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HomeMy WebLinkAbout2009 CON CDC Homeowner's Regulatory Agreement HOME Program - C GomezFREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 • WHEN RECORDED PLEASE MAIL TO: The Community Development Commission of National City 1243 National City Boulevard National City, CA 91950-4397 APN: 551-650-34-00 DO # 2OO9-O J�3'g94 I IIIIIIII III IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIII IIII JUN 29, 2009 8:48 AM OFFICIAL RECORDS SAN CDIEGO COUNTY RECORDER'S OFFICE DAVID L. BUTLER, COUNTY RECORDER FEES 0.00 PAGES: 9 IIIIIIIIIIIIIIIIIBIIIIIIIIHIIIIIIIIIIIIIIIIIIUIIIIIIIIUIIINIIIHlllnl1IIII HOMEOWNER'S REGULATORY AGREEMENT FOR HOME PROGRAM PARTICIPATION 3013 THIS REGULATORY AGREEMENT ("Regulatory Agreement" or "Agreement") is entered into as of this 27th day of May, 2009 between the Community Development Commission of the City of National City ("CDC"), and a Qualifying Household, on behalf if itself and Rebecca C Gomez ("Owner"). PREFACE WHEREAS, the City of National City receives a formula HOME Investment Partnership ("HOME") allocation from the Federal Department of Housing and Urban Development to carry out eligible activities in accordance with program requirements, and WHEREAS, the CDC administers HOME program funds for the City of National City for the purpose of providing homeownership programs to low-income first-time homebuyers in the City of National City, and WHEREAS, the Owner is interested in participating in CDC's HOME -funded First -Time Homebuyer Program, and will comply with all program rules and requirements, and WHEREAS, concurrently with the recordation of this Regulatory Agreement, the CDC is funding a loan secured by a deed of trust ("CDC Deed of Trust") to aid Owner, who is a first-time homebuyer, in acquiring the Property described below. The CDC Trust Deed and loan by the CDC was conditioned in part upon the recordation of a document setting forth certain restrictions upon the use and sale of the Property ; and WHERAS, Owner will use the proceeds of such loan for the acquisition of the real property with the street address of 204 Visayan , National City, California, more particularly described in Exhibit A attached and incorporated by this reference ("Property"); and WHEREAS, as further consideration for the loan and to further the interests of CDC, the Owner has agreed to enter into and record this Agreement. The covenants in this Agreement are intended to run with the land and be binding on Owner for the full term of this Agreement. NOW, THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWS., Owner shall receive HOME Investment Partnership funds for investment in real property owned by the Owner, as evidenced by legal title or a valid contract of sale. Acting in this capacity, the Owner will comply with all aspects of HOME regulations 24 CFR §92.504 including the following: A. DEFINITIONS The following terms have the meanings and content set forth in this Section A where used in this Agreement or attached exhibits. 1. "AREA MEDIAN INCOME" means the median income for the San Diego County Primary Metropolitan Statistical Area (PMSA), with adjustments for household size, as adjusted from time to time by the U.S. Dept. of Housing and Urban Development (HUD). 2. "CDC" is the Community Development Commission of the City of National City, a public body corporate and politic. Page 1 of 9 RECEIVED SEP 15 2009 )Iri urilty Dprnent Commis9iorl Initials 3. "DEED OF TRUST" means any deed of trust, assignment of rents, and security agreement placed on the Property or any part thereof as security for any Loan and other obligations with Owner as trustor and CDC as beneficiary, as well as any amendments to, modification of, and restatements of said deed (s) of 3d /, trust. 7" 4. "EFFECTIVE PERIOD" means the period commencing on the date of this agreement and endin30 the repayment of the loan from CDC, including any required Equity. 5. "EIGHTY PERCENT OF AREA MEDIAN INCOME" means annual income, which does not exceed eighty percent (80%) of the Area Median Income. 6. "HUD" means the United States Department of Housing and Urban Development. 7. "HOME FUNDS/HOME INVESTMENT": funds received pursuant to the HOME Investment Partnership Program under the Department of Housing and Urban Development (HUD), codified at 42 U.S.C. Section 12701, et seq., 24 CFR Part 92, to provide funds for affordable housing. 8. "HOMEOWNER INVESTMENT": homeowner's down payment and any capital improvement investment made by the owner since purchase. 9. "HOUSE" means the residential dwelling unit that is located on the Property. 10. "LOAN" is any loan of funds provided by CDC to any Owner for the purchase of the Property. 11. "LOAN DOCUMENTS" are collectively the Deed of Trust, Note, Note Rider, this Agreement and any loan agreement, deed of trust, or promissory note entered into between CDC and Owner with respect to any of the Property, as they may be amended, modified or restated from time to time, along with all exhibits and attachments to these documents. 12. "NOTE" means the promissory note and note rider executed by Owner in favor of CDC evidencing any part of a Loan, which is secured by a Deed of Trust, as well as any amendments to, modifications or, or restatements of said promissory note. The Note will be on file with CDC. 13. "OWNER" or "OWNERS" is the Qualifying Household that is the purchaser of the Property. 14. "PROPERTY" means the real property located at: 204 Visayan Street National City, California, and described in the attached Exhibit A, which is hereby incorporated into this Agreement by this reference, and any buildings or improvements now or hereafter situated on said real property. 15. "QUALIFYING HOUSEHOLD" means a household whose income is Eighty Percent of Area Median Income, as determined periodically by HUD, with adjustments in accordance with 24 CFR 92.252, and who is otherwise eligible to purchase the Property. 16. "QUALIFYING SALES PRICE" means a sales price that does not exceed 87% of the FHLMC conforming loan amount for a (1)-unit property in the City of National City, as may be amended from time to time. B. TERM OF AGREEMENT The term of this Agreement shall remain in full force and effect during the Effective Period regardless of any expiration of the term of any Loan, any payment or prepayment of any Loan, any assignment of a Note, any reconveyance of a Deed of Trust, or any sale, assignment, transfer, or conveyance of the Property, unless terminated earlier by CDC in writing or extended by the mutual consent of the parties. However, failure to record this Agreement by CDC shall not relieve Owner of any of the obligations specified herein. The covenants in this Agreement will run with the land for the benefit of CDC and its heirs, assigns and successors and be binding on Owner and Owner's heirs, assigns and successors for the full term of this Agreement. C. USE OF FUNDS The Loan will be used to acquire the Property. D. AFFORDABILITY 1. The House will qualify as affordable housing and will have: a. an initial purchase price that is a Qualifying Sales Price; and b. an estimated appraised value at acquisition that does not exceed Qualifying Sales Price. 2. The House must be the principal residence of the Owner at all times during the Effective Period. Page 2 of 9 Initials 3. The deferred Loan for the HOME -assisted House is $ 189,426.00 E. , RECAPTURE OF HOME FUNDS 3015 1. Pursuant to 24 CFR 92.254(a)(ii), CDC requires that HOME funds be recaptured if the housing does not continue to be the principal residence of the family. If there is a "transfer" the principal amount of the Note, together with a share of the "Equity" (if any), as hereafter defined, shall be immediately due and payable to the CDC. A "transfer" means (i) all or any part of the Property or any interest in the Property is sold, conveyed or transferred; (ii) Owner is not a natural person and a beneficial interest in Owner is sold, conveyed or transferred; (iii) all or any part of the Property is refinanced, except as otherwise allowed by law; (iv) Owner 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 the Note, Deed of Trust or this Agreement; or (vii) the filing of bankruptcy by the Owner. The Equity in the Property shall be calculated and shared between the Owner and CDC on the following basis: # Months After Date of Agreement Buyer's Equity Share (Increases 5% per year) CDC Equity Share (Decreases 5% per year) 0-12 (50%) (50%) 13-24 (55%) (45%) 25-36 (60%) (40%) 37-48 (65%) (35%) 49-60 (70%) (30%) 61-72 (75%) (25%) 73-84 (80%) (20%) 85-96 (85%) (15%) 97-108 (90%) (10%) 109-120 (95%) (5%) Thereafter (100%) (0%) If, for example, the Property is sold, rented, refinanced, conveyed, or transferred in the first year of the term of the Note secured by this Deed of Trust, Owner shall receive fifty percent (50%) of the Equity in the Property and CDC shall receive fifty percent (50%) of the Equity. "Equity" is defined as the dollar amount that constitutes the difference between the sales price of the Property (or in the event of a sale of the Property for an amount other than its fair market value or where there is no price established for the Property (i.e., rental or refinancing the Property, Borrower's failure to occupy the Property, material breach of the Note, Deed of Trust or this Agreement; or the filing of bankruptcy by the Borrower, the fair market value of the Property determined by an appraiser chosen by the Beneficiary in its sole discretion) and the sum of the following amounts: (a) principal on the First Note and the Deed of Trust, along with any interest and fees due thereon; and (b) principal on the Note and Deed of Trust, along with any interest and fees due thereon; and (c) all costs of sale, including costs of brokers' commissions, escrow fees, title costs and fees, recording costs, etc.; and (d) current year taxes, including all pro-rata real estate taxes calculated to the date of sale; and (e) (f) (9) borrower's down payment not including the loan from CDC to Owner; and all principal paid down on the First Note and Deed of Trust; and costs of any improvements to the Property, provided such improvements were approved by CDC prior to construction and provided that such improvements have been documented to the satisfaction of CDC. The amount of the Owner's share in the Equity of the Property shall increase by five percent (5%) per year, measured on the anniversary of the date of the Deed of Trust is recorded against the Property. Correspondingly, CDC's share in the equity of the Property shall decrease by five percent (5%) per annum. For the sake of example, if the Property is sold more than five (5) but less than six (6) years after the date of the Deed of Trust is recorded against the Property, CDC would have a twenty five percent (25%) share in the Equity and the Owner would have a seventy five percent (75%) share in the Equity of the Property. Page 3 of 9 Initials In the event that no Equity exists at the time of transfer or sale, the balance of the Note (item E.1.b above) will be due and payable as provided herein. In the event that a negative Equity situation exists, i.e., the proceeds from the sale of the Property are less than the balance of the Note, all net proceeds from the transfer or sale shall be paid to Beneficiary in full satisfaction of the Note. F. PROPERTY MANAGEMENT 3016 1. Maintenance and Security. During the Effective Period, Owner shall at his or her own expense maintain the Property in good condition, in good repair, and in decent, safe, sanitary and habitable living conditions for the benefit of that Owner's household. Owner shall maintain the Property in conformance with all applicable state, federal and local laws, ordinances, codes and regulations. 2. In the event that Owner fails to maintain the Property in accordance with these standards and after at least thirty (30) business days prior notice to Owner, CDC or CDC'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 CDC's discretion, and provide for payment thereof. Any amount advanced by CDC to make such repairs, together with interest thereon from the date of such advance at the rate of seven percent (7%) per annum (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 of the Owner to CDC and shall be secured by any Deed of Trust, if not previously reconveyed. G. REPAYMENTS HOME Funds that are loaned to the Owner are to be remitted (principal and interest, as warranted) to CDC to be retained and used as program income for additional First -Time Homebuyers. H. PROPERTY REQUIREMENTS Compliance with the following requirements is required as follows: 1) Maximum per -unit subsidy amount. The amount of HOME funds that a participating jurisdiction may invest on a per -unit basis in affordable housing will not exceed the per -unit dollar limits established by HUD. 2) Property Standards. Housing that is assisted with HOME funds, at a minimum, must meet Section 8 Housing Quality Standards. 3) Property Cost Limits. The value of acquisition and development of the housing units must not exceed eighty- seven percent (87%) of the FHLMC conforming loan amount for a (1)-unit property, located in the City of National City, as may be amended from time to time. 4) Occupancy Requirements. The HOME Program requires that occupancy standards must be maintained for the Effective Period for each of the assisted Houses as follows: (1) The prospective purchaser must be low income; that is, the purchaser must have an annual (gross) income that does not exceed Eighty Percent (80%) of Area Median Income, which will be determined at either the time the household initially occupies the property or at the time the HOME funds are invested; whichever is later. (2) Each Owner must occupy the property as a principal residence. Only loan default and subsequent foreclosure negates the principal residence limitation. 5) Ownership Interest. The purchaser must have fee simple title upon sale of a HOME -assisted unit or cooperative ownership interest upon sale of a HOME -assisted unit. 6) Refinance. CDC will subordinate to the following refinance situations only, subject to CDC approval and additional documentation is required: (1) FHA streamline refinance, with a reduction in total PITI and no cash out. (2) VA rate reduction refinance, with a reduction in total PITI and no cash out. (3) Conventional rate and term refinance, with a reduction in total PITI and no cash out. I. REVERSION OF ASSETS. Owner must transfer to CDC any HOME funds remaining in the Property after the time of expiration of the Effective Period when there is a change to title on the Property or any sale, rental, refinance, conveyance or transfer of Property. Any funds received as a result of this reversion of assets shall be used for additional HOME -eligible activities. Page 4 of 9 Initials J. DEFAULTS AND REMEDIES. In the event of any breach or violation of any agreement or obligation under this Agreement, CDC may proceed with any or all of the remedies as described in paragraph 18 of the Deed of Trust. 3017 K. NON -LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS. No officer, official, director, employee, agent or representative of CDC shall be personally liable to Owner for any obligation created under the terms of this Agreement except in the case of actual fraud or willful misconduct by such person. L. INDEMNITY. Notwithstanding the insurance coverage required herein, Owner shall indemnify and hold CDC and its officers, officials, directors, employees, agents and authorized representatives (each, an "Indemnified Party," and collectively, "Indemnified Parties"), free and harmless against any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including attorney's fees) which any Indemnified Party may incur as a direct or indirect consequence of (1) Owner's failure to perform any obligations as and when required by this Agreement; (2) any failure of any of Owner's representations or warranties to be true and complete; or (3) any act or omission by Owner or any contractor, subcontractor, management agent, or supplier with respect the Property, except where such losses are caused by the sole negligence or willful misconduct of Indemnified Parties. Owner shall pay immediately upon CDC's demand any amounts owing under this indemnity. The duty of the Owner to indemnify includes the duty to defend Indemnified Parties in any court action, administrative action, or other proceeding brought by any third party arising from the Property. Owner's duty to indemnify Indemnified Parties shall survive the term of this Agreement. M. SUBORDINATION. This Agreement shall be subordinated in priority only to the liens and encumbrances approved in writing by CDC in its sole and absolute discretion. N. GENERAL PROVISIONS 1. Governing Law. This Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law. 2. This Agreement Controls. In the event that any provisions of this Agreement and any Loan Documents conflict, the terms of this Agreement shall control. 3. Time. Time is of the essence in this Agreement. 4. Consents and Approvals. For those provisions of this agreement which are expressly subject to consent or approval of CDC, said consent or approval shall not be unreasonably withheld. Any approval must be in writing and executed by an authorized representative of CDC. 5. Notices, Demands and Communications. Formal notices, demands and communications between Owner and CDC shall be sufficiently given and shall not be deemed given unless dispatched by mailing it first class mail or by certified mail, return receipt requested, to the principal offices of Owner and CDC as follows: The Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950-4397 New Owner: Rebecca C Gomez Address: 204 Visayan Street National City, CA 91950 Any such written communications by mail shall be conclusively deemed to have been received by the addressee five days after the deposit thereof in the United States Mail, postage prepaid and properly addressed as noted above. 6. Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 7. Attorney's Fees. In the event of any litigation over the performance of this Agreement, the prevailing party shall be entitled to attorney's fees and costs incurred during the course of litigation. Page 5 of 9 IN WITNESS HEREOF, CDC and the Owner have executed this Agreement as of the date first hereinafter set forth. CDC: , The Community Development Commission of the City of National C. By: Print Name: Bad�Qau1S}Gel Its: Execufivc. Direci-or OWNER: Name: Rebecca C. Gomez Page 6 of 9 Initials 3018 ACKNOWLEDGMENT STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) 3019 On MA 12 8 , 2009 before me, Michael Dalla, City Clerk, personally appeared ARAb RAvLs7D J , who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct (SEAL) WITNESS my hand and official seal �l� 1il�Jf� MICHEL DALLA CITY CLERK OF THE CITY OF NATIONAL CITY Page 8 of 9 FTHB # 551-650-34-00 APN: 0907-NCO2 • ACKNOWLEDGMENT State of California ) County of San Diego ) 3020 On 3,1�- 3 2-u01.1 before me, L Ili Al) A L appeared �c b e Cc � C. , G a Notary Public, personally (1'l e Zr who proved to me on the basis of satisfactory evidence to be the person(, whose name(.) subscribed to the within instrument, and acknowledged to me that he/sue/they executed the same in his/lz&their authorized capacity(ij, and that by his/lam/their signature( on the instrument the person(), 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. ET Signature of Notary E. N. MALONE Commission # 1735829 Notary Public - California San Diego County Comm. Page 7 of 9 Initials Legal Description << t T 3021 LOT 34 OF PACIFIC VIEW ESTATES CASE NO. S-2004-16, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORD) 1G TO MAP THEREOF NO. 15556, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 29, 2007. Page 9 of 9 Initials 2. (7)0