as a member of the household.
C. HOUSEHOLD ELIGIBILITY REQUIREMENTS
1. Households shall have sufficient income and credit -worthiness to qualify for primary
financing from a participating lender.
2. Households shall have income that is verifiable by using Third Party verification.
3. Households will be required to provide a down payment or cash investment. A
minimum contribution of 2% of the total purchase price of the property will be required
from the borrower's personal funds and must be used for down payment, closing costs,
or cash reserves. If the borrower completes a Financial Fitness class, they City may
reduce this amount to 1.5%. The maximum amount of the contribution used towards
cash reserves must equal the minimum reserves required by the Lender of the first
mortgage. Cash gifts up to $50,000 may be given towards down payment assistance in
addition to the 2% owner contribution, but must be identified as part of the subsidy
layering analysis, reference Appendix C.
4. Maximum liquid assets after FTHB assistance may not exceed $25,000 (not including
retirement accounts, i.e. IRA's, 401(k), etc). Should an applicant be over this threshold
at time of application, the applicants buying power will be calculated based on the
qualifying first mortgage amount plus the City's gap financing threshold minus the
overage amount (thereby considering the overage as a down payment and lowering the
City's gap assistance). A worksheet of all assets and income shall be included in the
application package submitted to the City, reference Appendix B.
5. The combined income of all members of the household who are currently living
together as a family and will be living in the property must be included in the
determination of income. The household income must be projected as annual income.
All income sources must be disclosed.
D. CREDIT WORTHINESS
1. Households must have a minimum credit score of 620
Home First -Time Homebuyer Program Manual P a g e 18
Exhibit B
2. Borrowers with a foreclosure within the last five years must provide a letter of
explanation and substantial back-up documentation as to the cause of the foreclosure.
3. A credit report for the non -borrowing spouse is required. All debt of the non -borrowing
spouse will be used in the debt to income ratio calculations.
4. All collections and judgments must be paid in full, no exemptions
5. Bankruptcy within the last three years will result in a denial of assistance.
6. Child Support payments must be current and with no arrears.
E. ELIGIBLE PROPERTIES
1. Properties must be located within the City of National City limits.
2. Properties must be one (1) unit property that includes single-family homes, including
detached homes, condominiums or townhouses. Manufactured/mobile home,
duplexes, triplexes or four-plexes do not qualify as eligible properties.
3. All types of sales are eligible under the program with up to $20,000 available in city gap
Home financing.
4. Properties cannot have any outstanding civil penalties with the City of National City.
F. MAXIMUM PURCHASE PRICE
The maximum purchase price cannot exceed 95 percent of the median purchase price for the
area, as determined by HUD.
Condominiums and Townhomes: The 95% limit is $390,000 for existing townhomes ($428,000
for new construction), condominiums and single family homes). This limit is effective
4/13/2015. https://www.hudexchange.info/resource/2312/home-maximum-purchase-price-
after-rehab-value/
G. LOAN PROCEDURES AND TERMS
1. 3% interest deferred payment loans have a term of 30 years. No monthly payments of
principal or interest are required. When the buyer sells the property and wants to pay
the loan in full, in addition to the principal balance, the buyer must pay all the accrued
interest.
2. The Deed of Trust contains an acceleration clause, which will call the entire loan due and
payable upon certain events, including the following:
• Transfer or sale of the property
• If the borrower no longer occupies the property
• Discovery of willful misrepresentation or fraud in connection with any aspect of
the Deferred Payment 3% interest loan program
• Renting of the property
Home First -Time Homebuyer Program Manual Page 19
Exhibit B
• Uncured default by borrower on the first trust deed note, or deed of trust, or any
other senior or junior loan or encumbrance on the property.
3. The maximum loan amount shall not exceed $20,000 for households purchase 1 unit
properties (i.e. condominiums, townhomes, or detached single family home). The total
gap subsidies (inclusive of other sources) shall not exceed 40% of the purchase price,
subject to the condition of the property, qualifying factors and staff assessment. The
City loan may be used toward the required down payment, reasonable closing costs,
principal write -down assistance, an interest rate buy -down or any combination thereof,
but serves as gap financing and must be determined through a subsidy layering analysis,
see Appendix C.
4. The maximum CLTV (combined loan to value) of the City and the new 11t Trust Deed
loans shall not exceed the maximum approved CLTV required by the 11' mortgage
lender.
5. No non -occupant co -borrowers shall be allowed.
6. Total housing ratio (PITI) cannot exceed 38% of Applicant(s) gross monthly income or be
less than 30%. The City may make exceptions on a case by case basis.
7. Total debt -to -income ratio may not exceed 45% or 41% if obtaining an FHA loan.
a. All debt shall be counted, inclusive of any debt that the applicant has co -signed
for or identifies as a debt being paid by another party.
8. No prepayment penalty allowed.
9. Maximum fees to the Applicant of 2% origination, discount points for below par pricing
only, and $350 processing are acceptable for the purchase transaction. No other Broker
or Admin type fees allowed. Other third party fees that are reasonable and customary
are allowable, but total origination fee shall not exceed 2%.
10. No Origination fees may be charged to a family for the portion of the Home
Homeownership Assistance.
11. If the lender is also the City Program Administrator (that is receiving Home assistance),
the City must verify that the borrower is low-income and must inspect the housing unit
for compliance with the property standards.
Home First -Time Homebuyer Program Manual Page 110
Exhibit B
12. Any fees and/or commissions shall be customary and reasonable.
13. The terms of the City's Home second trust deed are designed to encourage long-term
residency in the program -assisted home. The loan term is 3% deferred calculated using
the simple interest method.
14. The loan shall become due and payable at the time of the property's transfer of title,
refinance (except as earlier defined), rental or sale.
15. Second and subsequent mortgages to the new First Trust Deed, except for this City
Loan, and a City HOME Loan, are not permitted.
16. Borrower can apply for CalHome funds as well as City HOME Investment Partnership Act
(HOME) Funds. However, the City reserves the right to limit the HOME funds. Total
combined assistance shall not exceed $76,000 ($56,000 CalHome, and $20,000 HOME).
Each program may require a separate application process. Each program requires its
own set of loan documents.
17. The loan is not assumable.
18. A Promissory Note, Deed of Trust, and Regulatory Agreement will secure the loan.
19. The City Loan can be used with conventional, FHA, VA, and other loans issued be a
qualified lender, except adjustable rate mortgages with less than five years fixed,
negative amortization and stated income mortgages.
20. The Program Administrator shall underwrite the City's loan. The City of National City's
Housing, Grants, and Asset Management Department does not underwrite the loans,
but shall review at their discretion for First -Time Homebuyer Program requirements.
Lenders will process the underlying mortgages using standard procedures, with
adjustments to those procedures to conform to the City loan guidelines.
21. The Program Administrator shall handle all the appeals process for applicants who have
been denied program participation. Applicants who are denied for being over -income
must wait "cooling off period" 6-months before re -applying.
Home First -Time Homebuyer Program Manual P a g e l 11
Exhibit B
SECTION II: PROGRAM ADMINISTRATION AND PROCEDURES
Eligible Applicants will apply for the City of National City's First -Time Homebuyer Program in
conjunction with normal mortgage loan application procedures. The City loan application must
be filed with an application for a mortgage to a Participating Lender.
The City loan processing procedures are designed to coincide with the standard mortgage loan
processing and underwriting criteria that are in place at most mortgage lending institutions,
although there are some City restrictions that must supersede normal processing and
underwriting criteria. Recognizing that there are procedural variations among participating
lenders, the steps outlined here are meant to serve as sequential guidelines, reference
Appendix D for a summary of the process and summary sheet to be included in each packet.
Please note, however, that all elements of the processing sequence must be completed at some
point.
A. LENDER ELIGIBILITY
Lender is defined as a financial institution, whether broker, retail, or wholesale, licensed to
make first mortgage loans in the State of California. All Lenders who wish to participate in the
City program must be enrolled as a participating lender. To enroll and maintain active status a
lender must:
1. Attend a lender certification course by the City's Program Administrator.
2. Agree to adhere to Quality Commitment Policy. Please refer to Appendix E.
3. Designate a contact person for the program.
4. Pay any associated lender certification fees as determined by the Program
Administrator.
5. All lending personnel involved with the City program must attend City training sessions
and study and apply procedures listed in the Lender Training Handbook.
6. Provide the First -Time Homebuyer Program Manual and Lender Training Handbook to
all loan processors.
Home First -Time Homebuyer Program Manual P a g e 112
Exhibit B
7. Cooperate with City Housing staff in providing the best possible service to the
Applicants.
The Lender will be required to submit certification that no material misstatements appear in
the application and program documents. If the Lender becomes aware of such, whether
negligently or willfully made, he/she must notify the City immediately. The Lender should also
be aware and inform the Applicant of penalties provided by California law if a person makes a
false statement or misrepresentation for the sole purpose of participating in this program.
Housing staff will take all lawful actions to correct or mitigate the problem.
B. LOAN ORIGINATION AND PROGRAM APPLICATION
1. Borrower applies to the Lender for a mortgage. Lender performs standard underwriting
procedures to qualify Applicant for a first mortgage, utilizing the City's required
underwriting requirements in lieu of certain standard criteria.
2. Lender describes parameters of the City program to Applicant and determines eligibility
based on a review of income, prior homeownership and all other factors listed in this
manual.
3. Lender obtains three prior year's tax returns from Applicant and prepares to have the
Seller Affidavit forwarded with instructions to the seller.
4. Lender gives the Applicant a copy of the City's First -Time Homebuyer Application,
Affidavit, and Release of Information. This document serves as the formal application to
the City and contains the required certifications below:
a. That the residence will be used as the Principal Residence and that the Applicant
must notify the City when the home ceases to be the Principal Residence.
b. That the Applicant has not had an ownership interest in a Property during the
three year period prior to the date of application.
C. That this is a new mortgage loan*.
d. That the loan applied for does not constitute a prohibited mortgage**.
e. That the Applicant was not forced to apply through a particular Lender.
f. That the Applicant's gross annual household income does not exceed permitted
income limits.
g. That no interest, commission or other fee is being paid to a related person.
h. Acknowledgment that any material misstatement or fraud is made under penalty
of perjury.
Home First -Time Homebuyer Program Manual P a g e 113
Exhibit B
i. City's loan application matches vesting on Vt Mortgage. City will not allowed
vesting as married but sole and separate property. However, if borrower
provides a letter from the 1" lender showing the difference in interest rate as
justification for allowing sole and separate property, City and its Program
Administrator may consider such request at its discretion. City staff and Program
Administrator will review these on a case by case basis. In circumstances, where
co -borrower has derogatory credit, the City will deny the request for sole and
separate property. If co -borrower has no credit lines, then the City will review
the interest rate variation and make a determination to allow for a change in
vesting.
*New Mortgage Requirements: The Lender and the Applicant, using the Program
Affidavits, state that the mortgage being acquired in connection with the loan
will not be used to acquire or replace an existing mortgage or land contract.
**Prohibited Mortgages: Any liens superior to the City First -Time Homebuyer
Loan, other than the new first Trust Deed, are not allowed under any
circumstances.
C. CITY APPLICATION PACKET
Applicant/Lender transmits an application packet to the City's Program Administrator that
includes the following City forms and additional documentation as required:
1. City First -Time Homebuyer Application*,seeAppendixA
2. Authorization for Release of Information Form*, see AppendixA
3. Complete copy of Lender's First Mortgage Loan Application
4. Income Computation Worksheet and all supporting documentation*, see Appendix 8
5. Subsidy Layering Analysis, see Appendix C
6. Two most recent 30-day bank statements & income documentation as described in
application
7. Three years of Federal Income tax Returns and/or Declaration of No Income Affidavits*
for a three-year period
8. Certificate of Completion for First -Time Homebuyer Education Training Course
Once property has been selected:
1. Purchase Contract and all Addendums signed by all parties
2. Program Administrator issued commitment letter
3. Lead -Based Paint Disclosure*
4. Appraisal and Third Party Inspection
5. Property Standard (PS) Checklist
6. Copy of Signed Receipt of Disclosures
7. Copy of Title Report
Home First -Time Homebuyer Program Manual Page 114
Exhibit B
8. Funding Request and Escrow Information Sheet*
9. Letter of Assignment (if the Funding Lender is different than the Originating Lender: A copy
of the Notice of Transfer signed at closing or a letter on company letterhead with the name,
address, phone and fax number of the Funding Lender along with the date the assignment is
being made will be sufficient)
10. Signed and executed copy of the Power of Attorney if applicable
* City Forms are to be completed as high quality copies of the original documents. Updated
forms will be provided to participating lenders as they are revised and may be ordered by
contacting the City's Program Administrator. Please note that all documents must be
submitted in hard -copy form and are not accepted by facsimile. All applicants must provide a
release to the City, HCD and the Program Administrator, allowing of review of any documents
to provide proof of employment and earnings, current occupancy, and other related
information, see Appendix A.
Mail the APPLICATION PACKAGE to the Program Administrator:
City of National City
Housing, Grants, and Asset Management Department
1243 National City Boulevard
National City, CA 91950
Submission of the above mentioned forms/documents to the Program Administrator
constitutes completion of the APPLICATION PACKAGE. Technically, the originating broker's role
is finished and the funding lender is responsible for submitting the final Close of Escrow
Package. However, it is advisable for the broker to discuss with the funding lender their role in
submitting the closing package, a failure to meet the Commitment expiration deadline can
result in additional work and costs to both the broker and funding lender.
D. CITY PROCESSING
1. Program Administrator accepts and reviews the Application package and makes a
determination as to completeness and accuracy. The City will also review the
Application and make a final determination to eligibility. Final determinations for
eligibility and all interpretations of the regulations shall be at the discretion of the City's
Community Development Manager.
a. Approvals - Once approved, the City will issue a pre -commitment of funds for a
60 day period. After the pre -commitment period funds will be released back
into the FTHB Program. One extension may be granted of up to 30 days due to
extenuating circumstances and at the discretion of the City.
b. Denials — Should an application be deemed ineligible for any reason once
submitted by the Program Administrator to the City, the City will issue a denial
Home First -Time Homebuyer Program Manual P a g e 115
Exhibit B
letter and such applicant will be required to submit a new application in entirety.
After the initial application, denials may be issued due to any household
changes, including but not limited to, changes in household size, debt, assets, or
income. In such cases, the applicant may be required to submit proof of the
change for a period of time (as identified in the denial letter), dependent on the
reason for the change and at the discretion of the City's Housing, Grants, and
Asset Management Department.
2. All applications received are subject to the availability of funds. The City has sole
discretion to terminate or suspend the program at any time.
3. The City will maintain a cumulative total of loan amounts reserved. When program
funds are about to be depleted, the Program Administrator will notify all participating
Lenders.
4. A commitment of funds will be issued by the Program Administrator for a 60 day period
at receipt of the purchase contract. If the purchase contract falls through, the City will
have sole discretion to release the funds back into the FTHB Program or issue an
extension of the pre -commitment.
5. Lender will complete the remainder of the standard mortgage application process.
6. Program Administrator/City Package Turn -Around: The Program Administrator shall
date -stamp packages and review in order of receipt. Turn -around time for reviewing
and sending a loan commitment or denial letter to the Lender is 6 business days from
the receipt of a complete* package.
7. RUSH: Packages marked "RUSH" or "SUPER RUSH" etc. will not be processed ahead of
other pending packages.
8. Incomplete Packages: Incomplete packages may delay the approval and subsequent
issuance of the City Commitment Approval Letter.
* Complete packages must include those items listed under Section II.D.
E. PROPERTY SELECTION
1. Once a property has been selected an initial purchase offer can be issued contingent on
a certified licensed third party appraisal and property meeting inspection requirements,
per Section F and G.
Home First -Time Homebuyer Program Manual P a g e 116
Exhibit B
2. An appraisal to establish the property value as determined by a certified state licensed
appraiser must be completed and provided to the City, as well as a third party
inspection and all lead certification requirements as specified in Section F.
3. Prior to the presentation of the final purchase offer, adjusted based on the licensed
appraisal, a voluntary acquisition notice shall be given to the owner of record. The City
shall provide the acquisition notice directly to the owner of record ensuring that it
complies with Program requirements, reference example "Voluntary Acquisition" notice
in Appendix D. All applicants shall submit a "Request for Issuance of the Voluntary
Acquisition", see Appendix D. The acquisition notice must be placed on top of a
purchase offer that is to be presented to the seller. The acquisition notice will include
the following:
a. The participant has power of eminent domain, but will not acquire the property
if negotiations fail to result in an amicable agreement ("Voluntary Acquisition");
b. An estimate of the property value of the property as determined by a state
licensed appraiser and paid for by the Applicant, conducted within 60 days of
said purchase offer and acquisition notice;
c. Seller certifies that the property has not been occupied by a tenant within the
last four months (with the exception of the potential buyer) and that no tenant
has been forced to move within the last four months. In addition, seller warrants
that no rent is being received for the property, and further certifies that no
occupants of the property pay rent to reside there;
d. Since the purchase is voluntary, the seller is not eligible for relocation payments,
or other relocation assistance; and,
e. If an acquisition notice is not provided to the seller containing the above
disclosures prior to submitting the purchase offer, a provision that the seller may
withdraw from the agreement after this information is provided. All purchase
offers shall be reviewed by the City and/or Program Administrator prior to
submittal to the seller to ensure the appropriate contingency clauses are
contained in the document regarding inspections, tenant -occupancy, loan
approvals, and other necessary items to comply with these guidelines. Only after
a participant has an accepted purchase contract shall the commitment letter be
issued by the Program Administrator and an allocation of funds can be reserved
for the City second loan.
F. PROPERTY INSPECTION
1. All applicants are required to obtain a housing inspection from a certified independent
third party.
Home First -Time Homebuyer Program Manual P a g e 117
Exhibit B
2. All properties built prior to 1978 must meet new HUD regulations for notification,
inspection, reduction/abatement and clearance of lead -based paint hazards under Title
X of the Housing and Community Development Act of 1992 (effective September 15,
2000). If subject property was constructed prior to 1978, during the due diligence
period, the Lender must request that an Independent Certified Risk Assessor (or
certified equivalent) conduct a property inspection and Risk Assessment in compliance
with the Home Program.
The following Table demonstrates the steps necessary in evaluating and correcting lead -
based paint in relation to the dollar amount spent on the rehabilitation of the property.
If a determination is made by the Certified Risk Assessor (or equivalent per HUD
protocol), that Lead -Based Paint Hazards are present on the subject property, the City
shall notify Buyer, Lender and Escrow within 15 days of such determination and provide
those parties with a copy of any and all Risk Assessment Report(s). The Lender will be
notified of work needed to cure defects, if any. If defective paint surfaces are found,
seller must properly abate the painted surfaces or the home shall be ineligible for
purchase. Seller and purchaser will be required to sign a disclosure form prior to the
close of escrow.
3. The written report(s) of findings must be provided to the City's Program Administrator.
The Program Administrator will review the reports and conduct a physical inspection to
Home First -Time Homebuyer Program Manual P a g e 118
Exhibit B
ensure the subject property meets HUD"s Property Standards and HUD lead -based paint
regulations. The City and/or Program Administrator may also request an inspection be
conducted by the City's Code Enforcement or Building Department to ensure the
property meets City building standards, inclusive of all required permits.
4. The City loan may be funded upon the completion of the repairs and clearance from the
Risk Assessor and the City Program Administrator. Properties must meet minimum
health and safety standards upon occupancy, as inspected by the Program
Administrator. In some cases, the City may authorize occupancy or escrow closing prior
to all repairs being completed, should the applicant apply for a FHA 203K loan. See
Appendix F for detailed Property Standards (PS) and Appendix G for the PS Inspection
Form.
5. VA or FHA -insured First Mortgages: In cases where the buyer obtains said mortgage, the
City may substitute the VA or FHA property inspection for the third party property
inspection, however the Program Administrator and/or City Staff must still conduct the
PS inspection as described previously. The FHA inspection does not, however, satisfy
HUD lead -based paint regulations unless no lead -based paint hazards are found and are
fully noted on the FHA inspection report.
G. LOAN CLOSING
1. Program Administrator partially completes the Closing Affidavit.
2. Lender and City forward loan documents to selected escrow officer with instruction for
closing the loans. The buyer signs the City loan documents. The escrow officer forwards
the copies of the executed Loan Documents back to the Program Administrator.
3. Before the expiration of the 60-day commitment and prior to recordation the Lender
and Escrow send the Close of Escrow documents to the Program Administrator. These
documents include:
a. Signed copy of City Deed of Trust and Homeowner's Regulatory Agreement for
the HOME program participation (Escrow sends original Deed of Trust and
Agreement to County Recorder's Office), original Promissory Note, Truth in
Lending Statement, Escrow Instructions and all amendments and copy of
estimated HUD 1 Statement, see Appendices H-J for samples of the Regulatory
Agreement, Deed, and Note.
b. City Loan Disclosure, see Appendix K.
c. City Error and Omission/Compliance Agreement
d. Closing Affidavit signed by the Applicant(s) at the time of the loan closing.
e. All outstanding loan conditions listed on the Commitment letter and/or
Instructions to Escrow.
Home First -Time Homebuyer Program Manual P a g e 119
Exhibit B
f. City reviews Closing Package and checks the file to ensure all necessary
documents have been submitted.
4. City loan documents are only good during the month that they are drawn and any
delays may require the preparation of all City final loan documents with a corrected
date. There will be no funding into the month.
5. Program Administrator will transfer funds by wire as instructed on the Funding Request
and Escrow Information Sheet located in the forms section of this Manual. Any
secondary wires that are issued due to errors on behalf of the Lender, Escrow or Title
Company will require an additional $35.00 re -wire fee and shall be paid by the party at
fault.
Lenders must adhere to the time frame for the City and the Program Administrator
processing period, promptly notifying the Program Administrator in writing of any loan
cancellations and/or request for reservation or commitment extensions.
If the Lender assigns responsibility of execution of City loan forms to Escrow or Title
Office personnel, the Lender assumes full responsibility for training the personnel to
comply with the requirements of this Manual.
H. CANCELLATION AND COMMITMENT EXPIRATIONS
1. Cancellations: When a decision is made not to continue with the City application,
written notice must be received at the office of the Program Administrator prior to the
expiration of the Commitment. The notice must include the reason for the cancellation
and the signatures of both the Lender and the Applicant.
2. Expiration of Commitment: Before the Commitment has expired, the Lender must
either:
a. Submit the closing package;
b. Submit written notice of loan cancellation; or
C. Request a 30 day extension in writing with explanation of extenuating
circumstances.
Upon expiration of the Commitment, the Lender must do one of the following
a) If the loan has not closed, the Lender must submit a request for extension and
provide estimate of closing date to the Program Administrator.
Home First -Time Homebuyer Program Manual Page 120
Exhibit B
b) If 60 days has passed since the Commitment was issued and no extension was
requested, the Lender must submit an entirely new Loan Application with
current income verification with a letter of explanation for the delay.
c) If the loan was canceled, the Lender submits a cancellation notice as described
above.
In all cases, expiration of the Commitment without the required action by the Lender
will result in the Lender being placed on "Inactive Status", and the Lender may submit
no new City applications until the issue has been resolved. Failure to comply may result
in the Lender's removal from the Certified Lender Partner List and program.
SECTION III: CHANGES PRIOR TO CLOSING
Program Administrator issues a loan Commitment based on the Applicant's and Seller's
Affidavits and the Lender's certification that the City's Program requirements have been met.
The Lender must immediately notify the Program Administrator in writing of any change that
could affect the Applicant(s) eligibility for the loan. If a change in the circumstances of the
Applicant is such that he/she no longer meets program requirements, the Commitment is
automatically revoked, reference "Denial" Section D.1.b.
1. Income: The eligibility of the Applicant for a City loan is based on the Applicant's
anticipated taxable income. Program Administrator will issue the Commitment based
on the household income as of the date the Commitment is issued. The income verified
for the Commitment is valid as long as the loan closes within four months after the
financial information was originally submitted and there have been no changes which
effect previously reported income. If the loan does not close within three months, all
applicable City documentation must be submitted and income must be re -verified.
2. Marital Status: If the Applicant gets married after issuance of the Commitment and prior
to closing, the spouse must satisfy the prior homeownership requirements contained in
the First -Time Homebuyer Application and Affidavit and the Closing Affidavit. The
Lender must also notify the Program Administrator program administrator. Any
increase in the household income because of the new spouse must also be considered
and may affect re -issuance of a new Commitment.
3. Acquisition Cost: If a change in acquisition cost occurs after the Commitment and prior
to closing, the Lender will be required to originate and submit a new version of:
a. First -Time Homebuyer Loan Application and Affidavit
b. Amended Escrow Instructions
C. Seller Affidavit
d. Voluntary Acquisition Form
e. All other documentation that may be applicable as listed previously in this
Manual
Home First -Time Homebuyer Program Manual P a g e 121
Exhibit B
4. Loan Amount: Any changes to the loan amount which occur after the Commitment has
been issued and prior to closing must be reported to the City immediately by phone,
followed up with a written confirmation along with all applicable documentation listed
in this Program Manual. Upon receipt of revised/updated documentation, a revised
Commitment may be issued.
Home First -Time Homebuyer Program Manual P a g e 122
Exhibit B
APPLICATION FOR NATIONAL CITY HOME FIRST-TIME HOMEBUYER
PROGRAM CALIFORNIA
TIONALCIry
NA
7- �
Dear Applicant. INCORPORATED
Thank you for your application to the City of National City First -Time Homebuyer (FTHB)
Program. The successful completion of the application process may result in your receiving a
City loan. Therefore, it is very important that you take the time to read and complete each
page of this application before the lender sends it to our office. You will be certifying that you
understand and meet the Program Guidelines. If you have any questions about the guidelines
please contact your Certified Lender Partner.
First Name Middle Last Name Social Security Number D.O.B .
Address
Phone Number:
Occupation:
Employer Name and Address:
Work Phone:
Phone/ Cell Phone ( )
(1a) Marital Status
Gender
First-time Buyer
Citizenship
(check one)
(check one)
(check one)
(check one)
Single
Male
Yes
U.S. Citizen
Divorced
Female
No
Permanent Resident Alien
Married
(1 b) Race (check one)
White American Indian/Alaskan Native & White
Black/African American Asian & White
Asian Black/African American & White
American Indian/Alaskan Native American Indian/Alaskan Native & Black/African American
Native Hawaiian/Other Pacific Islander Other:
Hispanic Ethnicity (check one)
Yes
No
Exhibit B
Relationship to Primary Applicant
Address:
Phone Number:
Occupation:
Employer Name and Address:
Work Phone:
Home Phone/ Cell Phone ( ) -
(2a) Marital Status
Gender
First-time Buyer
Citizenship
(check one)
(check one)
(check one)
(check one)
Single
Male
Yes
U.S. Citizen
Divorced
Female
No
Permanent Resident Alien
Married
(2b) Race (check one)
White _
Black/African American _
Asian _
American Indian/Alaskan Native _
Native Hawaiian/Other Pacific Islander
Hispanic Ethnicity (check one)
Yes
No
American Indian/Alaskan Native & White
Asian & White
Black/African American & White
American Indian/Alaskan Native & Black/African American
Other:
Relationship to Primary Applicant
Address:
Phone Number:
Occupation:
Employer Name and Address:
Work Phone: Home Phone/ Cell Phone
(2a) Marital Status
Gender
First-time Buyer
Citizenship
(check one)
(check one)
(check one)
(check one)
Single
Male
Yes
U.S. Citizen
Divorced
Female
No
Permanent Resident Alien
Married
(2b) Race (check one)
White American Indian/Alaskan Native & White
Black/African American Asian & White
Asian Black/African American & White
American Indian/Alaskan Native American Indian/Alaskan Native & Black/African American
Native Hawaiian/Other Pacific Islander Other:
Hispanic Ethnicity (check one)
Yes
No
Exhibit B
Total # of persons in Household Total yearly Household Income $
Name
D.O.B.
M/F
Name
D.O.B.
M/F
Relationship to Head of Household
Name
D.O.B.
M/F
Relationship to Head of Household
Name
D.O.B.
M/F
Relationship to Head of Household
Name
D.O.B.
MIF
Relationship to Head of Household
Name
D.O.B.
MIF
Relationship to Head of Household
Name
D.O.B.
M/F
Relationship to Head of Household
1 Last Name, First Name
Self-
Employed?
Date Employment Starts
Occupation
❑ Yes
No
1Weekly Hours
Hourly Pay
Weekly
How often
Worked
Rate
ip:=us
paid?
Employer's Name
__1___Employer's_Address_(Street,_ City, _State, _Zip)___________________________________________________________________________________
__Employer's_Phone_#Employer's_
Fax #
1 Last Name, First Name
Self-
Employed?
Date Em to
P yment Starts
Occupation
❑ Yes
❑ No
1Weekly Hours
Hourly Pay
Weekly
How often
._Worked.........................................._Rate................................._ips/Bonus........................
............
paid?
_Name
................................................................................................................
Employer's Address Address_(Street,City, State, Zip) ____ ____
Employer's Phone# ---- Employer's Fax-#- ----
Exhibit B
WAR
reportMAI
children. If necessary, Type of Income Yes No
Who Receives Funds sources Monthly Amount Name and Address of Provider
Social Security
--
-- ----- -----
$
Benefits —
$
SSA or/and SSI
$
CALWORKS
$
$
Food Stamps
$
State Disability
--
-- ----- -----
Worker's
$
Compensation
Unemployment
$
Benefits
$
Veteran's
$
Benefits
--
-- ----- -----
$
Military
--
-- ----- -----
$
Pay/Allotment
$
Pensions or
$
Retirement
$
ChildSupport
....................
....................
......................................................................................
._$...............................................................................................................................................................................................
Spousal
--
-- ----- -----
$
Support
$
$
Contributions
Giftsor Loans
..............................................................................................................................._a...............................................................................................................................................................................................
Rental Property
--
-- ----- -----
$
Income
$
School
$
Financial Aid
--
-- ----- -----
$
Other Income
--
-- ----- -----
$
Any other additional sources of income reported on a separate sheet of paper attached? OYes ONo
Exhibit B
-- ----------------- --------------------------------------------------------- --- ----------------------------------------- -------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------
- - ---------- ----------------- ----------------------------- --------------------------------------------------- 401 k, I RAs,
-------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------
stocks
bonds, etc.)
Any other additional sources of asset reported on a separate sheet of paper attached? L3Yes L3No
REASONABLE ACCOMMODATION
DO YOU REQUIRE A SPECIFIC ACCOMMODATION TO FULLY UTILIZE OUR AGENCY'S SERVICES?
LJYes LJNo If YES, please specify how we may accommodate your disability:
Exhibit B
CERTIFICATION OF THE APPLICANT
acknowledge and understand that this Affidavit, as completed above, will be relied on for
determining my eligibility for a City of National City First Time Homebuyer (FTHB) Assistance
Loan using federal HOME funds from the U.S. Department of Housing and Urban Development.
I acknowledge that a material misstatement negligently made by me in this Affidavit or in any
other connection with my Application for a City (FTHB) Loan will constitute a violation
punishable by a fine and possible criminal penalties imposed by law, and will result in the
cancellation or revocation of the Loan. I acknowledge that any false statement or
misrepresentation or the fraudulent use of any instrument, facility, article, or other valuable thing
or service pursuant to my participation in the City Program is punishable by fine.
BUYER DATE BUYER DATE
BUYER DATE BUYER DATE
CERTIFICATION OF THE LENDER
Based upon reasonable investigation, the Lender has no reason to believe that the Applicant
has made any negligent or fraudulent material misstatements in connection with the application
for a City Loan and submits he completed information above as accurate and true to the best of
the Lender's knowledge.
Furthermore, the lender has determined that the applicant has been approved for a maximum
primary mortgage amount of $ . Their credit, income and assets have
been reviewed and deemed acceptable to the Underwriters of
(bank/lender) for the loan terms in
compliance with those acceptable to the First -Time Homebuyer (FTHB) Program. Based on the
FTHB Guidelines for calculating income, the applicant's anticipated annual income is
$ , and is therefore eligible for a loan of up to $20,000 through the FTHB.
ORIGINAL SIGNATURE OF OFFICER APPROVING THE LOAN DATE
PRINT NAME
PHONE
EMAIL
Exhibit B
FIRST-TIME HOMEBUYER PROGRAM AFFIDAVIT
By signing below applicant(s) makes the following certifications:
I, the undersigned, as part of my application for a shared equity assistance loan through the City
of National City First -Time Homebuyer Program (the "Program"), and in connection with a
purchase of a single-family home (the "Residence") and an application for a mortgage loan (the
"Mortgage Loan") from a lender (the "Lender") of my choosing, do hereby state that I have
carefully reviewed this document. I understand and agree with the answers provided in my
application, and do furthermore certify the following (please initial each line item):
1. That those people who I expect to initially share occupancy of the Residence with me are
listed in the First Time Homebuyer Application. (initial)
2. That all adults, whether on title or not, are considered an Applicant (over age of 18) for the
Program and must sign this Application. (initial)
3. That I am a first-time homebuyer, who has not had an ownership interest in a residential
property within the three years immediately preceding the date of this application, and I do
not and will not have an ownership interest in a residential property prior to the date of
loan closing. (initial)
4. That I will submit true and complete copies of my actual signed federal tax returns for the
preceding three tax years, or such other written verification that is acceptable to the
Program. (initial)
5. That the Residence will be occupied and used as my principal place of residence within 30
days of the date of Mortgage Loan closing. (initial)
6. That the Residence will not be used as an investment property, vacation home or recreation
home. (initial)
7. That real estate investment is a risky endeavor, and there is no guarantee of future return
on the initial investment. (initial)
8. That I will notify the Program in writing if the Residence ceases to be my principal residence.
(initial)
9. That I will be contacted by the City and/or the contracted loan servicer on an annual basis
to confirm occupancy of the Residence and furthermore, both parties have the right to
inspect the property for conformance with loan requirements upon notification.
(initial)
10. That the Mortgage Loan is a first mortgage, not a replacement mortgage. (initial)
11. That my income does not exceed the program income limits as explained to me by
Mortgage Lender. (initial)
12. That no person related to me has, or is expected to have, an interest as a creditor in the
Mortgage Loan being acquired for the Residence. (initial)
13. That the City Loan is issued on my behalf and may not be transferred.
14. That the loan I am applying is a shared equity loan for the first 15 years, in which the City
has a declining interest in any accrued appreciation. (initial)
15. That the City loan is due and payable upon sale or transfer of the property. (initial)
16. That after 15 years only the principal is due and payable upon transfer. (initial)
Exhibit B
17. That I may seek financing from any Lender of my choosing, and that I am in no way
prohibited from seeking financing from any potential Lender, so long as the Lender executes
and complies with the terms of the Lender participation Agreement and Program
Guidelines. (initial)
18. That a requirement of funding through the FTHB is to receive both pre- and post -purchase
counseling. (initial)
19. All transactions from Lending, Realty, and other services shall not constitute a conflict of
interest. Please refer to CFR 24 CFR §92.356
20. All transactions must be Arm's Length. I understand that an arm's length transaction is one
in which the buyer/tenant, Realtor(s), and seller/owner act independently and have no
relationship (by blood, marriage or unrelated business dealings) to each other, ensuring that
all parties in the deal are acting in their own self-interest, are not subject to any pressure or
duress from the other parties, and are dealing from equal bargaining positions. Two
strangers with equal bargaining power and knowledge of the property are likely to agree
upon a price that is close to market value, as the seller will strive for the highest price
possible while the buyer is striving for the lowest price possible. It's assumed that an arm's
length transaction will be fair and equitable to all parties involved and will result in a fair
market sales price.
CERTIFICATION OF THE APPLICANT
I acknowledge and understand that this Affidavit, as completed above, will be relied on for
determining my eligibility for a City Loan. I acknowledge that a material misstatement
negligently made by me in this Affidavit or in any other connection with my Application for a
City Loan will constitute a violation punishable by a fine and possible criminal penalties imposed
by law, and will result in the cancellation or revocation of the Loan. I acknowledge that any
false statement or misrepresentation or the fraudulent use of any instrument, facility, article, or
other valuable thing or service pursuant to my participation in the City Program is punishable
by fine.
PRINT APPLICANT NAME DATE APPLICANT SIGNATURE
Exhibit B
AUTHORIZATION FOR RELEASE OF INFORMATION ticau Faxed
NATIONA CTIry
Each household member 18 years or older must read and sign this IIgJ3
.roaPoseTxn
Authorization Form for Release of Information.
I, (legal name), do hereby
authorize any agencies, offices, groups organizations or business firms to release to SPRINGBOARD (SB),
COMMUNITY HOUSINGWORKS (CHW) and the CITY OF NATIONAL CITY any information or materials
which are deemed necessary to complete and verify my application for participation and/or to maintain
my continued assistance under the First -Time Homebuyer Program (FTHB). The information needed
may include verification or inquiries regarding my identity, household members, employment and
income, assets, allowances or preferences I have claimed, and residency. These organizations are to
include, but are not limited to: financial institutions; Employment Security Commission; educational
institutions; past or present employers; Social Security Administration; welfare and food stamps
agencies; Veteran's Administration, court clerks; utility companies; Workmen's Compensation Payers;
public and private retirement systems; law enforcement agencies; medical facilities and credit providers.
I understand that the U.S. Department of Housing and Urban Development (HUD), Community
HousingWorks (CHW), Springboard (SB), and/or the City of National City (City) may utilize third parties to
verify information and other computer matching programs in order to verify the information supplied on
my application. It is understood and agreed that this authorization or the information obtained with its
use may be given to and used by HUD, City, and/or CHW&SB in the administration and enforcement of
program rules and regulations and that HUD and/or CHW&SB and/or City may in the course of its duties
obtain such information from other Federal State or local agencies, including State Employment Security
Agencies; Department of Defense; Office of Personnel Management; the Social Security Administration;
and State welfare and food stamp agencies. If there is a discrepancy between the information provided
by the above sources and the information that I have provided, I understand that CHW/City may take
action to terminate my homebuyer assistance and make the loan due and payable including any accrued
interest, and will require the repayment of benefits I was not eligible to receive.
It is with my understanding and consent that a photocopy of this authorization may be used for
the purposes stated above. This authorization is valid for the life of the loan.
Address City State Zip
Date of Birth Social Security No. Telephone Number
Signature
Date Signed
Exhibit B
DATE:
Household Member Name:
Paid Hourly: $
YTD:
Dates covered
ANALYST:
Amount
REFERENCE NO.:
Source Document:
base pay per hour x 2080 working hours per year = $
Annual Income
_ $ x 2080 hours = $
# of Days* Daily Income Annual Income
YTD: $ — x 24 (bi-monthly)
Dates covered Amount # of Pay Periods or 26 (every 2 weeks)
Fixed Income: Pension / SSI / SSA (use GROSS from Letter or Paystub): $
Annual Income
x12=$
Annual Income
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Household Member Name: Source Document:
Paid Hourly: $ base pay per hour x 2080 working hours per year = $
YTD: $ — _ $ x 2080 hours = $
Dates covered Amount # of Days* Daily Income
Annual Income
Annual Income
YTD: $ — x 24 (bi-monthly) = $
Dates covered Amount # of Pay Periods or 26 (every 2 weeks) Annual Income
Fixed Income: Pension / SSI / SSA (use GROSS from Letter or Paystub): $ x 12 = $
Annual Income
-------------------------------------------------------------------------------------------------------------------
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Self Employment Income:
Household Member Name:
Last Tax Return Schedule C Net Income: $
+ Net Income from Profit and Loss covering period from end of last tax return through present + $
+ ALL Depreciation, One -Time Costs, Startup Costs, Expansion Costs, Amortization of Capital Indebtedness + $
TOTAL = $
TOTAL $ + number of months covered = $ x 12 = $
Monthly Income Annual Income
*To annualize YTD:
STEP 1: Establish number of days the information covers
Computation: YR MO DAY end date of information Use a 30 day month and "borrow" months or days to calculate
- YR MO DAY start date of information
Example: 07 05 01 "borrow 1 month (days = 31)
Convert months to days (8 x 30 = 240), add any remainder days - 06 08 31 then "borrow" 1 year (months =16)
8 0
STEP 2: Divide YTD figure by calculated number of days to get daily
amount earned
STEP 3: Multiply daily figure by 2080 hours if indication is that wages are earned 40 hours per week; adjust for other than 40 hour work week. This
provides the annual figure.
Appendix B-2
Exhibit B
Borrower Name:
Employer Name:
❑ Paystubs ❑ W-2s
❑ Other
Dates Covered
❑ Tax Returns ❑ VOE
to
❑ Paid every 2 weeks (26 pay periods)
❑ Paid twice a month (24 pay periods)
❑ Paid Monthly (12 pay periods)
❑ Year-to-date (YTD) annualized (instructions below)
Borrower Name:
Employer Name:
❑ Paystubs ❑ W-2s ❑ Tax Returns ❑ VOE
❑ Other
Dates Covered
to
❑ Paid every 2 weeks (26 pay periods)
❑ Paid twice a month (24 pay periods)
❑ Paid Monthly (12 pay periods)
❑ Year-to-date (YTD) annualized (instructions below)
Borrower Name:
Employer Name:
❑ Paystubs ❑ W-2s
❑ Other
Dates Covered
❑ Tax Returns ❑ VOE
to
❑ Paid every 2 weeks (26 pay periods)
❑ Paid twice a month (24 pay periods)
❑ Paid Monthly (12 pay periods)
❑ Year-to-date (YTD) annualized (instructions below)
Borrower Name:
Employer Name:
❑ Paystubs ❑ W-2s ❑ Tax Returns ❑ VOE
❑ Other
Dates Covered
to
❑ Paid every 2 weeks (26 pay periods)
❑ Paid twice a month (24 pay periods)
❑ Paid Monthly (12 pay periods)
❑ Year-to-date (YTD) annualized (instructions below)
To annualize YTD:
STEP 1: Establish number of days the information covers
Use a 30 day month and "borrow" months or days to calculate
Computation: YR MO DAY end date of information
- YR MO DAY start date of information Example: 07 05 01 "borrow 1 month (days = 31)
- 06 08 31 then "borrow" 1 year (months =16)
Convert months to days (8 x 30 = 240), add any remainder days 8 0
STEP 2: Divide YTD figure by calculated number of days to get daily
amount earned
STEP 3: Multiply daily figure by 2080 hours if indication is that wages are earned 40 hours per week; adjust for other than 40 hour work week. This
provides the annual figure.
Signature
Title
Date
Appendix B-1
Exhibit B
APPENDIX C
SUBSIDY LAYERING ANALYSIS
The City's First -Time Homebuyer (FTHB) Program is funded through the U.S. Department of Housing and
Urban Development's HOME Investment Partnership Act Program (HOME). HOME program m
Administration Responsibilities states that before committing funds to a project, the participating
jurisdiction must evaluate the project (subsidy layering analysis) in accordance with guidelines that it has
adopted for this purpose and will not invest any more funds, in combination with other governmental
assistance, than is necessary to provide affordable housing.
In order to determine the "buying power" of an applicant for the FTHB Program, lenders shall provide
evidence for financing of the maximum primary loan amount and determine eligibility for the City's
program. The combined dollar amount of the qualifying first mortgage and maximum threshold of
qualifying FTHB funding shall establish an estimated "maximum purchase price". This amount will be
included in the City's 60-day pre -commitment letter in order to facilitate applicants in finding eligible
properties under the FTHB Program.
Once a property has been selected and the purchase price has been determined, a "gap" analysis shall
be conducted to determine the exact dollar amount of the second mortgage with the City. The Lender
must provide an analysis calculating cash available for all housing expenses* by taking the lesser of the
housing ratio (PITI) to monthly income of 38% or debt -to -income ratio of 41% FHA/45% minus debt. The
housing cash available will then be used to determine the amount of the primary loan and, ultimately, the
Program subsidy amount required, bridging the gap between the purchase price (less down payment)
and the amount of the primary loan. The Primary First mortgage must be a fixed rate loan.
* Monthly housing costs include, but are not limited to, payments of principal and interest on the first loan,
taxes (including mello roos), insurance (including mortgage insurance), homeowner association fees, and
other appropriate expenditures.
Following is a sample analysis, for illustrative purposes.
Family of 4 earning $3,231/month, $38,775/annual
Household Qualifies for up to $56,000 (80% AMI) ($20,000 HOME funds and $36,000 Cal HOME
funds)
Housing Payment 1008 form
Borrower Income $3,231.26 monthly income
Purchase Price of Home $170,000
Qualified for a 1St Mortgage of $122,000
Ratios: 32.746/44.970
Down Payment Assistance Available (not to exceed $56,000)
"Estimated Buying Power " Calculation
Qualifying Mortgage $122,000
FTHB Threshold $ 56,000
"Maximum" Purchase Price $178,000
"Gap" Calculation
Purchase Price of Property
$170,000
Less First Loan Amount
($122,000)
Plus Closing Costs*
($7,201.91)
Less Down Payment (2%)
($3,400)
Estimated "Gap" Financing Needed
$ 51,801
* Closing Costs may vary on each transaction depending on negotiated fees.
Lender shall not reduce 1 st mortgage amount to increase amount of gap financing. 1 st lender shall
maximize first mortgage using the maximum ratios (FHA/Conventional)
Exhibit B
APPENDIX D
SAMPLE
HOME- FIRST-TIME HOMEBUYER PROGRAM
SEQUENCE OF LOAN PROCESS & SUMMARY SHEET
1. HOMEBUYER / LENDER
• Completes Homebuyer Education course.
• Applies to Participating Lender for financing.
o Lender determines FTHB eligibility, including anticipated income.
o Determines "gap" through subsidy layering analysis.
o Estimates maximum purchase price.
o Lender completes Summary Sheet.
• Complete City FTHB Application, including: Affidavit; Lender Certification; Release of
Information, and other applicable declarations.
2. PROGRAM ADMINISTRATOR & CITY
• Review application for FTHB and issue denial or approval.
o If approved, City issues a 60 day letter of pre -commitment of funds. The
letter will include the threshold the household has qualified for and the
estimated "buying power"/"estimated maximum purchase price".
3. HOMEBUYER & REALTOR
• Selects house that is eligible for the FTHB.
• Places an initial purchase offer.
• Choose a certified appraiser to conduct a third -party appraisal to determine Market
Value of home and provides to City.
4. APPRAISER
• Conducts appraisal in accordance with FTHB requirements.
• Realtor/lender submit initial offer, appraisal, Appraiser Certification, Appraiser
Checklist, and Request for Issuance of Voluntary Acquisition to Program
Administrator.
6. HOMEBUYER & REALTOR
• Make Final Purchase Offer, accompanied by voluntary acquisition.
Exhibit D
Exhibit B
7. LENDER
• Starts processing for mortgage loan and City loan.
• Prepares and forwards update to application package to City, including Summary
Sheet update.
• Processes and underwrites Applicant for first mortgage.
• Has an Independent Certified Risk Assessor (or certified equivalent) conduct a
property inspection and Risk Assessment to ensure the subject property meets the
City's Property Standards (PS) and lead -based paint regulations. Notifies lender,
buyer and Escrow of work needed to cure defects within 15 days of lead -based
hazard determination (if applicable), and provides Buyer, Lender, and Escrow a copy
of any/all Risk Assessment Report(s).
8. PROGRAM ADMINISTRATOR STAFF AND CERTIFIED LEAD BASED PAINT
PROFESSIONALS
• The Program Administrator issues a 60 day Commitment to Lender after approving
the update to application package and verifying that the property meets minimum
property standards, Property Standards, reference. (NOTE: The City may choose to
issue a Commitment pending receipt of missing documentation and completion of
work to cure property of code violations and/or lead -based paint hazards.)
o Work to cure property defects and/or lead -based paint hazards takes place
by Certified Lead -Based Paint Professionals (if applicable).
o Re -inspection and clearance of property takes place to ensure Property
Standards and elimination of lead -based paint hazards (if applicable).
9. ESCROW, LENDER & PROGRAM ADMINISTRATOR
• Coordinates signing of all closing documents by Sellers and Borrowers, including the
following City documents:
o Deed of Trust, Promissory Note, and FTHB Regulatory Agreement.
10. LENDER
• Sends Close of Escrow Package and all outstanding documentation (per the
Commitment) to Program Administrator prior to Commitment expiration.
• Program Administrator works with City to get necessary signature on HOME
Agreement.
• Funds loan through Escrow/Title and Escrow/Title Company and sends Deed of Trust
and all recordable documents to the Title Company or County Recorder's Office
(close of escrow).
11. PROGRAM ADMINISTRATOR
• Receives and reviews Close of Escrow Package (outstanding documentation, original
documents, and certified/executed copies).
• Wires City loan funds through Escrow/Title and Escrow/Title Company sends Deed of
Trust and all recordable documents to the Title Company or County Recorder's
Office (close to escrow).
• Conducts random audit of Lenders records.
12. HOMEBUYER
• Receives City loan.
• Signs an Annual Affidavit of Owner -Occupancy.
• Provides evidence of Insurance
Exhibit D
Exhibit B
APPENDIX E
CITY LOAN QUALITY COMMITMENT POLICY
The City of National City Housing, Grants and Asset Management Department and the Program
Administrator invites the entire mortgage lending community to participate in the First -Time
Homebuyer Program. Participation will continue to be open to those mortgage lenders who
uphold the following work standards:
• Lending company personnel receive training for the program before being assigned to
prepare loan packages. This training includes: Program Administrator training sessions (if
applicable); knowledge of training manual; knowledge of City -provided update letters.
• Each lender enrolled in the program designates a Program Administrator Contact Person for
each participating branch. The Contact's responsibilities include: 1) making Lender Update
letters (including attachments) available to all City loan -related personnel in a timely
manner; 2) attending at least one training session per year (if applicable); 3) notifying
Housing staff of any re -assignment of Contact person and/or changes in company location
and or status.
• Expiration of a Loan Commitment without submission of the required paperwork must be
addressed in a timely manner by; submitting the documents necessary to make the file
current, close the loan, or canceling the pending loan with notification to the City.
• The lender must obtain the Commitment to issue the loan before funding the loan.
• Each funding lender ensures that the closing or funding department of their company is
aware of their obligations under the city loan program and are prepared to submit all
necessary closing documentation in a timely manner.
• Buyers are treated fairly, receiving a full and accurate explanation about the city loan. For
questions that the lender cannot answer, the buyer is referred to housing staff.
Appendix E
Exhibit B
APPENDIX F
PROPERTY STANDARDS (PS)
The City's First -Time Homebuyer Program is funded through the U.S. Department of Housing
and Urban Development's HOME Program. HOME program requires housing must "meet all
applicable State and local code requirements and, if there are no such standards or code
requirements, the housing must meet the housing quality standards in 24 CFR 982.401".
The Acceptability Criteria listed with each section sets the minimum standards that must be
met in all residential units. The Interpretation of Acceptability Criteria listed after those criteria
are the standards that City feels should also be met if the property is to have long-term utility
and contribute to the livability of the unit.
ACCEPTABLE CRITERIA AND INTERPRETATIONS
A. SITE AND NEIGHBORHOOD - The site and neighborhood shall be reasonably free from
disturbing noises and reverberations and other hazards to the health, safety and general
welfare of the occupants.
ACCEPTABILITY CRITERIA - The site and neighborhood shall not be subject to serious
adverse environmental conditions, natural or manmade such as:
1. Dangerous walks, steps or instability;
2. Flooding, poor drainage, septic tank back-ups, sewer hazards or mudslides;
3. Abnormal air pollution, smoke or dust;
4. Excessive noise, vibrations or vehicular traffic;
5. Excessive accumulations of trash;
6. Vermin or rodent infestation;
7. Fire hazards;
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. All steps and walks should be level, free from dangerous cracks, crumbling or breaks,
tripping hazards, broken & missing materials, etc., and be provided with sufficient
pitch to prevent water accumulation.
2. The lot should have positive drainage away from the dwelling and/or dwelling unit
to prevent standing water at the foundation.
3. No additions.
4. No additions.
5. Any materials, which accumulate on a property in the neighborhood, should be
removed or screened and arranged in a manner that does not detract from the
general appearance of the neighborhood.
6. No additions — see #5 above — removal of trash, garbage, debris, etc., will
significantly reduce infestation problems.
Exhibit B
7. The site should be free from fire hazards, such as the storage of highly flammable
materials, etc.
B. ACCESS —The dwelling/dwelling unit shall have adequate access for the occupants.
ACCEPTABILITY CRITERIA
1. The dwelling/dwelling unit shall be usable and capable of being maintained without
unauthorized use of other private properties.
2. The building shall provide an alternative means of egress in case of fire, i.e., fire
stairs, egress through windows, etc.
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. The property should be adjacent to an access street or road.
2. No additions.
C. STRUCTURE AND MATERIALS - The dwelling/dwelling unit shall be structurally so as not
to pose any threat to the health and safety of the occupants and so as to protect the
occupants from the environment.
ACCEPTABILITY CRITERIA
1. Ceilings, walls (interior and exterior), floors, roofs, porches, etc., shall not have any
serious defects such as severe bulging or leaning, large holes, loose surface
materials, severe buckling or noticeable movement under walking stress, missing
parts, or other serious damage.
2. The roof structure shall be firm and the roof shall be weather tight.
3. The exterior wall structure and the exterior and interior wall surfaces shall not have
any serious defects such as serious leaning, buckling, sagging, cracks or holes, loose
materials, loose siding or other serious damage.
4. The conditions and equipment of interior and exterior stairways, halls, porches,
walkways, etc., shall be such as not to present a danger of tripping and/or falling.
5. Elevators shall be maintained in a safe operating condition.
6. In the case of a mobile home, the home shall be securely anchored by a tie -down
device, which distributes and transfers loads imposed by the unit to appropriate
ground anchors so as to resist wind, overturning and sliding.
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. Where crawl spaces or basements exist, all first -floor structural wood members,
including floor joists, plates, piers and pilings should be inspected for cracked,
broken, rotten or otherwise damaged conditions. Damaged members should be
repaired and/or replaced as required.
The exterior/interior walls should be weather -tight in a manner that prevents heat
loss in the winter (cooling loss in the summer) as much as possible. This includes the
repainting and/or installations of siding to protect the exterior surface from the
Exhibit B
elements. The interior walls should be repaired/replaced as required to facilitate
this criterion.
2. The roof structure should be firm in that all roof -framing members should be free
from cracks and rot. The roof sheathing should be solid and free from sagging,
buckling, heaving, etc. If the roof appears to be well worn, it should be replaced. If
possible, the best replacement will include stripping all the way down to the
sheathing and replacing. If costs dictate, a second layer of roofing can be installed
over the first layer. If there are already two or more layers of roofing materials, the
roof should be stripped down to the sheathing, and if necessary, replace the
sheathing and then install the new roof covering.
3. Concrete block or brick foundations, piers and pilings, should be inspected for loose
mortar joints. All empty or cracked mortar joints should be tuck -pointed in an
acceptable manner to match, as closely as possible, the rest of the structure. The
joints should be recessed.
The chimney should be inspected for loose mortar joints and proper height. All
empty or cracked mortar joints should be tuck -pointed in an acceptable manner to
match, as closely as possible, the rest of the chimney. The joints should be recessed.
4. All exterior steps, walkways and porches should be free of tripping hazards.
Crumbling, cracked, broken, missing and/or uneven conditions should be repaired
and/or replaced as necessary.
The condition of all interior stairways should be such as not to present a danger of
tripping or falling, see above. Handrails should be properly installed on all stairways.
5. No additions.
6. No additions.
7. The property should be inspected by a qualified extermination firm, and if necessary
treated for vermin, rodents, termites and other wood -burrowing insects.
8. All outbuildings such as garages, storage sheds, etc., should be repaired to a usable
condition or removed from the property.
9. The general appearance of the outside of the structure and the lot, after
rehabilitation, should be such that it makes a significant contribution to the general
appearance of the neighborhood.
10. Installation of gutters and down spouts is strongly recommended in order to divert
water away from foundations.
D. LEAD -BASED PAINT —The dwelling unit shall be in compliance with the HUD Lead -Based
Paint regulations.
ACCEPTABILITY CRITERIA
1. The dwelling/dwelling unit shall comply with HUD Lead -based Paint regulations at 24
CFR Part 35, issued pursuant to the Lead -Based Paint Poisoning Prevention Act, 42
USC 4801.
2. The owner shall provide a certification that the dwelling is in compliance with such
HUD regulations.
Exhibit B
3. If the property was constructed prior to 1978, any in -place tenant/family shall be
furnished a notice and pamphlet as required by the Lead -Based Paint regulations.
Such notice shall inform them of the procedures regarding the hazards of lead -based
paint poisoning, the symptoms and treatment of lead poisoning and the precautions
to be taken against lead poisoning.
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. Compliance with the Lead -Based Paint regulations requires the following actions:
• Notification to all occupants that the property may contain lead -based paint, if
constructed prior to 1978, and the hazards, symptoms and treatment of such
poisoning, including information on testing for elevated blood levels (EBL) for
children.
• All contracts shall include language prohibiting the use of lead -based paint.
• The inspection for and elimination of "immediate hazards", which are defined as
chipping, peeling, flaking, cracking or other defects in previously painted
surfaces.
2. No additions.
3. No additions.
Exhibit B
E. WATER SUPPLY
ACCEPTABILITY CRITERIA
1. The dwelling/dwelling unit shall be served by an approved public or private sanitary
water supply.
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. The dwelling unit should have a water heater of sufficient capacity to serve present
and anticipated future residents. Further, they should not be allowed in bathrooms,
bedrooms, sleeping rooms or closets.
2. Hot and cold water should be supplied to all kitchens, baths and laundry facilities.
3. All water lines should be protected from freezing.
F. INTERIOR AIR QUALITY - The dwelling/dwelling unit should be free of pollutants in the
air at levels that threaten the health of the occupants.
ACCEPTABILITY CRITERIA
1. The dwelling/dwelling unit shall be free from dangerous levels of air pollution from
carbon monoxide, sewer gas, fuel gas, dust and other harmful air pollutants.
2. Air circulation shall be adequate throughout the dwelling/dwelling unit.
3. Bathroom areas shall have at least 1 openable window or other adequate exhaust
ventilation.
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. All gas or oil fired appliances should have proper venting to the outside of the
dwelling/dwelling unit for combustion gases.
2. All windows designed to open should be capable of being easily opened, provided
with the proper window hardware to make them both operable and openable, and
provided with screens properly installed and maintained.
3. Kitchen areas should also have proper ventilation.
G. ILLUMINATION AND ELECTRICITY — Each room shall have adequate natural or artificial
illumination to permit normal indoor activities and to support the health and safety of
the occupants. Sufficient electrical sources shall be provided to permit use of essential
electrical appliances while assuring safety from fire.
ACCEPTABILITY CRITERIA
1. Living and sleeping rooms shall include at least one window.
2. A ceiling or wall -type light fixture shall be present and working in the bathroom and
kitchen areas.
3. At least two electric outlets, one of which may be an overhead light, shall be present
and operable in the living area, kitchen and each bedroom area.
11►11:1ilk] a:»I/_Y1Ius] to] VTT414:1il/_1*.]III V94 ilk] 11:1ilk] _1
Exhibit B
1. No additions not performed in a workmanlike manner.
2. A ceiling or wall fixture, operated by a wall switch should be present in the kitchen,
bath and hallways.
3. All outlets installed as a result of the rehabilitation work should be of the grounded
type.
4. Each unit should be provided with a least 100 amp service and a sufficient number
of circuits to service present and anticipated future use of the:
• There should be separate circuits for any air conditioners (including window
type), furnaces, electric dryers, electric stoves, microwaves and any other special
appliances.
• There should be two separate 20-amp circuits (minimum) for the heavy
workload area in the kitchen, and all kitchens should be wired to the National
Electric Code (NEC), based on the size and layout of each individual kitchen.
• With the exception of kitchens (see b. above), all other rooms should be
assessed relative to their use of electricity and additional outlets and/or switches
installed based on usage and safety factors.
• Electrical outlets in the bathrooms and kitchens should have an overload switch.
5. Connection at the main service to the unit should be in an acceptable manner.
• Placement of the connection should be out of the reach of children,
• Proper anchoring should be used.
6 All defective exposed "knob & tube" wiring should be removed. It is recommended
that any additional exposed "knob & tube" also be removed and replaced in conduit
to prevent splicing and/or unsafe usage.
7. All hazardous conditions such as broken switches/outlets, missing covers, bare
wiring, fixtures not properly installed/anchored should be repaired/replaced in an
acceptable manner. It is recommended that all "pendant" type fixtures be replaced
with an appropriate ceiling/wall fixture.
8. Although though a room may meet acceptability criteria #3 above, if the inspection
reveals the use of octopus plugs, adapters, extension/zip cords and/or other unsafe
practices, additional outlets should be installed.
H. THERMAL ENVIRONMENT — The dwelling/dwelling unit shall have and be capable of
maintaining a thermal environment healthy for the human body.
ACCEPTABILITY CRITERIA
1. The dwelling/dwelling unit shall contain safe heating and cooling facilities, which are
in proper operating condition and can provide adequate heat and/or cooling to each
room in the dwelling/dwelling unit appropriate for the climate to insure a healthy
living environment.
2. Unvented room heaters that burn gas, oil or kerosene are unacceptable.
INTERPRETATION OF ACCEPTABILITY CRITERIA
Exhibit B
3. All parts of the venting system for central heating/cooling units should be in proper
working condition. For example:
• Vent pipes should be free of rust and be properly maintained.
• Where vent pipes are connected to a masonry chimney, that chimney should be
properly maintained so that all mortarjoints are tightly sealed.
4. No additions.
5. The attic should be insulated to a rating of R-30 with acceptable insulation material.
Where cellulose is used, it should be tested for fire protection. Cellulose bags should
be labeled with acceptable ratings derived from flame -spread tests.
6. Weather stripping should be applied as needed around all doors and windows.
7. Storm windows and doors should be installed whenever possible.
8. Any inside walls that are on an exterior wall, if opened down to the studs during the
course of the rehabilitation, should be fully insulated with an acceptable insulation
material.
9. All joints in the building envelope should be caulked/sealed. All brittle or loose
caulking should be replaced.
10. Supply and return heating/air-conditioning ducts should be insulated whenever they
run through unheated areas/spaces.
11. It is strongly recommended that whenever space heaters and/or floor furnaces are
used, they be replaced with a properly installed more efficient central
heating/cooling system.
SANITARY FACILITIES —The dwelling/dwelling unit shall include its own sanitary facilities,
which are in proper operating condition, can be used in privacy, and are adequate or
personal cleanliness and the disposal of human waste.
ACCEPTABILITY CRITERIA
1. A flush toilet in a separate, private room; a fixed basin with hot and cold running
water; and a bathtub and/or shower with hot and cold running water, shall be
present in the dwelling/dwelling unit, and shall be fully operational.
2. These facilities shall utilize an approved public or private disposal system.
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. The toilet, basin, and tub or shower should all be located in the same room, if at all
possible.
2. Where a public sewage system is not used, documentation in the file should
show where the appropriate health agency has approved the disposal system.
SPACE AND SECURITY —The dwelling/dwelling unit shall afford the family
adequate space and security.
ACCEPTABILITY CRITERIA
1. A living room, kitchen area, and bathroom shall all be present.
Exhibit B
2. The dwelling/dwelling unit shall contain at least one sleeping or living/sleeping room
of appropriate size for each two persons.
3. Exterior doors and windows accessible from outside the unit shall be lockable.
4. Each dwelling/dwelling unit should have smoke detectors. Where bedrooms are
located on more than one floor of a structure, smoke detectors should be installed
on each floor. It is recommended that all smoke detectors be U.L. approved and be
hard -wired. U.L. approved battery type or a combination electric/battery type may
also be used.
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. No additions
K. FOOD PREPARATION AND REFUSE DISPOSAL — The dwelling/dwelling unit shall contain
suitable space and equipment to store, prepare and serve foods in a sanitary manner.
There shall be adequate facilities and services for the sanitary disposal of food waste
and refuse, including facilities for temporary storage where necessary.
ACCEPTABLE CRITERIA
1. The unit shall contain the following equipment in operating condition: 1) cooking
stove or range, 2) refrigerator or appropriate size for the unit supplied by either the
owner or the tenant/family, and 3) kitchen sink with hot and cold running water.
2. The sink shall drain into an approved public or private system.
3. Adequate space for the storage, preparation and serving of food shall be provided.
4. There shall be adequate facilities and services for the sanitary disposal of food waste
and refuse, including facilities for temporary storage where necessary (i.e. garbage
cans).
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. No additions made without City permits and not performed in a workmanlike
manner.
2. Food storage space should be in the form of cabinets and/or pantry type storage.
Food preparation space should be in the form of counters or other horizontal
workspace.
3. No additions.
L. SANITARY CONDITION -The unit and its equipment shall be in sanitary
condition.
ACCEPTABILITY CRITERIA
1. The unit and its equipment shall be free of vermin and rodent infestation.
INTERPRETATION OF ACCEPTABILITY CRITERIA
1. No additions not made without City permits.
Exhibit B
�NCORP0A 4TfP
PROPERTY STANDARDS INSPECTION FORM
A. General Information:
1. Address of Inspected Unit:
2. Borrower Name:
3. Date of Inspection:
4. Inspector's Name:
The following visual inspection is performed by the City of National City and is to be used as
information purposes only. The City of National City is not a licensed inspection company and
in no way is this to be construed as the borrower's Physical Inspection or due diligence
inspection. This will only state the condition of the above referenced property at the time of
inspection that the inspector can visually see, prior to the close of escrow. There are no invasive
inspections performed nor will the City of National City determine the useful life of some of the
mayor systems such as roofs, crawl spaces, plumbing, or other in depth testing or inspections.
Should these items be of concern please be sure to contact a professional for those inspections
or testing. If professional(s) is/are needed in cases of lead based paint testing, the City will
require the borrower or the seller to pay for a third party inspector.
Notes:
BUILDING EXTERIOR
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the exterior maintained in good repair, structurally
sound, and sanitary?
2.
PROTECTIVE TREATMENT
Are all exterior surfaces, other than decay -resistant
woods, protected from the elements and decay?
Is any paint peeling, flaking, chipped, cracking, chalking
or showing any other signs of paint deterioration?
Is all siding, masonry, vinyl, wood, or other surfaces,
maintained in good repair, weather resistant, and
water tight?
Are all metal surfaces treated to prevent rust and
corrosion?
3.
FOUNDATION WALLS/SLABS
Are all foundation walls/slabs maintained plumb and
free from open cracks?
Are foundation vents in good repair and kept in such
conditions so as to prevent the entry of rodents and
other pests?
4.
EXTERIOR WALLS
Are all walls free from holes, breaks, and loose or
rotting materials and maintained weatherproof and
properly surface coated where required to prevent
deterioration?
5.
SIDEWALKS & DRIVEWAYS
Are sidewalks, walkways, and driveways in a proper
state of repair and maintained free from hazardous
(trip) conditions?
6.
ROOF
Is the roof and flashing sound, tight, and not have
defects that admit moisture to the interior of the
structure?
7.
GUTTERS & DOWNSPOUTS Are gutters and
downspouts maintained in good repair and free from
obstructions?
8.
PREMISE IDENTIFICATION
Does the building have 4" high and %" wide address
numbers placed in a position to be plainly seen from
street and contrast with the building background?
9.
SOFFIT/FASCIA/DECORATIVE FEATURES / TRIM
Are all soffit, fascia cornices, belt courses, corbels, terra
cotta trim, wall facings, and other similar decorative
features, and trim maintained in good repair, properly
anchored, and in a safe condition?
10.
STAIRWAYS, DECKS, PORCHES & BALCONIES
Are all exterior stairways, decks, porches, & balconies,
and all appurtenances attached to, structurally sound,
maintained in good repair, with proper anchorage, and
capable of supporting imposed loads?
11.
SKYLIGHT
Are all skylights kept in sound condition, good repair,
and weather tight?
Exhibit B
12.
CHIMNEY
Are all chimneys structurally sound, safe, sound, and
maintained in good repair?
Are all exposed metal or wood surfaces protected
against decay or rust by paint or other surface
treatment?
BUILDING EXTERIOR (continued)
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
13.
HANDRAILS & GUARDRAILS
Are handrails and guardrails firmly fastened, capable of
supporting normal loads, and maintained in good
repair?
Do all stairways having more than four (4) risers have a
handrail on one side?
Do all open portion of a landing, balcony, porch, deck,
ramp, or other walking surface more than 30" above
grade have guardrails?
If handrails are present, are they at less 30" and not
more than 42" high?
If guardrails are present, are they at less 30" or more
above the floor of the landing, balcony, porch, deck,
ramp, or other walking surface?
14.
DOORS
Are all doors, frames, and hardware kept in sound
condition, good repair, and weather tight?
Do all locks tightly secure the doors to provide security
for the occupants and property within?
Does each door have a deadbolt with a throw of not
less than 1"?
Can the deadbolt be operated from the inside without
a key?
If storm doors or screen doors are present, are they
kept in sound condition, good repair, weather tight,
and have a self -closing device in good condition?
15.
WINDOWS
Are all windows and frames kept in sound condition,
good repair, and weather tight?
Is all glazing present and maintained free from cracks
and holes?
Are all windows that provide ventilation to habitable
rooms equipped with insect screens and kept in sound
condition and good repair?
If basement windows are present, are rodent shields or
storm windows in sound condition, good repair, and
weather tight?
16.
BASEMENT HATCHWAY (IF PRESENT)
Are basement hatchways maintained to prevent the
entrance of rodents, rain, and surface drainage water?
Are basement hatchways equipped with devices that
secure the dwelling from unauthorized entry?
17.
FENCES/GATES (RENTAL ONLY)
Are all fences and gates maintained in sound condition
and good repair?
18.
SANITARY DRAINAGE SYSTEM
Are all plumbing stacks, vents, waste and sewer line
function properly, maintained in a safe, sanitary
condition, and kept free from obstructions, leaks, and
defects?
Exhibit B
19.
WATER SUPPLY
Is the water supply system maintained in a safe,
sanitary condition, kept free from obstructions, leaks,
and defects?
If hose bibs or faucets are installed, are the bibs and
faucets protected by an approved atmospheric -type
(freeze proof) vacuum breaker?
20.
ELECTRICAL SERVICE
Does a three -wire, 120/240 volt, single-phase electrical
service with a rating of not less than 60 amperes, serve
the dwelling?
Is all equipment, wiring, and appliances properly
installed and maintained in a safe condition?
LIVING ROOM
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
and trim have any paint peeling, flaking, chipped,
cracking, chalking or showing any other signs of paint
deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
3.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation and lighting? (Example: 100 sq. ft
room must have 8 sq. ft of window glazing).
Is there at least one (1) openable window that has a
minimum opening of at least 45% of the minimum
glazed area as required above?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
4.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Is weather stripping present and in good condition on
all exterior doors?
5.
ROOM WIDTH AND HEIGHT
Is the width of the room in any plan dimension less
than 7'?
Is the ceiling height less than 7'?
6.
ELECTRICAL RECEPTACLES/SWITCHES
Exhibit B
Are there at least two working separate and remote
receptacle outlets?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
DEN OR FAMILY ROOM
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
and trim have any paint peeling, flaking, chipped,
cracking, chalking or showing any other signs of paint
deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
3.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation and lighting? (Example: 100 sq. ft
room must have 8 sq. ft of window glazing)
Is there at least one (1) openable window that has a
minimum opening of at least 45% of the minimum
glazed area as required above?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
4.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Is weather stripping present and in good condition on
all exterior doors?
5.
ROOM WIDTH AND HEIGHT
Is the width of the room in any plan dimension less
than 7'?
Is the ceiling height less than 7'?
6.
ELECTRICAL RECEPTACLES/SWITCHES
Exhibit B
Are there at least two working separate and remote
receptacle outlets?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
DINING ROOM
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
and trim have any paint peeling, flaking, chipped,
cracking, chalking or showing any other signs of paint
deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
3.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation and lighting? (Example: 100 sq. ft
room must have 8 sq. ft of window glazing)
Is there at least one (1) openable window that has a
minimum opening of at least 45% of the minimum
glazed area as required above?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
4.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Is weather stripping present and in good condition on
all exterior doors?
5.
ROOM WIDTH AND HEIGHT
Is the width of the room in any plan dimension less
than 7'?
Is the ceiling height less than 7'?
6.
ELECTRICAL RECEPTACLES/SWITCHES
Exhibit B
Are there at least two working separate and remote
receptacle outlets?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
KITCHEN
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
cabinets, and trim have any paint peeling, flaking,
chipped, cracking, chalking or showing any other signs
of paint deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
Are all countertops used for food preparation sanitary,
maintained in proper condition, and good repair?
3.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation and lighting? (Example: 100 sq. ft
room must have 8 sq. ft of window glazing)
Is there at least one (1) openable window that has a
minimum opening of at least 45% of the minimum
glazed area as required above?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
4.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Is weather stripping present and in good condition on
all exterior doors?
5.
ROOM WIDTH AND HEIGHT
Is there a clear passageway of not less than 3' between
countertops and appliances or countertops and walls?
Is the ceiling height less than 7'?
Exhibit B
6.
ELECTRICAL RECEPTACLES/SWITCHES/ FIXTURES: Are
there at least two working separate and remote
receptacle outlets?
Is there at least one permanently attached working
light fixture?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
KITCHEN (Continued)
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
7.
PLUMBING SYSTEM & FIXTURES
Does the kitchen have a sink, which is properly
connected to a public utility service?
Is the sink supplied with hot and cold running water?
Are all plumbing fixtures, including drains and water
lines, properly installed, maintained in working order,
kept free from obstructions, leaks, and defects, safe,
sanitary, and capable of performing the design
function?
8.
COOKTOP, OVEN OR RANGE SERVICE
Is there a working connection for either gas or
electrical service for installation of a cooktop, oven or a
range?
Are all service connections properly installed, of
adequate size (electrical), maintained in a safe
condition, good repair, free of leaks (gas), safe, and
capable of performing the design function?
Is the service free from electrical hazards?
9.
STOVE OR RANGE WITH OVEN (RENTAL ONLY)
Is there a working oven, and a stove (or range) with top
burners that work?
10.
REFRIGERATOR (RENTAL ONLY)
Is there a refrigerator that works and maintains a
temperature low enough so that food does not spoil
over a reasonable period of time?
MAIN BATHROOM
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
BATHROOM ACCESS
Do all occupants have access to at least one water
closet and lavatory without passing through another
bedroom?
3.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
cabinets, and trim have any paint peeling, flaking,
chipped, cracking, chalking or showing any other signs
of paint deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
Are all vanity countertops sanitary, maintained in
proper condition, and good repair?
4.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation? (Example: 30 sq. ft room must
have 2.4 sq. ft of window glazing).
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
Exception: In lieu of natural ventilation, artificial
mechanical ventilation complying with building code
is permitted. Is air exhausted by mechanical
ventilation discharged to the outdoors and not
recirculated?
5.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Does the door have an interior locking device?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Exhibit B
6.
ROOM WIDTH AND HEIGHT
Is the ceiling height less than 7'?
NOTE: There are no width requirements for
bathrooms.
7.
ELECTRICAL RECEPTACLES/SWITCHES/ FIXTURES:
Is there an at least one working receptacle outlet?
Is there at least one permanently attached working
light fixture?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair? Is the
room free from electrical hazards?
Exhibit B
8.
PLUMBING SYSTEM & FIXTURES
Does the bathroom have a bathtub or shower, lavatory
and water closet, which are properly connected to a
public utility service?
Are the tub or shower and lavatory supplied with hot
and cold running water?
Is the water closet supplied with cold running water?
Are all plumbing fixtures, including drains and water
lines, properly installed, maintained in working order,
kept free from obstructions, leaks, and defects, safe,
sanitary, and capable of performing the design
function?
MASTER BATHROOM
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
BATHROOM ACCESS
Do all occupants have access to at least one water
closet and lavatory without passing through another
bedroom?
3.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
cabinets, and trim have any paint peeling, flaking,
chipped, cracking, chalking or showing any other signs
of paint deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
Are all vanity countertops sanitary, maintained in
proper condition, and good repair?
4.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation? (Example: 30 sq. ft room must
have 2.4 sq. ft of window glazing).
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
Exception: In lieu of natural ventilation, artificial
mechanical ventilation complying with building code
is permitted. Is air exhausted by mechanical
ventilation discharged to the outdoors and not
recirculated?
5.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Does the door have an interior locking device?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Exhibit B
6.
ROOM WIDTH AND HEIGHT
Is the ceiling height less than 7'?
NOTE: There are no width requirements for
bathrooms.
7.
ELECTRICAL RECEPTACLES/SWITCHES/ FIXTURES:
Is there an at least one working receptacle outlet?
Is there at least one permanently attached working
light fixture?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair? Is the
room free from electrical hazards?
Exhibit B
8.
PLUMBING SYSTEM & FIXTURES
Does the bathroom have a bathtub or shower, lavatory
and water closet, which are properly connected to a
public utility service?
Note: Tub or shower is not required if main bathroom
has these items.
If tub and shower are present, are the tub or shower
and lavatory supplied with hot and cold running water?
Is the water closet supplied with cold running water?
Are all plumbing fixtures, including drains and water
lines, properly installed, maintained in working order,
kept free from obstructions, leaks, and defects, safe,
sanitary, and capable of performing the design
function?
BEDROOM #1
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
OCCUPANCY LIMITATIONS
Does bedroom have at least 70 sq. ft if occupied by one
(1) person and at least 50 sq. ft. for each occupant, if
occupied by more than one (1) person?
3.
BEDROOM ACCESS
Does bedroom have its own entrance without passing
through another bedroom or bathroom?
4.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
and trim have any paint peeling, flaking, chipped,
cracking, chalking or showing any other signs of paint
deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
5.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation and lighting? (Example: 100 sq. ft
room must have 8 sq. ft of window glazing)
Is there at least one (1) openable window that has a
minimum opening of at least 45% of the minimum
glazed area as required above?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
6.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Does the door have an interior locking device?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Exhibit B
5.
ROOM WIDTH AND HEIGHT
Is the width of the room in any plan dimension less
than 7'?
Is the ceiling height less than 7'?
EXCEPTION: In bedrooms with sloped ceilings, the
ceiling height must be 7' over not less than 1/3rd of
minimum floor area.
7.
ELECTRICAL RECEPTACLES/SWITCHES
Are there at least two working separate and remote
receptacle outlets?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
BEDROOM #2
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
OCCUPANCY LIMITATIONS
Does bedroom have at least 70 sq. ft if occupied by one
(1) person and at least 50 sq. ft. for each occupant, if
occupied by more than one (1) person?
3.
BEDROOM ACCESS
Does bedroom have its own entrance without passing
through another bedroom or bathroom?
4.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
and trim have any paint peeling, flaking, chipped,
cracking, chalking or showing any other signs of paint
deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
5.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation and lighting? (Example: 100 sq. ft
room must have 8 sq. ft of window glazing)
Is there at least one (1) openable window that has a
minimum opening of at least 45% of the minimum
glazed area as required above?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
6.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Does the door have an interior locking device?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Exhibit B
7.
ROOM WIDTH AND HEIGHT
Is the width of the room in any plan dimension less
than 7'?
Is the ceiling height less than 7'?
EXCEPTION: In bedrooms with sloped ceilings, the
ceiling height must be 7' over not less than 1/3rd of
minimum floor area.
8.
ELECTRICAL RECEPTACLES/SWITCHES
Are there at least two working separate and remote
receptacle outlets?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
BEDROOM #3
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
OCCUPANCY LIMITATIONS
Does bedroom have at least 70 sq. ft if occupied by one
(1) person and at least 50 sq. ft. for each occupant, if
occupied by more than one (1) person?
3.
BEDROOM ACCESS
Does bedroom have its own entrance without passing
through another bedroom or bathroom?
4.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
and trim have any paint peeling, flaking, chipped,
cracking, chalking or showing any other signs of paint
deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
5.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation and lighting? (Example: 100 sq. ft
room must have 8 sq. ft of window glazing)
Is there at least one (1) openable window that has a
minimum opening of at least 45% of the minimum
glazed area as required above?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
6.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Does the door have an interior locking device?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Exhibit B
7.
ROOM WIDTH AND HEIGHT
Is the width of the room in any plan dimension less
than 7'?
Is the ceiling height less than 7'?
EXCEPTION: In bedrooms with sloped ceilings, the
ceiling height must be 7' over not less than 1/3rd of
minimum floor area.
8.
ELECTRICAL RECEPTACLES/SWITCHES
Are there at least two working separate and remote
receptacle outlets?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
BEDROOM #4
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
OCCUPANCY LIMITATIONS
Does bedroom have at least 70 sq. ft if occupied by one
(1) person and at least 50 sq. ft. for each occupant, if
occupied by more than one (1) person?
3.
BEDROOM ACCESS
Does bedroom have its own entrance without passing
through another bedroom or bathroom?
4.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
and trim have any paint peeling, flaking, chipped,
cracking, chalking or showing any other signs of paint
deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
5.
WINDOWS
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Is there at least one (1) window facing directly outside,
that has a minimum glazed area of 8% of the total floor
area for ventilation and lighting? (Example: 100 sq. ft
room must have 8 sq. ft of window glazing)
Is there at least one (1) openable window that has a
minimum opening of at least 45% of the minimum
glazed area as required above?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
6.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Does the door have an interior locking device?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
Exhibit B
7.
ROOM WIDTH AND HEIGHT
Is the width of the room in any plan dimension less
than 7'?
Is the ceiling height less than 7'?
EXCEPTION: In bedrooms with sloped ceilings, the
ceiling height must be 7' over not less than 1/3rd of
minimum floor area.
8.
ELECTRICAL RECEPTACLES/SWITCHES
Are there at least two working separate and remote
receptacle outlets?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
UTILITY ROOM
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Is the room maintained in good repair, structurally
sound, and sanitary?
2.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
cabinets, and trim have any paint peeling, flaking,
chipped, cracking, chalking or showing any other signs
of paint deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair? Are
floor coverings sanitary, maintained in good repair, and
free from hazardous (trip) conditions?
Are all vanity countertops sanitary, maintained in
proper condition, and good repair?
3.
WINDOWS
Note: Utility rooms do not require windows.
If windows are present, are all window frames and trim
kept in sound condition, good repair, and weather
tight?
Is weather stripping present and in good condition on
all windows?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
4.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
5.
ROOM WIDTH AND HEIGHT
Is the ceiling height less than 7'?
NOTE: There are no width requirements for this room.
6.
ELECTRICAL RECEPTACLES/SWITCHES/ FIXTURES: Is
there at least one working receptacle outlet?
Is there at least one permanently attached working
light fixture?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the room free from electrical hazards?
Are all receptacles properly installed, of adequate size,
and capable of performing the design function?
Is the room free from electrical hazards?
Exhibit B
7.
PLUMBING SYSTEM & FIXTURES
If the washer hook-up is installed in this room, are all
plumbing fixtures, including drains and water lines,
properly installed and connected to a public utility
service, maintained in working order, kept free from
obstructions, leaks, and defects, safe, sanitary, and
capable of performing the design function?
If washer hook-up is present, is the washer hook-up
supplied with hot and cold running water?
HALLS & STAIRWAYS
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
GENERAL CONDITION
Are the halls and stairways maintained in good repair,
structurally sound, and sanitary?
2.
INTERIOR SURFACE
Does any interior surfaces, including windows, doors,
and trim have any paint peeling, flaking, chipped,
cracking, chalking or showing any other signs of paint
deterioration?
Are all walls and ceiling surfaces free of cracks or loose
plaster, decayed wood, or other defective surface
conditions?
Is all trim maintained in good repair, properly
anchored, and in a safe condition?
Are all floors sound and maintained in good repair?
Are floor coverings sanitary, maintained in good repair,
and free from hazardous (trip) conditions?
3.
WINDOWS (IF PRESENT)
Are all window frames and trim kept in sound
condition, good repair, and weather tight?
Is weather stripping present and in good condition on
all windows?
Are all operable windows easily opened and capable of
being held in position by window hardware?
Are all operable windows, located 6' or less above
ground level, equipped with a working window sash -
locking device?
4.
DOORS
Are all doors, frames, and hardware kept in sound
condition and good repair?
Do all doors fit reasonably well within its frame and are
capable of being opened and closed by being properly
and securely attached to jambs, headers or tracks as
intended by the manufacturer of the attachment
hardware?
5.
HALL WIDTH & HEIGHT
Is the width at least 36"?
Is the ceiling height less than 7'?
6.
ELECTRICAL RECEPTACLES/SWITCHES
Is there at least one permanently attached working
light fixture for the hall?
Is there at least one permanently attached working
light fixture for the stairway?
Are all receptacles, switches, fixtures, and cover plates
maintained in a safe condition and good repair?
Is the hall and stairway free from electrical hazards?
7.
HANDRAILS & GUARDRAILS
Are handrails and guardrails firmly fastened, capable of
supporting normal loads, and maintained in good
Exhibit B
repair?
Do all stairways having more than four (4) risers have a
handrail on one side?
Do all open portion of a landing, balcony, or other
walking surface more than 30" above floor level have
guardrails?
If handrails are present, are they at less 30" and not
more than 42" high?
If guardrails are present, are they at less 30" or more
above the floor of the landing, balcony, or other
walking surface?
MISCELLANEOUS
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
1.
MEANS OF EGRESS
Are there at a minimum two (2) egress doors to the exterior?
Do the egress doors open without the need for keys, special
knowledge, or effort?
If bars, grilles, grates, or other similar devices are installed on
windows and doors, can the devices be released or removed
from the inside without the use of a key, tool, or force
greater than that which is required for normal operation?
2.
SMOKE ALARMS
Are smoke alarms installed on the ceiling or walls outside the
immediate vicinity of bedrooms, in each bedroom, and in
each story within a dwelling?
Do smoke alarms receive primary power from the building
electrical system? Exception: Smoke alarms are permitted
to be solely battery operated in units which are not
undergoing alterations, repairs, or construction of any kind.
Are smoke alarms interconnected so that activation of one
alarm will activate all the alarms? Exception: Smoke alarms
are permitted to be solely battery operated in units which
are not undergoing alterations, repairs, or construction of
any kind.
3.
WATER HEATING FACILITIES
Are water heating facilities properly installed, maintained,
and capable of providing adequate amount of water to be
drawn at every required sink, lavatory, bathtub, shower, and
laundry facility at a temperature of not less than 110
degrees?
If a gas -burning water heater is installed, is it located in a
non -authorized area such as a bathroom, toilet room,
bedroom, or other occupied room normally kept closed?
Does the water heater have an approved combination
temperature and pressure -relief valve installed?
Does the water heater have a relief discharge pipe properly
installed and maintained?
If a gas -burning water heater is installed, is a supply of air for
complete combustion of fuel and for ventilation (flue vent)
to exterior of the space provided?
If electrical water heater is installed, is the electrical system
properly installed, of adequate size, and capable of
performing the design function?
4.
HEATING FACILITIES
Is there a heating system?
Are cooking appliances being used to provide space heating?
Is the heater capable of maintaining a room temperature of
68 degrees in all habitable rooms and bathrooms?
If a gas -burning heater is installed, is it located in a non -
authorized area such as a bathroom, toilet room, bedroom,
or other occupied room normally kept closed?
Exhibit B
If a gas -burning heater is installed, is a supply of air for
complete combustion of fuel and for ventilation (flue vent)
to exterior of the space provided?
If an electrical heater is installed, is the electrical system
properly installed, of adequate size, and capable of
performing the design function?
If the heating system is located in the attic, is there at least
one permanently attached working light fixture near the
system?
Is the thermostat installed properly, maintained in a safe
working condition, and capable of performing the intended?
MISCELLANEOUS (Continued)
Exhibit B
PASS
OR
Description
FAIL
N/A
Repairs Required
5.
DUCT SYSTEMS
Are the duct systems maintained free of obstructions
and capable of performing the required function?
6.
WASHER & DRYERS
If the washer hook-up is installed, are all plumbing
fixtures, including drains and water lines, properly
installed and connected to a public utility service,
maintained in working order, kept free from
obstructions, leaks, and defects, safe, sanitary, and
capable of performing the design function?
If washer hook-up is present, is the washer hook-up
supplied with hot and cold running water?
If washer hook-ups are installed, is there at least one
(1) grounded -type receptacle or a receptacle with a
ground fault interrupter?
If the dryer hook-ups are installed, is the electrical
system properly installed, of adequate size, and
capable of performing the design function?
If a clothes dryer is installed, is the exhaust
independent of all other systems?
Is the clothes dryer exhausted to the outside in
accordance with manufacturer's instructions?
7.
MECHANICAL EQUIPMENT
Are all mechanical appliances, air conditioning systems,
fireplaces, solid fuel -burning appliances, cooking
appliances, water heating appliances properly installed,
maintained in a safe working condition, and capable of
performing the intended use?
Are all required clearances to combustible material
maintained?
Are all safety controls for fuel -burning equipment
maintained properly?
8.
MINIMUM SPACE REQUIREMENTS (RENTAL ONLY)
Living Room: 1-2 Occupant — No requirements.
3-5 Occupants — Does the living room have at least 120
sq. ft. of space?
6 or more Occupants - Does the living room have at
least 150 sq. ft. of space?
Dining Area: 1-2 Occupant — No requirements.
3-5 Occupants — Does the dining area have at least 80
sq. ft. of space?
6 or more Occupants - Does the living room have at
least 100 sq. ft. of space?
Combination Living & Dining: 1-2 Occupant — No
requirements.
3-5 Occupants — Does the living room have at least 200
sq. ft. of space?
6 or more Occupants - Does the living room have at
least 250 sq. ft. of space?
Exhibit B
9.
INFESTATION
Is there any evidence of insect and/or rodent
infestation?
10.
GARAGE
Are all doors, frames, and hardware kept in sound
condition, good repair, and weather tight?
Do all locks tightly secure the doors to provide security
for the occupants and property within?
11.
PLANS/PERMITS/INSPECTIONS
All additions and/or conversions were built with
required state and local permits and final inspections.
Inspected by: on this day of 2015.
Exhibit B
FREE RECORDING REQUESTED
PURSUANT TO GOVERNMENT CODE
27383
Recording Requested By And When
Recorded Mail to:
City of National City
Housing, Grants, and Asset Management
1243 National City Boulevard
National City, CA 91950
SPACE ABOVE THIS LINE FOR RECORDER'S USE
[RECORD AFTER THE 1ST DEED OF TRUST]
DECLARATION OF COVENANTS CONDITIONS AND RESTRICTIONS
(HUD HOME Program 3% Deferred)
City Loan No.
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
("Declaration") is made as of this day of , 20 , by (hereafter collectively
and/or individually "Borrower"), in connection with that certain parcel of real property
("Property") located in the City of National City, County of San Diego, California, described in
Exhibit "A" attached hereto and incorporated herein by reference.
RECITALS
A. Concurrently with the recordation of this Declaration, the City of National City
("Lender") is funding a loan to Borrower ("HUD HOME Loan") evidenced by a promissory note
("HOME Note"). The HUD HOME Loan is secured by a deed of trust ("Deed of Trust") made by
Borrower, as trustor, in favor of the Lender as beneficiary. The Lender is making the HUD HOME
Loan to aid Borrower, who is a first-time homebuyer, in acquiring the Property.
B. The Deed of Trust and HUD HOME Loan and were conditioned in part upon the
recordation of this Declaration against the Property.
NOW, THEREFORE, Borrower hereby declares that the Property shall be subject to the
covenants, conditions and restrictions set forth below:
I. Representations and Warranties of Borrower. Borrower declares, represents and warrants
to the Lender and agrees as follows:
Exhibit B
(a) Income Eligibility Requirements -Annual Gross Income (§92.203). Borrower's
annual gross income, including the income of any co -purchasers or co -tenants, at the time of the
execution of this Declaration does not exceed eighty percent (80%) of the Area Median Income
for the San Diego -Carlsbad -San Marcos Metropolitan Statistical Area, as adjusted for family size,
as determined by HUD.
(b) Principal Place of Residence. For so long as the Deed of Trust is recorded against
the Property, Borrower will reside in the Property as Borrower's principal place of residence. The
Borrower shall be considered as occupying the Property as a principal place of residence if the
Borrower is living in the Property for at least ten (10) months out of each calendar year. Borrower
agrees not to neglect, sublet, lease or rent out all or any portion of the Property during such period.
(c) Ownership Interest. The Borrower has fee simple title on the Property (24 CFR
Part 92.254).
(d) Liquid Assets. At the time of the execution of this Declaration, Borrower, including
any co -purchasers or co -tenants and all other household members, does not hold, directly or
indirectly, "liquid assets", as defined below, whose aggregate value exceeds $25,000. As used
herein, the term "liquid assets" refers to cash and assets which are readily convertible to cash
within a reasonable period, including but not limited to savings and checking accounts, certificates
of deposit of any term, marketable securities, money market and similar accounts, mutual fund
shares, and insurance policy cash values. The term "liquid assets" shall not include retirement
funds which are not readily accessible or which cannot be accessed by the buyer without the buyer
incurring a penalty.
(e) Not a Full -Time Student. Borrower is not, and none of the co -purchasers or co-
tenants of Borrower are, a full-time student, or a household comprised exclusively of persons who
are full-time students, unless such persons are married and eligible to file a joint federal income
tax return. The term "full-time student" shall be defined as any person who will be or has been a
full-time student during five calendar months of the calendar year in question at an educational
institution (other than a correspondence school) with regular faculty and students.
(f) Not a Student Dependent. Borrower is not, and none of the co -purchasers or co-
tenants of Borrower are, a student dependent as defined in the U.S. Internal Revenue Code, unless
the taxpayer (upon whom the student in question is dependent) resides in the Property.
(g) Not an Owner of Real Property. Borrower does not, and none of the co -purchasers
of Borrower, own any real property at the time of escrow closing for the subject Property.
(h) First -Time Home Buyer, Displaced Homemaker or Single Parent. Borrower
satisfies at least one of the following criteria:
(1) Borrower is a first-time home buyer; that is, he or she has not owned a home
within the three-year period immediately preceding the date of this
Declaration; provided, however, an individual shall not be disqualified as a
first-time homebuyer on the basis that the individual owns or owned, as a
Exhibit B
principal residence during the three-year period, a dwelling unit whose
structure is not permanently affixed to a permanent foundation in
accordance with local or other applicable regulations or is not in compliance
with State, local, or model building codes, or other applicable codes, and
cannot be brought into compliance with the codes for less than the cost of
constructing a permanent structure;
(2) Borrower is a displaced homemaker as defined in 24 C.F.R. §92.2; or
(3) Borrower is a single parent as defined in 24 C.F.R. §92.2.
(i) Homebuyer Counseling. Borrower has attended a HUD -approved Homebuyer
Counseling session.
2. Due on Sale, Default, or 30-Years.
(a) Borrower shall pay principal and all accrued interest (either simple interest or
default interest, as the case maybe) on the HOME Note, in one lump sum, to Lender
upon the earliest of. (1) a Sale (as defined in Section 2(b), below); (2) a default after
completion of the applicable acceleration procedures set forth in Section 3, below;
or (3) thirty (30) years from the date first written above. Borrower shall make any
payments at the City of National City Finance Department's office located at 1243
National City Boulevard, National City, California 91950, or such other place as
designated by Lender. Notwithstanding the foregoing, in the event of a Sale,
where the net proceeds available from the sale are less than the amount that would
otherwise be due hereunder, then the Lender shall be entitled to recapture the net
proceeds available from the Sale. Net proceeds are defined as the sales price minus
repayment of all senior loans and any closing costs. "Senior loans" means loans
that are superior to the Deed of Trust. In the event of any Sale which is not a
foreclosure or an arm's-length transaction. The "sales price" shall be determined
by an appraiser holding a MAI designation from the Appraisal Institute that has at
least five (5) years of experience in the geographic area in which the Property is
located, selected by the Lender in its sole discretion.
(b) Sale Defined. The following shall all be considered transfers or sales of the
Property and shall be referred to herein generally as a "Sale": (i) all or any part of
the Property or any interest in the Property is sold, conveyed or transferred; (ii) if
Borrower is not a natural person and a beneficial interest in Borrower is sold,
conveyed or transferred; (iii) all or any part of the Property is refinanced or further
encumbered, except as otherwise allowed by law; (iv) Borrower does not occupy
the Property as his, her, or their, primary residence; (v) the leasing or renting of all
or any part of the Property; (vi) any material breach of this Declaration, the HOME
Note or Deed of Trust; or (vii) the filing of bankruptcy by the Borrower.
Notwithstanding the foregoing, a refinancing of the Property shall not be
considered a default, provided the Lender provides written consent to Borrower
prior to the refinancing, which consent may be granted or withheld in the sole and
absolute discretion of the Lender.
Exhibit B
(c) No Assumption of Note. The HOME Note may not be assumed by any person,
except as otherwise allowed by law.
3. Acceleration (Default).
(a) Acceleration, Remedies. Upon Borrower's default of this Declaration, the HOME
Note, the Deed of Trust, or any other document secured by this Declaration, the Deed of Trust
and/or the Property, Lender shall give notice to Borrower prior to acceleration, such notice shall
include:
(1) a description of the breach;
(2) the action required to cure such breach (if any);
(3) a date, not less than ten (10) days from the date the notice is mailed to
Borrower, by which such breach must be cured; and
(4) a statement that failure to cure such breach on or before the date specified
in the notice may result in acceleration of the sums secured by the Deed of Trust and sale of the
Property.
The notice shall further inform Borrower of the right to reinstate after acceleration and the
right to bring a court action to assert the nonexistence of a default or any other defense of Borrower
to acceleration and sale. If the breach is not cured on or before the date specified in the notice,
Lender, at Lender's option, may declare all of the sums secured by the Deed of Trust to be
immediately due and payable without further demand and may invoke the power of sale and any
other remedies permitted by applicable law, including, but not limited to, as provided in and
pursuant to the procedure set forth in the Deed of Trust. Lender shall be entitled to collect all
reasonable costs and expenses incurred in pursuing the remedies provided in this Section 3,
including, but not limited to, reasonable attorneys' fees.
(b) Borrower's Right to Reinstate.
(1) Curable Breach. Notwithstanding Lender's acceleration of the sums
secured by the Deed of Trust due to Borrower's breach, Borrower shall have the right to have any
proceedings begun by Lender to enforce the Deed of Trust discontinued at any time prior to five
(5) days before the sale of the Property pursuant to the power of sale contained in the Deed of
Trust or at any time prior to entry of a judgment enforcing the Deed of Trust if:
(A) Borrower pays Lender all sums which would be then due under the
HOME Note and the Deed of Trust had no acceleration occurred;
(B) Borrower cures all breaches of any other covenants or agreements
of Borrower contained in the Deed of Trust;
Exhibit B
(C) Borrower pays all reasonable expenses incurred by Lender and the
trustee in enforcing the covenants and agreements of Borrower contained in the Deed of Trust,
including, but not limited to, reasonable attorneys' fees; and
(D) Borrower takes such action as Lender may reasonably require to
assure that the lien of the Deed of Trust, Lender's interest in the Property and Borrower's
obligation to pay the sums secured by the Deed of Trust shall continue unimpaired.
Upon such payment and cure by Borrower as set forth in this Section 3(b) (1), the Deed of
Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration
had occurred.
(2)
Non -Curable Breach.
(A) Failure to Occupy/Renting Out the Property is a Violation of Law.
Borrower hereby acknowledges that the HUD HOME Loan evidenced by the HOME Note and
secured by the Deed of Trust and this Declaration was funded by Lender using U.S. Department
of Housing and Urban Development ("HUD") Home Investments Partnership Act ("HOME")
funds. Section 215 of the HOME Investment Partnerships Act (42 U.S.C. § 12745) and the HOME
program regulations (24 C.F.R. §92.254) require Borrower to occupy the Property as Borrower's
principal residence. Leasing or renting out the Property in whole or in part and/or Borrower's
failure to occupy the Property as Borrower's principal residence is a violation of State of California
and Federal law (in addition to being a violation of this Declaration). Lender is obligated by
Federal law to enforce the provisions of the HOME program, Lender's failure to do so would
jeopardize Lender's ability to obtain additional HOME funds from HUD and help other low-
income families to obtain affordable housing.
(B) Failure to Occupy/Renting Out the Property Materially Impairs
Lender's Security. Borrower hereby acknowledges and agrees that renting out the Property (in
whole or in part) and/or Borrower's failure to occupy the Property as Borrower's principal
residence, materially impairs Lender's security for the HUD HOME Loan and Lender's ability to
obtain additional HOME funds from HUD and help other low-income families to obtain affordable
housing. Borrower further acknowledges that if the Property is rented out (in whole or in part)
and/or Borrower fails to occupy the Property as Borrower's principal residence, then during any
such period the Property will not qualify as "affordable housing" and Lender may be in breach of
its obligations to HUD and therefore the Lender's security for the HUD HOME Loan will be
materially impaired.
(C) Failure to Occupy/Renting Out the Property is a Non -Curable
Breach. Borrower hereby acknowledges and agrees that renting out the Property (in whole or in
part) and/or Borrower's failure to occupy the Property as Borrower's principal residence, will be
a non -curable breach and Lender shall have the right to accelerate the HUD HOME Loan and
foreclose on the Property as provided herein. Notwithstanding anything to the contrary set
forth in this Declaration, Borrower agrees that in the event Borrower rents out the Property
(in whole or in part) and/or fails to occupy the Property as Borrower's principal residence,
Borrower shall not have the right to cure the breach and reinstate the HUD HOME Loan,
the Deed of Trust or the obligations secured thereby.
Exhibit B
(D) Borrower's Waiver. Borrower hereby knowingly waives and
relinquishes any and all legal and/or contractual rights Borrower may have to cure or otherwise
reinstate the Deed of Trust and the obligations secured thereby, in the event that Property is rented
out (in whole or in part) and/or Borrower fails to occupy the Property as Borrower's principal
residence.
(E) Representation of Comprehension. Borrower acknowledges and
agrees that Lender has advised Borrower (and each of them if there is more than one Borrower) to
retain an attorney to represent Borrower with respect to this Declaration. By executing this
Declaration, Borrower (and each of them if there is more than one Borrower) represents that: (i)
Borrower fully understands and accepts the terms of this Declaration, the HOME Note and Deed
of Trust; (ii) Borrower has relied upon the legal advice of Borrower's attorneys or that Borrower
has freely and independently chosen not to seek the advice of an attorney; (iii) that neither the
Lender nor its attorneys represents Borrower; (iv) that Borrower has had a full and ample
opportunity to consult with any other professionals of Borrower's choice in connection with the
rights and liabilities created by this Declaration, the HOME Note and Deed of Trust; (v) that
Borrower does not have any questions with regard to the legal import of any term, word, phrase,
or portion of this Declaration, the HOME Note and Deed of Trust, or any of the foregoing
documents in their entireties; and (vi) Borrower accepts the terms of this Declaration, the HOME
Note and Deed of Trust as written.
4. Term. This Declaration shall expire upon the earlier of the foreclosure of any deed of trust
or mortgage on the Property made in favor of or held by an institutional lender or investor that is
senior in recording priority to this Declaration or payment in full of the HOME Note.
5. Covenant Against Discrimination. Borrower covenants on behalf of itself and its
successors and assigns, and each successor in interest to the Property, not to discriminate against
any prospective purchaser of the Property on the basis of race, religion, sex or national origin.
6. Enforcement. Borrower expressly agrees and declares that Lender or any successor public
agency is a proper party and shall have standing to initiate and pursue any and all actions or
proceedings, at law or in equity to enforce the provisions hereof and/or to recover damages for any
default hereunder and/or to enforce the terms of this Declaration. Further, Lender or any successor
public agency shall be the proper party to waive, relinquish, release or modify the rights,
covenants, obligations or restrictions contained in or arising under this Declaration.
7. Attorneys' Fees. Upon the breach of the terms of this Declaration, the HOME Note or
Deed of Trust, Borrower agrees to pay Lender any and all attorneys' fees, court costs, trustee fees,
and any and all other fees and costs incurred by Lender as a result of said breach and/or default.
8. Severability. In the event that any provision or covenant of this Declaration is deemed to
be invalid or unenforceable by a court of competent jurisdiction, that provision shall be severed
from the rest of this Declaration and the remaining provisions shall continue in full force and effect.
Exhibit B
9. Covenants Run With The Land. The covenants contained herein shall constitute
"covenants running with the land" pursuant to Civil Code Sections 1460, 1462, 1463, 1464, 1465,
1467 and 1468, to the extent applicable, and shall bind the Property and every person having an
interest therein during the term of this Declaration, including Borrower and its successors, heirs
and assigns. Borrower agrees for itself and its successors that, in the event that, for any reason
whatsoever, a court of competent jurisdiction determines that the foregoing covenants do not run
with the land, such covenants shall be enforced as equitable servitudes against the Property.
10. Recordation. This Declaration shall be recorded in the Office of County Recorder of San
Diego, California.
11. Remedies Cumulative. Lender shall have the right, in the event of any breach of any such
agreement or covenant, to exercise all the rights and remedies, and to maintain any actions at law
or suit in equity or other proper proceedings to redress the breach of agreement or covenant.
12. Headings. The headings used in this Declaration are for convenience only and are not to
be used to interpret the meaning of any of the provisions of this Declaration.
13. Liberal Construction. The provisions of this Declaration shall be liberally construed to
effectuate its purpose. Failure to enforce any provision of this Declaration shall not constitute a
waiver of the right to enforce the provision later.
14. Number; Gender. The singular shall include the plural and the plural the singular, unless
the context requires the contrary; and the masculine, feminine and neuter shall include the
masculine, feminine or neuter, as the context requires.
15. Exhibits. Any exhibits referenced herein and attached to this Declaration are hereby
incorporated by reference.
16. Notices to Mortgagees of Record. On any loss to the Property, if such loss exceeds One
Thousand Dollars ($1,000.00), notice in writing of such loss shall be given to each mortgagee of
record.
17. Fire and Extended Coverage Insurance. Borrower shall obtain and maintain a policy of
fire insurance for the full insurable value of all the improvements within the Property. The form,
content and term of the policy, its endorsements and the issuing company must be satisfactory to
all mortgagees. If more than one mortgagee has a loan of record against the Property, or any part
thereof, the policy and endorsement shall meet the maximum standards of the various mortgagees
represented in the Property. The policy shall contain an agreed amount endorsement or its
equivalent, an increased cost of construction endorsement, vandalism and malicious mischief
coverage, a special form endorsement and a determinable cash adjustment clause or a similar
clause to permit cash settlements covering the full value of the improvements in case of partial
destruction and a decision not to rebuild. The policy shall name as insureds the owners, Borrower
and the mortgagees, as long as their respective interests may appear. "Mortgagees", as used herein,
includes beneficiaries under a deed of trust.
18. Binding Effect. This Declaration shall inure to the benefit of and be binding upon the
Exhibit B
successors and assigns of Borrower and the heirs, personal representatives, grantees, tenants,
successors -in -interest or assigns of the owners.
19. Certifications by Borrower. Not less frequently than once a year Borrower shall certify to
Lender that Borrower:
(a) Complies with all the terms and conditions of this Declaration and the Deed of
Trust; and
(b) Has obtained and does maintain fire and casualty insurance on the Property
satisfactory to Lender, including a certificate of insurance, of which Lender shall
be a holder, from the insurance company providing coverage satisfactory to Lender
which may not be cancelled by the insurance company without thirty (30) days
advance notice of cancellation.
20. Declaration Subordinate. This Declaration is subordinate to any deed of trust or mortgage
on the Property, which deed of trust is senior in recording priority to this Declaration. Any party,
and its successors and assigns, receiving title to the Property through a trustee's sale, judicial
foreclosure sale, or deed in lieu of foreclosure of such senior deed of trust or mortgage, and any
conveyance or transfer thereafter, shall receive title free and clear of the provisions of this
Declaration.
21. Refinancing. Neither the Property, nor any portion thereof, shall be refinanced without the
written consent the Lender, except as otherwise allowed by law. The Lender may withhold any
such consent in its sole and absolute discretion, nothing contained herein shall obligate Lender to
agree to Borrower's request to refinance the Property or any portion thereof.
22. Waiver by Lender. Any provision hereof, including without limitation, the requirement
that Borrower occupy the Property, may be waived only with the advance written approval of the
Lender and HUD for good cause shown.
23. HOME Period. The HUD HOME Loan was funded by Lender using U.S. Department of
Housing and Urban Development ("HUD") Home Investments Partnership Act ("HOME") funds.
The HOME program regulations (24 C.F.R. Part 92), apply for a period of years, from the
date of recordation of the Deed of Trust. Beginning years after the date of recordation of
the Deed of Trust, and for the remainder of the term of this Declaration, the Property will continue
to be subject to the restrictions set forth in this Declaration, but shall no longer be subject to the
HOME program regulations.
24. Declaration Independent of HOME Note. The obligations of Borrower under this
Declaration shall be independent of, and in addition to, Borrower's obligations under the HOME
Note, and repayment of the HOME Note shall not terminate or otherwise affect this Declaration.
Date:
Borrower:
Exhibit B
Date:
Borrower:
Exhibit B
EXHIBIT "A"
Legal Description of the Property
Property Address: , National City, California
Exhibit B
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document, to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
On
Public, personally appeared
ACKNOWLEDGMENT:
before me,
a Notary
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the persons acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature of Notary
(SEAL)
Exhibit B
FREE RECORDING REQUESTED
PURSUANT TO GOVERNMENT CODE
SECTION 27383
Recording Requested By And When
Recorded Mail To:
City of National City
Housing, Grants, and Asset Management
1243 National City Boulevard
National City, CA 91950
[RECORD AFTER THE CC&R'S]
DEED OF TRUST
(HUD HOME Program 3% Deferred)
City Loan No.
THIS DEED OF TRUST ("Deed of Trust") is made this day of , 20 , among the
Trustor, ("Borrower"), the trustee, ("Trustee"), and the Beneficiary, San City of
National City ("Lender"), whose address is 1243 National City Boulevard, National City, California
91950.
BORROWER HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with
power of sale, all that property in the City of National City, County of San Diego, State of
California, described as:
(See Legal Description - Exhibit "A")
which has the address of , San Diego, California (herein "Property Address");
TOGETHER with all the improvements now and hereafter erected on the Property, and all
easements, rights, appurtenances and rents (subject, however, to the rights and authorities given
herein to Lender to collect and apply such rents), all of which shall be deemed to be and remain
part of the property covered by this Deed of Trust; and all of the foregoing, together with said
property, are hereinafter referred to as the "Property";
TO SECURE to Lender:
(A) Repayment of the indebtedness evidenced by the Promissory Note (HUD HOME
Program three percent (3%) Deferred) of even date herewith, and extensions and renewals thereof, in
CITY OF NATIONAL CITY PAGE 1 OF 12
HOME -DEED OF TRUST
Exhibit B
the principal sum of U.S. Dollars ($ ) ("HOME Note") made by Borrower in favor of
the Lender;
(B) The performance of each agreement and covenant of Borrower under that certain
Declaration of Covenants, Conditions and Restrictions (HUD HOME Program 3% Deferred)
("Declaration") of even date herewith and recorded concurrently herewith affecting the Property;
(C) The payment of all other sums, with interest thereon, advanced to protect the security
of this Deed of Trust; and
(D) The performance of the covenants and agreements of Borrower contained herein.
BORROWER covenants that Borrower is lawfully seized of the estate hereby conveyed and
has the right to grant and convey the Property, and that Borrower is unencumbered except for
encumbrances of record. Borrower covenants that Borrower warrants, and will defend generally, the
title to the Property against all claims and demands, subject to encumbrances of record.
UNIFORM COVENANTS
Borrower and Lender covenant and agree as follows:
1. Payment of Principal and Interest. Borrower shall promptly pay when due the principal and
interest evidenced by the HOME Note.
2. Funds for Taxes and Insurance. To protect the security of this Deed of Trust, Borrower agrees
to pay, at least ten (10) days before delinquency, all taxes and assessments affecting the Property,
including assessments on appurtenant water stock, all encumbrances, charges and liens, with interest,
on the Property or any part thereof, which appear to be prior or superior hereto, and all costs, fees and
expenses of this Trust. Should Borrower fail to make any payment or fail to do any act as herein
provided, then Lender or Trustee, without obligation to do so and without notice to or demand upon
Borrower and without releasing Borrower from any obligation hereof, may make or do the same in
such manner and to such extent as either may deem necessary to protect the security hereof, Lender
or Trustee being authorized to enter upon the Property for such purposes; appear in and defend any
action or proceeding purporting to affect the security hereof or the rights or powers of Lender or
Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the
judgment of either Lender or Trustee appears to be prior or superior hereto; and, in exercising any
such powers, pay necessary expenses, employ counsel and pay his reasonable fees.
3. Application of Pam. All payments received by Lender under the HOME Note shall be
applied by Lender first in payment of amounts due to Lender by Borrower, then to interest payable
on the HOME Note, and then to the principal of the HOME Note.
4. Prior Mortgages and Deeds of Trust; Charges, Liens. Borrower shall perform all of
Borrower's obligations under any mortgage, deed of trust or other security agreement with a lien
which has priority over this Deed of Trust, including Borrower's covenants to make payments when
due. Borrower shall pay or cause to be paid all taxes, assessments and other charges, fines and
CITY OF NATIONAL CITY PAGE 2 OF 12
HOME -DEED OF TRUST
Exhibit B
impositions attributable to the Property which may attain a priority over this Deed of Trust, and
leasehold payments, if any.
5. Hazard Insurance. Borrower shall keep the improvement(s) now existing or hereinafter
erected on the Property insured against loss by fire, hazards included within the terms "extended
coverage," and such other hazards as Lender may require and in such amounts and for such periods
as Lender may require. The insurance carrier providing the insurance shall be chosen by Borrower
subject to approval by Lender, provided that such approval will not be unreasonably withheld. All
insurance policies and renewals thereof shall be in a form acceptable to Lender and shall include
a standard mortgagee clause in favor of and in a form acceptable to Lender. Lender has the right
to hold the policies and renewals thereof, subject to the terms of any mortgage, deed of trust or
other security agreement with a lien which has priority over this Deed of Trust. In the event of
loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make
proof of loss if not made promptly by Borrower. If Property is abandoned by Borrower, or if
Borrower fails to respond to Lender within thirty (30) days from the date notice is mailed by
Lender to Borrower that the insurance carrier offers to settle a claim for insurance benefits, Lender
is authorized to collect and apply the insurance proceeds at Lender's option either to restoration or
repair of the Property or to the sums secured by this Deed of Trust.
6. Preservation and Maintenance of Property. Borrower will keep the Property in good repair
and shall not commit waste or permit impairment or deterioration of the Property and shall comply
with the provisions of any lease if this Deed of Trust is on a leasehold. If this Deed of Trust is on a
unit in a condominium or planned unit development, Borrower shall perform all of Borrower's
obligations under the declaration of covenants, conditions and restrictions creating or governing the
condominium or planned unit development, the bylaws and regulations of the condominium or
planned unit development, and constituent documents. Borrower shall maintain the Property in
conformance with all applicable state, federal, and local laws, ordinances, codes and regulations. In
the event that Borrower fails to maintain the Property in accordance with these standards and after at
least thirty (30) business days prior to the notice to Borrower, the City or the City's Contractor or
Agent may, but shall be under no obligation to, enter upon the Property, make such repairs or
replacements as are deemed necessary in the City's discretion, and provide for payment thereof Any
amount advanced by the City to make such repairs, together with interest thereon from the date of
such advance at the rate of seven (7%) percent (unless payment of such an interest rate would be
contrary to applicable law, in which event such sums shall bear interest at the highest rate then
allowable by applicable law), shall become an additional obligation to the Borrower to the City and
shall be secured by the Deed of Trust, if not previously reconveyed.
7. Protection of Lender Security. If Borrower fails to perform the covenants and agreements
contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects
Lender's interest in the Property, then Lender, at Lender's option, upon notice to Borrower, may make
such appearances, disburse such sums including reasonable attorneys' fees, and take such action as is
necessary to protect Lender's interest. If Lender's required hazard insurance is a condition of making
the loan secured by this Deed of Trust, Borrower shall pay the premiums required to maintain such
insurance in effect until such time as the requirement for such insurance terminates in accordance
with Borrower's and Lender's written agreement or applicable law. Any amounts disbursed by
Lender pursuant to this Section, with interest thereon at the rate of ten percent (10%) per annum, will
CITY OF NATIONAL CITY PAGE 3 OF 12
HOME -DEED OF TRUST
Exhibit B
become additional indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and
Lender agree to other terms of payment, such amounts will be payable upon notice from Lender to
Borrower requesting payment thereof Nothing contained in this Section will require Lender to incur
any expense or take any action hereunder.
8. Inspection. Lender may make or cause to be made reasonable entries upon and inspections
of the Property, provided that Lender will give Borrower notice prior to any such inspection,
specifying reasonable cause therefor related to Lender's interest in the Property.
9. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in
connection with any condemnation or other taking of the Property, or part thereof, or for conveyance
in lieu of condemnation, are hereby assigned and shall be paid to Lender subject to the terms of any
mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of
Trust.
10. Borrower Not Released; Forbearance by Lender Not a Waiver. Extension of the time for
payment or modification of amortization of the sums secured by this Deed of Trust granted by Lender
to any successor in interest of Borrower shall not operate to release, in any manner, the liability of the
original Borrower and Borrower's successors in interest. Lender shall not be required to commence
proceedings against such successor or refuse to extend time for payment or otherwise modify
amortization of the sums secured by this Deed of Trust by reason of any demand made by the original
Borrower and Borrower's successors in interest. Any forbearance by Lender in exercising any right
or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude
the exercise of any such right or remedy.
11. Successors and Assigns Bound, Joint and Several Liability. The covenants and agreements
contained herein shall bind, and the rights hereunder shall inure to, the respective successors and
assigns of Lender and Borrower, subject to the provisions of Section 15 hereof All covenants and
agreements of Borrower shall be joint and several.
12. Notice. Except for any notice required under applicable law to be given in another manner:
(a) any notice to Borrower provided for in this Deed of Trust shall be given by
delivering it or by mailing such notice by certified mail, addressed to Borrower at the Property
Address; and
(b) any notice to Lender will be given by certified mail, return receipt requested, to
Lender's address stated herein or to such other address as Lender may designate by notice to
Borrower as provided herein.
Any Notice provided for in this Deed of Trust shall be deemed to have been given to Borrower or
Lender when given in the manner designated herein.
13. Governing Law, Severability_. The state and local laws applicable to this Deed of Trust shall
be the laws of the jurisdiction in which the Property is located. The foregoing sentence shall not
limit the applicability of federal law to this Deed of Trust. In the event that any provision or clause
CITY OF NATIONAL CITY PAGE 4 OF 12
HOME -DEED OF TRUST
Exhibit B
of this Deed of Trust or the HOME Note conflicts with applicable law, such conflict shall not affect
other provisions of this Deed of Trust or the HOME Note which can be given effect without the
conflicting provision and, to this end, the provisions of this Deed of Trust and the HOME Note are
declared to be severable. As used herein, "costs," "expenses" and "attorneys' fees" include all sums
to the extent not prohibited by applicable law or limited herein.
14. Borrower's Copy. Borrower shall be furnished a conformed copy of the HOME Note and
this Deed of Trust at the time of execution or after recordation hereof
15. Due on Sale. Breach or 30-Years.
(a) Pam. Borrower shall pay principal and all accrued interest (either simple interest
or default interest, as the case may be) on the HOME Note, in one lump sum, to Lender upon the
earliest of: (1) a Sale (as defined in Section 15(b), below); (2) a default after completion of the
applicable acceleration procedures set forth in Section 16, below; or (3) thirty (30) years from the
date of the HOME Note. Borrower shall make any payments at the City of National City Finance
Department's office located at 1243 National City Boulevard, National City, California 91950, or
such other place as designated by Lender. Notwithstanding the foregoing, in the event of a Sale,
where the net proceeds available from the sale are less than the amount that would otherwise be
due hereunder, then the Lender shall be entitled to recapture the net proceeds available from the
Sale. Net proceeds are defined as the sales price minus repayment of all senior loans and any
closing costs. "Senior loans" means loans that are superior to the Deed of Trust. In the event of
any Sale which is not a foreclosure or an arm's-length transaction. The "sales price" shall be
determined by an appraiser holding a MAI designation from the Appraisal Institute that has at least
five (5) years of experience in the geographic area in which the Property is located, selected by the
Lender in its sole discretion.
(d) Sale Defined. The following shall all be considered transfers or sales of the Property
and shall be referred to herein generally as a "Sale": (i) all or any part of the Property or any
interest in the Property is sold, conveyed or transferred; (ii) if Borrower is not a natural person and
a beneficial interest in Borrower is sold, conveyed or transferred; (iii) all or any part of the Property
is refinanced or further encumbered, except as otherwise allowed by law; (iv) Borrower does not
occupy the Property as his, her, or their, primary residence; (v) the leasing or renting of all or any
part of the Property; (vi) any material breach of the HOME Note, the Declaration, this Deed of
Trust, or any other agreement or obligation secured by the property; or (vii) the filing of bankruptcy
by the Borrower. Notwithstanding the foregoing, a refinancing of the Property shall not be
considered a default, provided the Lender provides written consent to Borrower prior to the
refinancing, which consent may be granted or withheld in the sole and absolute discretion of the
Lender.
(c) No Assumption of Note. The HOME Note may not be assumed by any person,
except as otherwise allowed by law.
NON -UNIFORM COVENANTS
Borrower and Lender further covenant and agree as follows:
CITY OF NATIONAL CITY PAGE 5 OF 12
HOME -DEED OF TRUST
Exhibit B
16. Acceleration (Default), Remedies. Upon Borrower's default (or breach) of this Deed of
Trust, the HOME Note, Declaration, or any other document secured by this Deed of Trust, the
Declaration and/or the Property, Lender, prior to acceleration, shall give notice to Borrower as
provided in Section 12 hereof specifying:
(a) the breach;
(b) the action required to cure such breach;
(c) a date, not less than ten (10) days from the date the notice is mailed to Borrower,
by which such breach must be cured; and
(d) that failure to cure such breach on or before the date specified in the notice may
result in acceleration of the sums secured by this Deed of Trust and sale of the Property.
The notice shall further inform Borrower of the right to reinstate after acceleration and the
right to bring a court action to assert the nonexistence of a default or any other defense of Borrower
to acceleration and sale. If the breach is not cured on or before the date specified in the notice,
Lender, at Lender's option, may declare all of the sums secured by this Deed of Trust to be
immediately due and payable without further demand and may invoke the power of sale and any
other remedies permitted by applicable law. Lender shall be entitled to collect all reasonable costs
and expenses incurred in pursuing the remedies provided in this Section 16, including, but not
limited to, reasonable attorneys' fees.
If Lender invokes power of sale, Lender shall execute or cause Trustee to execute a written
notice of the occurrence of an event of default and of Lender's election to cause the Property to be
sold and shall cause such notice to be recorded in each county in which the Property or some part
thereof is located. Lender or Trustee shall mail copies of such notice in the manner prescribed by
applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed
by law. After the lapse of such time as may be required by applicable law, Trustee, without
demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and
place and under the terms designated in the notice of sale in one or more parcels and in such order
as Trustee may determine. Trustee may postpone sale of all or any parcel of the Property by public
announcement at the time and place of any previously scheduled sale. Lender or Lender's designee
may purchase the Property at any sale.
Trustee shall deliver to the purchaser Trustee's deed conveying the Property so sold
without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall
be prima facie evidence of the truth of the statements made therein. Trustee shall apply the
proceeds of the sale in the following order:
(1) to all reasonable costs and expenses of the sale, including, but not limited to,
reasonable Trustee's and attorneys' fees and costs of title evidence;
(2) to all sums secured by this Deed of Trust; and
CITY OF NATIONAL CITY PAGE 6 OF 12
HOME -DEED OF TRUST
Exhibit B
(3) the excess, if any, to the person or persons legally entitled thereto.
17. Borrower's Right to Reinstate.
(a) Curable Breach. Notwithstanding Lender's acceleration of the sums secured by this
Deed of Trust due to Borrower's breach (default), Borrower shall have the right to have any
proceedings begun by Lender to enforce this Deed of Trust discontinued at any time prior to five (5)
days before the sale of the Property pursuant to the power of sale contained in this Deed of Trust or
at any time prior to entry of a judgment enforcing this Deed of Trust if:
(1) Borrower pays Lender all sums which would be then due under this Deed
of Trust and the HOME Note had no acceleration occurred;
(2) Borrower cures all breaches of any other covenants or agreements of
Borrower contained in this Deed of Trust;
(3) Borrower pays all reasonable expenses incurred by Lender and the Trustee
in enforcing the covenants and agreements of Borrower contained in this Deed of Trust, including,
but not limited to, reasonable attorneys' fees; and
(4) Borrower takes such action as Lender may reasonably require to assure that
the lien of this Deed of Trust, Lender's interest in the Property and Borrower's obligation to pay
the sums secured by this Deed of Trust shall continue unimpaired.
Upon such payment and cure by Borrower as set forth in this Section 17(a), this Deed of Trust
and the obligations secured hereby shall remain in full force and effect as if no acceleration had
occurred.
(b)
Non -Curable Breach.
(1) Failure to Occupy/Renting Out the Property is a Violation of Law. Borrower
hereby acknowledges that the loan evidenced by the HOME Note and secured by this Deed of Trust
was funded by Lender using U.S. Department of Housing and Urban Development ("HUD") Home
Investments Partnership Act ("HOME") funds. Section 215 of the HOME Investment Partnerships
Act (42 U.S.C. §12745) and the HOME program regulations (24 C.F.R. §92.254) require Borrower
to occupy the Property as Borrower's principal residence. Renting out the Property (in whole or in
part) and/or Borrower's failure to occupy the Property as Borrower's principal residence is a violation
of State of California and Federal law (in addition to being a violation of the HOME Note, Declaration
and this Deed of Trust). Lender is obligated by Federal law to enforce the provisions of the HOME
program, Lender's failure to do so would jeopardize the Lender's ability to obtain additional HOME
funds from HUD and help other low-income families to obtain affordable housing.
(2) Failure to Occupy/Renting Out the Property Materially Impairs Lender's
Security. Borrower hereby acknowledges and agrees that renting out the Property (in whole or in
CITY OF NATIONAL CITY PAGE 7 OF 12
HOME -DEED OF TRUST
Exhibit B
part) and/or Borrower's failure to occupy the Property as Borrower's principal residence, materially
impairs the Lender's security for the loan and the Lender's ability to obtain additional HOME funds
from HUD and help other low-income families to obtain affordable housing. Borrower further
acknowledges that if the Property is rented out (in whole or in part) and/or Borrower fails to occupy
the Property as Borrower's principal residence, then during any such period the Property will not
qualify as "affordable housing" and the Lender may be in breach of its obligations to HUD and
therefore the Lender's security for the loan will be materially impaired.
(3) Failure to Occupy/Renting Out the Property is a Non -Curable Breach.
Borrower hereby acknowledges and agrees that renting out the Property (in whole or in part) and/or
Borrower's failure to occupy the Property as Borrower's principal residence, will be a non -curable
breach and the Lender shall have the right to accelerate the loan and foreclose on the Property as
provided herein. Notwithstanding anything to the contrary set forth in this Deed of Trust,
Borrower agrees that in the event Borrower rents out the Property and/or fails to occupy the
Property as Borrower's principal residence, Borrower shall not have the right to cure the
breach and reinstate the loan, this Deed of Trust or the obligations secured hereby.
(4) Borrower's Waiver. Borrower hereby knowingly waives and relinquishes any
and all legal and/or contractual rights Borrower may have to cure or otherwise reinstate this Deed of
Trust and the obligations secured hereby, in the event that Property is rented out (in whole or in part)
and/or Borrower fails to occupy the Property as Borrower's principal residence.
(5) Representation of Comprehension. Borrower acknowledges and agrees that
Lender has advised Borrower (and each of them if there is more than one Borrower) to retain an
attorney to represent Borrower with respect to the loan secured by this Deed of Trust. By executing
this Deed of Trust, Borrower (and each of them if there is more than one Borrower) represents that:
(i) Borrower fully understands and accepts the terms of this Deed of Trust, the HOME Note and
Declaration; (ii) Borrower has relied upon the legal advice of Borrower's attorneys or that Borrower
has freely and independently chosen not to seek the advice of an attorney; (iii) that neither the Lender
nor its attorneys represents Borrower; (iv) that Borrower has had a full and ample opportunity to
consult with any other professionals of Borrower's choice in connection with the rights and liabilities
created by this Deed of Trust, the HOME Note and Declaration; (v) that Borrower does not have any
questions with regard to the legal import of any term, word, phrase, or portion of this Deed of Trust,
the HOME Note or Declaration, or any of the foregoing documents in their entireties; and (vi)
Borrower accepts the terms of this Deed of Trust, the HOME Note and Declaration as written.
18. Assignment of Rents; Appointment of Receiver; Lender in Possession. As additional security
hereunder, upon acceleration of the HOME Note or abandonment of the Property, Lender, in person,
by agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and
manage the Property and to collect the rents of the Property including those past due. All rents
collected by Lender or the receiver shall be applied first to payment of the cost of management of the
Property and collection of rents, including, but not limited to, receiver's fees, premiums on receiver's
bonds and reasonable attorneys' fees, and then to the sums secured by this Deed of Trust. Lender and
the receiver shall be liable to account only for those rents actually received.
19. Reconveyance. Upon satisfaction of both of the following conditions: (i) payment of all sums
secured by this Deed of Trust and (ii) termination of the Declaration, Lender shall request Trustee to
CITY OF NATIONAL CITY PAGE 8 OF 12
HOME -DEED OF TRUST
Exhibit B
reconvey the Property and will surrender this Deed of Trust and all notes evidencing indebtedness
secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty to the
person or persons legally entitled thereto. Such person or persons shall pay all costs of recordation,
if any.
20. Substitute Trustee. Lender, at Lender's option, may from time to time appoint a successor
trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender
and recorded in the office of the Recorder of the county where the Property is located. The instrument
shall contain the name of the original lender, Trustee and Borrower, the book and page where this
instrument is recorded, and the name and address of the successor trustee. The successor trustee shall,
without conveyance of the Property, succeed to all the title, power and duties conferred upon the
Trustee herein and by applicable law. This procedure for substitution of trustee shall govern to the
exclusion of all other provisions for substitution.
21. Request for Notices. Borrower requests that copies of the notice of sale be sent to Borrower's
address which is the Property Address.
22. Statement of Obliag tion. Lender may charge a fee not to exceed the amount allowed by law
for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California.
23. Covenants, Conditions and Restrictions. The Property is subject to the Declaration which
is not attached hereto but is incorporated herein by reference. Borrower acknowledges receipt of
the Declaration and agrees, for himself, his heirs, successors and assigns to be bound by the same.
The obligations of Borrower under the Declaration shall be independent of, and in addition to,
Borrower's obligations under the HOME Note, and repayment of the HOME Note shall not
terminate or otherwise affect the Declaration.
24. Representations and Warranties of Borrower. Borrower represents and warrants, and a
violation thereof shall constitute a default/breach of this Deed of Trust, to the Lender as follows:
(a) Annual Gross Income. Borrower's annual gross income, including the income of
any co -purchasers or co -tenants, at the time of the execution of this Deed of Trust
does not exceed eighty percent (80%) of the area median income for the San Diego -
Carlsbad -San Marcos Metropolitan Statistical Area, as determined by HUD.
(b) Principal Place of Residence. For so long as this Deed of Trust is recorded against
the Property, Borrower will reside in the Property as Borrower's principal place of
residence. The Borrower shall be considered as occupying the Property as a
principal place of residence if the Borrower is living on the Property for at least ten
(10) months out of each calendar year. Borrower agrees not to neglect, sublet, lease
or rent out all or any portion of the Property during such period.
(c) Liquid Assets. At the time of the execution of this Deed of Trust, Borrower,
including any co -purchasers or co -tenants, and any other household members, does
not hold, directly or indirectly, "liquid assets", as defined below, whose aggregate
value exceeds $25,000 As used herein, the term "liquid assets" refers to cash and
CITY OF NATIONAL CITY PAGE 9 OF 12
HOME -DEED OF TRUST
Exhibit B
assets which are readily convertible to cash within a reasonable period, including
but not limited to savings and checking accounts, certificates of deposit of any term,
marketable securities, money market and similar accounts, mutual fund shares, and
insurance policy cash values. The term "liquid assets" shall not include retirement
funds which are not readily accessible or which cannot be accessed by the buyer
without the buyer incurring a penalty.
(d) Not a Full -Time Student. Borrower is not, and none of the co -purchasers or co-
tenants of Borrower are, a full-time student, or a household comprised exclusively
of persons who are full-time students, unless such persons are married and eligible
to file a joint federal income tax return. The term "full-time student" shall be
defined as any person who will be or has been a full-time student during five
calendar months of the calendar year in question at an educational institution (other
than a correspondence school) with regular faculty and students.
(e) Not a Student Dependent. Borrower is not, and none of the co -purchasers or co-
tenants of Borrower are, a student dependent as defined in the U.S. Internal
Revenue Code, unless the taxpayer (upon whom the student in question is
dependent) resides in the Property.
(f) Not an Owner of Real Property. Borrower does not, and none of the co -purchasers
of Borrower, own any real property at the time of escrow closing for the subject
Property.
(g) First -Time Home Buyer, Displaced Homemaker or Single Parent. Borrower
satisfies at least one of the following criteria:
(1) Borrower is a first-time home buyer; that is, he or she has not owned
a home within the three-year period immediately preceding the date
of this Deed of Trust;
(2) Borrower is a displaced homemaker as defined in 24 C.F.R. §92.2;
or
(3) Borrower is a single parent as defined in 24 C.F.R. §92.2.
25. Request for Notice of Default. Lender requests that copies of notices of foreclosure from the
holder of any lien which has priority over this Deed of Trust be sent to Lender's address, as set forth
on page 1 of this Deed of Trust, as provided by Section 2924b of the Civil Code of California.
26. Refinancing. Neither the Property, nor any portion thereof, shall be refinanced without the
written consent of the Lender, except as otherwise allowed by law. The Lender may withhold any
such consent in its sole and absolute discretion, nothing contained herein shall obligate the Lender
to agree to Borrower's request to refinance the Property or any portion thereof
CITY OF NATIONAL CITY PAGE 10 OF 12
HOME -DEED OF TRUST
Exhibit B
27. Severability. If any provision of this Deed of Trust is deemed to be invalid or unenforceable
by a court of competent jurisdiction, that provision shall be severed from the rest of this Deed of
Trust and the remaining provisions shall continue in full force and effect.
28. Usury Savings Clause. If a court of competent jurisdiction determines, by way of final
unappealable order or judgment that the interest rate charged under the HOME Note is usurious,
then such rate shall automatically and retroactively be reduced to the maximum rate allowed under
applicable law.
29. Waiver by Lender. Any provision hereof, including without limitation, the requirement
that Borrower occupy the Property, may be waived only with the advance written approval of the
Lender and HUD for good cause shown.
30. Subordination of Deed of Trust. Borrower concurrently has executed a deed of trust or
mortgage in favor of ("Senior Deed of Trust"). This Deed of Trust is subordinate
to the Senior Deed of Trust on the Property, which the Senior Deed of Trust is senior in recording
priority to this Deed of Trust. Any party, and its successors and assigns, receiving title to the
Property through a trustee's sale, judicial foreclosure sale, or deed in lieu of foreclosure of such
Senior Deed of Trust, or assignment of the Senior Deed of Trust to the Secretary of U.S.
Department of Housing and Urban Development, and any conveyance or transfer thereafter, shall
receive title free and clear of the provisions of this Deed of Trust.
31. HOME Period. The loan evidenced by the HOME Note and secured by this Deed of Trust
was funded by Lender using U.S. Department of Housing and Urban Development ("HUD") Home
Investments Partnership Act ("HOME") funds. The HOME program regulations (24 C.F.R. Part
92), apply for a period of years, from the date of recordation of this Deed of Trust.
Beginning years after the date of recordation of this Deed of Trust, and for the remainder
of the term of the HOME Note, the Property will continue to be subject to this Deed of Trust, but
shall no longer be subject to the HOME program regulations.
Date:
Date:
IN WITNESS WHEREOF, Borrower has executed this Deed of Trust.
Borrower:
Borrower:
CITY OF NATIONAL CITY PAGE 11 OF 12
HOME -DEED OF TRUST
Exhibit B
EXHIBIT "A"
Legal Description of the Property
Property Address: , National City, California
CITY OF NATIONAL CITY DEED OF TRUST EXHIBIT "A"
Exhibit B
ACKNOWLEDGMENT
State of California )
County of San Diego )
On 20 before me,
notary public personally appeared
who proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on
behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public
(Seal)
CITY OF NATIONAL CITY DEED OF TRUST ACKNOWLEDGMENT
Exhibit B
ACKNOWLEDGMENT
State of California )
County of San Diego )
On 20 before me,
notary public personally appeared
who proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on
behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public
(Seal)
CITY OF NATIONAL CITY DEED OF TRUST ACKNOWLEDGMENT
Exhibit B
, 20
Date
PROMISSORY NOTE
(HUD HOME Investment Partnership Act Program 3% Deferred)
("HOME Note")
City Loan No.
Property Address: , National City, California ("Property")
1. Borrower's Promise to Pay. In return for a loan ("HOME Loan" or "Loan") that the
undersigned ("Borrower") has received, Borrower promises to pay U.S. Dollars ($ )
("Principal") to the order of the lender, City of National City ("Lender"). Borrower acknowledges
and agrees that Lender may transfer this HOME Note. Lender or anyone who takes this HOME
Note by transfer and who is entitled to receive payments under this HOME Note will be called the
"Note Holder." In addition to the protection given to the Note Holder under this HOME Note, this
HOME Note shall be secured by a deed of trust ("Deed of Trust") and Declaration of Covenants,
Conditions, and Restrictions ("Declaration") made by Borrower in favor of the Lender and
recorded as an encumbrance against the Property.
2. Compliance with HOME Requirements. Borrower acknowledges and agrees that the
HOME Loan is subject to the terms, conditions, and restrictions of the HOME Investment
Partnerships Act (42 U.S.C. §12745) and the HOME program regulations (24 C.F.R. Part 92), all
of which are hereby incorporated by reference, for a period of years, from the date of
recordation of the Deed of Trust. Beginning years after the date of recordation of the Deed
of Trust, and for the remainder of the term of this HOME Note, the Property will continue to be
subject to the restrictions set forth in this HOME Note, but shall no longer be subject to the HOME
program regulations.
3. 3% Deferred Interest. This HOME Note shall accrue simple interest at the rate of 3% per
annum. Provided, however, in the event Borrower defaults under the terms of this HOME Note,
the Deed of Trust, or the Declaration, or any other document secured by the Declaration, Deed of
Trust, or the Property, then Borrower shall owe Lender the "Default Interest." "Default Interest"
means interest accrued from the date of this HOME Note, in an amount equal to ten percent (10%)
simple interest per annum.
4. Pam. Borrower shall pay principal and all accrued interest (either simple interest or
default interest, as the case may be), in one lump sum, to Lender upon the earliest of: (1) a Sale
(as defined in Section 5, below); (2) a default after completion of the applicable acceleration
procedures set forth in Section 6, below; or (iii) thirty (30) years from the date first written above.
Borrower shall make any payments at Lender's offices located at the City of National City Finance
Department's office located at 1243 National City Boulevard, National City, California 91950, or
such other place as designated by Lender. Notwithstanding the foregoing, in the event of a Sale,
where the net proceeds available from the sale are less than the amount that would otherwise be
due hereunder, then the Lender shall be entitled to recapture the net proceeds available from the
CITY OF NATIONAL CITY PAGE 1 OF 8
HOME -PROMISSORY NOTE
Exhibit B
Sale. Net proceeds are defined as the sales price minus repayment of all senior loans and any
closing costs. "Senior loans" means loans that are superior to the Deed of Trust. In the event of
any Sale which is not a foreclosure or an arm's-length transaction. The "sales price" shall be
determined by an appraiser holding a MAI designation from the Appraisal Institute that has at least
five (5) years of experience in the geographic area in which the Property is located, selected by the
Lender in its sole discretion.
5. Sale Defined. The following shall all be considered transfers or sales of the Property and
shall be referred to herein generally as a "Sale": (i) all or any part of the Property or any interest
in the Property is sold, conveyed or transferred; (ii) if Borrower is not a natural person and a
beneficial interest in Borrower is sold, conveyed or transferred; (iii) all or any part of the Property
is refinanced or further encumbered, except as otherwise allowed by law; (iv) Borrower does not
occupy the Property as his, her, or their, primary residence; (v) the leasing of all or any part of the
Property; (vi) any material breach of this HOME Note, the Declaration, Deed of Trust, or any other
agreement or obligation secured by the Property; or (vii) the filing of bankruptcy by the Borrower.
Notwithstanding the foregoing, a refinancing of the Property shall not be considered a default,
provided the Lender provides written consent to Borrower prior to the refinancing, which consent
may be granted or withheld in the sole and absolute discretion of the Lender.
6. Acceleration (Default).
(a) Acceleration, Remedies. Upon Borrower's default (breach) of this HOME Note,
the Deed of Trust, Declaration, or any other document secured by the Deed of Trust, Declaration,
and/or the Property, Lender shall give notice to Borrower prior to acceleration, such notice shall
include:
(1) a description of the breach;
(2) the action required to cure such breach (if any);
(3) a date, not less than ten (10) days from the date the notice is mailed to
Borrower, by which such breach must be cured; and
(4) a statement that failure to cure such breach on or before the date specified
in the notice may result in acceleration of the sums secured by the Deed of Trust and sale of the
Property.
The notice shall further inform Borrower of the right to reinstate after acceleration and the
right to bring a court action to assert the nonexistence of a default or any other defense of Borrower
to acceleration and sale. If the breach is not cured on or before the date specified in the notice,
Lender, at Lender's option, may declare all of the sums secured by the Deed of Trust to be
immediately due and payable without further demand and may invoke the power of sale and any
other remedies permitted by applicable law, including, but not limited to, as provided in and
pursuant to the procedure set forth in the Deed of Trust. Lender shall be entitled to collect all
reasonable costs and expenses incurred in pursuing the remedies provided in this Section 6,
including, but not limited to, reasonable attorneys' fees.
CITY OF NATIONAL CITY PAGE 2 OF 8
HOME -PROMISSORY NOTE
Exhibit B
(b) Borrower's Right to Reinstate.
(1) Curable Breach. Notwithstanding Lender's acceleration of the sums
secured by the Deed of Trust due to Borrower's breach, Borrower shall have the right to have any
proceedings begun by Lender to enforce the Deed of Trust discontinued at any time prior to five
(5) days before the sale of the Property pursuant to the power of sale contained in the Deed of
Trust or at any time prior to entry of a judgment enforcing the Deed of Trust if:
(A) Borrower pays Lender all sums which would be then due under this
HOME Note and the Deed of Trust had no acceleration occurred;
(B) Borrower cures all breaches of any other covenants or agreements
of Borrower contained in the Deed of Trust;
(C) Borrower pays all reasonable expenses incurred by Lender and the
trustee in enforcing the covenants and agreements of Borrower contained in the Deed of Trust,
including, but not limited to, reasonable attorneys' fees; and
(D) Borrower takes such action as Lender may reasonably require to
assure that the lien of the Deed of Trust, Lender's interest in the Property and Borrower's
obligation to pay the sums secured by the Deed of Trust shall continue unimpaired.
Upon such payment and cure by Borrower as set forth in this Section 6(b)(1), the Deed of
Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration
had occurred.
(2)
Non -Curable Breach.
(A) Failure to Occupy/Renting Out the Property is a Violation of Law.
Borrower hereby acknowledges that the Loan evidenced by this HOME Note and secured by the
Deed of Trust and Declaration was funded by Lender using U.S. Department of Housing and Urban
Development ("HUD") Home Investments Partnership Act ("HOME") funds. Section 215 of the
HOME Investment Partnerships Act (42 U.S.C. §12745) and the HOME program regulations (24
C.F.R. §92.254) require Borrower to occupy the Property as Borrower's principal residence.
Renting out the Property (in whole or in part) and/or Borrower's failure to occupy the Property as
Borrower's principal residence is a violation of State of California and Federal law (in addition to
being a violation of this HOME Note). Lender is obligated by Federal law to enforce the provisions
of the HOME program, Lender's failure to do so would jeopardize Lender's ability to obtain
additional HOME funds from HUD and help other low-income families to obtain affordable
housing.
(B) Failure to Occupy/Renting Out the Property Materially Impairs
Lender's Security. Borrower hereby acknowledges and agrees that renting out the Property (in
whole or in part) and/or Borrower's failure to occupy the Property as Borrower's principal
residence, materially impairs Lender's security for the Loan and Lender's ability to obtain
CITY OF NATIONAL CITY PAGE 3 OF 8
HOME -PROMISSORY NOTE
Exhibit B
additional HOME funds from HUD and help other low-income families to obtain affordable
housing. Borrower further acknowledges that if the Property is rented out (in whole or in part)
and/or Borrower fails to occupy the Property as Borrower's principal residence, then during any
such period the Property will not qualify as "affordable housing" and Lender may be in breach of
its obligations to HUD and therefore the Lender's security for the Loan will be materially impaired.
(C) Failure to Occupy/Renting Out the Property is a Non -Curable
Breach. Borrower hereby acknowledges and agrees that renting out the Property (in whole or in
part) and/or Borrower's failure to occupy the Property as Borrower's principal residence, will be
a non -curable breach and Lender shall have the right to accelerate the Loan and foreclose on the
Property as provided herein. Notwithstanding anything to the contrary set forth in this HOME
Note, Borrower agrees that in the event Borrower rents out the Property (in whole or in part)
and/or fails to occupy the Property as Borrower's principal residence, Borrower shall not
have the right to cure the breach and reinstate the Loan, the Deed of Trust or the obligations
secured thereby.
(D) Borrower's Waiver. Borrower hereby knowingly waives and
relinquishes any and all legal and/or contractual rights Borrower may have to cure or otherwise
reinstate the Deed of Trust and the obligations secured thereby, in the event that Property is rented
out (in whole or in part) and/or Borrower fails to occupy the Property as Borrower's principal
residence.
(E) Representation of Comprehension. Borrower acknowledges and
agrees that Lender has advised Borrower (and each of them if there is more than one Borrower) to
retain an attorney to represent Borrower with respect to the Loan evidenced by this HOME Note.
By executing this HOME Note, Borrower (and each of them if there is more than one Borrower)
represents that: (i) Borrower fully understands and accepts the terms of this HOME Note, the Deed
of Trust, and Declaration; (ii) Borrower has relied upon the legal advice of Borrower's attorneys
or that Borrower has freely and independently chosen not to seek the advice of an attorney; (iii)
that neither the Lender nor its attorneys represents Borrower; (iv) that Borrower has had a full and
ample opportunity to consult with any other professionals of Borrower's choice in connection with
the rights and liabilities created by this HOME Note, the Deed of Trust, and Declaration; (v) that
Borrower does not have any questions with regard to the legal import of any term, word, phrase,
or portion of this HOME Note, the Deed of Trust, or Declaration, or any of the foregoing
documents in their entireties; and (vi) Borrower accepts the terms of this HOME Note, the Deed
of Trust and Declaration as written.
7. No Assumption. This HOME Note is not assumable, except as otherwise allowed by law.
8. Borrower's Payments Before They Are Due. Borrower has the right to make payments of
principal at any time before they are due. Borrower may make a full prepayment or a partial
prepayment. All payments received on account of this HOME Note shall be first applied to
accrued interest and the remainder shall be applied to the reduction of principal. Borrower may
make a full prepayment at any time. The obligations of Borrower under the Declaration shall be
independent of, and in addition to, Borrower's obligations under this HOME Note, and repayment
of this HOME Note shall not terminate or otherwise affect the Declaration.
CITY OF NATIONAL CITY PAGE 4 OF 8
HOME -PROMISSORY NOTE
Exhibit B
9. Representations and Warranties of Borrower. Borrower represents and warrants, and a
violation thereof shall constitute a default/breach of this HOME Note, to the Lender as follows:
(a) Annual Gross Income. Borrower's annual gross income, including the income of
any co -purchasers or co -tenants, at the time of the execution of this HOME Note
does not exceed eighty percent (80%) of the Area Median Income for the San
Diego -Carlsbad -San Marcos Metropolitan Statistical Area, as determined by HUD.
(b) Principal Place of Residence. For so long as the Deed of Trust is recorded against
the Property, Borrower will reside in the Property as Borrower's principal place of
residence. The Borrower shall be considered as occupying the Property as a
principal place of residence if the Borrower is living in the Property for at least ten
(10) months out of each calendar year. Borrower agrees not to neglect, sublet, lease
or rent out all or any portion of the Property during such period.
(c) Liquid Assets. At the time of the execution of this HOME Note, Borrower,
including any co -purchasers or co -tenants, does not hold, directly or indirectly,
"liquid assets", as defined below, whose aggregate value exceeds $25,000. As used
herein, the term "liquid assets" refers to cash and assets which are readily
convertible to cash within a reasonable period, including but not limited to savings
and checking accounts, certificates of deposit of any term, marketable securities,
money market and similar accounts, mutual fund shares, and insurance policy cash
values. The term "liquid assets" shall not include retirement funds which are not
readily accessible or which cannot be accessed by the buyer without the buyer
incurring a penalty.
(d) Not a Full -Time Student. Borrower is not, and none of the co -purchasers or co-
tenants of Borrower are, a full-time student, or a household comprised exclusively
of persons who are full-time students, unless such persons are married and eligible
to file a joint federal income tax return. The term "full-time student" shall be
defined as any person who will be or has been a full-time student during five
calendar months of the calendar year in question at an educational institution (other
than a correspondence school) with regular faculty and students.
(e) Not a Student Dependent. Borrower is not, and none of the co -purchasers or co-
tenants of Borrower are, a student dependent as defined in the U.S. Internal
Revenue Code, unless the taxpayer (upon whom the student in question is
dependent) resides in the Property.
(f) Not an Owner of Real Property. Borrower does not, and none of the co -purchasers
of Borrower, own any real property at the time of escrow closing for the subject
Property.
(g) First -Time Home Buyer, Displaced Homemaker or Single Parent. Borrower
satisfies at least one of the following criteria:
CITY OF NATIONAL CITY PAGE 5 OF 8
HOME -PROMISSORY NOTE
Exhibit B
(1) Borrower is a first-time home buyer; that is, he or she has not owned a home
within the three-year period immediately preceding the date of this HOME
Note; provided, however, an individual shall not be disqualified as a first-
time homebuyer on the basis that the individual owns or owned, as a
principal residence during the three-year period, a dwelling unit whose
structure is not permanently affixed to a permanent foundation in
accordance with local or other applicable regulations or is not in compliance
with State, local, or model building codes, or other applicable codes, and
cannot be brought into compliance with the codes for less than the cost of
constructing a permanent structure;
(2) Borrower is a displaced homemaker as defined in 24 C.F.R. §92.2; or
(3) Borrower is a single parent as defined in 24 C.F.R. §92.2.
10. Borrower's Waiver. Borrower hereby waives the rights to require the Note Holder to do
certain things if Borrower does not keep the promises made in this HOME Note, the Deed of Trust
or the Declaration. Those things are:
and
(a) to demand payment of amounts due (known as "presentment");
(b) to give notice that amounts due have not been paid (known as "notice of dishonor");
(c) to obtain any official certification of nonpayment (known as "protest")
11. Giving of Notices. Any notice that must be given to Borrower under this HOME Note will
be given by delivering it or by mailing it by certified mail addressed to Borrower at the Property
address. Any notice that must be given to the Note Holder under this HOME Note will be given
by mailing it by certified mail to the City of National City Finance Department's office located at
1243 National City Boulevard, National City, California 91950 or such other address as Lender
may designate in writing.
12. Responsibility of Persons Under This Note. If more than one person signs this HOME
Note, each of them is fully and personally obligated to pay the full amount owed and to keep all
promises made in this HOME Note. The Note Holder may enforce its rights under this HOME
Note against each person that signs this HOME Note individually or against all of them together.
This means that any one of the persons that sign this HOME Note may be required to pay all of
the amounts owed under this HOME Note. Any person who takes over the rights of the persons
that sign this HOME Note or obligations under this HOME Note will have all of the rights of the
persons that sign this HOME Note and must keep all of the promises made in this HOME Note.
13. Attorneys' Fees. Upon the breach of the terms of this HOME Note, the Deed of Trust or
Declaration, the Borrower agrees to pay Lender any and all attorneys' fees, court costs, trustee
CITY OF NATIONAL CITY PAGE 6 OF 8
HOME -PROMISSORY NOTE
Exhibit B
fees, and any and all other fees and costs incurred by Lender as a result of said breach and/or
default.
14. Severability. If any provision of this HOME Note is deemed to be invalid or unenforceable
by a court of competent jurisdiction, that provision shall be severed from the rest of this HOME
Note and the remaining provisions shall continue in full force and effect.
15. Governing Law. This HOME Note shall be construed in accordance with and be governed
by the laws of the State of California.
16. No Waiver by the Lender. No waiver of any breach, default or failure of condition under
the terms of this HOME Note, the Deed of Trust, the Declaration, or any obligation secured thereby
shall thereby be implied from any failure of the Lender to take, or any delay by the Lender in
taking action with respect to such breach, default or failure or from any previous waiver of any
similar or unrelated breach, default or failure; and a waiver of any term of this HOME Note, Deed
of Trust, Declaration, or any of the obligations secured thereby must be made in writing and shall
be limited to the express written terms of such waiver.
17. Usury. If a court of competent jurisdiction determines, by way of final unappealable order
or judgment that the interest rate charged under this HOME Note is usurious, then such rate shall
automatically and retroactively be reduced to the maximum rate allowed under applicable law.
NOTICE TO BORROWER:
Do not sign this HOME Note if it contains blank spaces. All spaces should be
completed before you sign.
Date:
Date:
Borrower:
Borrower:
CITY OF NATIONAL CITY PAGE 7 OF 8
HOME -PROMISSORY NOTE
Exhibit B
APPENDIX K
HOME FIRST-TIME HOMEBUYER PROGRAM LOAN DISCLOSURE
The City of National City First -Time Homebuyer Program provides up to $20,000 in "gap"
financing for eligible low-income buyers for 1-unit property. Specific terms and conditions of the
assistance are specifically stated in the Promissory Note secured by a Deed of Trust and
Regulatory Agreement. A general summary of the program is as follows:
1. Buyers will sign a Promissory Note and Deed of Trust, for a loan in second position (or
third position with City approval if City HUD HOME funds are used), in favor of the City
of National City.
2. Buyers will sign a Regulatory Agreement
3. The loan term is 30-years
4. After year 30 principal loan and accrued interest will be due and payable.
5. If at any time before 30 years the property is sold or refinanced, the loan will be due
and payable consistent with the terms and conditions of the Promissory Note and Deed
of Trust.
6. If at any time the buyer defaults on any terms or conditions of the loan and agreement
with the City under the FTHB Program, additional accrued interest will be due in
addition to the principal of the loan.
7. The loan may be paid by buyer at any time without pre -payment penalty.
Please sign and date this form acknowledging that you have read and understand the terms of
the loan that you are entering in to as summarized above.
Date:
Buyer:
Print Name
Buyer:
Print Name
Signature
Signature
Exhibit B
APPENDIX L
CITY OF NATIONAL CITY
FIRST-TIME HOMEBUYER PROGRAM
ERROR AND OMISSIONS/COMPLIANCE AGREEMENT
The City of National City First -Time Homebuyer Program (FTHB) provides "gap" financing for
eligible low- and moderate -income buyers.
The undersigned Borrower(s) for and in consideration of the City funding the closing of the
FTHB loan agrees, if requested by City of Program Administrator, to fully cooperate and adjust
for clerical errors, any or all loan closing documentation if deemed necessary or desirable in the
reasonable discretion of City.
The undersigned Borrower(s) agree(s) to comply with all noted requests by the City and/or
Program Administrator within 5 days from date of mailing said requests.
Date:
Buyer:
Print Name
Buyer:
Print Name
Signature
Signature
Appendix L