HomeMy WebLinkAbout2010 CON CDC San Diego Habitat for Humanity - Amendment DDA Affordable HousingFIRST AMENDMENT TO
DISPOSITION AND DEVELOPMENT AGREEMENT
(1441 Harding)
THIS FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT
AGREEMENT ("Amendment") is entered into as of this 6 " day of Pa a , 2010, by and
between the Community Development Commission of the City of National City, a public body,
corporate and politic ("CDC"), and San Diego Habitat for Humanity, Inc., a California nonprofit
corporation ("Developer").
RECITALS
A. Developer and the CDC entered into that certain Disposition and Development
Agreement, dated AQ 9" a , 2009 (the "DDA").
B. Developer and the CDC desire to revise and update the "Resale Restriction" that
was attached as "Attachment 10" to the DDA.
C. Unless otherwise defined herein, all capitalized terms used in this Amendment
shall have the meanings attributed to them in the Agreement.
Now, therefore, in consideration of the foregoing and other good and valuable
consideration, Developer and the CDC agree as follows:
1. Replacement of Attachment 10. Attachment 10 to the DDA is hereby deleted in its
entirety and replaced with Exhibit "A" attached hereto.
2. Confirmation of Obligations. Except as expressly amended or modified herein, the DDA
shall remain unmodified and in full force and effect. Except to the extent modified by this
Amendment, Developer hereby confirms each of the covenants, agreements and obligations of
Developer set forth in the DDA.
3. Counterparts. This Amendment may be executed in any number of counterparts and, as
so executed. the counterparts shall constitute one and the same instrument.
4. Exhibits and Recitals Incorporated. All exhibits referred to in this Amendment are
hereby incorporated in this Amendment by this reference, regardless of whether or not the
exhibits are actually attached to this Amendment. The Recitals to this Agreement are hereby
incorporated in this Agreement by this reference.
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5. Authority to Sign. All individuals signing this Amendment for a party which is a
corporation, limited liability company, partnership or other legal entity, or signing under a power
of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the
CDC that they have the necessary capacity and authority to act for, sign and bind the respective
entity or principal on whose behalf they are signing.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
DEVELOPER:
San Diego Habitat for Humanity, Inc, a California nonprofit public benefit corporation
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By c: rciU
Print Name: Q
Title: Cs¢.G.a„—0Crec-- Ar—
CDC:
Community Development Commission of the City of National City
By:
Print Name: o.J //os.r
Title: C ,rj
APPROVED AS TO FORM:
George H.'Eiser, III
City Attomey
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Exhibit A
Resale Restriction
Recording Requested By:
Community Development Commission
of the City of National City
1243 National City Boulevard
National City, CA 91950-4397
And When Recorded Mail To:
Community Development Commission
of the City of National City
1243 National City Boulevard
National City, CA 91950-4397
AFFORDABLE HOUSING RESALE RESTRICTIONS,
OPTION TO DESIGNATE ELIGIBLE PURCHASERS AND
OPTION TO PURCHASE UPON DEFAULT
(1441 Harding Avenue)
This Affordable Housing Resale Restrictions, Option to Designate Eligible Purchasers
and Option to Purchase Upon Default ("Resale Restriction") is executed this day of
, 2010, by the Community Development Commission of the City of National
City ("CDC"), and by , as owner
("Owner") of the real property located in the City of National City, County of San Diego, State
of California, more particularly described on Exhibit "A" attached hereto (the "Restricted Unit").
RECITALS
A. Owner is purchasing the Restricted Unit from San Diego Habitat for Humanity,
Inc. ("Habitat") concurrently with the execution and delivery of this Resale Restriction. The
Restricted Unit is part of a larger parcel of real property (the "Habitat Property") that was
previously sold by the CDC to Habitat.
B. The CDC purchased the Habitat Property from the previous owner utilizing HUD
HOME funds. HUD HOME funds are to be used solely for the construction, use and occupancy
of affordable housing in accordance with 24 Code of Federal Regulations Part 92. Owner and
the CDC are executing this Resale Restriction and causing it to be recorded against the
Restricted Unit in order to ensure compliance with the HUD HOME program, including without
limitation compliance with 24 Code of Federal Regulations Part 92.
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C. The purpose of this Resale Restriction include, without limitation, to: (i) establish
resale and occupancy restrictions for the Restricted Unit; (ii) reserve to the CDC an option to
designate eligible purchasers, as hereafter defined, to acquire the Restricted Unit; (iii) to restrict
the Restricted Unit with this Resale Restriction for a period of forty-five (45) years, and (iv) to
grant to CDC an option to acquire the Restricted Unit in the event of a default by the Owner of
the terms of this Resale Restriction.
D. Concurrently herewith Owner is executing a promissory note in favor of the CDC
("CDC Note"). The CDC Note and the Resale Restriction shall be secured by a deed of trust
("Deed of Trust") executed by Owner in favor of the CDC. The Deed of Trust shall be recorded
in the Office of the County Recorder of San Diego County against the Restricted Unit,
concurrently with recordation of this Resale Restriction.
NOW, THEREFORE, CDC and Owner hereby declare and restrict the Restricted Unit as
follows:
1. Representations and Warranties of Owner. Owner declares, represents and warrants to
the Commission and agrees as follows:
(a) Annual Gross Income. Owner's annual gross income, including the income of
any co -purchasers, at the time of the execution of this Resale Restriction does not exceed sixty
percent (60%) of the Area Median Income. "Area Median Income" means the lesser of: (i) the
median income for the San Diego metropolitan area, as adjusted for family size, as said median
income is determined by HUD; or (ii) the median income for the San Diego metropolitan area, as
adjusted for family size, as said median income is determined by the California Department of
Housing and Community Development.
(b) Principal Place of Residence. Owner will reside in the Restricted Unit as Owner's
principal place of residence until the earlier of: (i) the sale of the Restricted Unit in accordance
with the terms of this Resale Restriction; or (ii) forty-five (45) from the date this Resale
Restriction is recorded against the Restricted Unit. Owner shall be considered as occupying the
Restricted Unit as a principal place of residence if the Owner is living in the Restricted Unit for
at least ten (10) months out of each calendar year. Owner shall not to sublet, lease or rent out all
or any portion of the Restricted Unit during the term of this Resale Restriction.
(c) Liquid Assets. At the time of the execution of this Resale Restriction, Owner,
including any co -purchasers, does not hold, directly or indirectly, "liquid assets", as defined
below, whose aggregate value exceeds one hundred percent (100%) of the then -current annual
Area Median Income. 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 team "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.
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(d) Not a Full -Time Student. Owner is not, and none of the co -purchasers of Owner
is, 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. Owner is not, and none of the co -purchasers or co-
tenants of Owner is, 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 Restricted Unit.
(f) Not an Owner of Real Property. Owner does not, and none of the co -purchasers
of Owner, own any real property at the time of escrow closing for the Restricted Unit.
(g) First -Time Home Buyer, Displaced Homemaker or Single Parent. Owner satisfies
at least one of the following criteria:
(1) Owner 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 Resale Restriction;
(2) Owner is a displaced homemaker; or
(3)
Owner is a single parent.
2. Acknowledgment and Certification. Any purchaser of the Restricted Unit from Owner
and any subsequent purchaser from such purchaser or successors (hereinafter each is referred to
as "Purchaser") shall certify his/her acknowledgment receipt of this Resale Restriction and all
the provisions and restrictions contained herein, on a form approved by the CDC in its sole
discretion.
3. Restrictions on Transfer.
(a) Forty -Five Year Affordable Term. For a period of forty-five (45) years commencing
on the date this Resale Restriction is recorded in the Office of the County Recorder of San Diego
County against the Restricted Unit (the "Affordable Term"), any transfer of the Restricted Unit
shall be subject to the provisions of this Resale Restriction. Any subsequent transfer by a
Purchaser to a subsequent Purchaser shall also be subject to the provisions of this Resale
Restriction until the end of the Affordable Term.
(b) Transfer Defined. "Transfer" shall mean: (i) all or any part of the Restricted Unit or
any interest in the Restricted Unit is sold, conveyed or transferred; (ii) if Owner is not a natural
person and a beneficial interest in Owner is sold, conveyed or transferred; (iii) all or any part of
the Restricted Unit is refinanced or further encumbered, except as otherwise allowed by law; (iv)
Owner does not occupy the Restricted Unit as his, her, or their, primary residence; (v) the leasing
of all or any part of the Restricted Unit; (vi) any material breach of this Resale Restriction; or
(vii) the filing of bankruptcy by Owner. Notwithstanding the foregoing, a refinancing of the
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Restricted Unit shall not be considered a Transfer, provided the CDC provides written consent to
Owner prior to the refinancing, which consent may be granted or withheld in the sole and
absolute discretion of the CDC. Transfer shall not include transfer to a spouse in a dissolution
proceeding, to a spouse who marries the Purchaser after the Purchaser has acquired title to the
Restricted Unit, or to a Purchaser who originally acquired title to the Restricted Unit as a co-
owner with a spouse, who acquires the deceased spouse's interest in the Restricted Unit, upon a
death of that spouse.
4. Maintenance and Inspection of Restricted Unit. Purchaser shall maintain the Restricted
Unit and the improvements thereon in good condition and repair throughout the Purchaser's
period of ownership of the Restricted Unit. In addition, upon CDC's receipt of a notice of intent
to transfer as detailed in Section 5 below, CDC shall be given the right to enter and to inspect the
Restricted Unit to determine whether any violations of applicable building, plumbing, electric,
fire, housing or other applicable codes exist and whether the Restricted Unit has been maintained
in good condition, upon reasonable written notice of not less than ten (10) days. CDC shall
notify Purchaser with regard to any noted code violations and maintenance deficiencies
(collectively, the "Deficiencies"), and Purchaser shall cure the Deficiencies in a reasonable
manner acceptable to the CDC within sixty (60) days of being notified in writing of the result of
the inspections. Should the Purchaser fail to cure all the Deficiencies prior to the scheduled date
for the close of escrow, at the option of the CDC or an Eligible Purchaser as defined in Section 7
below, escrow may be closed, title passed and money paid to the Purchaser subject to the
condition that such funds as are necessary to pay for curing the Deficiencies, based upon written
estimates obtained by the CDC, shall be withheld from the money due the Purchaser and held by
the escrow holder for the purpose of curing the Deficiencies. The CDC and/or the Eligible
Purchaser shall cause the Deficiencies to be cured and, upon certification of completion of work
by the CDC, the escrow holder shall utilize such funds to pay for said work. Any remaining
funds shall be paid to the Purchaser.
5. Notice of Transfer. In the event the Purchaser intends to transfer the Restricted Unit, the
Purchaser shall promptly notify the CDC in writing of such intent ("Notice of Intent to
Transfer"), by certified mail return receipt requested, to the Community Development
Commission of the City of National City 1243 National City Blvd., National City, California
91950, or such other address as the CDC may designate. The Purchaser has the right to
withdraw the Notice of Intent to Transfer prior to the opening of escrow to purchase the
Restricted Unit.
6. CDC's Option to Designate an Eligible Purchaser. Upon receipt of the Notice of the
Intent to Transfer, the CDC shall have the option, but not the duty, to designate an Eligible
Purchaser to purchase the Restricted Unit in the manner set forth hereunder, if the proposed
transferee is not approved for any reason. Within thirty (30) days of receipt by the CDC of the
Notice of Intent to Transfer, the CDC shall: (1) notify the Purchaser of the Maximum Sales
Price, as defined in Section 8 herein, to be paid for the Restricted Unit; (2) inspect the Restricted
Unit as described in Section 4, above; and (3) notify the Purchaser regarding whether or not the
CDC intends to exercise its option to designate an alternate Eligible Purchaser. The notification
to the Purchaser regarding the option to designate an eligible Purchaser shall be sent by certified
mail return receipt requested. If the CDC exercises this option to designate a Purchaser, it shall
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cause an escrow to purchase the Restricted Unit to be opened within thirty (30) days following
such notification to the Purchaser, and it shall cause the Restricted Unit to be purchased by its
designated Eligible Purchaser within the ninety (90) days following the receipt by the CDC of
the Purchaser's Notice of the Intent To Transfer.
7. Transfer to Eligible Purchaser. In the event the CDC does not exercise its option to
designate an Eligible Purchaser, the transfer of the Restricted Unit by the Purchaser must be to
an Eligible Purchaser. An Eligible Purchaser shall be any household meeting the criteria set
forth in Section 1(a)-(g), above.
8. Determination of Maximum Sales Price.
(a) Calculation of Maximum Sales Price. The maximum amount of money and/or
other consideration, of any kind whatsoever, that the Owner (or any subsequent Purchaser selling
the Restricted Unit) may receive for any transfer of the Restricted Unit shall be called the
"Maximum Sales Price." Maximum Sales Price" shall mean the lesser of: (i) the sum of (A) the
purchase price which would result in a Monthly Housing Cost, as determined by the CDC, which
does not exceed the product of one twelfth (1/12) of thirty percent (30%) times sixty percent
(60%) of the then Area Median Income as adjusted for household size appropriate for the unit,
plus (B) the amount of the CDC Note plus (C) down payments to be determined; or (ii) the
Single Family Mortgage Limit for the County of San Diego under Section 203(b) of the National
Housing Act (12 U.S.C. §1709(b)) or any other limitation then provided by Code of Federal
Regulations §92.254(a) or any successor law or regulation. In the case where there is no
Purchaser of the Restricted Unit, the CDC shall calculate the principal and interest payments
assuming a five (5%) percent down payment and that the annual interest rate is the then Fannie
Mae 90-day delivery rate.
(b) Monthly Housing Cost. "Monthly Housing Cost" shall mean all of the following
associated with the Restricted Unit, estimated or known as of the date of the close of escrow of
the sale of the Restricted Unit: (i) principal and interest payments on the 30 year, fixed-rate
mortgage loan actually obtained by the Purchaser, and any loan insurance fees associated
therewith; (ii) property taxes. assessments, including Mello Roos fees, if applicable; (iii) fire and
casualty insurance covering replacement value of property improvements (to the extent not
covered by the homeowner association encompassing the Site); (iv) any homeowner association
fees; (v) private mortgage insurance, if applicable; and (vi) reasonable costs of utilities. Monthly
Housing Cost shall be an average of estimated costs for the next twelve (12) month period as of
the date of the close of escrow of the sale of the Affordable Unit.
9. Defaults and Remedies.
(a) Acceleration, Remedies. Upon Owner (or any Purchaser's) breach of this Resale
Restriction, the CDC Note, the Deed of Trust or any other obligation or document secured by the
Restricted Unit, the CDC shall give notice to Owner (or the Purchaser, as applicable) prior to
acceleration, such notice shall include:
(1)
a description of the breach;
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(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
Owner, 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
Restricted.
The notice shall further inform Owner (or the Purchaser, as applicable) 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 Owner to acceleration and sale. If the breach is not cured on or
before the date specified in the notice, CDC, at CDC'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, as provided in
and pursuant to the procedure set forth in the Deed of Trust. CDC shall be entitled to collect all
reasonable costs and expenses incurred in pursuing the remedies provided in this Section 9,
including, but not limited to, reasonable attorneys' fees.
(b) Owner's Right to Reinstate.
(1) Curable Breach. Notwithstanding CDC's acceleration of the sums secured
by the Deed of Trust due to Owner or a Purchaser's breach, Owner or any Purchaser shall have
the right to have any proceedings begun by CDC to enforce the Deed of Trust discontinued at
any time prior to five (5) days before the sale of the Restricted Unit 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) Owner or Purchaser pays CDC all sums which would be then due
under the CDC Note and the Deed of Trust had no acceleration occurred;
(B) Owner or Purchaser cures all breaches of any other covenants or
agreements of Owner or Purchaser under this Resale Restriction and the Deed of Trust;
(C) Owner or Purchaser pays all reasonable expenses incurred by CDC
and the trustee in enforcing the covenants and agreements of Owner or Purchaser contained in
this Resale Restriction or the Deed of Trust, including, but not limited to, reasonable attorneys'
fees; and
(D) Owner or Purchaser takes such action as CDC may reasonably
require to assure that the lien of the Deed of Trust, CDC's interest in the Restricted Unit and
Owner's or Purchaser's obligation to pay the sums secured by the Deed of Trust shall continue
unimpaired.
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Upon such payment and cure by Owner or Purchaser as set forth in this Section 9(b)(1),
this Resale Restriction, 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 Restricted Unit is a Violation of
Law. Owner and each Purchaser hereby acknowledges that the loan evidenced by the CDC Note
and secured by the Deed of Trust was funded by the CDC 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 Owner and each Purchaser to occupy the Restricted Unit
as their principal residence. Renting out the Restricted Unit and/or Owner or any Purchaser's
failure to occupy the Restricted Unit as their principal residence is a violation of State of
California and Federal law (in addition to being a violation of this Resale Restriction). CDC is
obligated by Federal law to enforce the provisions of the HOME program, CDC's failure to do
so would jeopardize CDC'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 Restricted Unit Materially
Impairs CDC's Security. Owner and each Purchaser hereby acknowledges and agrees that
renting out the Restricted Unit and/or Owner or any Purchaser's failure to occupy the Restricted
Unit as their principal residence, materially impairs CDC's security for the CDC Note and
CDC's ability to obtain additional HOME funds from HUD and help other low-income families
to obtain affordable housing. Owner and each Purchaser further acknowledges that if the
Restricted Unit is rented out and/or Owner or any Purchaser fails to occupy the Restricted Unit
as their principal residence, then during any such period the Restricted Unit will not qualify as
"affordable housing" and CDC may be in breach of its obligations to HUD and therefore the
CDC's security for the loan will be materially impaired.
(C) Failure to Occupy/Renting Out the Restricted Unit is a Non -
Curable Breach. Owner and each Purchaser hereby acknowledges and agrees that renting out the
Restricted Unit and/or Owner or any Purchaser's failure to occupy the Restricted Unit as their
principal residence, will be a non -curable breach and CDC shall have the right to accelerate the
loan and foreclose on the Restricted Unit as provided herein. Notwithstanding anything to the
contrary set forth in this Resale Restriction, Owner and each Purchaser agrees that in the
event Owner or any Purchaser rents out the Restricted Unit and/or fails to occupy the
Restricted Unit as their principal residence, neither Owner or any Purchaser shall have the
right to cure the breach and reinstate this Resale Restriction, the loan, the Deed of Trust or
the obligations secured thereby.
(D) Owner's Waiver. Owner and each Purchaser hereby knowingly
waives and relinquishes any and all legal and/or contractual rights Owner and any Purchaser may
have to cure or otherwise reinstate the Deed of Trust and the obligations secured thereby, in the
event the Restricted Unit is rented out and/or Owner or any Purchaser fails to occupy the
Restricted Unit as their principal residence.
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(E) Representation of Comprehension. Owner and each Purchaser
hereby acknowledges and agrees that CDC has advised Owner and each Purchaser (and each of
them if there is more than one Owner or Purchaser) to retain an attorney to represent them with
respect to this Resale Restriction. By executing this Resale Restriction, Owner and each
Purchaser (and each of them if there is more than one Owner or Purchaser) represents that: (i)
each of them fully understands and accepts the terms of this Resale Restriction, the CDC Note
and Deed of Trust; (ii) each of them has relied upon the legal advice of their attorneys or they
have freely and independently chosen not to seek the advice of an attorney; (iii) that neither the
CDC nor its attorneys represents them; (iv) each of them has had a full and ample opportunity to
consult with any other professionals of their choice in connection with the rights and liabilities
created by this Resale Restriction, the CDC Note and Deed of Trust; (v) that none of them has
any questions with regard to the legal import of any term, word, phrase, or portion of this Resale
Restriction, the CDC Note and Deed of Trust, or any of the foregoing documents in their
entireties; and (vi) each of them accepts the terms of this Resale Restriction, the CDC Note and
Deed of Trust as written.
10. CDC's Option to Purchase Upon Default. In addition to the remedies provided the CDC
in Section 9 above, the CDC has and is hereby granted the option ("Option") to purchase the
Restricted Unit effective upon the declaration of a written default by the CDC. The CDC's
option to purchase may be exercised upon a default under this Resale Restriction decision to
exercise its option to purchase the Restricted Unit on the following terms and conditions:
(a) Grant of Option. Owner and all subsequent Purchasers hereby grant to CDC an option
(the "Option") to purchase the Restricted Unit on the terms and conditions set forth herein. The
purchase price payable by the CDC to the Owner for the Restricted Unit (the "Option Price")
shall be the greater of (a) the Maximum Sales Price, as defined in Section 8 hereof, or (b) the
sum of the current balance of the First Lien ("First Lien" means the lien of the institution making
the purchase money loan to the Owner for the purchase of the Restricted Unit and/or any
acceptable refinancings), plus the Owner's share of escrow, title and other closing costs as set
forth in Section 4 hereof. The Option created hereby shall be irrevocable by Owner and shall be
binding upon the successors and assigns of Owner. The CDC shall have the right of specific
performance to enforce the terms of this Option.
(b) Term and Consideration for Option. The term of the Option ("Option Term") shall
commence on the date of this Resale Restriction, and shall expire upon the expiration or
termination of the Affordable Term.
(c) Exercise of Option. The Option may be exercised by CDC's delivery to Owner of
written notice of such exercise (the "Exercise Notice") only upon the occurrence of an event of
default under the First Lien. In the event that the CDC exercises the Option, but the Owner cures
the default of the First Lien prior to the sale of the Restricted Unit to the CDC, the CDC's
exercise of the Option shall be deemed revoked. The revocation of the exercise of the Option
shall not terminate this Option Agreement or preclude the CDC from subsequently exercising the
Option upon a later event of default under the First Lien.
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(d) Escrow and Completion of Sale. Within five (5) days after CDC has exercised
the Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with an
escrow company mutually acceptable to CDC and Owner for the conveyance of the Restricted
Unit to the CDC. The CDC shall deposit the Option Price in escrow not later than one (1)
business day prior to the anticipated close of escrow date. The CDC's obligation to close escrow
shall be subject to the CDC's approval of a then -current preliminary title report and, at CDC's
option, environmental and other site testing. Any exceptions shown on such preliminary title
report created on or after the Owner's acquisition of the Restricted Unit shall be removed by
Owner at its sole expense prior to the close of escrow pursuant to this Section 10(d) unless such
exception(s) is(are) accepted by CDC in its reasonable discretion; provided, however, that CDC
shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters
affecting title existing on the date of Owner's acquisition of the Restricted Unit, (iii) liens and
encumbrances in favor of the City of National City, (iv) the First Lien (if the CDC is taking
subject to the First Lien), (v) this Resale Restriction, and (vi) matters shown as printed
exceptions in the standard form CLTA owner's policy of title insurance. The parties shall each
be responsible for one-half of the escrow fees, documentary transfer taxes, recording fees and
any other costs and expenses of the escrow, and the Owner shall be responsible for the cost of a
CLTA owner's policy of title insurance. CDC shall have thirty (30) days after exercise of the
Option to enter upon the Restricted Unit to conduct any tests, inspections, investigations, or
studies of the condition of the Restricted Unit. Owner shall permit the CDC access to the
Restricted Unit for such purposes. The CDC shall indemnify, defend, and hold haiiuless Owner
and its officers, directors, shareholders, partners, employees, agents, and representatives from
and against all claims, liabilities, or damages, and including expert witness fees and reasonable
attorney's fees and costs, caused by CDC's activities with respect to or arising out of such
testing, inspection, or investigatory activity on the Restricted Unit. Escrow shall close promptly
after acceptance by CDC of the condition of title and the physical and environmental condition
of the Restricted Unit, and in no event later than ninety (90) days after the date that the CDC has
exercised the Option. Until the Closing, the terms of the Restriction and the documents executed
and recorded pursuant thereto shall remain in full force and effect.
11. Non-liabilitv of the CDC. In no event shall the CDC become in any way liable or
obligated to the Purchaser or to any successor -in -interest of the Purchaser by reason of its option
to purchase under either Section 6 or Section 10 herein nor shall the CDC be in any way
obligated or liable to the Purchaser or any successor -in -interest of the Purchaser for the CDC's
failure to exercise such option to purchase or to designate an Eligible Purchaser.
12. Binding on Successor and Assigns. This Resale Restriction shall bind, and the benefit
hereof shall inure to, the Owner, the Purchaser, and to their respective heirs, legal representative
executors, successors in interest and assigns, and to the CDC and its successors except as
provided in Section 3. Provided, however, upon a release of this Resale Restriction, either
through a foreclosure or the receipt of a deed in lieu of foreclosure by the holder of the First
Lien, this Resale Restriction, shall not thereafter reattach.
13. Subordination. This Resale Restriction is to be recorded in first lien priority position.
Notwithstanding the foregoing, this Resale Restriction may be recorded in second lien priority
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position if the lender financing the Owner's purchase of the Restricted Unit will not allow its
deed of trust to be subordinate to the Resale Restriction.
14. Invalid Provisions. If any one or more of the provisions contained in this Resale
Restriction shall for any reason be held to be invalid, illegal or unenforceable in any respect then
such provision or provisions shall be deemed severable from the remaining provisions contained
in this Resale Restriction, and this Resale Restriction shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein.
15. Controlling Law. The terms of this Resale Restriction shall be interpreted under the laws
of the State of California.
16. Notices. All notices required herein shall be sent to the CDC by certified mail return
receipt requested, as follows:
Community Development Commission of the City of National City
1243 National City Blvd.
National City, CA 91950
or such other address that the CDC may subsequently request in writing. Notices to the
Purchaser shall be sent by certified mail return receipt requested to the Restricted Unit address.
17. Interpretation of Restriction Covenants. The terms of this Resale Restriction shall be
interpreted to encourage to the extent possible that the Maximum Sales Price of and mortgage
payments for the Restricted Unit remain affordable to households earning sixty percent (60%) or
less of the area medium income as adjusted annually and as further adjusted for household size.
18. Non -Discrimination Covenants. The Owner covenants by and for itself and any
successors in interest that there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status,
national origin, ancestry, familial status, source of income or disability in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit. The foregoing
covenants shall run with the land.
19. Promissory Note in Favor of CDC.
(a) Execution by Owner and Calculation of Principal Amount. During the
Affordability Period, Owner and each Purchaser shall be obligated to execute the CDC Note
which shall be in a form approved by the CDC in its sole discretion, to ensure the continued
affordability of the Restricted Unit. The principal of the CDC Note shall be an amount equal to
the difference between (i) (i) the Single Family Mortgage Limit for the County of San Diego
under Section 203(b) of the National Housing Act (12 U.S.C. §1709(b)) or any other limitation
then provided by Code of Federal Regulations §92.254(a) or any successor law or regulation;
less (ii) the Maximum Purchase Price. Such amount will not actually be paid by the CDC to the
Owner or Purchaser, but represents the subsidy constructively received by the Owner or
Purchaser as a result of purchasing the Restricted Unit at a price below its fair market value.
12
W.FLLEORKED[BECTSSIkareny,Desktop\DDA Amendment don
(b) CDC Note Secured by Deed of Trust. The Owner's payment obligations pursuant
to the CDC Note shall be secured by the Deed of Trust which shall be in a form approved by the
CDC in its sole discretion (the "Deed of Trust"), and which shall encumber the Restricted Unit in
second lien priority position.
(c) Repayment of the CDC Note. No repayment of the CDC Note shall be due until
the earliest to occur of the following events, at which time the entire principal balance of the
CDC Note and unpaid and default interest thereon shall be due and payable, at the option of the
CDC: (i) a Transfer that is not approved by the CDC in writing; (ii) Owner or any Purchaser's.
uncured default under the terms of this Resale Restriction, the CDC Note or the Deed of Trust; or
(iii) any Owner or any Purchaser's default under the terms of the First Lien. In the event of a
Transfer that is approved by the CDC in writing, the Owner's obligation to repay the CDC Note
shall be assumed by the subsequent purchasers of the Restricted Unit. The CDC Note shall be
deemed satisfied on the forty-fifth (45th) anniversary of the date this Resale Restriction is
recorded against the Restricted Unit, provided that the Owner and its successors in interest to the
Restricted Unit remained in compliance with the terms of this Resale Restriction throughout the
Affordability Period.
(d) Subordination of the Deed of Trust. The CDC shall execute such subordination
agreements subordinating the Deed of Trust securing the CDC Note as may be reasonably
requested by the holder of a First Lien. Any such subordination agreements shall be in a form
approved by the CDC in its reasonable discretion. This Resale Restriction will not be
subordinated.
20. Written Consent of CDC Required Before Transfer. During the Affordability Period, the
Restricted Unit, and any interest therein, shall not be conveyed by any Transfer or refinancing,
except as expressly provided in this Resale Restriction, except with the express written consent
of the CDC.
21. Attorneys' Fees. The parties agree that the prevailing party in litigation for the breach
and/or interpretation and/or enforcement of the terms of this Resale Restriction shall be entitled
to their expert witness fees, if any, as part of their costs of suit, and reasonable attorneys' fees as
may be awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section
1033.5 and any other applicable provisions of California law, including, without limitation, the
provisions of CCP Section 998.
22. Monitoring. The Owner shall annually report to the CDC, in writing, confirming that
they continue to reside in the Restricted Unit, have not leased or rented the Restricted Unit for
more than the allowed, period of time, providing evidence of insurance, evidence of the payment
of taxes, if not impounded, and any and all other infounation reasonably needed by the CDC to
assure compliance with the terms of the Restriction on a form or forms prepared by the CDC.
Within 15 days of a written request from the CDC to the Owner, Owner shall respond with all
information requested to all the CDC complete its monitoring responsibilities under the terms of
the Restriction. Failure to completely and timely comply with requests shall be deemed a
material default under the terms of the Restriction.
13
\\FILE01\REDIRFCTSS\karenyTesktop\DDA Amendment doc
IN WITNESS WHEREOF, the parties have executed this Resale Restriction on or as of
the date first written above.
CDC:
Community Development Commission of the City of National City
By:
Print Name: Ron Morrison
Its:_Mayor
OWNER:
Print Name: Print Name:
14
FILED I\REDIRECTS$ kareny\DesktoplDDA Amendment dou
RESOLUTION NO. 2010 — 75
RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF NATIONAL CITY APPROVING
AN AMENDMENT TO THE DISPOSITION AND DEVELOPMENT
AGREEMENT WITH SAN DIEGO HABITAT FOR HUMANITY, INC.,
ALLOWING FOR FIRST-TIME HOMEBUYER PROMISSORY NOTES
TO BE FORGIVEN ON THE FORTY-FIFTH ANNIVERSARY DATE
OF THE RECORDING OF THE AFFORDABLE HOUSING RESALE
RESTRICTIONS, OPTION TO DESIGNATE ELIGIBLE PURCHASERS
AND OPTION TO PURCHASE UPON DEFAULT AGREEMENT
WHEREAS, the Community Development Commission of the City of National
City ("CDC") is implementing the Redevelopment Plan for the National City Redevelopment
Project; and
WHEREAS, the CDC acquired the property located at 1441 Harding Avenue
using $400,000 in federal HOME funds to develop an affordable housing project; and
WHEREAS, San Diego Habitat for Humanity, Inc., is a certified Community
Housing Development Organization qualified to develop an affordable housing project utilizing
federal HOME funds, and was selected on October 17, 2006, by the CDC to develop said
property; and
WHEREAS, on December 19, 2006, the CDC entered into an Exclusive
Negotiations Agreement (ENA) with Habitat for Humanity to prepare plans for the development
of affordable housing on the site; and
WHEREAS, on December 1, 2008, the National City Planning Commission
recommended approval of the Project; and
WHEREAS, on December 2, 2008, City Council allocated $272,119 in HOME
Investment Partnerships Program income funds; and
WHEREAS, on April 21, 2009, the CDC entered into a Development and
Disposition Agreement (DDA) with San Diego Habitat for Humanity to develop three for -sale
single-family units affordable to families earning 60-percent of the Area Median Income as
defined by the U.S. Department of Housing and Urban Development
WHEREAS, San Diego Habitat for Humanity has worked diligently to process
land use entitlements and permits for the project; and
WHEREAS, San Diego Habitat for Humanity is requesting that the CDC amend
the DDA to reflect that loans to eligible families be entirely forgiven on the forty-fifth (45th)
anniversary date that the Resale Restriction is recorded against the restricted unit.
NOW, THEREFORE, BE IT RESOLVED that the Community Development
Commission of the City of National City hereby authorizes the Chairman to execute an
Amendment to the Disposition and Development Agreement with San Diego Habitat for
Humanity to develop an affordable housing project at 1441 Harding Avenue in National City,
including provisions that loans be entirely forgiven on their 45th anniversary date if certain
criteria are met. Said Amendment to Disposition and Development Agreement is on file in the
office of the City Clerk.
-- Signature Page to Follow --
Resolution No. 2010 — 75
April 6, 2010
Page Two
PASSED and ADOPTED this 6th day of April, 201
on Morrison, Chairman
ATTEST:
Bra •1'� �s,�; Secretary
APPROVED AS TO FORM:
George H. Eiser, III
City Attorney
Passed and adopted by the Community Development Commission of the City of
National City, California, on April 6, 2010, by the following vote, to -wit:
Ayes: Commissioners Morrison, Sotelo-Solis, Van Deventer, Zarate.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Chairman, Community Development Commission
Secre = - + unt Development Commission
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2010-75 of the Community Development Commission of the City of
National City, California, passed and adopted on April 6, 2010.
Secretary, Community Development Commission
By:
Deputy
EETING DATE:
CITY OF NATIONAL CITY, CALIFORNIA
COMMUNITY DEVELOPMENT COMMISSION
COUNCIL AGENDA STATEMENT
April 6, 2010
caoota-n'1
AGENDA ITEM NO. 31
ITEM TITLE:
Resolution of the Community Development Commission of the City of National City (CDC) approving an
amendment to the Disposition and Development Agreement with San Diego Habitat for Humanity, Incorporated,
allowing for first-time homebuyer promissory notes to be forgiven on the forty-fifth anniversary date of the
recording of the Affordable Housing Resale Restrictions, Option to Designate Eligible Purchasers and Option to
Purchase Upon Default aereement (Resale Restriction). (Community Development)
PREPARED BY: Alfredo Ybarra DEPARTMENT: Communi 1 - %elopment
PHONE: 619 336-4279 APPROVED BY:
EXPLANATION:
On April 21, 2009, the City Council authorized the Chairman to execute a Disposition and Development Agreement for the
development of three (3) single family units consisting of two — 2 story units and one — 1 story unit. The 8,625 parcel is
located on the northeast corner of 14 h and Harding Avenue. Currently, one unit is ready for sale and the other two are under
construction. Each unit will be sold to families earning at or below 60-percent Area Median Income (AMI) and will be
restricted in price to remain affordable to buyers earning at or below 60-percent Area Median Income for a period of forty-five
years.
Attachment 10, "Resale Restriction", to the DDA requires each owner to repay the original principal amount of the first-time
homebuyer note without interest on the forty-fifth (45th) anniversary of the recording of the Resale Restriction on the property.
Habitat for Humanity believed the loans would be forgiven on the forty-fifth anniversary date. As a result, Habitat for
Humanity is requesting that the Community Development Commission amend the DDA to reflect that loans to eligible
milies be entirely forgiven on the forty-fifth (45th) anniversary date that the Resale Restriction is recorded against the
_stricted unit.
FINANCIAL STATEMENT: APPROVED:
ACCOUNT NO. APPROVED:
Not applicable
ENVIRONMENTAL REVIEW:
Not applicable
ORDINANCE: INTRODUCTION:
FINAL ADOPTION:
Finance
MIS
STAFF RECOMMENDATION:
Community Development Commission adopt resolution
BOARD / COMMISSION RECOMMENDATION:
Not Applicable
o. aolo•`l
TTACHMENTS:
first Amendment to Disposition and Development Agreement (1441 Harding)
OFFICE OF THE CITY CLERK
1243 National City Blvd.
National City, California 91950
Michael R. Dalla, CMC - City Clerk
619-336-4228 phone • 619-336-4229 fax
April 15, 2010
Mr. Bradford Bates
San Diego Habitat for Humanity, Inc.
10222 San Diego Mission Road
San Diego, CA 92108
Dear Mr. Bates,
On April 6, 2010, Resolution No. 2010-75 was passed and adopted by the
Community Development Commission of the City of National City, approving an
amendment to a disposition and development agreement with San Diego Habitat
for Humanity.
We are enclosing for your records a certified copy of the above Resolution and a
fully executed original amendment.
Michael R. Dalla, CMC
City Clerk
Enclosures
cc: Housing & Grants Department