HomeMy WebLinkAbout2009 CON CDC Homeowner's Regulatory Agreement HOME Program - E CalderonCuero°';'
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
WHEN RECORDED PLEASE MAIL TO:
Community Development Department
City of National City
1243 National City Boulevard
National City, CA 91950-4397
1
040
Qoc # 207 7-oo53s7 0
11111111101111111111111111111111111111111111111111111111111111111
JAN 28, 2011 8:00 AM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
Ernest J. Dronenburg, Jr., COUNTY RECORDER
FEES: 0.00
PAGES:
9
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(SPACE ABOVE FOR RECORDER'S USE ONLY,
APN: 563-131-02-00 FTHB #1103-H1-NC
HOMEOWNER'S REGULATORY AGREEMENT FOR HOME PROGRAM PARTICIPATION
THIS REGULATORY AGREEMENT ("Regulatory Agreement" or "Agreement") is entered into as of this
18th day of January, 2011 between the City of National City ("City"), and a Qualifying Household, on behalf of
itself and Eugenio Calderon ("Owner"). _
PREFACE
WHEREAS, the City of National City receives a formula HOME Investment Partnerships ("HOME") Program
allocation from the Federal Department of Housing and Urban Development to carry out eligible activities in
accordance with program requirements; and
WHEREAS, the Owner is interested in participating in City 's HOME -funded First -Time Homebuyer Program,
and will comply with all program regulations and requirements; and
WHEREAS, concurrently with the recordation of this Regulatory Agreement the City is funding a loan ("Loan")
secured by a deed of trust ("Deed of Trust") to aid Owner, who is a first-time homebuyer, in acquiring the Property
described below. The Trust Deed and Loan by the City was conditioned in part upon the recordation of a document
setting forth certain restrictions upon the use and sale of the Property; and
WHEREAS, Owner will use the proceeds of such Loan for the acquisition of the real property with the street
address of 2825 J Avenue, National City, California, 91950 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 the City, 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 the Owner for the full term of
this Agreement.
NOW, THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWS;
The 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). �G
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2. "CITY" is of the City of National City, California, a public body corporate and politic.
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 City as beneficiary, as well as any amendments to, modification of, and restatements of said
deed (s) of trust.
4. "EFFECTIVE PERIOD" means the period commencing on the date of this agreement and ending on
the repayment of the Loan from the City, including the repayment of any required Equity as defined
in Section E of the Agreement.
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 the City to any Owner for the purchase of the Property.
1 1 . "LOAN DOCUMENTS" are collectively the Deed of Trust, Note, Note Rider, this Regulatory
Agreement and any loan agreement, deed of trust, or promissory note entered into between City 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 City 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 the City.
13. "OWNER" or "OWNERS" is the Qualifying Household that is the purchaser of the Property.
14. "PROPERTY" means the real property located at: 2825 J Street, National City , California, 91950
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 95 percent (95%) of the
median purchase price for the area, as determined by the U.S. Department of Housing and Urban
Development.
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 the City in writing or extended by the mutual consent of the parties. However, failure to
record this Agreement by the City 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 the City 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 by the Owner who is a member of a Qualifying Household.
D. AFFORDABILITY
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Owner Initials
ii
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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.
3. The deferred Loan for the HOME -assisted House is $ 40,000.00.
E. RECAPTURE OF HOME FUNDS
Pursuant to 24 CFR 92.254(a) (ii), the City 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
City. A "transfer" means (i) all or any part of the Property or any interest in the Property that 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 City on the following basis:
# Months After Date of
Agreement
Buyer's Equity Share
(Increases 5% per year)
City 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
the City 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) borrower's down payment not including the Loan from the City to the Owner; and
(f) all principal paid down on the First Note and Deed of Trust; and
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(g) costs of any improvements to the Property, provided such improvements were
approved by the City prior to construction and provided that such improvements
have been documented to the satisfaction of the City.
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,
the City'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, the City 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.
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 the
City, as beneficiary in full satisfaction of the Note. When the HOME recapture requirement is triggered by a sale
(voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to
repay the home investment due, the participating jurisdiction can only recapture the net proceeds, if any. The net
proceeds are the sales price minus superior Loan repayment (other that HOME funds) and any closing costs.
F. PROPERTY 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.
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, 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 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 the City 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 the City to be
retained and used as program income to originate additional Loans to 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 unit, located in the
City of National City must not exceed 95 percent (95%) of the median price for the area, as
determined by the U.S. Department of Housing and Urban Development.
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:
(a) 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.
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(b) 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. The City will subordinate to the following refinance situations only, subject to City approval
and additional documentation is required:
(a) FHA streamline refinance, with a reduction in total PITI and no cash out.
(b) VA rate reduction refinance, with a reduction in total PITI and no cash out.
(c) Conventional rate and term refinance, with a reduction in total PITI and no cash out.
I. REVERSION OF ASSETS
Owner must transfer to the City 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.
J. DEFAULTS AND REMEDIES
In the event of any breach or violation of any agreement or obligation under this Agreement, the City may proceed
with any or all of the remedies as described in paragraph 18 of the Deed of Trust.
K. NON -LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS
No officer, official, director, employee, agent or representative of the City 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 City 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 the City'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 the
City 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.
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4. Consents and Approvals. For those provisions of this agreement which are expressly subject to
consent or approval of the City, said consent or approval shall not be unreasonably withheld. Any
approval must be in writing and executed by an authorized representative of the City.
5. Notices, Demands and Communications. Formal notices, demands and communications between
Owner and the City 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 City as follows:
Community Development Department
City of National City
1243 National City Boulevard
National City, CA 91950-4397
New Owner: Eugenio Calderon
Address: 2825 J Avenue
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.
IN WITNESS HEREOF, the City and the Owner have executed this Agreement as of the date first hereinafter set
forth.
City of Nat' I City
By:
Ron Morrison, Mayor
Owner:
By:/1/1/!/�L
io Calderon
Page 6 of 7 Owner Initials eC
ACKNOWLEDGMENT
State of California )
County of San Diego )
1046
On January 20, 2011 before me, Charles A. Nissley Jr., a Notary Public, personally appeared Ron Morrison 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.
1.10.R1Fsl� r11NLEY Ift
aCsibille
COMM.1117N224
l�coupi re
1_
Signature of Notary\
1047
ACKNOWLEDGMENT
State of California
County of SAN DIEGO
On January 21, 2011 before me, Mary Ann Erickson, Notary Public
(insert name and title of the officer)
personally appeared Eugenio Calderon
who proved to me on the basis of satisfactory evidence to be the person(g) whose name(.) is/afe
subscribed to the within instrument and acknowledged to me that he/shaithey executed the same in
his/kw/their authorized capacityEiae); and that by his/hcrfthcir signature(2)-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.
Signature
MARY ANN ERICKSCN
Commission # 1839452
z,rr, Notary Public - California
San Diego County
My Comm. Expires Mar 5, 2013
"Exhibit A"
Legal Description
(must be attached prior to recordation)
The land referred to herein is situated in the State of CALIFORNIA, County of SAN DIEGO, and described as
follows:
1048
LOT 2, BLOCK 3 OF OLIVEWOOD TERRACE, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1542, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, MARCH 8, 1913.
Assessor's Parcel Number: 563-131-02-00
Page 7 of 7 Owner Initials e o