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HomeMy WebLinkAbout2011 CON CDC (Affordable Housing Resale Restrictions) - Jose & Anabel Morales 814 "G" AveRecording Requested by: First American Title Subdivision Sale -Out NO CHARGE ON THIS DOCUMENT FOR THE BENEFIT OF THE CITY OF NATIONAL CITY ecor Igitequeste And When Recorded Mail To: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950 3322 D O C # 2012-0047537 111111114111111111111113111111111111111111 JAN 27, 2012 8:00 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDERS OFFICE Ernest J. Dronenburg, Jr., COUNTY RECORDER FEES: 0.00 WAYS: 2 PAGES 16 I IIIII IIIII IIIII IIIII I III IIII IIII II II II II II II IIII IIIII IIIII IIIII IIIII IIII IIII AFFORDABLE HOUSING RESALE RESTRICTIONS, OPTION TO DESIGNATE ELIGIBLE PURCHASERS AND OPTION TO PURCHASE UPON DEFAULT -(48+8 Avenue) 1314- Aw1 3-T ik This Affordable Housing Resale Restrictions, Option to Designate Eligible Purchasers and Option to Purchase Upon Default ("Resale Restriction") is executed this 9th day of December, 2011, by the Community Development Commission of the City of National City ("CDC"), and by Juan Jose Morales and Anabel Morales, Husband and Wife as Joint Tenants, as owner (individually and collectively, "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 CDC to Habitat. "Owner" as hereafter used means the person(s) including co -purchasers defined as such in the first paragraph of this Resale Restriction and that person's successors and assigns with respect to this Resale Restriction and/or the Restricted Unit. B. CDC purchased the Habitat Property from the previous owner utilizing U.S. Department of Housing and Urban Development ("HUD") Home Investment Partnerships Act Funds ("HUD HOME Funds"). CDC then used funds from CDC's Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the California Health and Safety Code (the "Low -Mod Funds") to prepare the site for development. Subsequently, CDC made a loan to Habitat 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. Low -Mod Funds are to be used as authorized by the provisions of the 1 H.Videcho\G Avenue Resale Restriction.doe 33?3 California Community Redevelopment Law (California Health and Safety Code Section 33000 et seq.). Owner and CDC are executing this Resale Restriction and causing it to be recorded against the Restricted Unit in order to ensure compliance with (i) the HUD HOME program, including without limitation compliance with 24 Code of Federal Regulations Part 92; (ii) California Health and Safety Code Section 33000 et seq.; and (iii) the Redevelopment Plan for the National City Redevelopment Project, adopted by Community Development Commission of the City of National City on July 18, 1995, as amended. C. The purposes of this Resale Restriction include, without limitation: (i) to establish resale and occupancy restrictions for the Restricted Unit; (ii) reserve to 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 Owner of the terms of this Resale Restriction. D. Concurrently herewith Owner is executing a promissory note in favor of 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 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 CDC 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 eighty percent (80%) of the Area Median Income. "Area Median Income" means the lesser of: (i) the median income for the San Diego -Carlsbad -San Marcos 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) years from the date this Resale Restriction is recorded in the Office of the County Recorder of San Diego County against the Restricted Unit. Owner shall be considered as occupying the Restricted Unit as a principal place of residence if Owner is living in the Restricted Unit for at least ten (10) months out of each calendar year. Owner shall not sublet, lease or rent out all or any portion of the Restricted Unit during the Affordable Term, as hereafter defined, of this Resale Restriction. (c) Liquid Assets. At the time of the execution of this Resale Restriction, Owner does not hold, directly or indirectly, "liquid assets", as defined below, whose aggregate value 2 H \ndeellu\G Avenue Resale Reslnctiun.duc 332d 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 term "liquid assets" shall not include retirement funds which are not readily accessible or which cannot be accessed by Owner without Owner incurring a penalty. (d) Not a Full -Time Student. Owner is not 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 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 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 (3)-year period immediately preceding the date this Resale Restriction is recorded in the Office of the County Recorder of San Diego County against the Restricted Unit; (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 of receipt of this Resale Restriction and all the provisions and restrictions contained herein, on a form approved by 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 3 Hindecho\G Avenue Resale Restric[ion.doc 3325 Purchaser to a subsequent Purchaser shall also be subject to the provisions of this Resale Restriction until the expiration 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, resold, conveyed, transferred, alienated. leased, rented or assigned; (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, pledged, hypothecated, except as otherwise expressly permitted 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) any judicial or non -judicial foreclosure, attachment, insolvency, receivership or bankruptcy proceeding against Owner or the Restricted Unit. Notwithstanding the foregoing, a refinancing of the Restricted Unit shall not be considered a Transfer, provided CDC provides written consent to Owner prior to the refinancing, which consent may be granted or withheld in the sole and absolute discretion of CDC. "Transfer" shall not include (A) a transfer by gift, devise, or inheritance to Owner's spouse or to Owner's child. provided the child would qualify as an Eligible Purchaser; (B) taking of title by a surviving joint tenant who is Owner's spouse or Owner's child. provided the child would qualify as an Eligible Purchaser; (C) transfer of title to a current or former spouse pursuant to divorce or dissolution proceedings; (D) acquisition of title or interest to the Restricted Unit in conjunction with marriage after Owner acquired title to the Restricted Unit; and (E) a transfer specifically approved in writing by CDC and Habitat. 4. Maintenance and Inspection of Restricted Unit. Owner shall maintain the Restricted Unit and the improvements thereon in good condition and repair throughout Owner'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 Owner with regard to any noted code violations and maintenance deficiencies (collectively, the "Deficiencies"), and Owner shall cure the Deficiencies in a reasonable manner acceptable to CDC within sixty (60) days of being notified in writing of the result of the inspections. Should Owner fail to cure all the Deficiencies prior to the scheduled date for the close of escrow, at the option of CDC or an Eligible Purchaser as defined in Section 7 below, escrow may be closed, title passed and money paid to Owner subject to the condition that such funds as are necessary to pay for curing the Deficiencies, based upon written estimates obtained by CDC, shall be withheld from the money due Owner and held by the escrow holder for the purpose of curing the Deficiencies. CDC and/or the Eligible Purchaser shall cause the Deficiencies to be cured and, upon certification of completion of work by CDC, the escrow holder shall utilize such funds to pay for said work. Any remaining funds shall be paid to Owner. 5. Notice of Transfer. In the event Owner intends to transfer the Restricted Unit, Owner shall sixty (60) days prior to the opening of escrow notify Habitat and CDC in writing of such intent ("Notice of Intent to Transfer"). The Notice of Intent to Transfer shall be sent by certified mail return receipt requested, to the Community Development Commission of the City of 4 H \ndechn\G Avenue Resale Restriction. Anc National City 1243 National City Blvd., National City, California 91950, or such other address as CDC may designate. Owner 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, 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 CDC of the Notice of Intent to Transfer, CDC shall: (1) notify Owner 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 Owner regarding whether or not CDC intends to exercise its option to designate an alternate Eligible Purchaser. The notification to Owner regarding the option to designate an Eligible Purchaser shall be sent by certified mail, return receipt requested. If CDC exercises this option to designate an Eligible Purchaser, CDC shall cause an escrow to purchase the Restricted Unit to be opened within thirty (30) days following such notification to Owner, and CDC shall cause the Restricted Unit to be purchased by its designated Eligible Purchaser within the ninety (90) days following the receipt by CDC of Owner's Notice of Intent to Transfer. CDC's option to designate an Eligible Purchaser and right to cause the Property to be transferred to an Eligible Purchaser pursuant to this Section 6 shall be subject, subordinate and inferior to any right or option of Habitat to acquire the Restricted Unit in the event of a Transfer, whether such right or option now exists or is hereafter created in favor of Habitat. 7. Transfer to Eligible Purchaser. In the event CDC does not exercise its option to designate an Eligible Purchaser, the transfer of the Restricted Unit by Owner 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 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 CDC, which does not exceed the product of one twelfth (1/12) of thirty percent (30%) times eighty percent (80%) 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) the amount of any other downpayment assistance grant or a similar grant which is approved by CDC, provided that such assistance is a grant (i.e., no payments are required under such assistance and the assistance does not need to be repaid by the Purchaser); 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, CDC shall calculate the principal and 3326 5 H: ndecho\G Avenue Resale Restriction.doc 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 a fully -amortizing thirty (30)- year, fixed-rate mortgage loan actually obtained by the Purchaser, and any loan insurance fees associated therewith (under no circumstances shall any Purchaser of the Restricted Unit obtain a mortgage loan that contains an adjustable interest rate); (ii) property taxes and assessments, including Mello Roos fees, if applicable; (iii) fire and casualty insurance covering replacement value of Restricted Unit improvements (to the extent not covered by the homeowner association governing the Restricted Unit); (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 for the pending sale of the Restricted 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, CDC shall give notice to Owner (or the Purchaser, as applicable) 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 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 the acceleration of the sums secured by the Deed of Trust and the sale of the Restricted Unit. 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. 3327 6 H-.\ndecho\G Avenue Resale Restiiction.doc 3328 (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 to 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. 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 CDC using a combination of HUD HOME Funds and Low -Mod Funds (as described in Recital A, above). Section 215 of the HOME Investment Partnerships Act (42 U.S.C. §12745), the HOME program regulations (24 C.F.R. §92.254) and the California Community Redevelopment Law 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 State of California and Federal law to enforce the provisions of the California Community Redevelopment Law and the HOME program, CDC's failure to do so would jeopardize CDC's ability to obtain additional HUD HOME Funds from HUD and help other low-income families to obtain affordable housing. 7 11 ndecho\G Avenue Resale Restriction doc 3329 (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 HUD 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 under the California Community Redevelopment Law and therefore 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, including, without limitation CDC's ability to approve certain transfers under Section 3(b), 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. (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 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. 8 Hlndecho\G Avenue Resale Restriction doc 3330 10. CDC's Option to Purchase Upon Default. In addition to the remedies provided CDC in Section 9 above, CDC has and is hereby granted the option ("Option") to purchase the Restricted Unit effective upon the declaration of a written default by CDC. CDC's option to purchase may be exercised upon a default under this Resale Restriction 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 CDC to 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 Owner for the purchase of the Restricted Unit and/or any acceptable refinancings), plus 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. 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 CDC exercises the Option, but Owner cures the default of the First Lien prior to the sale of the Restricted Unit to CDC, CDC's exercise of the Option shall be deemed revoked. The revocation of the exercise of the Option shall not terminate the Option or preclude CDC from subsequently exercising the Option upon a later event of default under the First Lien. (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 CDC. CDC shall deposit the Option Price in escrow not later than one (1) business day prior to the anticipated close of escrow date. CDC's obligation to close escrow shall be subject to 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 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 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 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 9 I CMdecho'G Avenue Resale Restriction. doe 3331 conduct any tests, inspections, investigations, or studies of the condition of the Restricted Unit. Owner shall permit CDC access to the Restricted Unit for such purposes. CDC shall indemnify, defend, and hold harmless 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 attorneys' 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 CDC has exercised the Option. Until the closing, the terms of this Resale Restriction and the documents executed and recorded pursuant thereto shall remain in full force and effect. (e) Notwithstanding anything to the contrary contained herein, CDC's option to purchase the Restricted Unit pursuant to this Section 6 shall be subject, subordinate and inferior to any right or option of Habitat to acquire the Restricted Unit in the event of a Transfer or default by Owner, whether such right or option now exists or is hereafter created in favor of Habitat. 11. Non -liability of CDC. In no event shall CDC become in any way liable or obligated to Owner or to any successor -in -interest of Owner by reason of its option to purchase under either Section 6 or Section 10 herein nor shall CDC be in any way obligated or liable to the Purchaser or any successor -in -interest of the Purchaser for 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, Owner, the Purchaser, and to their respective heirs, legal representative executors, successors in interest and assigns, and to 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 position if the lender financing Owner's purchase of the Restricted Unit will not allow its deed of trust to be subordinate to this 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. 10 H.lndecho\G Avenue Resale Restriction.dee 3332 16. Notices. All notices required herein shall be sent to 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 CDC may subsequently request in writing. Notices to Owner 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 eighty percent (80%) or less of the area medium income as adjusted annually and as further adjusted for household size. 18. Non -Discrimination Covenants. 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 Term, Owner and each Purchaser shall be obligated to execute the CDC Note which shall be in a form approved by 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) 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 CDC to Owner or Purchaser, but represents the subsidy constructively received by Owner or Purchaser as a result of purchasing the Restricted Unit at a price below its fair market value. (b) CDC Note Secured by Deed of Trust. 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 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 CDC: (i) a Transfer that is not approved by 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 11 Hlndeoho\G Avenue Resale Restnctiondoc 33 ..3 Transfer that is approved by CDC in writing, 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 Owner and its successors in interest to the Restricted Unit remained in compliance with the terms of this Resale Restriction throughout the Affordability Term. (d) Subordination of the Deed of Trust. 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 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 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. Owner shall annually report to 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 information reasonably needed by CDC to assure compliance with the terms of this Resale Restriction on a form or forms prepared by CDC. Within 15 days of a written request from CDC to Owner, Owner shall respond with all information requested by CDC for CDC to complete its monitoring responsibilities under the terms of this Resale Restriction. Failure to completely and timely comply with requests by Owner shall be deemed a material default under the terms of this Resale Restriction. 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: Chairman 12 H.\ndecho\G Avenue Resale Resuiclion.doc OWNER: �Jctx j vSo Maya (eS 'Qv‘Qbe\ craleS Print Name: yfc TOSe ✓ale) Print Name: may\ abe\ wo r41 e� 3334 13 H:\ndecho\G Avenue Resale Restriction doe State of California County of San Diego ) ) ACKNOWLEDGMENT 335 on e i-. `( , 2011 , before me,'D P4-. ) Story J 1 M( , personally appeared Ta n TS g t 0 V'QL'e3 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 upon 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 State of California County of San Diego ) ) ) 'num. 111MM1MIIIlltillllnlunllllllil111111Wn1umum 1111111mg D. PAZ I. . COMM. #1845984 v NotaryPublic - Californi o E eV San Diego County My Comm Ex' es May 21, 20131 IIP::till ll 11111114101111110111111111111111111. ,11111111111111111MONNIMMIE ACKNOWLEDGMENT (Seal) On bee. q , 201 (, before me, T. Pa*./ J f-ary PilblVC personally appeared Ana b e J Mora I,e 5 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 upon 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 JIMIHIIM IMIIIIHIIIIIIIIIIIIIIIInulaumuulnIHnN1111NI*UMuunIC D. PAZ COMM. #1845984 z Notary Public - California o San Diego County fMy Comm. Exp': s May 21, 2013= IIIIIIMII Illillllllllllllllllllllli'� �1111111M1 llllNlllllpfllillllfl (Seal) 14 H \ndechn\G Avenue Resale Restriction doe ACKNOWLEDGMENT State of California County of San Diego 3 5 On L C_ l , 201L, before me, U; n jcc / r) I( 1 ef- personally appeared RU7n ) Dr/7sCn who proved to me on the basis of satisfactory evidence to be the person(s� wvhose names - is/are,subscribed to the within instrument and acknowledged to me that he/slwithey executed the same in his/her/their authorized capacity(ies), and that by hislherfthe r signature,@) on the instrument the person(s), or the entity upon behalf of which the perso48)-acted, executed the instrument. 1 certify under penalty of perjury under the laws of th - . f-California. that the, fore ping paragraph is true and correct. , - VIRGINIA MILLER !:-\,, Commission N 181499E • `l Notary Public - California WITNESS my hand and official seal. , �+San Diego County y r i _� _ •My Comm. Expires Dec 26, 201E Signature (, . ,Uybtrj 1 (Seal) t� 15 HAndecho\G Avenue Resale Restriction.doc Order Number: NHSC-3752067 (10) Page Number: 8 EXHISIT "A LEGAL DESCRIPTION 3337 Real property in the City of National City, County of San Diego, State of California, described as follows: CONDOMINIUM NO. 3, AS SHOWN UPON CONDOMINIUM PLAN FOR G AVENUE CONDOMINIUMS RECORDED WITH THE COUNTY RECORDER OF SAN DIEGO COUNTY ON AUGUST 15, 2011, AS DOCUMENT NO. 2011 0416568 ("CONDOMINIUM PLAN"), BEING PORTIONS LOT 1 OF CASE FILE NO. 2008-20-PD-S, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 15779, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, ON MARCH 12, 2010, COMPOSED OF THE FOLLOWING: PARCEL 1 (LIVING UNIT): THE LIVING UNIT WITH THE SAME NUMBER AS THE CONDOMINIUM DESCRIBED ABOVE. PARCEL 2 (COMMON AREA): AN APPURTENANT UNDIVIDED FRACTIONAL INTEREST AS TENANT IN COMMON IN AND TO THE COMMON AREA IN THE PHASE IN WHICH THE LIVING UNIT DESCRIBED IN PARCEL 1 ABOVE IS LOCATED EQUAL TO THE RECIPROCAL OF THE NUMBER OF LIVING UNITS WITHIN THAT PHASE; THE COMMON AREA IS SHOWN AND DESCRIBED ON THE CONDOMINIUM PLAN. PARCEL 3 (EASEMENT OVER ASSOCIATION PROPERTY): NON-EXCLUSIVE APPURTENANT EASEMENTS IN AND TO THE ASSOCIATION PROPERTY NOW OR HEREAFTER OWNED BY G AVENUE CONDOMINIUMS OWNERS ASSOCIATION, A CALIFORNIA NONPROFIT MUTUAL BENEFIT CORPORATION ("ASSOCIATION"). "ASSOCIATION PROPERTY" IS DEFINED IN THE CONDOMINIUM PLAN AND IN THE DECLARATION OF RESTRICTIONS FOR G AVENUE CONDOMINIUMS RECORDED AUGUST 15, 2011 AS DOCUMENT NO. 2011-0416569, IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA ("DECLARATION"). PARCEL 4 (EXCLUSIVE USE AREA - PATIO AND LANDING): THE EXCLUSIVE RIGHT TO USE ANY EXCLUSIVE USE AREA SHOWN ON THE CONDOMINIUM PLAN AS BEING APPURTENANT TO THE LIVING UNIT DESCRIBED IN PARCEL 1 ABOVE. PARCEL 5 (EXCLUSIVE USE AREA - PARKING SPACE): THE EXCLUSIVE RIGHT TO USE THE PARKING SPACE SHOWN ON EXHIBIT "B" TO THE DECLARATION AS BEING ASSIGNED AND APPURTENANT TO THE LIVING UNIT DESCRIBED IN PARCEL 1 ABOVE. First American Title Recording Requested by: First American Title Subdivision Sale -Out NO CHARGE ON THIS DOCUMENT FOR THE BENEFIT OF THE CITY OF NATIONAL CITY Y And When Recorded Mail To: Community Development Commission of the City of National City 1243 National City Boulevard National City, CA 91950 D O C # 2012-0047536 11 umi 11111111111 iummu i IIIIIIIIIIIII JAN 27, 2012 8:00 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE Ernest . Dronenburg.Jr-. COUNTY RECORDER FEES: 27.00 PAGES: uuum 5 IIIIIII11111IIIII11111IIIIIIIIIIIIIIIIIIIIIIIII11111IIIIIIIIIIIIIIIIIIIIIIIII1111IIII 3317 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (HEALTH AND SAFETY CODE §33334.3(f)(3)(B)) (1814 G Avenue) NOTICE IS HEREBY PROVIDED AS FOLLOWS: 1. Juan Jose Morales and Anabel Morales ("Owner"), is/are the owner of that certain real property located in the City of National City, California, more particularly described in the attached Exhibit "A" ("Property"). 2. The Community Development Commission of the City of National City ("CDC") is providing partial financing for the Property with moneys from its Low and Moderate Income Housing Fund. 3. Concurrently herewith Owner and the CDC are causing the Property to be encumbered by that certain AFFORDABLE HOUSING RESALE RESTRICTIONS, OPTION TO DESIGNATE ELIGIBLE PURCHASERS AND OPTION TO PURCHASE UPON DEFAULT ("Notice"), which generally restricts the rent and occupancy of Property to persons at or below eighty percent (80%) of AMI, as set forth in more detail in the CC&R's. 4. The Notice expires forty-five (45) years from recordation thereof (except as otherwise provided therein). N:\Shayna\National City-G\20] I Closings \Morales\Notice of Affordability Restrictions (2).doc 5. The Property is generally located at 1814 G Avenue, National City, California. 6. The Property assessor's parcel number is SADO-ti33-b(o-0o . gain AVI TT'DL( 7. In the event of any conflict between one or more provisions of this document and one or more provisions of the Notice, the provisions of the Notice shall apply. 8. This Notice of Affordability Restrictions on Transfer of Real Property may not be amended, terminated, or revised without the written consent of the CDC. Dated this 9th day of December, 2011. Owner: V- 7bSL' /vales' Juan Jose Morales Kvtctk,2\ VV&p ret S Anabel Morales CDC: Communit velopment Commission of the City of National City By: Ron Morrison, Chairman 2 N;\Shayna\National City-G\2011 Closings \Morales\Notice of Affordability Restrictions (2).doc State of California County of San Diego ) ) ) ACKNOWLEDGMENT 3319 , 201 (, before me,b,P , notary public personally appeared, -IAQn Ti -S� (Y1 O r a ICES 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. 1 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. SignatureIb State of California County of San Diego ) ) ) 'JIII1111111 (Seal) 0IIIIIOx111111II111IIIIn111III1111111111101 ummaN II1111111C D. PAZ COMM. #1845984 Notary Public - California San Diego County VMy Comm. Expi=es May 21, 2013=_ IIININII INIIIIIIIIIIIIIIIIIIillltl.-.:!IIIIIIIIMI IIXIMIIIIINNNllllr. ACKNOWLEDGMENT Con(1) e(', l , 2011 , before me,b ri — , notary public personally appeared, Ahahe ( ►'floraies 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. 71111111NN IMN1111NIIIIIIIIIIIIIIIIIINII1111111111IIIINNNNNNNNMNNNIIIIn,c D. PAZ COMM. #1845984 Notary Public - California o _=' {� J San Diego County M i Comm. Expii s May 21, 2013_- .11!. "YIIIII rr 1111111111I II111111111111111111111111r IIIIIII11111111111NN1t111111111 r. (Seal) 3 N:\Shayna\National City-G\201 I Closings\Morales\Notice of Affordability Restrictions (2) doc State of California County of San Diego 3320 ACKNOWLEDGMENT /`! , 201 , before me, (Ii fjAi4 /�]i /k notary public personally appeared, r/ /.S'O kiwho proved to me on the basis of satisfactory evidence5to be the person.(&) whose names) is/e subscribed to the within instrument and acknowledged to me that he/shel hey executed the same in his/her-4146r authorized capacity.(.ie ), and that by his/herhhair signatureO-on the instrument the personkerer the entity on 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. WITNESS my hand and official seal. r Signatur Seal) 4 N:\Shayna\National City-G\2011 Closings\Blanco\Notice of Affordability Restrictions (2).doc Order Number: NHSC-3752067 (10) Page Number: 8 EXHIBIT "" 3 3 2 I LEGAL DESCRIPTION Real property in the City of National City, County of San Diego, State of California, described as follows: CONDOMINIUM NO. 3, AS SHOWN UPON CONDOMINIUM PLAN FOR G AVENUE CONDOMINIUMS RECORDED WITH THE COUNTY RECORDER OF SAN DIEGO COUNTY ON AUGUST 15, 2011, AS DOCUMENT NO. 2011 0416568 ("CONDOMINIUM PLAN"), BEING PORTIONS LOT 1 OF CASE FILE NO. 2008-20-PD-S, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 15779, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, ON MARCH 12, 2010, COMPOSED OF THE FOLLOWING: PARCEL 1 (LIVING UNIT): THE LIVING UNIT WITH THE SAME NUMBER AS THE CONDOMINIUM DESCRIBED ABOVE. PARCEL 2 (COMMON AREA): AN APPURTENANT UNDIVIDED FRACTIONAL INTEREST AS TENANT IN COMMON IN AND TO THE COMMON AREA IN THE PHASE IN WHICH THE LIVING UNIT DESCRIBED IN PARCEL 1 ABOVE IS LOCATED EQUAL TO THE RECIPROCAL OF THE NUMBER OF LIVING UNITS WITHIN THAT PHASE; THE COMMON AREA IS SHOWN AND DESCRIBED ON THE CONDOMINIUM PLAN. PARCEL 3 (EASEMENT OVER ASSOCIATION PROPERTY): NON-EXCLUSIVE APPURTENANT EASEMENTS IN AND TO THE ASSOCIATION PROPERTY NOW OR HEREAFTER OWNED BY G AVENUE CONDOMINIUMS OWNERS ASSOCIATION, A CALIFORNIA NONPROFIT MUTUAL BENEFIT CORPORATION ("ASSOCIATION"). "ASSOCIATION PROPERTY" IS DEFINED IN THE CONDOMINIUM PLAN AND IN THE DECLARATION OF RESTRICTIONS FOR G AVENUE CONDOMINIUMS RECORDED AUGUST 15, 2011 AS DOCUMENT NO. 2011-0416569, IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA ("DECLARATION"). PARCEL 4 (EXCLUSIVE USE AREA - PATIO AND LANDING): THE EXCLUSIVE RIGHT TO USE ANY EXCLUSIVE USE AREA SHOWN ON THE CONDOMINIUM PLAN AS BEING APPURTENANT TO THE LIVING UNIT DESCRIBED IN PARCEL 1 ABOVE. PARCEL 5 (EXCLUSIVE USE AREA - PARKING SPACE): THE EXCLUSIVE RIGHT TO USE THE PARKING SPACE SHOWN ON EXHIBIT "B" TO THE DECLARATION AS BEING ASSIGNED AND APPURTENANT TO THE LIVING UNIT DESCRIBED IN PARCEL 1 ABOVE. First American Title